[Posted 7:00 AM ET]
President Bush is being dragged kicking and screaming into a
debate over postwar Iraq. The reconstruction effort has been a
failure and I don’t want to hear, well, this part of the country is
quiet and this one has a hospital that actually is stocked with
medicine with current expiration dates. Some of us knew long
ago this would be a huge process and that ‘mission
accomplished’ wouldn’t be appropriate for years. What’s
surprising is that many of our leaders, namely Secretary of
Defense Rumsfeld, couldn’t see this, and for his part, amazingly,
the secretary is still looking to cut and run.
What upsets me is that we never should have had the rancorous
debate we currently are witnessing in the first place. All
President Bush had to do was level with the American people on
the commitment and costs required, yet the administration is still
jerking everyone around.
Pity Secretary of State Powell, who is like the guy forced to
clean up after a parade of elephants. [Oops. Bad analogy.] Now
we head back, groveling, to the United Nations, and the
administration has no one to blame but themselves.
After all, remember my talk shortly after 9/11 that, taking
Rumsfeld’s own lead, this was going to be a dirty war? I pleaded
that the U.S. should be sitting in smoke-filled, vodka-laced
rooms with the Russians, for example, cutting deals on the Iraqi
oil concession in return for support. [I included Iran in that
equation as well.] We didn’t. And look at Britain. They thought
they’d get some deals automatically and they’ve received
virtually nothing. Meanwhile, Halliburton will take in $1.7
billion plus.
It didn’t have to be this way and to those who scoff at my
suggestion of how we could have avoided this mess, I say there
was, and is, nothing more important than winning the war on
terror. None of us should give a damn whether Russia’s Lukoil
or some French or German company got a piece of the action if
we ensured a safer world for us all by doing so.
So now we’re back to square one, albeit thankfully sans Saddam,
and one can’t be surprised that the French and Germans are
balking anew. I don’t like it one bit, but as Tim Russert adds,
rightly or wrongly, some nations feel they were “steamrollered
into Iraq” so why cooperate today?
But somehow we’ll get through this and I eagerly await the
President’s speech on Sunday, though there is one other problem.
The Iraqis must take some responsibility themselves and this 25-
member governing council, along with the newly formed cabinet,
is pitiful. It’s also wrong for the U.S. to take the blame for
security at the holy shrine in Najaf. The military was doing the
right thing in keeping a distance, out of respect, and if the reports
are true that the vehicle loaded with the bomb may have been
sitting there for 24 hours, whose fault is that? Ask police in
London, Paris, Belfast or Dublin, for example, what happens to
an idle car after just one hour? Don’t’ blame the U.S. for this
seeming lack of intelligence on the part of Ayatollah al-Hakim’s
supporters.
Some other notes:
–Talk about not getting the truth. 2 weeks ago, when I heard the
U.S. was sending 25-30,000 Iraqis to Hungary for police
training, I thought, what a brilliant idea and what an effective use
of an ally. [I didn’t write this here at the time.] Guess what? As
of 3 days ago the Hungarian prime minister claimed he had never
been approached on the plan. Incredible.
–I agree with analyst Robert Kagan, the size of the American
military, overall, must be increased immediately. Senator John
McCain reiterated the same thought Friday, while urgently
calling for more troops for both Iraq and Afghanistan. And
regarding Iraq, British Foreign Secretary Jack Straw is one who
is dealing in reality, unlike some of his American counterparts,
when he says the British need more troops of their own on the
ground to secure key sites, while warning the infrastructure must
be largely fixed by the holy month of Ramadan. He’s bang on.
Finally, no one seems to be talking about the real reason why the
U.S. needs to have a significant force in Iraq for many years to
come. Not to patrol the streets of Baghdad or Karbala, that will
rightfully be turned over to Iraqis over time, but rather to keep
pressure on the likes of Syria and Iran.
