[Posted 7:00 PM local, Saturday…from Seoul, SK]
Frankly, UN, I Don’t Give a Damn
So spoke Iranian President Mahmoud Ahmadinejad as the
International Atomic Energy Agency presented its final report on
Iran’s nuclear program and said, yes, Iran is enriching uranium.
But far more worrisome is the fact the IAEA had to admit it had
no clue what Iran was really doing, let alone where. This is the
same agency, of course, that was hoodwinked for 18 years before
Iran itself came clean and confessed it was working on nuclear
technology.
Earlier in the week, Ahmadinejad said “No one can take away
(our nuclear effort),” while Grand Ayatollah Khamenei
threatened the West again if attacked.
And if there are still three or four halfway educated people out
there who doubt Iran’s true intentions, let me note a report from
the London Times.
Ahmadinejad recently met with one of the world’s leading
terrorists, Hizbullah’s Imad Mugniyeh, in Syria. What’s
significant here is that Mugniyeh is responsible for Hizbullah’s
overseas operations and would be the one launching some of
Iran’s counterattacks should the U.S. and/or Israel bomb
suspected nuclear facilities.
So the Security Council should have a pretty clear mandate about
now, right? I mean sanctions, at a minimum, should be levied
immediately because Iran is snubbing its nose at the world
community, right?
Wrong. Russian President Vladimir Putin said it’s up to the
IAEA to figure out a solution (even though the Security Council
asked the IAEA for the report), while China remains adamant
against any action that would potentially impact its ability to
receive Iran’s oil. So once again it’s up to the United States to
lead and, as we all know by now, our credibility isn’t exactly at
its strongest these days.
The Security Council meets next week but no one should expect
any decisive action. Iran continues to play its hand brilliantly
and I for one wouldn’t want to chance that it’s bluffing. The
U.S. can only assume the mullahs will obtain the bomb far
sooner than most “experts” agree and now we also know Iran
clearly has the delivery capability, as a recent purchase of 18
long-range missiles from North Korea proves.
Iraq
But believe it or not, there is a shred of decent news this week on
this front and without attempting to be too cute, I’d love to see a
clash between Ayatollah Khamenei and Iraq’s Ayatollah al-
Sistani. Kind of like Gandalf vs. Saruman.
Let’s face it…if Ayatollah Sistani had not been the force for
moderation that he has been the past three years, the war in Iraq
would have already been lost. Sistani once again called for
peace and, most importantly, offered his support to the new
government being formed in Baghdad in dismantling the militias.
Prime Minister-designate al-Maliki, who met with Sistani, will
get nowhere without disbanding these private armies, but had
earlier sent mixed signals on the subject, saying, yes, they should
be dismantled but the militias should also be integrated into the
security forces. It’s a fine line here, but U.S. Ambassador
Khalilzad said “decommissioned, demobilized,” first, then
integrated. In other words, al-Maliki was acting like militia
units, en masse, could join the formal Iraqi police and army
forces, while Khalilzad is saying they must give up their
weapons first and then each member would be handled on a case
by case basis.
Enter Sistani, who recognizes that either way the security forces
will always be infiltrated by bad guys, but in the end minimizing
violence is the key to establishing some kind of stable Iraqi state.
Meanwhile, al-Zarqawi brazenly appeared on video, unmasked,
and I agree with the Bush administration this is an act of
desperation. Desperate people, though, are still capable of
incredible acts of cruelty. But while our inability to capture him
is mind-boggling, Zarqawi may have just overplayed his hand.
We also note the deaths of three Italian soldiers and one
Romanian in a car bombing. It’s easy to forget the Italians still
have 2,000 troops here, mostly in Nasiriyah, and play a critical
role. Unfortunately, for those of us still supporting the war, the
recent change of government in Rome doesn’t bode well when it
comes to Italy’s future participation.
Also, in that other war, Afghanistan, we note the deaths of four
Canadian soldiers in an attack there.
Finally, in this evolving war on terror, authorities in Egypt now
suspect the recent bombing of another Sinai resort, the third such
attack in 18 months, could be the work of a new home-grown
network, not al-Qaeda, which has never claimed responsibility
for any of the blasts.
Korea
“In the half century since the agreement, there has been a great
change on this land. Guns have turned into ploughs, cannon
smoke into factory smoke, and gunfire into sounds of love and
harmony, establishing the base for well-being and national
peace.”
–Inscription on the Korean War Memorial in Seoul.
