[Posted 7:00 AM ET]
Iraq
This week President Bush did what he should have been doing
every few months since the fall of Baghdad; get out in front of
the American people, give an honest update and explain again
just why we’re waging this war.
Of course some of us wish he’d admit past mistakes and level
with us when it comes to redefining the original mission as he
has…from finding WMD and removing Saddam to hunting
down terrorists…but he’s seemingly incapable of that at this
point. I can live with it, but believe me I understand those who
can’t just as long as at the same time they also know what’s at
stake if we lose.
President Bush greatly exaggerated some important points the
other night, such as the success, or lack thereof, of the rebuilding
effort. I’m glad the little children are going to school, but I don’t
need to go to Baghdad myself to know the infrastructure remains
a shambles thanks to incompetence, corruption and deceit; the
latter concerning those donor nations who haven’t honored their
initial pledges of support.
What President Bush did do the other night is take Senator John
McCain’s advice. Make it a call for national service. Here I
believe he may have succeeded enough to help in the recruitment
effort.
As support for the war has been dwindling, particularly the past
year, Bush did little to stem the tide. One survey this week
revealed that by a 61-37 margin, the people don’t believe the
president has a clear plan for Iraq. [USA Today / CNN / Gallup]
52% in another believe he has “intentionally misled” the public
in making the case for war. [Washington Post / ABC News] But
Bush is lucky another poll has 52% believing the war has
contributed to our long-term security [Washington Post / ABC
News] and a majority still doesn’t just want to pull out without
completing the mission.
In other words it’s not too late to begin to repair the political
damage. Of course on this point it’s also largely dependent on
the will of the Iraqi people.
I fall in the camp that believes the deadlines established must be
followed; those being August 15 for a draft constitution, mid-
October for a referendum on same, and December to elect a new
government. This is where Shiite Ayatollah al-Sistani can play a
pivotal role, as he already has on a number of occasions and did
once again this past week in offering concessions to the Sunnis.
But even here I remind you of a cryptic note I wrote last week,
knowing only at the time that a hardliner had won the
presidential run-off in Iran. Shia-dominated Iran will have an
even greater impact on the political process in Iraq than ever
before. There is no way of knowing, however, exactly how this
will play out.
But I have to take a moment to talk about Secretary of Defense
Donald Rumsfeld who was all over the airwaves Sunday as the
administration’s designated defender of the war. I watched him
on “This Week” and “Meet the Press” and I was both infuriated
and exasperated. Anyone who follows politics knows the
difference between spin and outright lying. I called Rumsfeld
the latter in this space back in May 2003 and his performance
Sunday was disgraceful.
At one point Tim Russert asked the secretary if he or the
administration had made any misjudgments about the war, like in
1,700 dead, the $200 billion price tag, and no WMD. Rumsfeld,
with that little sneer of his, told Russert that in fact he had
“submitted a list of contingencies” to the president beforehand.
Was “insurgency” on it? Russert asked. Rumsfeld replied “I
don’t know.”
It was enough to make one sick. I’m holding back as much as I
can, friends, when it comes to discussing this man. But I really
can’t recall ever feeling such disdain for a leading Washington
figure, save one, as I do Donald Rumsfeld; especially given his
role as leader of the Pentagon in a time of war.
I can understand why at this point the president would be
reluctant to show Rumsfeld the door. It would be an admission
that mistakes have been made and all is not going as well as
Bush wants the public to believe. But history will not look
kindly on the secretary and the danger for the Bush legacy is that
Rumsfeld drags the president down with him.
Wall Street
The Federal Reserve raised the short-term fed funds rate a 9th
time, another quarter point, to 3.25% as it offered the economic
“expansion remains firm” and “longer-term inflation
expectations remain well contained.” But if inflation is well
contained, and the Fed’s #1 priority is to maintain price stability,
then it must be ready to stop hiking rates, right? Wrong.
