[Posted 7:00 AM ET]
The Middle East
In another momentous week, particularly for the president of the
United States, historians may one day focus on the words of
President Mahmoud Ahmadinejad of Iran, instead, and world
reaction to them as the most significant event of this time.
The newly elected Ahmadinejad said the state of Israel should be
“wiped off the map,” urging Palestinian terrorists to accomplish
the task. Condemnation from around the world was swift.
British Prime Minister Tony Blair, as is so often the case, best
spoke for the civilized world.
“I have never come across a situation (with) the president of a
country saying they want to wipe out another country. Their
attitude toward Israel, terrorism, their attitude on the nuclear
weapons issue is not acceptable.
“If they continue down this path then people are going to believe
that they are a real threat to our world security and stability.”
Blair said that people always ask him for assurances that Britain
was not contemplating action against Iran.
“If they carry on like this, the question that people are going to
be asking is: When are you going to do something about this?
Can you imagine a state like that with an attitude like that having
a nuclear weapon?”
[International Herald Tribune]
Israel called for Iran’s expulsion from the United Nations and
while the United States said this wasn’t the appropriate course of
action, even UN Secretary General Kofi Annan bitterly
condemned the Iranian leader’s talk.
Importantly, Ahmadinejad’s words set off a firestorm in Iran
itself. Moderate voices such as former president Rafsanjani were
infuriated and complaints poured in to the mullahs to rein
the president in. Speaking from Russia, Iran’s best ally, the
Iranian ambassador pleaded Ahmadinejad was taken out of
context. And while there were demonstrations in support of the
president on Friday, this was an annual anti-Israel day of protest
and from the pictures I saw on the BBC, it seemed more staged
than usual.
The words, and timing, are potentially momentous because it
further isolates Iran at a time when it has been arguing for
respectability. It also presents another reason for Britain,
Germany and France, the Euro-3, to work closely with the
United States in adopting an even tougher line on the nuclear
weapons front. For starters, the Europeans removed their
ambassadors to Tehran.
And it’s important because of Iran’s role in supporting terrorism
in Syria and Lebanon, at a time when Syria, too, is under the gun
thanks to the UN’s investigation into the assassination of
Lebanon’s Rafik Hariri.
The UN Security Council is slated to discuss Syria on Monday
and while Russia and China are not likely to allow a call for
sanctions, there is a slim chance the two may just abstain from
voting and let a tough resolution go through. Russian President
Vladimir Putin called Syrian President Bashar Assad and urged
him to cooperate. In Damascus, one can only wonder how it’s
playing out there as the overmatched Assad can’t possibly know
who his real friends are.
In Lebanon, some members of parliament are calling for the
resignation of pro-Syrian President Lahoud, while the Lebanese
military has been facing off against militant camps on the Syria –
Lebanon border following the killing of a contractor working for
the Lebanese Army. At the same time there is a concerted effort
to stop the flow of arms from across the border into Lebanon, a
fact I brought up a few weeks ago that was confirmed this week
in a UN report. Investigator Detlev Mehlis has also called for
increased security for his 30-member team who obviously face
the threat of assassination.
But here’s where it gets murky, and it’s why Lebanon is both
fascinating and frustrating. At the end of the day, while all good
people hope for a flourishing democracy here that can be as good
an example for the region as stability in Iraq, it is still a tribal
nation, as I learned firsthand on my trip here this past spring.
The Lebanese government refuses to heed the UN’s call to
disarm Hizbullah, in keeping with Security Council Resolution
1559, insisting it was an “internal matter” subject to national
dialogue. Syria is sending arms to the Palestinians here and Iran
continues to flood Hizbullah with support. The Lebanese
government, with Hizbullah as a member of parliament, is too
weak to disarm a group that continues to renounce Israel’s right
to exist.
So you have Iran and Syria under the gun, while Lebanon,
despite its great potential, remains confused as to its true identity.
The West, and separately, Israel, can not afford to be patient for
long and it’s all going to come to a head over the coming six
months.
Which brings us to Iraq. 2,000 American deaths is not just some
arbitrary number and 1,850 have died since May 1, 2003, when
President Bush declared official combat over, while thousands
more have been gravely wounded in the ensuing 30 months.
I’m also not one to dismiss the 320 non-Iraqi civilian contractors
who have been killed, nor the coalition forces who have given
their lives, nor the 30,000 Iraqi civilians, by the most credible
estimates.
President Bush said the best way to honor the sacrifice of our
brave men and women in uniform “is to complete the mission.”
One only hopes he has learned from the countless mistakes of the
past.
The Washington Post editorialized this week.
