Week in Review

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Week in Review

06/05/2010

For the week 5/31-6/4

John Wooden, RIP

I just learned of the passing of the coaching legend at age 99. Wooden was such a titanic figure in America, both on the court and off. Over ten years ago, I noted a column that Rick Reilly, then with Sports Illustrated, had written on The Wizard of Westwood. Here in part is that piece.

“There has never been another coach like Wooden, quiet as an April snow and square as a game of checkers; loyal to one woman, one school, one way; walking around campus in his sensible shoes and Jimmy Stewart morals. He’d spend a half hour the first day of practice teaching his men how to put on a sock. ‘Wrinkles can lead to blisters,’ he’d warn. These huge players would sneak looks at one another and roll their eyes. Eventually, they’d do it right. ‘Good,’ he’d say. ‘And now for the other foot.’

One day, center Bill Walton showed up with a full beard.  Walton was a rebel back then.  It was amazing he was able to play for Wooden.

“ ‘It’s my right,’ Bill told the Coach.  Reilly writes, “Wooden asked if he believed that strongly. Walton said he did.”

 “ ‘That’s good, Bill,’ Coach said. ‘I admire people who have strong beliefs and stick by them, I really do. We’re going to miss you.’  Walton shaved it immediately. Today he calls Wooden once a week to tell him how much he loves him.”

Reilly concludes: “Wooden’s almost 90 now. A little more hunched over than last time. Steps a little smaller. You hope it’s not the last time you see him. He smiles. ‘I’m not afraid to die,’ he says. ‘Death is my only chance to be with her (his wife) again.’

“Problem is, we still need him here.”

We had him another ten years it would turn out, and those who knew and cherished John Wooden loved every minute that they were able to be in his presence. Wooden wasn’t just a great coach, he was one of the great teachers of all time.

Israel, the Flotilla, and the Future

The Israeli Navy boarded three of six ships in a flotilla carrying thousands of tons of relief supplies for Gaza, and in the last clashed with activists, killing nine Turks, including a Turkish-American. It was long-feared this Freedom Flotilla, led by a Turkish organization and the most ambitious attempt yet to break Israel’s three-year blockade of Gaza, was up to no good, but Israel, keeping to a pattern the past few years, did not act smartly and the result was a huge ratcheting up of tensions in the region, while at the same time exposing Turkey for the fraud it has become.

Israeli Prime Minister Benjamin Netanyau:

“Israel is facing an attack of international hypocrisy. If the blockade had been broken, it would have been followed by dozens, hundreds of boats. Each boat could carry dozens of missiles.”

“(We) saw an action directed by terrorists affiliated with Hamas. This was not the Love Boat.”

“There was an attempt to lynch Israeli soldiers. Are these peace lovers, pacifists? These are supporters of terrorism, extremists.”

Turkish Prime Minister Tayyip Erdogan:

“Israel’s behavior should definitely, definitely be punished. The time has come for the international community to say ‘enough.’”

I have very strong opinions on this, but first this is one of those instances where in order to build the history I have been doing with this column, I need to state the views from all sides. I will offer up my own view at the end.

“From Israel’s vantage point this was a no-win situation. Allow the ships to dock in Gaza and they would unload supplies that might be used to arm Hamas. Stop the ships and you risk a public relations disaster, which is exactly what happened.

“First the ships ignored repeated warnings from the Israeli navy to turn back or to put into the Israeli port of Ashdod where the supplies could be off-loaded, inspected, and, if purely humanitarian, sent on to the Gaza Strip. They kept on sailing even after Israel publicly warned that its commandos would board the vessels.”

“So the Prime Minister of Turkey calls Israel ‘a festering boil in the Middle East that spreads hate and enmity,’ while his foreign minister compares Monday’s Israeli naval raid on a flotilla of ships headed for the Gaza Strip…to the attacks of September 11, 2001. For good measure, the Turks have also wagged their finger at the Obama Administration for not immediately denouncing Israel’s actions.

“Yet the more facts that come to light about the flotilla, its passengers and their sponsors, the more it seems clear that Prime Minister Recep Tayyip Erdogan’s government, far more so than Israel’s, must be held to account for Monday’s violent episode….

“The Turkish accounting should begin with a full explanation from the government of its relationship with the IHH, an Istanbul-based Islamic ‘charity’ that purchased three of the six boats used in the flotilla from the city government, sent hundreds of its activists along with it, and reportedly has ties to Turkey’s ruling Islamist AKP Party.

“The IHH…has widely reported links to Hamas, the terrorist group that runs Gaza and most directly threatens Israel. Moreover, in the 2001 Seattle trial of Ahmed Ressam, the would-be Millennium bomber, French counterterrorism magistrate Jean-Louis Bruguiere testified that the IHH had played an ‘important role’ in Ressam’s plot to bomb LAX airport on New Year’s Day, 2000, and that there was ‘a rather close relation’ between the bomber and the Turkish group….

“All of this should concern the Obama Administration no less than it does the leadership in Jerusalem. The President has invested considerable efforts in courting Mr. Erdogan, his government and Turkish public opinion. The reward has been a Turkey that conducts a diplomacy of obstruction when it comes to Iran, along with a diplomacy of provocation when it comes to Israel.

“Whatever this might achieve for Mr. Erdogan politically in the short run, in the long run it means a Turkey admired only by neighboring despots, one that no responsible country can trust.”

“Yesterday’s ‘aid convoy’ incident off the coast of Gaza wasn’t about bringing humanitarian supplies to the terrorist-ruled territory. It wasn’t even about Israel.

“It was about Turkey’s determination to position itself as the leading Muslim state in the Middle East….

“Turkish decision-makers knew Israel would have to react – and were waiting to exploit the inevitable clash. The provocation was as cynical as it was carefully orchestrated.

“The lead vessel…just happened to have an al-Jazeera TV crew on board to film Israel’s response….

“Purely by coincidence, dozens of ‘peace activists’ waited with sharpened iron bars, clubs, slingshots – and rifles. Of course, the nine dead in the melee were all Israel’s victims….

“Neither the activists nor the Turkish government wanted a negotiated outcome. This was a stunt from the start.

“Now, as we wait to see if Hamas and Hizbullah up the ante, the world ignores Turkey’s decisive role in this fiasco.

“The U.S. and the European Union cling to the fiction that Turkey’s a ‘westernized Muslim democracy.’ But Turkey’s moving to the east as fast as the Islamist leaders of the ruling Justice and Development Party (AKP) can drag it there….

“The most dramatic transformation in the Middle East since the fall of the shah is playing out before us. And we can’t see behind the mask of the ‘plight of the Palestinians’ (a key Obama administration concern).”

