Week in Review

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Week in Review

08/14/2010

For the week 8/9-8/13

Wall Street

The rally in equities came to a screeching halt this week as all manner of responsible and respected experts talked of a U.S. and global economy that wasn’t exactly firing on all cylinders. 

The Federal Reserve, in opting to leave the short-term funds rate unchanged and essentially zero, said it was also looking to keep longer-term rates low as well through the appropriate reinvestment of proceeds from its expiring mortgage-backed securities into longer-dated Treasuries, thereby maintaining the size of the Fed’s balance sheet instead of a natural shrinking of it because you see, kids, when Chairman Ben Bernanke used the term “unusual uncertainty” in describing the economic outlook last month during one of his appearances before Congress, he wasn’t kidding.

This week the Fed said the pace of recovery has slowed and the expansion would be “more modest in the near term than anticipated.” Of course you could counter that in keeping short-term rates at zero, thereby killing seniors and savers, who don’t feel like stretching for risk because often this is like playing Russian roulette if you don’t know what you’re doing, the economy hasn’t benefited one bit, and even though mortgage rates have hit an all-time low of 4.44% on a 30-year fixed, housing hasn’t benefited much, and in terms of refinancing, while applications are up and this is good, it’s pretty tough to find a banker to give you a new mortgage when your existing one is underwater, though there are federal programs now that do just that so check around…not that I am personally happy with this.

But this was also a week where PIMCO’s esteemed Mohamed El-Erian said there was a 25% risk of outright deflation in the U.S., not an insignificant number, while Goldman Sachs said there is a 25%-30% chance of a double-dip in the economy, which while there isn’t an official definition of one, all of us have to agree is another period of at least two consecutive quarters of negative growth.

I’ve said, though, that when it comes to a double-dip, whether or not we actually get there isn’t as important as the fact that it continues to feel like a recession, today. That’s what’s influencing consumer and corporate behavior. We’re not spending as much as we normally do and corporations aren’t taking their considerable cash piles and investing it in new workers.

But don’t just listen to PIMCO and Goldman Sachs, listen to Cisco Systems CEO John Chambers, the straightest shooter in Corporate America. Yes, Cisco’s earnings report was strong, and Cisco is one company that plans on continuing to hire new workers, mostly in the U.S. But Chambers, who has been bullish during the recovery, echoed Bernanke when he said “unusual uncertainty” was “an appropriate description of what’s occurring” in the global economy.

So it’s no mystery why in an NBC News/Wall Street Journal survey, that 32% of Americans believe we’re headed in the right direction, and 58% believe we’re headed in the wrong one, while nearly 7 in 10 believe the economy hasn’t yet hit bottom.

It’s not just America that is gloomy these days. I would submit that the good news out of Germany on the GDP front, Friday, is a total anomaly when it comes to Europe. The German economy grew at its fastest quarterly rate since reunification in 1990, up 2.2% over the first quarter and far better than expected. Germany is the powerhouse in Europe, but it is far from representative of the health of the rest of the continent, in no small part because German manufacturers (and government policy) have a way of bullying the competition.

In Britain, the Bank of England said it was pessimistic about recovery in the UK, and that any bump in inflation, which it is experiencing today, will be tamed by slower growth. There are fears of a double-dip in housing here as well.

And why would Britain suddenly turn a bit gloomy? For the exact reason I’ve been giving for weeks now when someone would attempt to offer up unknowing bullishness concerning Europe.

In case you forgot, Britain’s new coalition government is slashing public spending to the bone, with other nations to follow. I was amused by this headline in the New York Times:

There were actually many experts who acted as if new Prime Minister David Cameron was kidding when he first assumed office. Ah, no he wasn’t! The initial cuts of $10 billion are but a drop in the bucket compared to what’s coming down the road there, yet as Sarah Lyall reports in the Times:

“(The) reduction measures have already had severe consequences. Public sector workers across the country, except for the lowest paid, will have their salaries frozen for the next two years. Oxfordshire, facing a nearly $1 million trim in its safety budget, has been forced to shut down all of its 161 traffic speed cameras.

“Nottinghamshire plans to close three recycling facilities and some of its day care centers (and so on)….

“But far worse cuts await in October, when the government issues its long-term budget plans. Mr. Mutton (of Coventry), predicted that the next round of cuts would cost the city at least 10,000 jobs. Analysts have estimated that about 600,000 public-sector jobs could be lost nationwide.”

That’s real pain…and it’s not exactly conducive to a buoyant consumer or housing market. [But to keep repeating myself, Britain will emerge far stronger, as will the United States once it starts seriously biting the bullet.]

The thing about Europe, though, is it’s not just about various nations, Spain being among them, slashing budgets during an already tough time for their economies. It’s also about the fact that the euro wounds from the first round of the crisis this spring haven’t totally heeled. Slovakia, for one, has been under scathing attack all week for being the only member of the eurozone to reject the Greek aid package, and by a 69-2 vote! A spokesman for German Chancellor Merkel said, “All member states committed themselves politically to assistance for Greece. Every member relies on solidarity; solidarity is no one-way street.”

“It is a breach of the commitment undertaken by Slovakia in the Eurogroup.”

True, Slovakia was only contributing 1% of the loan package so that’s not in jeopardy, but their stance is a shot across the bow and I would submit that round two of the European debt crisis is not that far away.

Because it’s not just about an outrageous 69-2 vote in Slovakia, it’s also about the fact that suddenly, there are renewed questions as to the health of Ireland’s financial institutions, including state-owned Anglo Irish Bank which is kind of like their Fannie Mae and Freddie Mac…as in the Irish government keeps injecting mammoth swaths of cash with seemingly no end in sight. And Allied Irish Bank could be next up on the nationalization train. [I’m going to be in Ireland in a few weeks and hope to pick up a good story or two.]

Turning to China, July industrial production came in up 13.4%, the weakest pace in 11 months, while retail sales rose 17.9% for the month, down from June’s pace. True, these are still very solid numbers but it’s a slowdown nonetheless. Exports for the month, up 38.1%, were however better than expected but down from 43.9%. And in the critical housing market, July home prices were up 10.3% over year ago levels, unchanged from June, and a good sign. But while there is concern China’s slowdown is accelerating, personally I remain in the camp that says the government will manufacture a soft landing, particularly when it comes to housing. A decline is coming on this front, but no more than 15-20%, which would be healthy.

Back in the States, banks are increasingly forgiving those who took out home-equity loans and lines of credit as the homeowner threatens to walk away instead. As one fellow put it, “Americans seem to believe that anything they can get away with is O.K.” Ain’t that the truth. Settle on my terms or I’ll declare bankruptcy.

