[Posted 7:00 AM ET]
Iraq
When you cut through all the rhetorical garbage being hurled,
from one side of the political aisle to the other, it boils down to
this. There is but one man who is to blame for the predicament
we find ourselves in today, in Iraq, and that is President George
W. Bush.
From the fall of Saddam’s statue in the spring of 2003 and the
declaration that major combat operations were over, our
president has failed the American people. Historians will point
to the summers of 2003 and 2004, in particular, as being critical
junctures in the post-war phase where President Bush exhibited
an amazing lack of leadership in failing to recognize that changes
needed to be made in how the war was being waged.
The president and Vice President Cheney used phrases this past
week such as “deeply irresponsible” and “we won’t let critics
rewrite history” to counter the native insurgency they now face
on the home front, from an equally contemptible Democratic
leadership, I hasten to add, yet the responsibility for the post-war
debacle lies firmly on their shoulders.
I choose to support the few Republicans in the Senate, chiefly
senators John McCain and Lindsey Graham, who have
steadfastly questioned the Pentagon’s strategy while also
recognizing that the first priority should be to win, not talk of a
draw down in forces. I remain a supporter of the war because I
recognize, as McCain has said a thousand times, “failure is not
an option.” But I can not forgive President Bush for bringing us
to this critical juncture with such a deeply divided Congress and
country.
As for the events of the week, aside from the usual number of
horrific bomb attacks and discoveries of torture, here are the
facts.
The Senate passed a resolution, 79-19 (a few like McCain and
Graham in dissent), calling for 2006 to be “a period of significant
transition to full Iraqi sovereignty.”
No one denies this is an appropriate statement of principle, but
it’s the context and timing that is deeply disturbing. Democrats
saw it, correctly, as a vote of no confidence. Republicans who
voted for the resolution spun it as an effort to tell the Iraqis to
take charge of their own country; as if they don’t already know.
Either way, those that seek to do us harm emerged the real
winners.
On the other hand, in the ongoing pre-war battle, yes, as Bush
and Cheney claimed, the Democrats “looked at the same
intelligence” as the White House had. The Democrats can not
claim they didn’t have enough information, or that what was
presented was “manipulated.” Mistakes were of course made in
interpretation, but to say that some Defense Intelligence Agency
memo that refuted some of the evidence was never shown to
Democrats and that this alone would have prevented them from
supporting the move against Iraq is simply liberal pabulum.
This war was set up by the aftermath of the first Gulf War, the
failure to support the insurgency in 1991, Saddam’s ability to
survive, collusion in the oil-for-food program, the snubbing of
one UN Security Council resolution after another, booting the
weapons inspectors out, a consensus in the world community that
if Saddam didn’t already have them, he was hell-bent on
acquiring WMD, and then the post-9/11 environment.
Both parties occupied the White House during this period and
both sides spoke of “a gathering danger.” Those who deny the
above are the true revisionists.
So where does this all leave us today? To say it’s a “mess” is too
trite and doesn’t do justice to those, such as the American and
British soldier, who have truly sought to make a difference and
change world history by bringing democracy to a region that has
known none. The cause is noble and just. This war was not “a
big mistake” as President Clinton said this week, while appearing
to erase his own past pronouncements from the history books.
But the execution of the post-war phase, the failure to prepare
and then the failure to quickly adapt to the realities on the
ground, has left the U.S. and its dwindling number of allies one
last fleeting hope that the parliamentary election of Dec. 15
somehow produces an assembly where all three major factions
work towards some common goal of stability. I want to remain
optimistic, but I’m also a realist.
Lastly, as I noted awhile back, Wall Street Journal columnist
Daniel Henninger first broached the idea of President Bush going
to Baghdad for Thanksgiving and giving a speech on democracy.
I can imagine the White House wants to do this in the worst way
and has been contemplating the contingencies for weeks. Mr.
President, go.
Wall Street
I submit market technicals, money flows and seasonality are
powering stocks forward more than anything else these days. All
are compelling and it’s hard to refute the trends.
Fundamentally, however, I maintain the earnings story is not as
good as the talking heads are telling you, though this week’s
news from the likes of Hewlett-Packard and General Electric on
this front can’t just be waved off.
But you do have this battle among retailers, such as that between
Wal-Mart and Target where the former is saying Christmas will
be strong and the latter says it won’t. I still need a lot of
convincing to be turned into a bull here.