“Though the investigations to come will find many to blame, it’s already clear that Israel’s response to the pro-Palestinian flotilla was both misguided and badly executed.

“We have no sympathy for the motives of the participants in the flotilla….

“Yet the threat to Israel was political rather than military. So far there’s been no indication the boats carried missiles or other arms for Hamas. Mr. Netanyahu’s aim should have been to prevent the militants from creating the incident they were hoping for.”

“Israeli Zionism increasingly contradicts the ethical and moral foundations of historical Judaism: international law applies to the entire world, but the state of Israel reserves for itself the special right to ignore and transcend that law, and to attack humanitarian convoys in the open seas, in the name of defending the Jewish people and their values.  Now, this Israeli-Zionist penchant for taking any and all measures deemed necessary to protect the Jewish people has over-spilled the narrow conflict with Palestinians and Arabs, and has resulted in the death of Turks. In this way, Israel has committed a grave affront to the concept of the universality of international law….

“Israel makes of its historical and permanent victimhood an absolute right to transform any place in the world into a free-fire zone and a killing field where it can run amok – in the name of protecting the Judaism that, in fact, it only increasingly besmirches and demeans.

“Israel is becoming a new Jewish ghetto, increasingly isolated from and criticized by the world, and doubly tragic because this is largely the consequence of its own handiwork.

“Jewish ethics hold human beings accountable to a higher moral code. Does this also apply to a Jewish state?”

“(Israel’s) political structure is deteriorating, as its governments face accusations that were unthinkable in the past: political myopia, technical inefficiency, pure stupidity and self-deception.

“If Netanyahu’s intention is to make Israel ‘fit in’ in the Middle East, he might be succeeding, as political dysfunction, and the waste of a people’s energy and talents, are becoming the norm.

“This unstable situation in Israel can easily spiral out of control, and neighboring countries should be aware of the consequences. It doesn’t matter which side in Lebanon is right – Israel will use Hizbullah’s arms as a pretext to attack, versus Israel doesn’t need Hizbullah’s arms as a pretext to attack – the result is the same. Israel is likely to lash out.”

“As Israel stumbles to limit the fallout from its foolish, violent handling of the Gaza flotilla incident, a larger question is what the fiasco means for the United States in the Middle East. Beyond the negative impact on peace negotiations, Washington must determine how to defend its interests amid the current transmutations in the region.

“The ‘peace process’ is very nearly dead. It’s almost impossible to imagine that Israelis and Palestinians will conclude a settlement in the foreseeable future, and the problem goes beyond the negotiators on each side. The obstacles are structural: There is no will or trust in Israel to make the concessions a settlement requires, and Prime Minister Benjamin Netanyahu will not jeopardize his coalition to pursue an uncertain peace. And Hamas has the ability to undermine any agreement with Israel reached by the Palestinian Authority, while the Arab states are too bankrupt politically to prevent this….

“Today, Israel is devoid of any vision, of any sense of how the country might integrate into the Middle East. And across the aisle is a Palestinian partner who, unless it can produce an advantageous end-game soon, will see its standing disintegrate to the advantage of Hamas and its allies.

“As the United States watches this shipwreck, it seems helpless to prevent it and has no backup plan to defend its own aims in the region….What is Obama’s Plan B? Israel is becoming more isolated internationally by the day; America’s Arab allies, particularly Egypt and Saudi Arabia, are weaker than ever; and even the United States itself is losing its primacy in the Middle East by pursuing an elusive victory in Afghanistan and abandoning a rare success in Iraq.

“If one had to wager on the shape of the region in the coming years, it would be reasonable to put money on America’s enemies. Iran, Syria, armed Islamist groups such as Hizbullah and Hamas, even American allies such as Turkey that have chosen to fundamentally overhaul their connection with Washington and Israel, are showing themselves to be far more adept at playing to Middle Eastern vicissitudes than the Obama administration. A new regional order is taking shape, and Washington is still using weapons from the old order.”

So where do I come down? It should be pretty clear to long-time readers. If nothing else, I’m consistent, and aside from the fact I said weeks ago there was zero reason to be optimistic about anything in the world these days (which looks more prescient by the hour), Israel has once again blown it.

Israel’s overreaction in 2006 led to a full-blown, bungled war with Hizbullah that claimed the lives of over 1,000 Lebanese civilians, while resulting in the deaths of 120 Israeli soldiers. Hizbullah was thus given every reason to rearm itself to the fullest and with Syrian and Iranian help it has, making the next war far worse.

Israel has insisted on expanding its settlements, giving Palestinian extremists an ongoing excuse for recruitment, as well as a perfect fundraising pitch. I would cut off U.S. funding of Israel until it stops.

Israel has incredibly failed to understand that if it had turned Shebaa Farms back over to the Lebanese (technically through Syria), it would have taken away Hizbullah’s very raison d’etre. Call Hizbullah’s bluff.

Israel, in the face of UN Security Council Resolutions 1559 and 1701, blatantly continues to violate Lebanon’s airspace through its flyovers. How many times have I brought this issue up? Once again, this week we had the following:

“Israeli military aircraft came under anti-aircraft fire over Lebanon on Tuesday but there were no casualties. The Lebanese Army fired at Israeli planes on reconnaissance flights over the south Lebanon regions of Khiam and Marjayoun.” [Reuters]

Yes, it’s not fair, but Israel has to be perfect and its actions have been far from it. There is no way…no way…Israel can claim the moral high ground these days. 

My point has always been that Israel needed to desist from building further settlements, stop the flyovers, and at least open up negotiations on Shebaa Farms. Then, and only then, after a suitable period of time, when Hamas and/or Hizbullah inevitably violate any ceasefire agreements, would Israel once and for all be able to stand up and say, “See, we can’t negotiate with these people. We are going our own route,” and few could disagree outside of those circles that have always sought Israel’s destruction. It’s only then that Israel could have the backing, silent though it would be, from the likes of Saudi Arabia, Egypt and Jordan for a strike on Iran’s nuclear facilities. This is why I thought Israel should strike last fall. More and more it’s clear that was the maximum time to move. But the Israelis and the Obama administration failed to act during this window. That’s now closed. 

Yes, it’s over. Israel used to represent the height of competency. It no longer does. It’s lost, and its allies slithering away. The White House, for once, however, deserves credit for standing up for Israel at this time of renewed crisis, but this administration has screwed up itself in so many different ways that no one cares. Many in the Middle East now see that Israel is wounded, and increasingly divided internally between the moderates and hard-liners. Israel appears to be on a path of self-destruction…only it won’t be afraid to take out others with it.