And a comment on the House passing a $26 billion sop to teachers and unions (through the states), which following Senate passage earlier, President Obama quickly signed.

“(Taxpayers) are figuring out that these state bailouts are only making unions more reluctant to share their sacrifice. While Mr. Obama quotes the union figure of 160,000 potential lost teacher jobs, those don’t have to come out of the classroom. According to research by Eric Hanushek of Stanford University, student enrollment grew by 22% from 1990 to 2007, but teacher employment grew by 41%. Since 2000, enrollment has grown by 5% but teacher employment by 10%.

“The unions themselves could have prevented some layoffs had they been willing to adjust their rich benefits. In Milwaukee, for example, nearly all of the 500 teacher layoffs announced earlier this year could have been avoided if the unions had agreed to change health plans that cost $23,000 per teacher per year for family coverage. They could have accepted a still-rich $17,000 plan. The unions chose for layoffs, betting (correctly) that Democrats in Washington would come to their rescue.

[Ed. I think I’m going to get sick, especially seeing as I’m paying $800 a month for health insurance, as a single, all out of pocket.]

“Keep in mind that this teacher bailout also amounts to a huge contribution by Democrats to their own election campaigns. The National Right to Work Committee estimates that two of every three teachers belong to unions. The average union dues payment varies, but a reasonable estimate is that between 1% and 1.5% of teacher salaries goes to dues. The National Education Association and other unions will thus get as much as $100 million in additional dues from this bill, much of which will flow immediately to endangered Democratic candidates in competitive House and Senate races this year.

“So in the name of still another ‘stimulus,’ Democrats are rewarding their own political funders, putting the most fiscally responsible states into even greater distress, and postponing the day of reckoning for spendthrift states. Oh, and Mr. Obama rushed to sign the bill Tuesday, violating his campaign pledge to give the public five days to read legislation online. As we say, the only way for voters to stop such fiscal abuse is to run this crowd out of town.”

Street Bytes

--The major averages took it on the chin, with the Dow Jones giving back 3.3% to 10303, while the S&P 500 lost 3.8% and Nasdaq, 5.0%. All three are now down for the year. John Chambers’ comments on the tech front didn’t help, nor did the general malaise…the dog days of August. But the big header, Wednesday’s 265-point drubbing, was more about a delayed reaction to the Fed’s comments that the economy is sucking wind, plus a far worse trade deficit figure forced economists to go back to the drawing board and reduce their forecasts on 3rd quarter and second half GDP.

--U.S. Treasury Yields

6-mo. 0.18% 2-yr. 0.53% 10-yr. 2.67% 30-yr. 3.86%

Look at that 10-year. The Fed’s statement this week reiterated that inflation will remain “subdued” for some time and this week’s figures on consumer prices for July certainly didn’t cause any great consternation on this front, with prices rising 0.3%, but up just 0.1% ex-food and energy. The CPI for the past 12 months is only up 1.2%, with the core 0.9% over the same period. Again, until wages start rising, which isn’t happening anytime soon, don’t bother me about any risk of much higher prices based on the “official” inflation data, the only figures the bond market cares about.

--The U.S. budget deficit through July came in at $1.169 trillion vs. $1.267 trillion for the comparable period in 2009. But with two months to go in the fiscal year, there seems little doubt the final tally will once again exceed $1.4 trillion. The budget deficit has had a record 23 straight months of red ink. Aren’t we good? Actually, the only reason why the deficit decreased slightly is because corporate tax collections are up with better earnings.

--Some other global tidbits. Greece’s second quarter GDP was down 1.5% as it attempts to do all the right things in slashing spending. Taiwan’s exports for July were much better than expected, up 38.5%. India’s industrial production rose 7.1% in June, the slowest in 13 months, and the Aussie unemployment rate ticked up to 5.3%, though just about every nation on earth would kill for this. Aussie Aussie Aussie!!!

--In a surprise announcement, General Motors CEO Ed Whitacre announced he was leaving Sept. 1, to be replaced by director Dan Ackerson. Whitacre, who took over for Fritz Henderson as CEO in December, gets a large share of the credit for helping turn the automaker around after the government’s $50 billion bailout. GM reported second-quarter net income of $1.54 billion, up from the $1.07 billion it reported in the first. Last year, GM lost $18.9 billion in the first six months.

So now GM is looking to raise $12 billion to $16 billion in what could be the second-largest IPO in U.S. history behind Visa Inc.’s $19.7 billion in March 2008. The goal of GM is to sell a fifth of the 61% U.S. Treasury stake to reduce the government to a minority owner.

--U.S. farmers are prepared to rock and roll on the wheat front with the devastation of Russia’s crop in its drought and fires, with the Agriculture Department expecting U.S. wheat exports to soar 36%, and at higher prices. Due to the Russian situation, wheat prices are up 50%-60% in just the past two months. But U.S. farmers could easily have weather issues of their own, such as the current flooding in Iowa.

--In my pieces on the BP oil spill, I’ve said that while no one knows for sure what the long-term impact would be in the waters, certainly we shouldn’t be surprised to learn of a few dead zones, noting there are already significant ones off the Oregon-Washington coast from agricultural/pesticide runoff.

This week, Leslie Patton of Bloomberg had a story on how the Gulf of Mexico already has a significant low-oxygen dead zone “about the size of Massachusetts, caused by chemical runoff into the Mississippi River that flows into the sea,” which has nothing to do, it would seem, with the BP spill. The National Oceanic and Atmospheric Administration said this summer the area is twice as large as last year, and the fifth-largest since measurements began in 1985. Thus far in Texas’ shrimp season, which opened July 15, the catch is 25% of normal. The total harvest in the western gulf, including the dead zone, is expected to be 20% below the historical average.

As for the well, it’s almost permanently plugged, save for a remaining issue, while BP announced its costs had risen to $6.1 billion.

--China is giving 2,000 industrial companies two months to close obsolete production facilities or face cuts in credit and a suspension of government approvals. Aside from being an effort to reduce overcapacity, the move is designed to improve the environment in shutting outdated factories that are poisoning the land, water and skies.

--Social Security celebrated its 75th birthday, giving me yet another excuse to say, as I have since day one of this column in 1999, that the idea of privatizing the program is the single dumbest idea I’ve heard, which should have been disproved in the last market crash, but some Republicans insist on resurrecting it again. 

