[Posted 7:00 AM ET]
“The United States is overextended, not just militarily but
economically. We are trying to do too much, borrow too much,
spend too much, and sooner or later we will have to suffer the
consequences. We are a country in the beginning stages of what
can best be described as hegemonic decay. Empires take decades
if not centuries to wither, a process more clearly viewed through
a rearview mirror; Edward Gibbon’s masterful account of the
decline and fall of the Roman Empire is perhaps the greatest
example of this truth. But here and now, we’re much less
inclined to Gibbon’s viewpoint than we are to Alfred E.
Newman’s. “What, we worry?” is pretty much the national
motto when it comes to our finance-based economy and its future
prospects.”
–William Gross / PIMCO…Washington Post Op-Ed, 1/13/04
Granted, Mr. Gross’s position isn’t a real popular one these days,
witness the recent euphoria on Wall Street, and as I’ve noted in
the past, whether it’s Gross, Morgan Stanley economist Stephen
Roach, or even yours truly – all of us harboring serious doubts as
to the sustainability of certain trends – no one can dispute we are
currently in a real sweet spot. It’s what comes after it, perhaps
starting with the second half of 2004, that”s the issue.
But for now, can you say nirvana? Interest rates, as measured by
the key 10-year Treasury, plummeted back below 4% (before a
late sell-off on Friday), meaning mortgage rates are once again
falling, thus giving the housing sector another lift. Core inflation
figures, as reflected this week by the latest readings on producer
and consumer prices, remain tame; in the case of the CPI at a
40+ year low. The U.S. trade deficit finally fell in November,
the first such decline in 13 months, which helped rally the dollar.
And then you had a report for the month of November that
showed foreigners plowing a net $87 billion into U.S. financial
assets, triple October’s level and 20 times September’s, again
lending further support for the greenback. This last bit is a huge
positive because America needs this capital to finance our
soaring deficits, without which interest rates would have to rise
until they reach a level that is attractive again for these same
investors.
I mean, heck, you also had a bunch of Federal Reserve governors
and Chairman Alan Greenspan issue the all clear sign, yet again,
in a number of presentations this week, with Greenspan telling a
Berlin audience that he is “optimistic” about avoiding a dollar
crisis, U.S. deficits aren’t an immediate problem thanks to
“international flexibility,” and it’s only “a matter of time before
we see employment pick up significantly.”
Now I suppose you’re waiting for a “Yeah, but…” from moi.
Not yet, friends, because on the earnings front we heard far more
that was bullish than bearish, and the likes of blue chips IBM,
G.E. and Intel were pretty positive on the rest of the year and into
2005, so what’s not to like? Not much, unless you are one who
focuses on valuation, though even I don’t have a huge problem
with current multiples on the aforementioned big boys.
It’s Nasdaq in general that I take issue with, but I’ll spare you
that diatribe for this week. I would just say that with all the
happy talk in general over the outlook for capital spending, for
example, much of this was already baked into the equation. I’m
not surprised by the presentations. I just can’t stomach the share
prices in many of the names that are once again peopling the
most active list.
And you have to forgive me if I interject a “hot spot” or two, but
I’m going to continue to be more cautious than the average Joe
simply because issues such as North Korea and Iran matter, and
they don’t appear as if they’ll be resolved quickly, while Iraq, as
I’ll point out later, has the potential to totally overwhelm
Washington.
Finally, we’ll go back to Bill Gross, a giant in the financial
industry who I am most familiar with and a man whose opinion I
respect. Gross concluded his op-ed piece by asking, “…where’s
the big, bad wolf in this story? Well, in addition to future
domestically induced bond market sell-offs destroying the
housing market, and a finance-based economy inexorably
slowing down as restrictively higher yields work their historical
magic, the fulcrum of a future creditor-based revolt probably
rests in Beijing rather than in New York or Washington.”
—
Street Bytes
–Just another solid week, the 8th straight advance for both the
Dow Jones and S&P 500, 7th out of 8 for Nasdaq, with gains of
1.6% on each of the first two and 2.6% for the tech barometer.