So with our old example of the three-legged stool – the
consumer, real estate, and capital spending – I maintain the
consumer will rein in spending this holiday season, real estate
has clearly peaked, but with corporations flush with cash it
appears capital spending could be in the midst of a solid quarter.
More specifically on real estate, you had further evidence the
nationwide market has peaked with the revelation that October
housing starts were down sharply, though I’ve tried to never tout
just one month’s data when it comes to this sector. It’s just that
we have finally entered the stage where with housing it’s one
step forward, two back; when it had been three forward and one-
half step back for the better part of a decade.
But to those saying the bubble has been officially popped, not
quite yet. 30-year fixed mortgages, while near 6.50%, are still
reasonable and the labor market is solid. Housing prices are
going down in some markets but this doesn’t mean the country
has popped. Maybe pull out an old Lawrence Welk or Guy
Lombardo tape for New Year’s Eve and watch a few bubbles pop
that night. That may be about the timing for real estate as well.
And on the topic of rates, as we move through 2006 and into
2007 and beyond, those holding adjustable and floating rate
mortgages will of course get slammed come reset time. If I’m
wrong on Christmas retail sales, it will simply be because few
resets have taken place and the recent slide in energy prices may
provide a spark in terms of earlier expectations.
Just a few other items of note before the bits and bytes below.
It’s clear that financing America’s trade deficit remains a non-
issue with word a record $118 billion in U.S. securities was
purchased by foreigners in September, far exceeding any
monthly trade figure (a simple way to look at this problem). So
while the trade data remains one of those long-term issues, like
chemicals leeching into an aquifer it hasn’t reached our taps yet.
This is not one of my concerns these days.
And as Fed Chairman Alan Greenspan says his last farewells,
he’ll give an obligatory warning on deficits but he’s not really
too concerned either. Nor will his successor Ben Bernanke have
sleepless nights because of them.
But Bernanke will be worried about inflation and here it also
remains a non-issue by my thinking. Both the core producer and
consumer price figures, ex-food and energy, were tame for
October (-0.3% for the PPI, +0.2% for CPI). In fact, year over
year, the core CPI is running at a 2.1% rate and I maintain we’ll
be talking about deflation in 2006. Product price increases
simply will not stick in this global marketplace of ours,
especially when we finally get the slowdown I’ve been calling
for.
Lastly, I see it as my job to keep at least one eye open at all times
to the hot spots; those events that could crush confidence and trip
us up. Never forget what kind of world we live in. Some issues,
such as the coming clash across Europe, or even bird flu, take
time to develop and you have more than enough maneuvering
room to reallocate assets if need be. But others, such as a terror
attack on U.S. soil, or a nuclear test by North Korea or Iran, can
occur without warning. I see us moving into another period
where from a financial market standpoint, Wall Street is playing
its games without a care in the world. No doubt, this can go on
for a long time. But never forget the lessons of history, nor how
incredibly levered our global economy is and how fiscally ill-
prepared we are for the worst.
Street Bytes
–The winning streak continued with the Dow Jones now just 17
points shy of its 2004 closing figure at 10766. But the S&P 500
and Nasdaq are now at 4-year+ highs, 1248 and 2227,
respectively, and up 3.1% and 2.4% for 2005. Tack on a few
more big advances and suddenly it’s not so bad a year after all.
[If you are new to the site, I said all three would decline 5% in
2005 and I don’t allow myself the luxury of changing this
forecast mid-stream.]
Aside from the Hewlett-Packard, G.E. and General Motors news
(below), the airlines have certainly perked up in the face of
falling jet fuel prices and rising loads. I know there wasn’t an
empty seat on my two flights between Newark and Amsterdam
this week.
And just a comment on the performance of the major Asian
markets, ex-China. They certainly don’t appear to be too
concerned about bird flu as they rocket higher. And performance
in Europe has been strong, too, despite a sluggish, if not
downright poor economy there.
–U.S. Treasury Yields
6-mo. 4.30% 2-yr. 4.39% 10-yr. 4.50% 30-yr. 4.69%
The yield curve between the two- and 10-year Treasury was
close to inverting on Thursday but widened a bit late Friday on
word the European Central Bank is finally preparing to raise
interest rates after keeping its key short-term target at 2% since
June 2003. The ECB has been growing increasingly concerned
about inflation, but at the same time no one expects it to move
more than about a half-point over the next few months.