Social Security is not in trouble. Raise the retirement age to 70, gradually, and adopt my own, unique idea of giving a COLA (cost-of-living adjustment) of inflation minus 1% just one or two years…giving retirees ample notice…say 2013 and maybe 2015…and you’d be amazed how the numbers play out. Retirees will still have something decent to live on and we won’t have to play around with means testing. This program is one that truly makes America special, ensuring that we don’t live as peasants as the elderly do in Russia, as long as we’ve acted just halfway responsible with our finances in the years leading up to those first benefits. And for those who say, “But why am I paying for others? I should be the one responsible for my money,” tough.

As for Medicare, I’ve always said that is an entirely different issue.

--Oracle is suing Google for patent and copyright infringement, as the latter’s cellphone sales explode. Google, you see, uses the Java operating system (relabeled Android), which was Sun Microsystems’ baby, but then Oracle acquired Sun. What is perplexing to some, though, is that Google was deemed to have rights to use Java under a licensing agreement, and as a former Sun manager told the Wall Street Journal, “Everyone is using Java.” But now Oracle, owner of Java, wants to be paid, whereas Sun was criticized for basically giving it away.

Overall, global sales of phones using Google’s Android platform now exceed Apple’s iPhone, though the growth comes largely at the expense of Nokia and Research in Motion’s BlackBerry. Beneficiaries include Motorola and Sony.

--Speaking of BlackBerry, Saudi Arabia said it would allow RIM to continue to use its phones in the Kingdom, but India is the new country that is ready to suspend usage.

--The government’s investigation into complaints of sudden acceleration of Toyota vehicles has found only one instance in which an accelerator pedal became trapped under a floor mat out of 58 vehicles that crashed, according to a preliminary report to Congress, and the New York Times. Toyota claims its contention that electronics were not at fault and that many of the reports of sudden acceleration were the result of human error is vindicated.

--Not including a reserve fund for natural disasters that didn’t have to be accessed, the 2010 Census cost $800 million less than budgeted because the 72% mail-back response rate was higher than expected. But it still cost $13.1 billion vs. $8.2 billion in 2000.

--New York City is expected to welcome a record 47.5 million tourists this year, exceeding the 2008 peak. Attendance at museums and at Broadway shows is also at all-time high. I forgot to mention that about three weeks ago I went to the Metropolitan Museum of Art to escape the heat for a few hours on a Saturday (I was already in the city) and couldn’t believe how packed it was, at $20 a head. [I had also forgotten how great the place is and need to get back there when the traffic isn’t quite as intense.]

--Grocery prices fell 14% in the last 18 months in Ireland as the big supermarket chains, which control 70% of the market, deal with bargain-hunting customers. A sign of things to come here?

--Deflation, part deux: The California mansion where Michael Jackson died is on the market for about $29 million, or $10 million less than the 2008 price tag.

--Magazine sales continue to drop, with 8 of the top ten titles seeing declines in circulation over the first half of the year vs. 2009. The biggest loser is Reader’s Digest, down 25%. But, in an encouraging sign, monthly ad sales for August jumped 10%, the first double-digit increase in six years. [Crain’s New York Business]

--You’ve gotta love McDonald’s, which continues to rock with sales up 7% in July across the globe as it took advantage of the heat and sold a ton of smoothies and frappes.

And get this. New York City’s health department has just introduced a grading system for restaurants. A is the highest mark, followed by B and C. Starting in September, these grades will have to be posted prominently in restaurant windows. 

So the first As have been given out to a McDonald’s on Sixth Ave., and even a White Castle on East 103rd street in Manhattan, but famed Jean Georges received 15 violations and was faulted for holding cold food above 41 degrees, while The Palm received 20 violations and the Four Seasons Hotel eatery, 17. All of these only get a B and have a few weeks to get up to par or everyone will see a B, not an A, in the window. Love it.

--Meanwhile, at the Indiana State Fair, the newest offering is a burger served between two Krispy Kremes, or the doughnut burger. Dennis Reas, the concessionaire, says that to survive selling novelty fair food, he needs to think up new products every year.

Now that’s my kind of job. Get a bunch of friends, a case of cold domestic (the economy still precluding the purchase of premium), and just brainstorm. Maybe have a test kitchen handy. And a fire extinguisher.

--Whole wheat bread has topped sales of the white variety for the first time ever. I’m kind of surprised it took this long, seeing as white bread will kill you…remember Big Yaz bread, old-timers?

--“Peak Oil” advocate Matthew Simmons died suddenly at the age of 67. I was floored that there was zero mention of this in the Wall Street Journal or on CNBC, which to me can only be attributed to the fact he died in rather mysterious circumstances…an “accidental drowning” in a hot tub at his Maine home.

--The full details on just what happened with Hewlett-Packard’s Mark Hurd and his relationship with Jodie Fisher still haven’t come out, but the consensus is he walks away with about $40 million in cash, stock and parting gifts, while Hurd did settle with Fisher on her sexual-harassment lawsuit for an undisclosed sum and both said they weren’t rolling around in the grass.

But if the whole issue was over falsified expense reports, as we’re being led to believe, many ask, ‘Why is he receiving any kind of severance at all since any other employee would have been fired?’ 

As for Ms. Fisher, she has moved to my state of New Jersey to work in a staffing agency run by her mother; yet another example of how the economic policies of new Republican Gov. Chris Christie are beginning to bear fruit, thus further enhancing his national image for 2012….or is this a stretch? 

Shares in H-P, $46.30 the day of the announcement of Hurd’s departure, closed at $40.45 one week later.

--I was in Atlantic City last weekend (Fergie of the Black Eyed Peas is worth the price of admission, guys) and reminded of how much potential the place has. But the 11 casinos there continue to suffer from increased competition in the surrounding states, including the introduction of table games in both Pennsylvania and Delaware in July. For the month, A.C. casino revenues continued their slide, down 5%. I posted a “Wall Street History” piece for those interested in the topic, including a look at Gov. Christie’s plan to save A.C., at the expense of our horse racing industry.

--I couldn’t give a damn about the case of flight attendant Steven Slater. He’s getting his 15 minutes of fame, he’s an a-hole, and I half expect to see him waiting on my table one of these days. But for the archives, Slater wants to go back to work at JetBlue, which is highly unlikely, seeing as evidence is emerging he created the whole incident to give him an excuse to try out his emergency chute dismount, one that apparently he had been planning for years. 

--Out of work like Mr. Slater? Why not become a whistleblower? Under the financial reform bill, informants for the SEC can now receive 10% to 30% of any sanction imposed over $1 million – including a share of the proceeds from any related regulatory action or shareholders’ lawsuit. As Columbia University professor John Coffee notes, “We’ve seen recent settlements of SEC actions of up to $800 million…this is a tremendous incentive for people to blow the whistle and for entrepreneurial law firms to represent them.”