It’s the best stretch in years and aside from the aforementioned
solid earnings reports you had the $58 billion merger between
J.P. Morgan Chase and Bank One. Such deals have always been
known to warm the cockles, and it bodes well for future
investment banking business (and Hummer sales), if nothing
else.
Plus we are solidly back in a momentum / program-trading
driven environment; rationality be damned. Take Internet
equipment maker Juniper Networks, for example, which handily
beat estimates and upped guidance for ’04, but after soaring on
the news trades at a 70 multiple on future expectations…and I’m
being very generous.
But there were a few mildly disappointing news items, such as
tech consulting firm Accenture’s tepid outlook and software
giant SAP’s failure to beat expectations with its earnings
pronouncement. Then again there was my neighbor Lucent.
Hey, I hope this company rebounds because it will only benefit
the value of my home three blocks down the hill, but it too is
getting a mite frothy, even at just $5. [Congratulations are in
order, though, for anyone picking it up at a $1. You have my
admiration.]
–U.S. Treasury Yields
6-mo. 0.96% 2-yr. 1.67% 10-yr. 4.03% 30-yr. 4.89%
So what else can go right? Aside from the week’s strength in the
dollar (and I defy anyone to get too excited following the slide of
the past year), there is that chance that the federal budget deficit
numbers come in far better than currently anticipated due to the
strength in the economy. No doubt the administration will play
games with expectations, but if the number for fiscal ’04 is
closer to $400 billion than $500 billion, it’s a positive, even if it
is still at a record gross level, because as an overall share of the
economy it just isn’t that big a deal, for now.
–In a piece for the New York Times, Bill Gross worried about a
“minor bubble in the corporate bond market” and he also said he
was taking his own money out of the PIMCO Total Return Fund
that he manages. But since I mentioned this one the other week,
projecting a return on the fund of minus 1-2%, I have to
comment on his own projection of a ‘gain’ of 2-3% “before
fees.” I always use the ‘A’ shares when discussing potential
returns, which includes fees, while he is talking institutional
shares. In other words, if we were comparing apples to apples,
his estimation is really up 1-2%. I’ll stick with mine, but we’re
both expecting interest rates to rise rather substantially from
current levels by year end and if they don’t, both of us will have
been on the low side, especially yours truly.
–In an interview with CNBC, one Fed governor was asked if he
was concerned about a possible bubble in real estate. “What
would make real estate decline?” he responded. For starters, an
attitude like that, I mused.
–One thing I can’t argue with, technically the equity markets
look great, and it’s a big reason why I couldn’t place a big bet on
the ‘short’ side without fear of getting creamed.
–China is busy bailing out its large banks as it prepares to bring
them public, before unleashing foreign competition into China’s
banking sector in 2007 as mandated by the WTO. Of course this
is also just another excuse for me to warn about transparency and
accounting issues as you ponder your own investments here.
Activity among Wall Street’s biggest players is fast and furious,
not always a good sign for investors as we should have learned
from the past.
On the technology front, China appears to be in violation of
various WTO mandates as it adopts national standards in order to
freeze out foreign competitors, i.e., ‘adopt ours (such as in
wireless applications) or you won’t be able to play here.’
Then there is energy. China’s fuel imports rose a whopping 31%
in 2003 and it will overtake Japan in ‘04 as the world’s 2nd-
largest consumer of oil.
–Speaking of all things oily and gaseous, aside from China’s
exploding demand there are also a myriad of bottle necks in the
supply chain, including a traffic jam in both the Bosporus and
Dardenelle (partly due to security concerns), as well as
continuing sabotage on the pipeline from Iraq into Turkey.
Meanwhile, inventories in the U.S. are at 28-year lows and some
northeastern U.S. utilities faced major demand crunches this
week due to the record cold wave. There was even talk on
Friday of “rolling blackouts,” a term normally reserved for
summer.