We have our pick of bases in Iraq and we must maintain a sizable
force somewhere in the country. The Iraqi people will learn to
deal with this, and with no real army of their own will welcome
the ‘discreet’ presence. Remember, this is more than just about
Iraq. Other regimes in the region must fall, either from within or
through outside force, or we will never be truly secure.
Wall Street
Another mostly positive week for the financial markets, save a
little sell-off on Friday. The major equity averages have now
broken through key targets and the economy, with one notable
exception, is cooking. Factory orders are up, a separate key
measure of manufacturing activity showed real growth, auto
sales are generally better than expected, retail sales are strong,
tech bellwethers Cisco and Intel had positive comments, even
energy prices fell some, the latter meaning we won’t have to see
endless stories of folks whining at the pump.
And then you had talk from some Federal Reserve governors,
like Bernanke and McTeer, who proclaimed that there is zero
inflation in sight, and in the case of Bernanke, the Fed may have
to lower interest rates even further if job growth doesn’t pick up.
The bond market loved such talk and rallied strongly from earlier
lows, so fears on that front may subside for a while.
But we do have this not so small issue of jobs. I’ll address the
China angle in a bit, but it’s safe to say that this time really is
different. It’s not just manufacturing that is suffering (to the tune
of 2.7 million+ jobs in the past 3 years), but there are real fears
on the white-collar front as well.
Heck, if we were paid a nickel for every time we heard
“employment is a lagging indicator” we’d all be rich, but
Friday’s employment report showing a loss of 93,000 jobs for
August, when a small increase was forecast, even as the
economy is now clearly growing at a 4%+ clip doesn’t cut it.
Come spring of next year the Bush administration can crow all it
wants about what could then be 5% growth, but if the job picture
hasn’t significantly improved the campaign has a problem.
Then again, seriously, if by end of next summer the Dow Jones is
at 10000 and employment is improving, reelection is a virtual
lock, plus it’s not as though one Democrat has a better solution.
[To me, 10000 means that we have not been hit by a serious
terror attack, North Korea does not flare up, and the bond market
is behaving in reasonable fashion.]
But I wrote two weeks ago that while most of the bullish
economic indicators were laid out in black and white, if you want
to be a bear you have to use a little imagination and that’s where
the deficit comes in. It’s the one issue that most concerns
PIMCO’s Bill Gross, for example, and even with an improving
economy it will keep exploding if…..we revise the alternative
minimum tax ($400 billion), we adopt a prescription drug benefit
($400 billion), and, most importantly, pay for the homeland
security necessary to ensure as much as humanly possible that
the U.S. doesn’t suffer a catastrophic attack, including a longer
commitment in Iraq and an increase in the overall size of the
military (a further $200 billion…by my very rough calculations).
Folks, those are real numbers and someone has to both pay for,
and finance, it. Rising interest rates and a tumbling currency are
but two potential consequences, setting us up for a major
downturn in equities.
Street Bytes
–The Dow Jones rose another 87 points (to 9503), despite a
sizable loss on Friday on the heels of the lousy employment data,
while Nasdaq had its fourth straight up week of 2.5% or better,
closing at 1858. As noted above, positive comments from Cisco
and Intel were huge, particularly in the case of Intel and its
implication for the PC replacement cycle. Wal-Mart also
weighed in with an increase in same-store sales for August of a
whopping 6.9% as the company continues on its mission to take
over the world. [Hey, quality goods at a fair price for all, except
the only jobs available anywhere would be working in the stores
or stitching sneakers for $1 a day in Niger, the latter being my
next projected hot market for WMT employment.]
Equity markets worldwide continue to rise, too, and inflows into
stock mutual funds are gaining steam. What’s not to like?
Valuation. But I grant you that this market could run a lot
further if we enter a truly frothy phase, I just won’t be along for
the ride.
–U.S. Treasury Yields
6-mo. 1.02% 2-yr. 1.71% 10-yr. 4.35% 30-yr. 5.19%
No mystery here. With the comments from the Fed governors
that the last thing to worry about is inflation and that the Fed
won’t be raising rates until well into ‘04, if then (election,
remember) bonds rallied, particularly the 2-year. It won’t last,
but you take what you can get.