Nonetheless, this narrows the spread between U.S. securities and
their European counterparts.
–General Motors traded down to its lowest level since 1987,
before CEO Rick Wagoner issued a statement that rumors of a
Chapter 11 filing were once again unfounded. Defenders of GM
like to point out it has $19 billion in cash (more if you count the
stake in GMAC and other assets), but the fact is it ran through
$10 billion in just the last two years.
–The median home price in the six-county Southern California
housing market was $473,000 in October, down from $476,000
in August.
–Shares in Google topped $400, which gives the company a
market value as much as Yahoo and eBay combined and ahead
of Cisco Systems and Time Warner. As I noted a few weeks
ago, however, Google is one case where you can’t just look at
the P/E and say it’s overvalued. ‘Short’ this one at your own
risk.
–Exxon Mobil has lowered its finding costs each year since the
1980s…from $2.75 per barrel to $0.44 per barrel in 2004.
[Financial Times] In other words, you’d think it could afford to
spend more on exploration.
But on a different topic, while I remain a supporter of Big Oil, I
was as miffed as the next guy to learn this week that the
industry’s leaders probably lied to a Senate committee the other
day when they denied having met with Vice President Cheney’s
energy task force in 2001, as documents that have since emerged
show they did. [Washington Post] For the first and only time in
my life, I agree with my own Democratic Senator Frank
Lautenberg that these guys should be brought back and put under
oath.
–Some important long-term items on the energy front. Kuwait
announced that production at the world’s 2nd-biggest oil field has
peaked, while on the other hand the International Energy Agency
maintains Saudi Arabia is capable of ramping up from its current
10.5 million barrels per day pace to 18.2 million by 2030; a
sentiment that flies in the face of expert Matthew Simmons’s
forecasts. As for key producer Venezuela, my friends at
Pritchard Capital tell me production here continues to slide,
though this is more about President Chavez’s rule and a rapidly
deteriorating infrastructure than anything else.
–China’s industrial production rose 16% in October, but here
experts are warning of overcapacity, while fixed-asset
investment soared another 27% in October, though this was
actually less than forecast.
–I’ll attempt to sort out all the tax proposals that came out of
Congress the past 48 hours next week. What is important for now
is that millions shouldn’t have to worry about the alternative
minimum tax, a good thing. Otherwise, we really have to wait
until House-Senate conferences concur on final legislation
following the Thanksgiving recess.
–Hewlett-Packard is successfully undercutting Dell in the PC
game, thanks to the leadership of new CEO Mark Hurd. I, like
so many others, had buried HP. Congratulations to the
employees for this great comeback. As for Dell, as noted in this
space a long time ago the service began to slip in a big way and
you’ve seen the result. That also should have been the telltale
sign to abandon ship if you were a shareholder. Just something
else to file in the memory bank the next time a similar situation
comes along.
–A lot is being said about the UN technology summit that is
beginning to address the issue of American control of the
Internet. I have a definitive piece on this on my “Wall Street
History” link, 10/28/05, and will not be rehashing it in this space.
However, I was floored to see an AP story by Matt Moore that
said the following:
“President Robert Mugabe of Zimbabwe spoke for the more
radical opposition to U.S. control, saying Washington and its
allies cannot continue to ‘insist on being world policemen on the
management of the Internet.’
“ ‘Why should our diverse world be beholden to an American
company?’ he told more than 10,000 government, business and
other delegates.”
Why the heck was Mugabe even allowed into a conference hall,
let alone speak?! Why did Mr. Moore not mention in the balance
of his piece that Robert Mugabe is a pariah? Why did Mr.
Moore give him any ink at all?
–Johnson & Johnson and Guidant finally reached an agreement
on their merger, 15% below the original target price due to
Guidant’s product issues.
–Privately-held Koch Industries (oil, cement, asphalt, cattle
ranching) is purchasing Georgia-Pacific (toilet paper, and other
stuff) for $13 billion; what proved to be a cool 39% premium for
GP shareholders. Koch thus becomes the largest private
company by revenue, including Cargill.
-Cisco Systems acquired set-top box maker Scientific Atlanta for
$6.9 billion in an attempt to access the fast-growing market for
converged television, phone and Internet services over
broadband networks. By the market’s early reaction, it is
dubious that this was the most effective use of Cisco’s cash.