–The SEC is zeroing in on the practice in the mutual fund
industry of paying for shelf space, or “revenue sharing.” This is
something that goes back to my days in the business and on the
surface there is nothing illegal here if it was properly disclosed.
But many, such as the SEC’s Stephen Cutler, would argue that
burying a line or two in the prospectus isn’t enough and so the
industry is gearing up for new regulations that will spell out just
what the incentives were for the broker or financial advisor to
sell you a particular fund offering.
I could go on and on about this topic and I will spend more time
on it next week, but for now here’s what ticks me off about the
stories being written. 90% of them don’t differentiate between
‘brokers’ and ‘brokerage firms’ and it’s an important distinction.
The brokers, those selling to you, often don’t receive any extra
compensation for selling a preferred fund, rather it’s the
brokerage firm’s headquarters (starting with mutual fund
marketing…then working up) that does. It’s HQ that often rams
the funds down everyone’s throat, and I could say the same thing
about all manner of products on the Street, not just funds, and
then the branch manager comes under fire if certain targets aren’t
met.
The other issue in the “payola scandal,” as some are calling it,
has to do with the difference between paying out in ‘hard’ or
‘soft’ dollars. For example, Fund Co. A cuts a check for 10 basis
points on sales to Brokerage X, versus directing a similar dollar
amount in commissions to Brokerage X’s trading desk. The
former practice is clear cut and not necessarily a conflict of
interest, while the latter definitely smacks of one since the fund
shareholder may not be receiving the lowest price for trades done
in the portfolio. To be continued.
–Regarding the J.P. Morgan Chase – Bank One merger, the New
York Post’s Paul Tharp had a good angle on the CEO of JPM.
“William Harrison…will walk away with company stock valued
at $159 million – just about what the bank had to pay in penalties
last year for handling a phony partnership deal for the corrupt
Enron crowd.”
–In a related item, Merrill Lynch pre-announced that it will be
reporting record earnings for all of 2003, in excess of $3.8
billion. While this is great for the employees who survived the
purge of 2001-2002, and while Wall Street’s big bonuses help
fuel activity throughout the economy, it is nonetheless a joke to
compare such huge profits with the puny penalties all of the
Street paid for its past transgressions. And to think that if Eliot
Spitzer hadn’t become involved, we wouldn’t have seen even
that much.
–Waddell & Reed is being investigated for allegedly switching
6,700 clients from one variable annuity to another, needlessly,
thus generating up to $47 million in fees and commissions.
–Continental Airlines Chairman and CEO Gordon Bethune is
leaving a year early, a big blow. Like many others I have a
tremendous amount of respect for this man and he would make
for a helluva political candidate, though he’s undoubtedly too
smart to pursue this path.
–Former Enron CFO Andrew Fastow finally pled guilty and will
be serving 10 years in prison. Coupled with his wife, who will
be serving a few months of her own, that makes 7 convictions
thus far in the Enron investigation. Mr. Fastow received the
relatively light sentence due to the fact he has agreed to sing
against the likes of former CEOs Ken Lay and Jeffrey Skilling,
as well as the investment bankers and accountants involved in
the structuring of the illegal partnerships.
–Germany’s economy actually shrank last year, the first time
since 1993, but this is old news. It’s expected to grow at an
admittedly tepid 1.5% rate in 2004.
–Barron’s Eric Savitz had a piece on the valuations applied to
XM Satellite Radio and Sirius, the two big players in this market.
As of one week ago, investors were valuing the projected
subscriber base at 43 and 110 years of service, respectively. Ah
yes, shades of the Bubble.
–New York City’s budget picture has brightened considerably in
just one year thanks to Wall Street’s soaring fortunes and
increased tax revenues. Mayor Michael Bloomberg’s approval
rating will begin to rise.
You will also soon see more and more stories of improvement in
state budgets and pension funds, as is the case here in New
Jersey. It’s only natural, with the rally on Wall Street, and
another big plus for President Bush.