Because the Fed also avers that “Pressures on inflation have
stayed elevated.” Well what the heck is it, Chairman Greenspan?
Either inflation is a problem or it’s not.
Of course it isn’t. Yes, I know all the things you and I pay for
every day are going up faster than 2-3%, but we still have to deal
with the official data and using these numbers inflation is not an
issue. If it was, the long end of the yield curve would be rising,
not falling as it has been (until Friday), even with all the buying
of bonds by foreigners and pension funds.
So the reason why it was a shaky week for equities, basically
unchanged after a dreadful performance the prior one, is because
the markets believe the Fed is going to keep hiking beyond the
August meeting and maybe straight through the end of the year,
to 4% or thereabouts. That could translate into real damage, like
with earnings, for starters, but we’ll focus more on this next time.
For now, this week’s news on the economy was positive.
Readings on consumer confidence have suddenly turned upward,
and by substantial margins, thanks to a better sense of job
security, and two key manufacturing figures were also higher
than expected, foretelling renewed vigor here, perhaps. And
even when a number came in flat, such as with May’s personal
consumption figure, it was quickly brushed off because June is
expected to look far better, as one glance at Friday’s release on
auto sales indicated.
But there are other signs the global outlook is increasingly shaky.
While air passenger traffic is up almost everywhere, air-cargo
shipments are down, as are all other major shipping barometers.
And obviously we still have sky-high energy prices, with oil,
after a temporary dip mid-week, still finishing at the $58.75
level. Yet as inventories remain at multi-year highs, the bulls,
including T. Boone Pickens who is now forecasting $100 in the
next 12 months, say the excess will be sopped up over the
summer, setting us up for real supply issues by the 4th quarter.
Plus there’s the new hardline president in Iran who has already
threatened to keep out foreigners which invariably will translate
into less production from Iran’s fields.
Record high oil prices are killing much of the developing world,
particularly in Asia. This week Singapore, Thailand, the
Philippines and South Korea all blamed energy for hits to their
economy as they ratchet down their GDP projections.
[Ironically, for the first time in over a decade it seems, Japan is
suddenly the beacon of hope as business confidence, as well as
both capital and consumer spending, have picked up in recent
months.]
As for China, the government announced that slowing growth in
the demand for domestic steel has produced a huge surplus. But
when it comes to seeking new and future sources of energy,
China remains relentless. This week President Hu Jintao met
with Russian President Vladimir Putin as Hu makes another bid
for the majority of the output that will eventually be flowing
from the Siberian pipeline project. As of today the bulk would
go to Japan and the U.S., but this can always change.
To digress a bit, David Wall, a China expert in London, had the
following commentary for the Moscow Times.
“The more we see of Hu Jintao, the more we seem him shifting
back toward Mao. Putin and Hu respect each other’s positions
on suppression of internal dissent and on raising the status of
their own countries in the eyes of the world. (But) they still look
at each other out of the corners of their eyes.”
Back to China and oil, Beijing was working with Ecuador this
week to solidify its energy relationship there, just a continuation
of its global policy to ensure its economy always has enough
crude and natural gas to keep it humming.
Which brings me to the issue of CNOOC and Unocal. I believe
in free trade and I believe that the spectacular rise of China as an
economic power has benefited us all in ways the average
American doesn’t think about. It’s not just lower consumer
prices, it’s lower bond yields as China uses its dollars to buy our
Treasury paper which has in turn played a huge role in fueling
the real estate boom.
But on some issues we have to draw the line and energy and
CNOOC is one such case. Not because a CNOOC / Unocal
merger impacts national security. It doesn’t due to the makeup
and volume of UCL’s reserves. But if we let this one go through
we make it far harder to prevent the next offer. Where I have a
real problem is China should have been told in no uncertain
terms long ago this is an area that is off limits. CNOOC is a
government-owned company, after all. Where the heck was the
State Department and the White House, this being far more than
a mere commerce issue? All we’ve done, instead, is give China
another propaganda weapon.