“What does matter is what has come from those sacrifices. The
most brutal and dangerous dictator in the modern history of the
Middle East was deposed, and last week he was put on trial
before an Iraqi court. Millions of Iraqis he oppressed continue to
be grateful for their liberation; unlike most Americans, they still
believe that the invasion was worth the cost. Despite the
continuing insurgency, more than 60 percent of registered voters
turned out this month for a constitutional referendum, and slates
are forming for a parliamentary vote in December that could be
the most inclusive, competitive and meaningful election ever
held in the Arab world.
“That the war remains broadly unpopular among Americans, and
is routinely and glibly described as a catastrophe by
administration critics, shows that these achievements are cloaked
by the continuing bloodshed. The horrific nature of car bomb
and suicide attacks on U.S. soldiers and innocent civilians has
compounded the effect of the loss of life. So have the failure to
find weapons of mass destruction – the threat that originally
appeared to justify the costs and risks of an invasion – and the
seeming intractability of the insurgency, which has survived
countless military offensives, killings or arrests of top leaders,
and changes of tactics. The political gains, though real, have
been undermined in recent months by the sectarian and ethnic
polarization of Iraqis and the apparent effort by a number of
Shiite and Kurdish political leaders to carry out a de facto
partition of the country under the guise of ‘federalism.’ That
agenda, and the Bush administration’s weak response to it,
threatens to tip Iraq into a full-scale civil war, with U.S. troops
caught in the middle.”
Which brings us to the political situation in Iraq today. The
constitution was approved by a 79-21 margin, with two Sunni
provinces, including Anbar (which contains Ramadi and
Fallujah), turning it down by huge margins. [97% in Anbar] But
three of 18 provinces were required to vote against the document
to kill it, and by 2/3s in each of the three, and a third, Nineveh
(Mosul) registered a no vote of just 55%.
So we now move on to the December 15 parliamentary elections
in which the Sunnis hope to gain a more substantial
representation in the political process.
The candidates and slates are lining up and the alliance of Shiite
religious parties that gained control last January have agreed to
run again as one. Secular interests will be led by Iyad Allawi,
your editor’s favorite, while current Deputy Prime Minister
Ahmad Chalabi will once again sell himself out to the highest
bidder….as long as he gains control of the oil portfolio. And
then there is Shia cleric Moqtada al-Sadr, who has announced he
will present a list of candidates with radical Sunnis “to prevent
enemies of Iraq from attaining their goals.”
Finally, the headlines this weekend are being dominated by the
Fitzgerald investigation and the indictment of Vice President
Cheney’s chief of staff, Scooter Libby. Many are painting this
fiasco as a judgment on building the case for the war. As
CNBC’s Chris Matthews put it, “We went to war on
background,” a sentiment I do not share.
Both sides of the political aisle will be arguing this issue for
decades to come and eventually the historians, and possibly the
courts, will help sort it out.
For now, though, from my own perch I would just urge everyone
to remember the context of the debate, going back to the
previous administration in the White House. Robert Kagan put it
best in an op-ed for the Washington Post by reminding us that
the New York Times and Washington Post, along with other
news organizations, ran many alarming stories about Iraq’s
weapons programs before George W. Bush was ever elected:
“A quick search through the Times archives before 2001
produces such headlines as ‘Iraq Has Network of Outside Help
on Arms, Experts Say’ (November 1998), ‘U.S. Says Iraq Aided
Production of Chemical Weapons in Sudan’ (August 1998), ‘Iraq
Suspected of Secret Germ War Effort’ (February 2000), ‘Signs
of Iraqi Arms Buildup Bedevil U.S. Administration’ (February
2000), ‘Flight Tests Show Iraq Has Resumed a Missile Program’
(July 2000)….The Times stories were written by Barbara
Crossette, Tim Weiner and Steven Lee Myers; (Judith) Miller
shared a byline on one.
“Many such stories appeared before and after the Clinton
administration bombed Iraq for four days in late 1998 in what it
insisted was an effort to degrade Iraqi weapons programs. Philip
Shenon reported official concerns that Iraq would be ‘capable
within months – and possibly just weeks or days – of threatening
its neighbors with an arsenal of chemical, biological and even
nuclear weapons.’ He reported that Iraq was thought to be ‘still
hiding tons of nerve gas’ and was ‘seeking to obtain uranium
from a rogue nation or terrorist groups to complete as many as
four nuclear warheads.’ Tim Weiner and Steven Erlanger
reported that Hussein was closer than ever ‘to what he wants
most: keeping a secret cache of biological and chemical
weapons.’ ‘To maintain his chemical and biological weapons –
and the ability to build more,’ they reported, Hussein had
sacrificed over $120 billion in oil revenue and ‘devoted his
intelligence service to an endless game of cat and mouse to hide
his suspected weapons caches from United Nations inspections.’
….
“From 1998 through 2000, the Times editorial page warned that
‘without further outside intervention, Iraq should be able to
rebuild weapons and missile plants within a year’ and that ‘future
military attacks may be required to diminish the arsenal again.’