I visited the memorial on Friday before taking a trip to the DMZ,
the demilitarized zone between North and South, and the above
pretty well sums up today’s South Korea, one of the true Asian
Tigers.
I was walking through the museum for about an hour, though,
when I realized I was the only American in the place. Then I
was startled to turn a corner and see three U.S. soldiers. Of
course I shouldn’t have been. After all I’m well aware we still
have 30,000 troops here, but my reaction is also a sign of how
easy it is to take things for granted in Korea, forgetting that the
nut job across the border in Pyongyang could at any moment
unleash the whirlwind.
In the museum itself, one that covers Korean participation in all
wars (note to self…no wonder they hate the Japanese), when you
enter the formal Korean War exhibit you are in a room
surrounded by war footage blasted on the walls.
It was captivating film but I was immediately struck by
something else. Every single adult that passed through as I was
standing there stopped for a while to view the carnage on
display. But not one single student. The school kids couldn’t
have cared less as they noisily, and rudely, moved on.
And boy you better believe this is important. I saw firsthand
how in a recent poll here, half of South Korea’s young people
would side with North Korea if the United States attacked Kim
Jong il’s nuclear facilities. You’re reading that right. In turn,
just a fraction of those with memories of the war and its
depressing aftermath would.
When I was in Lebanon last year, I mentioned that there was no
more complex place in the world, politically, but the Korean
Peninsula is right up there.
The elderly here understand just how wicked and dastardly the
North Korean regime is and how at a moment’s notice, Seoul
could be vaporized. The youth are like “whatever.”
But there are also some good reasons for the latter attitude. The
last thing anyone wants is a war, obviously, and both South
Korea and China are terrified the North could implode, sending
millions of refugees pouring across their borders.
So both the South and China are trying economic integration and
this isn’t a bad thing. At North Korea’s largest experiment with
capitalism, an industrial complex at Kaesong which I could see
the outlines of from the DMZ, 6,000 workers are bussed in each
day to work for South Korean-owned plants. The South needs a
low-wage base to compete with China, so many South Koreans
view China as the real issue, not their cousins north of the 38th
parallel.
For China’s part, they are moving from competing with the likes
of Thailand and Indonesia, in terms of quality of goods, to vying
with southern European nations and South Korea, and eventually
France, Germany, Japan and the United States. [See the
Microsoft / Lenovo deal, for example, and the future of the
Chinese auto industry.]
Caught in the middle, actually, is the U.S. I haven’t been a fan
of Secretary of Defense Donald Rumsfeld, to say the least, but I
thoroughly agree on his basic outline for realigning U.S. forces,
including an item I discuss below involving Guam.
Here in South Korea, the Pentagon now believes the South is
more than capable of defending itself and we have been moving
our remaining forces away from the DMZ, as well as Seoul. [It’s
hard to imagine, since it’s largely hidden, but you forget Seoul
itself is an armed camp.] In the War Museum I ended up talking
to one of the three American soldiers, a Private Quinones from
Jersey City, NJ, who told me he was stationed at our main base
these days, some 30 miles south of Seoul and further away from
a potential North Korean artillery blitz. Most South Koreans,
especially the young people, want us totally out. You know
what? We should be, as long as we can project a strong enough
presence within a few hours flying time of Pyongyang. Think
nuclear retaliation.
As for the U.S. / North Korean relationship these days, it would
appear the U.S. is making real progress in disrupting Lil’ Kim’s
illegal activities that are the lifeblood of his dictatorship.
Counterfeiting, drugs, money-laundering, arms trafficking…all
seem to be in some state of disarray according to reports, though
at the same time the North still managed to deliver those long-
range missiles to Iran.
So the question is does White House strategy drive the North
Koreans to the negotiating table? Will Kim Jong il realize his
future is in playing a role towards the establishment of a unified
Korea? As opposed to the situation with Iran, where I see no
good resolution, I am equal parts pessimist and optimist on this
front. I just wish we knew more about Kim’s generals. Where
do they really stand? It’s the burning question the U.S.
intelligence community would like an answer to.
As for my trip to the DMZ, you’re going to have to forgive me in
holding back on some thoughts because I’m both running out of
time before posting and I need to further assimilate everything I
saw.
I went with 12 others, Canadians and Europeans, and for part of
the six-hour excursion we were joined by other tours. You get to
see quite a bit and get a real sense of the dangers, though you’re
never close enough to see any North Koreans.
The tour takes you to the Freedom Bridge that all of you have
seen on television and at this point you’re in the 8-km “military
exclusion zone” which both sides have. Then in the middle is the
2-km DMZ, again on both sides.
