[Posted 8:30 AM ET]
National Security Strategy 2006
Much has been made of the latest White House survey on
national security, mandated by Congress, but some of the
accounts aren’t painting an accurate picture.
Under the topic “Prevent Our Enemies from Threatening Us, Our
Allies, and Our Friends with Weapons of Mass Destruction”:
“To forestall or prevent such hostile acts by our adversaries, the
United States will, if necessary, act preemptively in exercising
our inherent right of self-defense. The United States will not
resort to force in all cases to preempt emerging threats. Our
preference is that nonmilitary actions succeed. And no country
should ever use preemption as a pretext for aggression.
“Countering proliferation of WMD requires a comprehensive
strategy involving strengthened nonproliferation efforts to deny
these weapons of terror and related expertise to those seeking
them; proactive counterproliferation efforts to defend against and
defeat WMD and missile threats before they are unleashed; and
improved protection to mitigate the consequences of WMD use.
We aim to convince our adversaries that they cannot achieve
their goals with WMD, and thus deter and dissuade them from
attempting to use or even acquire these weapons in the first
place.”
The change in policy from the last report, 2002, may be slight
but it’s significant and nowhere near as hardline as some are
presenting it.
Back on 6/28/03 in this space, I quoted George Will, who
weighed in on the search for weapons of mass destruction in
Iraq, three months into the conflict.
“Americans seem sanguine about the failure – so far – to validate
the war’s premise about the threat posed by Hussein’s WMD, but
a long-term failure would unravel much of this President’s policy
and rhetoric.”
Alas, it has.
Continuing with the National Security Strategy:
“We may face no greater challenge from a single country than
from Iran. For almost 20 years, the Iranian regime hid many of
its key nuclear efforts from the international community. Yet the
regime continues to claim that it does not seek to develop nuclear
weapons. The Iranian regime’s true intentions are clearly
revealed by the regime’s refusal to negotiate in good faith; its
refusal to come into compliance with its international obligations
by providing the IAEA access to nuclear sites and resolving
troubling questions; and the aggregate statements of its President
calling for Israel to ‘be wiped off the face of the earth.’ The
United States has joined with our EU partners and Russia to
pressure Iran to meet its international obligations and provide
objective guarantees that its nuclear program is only for peaceful
purposes. This diplomatic effort must succeed if confrontation is
to be avoided.”
A far cry from the pre-Iraq bombast; rhetoric which I supported
100% in all fairness. Our credibility is shot and the last thing the
Bush administration wants is military confrontation.
The National Security Strategy:
“(We) will continue to take all necessary measures to protect our
national and economic security against the adverse effects of
their bad conduct. The problems lie with the illicit behavior and
dangerous ambition of the Iranian regime, not the legitimate
aspirations and interests of the Iranian people. Our strategy is to
block the threats posed by the regime while expanding our
engagement and outreach to the people the regime is
oppressing.”
So the United States seeks regime change, as all supporters of a
saner world do, but British Foreign Secretary Jack Straw argued
this could only occur from within. In the meantime, the brain
drain continues in both Iran and Iraq and it’s hard to see how a
mass uprising can take place to replace the mullahs.
The Tehran Times:
“The Supreme Leader (Ayatollah Ali Khamenei) noted that the
U.S. administration thinks it can realize its global goals through
the use of weapons or money. ‘But they will never succeed, just
as they didn’t in the Middle East, particularly in Iraq,
Afghanistan, Lebanon, Syria, and Palestine.’”
Amir Taheri / New York Post:
“What ‘known knowns’ could justify regime change in the eyes
of the international community?
“Well, there is Tehran’s desire to wipe Israel off the map ‘like a
stain of shame on Islam’s purity,’ to quote President Mahmoud
Ahmadinejad. Next week, Tehran will host a vast gathering of
‘rejectionists,’ including leaders of Hamas, the winner of the
recent Palestinian elections. On the agenda is ‘an Islamic
strategy to destroy the Jewish state and recover Palestine.’ The
terror jamboree includes a seminar with more than 100 ‘scholars’
from 40 countries to prove that ‘the Holocaust is a Jewish
fabrication to generate sympathy for Israel,’ to quote Ayatollah
Mesbah Yazdi, the regime’s rising ideological star.
“The ‘international community’ may dismiss all that as also ‘no
business of ours,’ since the only target appears to be Israel. But
then what about what the Islamic Republic is doing in Iraq and
Afghanistan, to mention just two examples of Tehran’s attempt
at exporting its Khomeinist ideology?”
Iranian President Mahmoud Ahmadinejad:
“We will not bend to a few countries’ threats as their demands
for giving up our nation’s rights are unfair and cruel. We know
well that a country’s backing down one iota on its undeniable
rights is the same as losing everything.”
[Tehran Times]
I was reading a ridiculous op-ed in the International Herald
Tribune, wherein the author said according to U.S. experts
Tehran is a decade away from having a nuclear weapon. I pray
those sentiments aren’t widespread. They don’t appear to be in
the White House and they certainly aren’t in Israel.
But for now it’s all in the hands of the UN Security Council. We
are victims of our past and shoddy intelligence, as George Will
foresaw. And for its part Iran continues to brilliantly play its
version of the four corners offense, stalling for time and icing the
opposition.
Iraq
This week President Bush touted U.S. success in training Iraqi
forces, though he admitted the police and security units had been
infiltrated. Later we learned just how close to disaster we came.
From “Week in Review,” 1/28/06…
Greg Grant wrote the following in Defense News:
“As car bomb attacks and suicide bombers creep ever closer to
the heavily fortified Green Zone…Iraqi insurgents are testing the
security of the country’s seat of power in preparation for a large-
scale assault, U.S. military sources said.”
Thankfully, the coalition was on the ball as we learned a plot to
attack the U.S. and British embassies in the Green Zone was
foiled. Iraqi Interior Ministry officials were implicated. I wrote
back on 1/28, “one catastrophic attack in the Green Zone could
represent the final tipping point in maintaining our forces there
at significant levels.” Sources say we were very close to this
happening. After all, the latest NBC / Wall Street Journal poll
showed 61% disapprove of the president’s handling of Iraq and
the same number want the United States to reduce its troop
levels.
But at least the Iraqi Parliament finally met…for all of thirty
minutes. Simply stirring. And since I was blasting General
Tommy Franks when it wasn’t cool to do so, I have to note the
comments this week of New York Times columnist David
Brooks concerning the first few weeks of the Iraq war back in
March 2003 when the administration, and Franks, put their
blinders on.