Otherwise, Iraq could ‘restore its ability to deliver biological and
chemical weapons against potential targets in the Middle East.’
‘The world,’ it said, ‘cannot leave Mr. Hussein free to
manufacture horrific germs and nerve gases and use them to
terrorize neighboring countries.’….
“The Times was not alone, of course. On Jan. 29, 2001, The
Post editorialized that ‘of all the booby traps left behind by the
Clinton administration, none is more dangerous – or more urgent
– than the situation in Iraq. Over the last year, Mr. Clinton and
his team quietly avoided dealing with, or calling attention to, the
almost complete unraveling of a decade’s efforts to isolate the
regime of Saddam Hussein and prevent it from rebuilding its
weapons of mass destruction. That leaves President Bush to
confront a dismaying panorama in the Persian Gulf,’ including
‘intelligence photos that show the reconstruction of factories
long suspected of producing chemical and biological weapons.
“This was the consensus before Bush took office, before Scooter
Libby assumed his post and before Judith Miller did most of the
reporting for which she is now, uniquely, criticized. It was based
on reporting by a large number of journalists who in turn based
their stories on the judgments of international intelligence
analysts, Clinton officials and weapons inspectors. As we wage
what the Times now calls ‘the continuing battle over the Bush
administration’s justification for the war in Iraq,’ we will have to
grapple with the stubborn fact that the underlying rationale for
the war was already in place when this administration arrived.”
Wall Street
It was another totally absurd week in the markets, with
increasing volatility and a seeming disregard for the
fundamentals. The adage of “waiting 24 hours” was never more
useful than it is today; whether it’s deciphering the political
landscape, the U.S. economy, or the direction of share prices.
The Street soared Monday on the appointment of Ben Bernanke
to be Alan Greenspan’s successor in February at the Federal
Reserve. But the next three days, stocks gave up these gains on
punk earnings, rising interest rates, and rumors of a bankruptcy
filing by General Motors. Then on Friday, the third quarter
report on GDP was released, a solid 3.8% gain, and coupled with
the fact President Bush’s swami Karl Rove wasn’t indicted, the
market catapulted higher…only the laws of gravity will prevail,
this much I can assure you, and we will head back down shortly.
But let’s start by looking at what I see as the negatives from the
past week.
Both existing and new home sales were up slightly (the former
wouldn’t have been were it not for Katrina rebuilding), but more
importantly, when measuring the critical “wealth effect,” in both
categories the median home price fell over the previous month
and interest rates are rising. A conventional 30-year mortgage is
now comfortably over 6% and with the 10-year Treasury
breaking out of its 4.00-4.50% range, closing the week at 4.57%
and approaching the March 23 peak for the year of 4.69%, we
are suddenly near the tipping point for this category, 5%, which
would spell the end of the housing boom, for starters. In the
meantime, I have said all year real estate would “stagnate,” not
crash (thanks in no small part to the still historically low rates),
and we have been seeing signs of this the past quarter in many
parts of the country. Plus this week’s sales figures also revealed
rising inventories, on top of the fine example of the southern
California market as provided to us last week by Josh P.
Earnings reports have been poor. Companies can massage the
numbers a myriad of ways to hit the per-share figure, but the
guidance for coming quarters, including from the likes of Texas
Instruments, Amazon, Microsoft and Bristol-Myers Squibb, to
name a few key players, has been weak. Aside from the energy
sector, this has not been a great quarter. The current one will
disappoint further.
And but for a few chemical companies, Corporate America can
not pass on rising commodity prices in this global economy of
ours, nor are wages increasing significantly either. [The latest
data on the latter shows a gain of just 2.3%, year over year.]
Worker benefits are also being pared at light speed and that’s a
reduction in take home pay, no matter how you slice it.
Consumer confidence continues to tumble, as spelled out in the
two leading surveys. Now this is often deceiving. We tell a
pollster we’re in a lousy mood, but then go shopping to help
$buck ourselves back up. That’s been the history of these
readings. But when they decline to the levels of today, you have
to take note and with the big issues of Iraq, energy, and political
malfeasance still in the forefront, and with a potential avian flu
scare down the road, this Christmas season will not be a merry
one for retailers.
And on the issue of energy, as my friend Trader George reminds
me when it comes to the daily volatility in both the futures and
share prices, “It’s adults only swim time.” This week natural gas
soared anew to back over $14, thanks to an early cold snap,
before settling at the $13 level, which I would call the tipping
point here. $13 translates into heating bills at least 70% higher
than last year. 99% of you know what’s coming in your late
Nov. / early Dec. bill and the other 1% are about to find out.
Some of you may opt to eat gruel that day. I know I will.