War with Iran is now inevitable. Some say Israel couldn’t possibly act against the mullahs given the current environment, but should Hizbullah instigate a conflict, Israel will be left with little choice and with the weak governments that Michael Young discussed above, the likes of Egypt and Jordan won’t be able to hold back their people who will demand action.

As reported by the Sunday Times of London, Israeli submarines, equipped with nuclear cruise missiles, are to be deployed in the Gulf near the Iranian coastline. This is Israel’s response to fears ballistic missiles are falling into the hands of Hizbullah.

At the same time, the disgraceful failure to levy a new round of harsh sanctions on Iran continues to buy time for Tehran, with the International Atomic Energy Agency saying this week that sensitive equipment that can be used for extracting plutonium for a nuclear weapon has gone missing from a Tehran laboratory months after it was disclosed to the UN watchdog. And the IAEA said Iran has produced enough nuclear fuel that with further enrichment could produce two bombs.

Internally, one date bears watching in Iran, June 12, the anniversary of the disputed election. According to the New York Times, two million paramilitary troops have been ordered into Tehran as the regime also launches another morals crackdown, such as on mingling of the sexes. The two main opposition leaders, Moussavi and Karroubi, have urged followers to march on that date.

Lastly, an editorial in Thursday’s Wall Street Journal summed it up perfectly.

“From Bush to Obama, the U.S. strategy toward Iran has oscillated between naïve and unserious. We now stand months from Iran reaching a nuclear breakout capability. Unless credible options to stop Iran are put on the table, the risk of violent confrontation with Tehran – instigated by Israel or not – rises with each day.”

Wall Street

It was another horrible week in the markets, the pain of which was softened only by one of those absurd rallies midweek until Friday’s swoon. There is no other way around it…Friday’s jobs report was one of the worst in years. If you’re wondering what I’m talking about when you heard that we added 431,000 jobs and the unemployment rate ticked down from 9.9% to 9.7%, understand the entire increase was pretty much a result of low-paying government temp positions, such as census workers. The private sector created a mere 41,000; pitiful for what some have been trying to convince us was a brisk recovery. Yet for some crazy reason, President Obama and his sidekick, Joe Biden, trumpeted the jobs figures, not just Friday, but earlier in the week as well because, incredibly, they didn’t think it worthwhile to separate temp work from good full-time positions.

This year is actually now playing out exactly as I forecast it would. The economy will be weaker in the second half than the first and we will be roiled with one geopolitical event after another. What we saw in the Middle East this week being a prime example of the latter, but also the mess on the Korean Peninsula and the ongoing Iranian nuclear situation.

But let’s take a look at further specifics. In the U.S., Federal Reserve Chairman Ben Bernanke clearly wasn’t surprised by Friday’s employment data. Earlier he told an audience he was concerned about the toll that long-term joblessness is taking on Americans.

“High unemployment imposes heavy costs on workers and their families, as well as on our society as a whole.”

Bernanke added he was very concerned that credit remains tight in terms of small business and job creation.

But two regional Fed bank presidents talked about the need to raise interest rates despite the lousy jobs picture. Kansas City’s Thomas Hoenig said, “With the improvements in market conditions and liquidity, and with an improving outlook, the FOMC (Federal Reserve Open Market Committee) would be prepared to raise the funds rate target to 1% by the end of summer.”

Now if he’s talking about giving savers, particularly seniors, a slight break, fine. I’m all for that line of reasoning. I believe it’s a crime that those of us with decent cash piles, let alone retirees, have to stretch for yield and take unnecessary risk.

But if Hoenig really thinks the economy is just Jim Dandy and that’s the reason for the hike, he’s a loon. Or he doesn’t believe that global events can drastically influence sentiment, which almost always trumps fundamentals.

I don’t doubt there have been some decent economic figures, including this week where we learned April construction spending rose 2.7%, but then the May employment report showed a decline in construction jobs.

Retailers, except Wal-Mart, announced their same-store sales figures for May and they were generally a little better than expected, but still putrid, like up 1.3% for Target and up 1.4% for Macy’s. Oh, they blamed the late Memorial Day weekend, but we were still talking comparisons with a year earlier when of course the economy was in far worse shape and this is the best they can do? So then Wal-Mart, which doesn’t release same-store figures anymore, said on Friday that they continue to see pressure on their customer base and that they would keep slashing prices to get them back.

Overseas, Europe is struggling, and will continue to, with Hungary’s new government, a la Greece, talking of how the previous administration cooked the books, leaving the country in a “grave situation.” Broadly speaking, in Europe it’s about spending cuts, reducing social services, pensions, and slashing public sector salaries. Easier said than done.

Take the case of raising the retirement age. When I heard Ireland and Britain hiked it to 68, I thought, gee, that’s a solid first step. Then I read the fine print. Try 68 by 2028 and 2046, respectively!

We have a long, long way to go before we’ll know if Europe can get its house in order. These are incredibly wrenching changes governments must implement and you’d have to be an idiot to think the people will just take it all lying down (even though that would be totally appropriate given the binge they’ve been on). And I haven’t even talked about rolling over the massive amounts of debt that each has accumulated.

So you have a European continent that could be stuck in neutral, at best, for years, nay decades. You also have an Asia that’s cooling.

With regards to China, I nailed it last week in identifying a topic that was all the discussion by Tuesday, the wage increases at troubled tech contractor Foxconn and a large Honda parts factory. In both cases, worker unrest over pay and labor conditions led to large salary increases; 33% at Foxconn and 20% at Honda, the latter deal finally enough to break a two-week strike.

Understand that in China, labor unions are prohibited but protests are tolerated…thus far. But as one who has a sizable position in a Chinese chemical/biodiesel outfit, I’m as concerned about margins as anyone else and while the Chinese government by week’s end was scrambling to come up with a new living wage policy, the sudden move to avoid civil unrest and address the pay issue certainly doesn’t help corporate profitability. But the debate over “income distribution,” as the gap between rich and poor widens to historic levels here, is at the top of the Communist Party agenda these days.

There has been much talk over the years concerning the official economic data. Well the Commie leadership has heard you (typed the editor semi-facetiously). Three government departments have launched a massive, nationwide investigation into key numbers such as GDP, industrial production and income. Violations “will be dealt with toughly,” according to one Chinese paper. A law stamping out false data actually went into effect a year ago but compliance has been questionable.    But this new emphasis is good.

Also good, especially if you invest in China, is the forecast of the World Bank’s chief economist who says China will still grow between 9% and 10% this year after an “overheated” first quarter.