China is unique. Ignore the mutterings that the U.S. allows all
kinds of foreign ownership in the energy sector. We’re getting
burned in Venezuela, for example, and China can burn us even
more so. Thus until China shows its cards with regards to
Taiwan and North Korea, they remain on double-secret probation
in my book.
Lastly, we’re at mid-year. How’s your editor doing? I’d give
myself a solid ‘B’ thus far, but it can end up anywhere between a
C and A by year end.
Back on 12/31/04, I said the China bubble will burst at some
point in ’05 and there will be civil unrest…I’m far from giving
up on this one.
I said there would be no dollar crisis, unless politics gets in the
way…i.e., China uses it as a political weapon. The China option
comes into play in 2006.
I said real estate only has to stagnate to have a big impact on
growth….and I submit this is coming to pass. Much of the
anecdotal evidence I see points in this direction. [Great stuff,
Allen H., on the Pittsburgh market, one that is clearly stagnating,
if not stumbling.] I’ll have more on this topic next week.
I said you’d see visible signs of a global slowdown by the second
half…I submit we’re almost there.
I said inflation would not be a problem and that the 10-year
Treasury would finish at 4.30%…this is easily my best prediction
thus far.
I said oil would average in the mid-$30s. Doh! Did I write that?
Eegads.
Bottom line, though, I have been writing that by year end talk
will be of global recession and ‘de’flation. While everyone else
is scrambling to change their forecasts, I wouldn’t change any
part of mine from six months ago with the exception of the oil
conundrum. You’ve probably noticed Bill Gross of PIMCO is
coming around to the same thinking.
On equities, by the way, I said the major averages, the Dow,
S&P 500 and Nasdaq, would all decline about 5%. So far so
good, but here one or two weeks in December can kill any
forecast.
Well there you have it. For sure, more fun and games in the
second half. But we don’t want too much excitement. That
would probably mean one of my hot spots ignited.
Street Bytes
–The major averages were basically unchanged on the week;
disappointing, really, considering solid news on the earnings
front from tech giant Oracle, the huge merger in the financial
sector (more below) and Friday’s super auto sales from General
Motors. But for the record, following are the returns for the first
half of the year.
Dow Jones -4.7%
S&P 500 -1.7%
Nasdaq -5.5%
Russell 2000 -1.8%
–U.S. Treasury Yields…7/1/05
6-mo. 3.36% 2-yr. 3.74% 10-yr. 4.04% 30-yr. 4.30%
Some benchmark figures:
6/13/03…2-yr. 1.10% 10-yr. 3.10%…the historic lows
6/30/04…2-yr. 2.52% 10-yr. 4.46%…Fed starts to hike
6/30/05…2-yr. 3.63% 10-yr. 3.92%…after 9th move
As you can see from the above, rates shot up on Friday from
Thursday’s quarter end close. While the Fed’s nine increases
since June 30, 2004 have impacted the short end of the yield
curve, it’s obviously had this perverse impact on the back end, a
topic I’ve beaten to death recently. What was important about
Friday, though, is that the stronger than expected manufacturing
and consumer confidence data, coupled with the Fed’s
pronouncement it wasn’t close to being finished (at least most of
us interpreted the statement that way), led to a sudden change in
psychology when it came to bonds.
However, all this means is that we are still in a broad trading
range for the 10-year, roughly 4.00-4.50% with the occasional
foray below 4. Until we’re substantially above 4.5%, there’s
nothing to get that worked up over. [Unless you are a highly
leveraged hedge fund and the move from 4 to 4.5% occurs
overnight.]
–Bank of America is acquiring the top credit-card issuer MBNA
for $35 billion, continuing a string of recent acquisitions that
place it at the forefront of consumer activity (and a pronounced
shift away from the corporate side). B of A is now #2 in both
market value and assets to Citigroup and the combined entity
will have 40 million active card members. [I initially thought,
gee, why not just hire a few hackers and gain control of the
MBNA accounts that way? Certainly it’s less expensive, right?]