–Former Hollinger International tycoon Conrad Black and three
of his cohorts were indicted for fraud, on a massive scale,
pertaining to the sale of several hundred Canadian newspapers
and the subsequent shuffling around of $tens of millions in
company funds that were then used for personal use; let alone the
fact Black and the rest evaded taxes. The indictments originated
in Chicago, under the purview of the same U.S. Attorney Patrick
Fitzgerald who is investigating the Valerie Plame leak. [More on
this last bit in ‘random musings.’]
–Organized crime rings are increasingly infiltrating Britain’s
banks. 7 former colleagues of Barclays are under investigation.
–A New York State Supreme Court judge ruled Goldman Sachs
can not represent both Archipelago and the New York Stock
Exchange in its imminent merger. NYSE chief John Thain is a
former Goldman Sachs co-president.
–And then we have this China / copper mess. A state
commodities trader, Liu Qibing, working for the Strategic
Reserve Bureau in Beijing, took a gigantic short position in
copper back in July and August on the London Metals Exchange.
He paid $3,300 per ton, expecting it to drop. Instead, it rose to
$4,200 and beyond. This is a man who had been wildly
successful in representing China before.
When the story came to light, amidst concerns Liu wouldn’t be
able to meet his obligations to deliver on the bet come
December, SRB officials denied even knowing him. Now they
say Liu (currently on leave…or hiding) was acting for himself
and not the government. Nonetheless, if China itself is to meet
the contractual commitments it’s now attempting to get out of, it
would have to buy back the copper at market prices and suffer
the loss, as it started to do in small measure this week. [Eventual
losses, if the SRB follows through, are estimated to be in the
neighborhood of $100 million.]
Confused? You should be. As the story unfolded this week my
head was spinning. The point to take away from it all, though, is
to look who’s at the top. This is classic communist China in
action.
–An hour before I flew to Amsterdam, I was interviewed for an
area daily on my thoughts concerning CNBC’s Jim Cramer, the
hottest property in the financial media as witnessed by his
Business Week cover story, New York Times pieces, and his “60
Minutes” segment.
I told the reporter that as much as I admired Mr. Cramer’s work
ethic and his past success, I have real problems with some of the
advice he gives on his show, “Mad Money;” such as
recommending a bunch of stocks in Peru that he’ll never follow
up on.
But as I’m flying across the Atlantic, I’m thinking ‘why did I
agree to do that?’ Jim Cramer is what he is and my main point is
I just hope most of the viewers watching understand that as well.
So I return late Tuesday, flip on CNBC, Cramer’s starting “Mad
Money” and he’s now recommending a bunch of Chile stock
plays. “Chile’s going up for years!” he bellows.
Boy, I hope that’s the case for the good of the continent, and
indirectly, America. But do you think he’d at least mention the
fact the country is embroiled in a presidential election campaign,
with a vote on Dec. 11? Of course not. What was once thought
to be a sure thing for the leader in the polls, Michelle Bachelet,
now looks like it’s headed for a run-off…at which point anything
can happen. A potential opponent is actually a center-right
millionaire businessman, which might not be such a bad thing by
my way of thinking should he emerge victorious.
Bottom line, though, who knows? Cramer did, at least, start off
by mentioning you could invest in a closed-end fund in Chile,
but then he hyped the stocks. Of course they went up the next
day and may continue to do so. Or they may not. Just don’t
expect him to offer any advice if they begin to stumble.
And with the above, I’m now finished discussing the man.
Buyer beware, as with anything else you see on a financial
network. As for the newspaper story, I haven’t seen it in print as
of this writing.
–IBM’s best supercomputer, Blue Gene / L, can do 280.6 trillion
calculations a second. The U.S. government currently uses it to
study the nuclear stockpile and perform other research. I thought
we only had about 10,000 nuclear warheads to begin with. They
ought to be able to keep track of them on a desktop.
–My portfolio: As part of my trip to Amsterdam, I took a train
ride into the country to the city of Alkmaar (a very cool place, by
the way). But what struck me was seeing about 30 wind turbines
located in an industrial park on the outskirts of Amsterdam and
none in the agricultural area that followed. [Later I did see some
by the ocean.] In other words, for the environmentalists out there
who are concerned that windmills kill migratory birds, in some
locations perhaps an industrial park is an alternative (assuming
it’s still a windy site).