But aside from the wage issue, China is dealing with a property sector that has frozen up owing to the government’s placing one restriction after another on those looking to buy a home (or second, or third) in order to prevent a bubble. The actions have worked. The issue now is do property prices collapse, slowly decline, or just level off? I do have to throw in another factoid, for those who say the Chinese property situation is similar to that in the U.S. Hardly.

The ratio of housing loans to GDP is 15.3% in China compared to 79% at the peak in the U.S.

And just a few other tidbits concerning Asia. While South Korea’s and Taiwan’s purchasing managers’ indexes were solidly positive in May, 56.4 and 57.4, respectively, they were down from April’s torrid pace. And in Japan you had another change in government, which while the market reacted pretty well to it, the elevation of Naoto Kan to succeed Yukio Hatoyama isn’t a particularly good thing when one of the reasons for his departure, a political funding scandal inside the DPJ, doesn’t go away when the DPJ remains in power.

Lastly, we have the BP oil spill disaster. Appearing on CNN’s Larry King, President Obama said he is “furious at this entire situation…Somebody didn’t think through the consequences of their actions.” No kidding. Everyone in the country was thinking that about a week after we realized that eventually we’d be watching pictures of oil-drenched pelicans. We’re all furious, Mr. President, which was the mood you failed to tap into until now.

I’ve watched the same coverage and interviews you all have and what’s most upsetting is what an LSU professor said on ABC’s “This Week” last Sunday. We know we have this huge spill, so why since day one weren’t ships all over the blast site skimming up the oil as it hit the surface?! Why weren’t we doing more to attack it at its source? This same professor (I apologize for not jotting down his name), said he was out “in a significant patch of oil and not a boat was in sight….not a skimmer around.” Again, a large portion of our problems, save for the underwater plumes we hear about, could have been resolved with a huge effort at the source.

It’s been about containment…and while President Obama can in no way be blamed for the spill itself, he can be faulted for failing to take charge in the containment efforts. Even Colin Powell said the administration must “demonstrate that it’s doing everything that it can do,” adding the president did his press conference three weeks too late. [Powell is normally loath to criticize anyone in his retirement years…it could impact his $100,000 speaking fees, after all.]

George Will, in addressing the issue of presidential leadership, summed it up. The handling of the spill’s aftermath “strikes at the narrative of competence.”

Two other points. In the United States, BP has had 760 violations in its refinery operations. The next company has 8. [Washington Post] And heaven forbid there’s a major hurricane in the area of the blowout before the relief wells are finished because it could easily destroy any containment efforts taken before then. If this were to be the case, then the most dire scenarios concerning the health of the Gulf of Mexico could indeed come to fruition.

I also have to add, Mr. President, that when you fly down to the region it wouldn’t be that hard to make a quick stop on Bourbon Street, have a beer and be filmed listening to a band as a way of promoting tourism. I’d ask you to go to the WWII Museum, as well, but you wouldn’t get it.

Street Bytes

--Stocks tumbled to 4-month lows (the lowest weekly close for the Dow since last October) as concerns over the strength of the recovery on the heels of the jobs report, plus the ongoing European currency crisis, slapped around any investor foolish enough to go back into waters with a glistening sheen. On Friday, while the Dow was plummeting 324 points, 497 of the S&P 500 lost ground. PIMCO’s Mohamed El-Erian said “Investors should keep their seat belts on and tight.” Personally, if I was a passenger, I’d fling myself out onto the shoulder and hope for nothing more than a broken ankle before the driver takes the two of you over a cliff.

[I forgot last time to include a little tidbit from Joe Granville, who is still kicking and penning a newsletter. Only because of who he is would I include his musings, but about two weeks ago Granville wrote that between now and into 2011, he expects the Dow to break the 3/9/09 low of 6547, and then…it’s a free fall. “What I see then is the worst decline in history.” Now how could I not have this down for the record? Conversely, the average of 13 equity strategists that Bloomberg tracks maintain the S&P 500 will finish the year at 1268.]

--U.S. Treasury Yields

6-mo. 0.21% 2-yr. 0.73% 10-yr. 3.20% 30-yr. 4.13%

Rates, especially on the long end of the curve, keep plummeting. Given the geopolitical environment, and a euro that fell below $1.20 for the first time since March 2006, no one should be surprised.

--Economist David Rosenberg says 45% of the jobless (more than 6.5 million people) haven’t worked for 27 weeks or more, compared to 3.2 million this time last year. This is catastrophic. It also augurs for continued wage deflation when you have 5.6 people vying for each job opening.

--At a G-20 meeting in South Korea this weekend, finance ministers are tackling the issue of raising capital requirements on large multinational banks, but implementation may be a long ways down the road due to turf battles. And the banks have launched an intense lobbying effort, an example of which comes from Bank of America, as reported in the Wall Street Journal.

“In combination, the proposals will inevitably reduce credit availability, increase the cost of borrowing and lead to slower economic growth.”

Yup. To which I’d reply to said Bank of America PR person, “You should have thought about this years ago.”

At the same G-20 event, Treasury Secretary Timothy Geithner said the pace of global recovery depends on domestic demand in Japan and Europe, and that the world shouldn’t rely on U.S. consumers to carry the ball as in the past.

--Canada and Australia are two developed nations that have largely avoided the pain the rest of us have experienced. Canada’s first quarter GDP rose 6.1% and its central bank became the first G-7 nation to raise interest rates. Australia’s Q1 GDP rose just 0.5% over last year but it continued a long stretch of positive action. One wonders, however, if a succession of rate increases here was a bit too much as now Australia’s commodities based economy faces a slowdown from prime customer China for its products.

--And then there is India, which in light of China’s tapping on the breaks, may actually be the best story going today. India’s GDP rose 8.6% in Q1 and some state economists believe growth is headed to the 10% level again.

--May auto sales were pretty good; though remember they are still being compared to last year’s desultory numbers in the first half.

General Motor’s rose 17%, Ford’s 22%, Chrysler’s 33%, Honda’s 19%, Nissan’s 11% and Hyundai’s 33%. Toyota’s, however, were up only 6.7%.

--Late this week there was an out-of-control natural gas well in the Marcellus Shale reserve of Pennsylvania that has been garnering a lot of attention in recent months. While there were no injuries, the well shot explosive gas and polluted water as high as 75 feet into the air before crews were able to tame it more than half a day later on Friday, according to the Washington Post. Had it caught fire, you’re talking another catastrophe. More on this next week, as we’ve been touting the safety of natural gas operations in lieu of the Deepwater Horizon disaster.