Unfortunately, in a merger of this kind there is always some pain
and an estimated 6,000 will lose their jobs….good paying jobs,
as President Bush would say.
–The Senate approved the Central American Free Trade
Agreement by a 54-45 margin but the act faces stiff opposition in
the House where the special interests, such as the sugar lobby,
often find easier prey.
–The Supreme Court unanimously ruled that file-sharing
software is illegal and companies liable if the products encourage
consumers to illegally share copyright protected material such as
songs, movies and television shows. Good. The Court also
sided with the cable industry in denying rivals access to its
broadband lines. I agree with this one as well.
–The Wall Street Journal had an extensive piece on a 3-year
investigation into the law firm of Milberg Weiss Bershad &
Schulman, the most aggressive class-action specialists in the
country, for fraudulent behavior involving kickback schemes.
One outside attorney, who has been indicted for appearing in 50
Milberg Weiss cases from 1981 to 2004, received $2.4 million in
secret payments to testify as plaintiff. William Lerach, who has
made a fortune in tons of class-action suits, including Enron’s,
was until recently a partner in Milberg Weiss and it’s not clear
whether he is a target as well. [One can assume he is.]
–Advanced Micro Devices Inc., the second-largest chipmaker,
sued Intel for coercing 38 companies through “old-fashioned
threats, intimidations and ‘knee-capping’” according to AMD’s
filing. AMD alleged “Intel’s actions included payments to
computer makers not to buy from AMD and the enforcement of
quotas at U.S. retailers.” AMD is seeking $billions in damages.
[Bloomberg News]
–John Mack’s returning to Morgan Stanley as CEO; a seemingly
popular choice among the rank and file after the horror show that
was Philip Purcell.
–Boeing named 3M CEO James McNerney as its new CEO in
what was a natural selection; McNerney having once run G.E.’s
jet-engine unit. What isn’t clear is how many post-its he took
with him, assuming he had access to the supply closet.
–Former HealthSouth CEO Richard Scrushy, one of the true
scumbags of our generation, somehow wormed his way out of a
conviction as he was acquitted by a hometown Birmingham,
Alabama jury in his company’s $2.7 billion fraud case. 15 other
executive had already pleaded guilty but they were such slimy
figures in their own right their testimony against Scrushy only
helped the defense. Kind of like the old Spy vs. Spy cartoon;
only this one was Worm vs. Worm.
But, lest you feel like all the crooks are getting off, just
remember that Ebbers, Kozlowski and Rigas, among others, have
been convicted. Still a pretty good batting average.
–Canada said it no longer wants to be the cheap drug store for
America as it’s concerned it won’t have enough for its own
people.
–A study by Deloitte Consulting reveals that the horse industry
contributes $39 billion to the U.S. economy and that there are
over 9.2 million horses in America. Owners spend an average
$2,900 a year on them; $5,800 if it’s a racer.
–Russian President Vladimir Putin met with U.S. and German
business leaders to try and reassure them his nation was still biz-
friendly. Putin, who is pressing for full WTO membership for
Russia, said he was willing to cooperate on joint energy
programs. But here’s what got me. Citigroup chairman Sandy
Weill said “We talked about transparency and the rules of the
road.” Transparency? Sandy Weill lectured Putin on
transparency? You’ve got to be kidding me. What’s he still
doing at Citigroup, anyway? And why is he representing the
U.S. in anything?
–The E.U. has granted Italy two more years to get its economic
house in order and lower its budget deficit below the mandated
3% of GDP level before it faces sanctions. What’s funny here is
that Germany just announced it won’t get its own deficits to
under 3% at least through 2007, which would mark six straight
years of non-compliance, yet Germany was never under any
threat of penalties. [Germany’s Chancellor Schroeder,
meanwhile, will get his early election in September.]