–China: Everyone knows that Treasury Secretary Snow’s visit to
browbeat China on its undervalued currency was for political
consumption back home, particularly those losing their jobs to
China’s manufacturers. But it may surprise you that on this
issue, I side with China, except in cases of pure “dumping.” At
the least, all the blame can’t go here for as they correctly state
it’s not always their fault that not only U.S. companies, but also
those from Taiwan, Hong Kong and Japan, for starters, are
moving production there. And Americans can’t forget that the
positive benefit is cheaper products for U.S. consumers which
keeps the overall inflation rate down.
It’s also important for the world that China’s economy grow, and
Chinese consumers are increasingly going to buy American
products as more and more of them move up the economic
ladder. It’s the same situation for the rest of Asia and Europe.
Chinese imports rose 45% in the 1st half of 2003.
That said, the problems of dislocation are serious, whether it’s in
the U.S., Mexico, Hungary or Taiwan, and as I’ve stated ad
nauseum, there is also the little issue of human rights, or lack
thereof, in China.
What’s needed most, though, in discussions on this volatile topic
are the facts, which for my part I’ll continue to dig up. I said it
would be a hot button for 2004 and it obviously will be beyond
that. In the meantime, those displaced must receive all
reasonable help and that costs money, money that we have no
choice but to spend.
–Japan: Little is said of Japan’s own currency machinations as it
is aggressively keeping the yen artificially low to promote its
exports. The U.S. is not as concerned in this instance, however,
because we want to see Prime Minister Koizumi re-elected (he
faces a party vote in a few weeks) and a growing Japan is good
for the world.
–The mutual fund scandal: Once again, you’ve come to the right
place if you want a little insight. It just so happens that yours
truly was in charge of the market timer relationships during my
time at PIMCO (along with my more important role of national
sales manager) and I was floored by the revelation that some
fund groups, such as at Bank of America, were allowing timers
to trade ‘after’ 4:00 PM, the accepted, and legal, close for
transactions.
But there is a lot of misinformation out there. Most timers
operate as follows.
Say the Dow Jones is at 10000 and the timer has $1 million in
the money market fund.
Day one…Dow falls 20
Day two…Dow falls 40
Day three…Dow is up 2
Day four…Dow rallies 80. Bingo, the timer gets back into the
market, choosing one or more equity funds.
Most timers are trend followers, either short-term (like every few
days) or longer-term, maybe 5-8 times a year.
Using the above example, the timer has to accept the NAV for
the close on day four, meaning he purchased it at a higher price
than when he first went into cash. But he’s trying to catch a
trend, and in the bull run of the 90s / early 2000, these trends
could run for a while. [Then they operated in reverse, of course.]
The problem is you also have to get out. What if the Dow tanks
200 on day five? If you are a trend follower, you can’t fight it,
you have to bail back into cash, but you’ve been whipsawed and
on this roundtrip you lost big. You then sit in cash waiting for
another reversal.
This is a simplistic way of explaining things, but it’s basically
how most operate, with many diversifying into various sectors,
market caps, foreign, gold, etc.
There is nothing wrong with market timing and some of the costs
to long-term shareholders being bandied about this week are
absurd, assuming the fund manager is handling the positions
properly.
For instance, a timer moving $1 million in and out of a $1 billion
fund has practically zero impact assuming a 3% cash position, or
$30 million. Managers can handle this, no problem.
But one timer, or a group, moving $30 million frequently in a $1
billion fund could cause chaos and force the manager to
constantly buy and sell shares, which does eventually have a real
impact on net asset value, to the detriment of the long-term folks.
What did I do? Some of the timers were sweethearts to work
with and played by rules that each fund company must abide by,
such as in dollar limits and numbers of transactions per fund.