“The week of March 24 (’03) is vital because if Rumsfeld had
made adjustments to the new circumstances then, much of the
subsequent horror could have been averted.
“But it is also a reminder of the reality one sees again and again:
Debate inside any administration is less sophisticated and
realistic than the debate among experts outside. The people
inside have access to a bit more information. But they are more
likely to self-censor for fear of endangering their careers. Debate
inside is much more likely to be warped by the egotism,
insecurity, power lust and distracting busyness of people at the
top.
“That’s true in general, and it’s true in spades in Donald
Rumsfeld’s Pentagon. (The book) ‘Cobra II’ makes Rumsfeld
and Franks each seem like Barry Bonds: a formerly intimidating
figure who now just seems pathetic. Those two were
contemptuous of the armchair generals and the TV kibitzers. But
at the crucial moment in their lives, they got things wrong, and
the pundits often got things right.”
In the interest of fair play, we’ll wrap up this segment on a
brighter note.
John Podhoretz / New York Post:
“Three years after the beginning of the war in Iraq, what have we
accomplished? The honest fact is that we don’t yet know the
answer to this question – and because we don’t know, the war
remains unpopular.
“For example, we don’t know yet whether the war we’re fighting
against al Qaeda in Iraq has made the United States safer because
we’ve tied down terrorist assets and distracted terrorist attention
from the homeland. This was not the purpose of the war at the
outset, but world-changing conflicts take twists and turns no one
can foresee.
“What we do know is that 4 ½ years have passed since 9/11, and
we have not been hit again. To be sure, others have – Spain and
Britain and Indonesia most evilly. But we have not. Is the war
in Iraq part of the reason? The question will have an answer –
not now, but eventually.”
Wall Street
“Call your broker, sell your real estate, buy stocks!”
–Jim Cramer, “Today” show, 3/17/06
Forget that this same man was down in the dumps on stocks just
this past Monday. That’s Manic Jim for you.
But to be fair, there was a lot to like this week. The consumer
price index was tame, with the core rate (ex-food and energy) up
just 2.1% year-over-year. The Federal Reserve’s regional survey
of economic activity (the Beige Book) showed the economy to
be growing at a modest pace with inflation contained. Retail
sales for February were down, which was good after a super hot,
weather induced surge in January (meaning the Fed has less
pressure to keep hiking interest rates), and housing starts for
February, while off 7.9%, were actually better than expected.
Plus wages are finally growing, but even here not yet fast enough
to worry the Fed, or so we’re told.
I mean I’d rush out to buy stocks too, except I remain paralyzed.
Yes, if you haven’t figured it out after all these years, I’m a
victim in bull markets of focusing too much on geopolitical
events. It can be perfectly sunny, but I’ll find that little
cumulous cloud that may contain enough rain to ruin the best of
parades. It’s a philosophy that’s actually helped me hold onto
my cash, even if at times it’s perhaps “too rational.” But
especially today, until I see clarity on rather important issues
such as Iran and Iraq, let alone North Korea and the war on terror
in general, you’ll never convince me the best course is to throw
caution to the wind and have 80% of your money in stocks.
But there’s something else on my mind this week, and it has to
do with the growing inequality, not just between the upper and
lower classes in America, but around the world. For example,
David Pilling wrote in the Financial Times this week:
“During Japan’s heady bubble, when land prices could only go
up and sprinkled gold was a culinary imperative, a full three-
quarters of the population considered themselves middle class.
Now, a Nikkei survey says, only 54 percent feel that way – and a
once-unthinkable 37 percent classify themselves as lower class.
“The country that last week officially emerged from a decade of
deflation is not the same one that entered its prolonged economic
crisis in 1990.”
I was rather shocked by this. And before you go off saying,
“Goodness gracious, editor, are you going liberal…or worse…
Democrat on us?” fret not.
But I couldn’t help but draw some conclusions after reading of
the likes of Goldman Sachs, which reported the largest quarterly
profit in the history of Wall Street and sees the outlook as being
as “favorable” as it’s ever been. Goldman earned $2.48 billion
for the three months ending 2/24 and while there are easily
identifiable reasons for the success that the average investor can
espy, chiefly the surge in mergers and acquisition activity across
the globe, there was another reason…Goldman Sachs is reaping
huge profits gambling with its own capital. The “Black Box” is
working, but I would remind you the last time we heard this term
so prominently was before Long-Term Capital Management
went under, almost taking the rest of us with them.
Don’t worry. It can’t possibly happen again (he smirked), but
look at some other trends.
Just this week I read of $2 billion being raised for a hedge fund
by two former senior executives at Morgan Stanley, $6 billion
(raised recently) by former Harvard endowment chief John
Meyer for his new fund, and $10 billion for a new venture fund
run by Bain Capital. In all, hedge funds are expected to bring in
$150 billion in new money this year, on top of $134 billion in
2005.
There’s nothing wrong with this on the surface, but it’s just
further evidence of the mammoth amounts of money being made
at the top, and the massive liquidity in markets across the globe.
At the same time, while Wall Street and corporate executives
with $185 million paydays (see the CEO of NorthFork Bancorp,
recently acquired by Capital One) play, our government is taking
on debt like there really is no tomorrow…i.e, spend it now before
Armageddon.
How else can you rationalize the fact the Republican-controlled
Senate just approved a $2.8 trillion budget outline (details to be
wrangled out later) that included spending of $11 billion ($16
billion by another calculation) more than the president
recommended? And Congress raised the national debt ceiling
this week to $9 trillion.
I last raised the issue of the interest on this national debt back on
2/11/06 because it continually amazes me no one seems to care.
It’s the single biggest item in the federal budget that should jump
out at all of you.
So this week George Will brought it up and my old Wall Street
friend Mark R. and I were discussing the topic. I mean for
crying out loud, the interest on the debt is $220 billion, 8 cents
on the dollar, and heading to $300 billion in short order, or 10
cents at that point. And yet we bitch and moan if a pet program
is eliminated that costs $1 billion.
And then there’s the current account deficit, the broadest
measure of the flow of goods and services plus business
investment. It’s now a record $805 billion, having risen 20% in
a single year! As the Washington Post observed in an editorial
this week:
“Put another way, Mr. Bush has managed to rack up more new
debt during his five years in office than the entire debt amassed
by the United States through 1988.”
The president will point to the war on terror and Katrina and the
like, and we’ll just sit back and shake our heads, “Yup, yup,
yup,” like the village idiot.