But as Business Week points out, when it comes to corporate
pension funds, many still base their funding obligations on high
expectations for market returns, such as GM’s 9% expected rate,
and to achieve these lofty goals they are increasingly shifting
into what many would label riskier sectors, such as junk bonds,
real estate and emerging market stocks.
–Business Week also had a piece on former Vanguard Chairman
Jack Bogle, who maintains a think-tank at Vanguard’s
headquarters. What I found fascinating about this curmudgeon is
how Bogle and his handpicked successor Jack Brennan refuse to
speak to one another. Bogle wanted to stay on as chairman
beyond the retirement age of 70 while Brennan is taking
Vanguard into directions different from what Bogle envisioned.
–Inflation watch…Mark R. reports that tickets for an annual
wine tasting in Philadelphia soared 25% this year. Yup, add this
to property taxes, health insurance, and tuition as indicators of
the real picture out there.
–My portfolio: Uh oh…I’m back into India, after prematurely
getting out last year and leaving gobs of rupee on the table. So
I’m about 32% energy (I had a nice winner with my refiner this
week), 4% Japan, 2% India, 2% pharmaceuticals, and 2%
Internet telephony. Hey, that adds up to 42% equities! Another
20% and I’ll be echoing, “What, me worry?”
—
International Affairs
Iraq: In an NBC / Wall Street Journal poll, by a 52-40 margin
voters think the Iraq war is worth the costs, both in human and
financial terms, and while the Bush administration should be
happy with this result, I draw the following conclusion. I
believe the American electorate is split 40 / 40 on almost all
issues, with the other 20 percent up for grabs, and if you
subscribe to this theory, it is unlikely the percentage who don’t
feel Iraq is worth it will decline much further, if at all. In other
words, this is as good as it gets.
The Provisional Coalition Authority headed by Paul Bremer has
a big problem on its hands, that being the timetable for handing
over authority to a transitional Iraqi government by June 30.
Understanding that the Shiites make up over 60% of the
population, the leading cleric, Ayatollah Sistani, is demanding
direct elections for the interim national assembly rather than the
immensely complex caucus system (probably stolen from Iowa)
that the coalition is trying to set in motion.
The fear is that general elections would only inflame the ethnic
divisions, and to make matters worse Sistani has refused to even
meet with Bremer, so Bremer rushed back to Washington this
week to work on plan B.
At the same time the U.S. also wants the U.N. and Kofi Annan
involved (“You wanted a role. Here, take this.”), though at this
stage it’s questionable whether Annan can have any impact.
Plus, you have a situation where the Iraqi Governing Council is
purging Baath Party members from new government jobs
(appropriate, but divisive), while the Kurds are rebelling, so far
peacefully, about their role in a new Iraq and potential oil
concessions as payment for cooperation.
If you get the sense from reading the above that it’s kind of a
mess, that’s the point. The Washington Post’s David Ignatius
posited the following theory in an op-ed comparing Bremer to a
bankruptcy trustee.
“Bremer’s bankrupt Iraq has three main political creditors: the
Shiites, the Kurds and the Sunnis. If any one of them presses for
unilateral advantage – threatens to ‘call its loans,’ so to speak –
the fragile structure of the new Iraq might crumble. As in a
bankruptcy, the creditors can achieve their goals only if they
patiently forbear – and let the trustee do his job of putting the
enterprise back together.”
There are no clear answers, knowing the parties involved, and
it’s the biggest reason why some of us said long before the war
started that the American people need to be prepared to see this
through for years and years to come, but as the June 30 deadline
approaches, with inevitable massive demonstrations against the
U.S. occupation, I still harbor serious doubts about our staying
power, especially if the Bush team sees an erosion in the poll #’s.
China: Joint Chiefs of Staff Chairman General Richard Myers
visited Beijing to meet with his counterparts and, significantly,
addressed the issue of China’s “very large” missile arsenal
directed at Taiwan, saying the U.S. was committed to Taiwan’s
defense.
But then on Friday night, Taiwan’s President Chen Shui-bian
addressed his people on the issue of the March 20 referendum.