Crude oil, despite coming off its Aug. 30 high of $70.85, still
closed the week above $60 ($61.22), its own tipping point, for a
14th straight week. Gasoline futures, however, have been falling
at a more rapid pace and are providing some relief at the pump.
But it is all about the weather now, especially for heating oil and
natural gas, and this will only add to the volatility. Putting my
junior weatherman hat on, the chances of a ‘normal’ winter
appear to be better than a ‘severe’ one, so my guess is we catch a
break. Inventory levels, after all, as I’ve argued all year are just
fine. It’s a big reason why I sold out of my last position in the
sector last spring….that and my belief in the coming global
slowdown that will put a real crimp in demand.
So what’s good?
Well the market does appear to like Mr. Bernanke; an academic,
competent, previous Fed experience, and one who is expected to
continue the policies of Alan Greenspan.
But what exactly will he do when he takes the reins, and after
Greenspan has hiked the federal funds rate to 4.25% or higher
over his final three meetings? And what will Bernanke do when
he faces his first crisis? Will he engender the same confidence,
worldwide, that the Maestro did? Who the heck knows? At least
we have a few more months to begin to sort it all out, starting
with the hearings on his nomination.
And on the positive side for the week, we also can’t ignore the
solid 3.8% increase in GDP for the third quarter; except I will
because it’s history. It’s a good number for all those who
enjoyed the benefits of it, but I’m movin’ on. The rest of you
can celebrate the past….that is if you can decipher how the
government came up with the figure after the dislocations from
the hurricanes.
But we’ll finish this segment with the latest developments on the
bird flu front.
One of the positives in recent days is that China appears to be
taking the possibility of a pandemic originating in its own
backyard more seriously, and it seems to be willing to share vital
information. Authorities have gone so far as to say they would
close the border if it can be proved a single human to human
transmission has occurred. China’s foremost concern has always
been an economy that goes into reverse, which would lead to
social instability. Better to accept a temporary lull than a global
recession resulting from a pandemic.
Taiwan, exasperated after attempting to negotiate with Tamiflu
manufacturer Roche, has copied the patent.
And the Asian Development Bank, in trying to estimate the
potential economic damage from a pandemic, noted that 2003’s
bout with SARS cost somewhere between $30 and $50 million in
lost trade and consumption. A mild avian flu pandemic,
however, would cost $110 billion, while a severe one’s price tag
could be $290 billion in short-term losses.
The European Union has banned the importation of live birds,
which means they’ll have to fly on their own power rather than
going business class.
And there was this scary story from Lebanon that I picked up
from the country’s Daily Star newspaper on Friday.
“Dozens of migrating birds have died mysteriously over the past
few days increasing fears bird flu has arrived in Lebanon.
Farmers in Ras al-Ain and Qleileh say they fear the ‘cause
behind the deaths is contagious and will spread to chicken farms
along the Tyrian coast.’
“Several farmers living on the coast south of Tyre reported
seeing dozens of migrating storks fall from the sky while flying
along the shore near Ras al-Ain.”
Yikes. Hope the babies survived.
Street Bytes
–The Dow Jones and S&P 500 had a strong week, up 1.8 and 1.6
percent, respectively, while Nasdaq registered a smaller 0.4%
gain. Aside from the news items mentioned above, the volatility
in the energy sector has been nuts, as best exemplified by my old
favorites, the XOI and OSX indexes.
The highs for these two were set on 9/29.
XOI…1091
OSX…178.6
10/21
XOI…924
OSX…155.6
And then this week was one wild day after another as the hedge
funds acted like a bunch of junkies. The 10/28 closing levels:
XOI…969
OSX…165.9
The above doesn’t even begin to tell the real story as the intraday
swings are downright absurd. This is today’s stock market,
folks, and it’s nothing more than a casino. Forget investigating
the oil companies for their extraordinary profits, a topic I’ll hold
off on until next week. The trading in energy stocks and the
futures markets need to be examined more than anything else
these days. That’s just my opinion, I could be wrong.
–U.S. Treasury Yields
6-mo. 4.21% 2-yr. 4.38% 10-yr. 4.57% 30-yr. 4.77%
Rates from two to 30 years rose 17 to 19 basis points this week, a
big move, on uncertainty as to which direction Bernanke will
take the Fed. Certainly the inflation news is not a concern, no
matter how many attempt to convince you otherwise. But for this
week, the feeling the new chairman will be soft on inflation
predominated, even as the economic news was nowhere near as
good as the GDP figure would lead you to believe, that is if you
were operating in a vacuum.
–While I’ll hold off on any discussion of windfall profits taxes
for now, for the record ExxonMobil earned a tidy $9.9 billion in
the quarter on $100 billion in revenue, while Royal Dutch Shell
recorded a take of $9 billion. And looking at things from the
other side, Saudi Arabia is projected to rake in $163 billion in oil
revenue this year as the economy grows 7% and the Kingdom
ends up with a $55 billion budget surplus.