–I was surprised the first confirmed case of mad cow for a U.S.-
raised animal did not become more of an issue outside of
Taiwan’s blocking importation of U.S. beef. It deserved to be.
Our testing procedures are abysmal compared to the rest of the
world and it’s going to backfire on us in a big way down the road
unless we get religion. In this particular instance, the
government hid the fact they knew of the ‘downer’ cattle since
November.
–Awhile back, director Peter Jackson filed suit against New Line
Cinema for his “Lord of the Rings” trilogy, alleging he was
underpaid by $millions; not a surprise given this business. But I
just found the following interesting. The three flicks were
produced for an aggregate $281 million and generated more than
$4 billion in retail sales from worldwide film exhibition, home
video, soundtracks, merchandise and television showings. After
payments to its partners, New Line cleared more than $1 billion.
[New York Times]
–Research shows that some Teflon products contain a potential
carcinogen, the chemical PFOA. The issue is how much of it
creates a danger. But I’m also thinking this could change the
meaning of some old political slogans. “The Teflon president”
may not mean what it once did since it’s actually closer to the
Watergate era “There’s a cancer in the presidency.”
–J.D. Power & Associates rates the Toyota Lexus as the most
reliable auto on the market. The Kia is worst. About six months
ago Kia was also rated worst in a crash test. In other words, you
can get the worst of both worlds in buying a Kia.
–AAA said this was going to be the biggest travel weekend ever
in America with an estimated 40 million traveling 50 miles or
more from home. No word on how many Kias will make it that
far before there is a problem of one kind or another.
–John Walton, son of Wal-Mart founder Sam Walton and one of
the richest men in the world with a net worth of $18 billion, died
when he crashed his ultra-light aircraft in ultra-wealthy Jackson
Hole, Wyoming.
–China has officially passed the 100 million Internet user mark.
99.4 million will no doubt be arrested over the coming months.
–The price of an average apartment in Manhattan is now up to
$1.3 million.
–I told you this would be a big problem for Disney….and now
it’s been forced to take shark’s fin soup off the menu at Hong
Kong Disneyland as activists carried the day, threatening
boycotts. Score another for the sharks in a year of successes for
them.
Foreign Affairs
Iran: “Our nation is continuing the path of progress and on this
path has no significant need for (relations with) the United
States.” So spoke new President Mahmoud Ahmadinejad (ah-
ma-DEE-ney-jahd…or…aah-MA-dee-ni-JAHD…take your pick,
though the former is easier) in his first press conference
following his victory. Ahmadinejad defeated opponent Hashemi
Rafsanjani by a shocking 62-36 margin as his campaign to make
Iran a “modern, advanced, powerful, and Islamic” model for the
world resonated with the poor he championed.
Just 45 and the son of a blacksmith, Ahmadinejad’s election
needs to be put in proper context. First off, I don’t believe he is
the same man seen in the photos from the hostage crisis of 1979-
80, but at the same time he has always said he supported the
revolution and in fact he seeks to reinvigorate it. So those
making a big deal of the photos are barking up the wrong tree.
What’s far more important is that Ahmadinejad’s election means
the three main levers of power, the presidency, parliament and
the Supreme Council, all rest in the hands of hardliners. But
ultimate power lies with the Council’s Ayatollah Ali Khamenei.
One thing to watch, though, is to see who Ahmadinejad
surrounds himself with. You would expect him to pick fellow
hardliners for his cabinet and if so that kills any recent gains on
the social front; such as in dating, music and the wearing of
colorful headscarves by women. [Small gains they were, I grant
you.]
As for the nuclear weapons program, it’s a certainty to continue
and negotiations with the Euro-3 and the U.S. on this front
should hit a brick wall. Plus Russia, our great friend, greeted
Ahmadinejad’s election with an offer to help Iran build more
nuclear reactors…just what we all need.