Others, though, were pure a-holes. One in particular I’ve
mentioned before, over two years ago, because of his little
adventure in outer space aboard a Russian craft. His positions
were way too big and he refused to cooperate, so we levied
restrictions that in effect killed his system. Since these days (I’m
talking mostly the mid-90s), I assumed all fund companies
quantified and established more formal rules and stated such in
the prospectus.
But, again, what is most amazing is that the four groups
implicated by New York Attorney General Eliot Spitzer allowed
the hedge fund in question to purchase after hours. Don’t get me
wrong, all the timers try and wait until the last possible moment,
3:59 if operationally possible, before placing an order, especially
during particularly volatile days. But it was impossible to end
run the system and wait, for example, for Intel’s 4:30
announcement to capture the prior net asset value in anticipation
of a move the following day. At least until I read what you all
did this week.
Yes, the mutual fund industry has suffered a serious black eye
and it sounds like the investigation will envelop many others.
I’ll have a lot more on this topic next week, including the trade in
foreign and gold funds.
–Oil and natural gas prices fell because of the perception
everyone stops driving after Labor Day, along with the hard fact
that the inventory picture has been improving. Lower prices are
good for the economy so even a holder of energy stocks, such as
yours truly, can’t complain. But of more import was a meeting
between Saudi Arabia and Russia, who have been on the ‘outs’
due to Russia’s correct charge that Saudi money has been aiding
Chechen Islamic terrorists. The two countries agreed to loosely
coordinate their oil production efforts in the future, not a totally
good thing if it comes to fruition. [Remember, Russia’s federal
budget is based on $21.50 oil and they need substantially above
that to begin to make a dent in the country’s sorry infrastructure,
including healthcare.]
What the relationship also points out is that Americans need to
remember an important fact that I think is often lost in the
rhetoric over “energy independence.” We can be totally energy
self-sufficient (including supplies from friendly neighbors) but
the actual ‘cost’ of oil will still be determined by Saudi Arabia
and, now, increasingly Russia. As they turn the spigot ‘on’ and
‘off,’ so go prices. Achieving energy independence, however, at
least ensures we have the supply in the first place.
–The Pension Benefit Guaranty Corp., the outfit that comes to
the rescue if your company goes bust and at least pays out a
fraction of the benefits you thought you could rely on for life,
says the number of underfunded companies is soaring.
Apologists say this really isn’t a problem; that the # used to
calculate future benefits and contributions needs to be changed.
It’s not that simple, as employees of Bethlehem Steel or LTV, for
example, could tell you.
–Dick Grasso, part quatre (part 4, for new readers): I can’t help
but pick on Larry Kudlow and Jim Cramer again, because they
continue to say things like Grasso’s accumulation of $140
million was simply “rewarding success” (Kudlow) and, after all,
he opened the Exchange following 9/11. Let’s get something
straight. After 9/11 Grasso did nothing that any other chief
executive in his position wouldn’t have done and it was also the
telephone companies who had to fix a shattered system
downtown. If a good backup had been in place for the
Exchange, outside the impact zone (as is now the case), the
NYSE could have reopened even earlier, and without putting
employees at risk due to the toxic air at the Trade Center.
Kudlow also added on the compensation front that “(Grasso
made) the ultimate sacrifice in putting everything back in the
kitty.” Spare me.
Then you have the Journal opining that the SEC, rather than
being upset, should “applaud” the Exchange’s disclosure. What?
Why didn’t we know all this crap before? Why didn’t we
understand the “corporate incestuousness” (Washington Post)
taking place in the NYSE’s corporate boardroom? Why aren’t
some admitting that the crisis of confidence on Wall Street
occurred on this worm’s watch?
There are stories that the individual members of the Exchange,
who’ve seen their fees soar while Grasso cashes giant checks, are
fixing for a fight. Good. They have my support. Those who
haven’t been doing their own tap dance on the law, that is.