Yes, I’m the one who said from the time of 9/11 on that we must
spend what it takes to win the war, like on port security, and yet
we’re finding ways to spend funds that should be allocated to it
in other ways, including the fact our ill-conceived war plan in
Iraq is now costing us $9.8 billion a month (including
Afghanistan) because we need to spend another $3 billion each
month going forward to replace broken and aging equipment.
What does it all mean? Once again we’re partying like it’s 1999.
At least the top 1% is. And just as in ’99, as the Nasdaq Bubble
was preparing to burst, there are signs the little guy is now
rushing back into stocks. [See my comments on Charles Schwab
below.]
I have tried hard not to continuously bring up how the
government is living on borrowed time and, don’t worry, when
the dollar crisis hits, or there’s another terror attack that totally
saps confidence, the last thing I’ll do is say “I told you so.”
So instead treat me as that little voice sitting on your shoulder,
urging restraint and caution. Give me a 20% weighting to go
along with the 80% ‘bull’ talk you are constantly hit with.
I started out this diatribe discussing the difference between the
haves and have nots in today’s society. There’s no reason to
explain any further. The division is widening, but history shows
these things have a way of equaling out in the end; not that this
will necessarily be good for all of us.
—
One topic I broached last week that worsened this past one is the
collapse in some emerging markets, particularly in the Middle
East. On Tuesday, the Dubai stock market plummeted over 11%
and the Saudi exchange is off some 25% in just a few weeks. I’ll
be writing of this in “Wall Street History” no doubt over the
coming years because it is a classic bubble bursting.
Dubai was up 132% in 2005 and Saudi Arabia soared 104%.
Other bourses in the region were up similar amounts.
But by my reading of the situation, it’s only the last six months
or so that the little guy has been rushing in; again, just like 1999,
and they are absolutely getting crushed. Much of the buying has
been with virtually 100% leverage.
It’s easy for those of us in the U.S. or other developed nations to
say ‘so what?’ in this instance. But market manias that end badly
almost always reach others’ shores. For starters, that’s less
money available to fund our deficits.
Emerging market equity funds have seen flows of $20.9 billion
this year, according to Bloomberg News, eclipsing the record for
all of 2005. Much of this is flowing into Asia, as well as Latin
America, and adherents would argue emerging market
economies are expected to grow at about a 5.5% rate in 2005, vs.
roughly 4% globally.
Sorry to keep repeating myself, but we’ve seen this act before,
too. And frankly I’ve been incredulous at how well some Asian
markets have performed since this is probably where bird flu first
mutates to human to human transmission, if ever. It would shut
these economies down cold, and quickly the rest of the world’s.
That doesn’t mean you rush to the exits, but geezuz, a little
caution is perhaps warranted.
Finally, amidst this seeming state of nirvana Wall Street and its
overseas brethren appear to be living in, much was made this
week of this goldilocks economy of ours…not too hot and not
too cold. The kind that keeps the Fed at bay.
It’s never that easy over the long haul. Either growth accelerates
and the Fed has to slam on the brakes even harder, thus causing a
recession, or the economy slows to the point where earnings
begin to disappoint in earnest. That’s how I see it. But who
knows what even the next seven days will bring?
Street Bytes
–Great week for equities as the Dow Jones finished up 1.8%. At
11279, the index is less than 500 points from its all-time high of
1722 set on 1/14/00. The S&P 500, up 2% to 1307, is still a
sizable 220 from its 3/24/00 peak of 1527 and as for Nasdaq, also
up 2%, well, you don’t really want to be reminded how far it
needs to go.
Earnings guidance and / or actual numbers from the likes of
Union Pacific, Sears Holdings and DuPont were big factors, as
was the rally in the bond market on receding Fed fears.
–U.S. Treasury Yields
6-mo. 4.77% 2-yr. 4.64% 10-yr. 4.67% 30-yr. 4.72%
Bonds rallied on the growing sentiment it’s “one and done” come
the March 27-28 Fed confab. Just remember this tune has been
sung before, though some Fed governors expressed the sentiment
this week that the board needed to be concerned about
“overshooting.”
–Dubai Ports World
Economist Robert Samuelson / Washington Post:
“Leadership in a democratic society requires a willingness and
ability to challenge and change public opinion when it is based
on misinformation, no information, prejudice or stupidity – as it
was in this case. There never was a genuine security problem.
The Dubai company wouldn’t have ‘taken over’ the U.S. ports.
It simply would have run some terminals. Cargo would still have
been handled by American, unionized longshoremen. The Coast
Guard and the U.S. Customs and Border Protection agency
would still have been responsible for port security.
“To be sure, the 9 million or so containers arriving annually in
the United States do pose security threats. In congressional
testimony, Stephen Flynn of the Council on Foreign Relations
outlined one danger: a truck driver, sympathetic to al-Qaeda,
picks up a container of sneakers in Indonesia; on the way to the
port, he diverts the truck so terrorists can load the container with
a ‘dirty’ nuclear device; and the container is shipped to Chicago,
where it’s detonated. Flynn urged more worldwide electronic
and radiation scanning of containers at ports of departure. He
estimated that screening would require about a $20 fee per
container….
“People outside the United States hold dollars because they
believe the currency maintains its value and offers a wide menu
of investment choices. The message from Congress is that the
menu is shorter than people thought. Once any investment is
stigmatized – rightly or wrongly – as a ‘security problem,’
Congress may act against foreigners.
“Every country has the right to protect its security interests. But
those interests must be defined coherently and not simply as the
random expression of political expediency. That’s what
happened here, as it did last year when Congress pressured a
Chinese oil company (CNOOC) to withdraw its bid for a U.S.
firm (Unocal). The more this process continues, the more it
corrodes confidence in the dollar.
“It will be said that other countries are equally nationalistic and
political, so their currencies aren’t realistic alternatives to the
dollar. Not true. If we imitate the French or Malaysians, the
dollar will have compromised its special status. The irony is that
the people who are creating all these risks are the very same
members of Congress who claim to be protecting us.”
David Brooks / New York Times:
“(Hillary) Clinton didn’t seem to mind when officials of the
United Arab Emirates kicked in up to a million dollars for her
husband’s presidential library. She didn’t seem alarmed when
Dubai poured at least $450,000 into her family bank accounts
through her husband’s speaking business. She didn’t object
when the Clinton administration approved a deal for a Chinese
government firm to run the Port of Long Beach. But when the
Dubai ports deal set off Know-Nothing mobs, she made sure she
had the biggest pitchfork.
“ ‘The White House is trying to hand over U.S. ports,’ Clinton
charged.
“ ‘We cannot afford to surrender our port operations to foreign
governments,’ she roared.