Afghanistan: Unfortunately, this is no longer “the forgotten war”
as the Taliban has increased its activity. Elections here must take
place in September, as scheduled, but there could be pressure to
delay them.
Israel: I have been warning August is going to be a chaotic
month in the region as Israel moves to dismantle the settlements
in Gaza and parts of the West Bank, and on Sunday the violence
started early as Israeli extremists clashed with troops over
buildings abandoned in 1967, for crying out loud, but just now
being demolished. One soldier switched sides during the conflict,
in a highly-publicized move with cameras rolling, saying “Jews
are beating Jews.” It’s certainly a sign of things to come.
As the protests picked up in intensity during the week, Prime
Minister Sharon spoke out against the radical settlers:
“They have said they will set the country on fire. They won’t set
anything on fire. Every one of us must understand and fight this
dangerous phenomenon.” [Jerusalem Post]
Meanwhile, in a Walter Cronkite / Vietnam type moment,
Israel’s top news anchor has begun speaking out against the
occupation after decades of being simply Israel’s most trusted
news man.
As for the Palestinian side, security chief Muhammad Dahlan is
adding his voice to those who say Israeli settlers are poisoning
land that is to be taken over by the Palestinians. Given the fact
Dahlan has credibility inside the Sharon government and is
viewed as a successor to Mahmoud Abbas, the charge carries
weight.
But to end on a positive note, since Yassir Arafat’s departure a
little over six months ago, the number of mobile phone
subscribers in the Palestinian territories has risen from 270,000
to 405,000; a staggering increase and a sign the Palestinian
economy is beginning to improve, which would be good for
everyone; jobs being better than rock throwing.
Lebanon: Hizbollah exchanged fire with Israel in the disputed
Shabaa Farms region with one Israeli soldier killed; in case you
needed further proof that Hizbollah has no plans to disarm. And
remember, a majority of Lebanese still see Hizbollah as a
defender of the country and the group responsible for kicking
Israel out years ago. On the political front, pro-Syrian Nabih
Berri retains his post as parliament speaker because the
opposition didn’t want a drawn out fight with Hizbollah and
partner Amal. But the #2 prime minister post went to former
finance minister Fouad Siniora, an anti-Syrian figure. Saad
Hariri was smart enough to recognize that at age 35 he was too
young to take the reins of power. President Lahoud remains at
the top for the time being.
China / Japan: Relations between the two continue to deteriorate
and as James Brooke of the New York Times pointed out, air
traffic between Japan and the mainland has slowed dramatically
following the protests of this past spring over Japan’s textbooks
and visits by its leaders to a war shrine.
Separately, Emperor Akihito and Empress Michiko journeyed to
the island of Saipan (scene of one of World War II’s fiercest
battles), the first ever visit by a member of the imperial family to
a war site outside of Japan. 43,000 Japanese soldiers and 5,000
Americans lost their lives here, as well as thousands of civilians,
many of whom were Korean. The Emperor and Empress paid
their respects at ‘Suicide Cliff,’ where the Japanese hurled
themselves onto the rocks and ocean below at the end of the
battle.
I make note of this, though, only because I went to Saipan back
in 1996 and the reports from this week failed to cite an important
historical fact. Coincidentally with my visit, a video had just
emerged showing Japanese soldiers holding babies as they went
off the cliff. For obvious reasons, the government did its best to
bury this side of the story (I personally saw the video), and it’s
why I’m surprised the royal family chose Saipan and not some
other site for this kind of commemoration. But then again no one
else picked up on this….at least as far as I could see.
Saudi Arabia: Prince Bandar, ambassador to the United States
since 1983 and confidant of every president during that period, is
resigning. Bandar is evidently falling out of favor and is losing
clout inside the Saudi royal family. I’ve always felt he wasn’t to
be trusted and too many times Washington went too far to
placate him.