–The European Union has lowered its growth targets yet again to
1.3% in 2005 and 1.9% in ’06.
–The Washington Post reported that three years ago, the
Transportation Security Administration (TSA) awarded a $1
billion contract to Unisys for a computer system to link federal
employees at hundreds of airports. The project is only half
complete and is now estimated to cost $3 billion. But
government officials themselves used the $1 billion level
because it would be more palatable to Congress….in case you
forgot how our corrupt system works.
–An internal Wal-Mart memo stirred up more controversy for
the behemoth as it advised screening potential employees for
health risks such as obesity. By week’s end the company was
backing off on parts of the policy. Benefit costs for Wal-Mart
grew to 1.9% of sales in 2005.
–You have to love the world of high finance. As the Refco
bankruptcy unfolds, J.C. Flowers withdrew its bid for the futures
division and was granted a $5 million fee for its troubles,
ostensibly because its offer encouraged further bidding. The
incestuous nature of this business still amazes me, even after
spending 16 years in the game. Meanwhile, famed hedge fund
operator Jimmy Rogers sued Refco for recovery of $362 million
in funds his group was holding here, alleging it was shifted from
a regulated to an unregulated Refco subsidiary.
As for the underwriters who brought Refco public just this past
August, and sold its bonds to investors, one analyst estimates the
likes of Credit Suisse, Bank of America and Goldman Sachs will
have to pay a collective $190 million to settle legal claims arising
from the company’s collapse. Brad Hintz of Sanford C.
Bernstein based his call on the amounts underwriters paid to
settle WorldCom litigation. [Crain’s New York Business]
–Heart device makers Medtronic, St. Jude Medical and Guidant
are being investigated by the Justice Department for their sales
practices.
–Research in Motion Ltd., makers of the BlackBerry, lost a key
appeal to the Supreme Court on a long-running patent
infringement suit. Initially, shares in RIMM fell but rebounded
by week’s end on the belief the company will now settle quickly
in order to avoid being forced to stop selling its products. Your
basic no-brainer, as we say around here.
–While the Japanese economy is turning around, the level of the
recovery is still in question and, significantly, prices continue to
fall with the CPI here declining in October, though not at the
level of September’s drop.
–I have written extensively on the issue of Yahoo turning over
information on a Chinese citizen, Shi Tao, to authorities, after
which Shi was sentenced to ten years in prison for sharing a
message with foreigners on the 15th anniversary of Tiananmen
Square. Herewith is further comment, courtesy of a report by
Tom Zeller in the New York Times.
Liu Xiaobo, a Chinese dissident in Beijing, wrote an open letter
to Yahoo founder Jerry Yang on a web site created by activist
Harry Wu, who spent 19 years in Chinese labor camps before
coming to the U.S.
“I must tell you that my indignation at and contempt for you and
your company are not a bit less than my indignation at and
contempt for the Communist regime.
“Profit makes you dull in morality…Did it ever occur to you that
it is a shame for you to be considered a traitor to your customer
Shi Tao?”
Representative Christopher Smith of New Jersey has pledged to
hold hearings on the matter.
“This is about accommodating a dictatorship. It’s outrageous to
be complicit in cracking down on dissenters.”
Tom Zeller comments:
“For its part, Yahoo, like Microsoft, Google and Cisco, makes a
compelling case when it asks what good it would do to lose
access to the Chinese market or to simply pull up stakes in
protest.
“ ‘I’ve always taken the attitude that you’re better off playing by
the government’s rules and getting there,’ the Yahoo chairman,
Terry Semel, told attendees (of a recent conference). ‘Part of our
role in any form of media is to get whatever we can into those
countries and to show and to enable people, slowly, to see the
Western way and what our culture is like, and to learn.’”
Liu Xiaobo:
“ ‘What you have said to defend yourself indicated that your
success and wealth cannot hide your poverty in terms of the
integrity of your personality,’ Liu wrote to Yang of Yahoo. ‘In
comparison with Shi, your glorious social status is a poor cover
for your barren morality, and your swelling wallet is an
indication of your diminished status as a man.’”
The debate continues.
–Chinese Internet portal Baidu.com’s earnings report was not as
rosy as expected and the shares declined over 10% on the week
to $68. Following its August IPO, Baidu traded as high as $154.
–Amazon’s profit margins are sliding and the shares fell 14%
following its earnings release. The coming Christmas season
won’t help.
–Interesting tidbit from Business Week and Ipsos Insight. 21%
of Americans 55 or older bank online, down from 26% in 2004.
More and more fear their identity may be stolen. In a related
item, a survey released this week by Consumer Reports found
that 86% of users have changed their online behavior in some
way because of the same concerns with identity theft. 25% said
they stopped making online purchases. [Stephen Ohlemacher /
AP]
–Mortgage fraud has cost $1 billion thus far in 2005.