--In an AP-GfK poll, 46% of Americans say they’re suffering from debt-related stress, though 53% say they feel little or no stress at all. [The other 1% are idiots and can’t make up their mind.] The average amount owed on credit cards is $3,900, but this is down from $5,600 last fall.

--Warren Buffett told a congressionally chartered panel investigating the financial crisis that he missed the warnings signs and failed to foresee the collapse. “The entire American public was caught up in a belief that housing prices could not fall dramatically.”

--More Americans traveled over the Memorial Day weekend than last year, but AAA estimates we will spend less on summer travel overall than in 2009.

--Good news…office leasing activity in Manhattan in May surged to the highest levels in nearly four years.

--And Continental Airlines had some encouraging news in announcing its May revenue per each seat flown a mile rose 23-24%, a sign business travelers may be returning.

--McDonald’s was forced to recall 12 million drinking glasses promoting the new Shrek movie because the painted designs contain the toxic metal cadmium, which can damage the liver, kidneys, lungs, nervous system and brain. The glasses were made in China.

--Hewlett-Packard is cutting a net 3,000 jobs; eliminating 9,000 in its enterprise services division while adding 6,000 in sales and delivery. HP employs 300,000 worldwide.

--Google is phasing out the internal use of Windows, a directive that began in January after Google’s Chinese operations were hacked, and could effectively end the use of it. As the Financial Times reported, “New hires are now given the option of using Apple’s Mac computers or PCs running the Linux operating system.”

--Apple CEO Steve Jobs told an audience at a technology conference that the idea for the iPad came before the iPhone. When asked about Apple’s increasingly tense relationship with Google, which has developed a Web browser and a computer operating system for its own cellphone, Jobs said, “They decided to compete with us, and so they are.”

Regarding the iPad, Jobs said the device was beginning to erode the usefulness of the personal computer, to which Microsoft CEO Steve Ballmer said, ‘Not so fast, Thin Man,’ as Ballmer scrambled to remain in the conversation.

[Even PIMCO’s Bill Gross, who doesn’t own a cellphone, admitted on CNBC the other day that he now had an iPad. Me? I’m still charging my Palm smartphone.]

--AT&T is the first wireless carrier to adopt separate plans for “data hogs.” Instead of paying $30 a month for unlimited data, customers will be given various options, with the more expensive plans covering 1,000 minutes of video, 400 song downloads or a million one-page e-mail messages.

Goodness gracious. What low-lifes have the time for all that? Sure, charge them $1,000 a month for all I care. Maybe they’ll get the message and become more productive members of society.

Said one analyst, “The biggest data pigs in the world are the iPhone guys.”

Most normal users should just stick to their existing plan because it’s amazing how little data you actually take up vs. the capacity.

--Templeton emerging markets guru Mark Mobius was in Beirut the other day and saw the spectacular growth I caught about five weeks ago there myself.

“We are very impressed by the high growth in Lebanon which is very attractive because this means that something right is happening and you are doing the right thing. We have been particularly interested in looking at the Lebanese banking and construction sectors.”

Rats….he was speaking at a big investment conference held at the Phoenicia Hotel where I stayed. That would have been interesting to crash.

Alas, by year end, all hell could once again break loose in Lebanon and Beirut won’t be immune to the violence.

[Lebanon’s tourism minister is expecting the biggest season ever this summer.]

--Just as I was told when I was in New Orleans, the supply of native oysters is running out already due to the spill. Many of the restaurants are scrambling for supplies from as far as California and Maryland.

--Uh oh…light beer sales are down, despite the fact I still drink light domestic myself until the personal portfolio recovers. Bud Light sales are down 5.3% this year and Miller Lite’s are off 7.5%, according to Ad Age.

But the Journal’s Eric Felten writes, “Advertising Age speculates that the dawdling of the economy has left 21-to-35-year-old men with pockets too empty to afford ‘premium’ (which is to say, heavily advertised) beers.”

Ah, Mr. Felten…and Ad Age? This is an improper use of the term ‘premium.’ Once and for all, domestic is just that, domestic. Anything outside U.S. borders is by definition premium, because virtually all beers brewed outside the U.S. of A. are superior. I don’t expect to see this mistake again…yet another sign of the apocalypse.

--Speaking of my portfolio, my nat gas play was up 10%, and we haven’t even had our first hurricane scare yet. But the China holding is floundering along with the rest of that market. It’s going nowhere until we get more clarity on the economic picture there.

--It goes without saying that the “Idiot of the Week” award goes to BP CEO Tony Hayward for saying on Sunday, “We’re sorry for the massive disruptions it’s caused to their lives. There’s no one who wants this thing over more than I do. I’d like my life back.”

[The “Good Guy of the Week” goes to Detroit pitcher Armando Galarraga.]

--Ripped from the pages of the Daily News, as reported by Jose Martinez:

“A Latina lovely says her bosses at Citigroup canned her for flaunting her ample assets at a midtown bank. Dangerously curvy Debrahlee Lorenzana contends her ex-bosses at Citibank in the Chrysler Building banned her from wearing sexy outfits or heels deemed ‘too distracting’ for male coworkers.

“ ‘I can’t help it that I have curves,’ Lorenzana told the Daily News. ‘And I’m not going to go eat and gain 50 or 100 pounds because my job wants me to be the same size as everyone else.’”

Ms. Lorenzana added, “Never did I ever show cleavage.”

“It’s been nearly a year since she worked there, but male customers at two midtown branches still recall going out of their way for a peek at her….

“Harold Mack, a paralegal, fondly recalled Lorenzana wearing ‘business-casual type things.’

“ ‘Whew, she was a hot one,’ said Mack, 26. ‘I’m sad she’s gone, but she did stick out. I know she distracted me whenever I came into the bank.’”

Foreign Affairs

North/South Korea: It’s been estimated that the cost of reunification between these two would be $900 billion over four decades. But that topic remains secondary to the current crisis on the border. Despite China’s lack of cooperation, as noted below, one wonders if there is any talk between U.S. and Chinese officials about securing North Korea’s nuclear weapons with Special Forces. [The fact Defense Secretary Robert Gates wasn’t visiting China because of the latter’s still being miffed at Washington’s arms sales to Taiwan is irrelevant. That’s not a new story. But thinking outside the box, I’m just wondering if secret talks are taking place.]

“China has been treating its neighbors, and the world, to a demonstration of why its rising power is not necessarily to be welcomed. Though it has become undeniable that its neighbor and client, North Korea, committed an act of war by sinking a South Korean warship in March, Beijing continues to shield the loathsome regime of Kim Jong-il….