As for moi, I bring this up because seeing 30 wind turbines
warmed my heart as I sit on my carbon fiber stock play. The
company supplies the leader in turbine blades with the carbon
fiber that makes them stronger and lighter. Overall, the wind
turbine business is expected to grow tenfold by 2010 to $80
billion. Alas, the stock itself has been lagging the market since
its spectacular rise…and fall…about six weeks ago.
Foreign Affairs
Europe and Islam: The following statistics are from the AP,
Center for the Study of Global Christianity, United Nations and
Frederick Kempe / Wall Street Journal Europe.
Muslims as a percentage of 2005 country population
France…8.2%
Germany…4.5%
UK…2.2%
Netherlands…4.9%
Spain…1.0%
Belgium…3.6%
Switzerland…4.3%
Denmark…2.1%
Mr. Kempe cites a political scientist, Olivier Roy, who argues, in
Kempe’s words, that “where Islamic culture has the best chance
of reformation and modernization” is in Europe. “A growing
Muslim middle class and an increasing number of Muslim
university students reject extremism but lack larger influence, he
says. He wants France and other European governments to do
more to tap these moderates and produce minority role models of
the sort the U.S. has in abundance: from Colin Powell and
Condoleezza Rice to a host of business and academic leaders.”
“For the moment,” Kempe adds, “the 577-member French
National Assembly has no Muslims representing mainland
France. They are strikingly absent as well, for the most part,
from national television.”
But while you look at the above percentages and, perhaps, say
‘what’s the big deal?’ the fact is demographics increase the sense
of urgency. Just as the Israelis argue when discussing
demographics and the Palestinians, the Muslim birth rate in
Europe is three times higher than that of non-Muslim Europeans,
“with the result the Muslim population will double again by
2025,” Kempe writes; and this doesn’t include Turkey’s
inclusion should they gain European Union membership.
These are the facts. And while tensions in France have lessened
considerably, thanks in no small part to the government finally
cracking down, I can’t help but make my own comments on the
Netherlands and the broader picture following my trip.
When you walk around Amsterdam, you’re left with a sense of
peace and tranquility. The beautiful homes, the canals, even the
crisp autumn air. But if you read enough on the politics of the
place, let alone talk to a few locals, you know that beneath the
surface there is fear and often violence.
The Netherlands has long been tolerant of immigrants. Call it
the guilt complex from World War II, as I’ll examine further in a
bit. Amsterdam has a Jewish mayor, after all. But then you
learn one member of parliament (MP) is currently in a secret
location under police protection, because Islamists have
threatened to kill him. Geert Wilders has said “Pure Islam is
violent.”
1.7 of 16.3 million inhabitants of the Netherlands are “non-
Western” immigrants, with about 1 million of these being
Muslim. But as in France and elsewhere in Europe they tend to
live in isolation, without making an attempt to integrate even if
given the opportunity…though this last bit is more the exception
than the rule.
But as Roger Cohen pointed out in a piece for the International
Herald Tribune over a month ago, Immigration Minister “Iron
Rita” Verdonk is leading a crackdown.
“We don’t expect (the Muslim immigrants) to go ice-skating in
winter or put on clogs. But we do expect them to learn our
language and accept basic values like equality of men and
women.”
Somali-born Ayaan Hirs Ali is a female MP who is also under
guard for renouncing Islam after 9/11.
“All Europe is in a state of denial…Islam is not a religion of
peace. We should acknowledge that it’s a very violent religion…
instead of pretending, like Bush, that this violence is not true
Islam….we should demand an Islamic Reformation.”
Most Americans haven’t a clue this kind of harsh debate is taking
place here. I have to admit I wasn’t focused on it myself until
the horrific murder by a Muslim fanatic of the right-wing
filmmaker Theo Van Gogh one year ago; an act which led to
reprisals from the right against mosques and Muslim schools.
The placid Dutch landscape hides this seething caldron that is
now being peeled back. And, yes, I do see a true clash of
civilizations spiraling out of control on the European continent in
our lifetime, with the neo-fascists lining up against the Islamic
fanatics. Terror attacks, or widespread riots, will only fuel the
right-wing and their poll #s will continue to grow. [Austria’s
Jorg Haider is the model of a charismatic figure I have in mind
that may be leading a European nation over the next decade at
the rate change is taking place.] I do not arrive at this position
lightly, or merely for shock value.