“ ‘We cannot cede sovereignty over critical infrastructure like
our ports,’ she insisted.
“All of these statements were deliberately misleading, since there
was never any question of ceding sovereignty or security. They
played to the rawest form of xenophobia.
“The consequences for the war on terror will be significant. As
David Ignatius wrote in the Washington Post, the government of
Dubai has done what we’ve asked all Arab governments to do. It
has challenged al Qaeda; supported U.S. forces; modernized the
educational system to combat extremism. It even gave $100
million in hurricane relief. We’ve proved that we may be inept
in combating our foes, but we’re ruthlessly efficient in betraying
our friends.”
Thomas Friedman / New York Times:
“Dubai is not a democracy, and it is not without warts. But it is a
bridge of decency that leads away from the failing civilization…
to a much more optimistic, open and self-confident society.
Dubaians are building a future based on butter not guns, private
property not caprice, services more than oil, and globally
competitive companies, not terror networks. Dubai is about
nurturing Arab dignity through success not suicide. As a result,
its people want to embrace the future, not blow it up.
“What’s ironic is that if Democrats who hate the Bush war in
Iraq had actually had a peaceful alternative policy for promoting
transformation in the Arab-Muslim world, it would be called ‘the
Dubai policy’: supporting internally driven Arab engines of
change.
“That’s why Arab progressives are stunned by our behavior. As
an Arab businessman friend said to me of the Dubai saga: ‘This
deal has left a real bad taste in many mouths. I mean this was
Dubai, for God’s sake! You could not have a better friend and
more of a symbol of globalization and openness. If they are a
security danger to the U.S., then who is not?’
“So whatever happens with the Iraq experiment – but especially
if it fails – we need Dubai to succeed. Dubai is where we should
want the Arab world to go. Unfortunately, we just told Dubai to
go to hell.”
–Chinese President Hu Jintao is coming to Washington in about
four weeks and it could be tension city. The White House has
finally had enough and with China’s ever soaring trade surplus
with the U.S., and with increased talk of protectionism and
27.5% tariffs on Chinese goods, this week Commerce Secretary
Carlos Gutierrez played pit bull:
“China’s failure to address economic frictions will have
consequences. Without concrete results, the administration, and
the American people, may be forced to reassess our bilateral
economic relationship.”
Gutierrez then added that with increased talk in Congress for
taking action, “Without results…Congress may go down a path
that none of us wants.”
But Chinese Premier Wen Jiabao earlier ruled out sharp
adjustments in the currency, the chief culprit in the growing
conflict.
And while we’re on this topic, China released its industrial
production output for January, up 16.2% year-over-year. That’s
on top of 16.4% in 2005, 16.7% in ’04 and 17% in ’03. I mean
it’s comical. Remember, much of China’s figures on the
economy are still generated at the regional level, by government
lackeys. If one guy reported, say, “We were only up 8%,” what
do you think would happen to him?
I don’t, however, dispute the China boom in general and on the
capital spending front, Beijing announced it was up 26.6% for
January and February. The target is 18% as China attempts to
slow things down, if you can call an 18% rate a slowdown.
–Meanwhile, across the pond, jobless claims spiked in the UK as
consumers are slammed by high energy prices. Natural gas is a
big issue here due to cold weather along with the closure of some
facilities that have led to extremely low inventories.
–The global market for credit derivatives (such as swaps) shot
up 39% in the second half of 2005 to $17.3 trillion. But the total
derivatives market, all instruments, is $270 trillion. [Bloomberg
News, Bank for International Settlements] The 10 largest U.S.
banks, incidentally, have a potential risk of $600 billion. So the
issues remain the same. Who owns what and to whom? What are
the counter-party risks?
–Related to the above, once again Fannie Mae said it uncovered
more accounting errors. [I swear this is not a repeat of prior
comments in this space.] Internal audits have revealed further
improper valuations for certain securities (i.e., derivatives) and
Fannie is spending $50 million a month to clean up the mess left
by Franklin Raines and his cohorts. But remember, Mr. Raines
gave a lot of money to the Kennedy Center!!!
Fannie Mae did have some separate comments this week
pertaining to the overall real estate environment that are worth
noting, seeing that they are a rather large player in the sector
(though their share of the mortgage securities market in the U.S.
is down to 25% from 45% in 2003).
Fannie sees home sales declining 8% in 2006 with average price
appreciation of 3%, while the National Association of Realtors
projects new and existing home sales to fall 6-8%, but prices to
rise 6% this year. So you add these two up and reach a
consensus; a soft landing and far from a disaster. I still say
second half of the year begins to reflect a different scenario.
–Staying on this topic, the latest figures for the Southern
California, six-county market, show the median home price
having risen 12.9%, year-over-year, in February, but sales are the
lowest in five years. [L.A. Times]
Then there’s Katrina-ravaged Louisiana and Mississippi. In
Louisiana, 12% of mortgage holders are 90 days behind on their
payments, 8% in Mississippi. These are the highest regional
figures anywhere in America since 1972 and compare to 1.33%
and 1.77% rates, respectively, prior to the hurricane. So imagine
if another one hits.
–The Senate revived prospects for drilling in the Arctic National
Wildlife Refuge, but it’s uncertain if the House will go along.
As for my promised analysis of today’s energy picture, it needs
to wait another week.
–Lots of stories on copper this week as it continues to reside in
record territory. As noted in a story by Patrick Barta of the Wall
Street Journal, similar to the supply / demand situation in the oil
market, they just aren’t producing enough copper to meet
demand and it largely goes back to the days when the metal was
languishing in the 70 cents area. There were no incentives to
develop new mines then.
I was reading a piece on Friday in the Santiago Times and Chile,
the Saudi Arabia of copper, can’t keep up because even it is
faced with far more regulatory demands than in the past in
developing new properties (and this is a good thing if you care
even one iota about the environment…Chile being a basket case
on this front).
Of course the copper story is also about squeezing profit
margins, and, aside from increased regulation, many of the mines
are in developing nations, such as Indonesia. The other day four
security officers at a mine run by Freeport-McMoran Copper &
Gold were hacked to death by locals protesting at a property in
Papua province, as the people feel the benefits have not been
flowing to them. [Similar to the issue in Nigeria’s oil-rich Delta
region.]
–In a landmark study, high doses of statins were found to reverse
chronic build-up of fat in the arteries, the “holy grail” in the fight
against heart disease.
–KIA Motors (South Korea) will build its first plant in the
United States (western Georgia) and by 2009 should be
employing 2,500 workers. And Toyota announced it is adding
1,000 jobs in this country. Yes, there is another side to the auto
story.