Philippines: The pressure on President Gloria Arroyo to resign
continues to grow and a coup seems imminent, knowing the
history of this place. Arroyo is getting hammered on allegations
she fixed the last election and some of the evidence being
presented doesn’t make it any easier for her. In addition, amidst
all manner of corruption and gambling charges of his own,
Arroyo was forced to jettison her husband, who was booted out
of the country indefinitely so as not to further tarnish her name.
Random Musings
–In the latest USA Today / CNN / Gallup survey, 64%
disapprove of President Bush’s handling of Social Security and
only 31% approve.
–Supreme Court Justice Sandra Day O’Connor became the first
to resign, not Chief Justice William Rehnquist as most expected.
But I will have little to say on the process to fill O’Connor’s seat,
much to the delight of most of you I’m sure. We are all about to
be saturation bombed on this topic.
–President Bush hiked aid to Africa, though he said the focus
needs to be on trade and good government. Bono issued a strong
statement of support afterwards. In fact Bono was quite
impressive on “Meet the Press” last Sunday; not that I was
surprised, being a long-time supporter of his efforts. And I have
to take note of a column the Weekly Standard’s Fred Barnes did
recently on the relationship Bono has with some of the world’s
leaders. While the British press is all too eager to drag Bono
down for saying good things about Bush, Bush himself had the
following comment at a press conference.
“(In) this world,” Bush said, “we got a lot of big talkers. (But)
Bono has come to see me. I admire him. He is a man of depth
and a great heart who cares deeply about the impoverished folks
on the continent of Africa. And I admire his leadership on the
issue.”
–So I’m glancing at the front page of the Wall Street Journal the
other day and there is this blurb concerning the town where I
grew up, and where I have the office for the site, Summit, New
Jersey. It seems Summit, in trying to keep a few homeless folks
out of the train station, invoked the Patriot Act and the Justice
Department came down hard on the town. But it turns out this
guy, Richard Kreimer, has sued Summit for $5 million as part of
a federal lawsuit. Kreimer has a reputation in these parts. He’s
the same guy who back in 1991 sued a local library that was
keeping him out because he stunk to high heaven. But a liberal
judge awarded him a ton of money. No, I don’t feel sorry for
Mr. Kreimer.
–I normally don’t comment on stories of this kind, either, but in
this instance I can’t help but note the incredible stupidity of the
Camden, New Jersey police department. Three kids were
missing, last seen playing in a lot, a massive manhunt involving
150 policemen was launched, and then less than two days later
the three were found dead, accidentally suffocated, in the trunk
of a car that was in the lot where they were last seen and which
had been given a cursory look when the search started. But
nobody opened the trunk. Unbelievable. No wonder that city is
a disaster.
–New York City’s murder rate may come in below 500 this year
for the first time since 1961. [Paid for by the New York City
Department of Tourism.]
–Canada and Spain joined Belgium and the Netherlands as the
only nations to grant same-sex marriages equal rights to those in
traditional unions. A quick glance at the map reveals that all four
fall roughly above the 38th Parallel.
–Uh oh….Dan L. reminded me that there were a slew of shark
attacks the summer before 9/11. Enough said.
–In Australia, kangaroos were responsible for 13,000 of the
17,750 collisions involving animals in 2004.
–I stumbled upon the last “Capital Gang” last Saturday on CNN.
For a long time this was my favorite program and I must say it
was one of the more interesting farewells I’ve ever witnessed.
There was no love lost between some of the regulars, such as in
Robert Novak telling Mark Shields early on that “for 17 years
you misrepresented my positions” (and he wasn’t smiling).
I loved the show because you really got all sides of the issues and
aside from Brother Novak being a hero of mine, I also enjoyed
fellow Wake Forest alum Al Hunt, with whom I exchanged a few
notes over the years as well as pleasantries at basketball games.
Hunt is a real class act. CNN is making a mistake in taking this
off the air, but then CNN can’t decide what it wants to be.