But in closing this chapter I must also leave you with my
experience at Amsterdam’s new “Verzetsmuseum,” (the Dutch
Resistance Museum). This spectacular place has been relocated
and expanded and should be among the top three stops for
anyone visiting the city.
The Dutch were naïve, as was the rest of Europe, on the eve of
World War II. Even after Hitler’s move on Poland, the
Netherlands felt they had little to fear. They were thus shocked
when Hitler invaded on May 10, 1940, and surrender occurred
five days later.
But even in the first months of the occupation, the Dutch
believed they’d be treated fairly and the Nazis, shrewdly,
installed the leader of the Dutch National Socialists Movement,
the sicko Anton Mussert (he was married to his aunt), as a way
of placating the Dutch people while the Nazis in turn basically
behaved.
But then an Austrian was placed in charge, Seyss-Inquart, and
the situation rapidly deteriorated. Here is a brief outline of what
happened to the Jews in the Netherlands.
May 1941 – Some streets given Jewish names
Sept. 14, 1941 – Jews were barred from the markets
Sept. 15, 1941 – Jews were barred from public facilities
Oct. 1, 1941 – Jewish children were sent to separate schools
Jan. 10, 1942 – The first Jews were sent to work camps in
Amsterdam
July 17, 1942 – Forced movement of all Jews to Amsterdam
Jan. 23, 1943 – Introduction of Jewish identity card
May 3, 1943 – Addition of Star of David to all clothing
In the end, of 140,000 Jews in the Netherlands prior to the
occupation, 102,000 were killed; a higher percentage than in any
other West European country. This is the genesis of the Dutch
guilt I spoke of above.
And so I’m walking through this chilling tale of history
(including stories of the brave Dutch workers who would strike
rather than work at their Nazi-run factories, only to be mowed
down 80-90 at a clip), when it hit me.
Will there come a time when a minority of a different kind is
rounded up in Europe?
—
Iran: The mullahs refuse to accept any deal that demands they
enrich uranium in Russia and insists on doing it on Iranian soil.
We are once again at an impasse, though at least this weekend
Russian President Putin is saying the right things in support of
the U.S. / Euro-3 position.
China: President Bush praised Japan and Taiwan as being role
models for democracy in Asia, adding the people of China had
“legitimate” demands for more freedom of speech and religion.
For his part, President Hu Jintao told the APEC conference that
his neighbors had nothing to fear from his nation, while at the
same time he didn’t say one word about bird flu…astounding.
North Korea: China, of course, contributed nothing in the last
round of nuclear disarmament talks, and while South Korea has
been towing China’s moderate line, at least this week South
Korean President Roh stood beside President Bush and said a
“nuclear-armed North Korea will not be tolerated.” Earlier,
Secretary of State Condoleezza Rice spoke of Pyongyang’s need
“to have a different attitude” at the next round of talks after last
week’s failure to produce any modicum of progress.
But for now, Kim Jong-il’s orcs slave away, deep in the bowels
of Mordor, unimpeded.
Israel: Secretary Rice did, however, broker a highly significant
deal over the Gaza Strip border between the Israelis and
Palestinians; an act which will finally allow for freer movement
for the latter. It’s a big step forward as at least the Gaza –
Egyptian border will be monitored by European supervisors,
while Israel will be able to watch the action on closed-circuit
television and maintain some say in who and what gets across.
As for the West Bank, Palestinians will be allowed to travel in
the territory in bus convoys.
All of this strengthens the hands of Palestinian President
Mahmoud Abbas ahead of the Jan. 25 parliamentary elections.
Meanwhile, Israeli Prime Minister Sharon called for early
elections in February as new Labour Party leader Amir Peretz
threatened to pull Labour’s 8 cabinet members out of the
coalition unless his demand for a vote by March was met. So
Sharon said, sure, let’s hold it; Sharon not wanting to sit around
with a fractured government any longer than he has to anyway.
As I said last week, this is going to be a helluva campaign, but
unfortunately a violent one.
Russia: President Vladimir Putin shook up his government and
designated a successor in 2008 by naming 40-year-old advisor
Dmitry Medvedev to the position of deputy prime minister.