--Philippine food and drink giant San Miguel Corp. is selling its hot-dog unit for more than $1 billion, in case you were thinking, ‘I wonder if there’s money to be made in hot dogs?’ But whenever I think of San Miguel, I can’t help but recall a long layover in Manila, like 10 hours, when there was little to do (actually, there was nothing to do) except sit in this small bubble bar, totally enclosed, where everyone was smoking except me and we were all drinking San Miguel, and, well, I ended up with the worst headache of my life. 

--My portfolio: My natural gas play, mostly Jan. 2011 call options, has taken a hit, but the heart of hurricane season begins Aug. 20. Colorado State researcher William Gray still believes 15 more “named” storms will develop before the 2010 season ends amid still rising temperatures in Atlantic waters. Another expert, Jim Rouiller of Planalytics, says, “The storms we will be talking about in the next few weeks will be the real deal.” I’m only waiting until about Sept. 10 before rolling over my position.

But after the close on Friday, my China specialty chemical/biodiesel holding reported earnings and they were terrific. We’ll see what happens on Monday, but for those of you playing along with me, assuming they don’t say anything bad on the call, we are finally ready to rock. [I do, however, have a political comment concerning China plays in general down below.]

--Finally, a rousing Happy 45th Birthday to Singapore. The capitalist city-state, with the authoritarian streak, does things the right way and is to be admired. 

Foreign Affairs

Iran: There are growing signs the harsh sanctions that the U.S. and EU levied (as well as Australia and Canada), on top of the UN’s mild ones, are indeed biting as Iran is forced to pay a higher premium to market prices for gasoline deliveries with many companies now shying away from supplying the country. Yes, Iran is awash in oil but thanks to a lack of investment, it has a pitiful refinery system and can’t meet domestic needs, so the country imports 40% of its petrol.

But opposition leader, Mehdi Karroubi, was quoted in Britain’s Guardian newspaper as saying the policies of the U.S. and the others were counter-productive.

“On the one hand, the government’s mishandling of the economy has resulted in deep recession and increasing inflation inside the country…On the other hand, we have sanctions which are just strengthening the illegitimate government,” Karroubi said.

“Look at Cuba and North Korea,” he continued. “Have sanctions brought democracy to their people? They have just made them more isolated and given them the opportunity to crack down on their opposition without bothering themselves about the international attention.”

So, while the Shah’s regime treated the opposition more fairly because it was concerned with international criticism, today’s rulers don’t care what the rest of the world thinks of them and thus the crackdown on dissent is more vicious.

Karroubi insisted the Green Movement was a reform effort, not a revolutionary one. “We are seeking nothing more than a free election.” [Reuters]

Therein, I believe, rests a clue as to Iran’s nuclear program. It’s about national pride as much as anything else and a change in government at this point is highly unlikely to change the stance on developing nuclear weapons.

Separately, while the sanctions by definition have been successful, nonetheless, Russia, China, Turkey and India are among the nations looking to circumvent them in terms of proceeding with trade and investment deals. Russia may be taking a big step this coming week by starting up the long-delayed Iranian nuclear plant at Bushehr, though this is a long process. [Brazil, on the other hand, has said it will honor the U.S. and EU stance, a significant move.]

And in the new issue of The Atlantic, Jeffrey Goldberg interviews a number of key players for their thoughts on the odds of a strike on Iran’s suspected weapons facilities. One high-level Israeli official told Goldberg, “If the choice is between allowing Iran to go nuclear, or trying for ourselves what [Barack Obama] won’t try, then we probably have to try.”

Analyst Ruslan Pukho said Iran’s military is not capable of staving off an Israeli or U.S. assault.

“On the whole, the Iranian air force’s and air defense forces’ potential should be evaluated as quite low. Iran cannot disrupt an Israeli, not to mention American, air attack on its nuclear facilities with the use of high-precision weapons and prevent their significant damage or destruction….

“For the Iranian air force and air defense forces in their current condition, even the simple destruction of several Israeli or U.S. planes would be a huge success.”

The consensus of the experts interviewed was Israel would strike by July 2011.

Israel/Lebanon: Hizbullah leader Sheikh Nasrallah unveiled what he said was an extensive history of Israeli espionage and surveillance that proves Israel had its hands in the assassination of former Lebanese Prime Minister Rafik Hariri. Those running the Special Tribunal for Lebanon (STL) looking into the case said, prove it…give us the evidence, which Nasrallah refuses to do because he doesn’t trust them.

The consensus, post- the border clash of almost two weeks ago, is that neither side, including Syria, wants war these days. My friend Michael Young in Beirut wrote an op-ed in the Wall Street Journal the other day saying the battle in Lebanon is really between Iran and Syria over who eventually has the ultimate influence, as Syria seeks to regain the power it held in 2005 before it was forced out following the Hariri assassination. But whereas Iran needs to keep Hizbullah’s weapons in place as insurance for an Israeli strike on Tehran’s nuclear facilities, it’s not as if Syria could move in and disarm Hizbullah. Plus both Syria and Hizbullah want the STL to go away as it could still easily indict one or the other, or both.

Meanwhile, a growing issue when it comes to the United States and Congress is what to do with future funding of the Lebanese army when there are suspicions that with growing ties between the army and Hizbullah, weapons aid could be turned on Israel, so Congress has suspended an additional $100 million in support until an in-depth review of the relationship between the two can be conducted. 

Lastly, Israel continues to conduct mock air raids over Lebanon in direct violation of UN Security Council Resolution 1701, yet I still haven’t seen a single defender of Israel in an opinion piece bring this up, ever. A rather convenient omission when it comes to the facts.

Afghanistan:  Just as in the case of the surge in Iraq, I am willing to give the current effort in Afghanistan time, but I also believe the upcoming strategy review in December is enough time for policymakers to reach some conclusions. As it is, today, 68% of the American people are less confident that the war will end well for the United States, according to the latest NBC News/Wall Street Journal survey. Only 44% approve of the job President Obama is doing on this front.

One of the issues that leads to such pessimism, aside from growing casualties, is the endless litany of stories of corruption. A massive U.S. probe that is attempting to track down $billions in aid continues to encircle Afghan President Karzai, including his family and friends.   For his part, Karzai is doing all he can to block the probe.

But in the case of the execution of the 10 medical aid workers by the Taliban, you have as clear an example as any of not only what NATO is up against, but the true face of evil, and the problem inherit in an exit that would invariably lead to a massive reign of terror, particularly against women.

“The barbarity of Islamic extremists has become a commonplace event, but the apparent murder last week of 10 aid workers…including six Americans, is especially notable as an education in the nature of the enemy….