Two questions will be posed on the ballot.
First, “The people of Taiwan demand that the Taiwan Strait issue
be resolved through peaceful means. Should mainland China
refuse to withdraw the missiles it has targeted at Taiwan and to
openly renounce the use of force against us, would you agree that
the government should acquire more advanced anti-missile
weapons to strengthen Taiwan’s self-defense capabilities?”
Second, “Would you agree that our government should engage in
negotiation with mainland China on the establishment of a ‘peace
and stability’ framework for cross-strait interactions in order to
build consensus and for the welfare of the peoples on both
sides?”
As this was just released, I’ll have further comment next week,
but for now Chen should have appeased Washington, which
feared a harsher tone.
Japan: I just want to alert you to a piece on my “Hott Spotts”
link concerning Japan’s new nationalism. It’s an important story.
India: My idyllic grand alliance of Japan, Australia, India,
Britain and the U.S. continues to take shape. This week, Prime
Minister Vajpayee hailed the new relationship with the U.S.,
saying the “strategic (partnership) is based increasingly on
common values and common interests.” India and the U.S. will
now expand cooperation on missile defense (joining recent
moves by Japan and Australia…Britain has always been there)
and towards this end President Bush lifted some technology
export controls that had been in place, while India agreed to
further lift restrictions on foreign investment in various sectors of
its economy. Vajpayee also announced he would seek a new, 5-
year term.
Iran: As the February 20 parliamentary elections draw near, the
hardline clerics and the Guardian Council continue to battle
President Khatami over the eligibility of reformist candidates
that the council seeks to ban. Khatami threatened to resign along
with the rest of the cabinet should his wishes not be followed.
But at week’s end, Ayatollah Khamenei said he was reviewing
the clerics’ orders. It will be interesting to see how this plays
out, to say the least, and those seeking a Libya-style agreement
on weapons of mass destruction with the mullahs in Tehran
should pay particular attention.
Israel: Syria rejected Israel’s offer of peace talks as not being
sincere, though even a hardliner like Israel’s Benjamin
Netanyahu is in favor of them. If Syria verifiably renounced
terrorism, it may get some of the Golan Heights back. Heck, I
really believe Syria could crack this year, but we need to see
reasonable stability in Iraq for this to occur.
North Korea: Last weekend the independent inspection team was
presented evidence of reprocessed plutonium as Pyongyang
sought to show off facets of its “nuclear deterrence.” There were
also further signs that up to 8,000 fuel rods had been removed…
to where, I doubt U.S. intelligence knows.
South Korea: The foreign minister, a big supporter of the U.S.,
resigned over disagreements in policy with the Roh
administration, the latter wanting to show its independence from
Washington. The timing couldn’t be worse given the impasse
over the above.
Russia: As predicted in this space, the Kremlin is already tussling
with the newly-elected government in Georgia over the fate of 2
Soviet-era bases which were slated to close in a year or two.
Moscow now says they need to remain until 2010, or, it will
accept a cool $500 million to close them sooner.
Mexico: President Vicente Fox was cordial in his meetings with
President Bush down in Monterrey and offered his support for
Bush’s immigration proposal. But I still see little chance
Congress acts on it this year. The other Latin American leaders
at the summit, with one or two exceptions, hate the U.S.
Canada: Bush did some fence-mending with Canada’s new
Prime Minister Paul Martin and the U.S. will allow our northern
friends to bid on a second round of major reconstruction
contracts in Iraq as long as Canada stops sending Arctic
temperatures across the border.
Random Musings
–The latest NBC / Wall Street Journal poll asked, ‘Should
President Bush be re-elected?’ Yes, by a 51-42 margin, and not
a great surprise that it broke down 86 / 10 among Republicans,
18 / 76 among registered Democrats.