Defense Minister Sergei Ivanov was also named a deputy pm, in
case Medvedev doesn’t prove up to the task. Russian Garry
Kasparov, a potential presidential candidate himself in ’08,
commented in the Wall Street Journal:
“In 2000, after Mr. Putin came to power in exactly the sort of
backroom deal we are hoping to prevent in 2008, he promised to
establish a ‘dictatorship of law’ in Russia. So far we have the
former at the expense of the latter. The consequences of this
transformation may only seem relevant to Russians today, but a
Russia with a disintegrating economy and no respect for the rule
of law will soon make our problems yours.”
Separately, Russia announced that the head of a leading space-
technology company was arrested on espionage charges for, what
else, passing sensitive information on to the Chinese.
Lastly, Georgia made some waves this week by refusing to
attend a Commonwealth of Independent States assembly due to a
diplomatic tiff with the Kremlin over credentials. Just one of
those little stories that sometimes escalates into a far bigger one
down the road.
Mexico: Speaking of diplomatic tiffs, President Vicente Fox,
showing some real guts, recalled his ambassador to Venezuela
and booted Venezuela’s out after Venezuelan President Hugo
Chavez warned Fox, “Don’t mess with me.”
This goes back to Fox backing the U.S. in calling for a Latin
America free trade agreement, after which Chavez called Fox a
“puppy” of Washington.
Mr. Chavez is way out of control these days, but how to rein him
in before he causes too much mayhem is one of the stickier
issues facing the White House these days.
Germany: Angela Merkel will formally become Germany’s first
woman chancellor on Nov. 22. But while the grand coalition
finally coalesced around an economic reform plan, one of tax
hikes and budget cuts, perhaps the most significant policy change
is the one that makes it easier for employers to fire employees, a
good thing in this sclerotic state.
Random Musings
–USA Today had another reminder of just how shaky our
homeland security is in reiterating that little if any air cargo is
screened for explosives.
–New Jersey gubernatorial candidate Doug Forrester blamed
President Bush for his loss to Democratic Senator Jon Corzine.
With all due respect, Mr. Forrester (whom I voted for), you’re
full of it. You were nine points down in the spring, before
Katrina and other issues torpedoed the White House, and you lost
by nine. You were just a flawed candidate in an already highly
democratic state, running against an incumbent in all but name
only. Suck it up.
–Just two weeks ago I remarked I wouldn’t be commenting
“much on the Scooter Libby case for the primary reasons that (1)
I have no clue what the facts really are and (2)…we still don’t
know definitively what the deal was with Valerie Plame.”
Pretty smart, if I may say so myself, in light of the Bob
Woodward revelation this week that he learned of Ms. Plame a
month before her identity was exposed to Libby. This case
should now be thrown out, but late Friday, prosecutor Fitzgerald
announced he was impounding another grand jury.
–I agree with Senator John McCain’s position on torture.
“The enemies we fight today hold our liberal values in contempt,
as they hold in contempt the international conventions that
enshrine them. I know that. But we are better than them, and we
are stronger for our faith. And we will prevail. It is
indispensable to our success in this war that those we ask to fight
it know that in the discharge of their dangerous responsibilities to
their country they are never expected to forget that they are
Americans, and the valiant defenders of a sacred idea of how
nations should govern their own affairs and their relations with
others – even our enemies.
“Those who return to us and those who give their lives for us are
entitled to that honor. And those of us who have given them this
onerous duty are obliged by our history, and the many terrible
sacrifices that have been made in our defense, to make clear to
them that they need not risk their or their country’s honor to
prevail; that they are always – through the violence, chaos and
heartache of war, through deprivation and cruelty and loss – they
are always, always, Americans, and different, better and stronger
than those who would destroy us.” [Newsweek]
–A Pew Research Center survey, conducted every few years,
reveals that 42% of Americans now say the U.S. should “mind its
own business internationally and let other countries get along the
best they can on their own;” up from 30% in 2002. Not a good
trend for the White House, to say the least. Iran and North
Korea, though, are now cited as the prime emerging threats to
U.S. security. Four years ago it was China.
–FEMA remains a disaster. First they set a deadline of Dec. 1
for Katrina and Rita victims to leave hotels, and then we learn
that flood insurance reimbursements have been cut off until the
agency gets more funding. I’m heading down to Flower Mound,
Texas, this week, representing an organization I’m involved
with, to hand the city a check for their efforts to shelter
Katrina victims. [Flower Mound helped my community in the
aftermath of 9/11.] I already know what kinds of stories I’m
going to hear while there, and I doubt I’ll be too complimentary
of FEMA for this Dec. 1 cutoff upon my return.