“The murders are a window on the threat that thousands of Afghans face every day if they dare to cooperate with the Afghan government….

“In the logic of today’s antiwar pessimism, the aid-worker murders are being portrayed as a sign of how badly the war is going. But they are more significant for revealing the Taliban method and the fate that will befall our Afghan allies if we let the Islamists once again overrun the country….

“The main U.S. strategic purpose in this war is self-defense in denying an al Qaeda sanctuary. But our cause also includes the moral imperative of preventing Islamic radicals from a victory that would give them rein to maim and murder thousands of innocents.”

But, again, the American people’s patience is running thin. General Petraeus must show progress by year end.

At least the London Times reported on Friday that “British commanders believe that they are close to achieving a significant tribal uprising against the Taliban that could lead to the reintegration of hundreds of insurgents fighting around Sangin, the most dangerous place in Afghanistan.”

It’s an area where more than 100 British soldiers have been killed but negotiations with the tribal groups appear to be bearing fruit and attacks are down 80% in the past month.

Iraq: The head of the Iraqi army, Lt. Gen. Babaker Zebari, warned that the Iraqi military would not be in a position to take full control of security for another decade.

“At this point, the withdrawal [of U.S. forces] is going well, because they are still here, but the problem will start after 2011,” he said. “The politicians must find other ways to fill the void after 2011…If I were asked about the withdrawal, I would say to politicians: the U.S. army must stay until the Iraqi army is fully ready in 2020.”

Of course yours truly knows it’s a mess as violence is picking up yet again, including the  bombing of an electricity generator in a Basra market that incinerated over 40 and wounded 185 last weekend at a popular market. Interviewed by NBC News, the U.S. commander, Gen. Ray Odierno, said on Friday that we won’t know for 3-5 years whether the Iraqi war was a success or failure. But we’re out of there, with a relatively thin force of 50,000 remaining only through 2011 at this point.

And there’s a developing and highly disturbing story that Turkey may have used chemical weapons against members of the Kurdish rebel group, the PKK, with German authorities confirming that eight were murdered by “the use of chemical substances.” Turkey denies this, but the pictures of the bodies are said to be so disturbing, no one wants to publish them.

Pakistan: President Zardari finally paid a visit to the flood zone and saw the immense devastation. The flooding crisis here will be unfolding over the coming months, not just weeks. Understand that while the death toll of 1,500 was dwarfed by the Indian Ocean tsunami, and the Kashmir and Haiti earthquakes, the 20 million that have been displaced in Pakistan thus far easily exceeds the combined total of the other three, which is why the UN is calling the Pakistan floods the worst natural disaster, ever.

One of the critical problems, though, is many nations are going to be reluctant to send significant aid to Pakistan over fears it will just fall into the wrong hands and down the rat hole. Disease is already spreading rapidly, with malaria a huge concern.

But to compound matters, with the army pressed into relief service, that means the fight against the Taliban in its Pakistani strongholds is over. The Taliban now gets to regroup, though some of the most severely impacted areas are also its home.

And now a name from the past, former President Pervez Musharraf, is setting up a new political party as part of a comeback, though for now he will run things in exile as he would be placed under arrest, or worse, should he attempt to return home immediately.

No one should be in the least bit surprised to wake up one morning to some dire headlines here concerning the political situation, but somehow the country has to be stabilized.

Russia: At the height of despair, the skies over Moscow finally cleared on Friday, this after hundreds died of the heat and soot that exacerbated existing ailments. For a time, Moscow was described as a claustrophobic gas chamber.

There is no doubt the government was ill-prepared and equipped for the fires, and at least a ¼ of the grain crop was ruined.

But as to the damage to the political careers of Dmitry Medvedev and Vladimir Putin, particularly in the case of the latter, they’ll weather it just fine, though for different reasons I’m still thinking a third force enters the picture in the coming years.

China: Investors in China stocks are being hurt not just by poor sentiment, but also a perception that relations between Washington and Beijing are worsening. One of the key issues, today, is the ratcheting up of tensions over control of the South China Sea and critical shipping lanes.

“Many of the islands in question might be little more than rocks, but given that they are close to the sea lanes for a significant chunk of world trade, they have huge strategic importance. As such, (Sec. of State Hillary) Clinton’s (recent) speech (that the U.S. was willing to act as a mediator in talks over the islands) is one of the most striking symbols of the diplomatic battle that will define Asia for the next few decades – a tussle between the U.S. and China to be the dominant voice.

“The Clinton statement had two goals: One was to emphasize that in Asian diplomacy, the U.S. is back. During the presidency of George W. Bush, some Asian governments felt that the U.S. had lost interest in the region. Whether this impression was justified or not, she was telling Asia’s leaders that the U.S. is not packing its bags any time soon.

“Most of all, the speech was a message to the region about China and its seemingly inevitable rise. Since the sinking of South Korea’s Cheonan warship in March, Washington has taken advantage of Beijing’s reluctance to criticize North Korea to boost its ties with Seoul and drive a wedge between China and South Korea. As suspicions grow in south-east Asia about China’s intentions in the South China Sea, the U.S. is presenting itself as the natural honest broker.”

But while the U.S. has been preoccupied in Iraq and Afghanistan, China has accelerated a military buildup that has the U.S. in its sights. “Rather than preparing for a fight with the U.S., Chinese planners want gradually to squeeze the U.S. out of its dominant position in Asian waters by developing a series of missile systems they describe as ‘anti-access’ weapons.”

But China has run into problems in the South China Sea with the likes of Vietnam, Malaysia and Taiwan and it’s all about the islands. China has publicly described the issue as having the same importance as Taiwan and Tibet.

Yet Geoff Dyer says Clinton “has laid a trap for Beijing….If China stands up to U.S. interference in its backyard and presents itself as the regional power, it risks pushing wary neighbors into the U.S. camp.”

North Korea: Lil’ Kim’s Orcs seized a South Korean fishing vessel with a crew of seven but at week’s end, no word on what happens next.

Venezuela / Colombia: With the inauguration of a new leader in Bogota, Juan Manuel Santos, Venezuelan President Hugo Chavez said he wanted to restore diplomatic relations after Santos’ predecessor, Alvaro Uribe, alleged Venezuela was harboring guerrilla groups such as FARC.  So on Tuesday, Chavez and Santos met, with Chavez urging FARC to release any hostages it has to open the way for talks. For his part, in his inauguration speech, Santos said repairing relations with Venezuela and Ecuador were top priorities.

But Chavez is getting away with lies. The evidence is overwhelming that he is harboring FARC. And now he is trying to dictate to the Obama administration who it can send as ambassador; Larry Leon Palmer not being Chavez’s choice because Palmer, in his confirmation hearing, said he was “keenly aware of the clear ties between members of the Venezuelan government and Colombian guerrillas.”