–Worldwide, foreign direct investment amounted to $1,393
billion in 2000, but fell to $651 billion in 2002. The U.S.
received $314 billion of the flows in 2000 and just $30 billion
last year, while China had $53 billion flow in during the same
period, making it the first time it topped the list. [Financial
Times]
–Royal Dutch / Shell announced it will not drill on sites
designated by the U.N. as ‘World Heritage’ ones. Hey, I have no
problem with that, until I realized this included the Arctic
National Wildlife Refuge. Doh!
–Well, I tried not to write anything about the auction for Vivendi
Universal’s assets, simply because I didn’t care, but I do have to
mention that NBC agreed to merge with Vivendi this week.
Coupled with other broadcast alliances, however, some (mainly
Democrats) still argue that the networks will have too much
control under the new FCC guidelines concerning ownership in
local markets, though this week a federal court issued a stay on
the FCC’s intentions.
Boy, this whole argument is way overrated and I’m firmly in the
camp of the networks and FCC Chairman Michael Powell.
Voters don’t give a damn about who owns local stations and the
merging of television and newspaper interests. There is more
than enough competition out there. More importantly, the claim
that people won’t receive the ‘local content’ they need is patently
false.
–Summit, New Jersey….we have another dirtball, at least an
alleged one. Former Goldman Sachs senior economist John
Youngdahl, who lives in my old home town (and current site of
StocksandNews) was indicted for insider trading on government
bond auction information from back in 2001. In fact my town is
loaded with…….better stop there. Something about security.
–Verizon Communications settled with the unions. The
company now looks to eliminate 20,000 jobs through attrition,
while replacing some with lower-paid, non-union employees.
–Paul Saffo, a technology think tank director, on Microsoft and
the plethora of computer viruses. “It’s outrageous that a
company this profitable does such a lousy job.” [Business
Week]
–I watched Peter Lynch on Rukeyser’s program Friday night.
Lynch is so full of it, claiming he knew nothing of the mutual
fund scandal until reading the papers Friday morning. I may
comment more on him next week.
–Michael Dell is a real American hero and success story, but
am I the only one who noticed he sold $360 million worth of
stock from August 19-22? Or is this just another case of
estate planning?
–My portfolio: I purchased a third energy company, a driller,
bringing my equity exposure to a whopping 22%. That’s as far
as I’m going. The rest is cash, earning zero, sitting in a coffee
can located in the Meadowlands.
International Affairs
Israel: Within the hour, as I go to “post,” Palestinian Prime
Minister Abbas has resigned, fed up with dealing with Yassir
Arafat and the terrorists. The peace process is dead. We now
await further developments.
North Korea: There is no clearer example of my dictum “wait 24
hours” than when dealing with North Korea and its rhetoric. One
day they seek a diplomatic solution to the issue of their nuclear
weapons program, the next they’re back to threatening to test-fire
a bomb or launch a rocket over Japan.
Unfortunately, no one in the civilized world has a real plan to
deal with this basket case, at least one that makes sense. Should
the North detonate a bomb, it appears the response among allies
would be to enforce a total economic quarantine which
Pyongyang has already said would be an act of war, while at
week’s end there were reports the Bush administration may offer
up some olive branches such as security guarantees and / or
formal diplomatic relations.
The problem is time is on Kim Jong Il’s side and I hate to keep
repeating myself but I don’t see any scenario whereby he
willingly gives up his “nuclear deterrent,” just knowing what we
know of this certifiable nutjob.
Hong Kong: Power to the People! On Friday, Chief Executive
Tung Chee-hwa announced he was withdrawing the controversial
anti-subversion legislation known as Article 23. You’ll recall
my extensive reporting on this surrounding the now highly
successful massive protest of July 1st. But, many are suspicious
of Tung’s motives and they have every right to be. The issue is
far from over.
Taiwan: The military conducted its largest live-fire exercise ever
as a reminder to the mainland that an invasion would be no
pushover. Unfortunately, it’s not an actual invasion I’d be
concerned about but rather a rain of missiles on the airfields and
strategic sites that leads the government in Taipei to throw up its
arms in order to avoid total devastation. Of course if China
knows that the U.S. would never let this happen, the point should
be moot. But for all my talk on this issue, realistically, how
could Beijing be stupid enough to do anything prior to the 2008
Olympics? Unless it’s tied to conflict over North Korea….