–But at the same time, I’ve also been highly uncomplimentary of
the situation in New Orleans, particularly as it relates to the
actions of city officials and the way the place was run before the
hurricane. The more you read, the more you also understand
New Orleans these days is nothing more than a giant mold spore.
My heart goes out to the innocent victims, but I remain
adamantly against just throwing $billions away to rebuild this
place as it once was.
–The case of lobbyist Jack Abramoff gets hotter and hotter.
Documents and letters have now been revealed that show about
three dozen members of Congress were involved in Abramoff’s
Indian tribe / casino game, including House Speaker Dennis
Hastert and Senate minority leader Harry Reid. A pox on all
their houses.
–After going to Europe, I’ve decided that in my next life I want
to be a money-changer. Geezuz, you get ripped off exchanging
funds these days.
–Grizzly bears are about to be removed from the endangered
species list, thanks to a baby boom in the Yellowstone National
Park region.
–But black bears in New Jersey are in deep trouble as the state
resumes bear hunts here. Any bear venturing into designated
areas that are deemed too populated can also be taken out (killed)
without a hearing. Unfair? Perhaps. But the bruins have known
this was in the works for years, seeing as they’ve been going
through the trash and reading the newspapers.
–A new study shows that working out every day, as opposed to
just three times a week, can extend your life a full 3.5 years.
–In Britain, sales of black Christmas trees are flying off the
shelves. Nothing nefarious here, mind you. Black just fits in
better with today’s trends in décor. [Good grief.]
–Former New York City police commissioner Bernard Kerik
pleaded the 5th nine times when questioned by New Jersey casino
authorities looking into a contractor with organized crime ties
that sought casino business (since denied). The same contractor,
though, did work for Kerik years ago on a Brooklyn property,
about $200,000 worth for which Bernie paid just $17,000. So let
the record show on 7/9/05 in this space I wrote, “Unbelievable.
Fox News has resurrected…Bernard Kerik, one of the true
dirtballs of our time.”
–Major League Baseball and its Players Association finally
reached agreement on a steroids policy with real teeth. All fans
of the sport have Congress to thank for this, for without pressure
from the likes of senators Jim Bunning and John McCain, this
whole deal was going nowhere. What’s sad is that this is
legitimately Congress’ biggest achievement of the term.
–Robert Tisch, co-owner of the football Giants, died just two
weeks after longtime partner Wellington Mara passed away. But
since I’ve made a habit of slamming some of America’s
corporate leaders for hiding behind their charitable work when
questioned on issues of ethics and outright fraud, in the case of
Mr. Tisch I am all too happy to acknowledge his superb work on
raising funds for the renovation of New York City public
schools’ athletic fields; in my mind as worthy a cause as there is.
–Lastly, I had a terrific time in Amsterdam, despite the earlier
comments on the political front. There’s a ton to do, it’s
beautiful, and it’s easy to get around. I loved the quaint
residential areas that you find in the middle of a major city, and
there’s a certain charm when thousands of workers are riding
bicycles to work. It’s no wonder that the air quality here is about
600 times better than, for example, Hong Kong.
I stayed at the Bilderberg Garden Hotel, which I highly
recommend, but like everywhere else in the world these days
Amsterdam is very expensive.
Back in 1968 when I was just ten years old, Amsterdam was the
first stop on my very first trip to Europe. Thanks to my parents,
it’s where I began to develop the travel bug. I regret now not
having returned since. I certainly won’t be waiting another 37
years before another visit.
—
Pray for the men and women of our armed forces.
God bless America.
Happy Thanksgiving.
—
Gold closed at $486…18-year high
Oil, $56.14…lowest weekly close since June 10. [New contract
began trading at $57.21]
Returns for the week 11/14-11/18
Dow Jones +0.8% [10766]
S&P 500 +1.1% [1248]
S&P MidCap +1.3%
Russell 2000 +0.8%
Nasdaq +1.1% [2227]
Returns for the period 1/1/05-11/18/05
Dow Jones -0.2%
S&P 500 +3.0%
S&P MidCap +9.9%
Russell 2000 +3.2%
Nasdaq +2.4%
Bulls 53.1
Bears 22.9 [Source: Chartcraft / Investors Intelligence]
Have a great week. I appreciate your support.
Brian Trumbore