We await the next chapter, as the State Department told Chavez he could stick it. Palmer is going to be our man in Caracas. 

[Meanwhile, a car bomb went off in Bogota on Thursday, injuring nine, and Santos called it a terrorist act, the first significant attack in Bogota in two years. FARC is suspected.]

Mexico: President Calderon said he is prepared to change strategy in the drug war that has claimed 28,000 lives. “I know that the strategy has been questioned,” he told political leaders this week, “and my administration is more than willing to revise, strengthen or change it if needed.” Calderon’s predecessor, Vicente Fox, said he supported the legalization of the production, sale and distribution of illegal drugs.

“We’ve got to see it [legalization] as a strategy to fight back and break the economic structure that enables cartels to earn such tremendous profits,” Fox wrote.

Haiti: A RAND Corp. report really highlights how pathetic this place is. What did an extensive study of this nation’s needs, post- the devastating earthquake, reveal?

First and foremost… “Accelerate the removal of rubble”! The report calls this “the single most important step toward reconstruction of housing and infrastructure that the Haitian government and donors can take.” Nothing’s happened on this front.

It’s like my long held theory, when idiots would talk of flooding Africa with laptops. No! Get them clean water and good roads, first, without which no further progress is possible.

So don’t bother me about Haiti until it hits ‘em, as it did the RAND Corp., that perhaps they should clear the rubble before thinking of anything else. 

Random Musings

--As I go to post, WikiLeaks spokesman Julian Assange vowed to release the rest of the secret Afghan war documents it has on file and the Pentagon warned that it had identified the additional 15,000 classified docs and that their exposure would be even more damaging than the initial 76,000. Assange must be brought to justice, which will require foreign cooperation. Just seeing his devilish, androgynous face should make you sick. Every human rights group, including Amnesty International, as well as Paris-based media watchdog Reporters Without Borders, have accused WikiLeaks of recklessness and “incredible irresponsibility.” The Pentagon has a team of 100 analysts going through the documents already released in an attempt to identify, and warn, Afghans whose names have been released.

Julian Assange claims that he wants to focus public debate on the war in Afghanistan and on civilians killed by American forces, but he seems to have no problem releasing information that will kill innocents as well as aid a Taliban cause that the world knows would massacre thousands if given the chance following a NATO withdrawal.

--There should be little doubt who the best member of the Obama administration is; Defense Secretary Robert Gates.   We are so lucky he chose to stay an extra year, but in what could be his last great mission, he is picking a fight with the Pentagon establishment and Congress in offering up the biggest budget cuts in history in order to ensure the grunts in the field continue to get the best possible support. This week Gates said:

“Since September 2001 the total number of general and flag officers has grown by more than 100 – including 40 four-star positions, [creating] a situation where personnel of higher and higher rank are assigned to do things that could be reasonably handled by personnel of lower rank.”

Among other things, Gates proposes to scrap the Joint Forces Command, based in Norfolk, Virginia, which ironically current General Ray Odierno, commander of U.S. forces in Iraq, is slated to take control of in November. Gates also announced he would slash funding for contractors supporting the services, saying the Pentagon had become over-reliant on private companies. Currently, contractors representing the Pentagon comprise 39% of the workforce. Gates also vowed to go after soaring healthcare costs, the budget for which has risen from $19 billion in 2000 to $50 billion.

“Gates is breathtakingly willing to take on poisonous political interests, unscrupulous contractors and bloated institutions. He may be the only senior official in our lifetimes who genuinely cares about both the troops and the taxpayers….

“Somebody has to feel the pain. Gates already had directed the services to identify $100 billion in internal cuts to free up funds for baseline needs. On Monday, he made another assault on the status quo….

“The challenge lies in forcing the services to cut their dead-wood good ol’ boys, not their up-and-coming innovators. Today, the Army’s senior generals are more inbred than a hillbilly family snowed in for a generation. And the Air Force is worse.”

But an immediate problem is dealing with Virginia’s congressional delegation, which will fight to the death for the Joint Forces Command hub in Norfolk. Peters notes, however, that President Obama can shut down JFCOM without Congress’ approval.

All savings from the cuts would be handed over to fund frontline troop and equipment initiatives.

--Democratic Congressman Charles Rangel gave a surprise, defiant speech on the House floor, defending himself against a slew of ethics charges.

“You’re not going to tell me to resign to make you feel comfortable. If I can’t get my dignity back here, then fire your best shot in getting rid of me through expulsion….I am not going away. I am here.”

Rangel’s fellow Democrats in the House were disgusted. Republicans gloated.

“Fact is, little of what Rangel claimed yesterday holds up. Starting, for example, with his whine that the House Ethics Committee took too long – more than two years – to conclude its probe.

“Yes, two years is a long time. But it only took that long because new charges kept emerging….

“To fully explore each charge, the probe had to keep expanding….

“To his clear discredit, he once again tried to blame others for what he called his ‘negligence.’….

“He may not like the consequences, but he has only one person to blame: Charlie Rangel.”

And then there was the mystery of why New York Democratic gubernatorial candidate Andrew Cuomo attended Rangel’s 80th birthday/fundraising bash on Wednesday night. That was dumb, and I kind of like the guy.

--But wait…there’s more! California Democratic Congresswoman Maxine Waters, also facing House Ethics Committee charges, is vowing to put up a big fight of her own, and drag a Missouri Republican, Rep. Sam Graves, into it, claiming Graves was guilty of something far worse than what Waters is being accused of, yet Graves got off.

--New York City Mayor Michael Bloomberg is suffering in the polls with an approval rating under 50% for the first time since 2005, owing to his support of a planned Islamic community center near Ground Zero. A majority of New Yorkers don’t want it.

Bloomberg has received a ton of criticism for scolding those in opposition to the mosque. “A handful of people ought to be ashamed of themselves,” he said about a week ago. The mayor says it’s all about the separation of church and state. But as the New York Post editorialized:

“The notion that the mosque controversy is a battle over religious freedom is utterly bogus. And it glosses over New Yorkers’ entirely legitimate concerns.

“Nor is there a question of whether the mosque should be forced to reveal the sources of its funding – though its failure to do so certainly heightens suspicions.”

And just who is this Imam Faisal Abdul Rauf? Some say he has ties to radical Islamists and refuses to label Hamas a terrorist group. As the New York Post editorial concludes:

But on Friday night, speaking at a White House dinner celebrating Ramadan, President Obama defended plans to build the mosque near Ground Zero.