Zimbabwe: It’s amazing President Robert Mugabe (two-time
“Dirtball of the Year”) is still in power, running his country
down to the roots as both African and Western leaders wimp out
on forcing change that should have occurred 3 years ago. But in
local elections this week, the opposition party outpolled
Mugabe’s Zanu thugs, taking 134 council seats to Zanu’s 100.
Turnout, though, was as low as 10% in some precincts due to
fear and the overall sense of despair.
Indonesia: And politics is playing an unfortunate role here, as
next year’s presidential election clearly influenced the decision
to give the spiritual leader of Jemaah Islamiyah, the cleric
Bashir, just 4 years in prison for treason, while acquitting the
bastard on more serious charges of plotting the Bali bombing.
President Megawati is afraid to offend the fundamentalists ahead
of the vote.
Burma: The military chief running the country said he had a
“road map for democracy,” while, again, democracy advocate
and Nobel Peace Prize winner Aung San Suu Kyi remains in
detention since May 30. The U.S. and other nations have
employed strict economic sanctions against Burma, but it’s
hoped here that when President Bush speaks before the U.N.
later this month that he blasts the druggies running the nation and
demands Suu Kyi’s immediate release.
Liberia: The people cheered wildly for Nigerian President
Obasanjo as he appeared in Monrovia to lend his support to the
peace efforts and the power-sharing arrangement. This is the
role the White House has long envisioned for Nigeria, a strong
regional force in West Africa that could fulfill a real leadership
position, including a military that could project its presence into
hot spots. Of course Nigeria still has serious domestic problems
of its own in dealing with Islamic militants. But as for the Bush
administration, read Donald Rumsfeld, this was a missed
opportunity.
Saudi Arabia: There was renewed talk this week of the
Kingdom’s role in 9/11, though as author Gerald Posner points
out, we should easily know how high up it went into the Royal
Family through the interrogation of key al Qaeda figures. It’s
just a matter of time before the truth gets out. Separately, Saudi
authorities claim to have found a plethora of surface-to-air
missiles near Jeddah, obviously capable of shooting down
aircraft. You hear something like this and you can’t help but
wonder when the terrorists will be successful. It’s not like we
can track down every rogue SAM in the hands of the devil.
Mexico: President Vicente Fox continues to flounder and he
received heat this week for closing the nation’s first human rights
office. He also fired his energy and environment ministers,
while more plants move their operations to China.
Britain: Defense Minister Geoffrey Hoon obviously didn’t tell
Lord Hutton’s commission the truth regarding his involvement in
the David Kelly affair. See ya, Geoffrey.
Random Musings
–Last week I noted that scholar Bernard Lewis believes Osama
bin Laden is dead. But Newsweek has a detailed story on how
bin Laden has been hanging out with his buddies in a well-
shielded part of Afghanistan on the Pakistani border. This isn’t a
surprise, per se, it’s just disturbing that, if true, we aren’t
flooding the area. And why aren’t we? One can easily surmise
it’s because we’re stretched too thin. Again, we need a larger
military, folks, not the downsized version Rumsfeld still seeks.
–In a New York Daily News survey, 56% of New Yorkers
disapprove of President Bush’s war on terror, though admittedly
this is a most liberal bunch, as witnessed by another question that
revealed 64% will vote for a Democratic candidate for president
in ’04.
–Speaking of Democrats, boy, that debate on Thursday was
awful, part of the reason being that 8 candidates is far too many
(it would have been 9 except Al Sharpton is such an idiot, he
didn’t plan on any weather delays in taking his flight to
Albuquerque). The two candidates who impressed me the least
were John Edwards (there truly is nothing there) and John Kerry.
As for Senator Kerry, Democratic operative Donna Brazile (of
all people) put it best in saying he doesn’t look comfortable in
his own skin. “It’s like someone put him in clothes that don’t
fit.” [Washington Post] Kerry’s appearance on “Meet the Press”
last Sunday was dreadful.