“China’s best response came (last) Friday when Premier Wen Jiabao, on a visit to Seoul, reportedly told President Lee Myun-bak in a closed meeting that Beijing would not protect the North if it concluded that the North was responsible. South Korean officials took that as a hint that China might not oppose Mr. Lee’s plan to seek a UN Security Council resolution condemning the Kim regime. Yet China has offered no sign that it will take any action of its own to pressure the North.”

Separately, Japan and South Korea vowed to stand united against Pyongyang, while a UN report on implementation of sanctions against the North said its research indicated that Lil’ Kim is continuing to supply Iran and Syria, as well as Burma (see below) with nuclear and ballistic missile technology, according to a copy of the report obtained by the AP.

Afghanistan: According to the Afghan financial intelligence unit, more than $1.3 billion in Saudi funds has flowed into Afghanistan, through Pakistan, with the sponsorship of terrorism its most likely use, as reported by the London Times. And the money flows are evidently increasing.

As for the Kandahar operation, which commences this month, U.S. commanders talk of squeezing rather than routing the Taliban that is embedded in the population of one million. It’s about winning the hearts and minds and if NATO is unsuccessful here, pacifying the rest of Afghanistan is impossible.

The U.S. is in a box because it can’t cause a lot of damage and risk civilian casualties as this will only be used for propaganda purposes. The Taliban thus has every incentive to put up a fight.

On the issue of the killing of al-Qaeda’s No. 3, Sheik Saeed al-Masri, in a drone attack in Pakistan, this was obviously a major success in the war on terror, and one can only hope that in tracking al-Masri, the U.S. is that much closer to finding bin Laden and Zawahiri.

But some of us can be excused for being a bit cynical, nine years after 9/11. There have been 10 other occasions in the past decade where an individual described as al-Qaeda’s No. 3 has been blown away and each time there was someone else to quickly replace him, as noted in the Washington Post. A former CIA analyst told the paper, “They know they’re going to be hit and they’ve planned somehow for it. We just don’t know what the bench is, or how deep.”

I’d point to the above bit on financing that speaks volumes, though in this case it is probably flowing more to the Taliban than al-Qaeda.

Lastly, Afghan President Hamid Karzai launched his ambitious peace plan, the peace jirga, or ‘circle jerk,’ where about 1,300 tribal leaders sit in a tent and talk about their smuggling operations, even as the Taliban launched an unsuccessful suicide attack on the opening day. To me, all you need to know is that Karzai’s opponent in the recent presidential election, Abdullah Abdullah, is blowing it off, just as the White House blew off Abdullah when the election was stolen from him.

Iraq: According to a CNN survey, 64% of Americans favor the president’s plan to keep just 50,000 troops in Iraq by end of the summer, with 35% opposed. But that approval drops to 51% if Iraq does not have a stable government by August and there is widespread violence at that time. Well, there are zero signs a government will be formed anytime soon.

My friend, Michael Young, adds on Washington’s imminent abandonment of Iraq. “Such an ally, located at the heart of the Middle East, would be valuable to Washington and represent the only serious Arab counterweight to Iran.”

Somalia: Clashes between Somali government forces and Islamist militants expanded late in the week with at least 28 killed in the capital of Mogadishu. The government actually controls about four blocks of the entire country and it’s a wonder it still exists.

Coincidentally, the Washington Post had a story on Friday about the Obama administration’s rapid expansion of the use of Special Forces, with commanders “developing plans for increasing the use of such forces in Somalia.” 

One military official told the Post, “We have a lot more access.” The White House, he said, is “asking for ideas and plans…calling us in and saying, ‘Tell me what you can do. Tell me how you do these things.’”

Meanwhile, in an absurd United Nations report this week, the UN questions the administration’s authority under international law to conduct drone attacks. Tough.

Thailand: Prime Minister Abhisit survived a no-confidence motion and promised there would be an independent investigation into whether the army used excessive force to clear anti-government protesters from Bangkok’s streets. But whereas the Red Shirts turned down Abhisit’s offer at the height of the protests for an early election in September, now Abhisit isn’t saying when he would hold them. I can’t emphasize enough what idiots the Red Shirts were not to take the deal offered.

Burma (Myanmar): The Washington Post’s Joby Warrick reports, “Burma has begun secretly acquiring key components for a nuclear weapons program, including specialized equipment used to make uranium metal for nuclear bombs, according to a report that cites documents and photos from a Burmese army officer who recently fled the country.

“The smuggled evidence shows Burma’s military rulers taking concrete steps towards obtaining atomic weapons…But it also points to enormous gaps in Burmese technical know-how and suggests that the country is many years from developing an actual bomb.”

The more the merrier when it comes to nukes, I always say.

France: President Sarkozy is now part of a long-simmering kickbacks scandal as police in Luxembourg tied him to a company that handled tens of millions in illegal funds. The case goes back to 1994 and the sale of French submarines to Pakistan. Opponents allege money from the contract was funneled to finance a 1995 presidential campaign managed by Sarkozy, then Budget Minister.

What’s particularly disconcerting about this, however, is the feeling of two French judges that a dispute between France and Pakistan over unpaid commissions resulted in Pakistani agents blowing up a bus carrying French-employed shipyard workers in Karachi in 2002, which resulted in 14 dead, 11 of them French. The attack was originally blamed on al-Qaeda. [London Times]

Britain: David Laws, a member of the new coalition government as Chief Secretary to the Treasury, and a Liberal Democrat, was forced to resign after admitting he claimed expenses to pay rent to his partner. Laws was instrumental in brokering the deal between Nick Clegg and Prime Minister David Cameron.

Germany: And in yet another high-profile resignation, German President Horst Koehler was forced to step down. A member of Chancellor Merkel’s Christian Democrats, Koehler said in a radio interview following a visit to German troops in Afghanistan that with Germany’s dependency on exports, military deployments could be “necessary…in order to defend our interests, for example free trade routes.”

Many Germans, uneasy over the country’s past, took Koehler’s remark to be about an unpopular deployment in Afghanistan, though he said he was referring to something like anti-piracy patrols off the coast of Somalia.

Colombia: Juan Manuel Santos, a former defense minister and ally of Alvaro Uribe, was unable to avoid a run-off when he fell short of 50% in last weekend’s vote, though his 46.6% was well ahead of his closest rival and he should handily win on June 20.

Random Musings

“For five weeks, it looked as though Obama considered the gushing that became the worst oil spill in U.S. history a distraction, like a fire alarm going off in the middle of a law seminar he was teaching. He’ll deal with it, but he’s annoyed because it’s not on his syllabus….