–CNBC’s Jim Cramer, hot off his Business Week cover, had
some awful advice the other night on his show…a basket of four
Latin American stock plays with an emphasis on Peru. Hey, I’d
invest in the continent, too, if I felt strongly about it, but to tell
the average investor to do anything but use closed-end or
exchange-traded funds in the emerging market arena is
irresponsible.
–U.S. demand for international funds is at a record level, a
classic contrarian sign…see above.
–SBC is adopting the AT&T name following approval of its
merger. So if you didn’t throw away your Ma Bell windbreaker,
you can continue to wear it proudly. [And I guess I can still wear
my Bell Telephone winter coat that I picked up for free when my
father was working there…kind of makes me feel like a lineman
for the county.]
–Ma Bell spin-off Lucent took a real turn for the worse this
week as the company announced revenues for the quarter that
were basically flat and the share price tanked all over again back
below $3. Lucent, which once had 157,000 employees and is
down to 30,000, announced further layoffs. I frankly don’t see
how this company survives the next economic downturn. And
sadly its retirees face even more in the way of benefit cuts.
–Russia’s $2.5 billion fur industry is suffering from
globalization and not just because it lost government support
back in 1991. The Chinese are flooding the market. “It’s
cheap,” one Moscow area fur farmer told the Moscow Times.
“In quality, it’s no better than Russian mink, but there’s gobs of
it, and it’s simply stifling our producers.”
Oh, I wouldn’t be so sure about the quality, sports fans. My
guess is it’s civet…as in civet cat.
–Two giants were in the news this week. First, it has been
reported that Universal Studios’ much anticipated “King Kong,”
slated for release on Dec. 14 and the one movie yours truly will
end up seeing all year, clocks in at three hours and with a
production price tag of $207 million. Naomi Watts plays the
dim-witted broad in this version who falls for a large mechanical
hand.
And we note the passing of the Jolly Green Giant, Len Dresslar.
It was in 1959 that Dresslar won the role in the television
commercials for veggies because he could say “Ho, ho, ho”
better than anyone before or after, including S. Claus.
“From the valley of the jolly…ho, ho, ho…Green Giant!”
Advertising Age labeled the Big Guy one of the three most
recognizable American advertising icons of the 20th century,
along with Tony the Tiger and Marlboro Man. [Tony was shot
by a poacher and the Marlboro Man succumbed to cancer.]
Actually, Dresslar did the voiceover on some Marlboro spots as
well, but he’ll forever be remembered around here because of a
commercial he did for Schlitz.
“When you’re out of Schlitz, you’re out of beer.”
Excuse me….I’m getting kind of choked up.
Foreign Affairs
Israel: A Palestinian suicide bomber, tied to Islamic Jihad, killed
five in Hadera and Israel retaliated, killing at least ten as I go to
post. But as I wrote last month during the UN General
Assembly, notice how the rest of the world no longer just issues
blanket condemnations of Israel for its own actions. It’s all
because Israeli Prime Minister Ariel Sharon took the bold step of
withdrawing from Gaza. And what’s also clear is that
Palestinian leader Mahmoud Abbas’s days are numbered,
witness the increasingly brazen actions by Islamic Jihad and
Hamas within the Palestinian territories.
China: Tension is increasing between Beijing and Tokyo over
energy resources in the East China Sea and this week Anthony
Faiola of the Washington Post reported that China has completed
one drilling platform and is near completion on a second, both of
which may be in Japanese waters. But, leave it to Beijing and its
embassy spokesman in Tokyo to say that any effort by Japan to
explore for oil & gas itself would be viewed by Beijing “as an
invasion of Chinese territory and…as a highly provocative act.”
Can you say ‘hubris’? [Japan countered, ‘Hey, you’re drilling in
OUR waters!’]
And a few words concerning New York Times columnist
Thomas Friedman, who has been filing some light reports from
China this week. In one column he wrote the following:
“Not only is China not a communist country anymore…”
Huh? Maybe not by the pure meaning of the word, Mr.
Friedman, but as the aforementioned Congressman Smith noted,
perhaps a better word is ‘dictatorship.’ In fact the official
definition of this is “a government in which absolute power is
held by a dictator or a small clique.” I don’t care how much you
glorify China’s rise to economic power, it’s still a dictatorship.
[I’d also nominate Mr. Friedman for the Edgar Snow award.]
Meanwhile, former Taiwanese president Lee Teng-hui has been
touring the United States, warning all democratic nations that to
“tolerate China’s oppression at home and military adventures
abroad” could lead to global disaster.
“Free nations must remain on the alert” as the mainland grows in
economic strength, he told an audience in Los Angeles.