–General Motors, infected by the Fannie Mae Virus where, due
to your mental faculties being sapped, you constantly come up
with accounting errors, revised its loss for 2005 to $10.6 billion,
or $2 billion more than originally reported in January. The
automaker blamed the bankruptcy of parts king Delphi; GM
facing a share of Delphi’s long-term obligations on the pension
and benefits front.
–The number of factories in the U.S. is 10% below the peak in
1997.
–Azerbaijan reported three humans died of bird flu while the
H5N1 virus spread from Sweden to Israel. U.S. Secretary of
Health and Human Services Michael Levitt recommended
Americans stock up on tuna fish. But remember, sports fans, to
buy ‘light’ tuna over ‘white’ because it contains less mercury.
–Interesting move in Argentina. The government is banning
exports of beef, Argentina being the world’s 3rd-largest producer
(with exports of $1.4 billion in 2005), because the government
wants domestic meat prices to drop…with inflation an increasing
concern. Argentinians eat three times more beef per capita than
in the U.S.
–The U.S. had its 3rd confirmed case of Mad Cow since
December 2003, though we were told this particular bovine
never entered the food chain…or so Elsie said in her last words
before being put down. What is worrisome, though, is that there
could be far more cows in this country with the disease than
reported simply because our detection procedures continue to lag
those of other developed countries. Nonetheless, I’ll continue to
use my George Foreman Grill for that seared-in taste in cooking
my own burgers.
–In a report by Zachery Kouwe of the New York Post, the U.S.
Attorney in Manhattan and the SEC are looking into the
possibility Refco (Remember them?) may have had $525 million
in fake bonds on its books.
“If the fake bonds prove to be part of the fraud at Refco, the firm
could have inflated its assets by nearly $1 billion – or more than
double what investigators originally thought.”
–Oh, to be a partner of the law firm Wiley Rein & Fielding LLP.
It would seem that these fine folks raked in $200 million of the
$612.5 million settlement in the Research In Motion
(BlackBerry) – NTP patent infringement suit. The other $400
million was divvied up among NTP shareholders and a good
time was had by all. [Peter Lattman / Wall Street Journal]
–Charles Schwab issued a bullish first-quarter forecast as client
trades in February were up a whopping 52% year-over-year. The
average per day was 319,600 last month. By comparison the
trough in the cycle was only 101,000 three years ago, while the
peak was reached in March 2000 at 347,000. Ergo, this is a
tremendous contrarian indicator.
–New York Attorney General Eliot Spitzer has charged H&R
Block with fraud for duping 500,000 clients into investing in
“Express IRA” retirement accounts where 85% lost money due
to excessive fees. The real problem is that most H&R Block tax
preparers are not registered securities brokers so this product
only offers a government guaranteed money market vehicle with
a pitiful interest rate while the fees eat up the normally low client
balances. What I was interested in were the incentives for H&R
Block employees to push the prospects into the accounts. It turns
out they received a bonus of just $5.50, but from my days on
Wall Street I can just imagine regional directors putting big time
pressure on their ‘sales force’ to capture these accounts because
of the recurring fees. “OK, anyone signing up 10 today gets a
box of Omaha Steaks!”
–Bear Stearns reported record profits, along with brethren
Goldman Sachs and Lehman Brothers, but it also reached a
settlement in the mutual fund market-timing scandal, to the tune
of $250 million. Bank of America paid the largest penalty for
permitting late-trading and other crimes and misdemeanors, $675
million, back in 2004.
–Back to Goldman Sachs and its stupendous earnings report,
revenues for the quarter were $10.3 billion vs. $6.4 billion a year
earlier. Gotta admit…that’s pretty awesome.
–Lukoil, Russia’s top oil producer, is taking over operation of
the gas pumps along the Garden State Parkway here in New
Jersey after Lukoil’s acquisition of Mobil stations. No one
seems to be protesting the move.
–In the Enron trial, Andrew Fastow admitted he hid his theft
from Ken Lay and Jeffrey Skilling.
–My portfolio: I have to make note of my largest holding, the
carbon fiber play, because of a headline I read. [If you’re new to
the site, the only individual names I give out involve country
funds.]
I don’t check out chat rooms, for various reasons, and after
reading this comment on XYZ there is a good reason why you all
should be highly skeptical of anything you read on them.
From the Motley Fool and an editor (employed by them since
1995) who scanned the message board for “renewable” plays.
“Spectre16 suggested carbon-fiber specialist XYZ. ‘While not a
pure alternative energy play, it is nevertheless tethered to energy
in a variety of ways,’ Spectre16 wrote, highlighting the
company’s role as the leading producer of wind-turbine blades
and its deep-sea drilling implications.’”
XYZ does not make the turbine blades, you idiot. It
manufactures the carbon fiber composite used in the
manufacturing process. And while XYZ is involved in the
building of deep-sea drilling rigs, try the word “applications”
rather than implications.
Sorry…had to rant on this one. Remember, folks, know what
you own before you buy.
–Finally, Robert C. Baker passed away the other day at the age
of 84. Baker was an agricultural scientist who was credited in
1982 by Forbes magazine with having invented processed
chicken in ‘63. From an obituary in the New York Times by
Douglas Martin:
“McDonald’s is often given credit for inventing chicken nuggets
in 1979, but the groundwork was laid by Dr. Baker’s
contributions in the 1960s in developing ways to bind chicken
meat together and make the coating stick to the reconstituted
meat.”
Evidently, Dr. Baker died of a heart attack. Or rather a “broken
heart,” one can assume; Dr. Baker having seen enough on the
bird flu front.
Foreign Affairs
Israel: Mort Zuckerman, publisher of U.S. News & World
Report, noted in his weekly editorial for the magazine that
Hamas was just buying time to consolidate power. No doubt
he’s right…it’s from Iran’s ‘How to Stall and Lull Them to
Sleep’ playbook.
But this week it was all about Israeli troops storming a prison
complex in Jericho on the West Bank. Earlier, U.S. and British
monitors had left their positions there, frustrated over the
Palestinians having released 46 prisoners in the past few weeks
and with rumors six key terrorists, including a man responsible
for the killing of Israel’s tourism minister back in 2001, were
about to be let go as well. Both the U.S. and Britain had
complained about the lack of security and they had legitimate
reasons to be concerned for their own safety.
So Israel moved in and captured the key figure, Saadat, along
with his five cronies. Palestinian President Mahmoud Abbas,
who is entirely irrelevant at this point, was outraged. The New
York Times was outraged. How could Acting Prime Minister
Ehud Olmert pull off such a campaign stunt two weeks before
Israel’s election?