“(It’s) strange that he would not have a more spontaneous emotional response to another horrendous hit for Louisiana, with residents and lawmakers crying on the news and dead pelicans washing up on shore. But then, he didn’t make his first-ever visit to New Orleans until nearly a year after Katrina hit. ‘I never had occasion to be here,’ he told the Times’ Jeff Zeleny, then at the Chicago Tribune.

“Just as President Clinton once protested to reporters that he was still ‘relevant,’ President Obama had to protest to reporters last week that he has feelings.

“He seemed to tune out a bit after the exhausting battle over health care, with the air of someone who says to himself: ‘Oh, man, that was a heavy lift. I’m taking a break.’

“He’s spending the holiday weekend in Chicago when he should be commemorating Memorial Day here with the families of troops killed in battle and with veterans at Arlington Cemetery.

“Republican senators who had a contentious lunch with the president last week described him as whiny, thin-skinned and in over his head, and there was extreme Democratic angst at the White House’s dilatory and deferential attitude on the spill….

“Obama and top aides who believe in his divinity make a mistake to dismiss complaints of his aloofness as Washington white noise. He treats the press as a nuisance rather than examining his own inability to encapsulate Americans’ feelings.

“ ‘The media may get tired of the story, but we will not,’ he told Gulf Coast residents when he visited on Friday. Actually, if it weren’t for the media, the president would probably never have woken up from his torpor and flown down there.”

“The failure of the top-kill technique in the Gulf of Mexico represents an interesting turning point on the Obama presidency. It symbolizes the end of the period of lightning advance and the beginning of the period of nasty stasis.

“President Obama swept into office having aroused the messianic hopes of his supporters. For the past 16 months he has been on nearly permanent offense, instigating action with the stimulus bill, Afghan policy, health care reform and the nearly complete financial reform. Whether you approve or not, this has been an era of bold movement.

“But now the troops are exhausted, the country is anxious, the money is spent and the Democratic majorities are teetering. The remaining pieces of legislation, on immigration and energy, are going nowhere….

“Meanwhile, the biggest problems are intractable. There’s no sign we will be successful in preventing a nuclear Iran. Especially after Monday’s events, there’s no chance of creating a breakthrough in the Arab-Israeli dispute. Unemployment will not be coming down soon. The long-term fiscal crisis won’t be addressed soon either.

“In other words, if the theme of the past 16 months was large change, the theme of the next period will be gridlock and government’s apparent impotence in the face of growing problems.”

--I have figured that not enough will be known about the health care legislation by the time voters go to the polls in November for there to be a real impact, either way. But writing in the Wall Street Journal this week, Karl Rove talks of a Congressional Budget Office update that found the new legislation would cost $115 billion more than estimated when it was enacted, and that October will see the first round of Medicare cuts.

But watch what comes out of Congress over the coming weeks because it’s my understanding some of these cuts will be restored and, again, the whole point of ObamaCare in 2010 was to roll out only the goodies this year before the pain begins to hit 2011 and beyond.

Rove notes, however, that aside from doctors and health care professionals talking to patients over the coming months about the negatives, “According to a survey by Towers Watson, a human resources consulting firm, 88% of companies plan to pass on increased health-care benefit costs to employees, 74% plan to reduce benefits, and up to 12% will drop all coverage for employees. Retirees won’t fare well either: 43% of employers that now provide retiree benefits are likely to reduce or eliminate them thanks to the new health legislation.

“Employers will not wait until the last moment to spring changes on their workers. They understand it is in their best interest to fully educate employees about the ramifications of the new health-care bill. Many have already begun helping employees understand why companies are being forced to make inevitable changes.

“The health-care concerns of millions of Americans will ripple through the electorate before November. When joined with other voter concerns on jobs, spending and deficits, these ripples are likely to create what analysts call a ‘wave’ election, which will wash away effective Democratic control of Congress.”

--A CNN/Opinion Research Poll finds that the economy is the most important issue facing the country today…45%. The federal budget deficit and health care are next at 12% and 11%, respectively. [The poll was conducted May 21-23, so I’m assuming the BP oil spill would register were it taken today.] The wars in Iraq and Afghanistan capture just 6% and terrorism 4%.

But regarding this last one, terrorism, the CNN survey was quite revealing. 55% of Americans now believe “that there will be further acts of terrorism in the United States over the next several weeks.”  Last August the figure was 34%. Even I am surprised at today’s number.

The week of May 24, coincidentally, Obama said the following of the international order that he sought.

“One that can resolve the challenges of our times – countering violent extremism and insurgency; stopping the spread of nuclear weapons and securing nuclear materials; combating a changing climate and sustaining global growth; helping countries feed themselves and care for their sick; resolving and preventing conflict, while also healing its wounds.”

“That’s a big agenda. But isn’t something missing? Nowhere in the long sentence, in the introduction to his new national security strategy, does Obama suggest that the international ‘engagement’ he proposes should serve to combat tyranny or oppression, or promote democracy. In that sense, it is typical of the first comprehensive account Obama has offered of his administration’s goals in the world. In theory – as in the practice of his first year – human rights come second….

“Definitions of strategy throughout the report, from how to defeat al-Qaeda to resolving the Israeli-Palestinian conflict to dealing with North Korea and Iran, exclude any mention of democracy or human rights….

“ ‘When our overtures are rebuffed,’ it says, Washington will use ‘public and private diplomacy’ and ‘incentives and disincentives’ in ‘an effort to change repressive behavior.’

“But will this policy apply to Russia – where the administration so far has offered nothing but incentives? ‘We support efforts within Russia to promote the rule of law, accountable government and universal values,’ the policy not-very-clearly says. How about the Arab Middle East? ‘We will continue to press governments in the region to undertake political reforms and to loosen restrictions on speech, assembly and media,’ says a sentence buried on Page 45.

“Maybe such textual analysis is meaningless. But Obama’s written strategy has a lot in common with what has actually happened since he took office. It will sound more familiar to the dissident Greens of Iran, or to the leaders of the nascent pro-democracy movement in Egypt, who are already deeply disillusioned with this administration. It will confirm the thinking of Vladimir Putin of Russia and Hu Jintao of China that strategic partnerships with the United States won’t require domestic reforms.

“Obama has already demonstrated that he does not accept Bush’s conclusion that the promotion of democracy and human rights is inseparable from the tasks of defeating al-Qaeda and establishing a workable international order. But nowhere in his 52-page doctrine is there a coherent explanation of why.”