“Free nations must develop and strengthen their global and
regional co-operation in both supporting the people of China in
their struggle for freedom and democracy as well as taking
measures to stop Chinese acts of oppression and aggression.”
Lee spoke of a double standard between the treatment of China
and the former Soviet Union.
“People in the west believed that Soviet human rights violations
and threats to neighboring countries should be stopped.
“But they believe that China’s violations of human rights and
threats to neighboring countries are ‘special Chinese
characteristics’ that can be tolerated.”
Regarding Taiwan’s own internal struggle, Lee said:
“The progress of Taiwan’s democracy is being hindered both by
threats from China and internally by the remnants of the Chinese
foreign power that once ruled Taiwan.
“What we need to do is change our name and get a new
constitution that is better suited to the current society in Taiwan,”
repeating his call to switch the island’s formal name from the
Republic of China to the Republic of Taiwan.
[South China Morning Post / AP]
Pakistan: For the millions suffering in the aftermath of the
earthquake, it gets grimmer and grimmer as winter approaches.
We shouldn’t be surprised to learn next spring that tens of
thousands froze and starved to death because enough aid didn’t
reach them before the snows began to fall. The logistics are
terrible in delivering the relief supplies, but the civilized world
can not afford a failed state and that is exactly where we’re
headed. President Musharraf may not survive the winter either.
Poland: Lech Kaczynski was elected president, a man who vows
to be a real friend of the United States. In fact he wants his first
trip to be to the White House, not Moscow. And further, as of
this writing Russian President Vladimir Putin hasn’t
congratulated him as Kaczynski has also said Putin should come
to Warsaw before he’d go to the Kremlin. Uh oh. And don’t
forget Russia controls much of the natural gas coming into this
country.
Mexico: I was watching the scene from Cancun on Monday and
thought the chaos there in the aftermath of Hurricane Wilma
would have become more of a story, though obviously the
networks have only so many reporters and resources to spread
around the world. The government here did not handle this well,
nor does it appear did the U.S. State Department in aiding
American citizens.
Mexico overall is a mess and the people haven’t benefited one
iota from its oil wealth. President Fox has been a huge
disappointment.
And if you’re planning on taking a little excursion across the
border to Tijuana, think again. This week the city broke its
record for murders with the 355th killing, including a popular
activist priest the other day who was shot in the head and neck
six times. 2,000 attended his funeral. The police across the land,
if they aren’t already corrupt, cower under their desks…afraid
they’ll be the next victim of the drug kingpins. And in some
respects, who can blame them?
United Nations: Over 2,000 companies were named in Paul
Volcker’s final report on the oil-for-food scandal as having paid
bribes to Saddam Hussein, or, in a few cases such as British
Member of Parliament George Galloway, accepted payments for
influencing debate. Most of the companies were Russian,
followed by France, and included Germany’s Siemen’s and
Sweden’s Volvo. As for UN Secretary General Kofi Annan,
while he wasn’t personally implicated it all occurred under his
watch. He can help salvage some of his legacy, though, by
playing a major role in the debate over Syria….at least in the
eyes of this scribe.
Canada: A Canadian Senate defense committee issued a scathing
report titled “Wounded: Canada’s Military and the Legacy of
Neglect,” and it’s quite blunt.
“In 2004, Canadians spent an estimated $16.1 billion on
alcoholic beverages, in comparison to the $14.1 billion they
spent on their armed forces. While beer and wine may help
Canadians forget that they are inadequately protected, we risk a
sober and somber awakening by continuing to let our defenses
down.”
Another section is titled “Cutting through the Bulls—.”
As reported by David Pugliese of Defense News, “The document
warns about aging command-and-control destroyers that are not
being replaced and naval helicopters ‘older than the parents of
the pilots who fly them.’” Flying hours for the Canadian Air
Force have been reduced by 59 percent since 1990.
But the reserves did a hell of a job the other weekend in blocking
traffic while I ran my half-marathon on Prince Edward Island!
Random Musings
–For a final time, the issue over Harriet Miers’s nomination to
the Supreme Court was not one of where she would come down
on certain litmus tests; rather it was President Bush’s total lack of
respect for his fellow Americans and the Constitution in selecting
a person with such limited experience. Pennsylvania Senator
Arlen Specter cried crocodile tears in calling the treatment of Ms.
Miers “disgraceful.” What was disgraceful was how our
president played us all for chumps.
–In a USA Today / CNN / Gallup poll, by a 54-39 margin people
said they would be more likely to vote in 2006 for a
congressional candidate who opposed Bush.
–What is becoming increasingly clear is that Senate Majority
Leader Bill Frist knew far more about his investment in HCA
than he’s let on thus far.
–Republican operative Ralph Reed has such a choirboy image
that you tend to give him a free pass even if you don’t agree with
his political philosophy. But what we’re learning through the
investigation into lobbyist Jack Abramoff is that Reed himself is
as dirty as they come and even The Weekly Standard is ripping
him to shreds. For starters, this avowed opponent of gambling
took huge wads of cash from Indian casino interests.