–OK, as you’re sitting around the barbecue this weekend, here’s
some U.S. trivia you can impart on your rapt listeners….the top
ten cities in America by population.
1. New York…8,104,000
2. Los Angeles…3,845,000
3. Chicago…2,862,000
4. Houston…2,012,000
5. Philadelphia…1,470,000
6. Phoenix…1,418,000
7. San Diego…1,263,000
8. San Antonio…1,236,000
9. Dallas…1,210,000
10. San Jose…904,000
[US Census Bureau / USA Today]
–Since the government first began keeping statistics in 1880,
there has never been a year with no deaths as a result of
tornadoes for the months of April-June…until now. But as the
experts say, it’s mostly just luck. The bulk of the activity, while
down significantly, has been over sparsely populated areas.
–Here are a few idiots for you, courtesy of the AP and South
China Morning Post.
“Thieves broke into a depot at Istanbul’s Topkapi Palace
Museum and ran off with nine Ottoman artifacts of minor
importance, officials and police said….
“The stolen items include a damaged tablet with Ottoman Sultan
Mahmud I’s signature, the signature of Sultan Abdulhamid I on
rotting paper, two worn-out shawls and a folding screen
decorated with star-shaped mother-of-pearl.”
You know the same guy who forges Babe Ruth’s signature
probably forged these, which is why they weren’t out on display.
As for the shawls, they must have belonged to the cleaning staff.
–But here’s a theft of a different sort. New England Patriots
owner Robert Kraft had occasion to show his Super Bowl ring to
Vladimir Putin, so when Kraft handed it to him, Putin pocketed
it. It took Kraft a few days to issue a statement.
“Upon seeing the ring, President Putin, a great and
knowledgeable sports fan, was clearly taken with its uniqueness.
At that point, I decided to give him the ring as a symbol of the
respect and admiration that I have for the Russian people and
(his) leadership.”
Of course Kraft is full of it….he was furious Putin walked away
with the gem…but seeing as Russia has a lot of loose nukes, it’s
probably best he first checked with the State Department before
issuing this statement, as I assume he did.
–We note the passing of a great patriot, “America’s Homer,”
historian Shelby Foote, 88. There is so much to like about this
man, including the fact he spent 20 years on his monumental 3-
volume “The Civil War: A Narrative” that for centuries to come
will stand the test of time. And isn’t it remarkable that he didn’t
become a household name until age 73 with Ken Burns’s
production. My brother was a huge fan and passed along a note.
“My favorite Foote story was of the old Rebel standing in line in
the woods before Pickett’s Charge. A rabbit dashed out of the
grass and dodged the men as it ran towards the back of the ranks.
The old Rebel said, ‘Run, old rabbit. If I was an old rabbit I’d
run too.’”
—
Pray for the men and women of our armed forces. We are
forever grateful for their service to our country.
God bless America.
—
Gold closed at $434
Oil, $58.75
Returns for the week 6/27-7/1
Dow Jones +0.1% [10303…one year ago, 10282]
S&P 500 +0.2% [1194…one year ago, 1125]
S&P MidCap +2.0%
Russell 2000 +2.0% [yes, strong week for both]
Nasdaq +0.2% [2057…one year ago, 2006]*
*I just added these figures so you could get some perspective for
the year in which the Fed has been tightening.
Returns for the period 1/1/05-7/1/05
Dow Jones -4.5%
S&P 500 -1.4%
S&P MidCap +4.0%
Russell 2000 -1.3%
Nasdaq -5.4%
Bulls 55.1
Bears 19.1 [Source: Chartcraft / Investors Intelligence]
So what to make of the above sentiment readings? They just
haven’t been as meaningful as they once were, years ago, but I
keep posting them. No doubt, the bull / bear #s are now at
extremes, good for contrarians.
Have a great holiday. Watch out for the sparklers; you can lose
an eye, you know.
Brian Trumbore
🙂 _]