“Our commitment to religious freedom must be unshakable.”

--Unions and school districts in New Jersey agreed to the lowest pay hikes for teachers in more than three decades, 2.03%, with an additional 18 districts breaking into contracts to freeze salaries, in what is seen as another victory for Gov. Chris Christie’s policies. Contracts up in the second half of 2009 were still being settled with average wage hikes above 4%. Christie had also urged voters to reject school budgets where teachers refused to freeze their pay and 58% were defeated, though the majority did not see concessions.

--I continue to feel strongly about First Lady Michelle Obama’s trip to Spain. This will hurt her husband beyond the current news cycle. Others, such as conservative commentator Kathleen Parker, were a bit more forgiving.

“Is it really such a terrible thing that the president’s wife took a few days off to enjoy the beaches of Spain? Yes and no.   Michelle Obama’s trip, though expensive in the context of our dire financial straits, isn’t putting a dent in the Treasury. But as a political move, it could not have been more out of step with most Americans’ reality. The obvious reasons include the stagnant job market, the depleted fortunes of the middle class, millions of lost homes and, for many, the prospect of an insecure financial future.

“A less obvious reason was revealed in a small detail. Reporting for Politics Daily, Lynn Sweet wrote that Mrs. Obama traveled to Spain at this particular juncture to comfort a friend whose father had recently died and whose daughter, a friend of 9-year-old Sasha Obama (who accompanied her mother), had especially wanted to celebrate her birthday in Spain.

“When many Americans are scraping together pennies to finance a birthday party at Chuck E. Cheese, the notion that a child must be treated to Spain’s beaches to celebrate her decade on the planet is a bitter pill to swallow.

“On balance, the vacation was poorly conceived but hardly a crime befitting the condemnation. Perhaps of more lasting concern is the missed opportunity for the first lady to set an example of restraint and even generosity.”

--Liberal commentator Dana Milbank of the Washington Post blasted President Obama for his extracurricular activities in an op-ed.

“(Last) Sunday, the commander in chief was at home hosting a fantasy camp for himself. He and his buddies had a birthday-weekend barbecue and basketball game with LeBron James, Alonzo Mourning, Magic Johnson and other legends of the sport.

“The day before, it was a four-hour golf outing for Obama and the boys. On Monday, he hosted the Super Bowl champion New Orleans Saints at the White House and talked about his own exploits on the gridiron last year with Saints quarterback Drew Brees.”

“ ‘He [Brees] tossed me a nice tight spiral that I then lateraled to a kid on [Dallas Cowboys linebacker] DeMarcus Ware’s shoulders,’ Obama recalled. ‘I also want to point out I beat [Pittsburgh Steelers safety] Troy Polamalu over the middle on that throw.’ Obama turned to Brees. ‘You remember?’

“According to Mark Knoller of CBS News, Obama has left the White House to play basketball 16 times so far, in addition to the countless times he has played on his home court. He’s shot 44 rounds of golf, gone fishing and played tennis. Total sporting-related events hosted at the White House: 45. That’s about six times the number of news conferences he has held.

“Obama’s foes have mocked him for playing golf more often than his sports-mad predecessor, who played only 24 rounds during his entire eight-year presidency. ‘Obama skips Polish funeral, heads to golf course,’ was one Washington Times headline. Liberals who once mocked George W. Bush’s ‘watch this drive’ moment on the golf course now speak of the need for Obama to clear his head.

“Whatever the merits of head clearing, (or in Bush’s case, brush clearing) Obama’s bachelor-birthday weekend at the White House set some sort of standard for presidential game-playing: the golf at Andrews Air Force Base with his buddies, then basketball Sunday with pros (and former pros) such as Grant Hill and Bill Russell (and Kobe Bryant watching from the sidelines) and finally, first thing Monday morning, the adoration of the Saints….

“The 44th president was considerably more animated when he arrived for the event, preceded by jazz music and cheers of ‘Who dat?’  He eschewed his usual teleprompter – no need for a crutch when talking sports – and frequently looked up from the text on the lectern to ad lib….

“Obama made clear where his loyalties remain, as he did when he wore his White Sox cap to throw out the first pitch for the Nationals. ‘Look, I’m a Bears fan – I’m not going to lie,’ he told the Saints. Still, he accepted the New Orleans jersey with No. 44 on it.

“ ‘Wear it in Chicago!’ somebody in the audience called out.

“The Super Bowl champs then watched Obama fly off in his helicopter, which would take him to his waiting 747.

“For a 12-year-old president, it doesn’t get any better than this.”

But the editorial board of the Wall Street Journal had a different take on all this.

“We wish Mr. Obama played more golf. Seven days a week, in fact. Imagine how much better off America would be – and how much more popular the president would be – had he taken the rising public protests against ObamaCare last summer as an opening to drop the subject and work on his handicap?

“The more Mr. Obama and his White House team practice their putting strokes, the less time they’d have to pass more stimulus, overregulate more industries, or raise more taxes. The economy would recover more rapidly with less political handling.

“So by all means, swing away, Mr. President. Work on that jump shot, polish your short game, practice your fly cast mending. Then watch GDP and your approval ratings rise.”

“The person on trial at The Hague is, according to the prosecution, a monster (Charles Taylor) responsible for some of the most horrific acts of the past century.

“Yet by the close of yesterday’s bizarre proceedings in the Special Court for Sierra Leone, it seemed that it was the reputation of supermodel Naomi Campbell that was at stake.”

This whole deal is absurd, as Campbell apparently lied as to her knowledge of the source of blood diamonds given her as a gift by the African warlord. Both Campbell’s top aide and actress Mia Farrow testified how the model boasted of being given the diamonds, whereas Campbell said she wasn’t sure who the source was. Earlier, Ms. Campbell referred to the Taylor trial as “a big inconvenience.”

But Campbell’s former aide, Carole White, as well as Mia Farrow, looked like idiots on the stand as well, as Taylor himself appeared to be bemused by it all.

 --A reporter for NBC, commenting on the death of former Alaska Senator Ted Stevens in a plane crash, said, “Tonight, people in Alaska and across America are mourning the loss of Alaska Rep. Sen. Ted Stevens.”

Excuse me? People across America are in mourning? I’m sorry to have to say this, but I’m tired of lazy ass reporting. Aside from costing American taxpayers countless, and unnecessary, $100s of millions over the years in earmarks as Alaska got way more than its fair share because Stevens rammed projects for his home state through by way of intimidation, he was yet another example of the need for term limits. There isn’t a single soul outside of Alaska who mourned Ted Stevens’ death.