You know, I try to mince my words when it comes to the
Palestinians, but these people have had decades to prove they can
handle anything responsibly. Any people that allowed Yassir
Arafat to plunder $billions, while allowing other terrorists to
hold them down and kill their economy, are simply losers.
Remember, this is part of Ariel Sharon’s great legacy in his final
years. Recall his stunning reception at last September’s United
Nations gathering. The rest of the world now understands, even
if for public consumption it still needs to say otherwise from time
to time.
And so we also learned this “prison” was really Club Med. The
terrorist Saadat kept birds, had flowers delivered, used other
prisoners as servants, ordered Cuban cigars, and had cellphones
and computers brought in….plus there was no lock down at
night.
Now try and defend the Palestinians.
India: A few weeks ago I praised the agreement reached between
President Bush and Indian Prime Minister Manmohan Singh on
the nuclear program front as being an example of the kind of
pragmatism I’ve been seeking in the foreign policy arena. Here
is further commentary.
Secretary of State Condoleezza Rice / Washington Post:
“This agreement is a strategic achievement: It will strengthen
international security. It will enhance energy security and
environmental protection. It will foster economic and
technological development. And it will help transform the
partnership between the world’s oldest and the world’s largest
democracy.”
[Addressing the concerns that we are breaking protocols related
to the Nuclear Nonproliferation Treaty and that it will lead to
nuclear weapons proliferation in the region…]
“Our agreement with India is unique because India is unique.
India is a democracy, where citizens of many ethnicities and
faiths cooperate in peace and freedom. India’s civilian
government functions transparently and accountably. It is
fighting terrorism and extremism, and it has a 30-year record of
responsible behavior on nonproliferation matters.”
[India turned down past requests by Libya and Iran for weapons
technology.]
“Aspiring proliferators such as North Korea or Iran may seek to
draw connections between themselves and India, but their
rhetoric rings hollow. Iran is a state sponsor of terrorism that has
violated its own commitments and is defying the international
community’s efforts to contain its nuclear ambitions. North
Korea, the least transparent country in the world, threatens its
neighbors and proliferates weapons. There is simply no
comparison between the Iranian or North Korean regimes and
India.”
Robert Kagan / Washington Post:
“Imagine a huge nation, a huge democracy, increasingly
prosperous, increasingly powerful and increasingly sympathetic
to the ideological and strategic objectives of the United States
and its democratic allies around the world. Imagine that this
powerful, prosperous, democratic nation sits on the same
continent with Russia and China, two huge geopolitical problems
waiting to happen. Imagine that this nation possesses a navy
capable of helping patrol strategically vital waterways and a
military force capable of acting as a deterrent against powerful
neighbors. Finally, imagine that this nation, despite its power,
has no record of using it for aggressive purposes but has been a
remarkably peaceful and often constructive member of the global
community.
“Would we or would we not want to have the closest possible
relationship, partnership, even alliance with such a country as we
head into an uncertain future?
“The answer, as Bismarck would have said, is a no-brainer….
“(The big question) likely to consume endless hours of hearings
on Capitol Hill in coming weeks is what effect the (Bush-Singh)
deal will have on the problem of Iran. Some will argue that the
Indian nuclear deal harms efforts to halt Iran’s nuclear weapons
program because it erects a double standard: We are willing to let
India do what we are not willing to let Iran do.
“The question is interesting in theory. In the real world, it’s not
that interesting. The notion that the Indian deal will set back
prospects for a diplomatic deal with Iran assumes that such
prospects exist. All available evidence suggests otherwise. The
Iranian government appears committed to building nuclear
weapons and will not be deterred by threats – except possibly the
threat of removal by military means – or won over by
blandishments….
“Were Congress somehow to reject the administration’s deal in
some effort to maintain a consistent principle on
nonproliferation, it would have no effect on Iran’s decisions. But
that futile gesture would have a devastating effect on U.S.
relations with India. In our less-than-ideal world, where, we are
often told, America needs good friends and allies, that would be
a terrible bargain.”
So now, as expected, Pakistan is fighting back. In an interview
with the Financial Times, Pakistan’s foreign minister said, “The
whole Nuclear Nonproliferation Treaty will unravel. It’s only a
matter of time before other countries will act in the same way….
Nuclear weapons are the currency of power and many countries
would like to use it. Once this goes through the NPT will be
finished. It’s not just Iran and North Korea. Brazil, Argentina
and Pakistan will all think differently.”
Brazil and Argentina will not go nuclear, at least that’s my guess,
and as for Pakistan, well, they’re going to continue on the path
they’re already on…seeking weapons guidance wherever they
can find it. President Bush was obviously right in not extending
Pakistan the terms he gave India.
This week, China’s vice-minister for foreign affairs was in India
for a round of high-level talks to resolve the festering border
issue between the two nations, but the Bush-Singh deal
dominated discussion. Needless to say, China isn’t happy.
Good. They’ve been jerking us around enough. Just look at the
six-party talks over North Korea where all they have to do is jack
Kim Jong-il up against the wall and say, “Look, you little
bastard. We have a good thing going here and you’re mucking
up the works.”
This week Condoleezza Rice was in Australia and it gives me
another excuse to go back into the archives to remind long-time
readers where I stood on my dream of a new alliance with the
UK, Australia, India and Japan.
From “Week in Review,” 7/12/03:
“What you aren’t hearing from either side of the political aisle is
the following. The United States must act as the world’s
policeman until such time as it can develop new, more far-
ranging relationships, particularly since NATO seems incapable
of pulling its share of the load. This is why I keep talking of a
new supra-alliance, including Britain, Australia, a re-armed
Japan and the largest democracy in the world, India. An alliance
that understands shared responsibilities for the protection of
human rights and, just as importantly, global trade and economic
opportunity.”
Now read what Secretary Rice had to say in a speech at the
University of Sydney on March 16.
[Dr. Rice is responding to a question about the rise of China.]
“When I sit and talk with my Chinese counterpart….it’s very
clear to the Chinese what our concerns are and what our hopes
are….
“What we want is for China to be responsible, to be a responsible
stakeholder in the international system, because a positive and
responsible China is going to be terrific for the world – not just
good, terrific.
“Now, when we have discussions with Japan and Australia, it’s
only natural. These are two of our oldest and deepest allies. We
share values. We have shared responsibility for the defense of
the Pacific over the years. And so I would hope that the Chinese
would see that these also are transparent discussions. We’re
democracies….And our relationship with Japan and with
Australia is a deep one but it is one that is trying to encourage a
Pacific region that we would all want to inhabit, including China.