–Newsweek reported that political operatives from both parties
are beginning to look at New Orleans as a site for their 2008
conventions. What an incredibly stupid idea.
–In honor of Rosa Parks, here was the scene back in 1955,
Montgomery, Alabama. From Bloomberg News:
“The Montgomery city bus system required blacks – 75 percent
of its riders – to enter the front of a bus to pay, then get off and
re-board through the back door.
“The first four rows were always reserved for whites. Blacks
could sit in the middle section, but if a white wanted one of the
seats, black passengers were forced to vacate the entire row.
Three women and two teenagers had already been arrested in
1955 for refusing to comply.
“Parks hadn’t planned to protest that day. She left her seamstress
job on the evening of Dec. 1, 1955. Her back and shoulders
ached and she hoped to get a seat. With the rear of the bus filled,
Parks sat in the first row of the ‘colored section’ with three other
blacks. A white man boarded and Blake (the driver) ordered
them to move. All did except Parks, who refused with a simple
‘No.’
“ ‘People always say that I didn’t give up my seat because I was
tired, but that wasn’t true,’ Parks said in her 1992 autobiography.
‘…No, the only tired I was, was tired of giving in.’
“Parks was taken to jail. On Dec. 5, 1955, her trial date, more
than 7,000 blacks met at the Holt Street Baptist Church. They
formed the Montgomery Improvement Association (MIA), with
(Rev. Martin Luther) King, a 26-year-old Ph.D., as its head. For
the next 13 months, virtually all blacks in Montgomery walked
or carpooled, despite harassment by authorities. The bus service
almost went bankrupt.”
Parents, a few years ago I wrote of visiting the Henry Ford
Museum in Dearborn, MI, one of the truly great facilities in the
world. One of the many unique exhibits here is the very bus
Rosa Parks was on that day. It makes for a terrific history lesson
for your children.
–Last week I mentioned the last Aussie survivor of World War I.
This week I have to note the passing of Rene Moreau, 108, one
of seven remaining French soldiers who fought in the “war to
end all wars.”
I couldn’t help but look up the number killed back then, which
some of the students out there should be aware of.
British Empire: just under 1 million
France: nearly 1.4 million
Italy: nearly ½ million
Russia: 1.7 million
Germany: 1.8 million
Austria-Hungary: 1.2 million
Turkey: 325,000
USA: 115,000
[Source: “Chambers Dictionary of World History”]
–Congratulations to the Chicago White Sox for their first World
Series triumph since 1917…speaking of World War I.
–Moscow received its first winter weather of the season this
week. It comes early here…and stays…so if you were planning
an invasion, I’d advise waiting until next year.
–Lots of animal chat this week:
3rd-grader Sierra Stiles was the first to kill a black bear in
Maryland’s hunting season, as confirmed by all appropriate
authorities. It needs to be noted, however, that according to the
Washington Post she skipped school. Now I was going to say
Sierra will rue the day she took one off, until I realized I
always seemed to come up with bird flu when I was a youth on
Opening Day for my beloved Mets.
Speaking of avian flu, I’m guessing that the parrot in Britain that
succumbed to the disease heroically aided baffled doctors by
saying with its last dying breath, “I have bird flu…I have bird
flu…… ”
And in the city of Rome, authorities have ruled that dog owners
can be fined for not walking their pets regularly. In addition, I
kid you not, round fish bowls have been banned because they
make fish blind. Now how many of you knew that?
So the animals here need a spokesman…or spokesanimal. The
BBC added, “It is not yet clear how the rules will be enforced, as
pets will remain unaware of their newly-acquired rights.”
Sounds like a job for Johnnie Cocker Spaniel.
—
Pray for the men and women of our armed forces.
God bless America.
—
Gold closed at $475…gold bugs love Bernanke
Oil, $61.22
Returns for the week 10/24-10/28
Dow Jones +1.8% [10402]
S&P 500 +1.6% [1198]
S&P MidCap +1.1%
Russell 2000 +0.4%
Nasdaq +0.4% [2089]
Returns for the period 1/1/05-10/28/05
Dow Jones -3.5%
S&P 500 -1.1%
S&P MidCap +4.0%
Russell 2000 -2.5%
Nasdaq -3.9%
*So I was looking through my records to find a week where both
the Dow and Nasdaq finished with comparable numbers and
back on 3/2/01, the Dow was 10466 and Nasdaq 2117. So in
other words, the last 4 ½ years have been a waste…and you
probably would have slept better being in cash.
Bulls 44.8…mild contrarian positive, below normal of 45
Bears 29.2
Have a great week. I appreciate your support.
Brian Trumbore