Ditto the death of former congressional heavyweight, Dan Rostenkowski, who served as chairman of the powerful House Ways and Means Committee for 13 years, 1981 to 1994. No doubt, Rostenkowski perfected the art of compromise on issues such as Social Security and the 1986 tax reform act (which killed a lot of tax shelters…a good thing, even as I was working on them at the time), but then in 1994, following a two-year federal investigation, he was charged with 17 counts of abusing his Congressional payroll, trading stamp vouchers for as much as $50,000 in cash, misusing his expense accounts, paying for personal vehicles with House funds, and obstruction of justice. He was a crook, and eventually he pleaded guilty to lesser charges and served 15 months in the slammer. Then, as he was leaving office, Bill Clinton pardoned Rostenkowski.

--A new antibiotic-resistant bacteria is causing havoc, and tremendous concern; picked up by patients going to India and Pakistan for medical procedures (cosmetic surgery mostly) and then brought back to places like the United States and Britain. What is being labeled NDM-1 is called “ominous” by those studying it, but it’s too early to tell if it’s worse than MRSA.

However, a UK doctor told the BBC that the strain is “widespread” on the Indian subcontinent and that it was a serious global public health problem.

--A panel of geoscientists told Congress that Greenland is rapidly approaching a tipping point that would see much larger masses of ice melting, larger than the mammoth chunk that recently fell off. An Australian sea level rise researcher, Dr. John Church, commented, “We’re beginning to move outside the range of what we have become used to seeing as normal variability, and see an acceleration of both greenhouse gas levels and sea level rise.” But then Church adds, “We are looking at a process that will be going on for centuries.” And that’s the problem with the debate (and why I prefer to focus on global pollution rather than global warming). Opponents react, “Centuries?! What’s the fuss?”

Then again, an American geoscientist, Professor Richard Alley, said the tipping point could be in the next decade. The UN says the threshold at which Greenland would melt is a temperature rise of between two and four degrees, at which point maybe Four Seasons could put together a good golf resort within a four-hour flight of the New York area.

--On the East Coast, every state from Maine to Florida suffered through one of its ten hottest Julys since records began in 1880. But you can’t draw any sweeping conclusions, as much as some want to. I always just focus on one thing, the jetstream, and it was stuck far north of its normal pattern, thus locking in the hot air. I mean it’s not any more difficult than that, sports fans. And as I noted at least three weeks ago, before the Russian fires got going, the jetstream was lined up in the same position straight across Northern Europe and Japan. 

--Finally, I agreed with the dismissal of Gen. Stanley McChrystal for a number of reasons. But aside from the obvious ones, I thought the guy was overrated, as so many of our generals are, and have been throughout history. McChrystal had his moment, in Iraq, but not Afghanistan.

So I read with interest the op-ed of Mary Tillman, Pat’s mother, in the Washington Post this week.

“Army Gen. Stanley A. McChrystal was forced to retire because of remarks he made to a Rolling Stone reporter. Having read the article that led to his departure, I feel strangely validated. ‘The Runaway General’ described by journalist Michael Hastings is exactly the same arrogant individual I believed him to be.

“McChrystal was in charge of Joint Special Operations Command in 2004, when my son, Pat, was killed in Afghanistan. But I didn’t become aware of him until March 2007. That’s when someone anonymously sent an Associated Press reporter a copy of a high-priority correspondence. The memo was written on April 29, 2004, by McChyrstal and sent to Gen. John P. Abizaid [and others]. Its purpose was to warn President George W. Bush and other officials to avoid making public comments about Pat’s heroic death at the hands of the enemy, because it was beginning to seem ‘highly possible that Corporal Tillman was killed by friendly fire’

“The memo went on to caution against ‘unknowing statements by our country’s leaders which might cause public embarrassment if the circumstances of Corporal Tillman’s death become public.’

“We knew nothing about this memo at the time it was written. In fact, we did not learn until weeks after Pat’s memorial service that it was even possible he was killed by friendly fire.

“The memo makes it clear there was no intention of telling the truth unless circumstances made it absolutely necessary. Much later, during Brig. Gen. Gary Jones’ investigation of Pat’s death, McChrystal was asked why we were kept in the dark.

“ ‘Question: Once you became aware that this was a possible fratricide, was there a conscious decision made not to tell the family of the possibility?’

“ ‘Witness: There was a conscious decision on who we told about the potential because we did not know all the facts. I did tell the senior leadership [long redaction] about the possibility prior to the memorial ceremony, because I felt they needed to know that before the ceremony. I believe that we did not tell the family of the possibility because we didn’t want to give them a half-baked finding.’

“McChrystal says they didn’t want to give us a half-baked finding. Yet that is exactly what they did. Rather than being told there were questions about Pat’s death, we were presented with a contrived story, an absolute lie about how he had been killed by enemy fire.”

Mary Tillman goes on to describe the discrepancies in the autopsy and field hospital report which “raised dire questions. Even the medical examiner called for a criminal investigation, but the adjutant general prevented it from going forward. By covering up the circumstances of Pat’s death, McChrystal and the rest of the chain of command may have, knowingly or unknowingly, covered up a crime.

“McChrystal’s actions should have been grounds for firing him back then.”

Mary Tillman and Pat’s father gave statements to the media when President Obama promoted McChrystal to top commander in Afghanistan, urging Obama to reconsider. “Our entreaties fell on deaf ears.”

Mary needed to read and think about the article and McChrystal’s firing before commenting. She also understands why some wonder why Pat’s death is so much more important than the others….at least such has been the coverage.

“Pat’s story initially became news because he was well known for having played in the NFL. The government used his fame to create propaganda for the war. Pat is not more important or special than any of the others who have fought in these wars, but the truth of what happened to Pat – and to every soldier who has died – is important. The truth shines a light on systematic corruption, incompetence and lack of accountability in the military and in government.

“Over the last five years, the Pentagon and Congress have had numerous opportunities to hold accountable those responsible for the coverup of Pat’s death. Each time they’ve failed. The government didn’t just lie to us; it lied to a nation.”

Thank you, Mary Tillman, for your own courage in tracking down the truth. 

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

God bless America.

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Gold closed at $1216
Oil, $75.39

Returns for the week 8/9-8/13

Dow Jones -3.3% [10303]
S&P 500 -3.8% [1079]
S&P MidCap -4.8%
Russell 2000 -6.3%
Nasdaq -5.0% [2173]

Returns for the period 1/1/10-8/13/10

Dow Jones -1.2%
S&P 500 -3.2%
S&P MidCap +1.1%
Russell 2000 -2.5%
Nasdaq -4.2%

Bulls 41.7
Bears 27.5 [Source: Chartcraft / Investors Intelligence]

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