“And then finally on India. India is a remarkable story….And
you see in India that as India is changing its policies toward the
world and toward the world economy, it’s also a rising economic
power. So when the President goes to India and says to the
Indians we want to help you develop civil nuclear power to deal
with your energy needs, it’s also quite transparent….
“So this is all in the course of taking these relationships on their
own terms, using all of these relationships to try to build a
broader framework for a peaceful Asia, and recognizing that with
some states like Japan or Australia or indeed with India we do
share something very special, which is common values and a
commitment to democracy.”
And so you see how the dream is taking shape. What Bush and
Rice would never admit openly, however, is that there is a time
issue involved. In the case of all five nations the current
governments are basically in agreement when it comes to the
chief geopolitical concerns of the day. But this won’t always be
the case; whether it’s 2008 in Washington, next year in London,
or a changing of the guard in the other three.
The rest of the world would be offended, no doubt, if the White
House convened a summit of the Fab Five, but the heck with
them. And for all the grief I have given President Bush over the
years, on this front he is deserving of praise and I would urge all
of you to remember the strategic implications of the new U.S. –
India relationship as Congress attempts to block the nuclear pact.
Any doubts, pull out a map.
China / Taiwan: I have a little dialogue between these two on my
current edition of “Hott Spotts,” but to sum up, Beijing’s
criticism of Taipei and President Chen Shui-bian has been harsh.
Chinese Premier Wen Jiabao told the National People’s Congress
“We are now carefully following developments and are fully
prepared for all eventualities” should Chen pursue independence.
But Wen also said “There is no such option that one side will
swallow up the other side.” Of course any rational person would
then reply to this statement, “So why do you have 784 missiles
pointed at Taiwan?”
Separately, Premier Wen commented on the Internet in China.
“We maintain that the industry should exercise self-discipline
and self-management. Websites should convey right messages
and information and should refrain from misleading the general
public or exerting an adverse impact on social and public order.”
Chances are some of my commentary wouldn’t fly over there in
Wen’s perfect world, but thus far the major search engines
continue to carry it (as my spot checks from time to time reveal).
Indonesia: Globetrotting Condi Rice was in Indonesia for an
important set of meetings with the leadership of the largest
Muslim nation in the world, and, the third largest democracy.
The Wall Street Journal editorialized on her trip and the current
mood here.
“(Amid) the chants telling Ms. Rice to ‘go to hell’: America’s
popularity in Indonesia has risen dramatically in the past year –
Gitmo, Abu Ghraib and Halliburton notwithstanding.
“That’s the conclusion of a remarkable poll conducted last month
for the Washington based NGO, Terror Free Tomorrow. Since
2003, the number of Indonesians with a favorable view of the
U.S. has nearly tripled, to 44% from 15%. More Indonesians
support the U.S. war on terror than oppose it: 40% to 36%, a first
for a Muslim country. The number who oppose U.S. anti-terror
efforts has also declined sharply, to 36% from 72%. Admiration
of Osama bin Laden has dropped, to 23% form 58%.
“The proximate cause for the changed Indonesian outlook has
been U.S. relief efforts following the December 2004 tsunami….
In the days immediately after the disaster, it was only the U.S.
Navy that could get urgent relief supplies to the affected areas
quickly. The U.S. government has since provided $400 million
in assistance to Indonesia and directly helped 600,000 people.”
I would add there is no doubt the presence of former Presidents
Bush and Clinton on the ground helped shape attitudes as well.
So there is some light at the end of the tunnel.
North Korea: From the National Security Strategy report.
“The North Korean regime…poses a serious nuclear proliferation
challenge. It presents a long and bleak record of duplicity and
bad-faith negotiations. In the past, the regime has attempted to
split the United States from its allies. This time, the United
States has successfully forged a consensus among key regional
partners – China, Japan, Russia, and the Republic of Korea
(ROK) – that the DPRK must give up all of its existing nuclear
programs….(The) United States will continue to press the DPRK
to implement these commitments.
“The United States has broader concerns regarding the DPRK as
well. The DPRK counterfeits our currency; traffics in narcotics
and engages in other illicit activities; threatens the ROK with its
army and its neighbors with its missiles; and brutalizes and
starves its people. The DPRK regime needs to change these
policies, open up its political system, and afford freedom to its
people. In the interim, we will continue to take all necessary
measures to protect our national and economic security against
the adverse effects of their bad conduct.”
I thought the administration had forgotten about this hellhole.
Belarus: Watch reaction to the rigged vote on Sunday, where the
dictator Lukashenko will undoubtedly receive 75%, as the
leading opposition figure claimed earlier. The security service
here, called the KGB, has warned that anyone taking part in anti-
government demonstrations will be branded a terrorist.
Over 300 opposition figures have been rounded up, the foreign
press has largely been kicked out, European Union monitors
were not granted visas, and the government even banned U.S.
camping equipment because it was afraid of opponents setting up
tent cities a la Ukraine and Lebanon.
But this is a very complex nation of 10 million. The economy is
growing, shelves are stocked, and the elderly like the fact their
pensions are being paid. Some experts believe Lukashenko’s
support legitimately stands at 50%, which would be enough to
avoid a run-off. In other words, what is this paranoid buffoon
afraid of?
Afghanistan: Four U.S. soldiers were killed in a single attack this
week.
Lebanon: There is growing evidence of Iran’s influence here,
beyond its relationship with Hizbullah.
Thailand: 100,000 protested peacefully in the largest
demonstration against Prime Minister Thaksin. Thaksin vows to
carry on with the election, a vote of confidence, in April as he
relies on his extensive support in rural areas.
South Korea: Prime Minister Lee Hae-chan was forced to resign
after he played golf rather than oversee the first day of a
nationwide rail strike. Hey, tee times are hard to come by here.
Colombia: After last Sunday’s vote, President Alvaro Uribe’s
party controls sizable majorities in both legislative houses. This
is great news, as our prime ally in Latin America is up for
reelection in May.
Serbia: Former dictator Slobodan Milosevic was found dead in
his prison cell at The Hague on Saturday. Two autopsies reached
the same conclusion; he died of a heart attack and was not
poisoned. For a few days, though, it wasn’t clear where he would
be buried and whether or not there would be any unrest.
Thankfully, while he was returned to Serbia, his hard-core
supporters did not choose the time to wreak havoc. Finally, it
would appear the majority of Serbs now see Milosevic for what
he was….one of the all-time thugs in human history.