–Joe Lieberman might as well drop out today. With all the press
coverage of the now Big 4 in Iowa – Dean, Kerry, Gephardt, and
Edwards – plus Clark, Lieberman doesn’t stand a chance of
gaining any traction. And if Gephardt finishes 2nd or 3rd in Iowa,
he’s finished, so both will exit after New Hampshire, where the
two will fail miserably. But a Dean, Clark, Kerry, Edwards
battle does have the potential to last a while. C’mon, wouldn’t
you love a brokered convention just once? It would be terrific
television.
–I have to defend Howard Dean on the cheap shot he took from
fake Reverend Al Sharpton concerning Dean’s lack of minorities
in his Vermont cabinet. Get real. No further comment required.
–Speaking of Sharpton, Michael Shackman had an expose in the
Times concerning further investigations into Sharpton’s financial
dealings. Some of us continually ask, “Where does he get all the
money?” [Ditto Jesse Jackson, for that matter.] Sharpton
recently spent $7,343 for 3 days at the Four Seasons in Los
Angeles, for example, yet he owes innumerable creditors.
–Paul O’Neill…………another classic example of why I say,
“Wait 24 hours.” It’s not even a story anymore.
–Last Sunday, “60 Minutes” had a piece on India and
outsourcing. It was balanced, but there is little wonder why so
many in America are concerned about the outsourcing trend in
general. So I just wanted to present the opinion of economist
Robert Samuelson, my personal favorite.
“Despite job losses (in the States), consumers or companies gain.
Lower prices boost purchasing power or profits. That creates
more demand at home. Consumers can spend more; businesses
can invest more. As long as the economy responds by expanding
production – and offering new things to buy – then most job
losses, even if traumatic for individuals, are temporary.
Similarly, what other countries earn abroad through exports they
can also spend abroad. Their imports may not initially come
from the United States, but if our products remain competitive,
we’ll get an adequate share of global trade.
“In theory, service imports (the result of outsourcing abroad)
shouldn’t be different. Although more workers may face the
unsettling global competition, job gains ought to dwarf job
losses. What’s unknown is whether this theory – which has
worked for 60 years – will continue to work.
“Is America’s economic vitality still suffering from the
technology and stock ‘bubbles’? If companies won’t expand – if
they’re glum about the future – then lackluster job growth will
choke the recovery. And what about the trading system? In
Asia, some countries hoard export earnings. They accumulate
huge reserves of ‘hard’ currencies (mainly dollars) rather than
spend for imports. If too many countries do this, the trading
system promotes stagnation and merely shifts jobs from one
country to another. In a weak job market, outsourcing – a small
threat by itself – could become a large lightning rod for anti-
globalization discontent.” [Source: Washington Post]
This last point is the protectionism many of us worry about.
–David Leppard had the following in the London Times
regarding the policy of checking airline passenger lists.
“Air passengers on key European routes…face new disruption
under government moves to block bogus asylum seekers…
“Seven out of 10 false claimants destroy their identity papers
during their journey and then tell British immigration officers
they are fleeing from a brutal regime.”
Lovely.
–Related to the above, with a few notable exceptions the world
continues to dodge one bullet after another on the terrorism front.
This week it was announced Swiss authorities had recently
arrested 8 suspected al Qaeda supporters based on cellphone
records, while Britain nabbed a potential suicide bomber who
may have been targeting an airport.
–I wish Carl Sagan was still alive. No one could articulate the
reasons for exploring space better than he, and that’s what we
need these days. Of course I fully support the president’s plan
for returning to the moon and using it as a platform for a manned
mission to Mars. We just have to do it, and to those who
complain it’s too costly (roughly 50% of the American public) I
say ‘wake up and smell the coffee.’ We waste gazillions of
dollars every year on idiotic government programs but when
NASA wants a few bucks everyone gets up in arms.
But does NASA always run the best ship? No, and some of the
existing programs should be scrapped, like the space station
(which Bush is under international pressure to complete),
because once we have a base on the moon, what do we need
that for?
Robert Zubrin, President of the Mars Society, wrote the
following in an op-ed for the Post.