But in looking at the debate dispassionately, Richard Gephardt
did exhibit some real fire in the belly that he needs to show more
of on the campaign trail. [I disagree with 90% of his positions,
but I still say he is the party’s best candidate, in the purest sense
of the word.]
Anyway, at one point I did flip to the NFL pre-game show to
catch Aerosmith and “Dream On,” a great oldie for many of us
over about the age of 40.
–Now I find this incredible, but 2/3s of Americans can’t name
one Democratic candidate. These folks shouldn’t be allowed to
vote; anytime, anywhere.
–And to my friends in California, is Democratic Party chairman
Art Torres an a-hole or what? And what’s the deal with that
lunatic Bob Mulholland? What is it about the Democratic party
chairmen in general? Nationally, Republicans have classy
gentlemen like Ed Gillespie, while the donkeys have Terry
McAuliffe. Must be the Hollywood influence.
–Ah yes, looking at the same issue two different ways, in this
case a German Marshall Fund survey of 8,000 Americans and
Europeans on attitudes over Iraq.
Headline / International Herald Tribune (owned by the NY
Times)
“Europeans’ doubt over U.S. policy rises”
Headline / Wall Street Journal
“Chill Between U.S. and Europe May Be Showing Signs of
Thaw”
[For those of you in journalism school, I just handed you a good
topic for a report.]
–SARS will return this winter (someone pass it on to Kim Jong
Il and do us all a favor) and the Chinese haven’t helped matters
as they lifted the ban on the wild animal trade, even as new
evidence is produced that the civet cat was responsible for the
outbreak that killed over 900 worldwide.
–Drugs, drugs, drugs: 20 times more opium is being harvested
in Afghanistan today than in 2001, while the Philippines is facing
an explosion in the use of crystal methamphetamine among its
youth. I’ll never forget my trip to Saipan about 7 years ago and
the horror stories of meth addiction on the island, one
consequence of which is a soaring crime rate. On the positive
side, British and Colombian officials announced the successful
completion of a joint operation that uncovered $6-$7 billion in
suspect, though freshly laundered, stocks and bonds in a major
victory against the Colombian cartel.
–The Environmental Protection Agency is at it again, as USA
Today reported that the EPA silently lifted a ban on the sale of
land polluted with PCBs. The agency said it hindered the
cleanup at contaminated properties, to which I say, 1) that’s b.s.,
2) why keep this secret? and 3) clean the freakin’ sites up!
–And as a follow-up to my thoughts on air quality in lower
Manhattan in the days after 9/11, former EPA administrator
Christie Whitman said the agency was never told to lie about
conditions by the White House, but EPA inspector general Nikki
Tinsley, in an interview with NBC News, said yes, the EPA was
pressured to alter reports, though she couldn’t identify if there
was any influence beyond the bureaucratic level. In other words,
unless someone else comes forward, it’s going to be hard to
prove my own suspicions.
–A federal appeals court threw out 100 death sentences across
various western states because judges rather than juries decided
in each case. The Supreme Court will rule on this in the spring
in what promises to be an explosive debate. Of course I come
down on the side of the judges.
–I saw that a luxury condo development under construction in
Las Vegas went up in flames Thursday night and I immediately
thought……the terrorist Earth Liberation Front. [As of this
writing I have yet to see the official cause of the blaze.]
–This whole idea of John Hinckley being allowed to take
unsupervised leave is absurd. The medical authorities who
believe it’s okay need to be supervised themselves.
–I have no problem with a congressman earning $158,000 a
year, but 5 raises in 5 years? C’mon, guys, you can be smarter
than that….wait a second, who am I kidding?
–There are mixed studies on whether some fish are really high in
mercury content and / or PCBs. The bottom line seems to be that
“farmed” product, such as salmon, should be eaten in
moderation. Well, since I’ve previously announced my own
tradition, “Salmon Sunday,” I’m going to be looking for wild
salmon only from here on. [Paid for by the WSS….the Wild
Salmon Society.]