France: Paris and surrounding environs witnessed another round
of extensive, violent protests; though this time it was over Prime
Minister Dominique de Villepin’s “first job contract.” Mr. de
Villepin designed the proposal to loosen up France’s rigid
employment market. From the Financial Times:
“The proposed contract allows employers to dismiss staff under
the age of 26 more easily during a two-year trial period. Mr. de
Villepin has argued that it would cut France’s crippling
unemployment. But students say it will bring instability, making
them ‘the Kleenex generation,’ used and then discarded.”
De Villepin’s poll numbers are at an all-time low.
On another matter, according to the London Times, “France kept
quiet about the discovery of a wild duck with bird flu while it
encouraged the EU to soften its safety regime against the killer
strain of the infection.”
France literally informed Brussels five minutes before the new
regulations were to take effect and the official message gave the
wrong date for the duck’s discovery.
The seven dead ducks were found by a hunter on February 11,
who then alerted officials. But while the EU mandates tests be
conducted immediately, France waited two days. A spokesman
said:
“We put them in storage because at that time the laboratory did
not work at the weekend.”
How very French!
Random Musings
–At least President Bush’s approval number is consistent…albeit
consistently bad. Regardless of which one you select it’s
anywhere from 34 to 40 percent. But much was made of the
latest from the NBC News / Wall Street Journal survey
concerning the direction of the country, a topic I broached myself
in last week’s review. Only 26% believe we’re going in the right
direction, while 62% believe we’re headed on the wrong track.
But of primary concern these days at the White House is the
issue of who the American people prefer to run Congress and
according to the NBC / Journal poll, we favor Democrats by a
50-37 margin. Imagine if the Dems actually had a leader and a
clear agenda.
–Could our government have botched the Moussaoui sentencing
trial any worse?
–In the April issue of The American Enterprise, there is an
article on charitable giving in the U.S. Check out the states
ranked at the top in terms of donations, based on percentage of
income.
1. Mississippi
2. Arkansas
3. South Dakota
4. Oklahoma
5. Tennessee
[Source: Catalogue for Philanthropy]
The point being “Red states give away a bigger portion of their
income than counterparts in havens of Blue liberalism like
California, Maryland, Washington, Vermont, and Oregon. The
six stingiest states are New Hampshire (#50), Massachusetts
(#49), New Jersey (#48), Rhode Island (#47), Wisconsin (#46)
and Connecticut (#45). “Many people who proclaim caring and
compassion in their politics apparently do not practice it in their
own lives.”
–It is absolutely despicable that the City of New York has yet to
finalize a development plan for Ground Zero.
–For those of you who’ve traveled to New York, you may be
curious to know 9 of 10 cab drivers are indeed foreign. But 40%
of them have been on the job at least ten years so you can be
reasonably assured they know where they’re going. [New York
Daily News]
–“60 Minutes’” Mike Wallace is retiring. What an amazing
career. He’ll be 88 soon.
–Oh those daffy Nigerians are at it again. The latest e-mail
solicitation that found its way to your editor.
“Delivery Agent. Note carefully the content of the crate is
‘MONEY US Dollar $14 Million Cash’ but I did not disclose it
to the Courier Services as Money, rather I informed them that the
crate contain Vital ‘DOCUMENTS AND EXPENSIVE AFRICA
ART WORK’ belonging to my client (that’s you)….
“On no account should you disclose the content of the crate
(Trunk Box) with the Diplomatic Courier Services for fear of
betrayal.”
See how easy it is to sneak stuff into the country?
[I have to admit I’d like to meet the individual(s) who fall for
these. It would probably be a trip.]
–From a story titled “Intense Storms Tied to Rising Ocean
Temperature” in the Wall Street Journal.
“A new study published yesterday in the online edition of the
journal Science says rising ocean temperatures around the globe
are to blame for the surge of intense hurricanes that has slammed
the U.S. and other countries in recent years – a finding likely to
further roil the debate over whether human activity is triggering
more-devastating storms.”
What’s the debate? If you don’t get it by now, you never will.
And to those who point to the U.S. National Oceanic and
Atmospheric Administration’s National Hurricane Center’s
statement last summer that record-breaking hurricane activity
was part of a natural cycle – not human activity, the Journal
points out NOAA backed away from this last month,
acknowledging some of its researchers disagreed. I hadn’t seen
this part prior to the Journal piece.
–Maybe the Chinese should hook up with the Nigerians. To wit:
From a story in the South China Morning Post.
“At least 28 people died when a boat registered to carry only two
passengers sank on the Youxi River in southwest China’s
Sichuan province…
“The accident occurred on Wednesday when the boat was
transporting farmers home from a rural fair…
“Only 10 survivors had so far been confirmed and rescuers
believed the death toll could rise.”
OK, kids. Here’s your word problem.
Bobby has a boat that is registered to carry only two people. He
decides, though, to take on more for a trip across the river.
But the boat flips over and at least 28 die. However, 10 also
survive.
By how many was the boat overloaded?
Bonus question: How much alcohol was consumed at this ‘fair’?
–Sports Illustrated’s “Sign of the Apocalypse”:
“Canada may cancel its annual seal hunt because warm weather
has made the ice too dangerous for the clubbers.”
–Canada’s winter, by the way, was its warmest on record (since
1948). So if Canada wasn’t hoarding all the cold, where did it
go? Looks like the Russkies kept it for themselves, if my
childhood geography / meteorology lessons taught me anything.
—
Pray for the men and women of our armed forces. In looking at
some figures the other day it struck me that in every month but
one, Feb. 2004, we’ve lost an average of at least one soldier per
day in Iraq.
God bless America.
—
Gold closed at $554
Oil, $62.77
Returns for the week 3/13-3/17
Dow Jones +1.8% [11279]
S&P 500 +2.0% [1307]
S&P MidCap +2.5%
Russell 2000 +2.7%
Nasdaq +2.0% [2306]
Returns for the period 1/1/06-3/17/06
Dow Jones +5.3%
S&P 500 +4.7%
S&P MidCap +6.3%
Russell 2000 +10.8%
Nasdaq +4.6%
Bulls 42.3
Bears 33.0 [Source: Chartcraft / Investors Intelligence…fewest
bulls since 8/20/04, a market low, and highest bear reading since
4/18/03, weeks from a key low as well.]
Have a great week. I appreciate your support.
I will be tough to reach in the coming days as I’m heading to
Ukraine. I promise to respond to your e-mails as soon as
possible.
*And I apologize for the technical issues early Saturday. It was
one of the more frustrating problems I’ve ever had.
Brian Trumbore