“Mars and Earth are not biologically isolated. As a result of
asteroidal impacts that periodically splatter matter from each
planet off into space, there is natural transfer between worlds.
Three and a half billion years ago, it seems clear that there was
liquid water on Mars and that Earth was already covered with
bacteria. So there almost certainly was life on Mars at that time,
if from no other source than the Earth. The real question is not
whether there was ever life on Mars, but whether such life had a
separate origin, or a common but prior origin, from Earth life.
Did genesis happen twice in our solar system, or just once? If
twice, did both types employ the same biochemical plan? If
once, was it life from Earth that seeded Mars, or did Mars seed
the Earth?”
Think about this next time you look up to the heavens.
–Last week I wrote on the latest study concerning the dangers
from eating too much mercury-and PCB-laced salmon,
particularly of the ‘farmed’ variety. And I have to admit that the
next day, instead of my traditional “Salmon Sunday” I ate
catfish, though farmed catfish in large quantities isn’t that great
for you, either. The problem is that farmed fish are being fed
pieces of other fish and it’s kind of like mad cow, which had its
origins in cattle being fed cow body parts.
But merely changing the feed formula that fish farmers employ,
while helpful, doesn’t necessarily solve the problem. Let’s face
it, we’re slowly ruining our food supply through pollution. As I
like to say, it’s all about clean air and water, everything else
flows from this…except in developing nations where you not
only need clean water, first, you next need good roads.
So I’m reading this piece in the L.A. Times on the people of
Greenland. These poor souls have the “highest human
concentration of industrial chemicals and pesticides found
anywhere on earth.” Greenland? Actually, it makes perfect
sense because their diet almost solely consists of the big fish, like
salmon or tuna, that contain the most PCBs and mercury,
compared to you or I who might eat fish just a few times a
month.
But it also shows you the spread of the chemicals throughout the
entire food chain, across the oceans, and it’s only going to get far
worse before we can even begin to think of reversing some of
this.
So what am I going to do now with my own diet? Plankton. I’ll
wash it down with beer.
–After I went to post last Saturday I read a headline in the
London Times, “Police doubts on Diana’s death.” The story
dealt with driver Henri Paul’s blood test and whether French
police properly took it, or if it was even Paul’s to begin with
since no DNA tests were taken. British officials emphasized
they didn’t see anything criminal, however, and Scotland Yard
has confidence in the French investigation. Ergo, to me it was
just another cheap shot at the royal family and as Alan Hamilton
wrote in the same paper later in the week, “Where is the public
outrage over the treatment of Prince Charles?”
–There was an incident last weekend where a passenger on a
commercial airliner from New York to Washington, if I recall
correctly, demanded to be flown to Australia. The poor guy got
in a bit of trouble but he really deserves credit for knowing that
Sydney is awesome this time of year, especially compared to the
zero degrees we had in New York on Friday morning!
–Congratulations to 14-year-old Michelle Wie for missing the
cut at the Hawaiian Open by just one shot. A fantastic
performance.
–New York City honored sanitation man Louis Gagliotto for
working 47 years without taking a single sick day. You should
have seen him with the mayor, beaming. God bless him.
—
God bless the men and women of our armed forces. Watch over
them during this troop rotation phase.
God bless America.
—
Gold closed at $407…a $20 collapse due to the strength in the
dollar.
Oil, $35.07
Returns for the week 1/12-1/16
Dow Jones +1.3% [10600]
S&P 500 +1.6% [1139]
S&P MidCap +1.6%
Russell 2000 +2.6%
Nasdaq +2.6% [2140]
Returns for the period 1/1/04-1/16/04
Dow Jones +1.4%
S&P 500 +2.5%
S&P MidCap +3.1%
Russell 2000 +6.0%
Nasdaq +6.8%
Bulls 56.4
Bears 18.8 [Source: Chartcraft / Investors Intelligence]
I’m off to New Hampshire to check out some of the presidential
candidates and drink a lot of hot chocolate.
Have a great week. I appreciate your support.
Brian Trumbore