–Around February 3, 2014, make sure you stock up on beer and
Chex Mix because newly identified “Asteroid 2003 QQ47” has a
one in 909,000 chance of hitting earth that March 14th with a
force that would be at least 8,000 times the impact of the bomb
on Hiroshima. I put a post-it note on the refrigerator…I suggest
you do the same.
–Just a small correction from last week regarding the exact
Dennis Miller quote.
“The main civil liberty I’m looking to protect is the ‘me not
getting blown up’ one.”
–What’s going on here? Hillary’s “Living History” is back to #2
on the New York Times best seller list. It’s a left-wing
conspiracy, my friends.
–I completed a six-day visit to Boston on Tuesday and I just
want to say to you Bostonians, you have an awesome city.
–The Wall Street Journal reported that cash-strapped school
districts are now charging high school students for activities such
as band and various sports. Nothing is more important than
athletics and the arts for our young people…everything else
should take a back seat, including computer purchases.
But then I read a column in Newsweek that said every kid should
have a computer in school. After all, the fellow wrote, how can
you do research without Google? That’s ridiculous.
I’ll fill you in on something involving StocksandNews. 99% of
the research for my “Hott Spotts” and “Wall Street History” links
is through good, old-fashioned books. I have over 100 history
compilations in my office and another 100 or so at home and my
philosophy is if I’m going to use a source I want an editor and
publisher standing behind the work to ensure as much reliability
as possible.
Of course this is an indictment of the very medium I’m using
myself, and obviously the web is incredibly useful for thousands
of searches and the ease of news gathering, but our children are
not employing the web just for research. Try ‘instant-
messaging,’ sports fans, for starters…the biggest freakin’ waste
of time ever created.
No, each kid does not need a PC in school….after all, 90% or
more probably now have one at home. Fund sports, music and
theatre, first. Then think about the tech side. One PC for every 2
kids is more than enough until they get to college. That’s just my
opinion, I could be wrong.
–But wait, there’s more. Speaking of kids and outdoor activities,
studies show they have a dangerous Vitamin D deficiency
because they aren’t playing outside enough and getting
exercise. Everyone needs some sun after all. And to compound
matters, kids drink too much soda and not enough milk. We’re
talking stunted growth and early osteoporosis.
–Finally, with talk of the Bush administration going back to the
U.N. for assistance in Iraq, it’s important for Americans to
understand that with all the rhetoric, we do have friends helping
us out aside from the British. I realize I’m about to forget a few,
but between operations in Iraq and Afghanistan, Australia,
Canada, Germany, Poland (in a big way), Denmark, Czech
Republic, Spain, Ukraine, Norway (great Air Force), the
Netherlands, even Mongolia (!), deserve our thanks.
Americans might hear of 50 soldiers here, 100 there, and think
“big deal,” but to many of these nations it IS a big deal and you
have parents and spouses worrying just as much as their
American counterparts. We can build a more effective coalition
with a combination of diplomacy and, yes, cash. We have no
other choice but to do so. In the meantime, as my overseas site
traffic continues to swell, I just wanted to let the new readers
know this is one American who appreciates many of your
nations’ efforts. Welcome aboard.
—
God bless the men and women of our armed forces.
God bless America.
—
Gold closed at $378
Oil, $28.88…$31.57 previous week.
Returns for the week 9/1-9/5
Dow Jones +0.9% [9503]
S&P 500 +1.3% [1021]
S&P MidCap +0.9%
Russell 2000 +2.3%
Nasdaq +2.6% [1858]
Returns for the period 1/1/03-9/5/03
Dow Jones +13.9%
S&P 500 +16.1%
S&P MidCap +21.8%
Russell 2000 +32.8%
Nasdaq +39.1%
Bulls 55.5%
Bears 18.2%
Have a great week. I appreciate your support.
Brian Trumbore