--Staying on the topic of the CNN poll, former New Jersey Gov. Tom Kean, co-chairman of the 9/11 commission, said in a Star-Ledger interview that “This is the most dangerous time I’ve seen since 9/11. Al-Qaeda is constantly learning our weaknesses, and the U.S. intelligence community is dysfunctional. I am feeling a sense of urgency,” about President Obama’s “failure to clarify who is in charge” of the massive intelligence gathering organization. If we don’t get our act together, we’re going to be in serious trouble.”

“For several years after 9/11, our government was successful in attacking decision-making centers of al-Qaeda. They responded by reorganizing themselves on a much smaller scale. They may be less sophisticated and less deadly, but they are also much harder to catch,” said Aaron Friedberg, professor of international affairs at the Woodrow Wilson School at Princeton University, and deputy national security adviser to former Vice President Dick Cheney.

Kean notes that six years after the recommendations of the 9/11 commission, “The FBI is still not fixed, and Homeland Security spends way too much of its time reporting to the 100 congressional subcommittees that claim some type of jurisdiction. We can’t count on the terrorists being incompetent forever.”

--With all of Europe’s economic and growing social issues, there is little doubt the attitudes towards immigrants will worsen rapidly.

--Last week I said I’d wait 24 hours before opining on the Joe Sestak/Bill Clinton job offer and upon reflection it didn’t warrant any further discussion.   But then a few days later we learned the White House made a similar offer to former Colorado House speaker Andrew Romanoff, who is running in a primary against Sen. Michael Bennet, who in turn took over from Ken Salazar when he resigned to become interior secretary; the White House supporting Bennet. Republican Congressman Darrell Issa (Calif.) asked, “How deep does the Obama White House’s effort to invoke Chicago-style politics for the purpose of manipulating elections really go?”

Is an independent investigation now warranted? Maybe, though I hope there isn’t one. Should Republican candidates nonetheless use these examples in their campaigns this fall? Absolutely. The man, Obama, who ran on a platform of transparency, has been far from it.

--Turning to the weather, this spring has been the warmest on record in New York City, almost five degrees above normal. Of course what this has to do with anything I really couldn’t tell you.

--Or maybe Al Gore got this data, sat Tipper down, and said, “See, this is what I’ve been talkin’ about!” At which point Tipper turned to Al and said, “You’re such a jerk. How I ever spent 40 years with you I’ll never know. I’m leaving.”

Yes, this summer will mark ten years since the two shared spit on stage at the Democratic National Convention. Much has changed in the world since then, and come to think of it, not a single thing that was good when you look at the big picture.

So I blame everything bad in the last ten years on Al and Tipper Gore.

--Finally, in reading various pieces on Memorial Day, some serious thought. There are about 1.41 million enlisted men and women in the Army, Marines, Navy and Air Force. 225,000 are deployed in combat zones, including Iraq and Afghanistan. Another 28,500 are in South Korea and 47,000 in Japan, meaning in the blink of an eye they could be involved in combat situations should Kim Jong-il not find his hair mousse or something one morning. Our presence in Japan, at Okinawa, resulted in Prime Minister Hatoyama’s resignation when he had to admit that in this scary time, his nation needed our presence there after all, thus breaking his campaign pledge to kick us out. South Korea, too, has now seen the light. When I was in Seoul a few years ago I was writing of how the American military was pulling its forces back from forward bases in the city in order to lower our profile at the government’s request. Today, while the younger generation in South Korea struggles with the meaning of the crisis, their elders sleep a little better at night knowing the United States is going to support them all the way should war break out. 

As Max Boot put it in a Los Angeles Times op-ed, he having traveled from the Middle East to Far East recently, visiting Central and Pacific Command, while there may be a lot of anti-Americanism even in the Age of Obama, “those countries that dismiss the prospects for continuing American leadership do so at their peril. The U.S. still possesses unprecedented power projection capabilities, and, just as important, it is armed with the goodwill of countless countries that know the U.S. offers protection from local bullies. They may resent us, but they fear their neighbors, and that’s the ultimate buttress of our status as the world’s sole superpower.”

Mark Helprin had a terrific op-ed in the Wall Street Journal on Memorial Day…in part:

“(A) universal connection links every living American with those who have fallen or will fall in American wars and overrides the lapses in sustaining and honoring their memories. We are and shall be connected to them by debt and obligation. Though if by and large we ignore the debt we owe to those who fell at Saratoga, Antietam, the Marne, Pointe du Hoc, and a thousand other places and more, our lives and everything we value are the ledger in which it is indelibly recorded. And even if we fail in the obligation, it is clear and it remains.

“What do we owe soldiers on the battlefields of the present or – do not doubt it – the future? How does one honor the inexpressibly difficult decision to walk toward annihilation, in some instances guaranteed, for the sake of the imperfect strategies of war, their confused execution, and their uncertain result? What can we offer the soldiers who will not know the outcome of their struggle, or ever again see those left behind?

“We owe them a decision to go to war ratified unambiguously by the American people through their constitutional and republican institutions. Except where instantaneous response is necessitated by a clear and present danger, this means a declaration of war issued by a Congress that will fully support its own carefully determined decision and those it sends to carry it out – nothing less, nothing hedged, nothing ducked….

“The debt we owe, and in regard to which we are at present deeply in arrears, may be difficult to pay but it is easy to see. To grasp its conspicuous clarity one need only walk among the graves and pause to give proper thought to even just one life among the many. Read slowly the name, the dates, the place where everything came to an end.

“I have seen lonely people of advancing age, yet as constant as angels, keeping faith to those they loved who fell in wars that current generations, not having known them, cannot even forget. The sight of them moving hesitantly among the tablets and crosses is enough to break your heart. Let that break be the father to a profound resolution to fulfill our obligation to the endless chain of the mourning and the dead. Shall we not sacrifice where required? Shall we not prove more responsible, courageous, honest, and assiduous? Shall we not illuminate our decisions with the light that comes from the stress of soul, and ever keep faith with the fallen by embracing the soldiers who fight in our name? The answer must be that we shall.”

Pray for the men and women of our armed forces, and all the fallen.

Gold closed at $1217
Oil, $71.51

Returns for the week 5/31-6/4

Dow Jones -2.0% [9931]
S&P 500 -2.2% [1064]
S&P MidCap -3.5%
Russell 2000 -4.2%
Nasdaq -1.7% [2219]

Returns for the period 1/1/10-6/4/10

Dow Jones -4.8%
S&P 500 -4.5%
S&P MidCap +1.3%
Russell 2000 +1.4%
Nasdaq -2.2%

Bulls 39.8
Bears 28.4 [Source: Chartcraft / Investors Intelligence]

Have a great week. I appreciate your support.

Brian Trumbore

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