The highlight was going through tunnel #3 that the South
Koreans discovered in 1978, the first two having been found in
1974 and 1975. [A 4th was uncovered in 1990.] You walk the
equivalent of 10 stories down and then 400 meters across before
you hit the first of three concrete walls installed by the South
Koreans to prevent the North from flooding the tunnel on their
end with poison gas.
The discovery of the tunnels was a huge shock to the South
because you have to picture in tunnel #3, for example, anywhere
from 10,000 to 30,000 soldiers could have emptied into South
Korea, per hour….all only 30 miles from the center of Seoul.
The ceiling is about 5 feet 6 inches and being taller than that I
had to crouch down the whole time walking through it. No more
tunneling for me, by the way. But you’re also thinking ‘just how
many North Koreans died building this thing?’ They used prison
labor, of course, and there was no food or water supply.
You are also taken to an observation post in the middle of the
DMZ where with binoculars you can easily see across to the
North, as well as Panmunjom where any negotiations between
the two sides take place. Even the negotiating table has a
dividing line right down the middle.
Our tour guide, a young woman, was very optimistic about the
future, particularly because of the economic integration taking
place. But what concerns me is the clear indifference by many in
the South towards its nation’s history. I’ll have further thoughts
next week after going through all my notes, but sitting in my
hotel room, knowing some nut could launch an artillery barrage
that would take out hundreds of thousands of people at a
moment’s notice, would certainly have me sleeping with one eye
open were I citizen here. Lastly, consider this. There are an
estimated 30,000 North Korean spies in the South.
Wall Street
Once again the major averages were mixed as the tug of war
continues between those who believe the Federal Reserve is
basically finished raising rates, after one last hike on May 10,
and those who feel the economy is simply too hot and
inflationary pressures, be they from energy, other commodities,
and eventually wages, will force the Fed to do otherwise.
This week Federal Reserve Chairman Ben Bernanke appeared
before a joint congressional economic committee and said
“vigilance in regard to inflation is essential.” But he also added
he was concerned about a slowing housing market and rising
energy costs and the impact these two in particular can have on
the consumer and overall economic activity. So Bernanke added
the Fed could pause for a spell to examine more data, as the
Fed’s governors are certainly well aware there is a lag effect
from the 15 interest rate increases they’ve already instituted.
The bond market took Bernanke’s comments to heart and yields
on the long end of the curve rose slightly on the week while the
two-year Treasury rallied a bit on the theory that the Fed will
indeed stop for a while.
The long end, of course, is more concerned with an actual
inflation threat, while the shorter end concerns itself with the
here and now.
But what does the actual data tell us? This week’s readings on
housing were decidedly mixed. While existing and new home
sales rose, surprising some, the median price on existing was up
just 7.4% year over year, as opposed to the double digit growth
we’ve been used to, while the median price on new home sales
actually fell 2.2% from a year ago and a full 6.5% between
February and March. No matter how you slice it, the market has
stagnated in terms of price and the issue becomes is housing on
the verge of rolling over?
Two key readings on consumer confidence were mixed as the
full impact of the recent price spike at the gas pump has yet to be
fully felt in these surveys, while the Fed’s review of regional
economic activity expressed some of the same concerns Ben
Bernanke shared, including the finding that while some
companies are attempting to pass through higher costs, they are
meeting only limited success thus far thanks to competition.
Regarding energy, oil settled down this week despite the
worsening news on the Iran front, but little should be read into
this, especially President Bush’s dubious call for tapping the
Strategic Petroleum Reserve (this isn’t an emergency) and a
Senate proposal for a $100 rebate as well as renewed calls on the
part of Congress to investigate the oil industry for price gouging.
As for the rebate, I’ve already spent mine on about six beers
here in Seoul. I mean to tell you, a pint of Guinness is $16!
A regular bottle of beer is $9 in my hotel. Come to think of it,
I’ll gladly take the $100, Mr. President…or am I supposed to use
it for something else? Anyway, it doesn’t help matters when the
likes of ExxonMobil are reporting earnings of $8.5 billion.
Everywhere you go soaring oil is a drag and the future isn’t
particularly rosy when you have a leading producer such as
Venezuela and its wingnut President Hugo Chavez proclaim that
he is out to de facto nationalize his nation’s energy resources in
significantly hiking royalties received by the government as well
as taxes levied on those drilling for it. Ergo, if I’m a foreign oil
company, why the heck would I want to do business here? And
this is the rub. Venezuela desperately needs new investment and
technology, it won’t get it, and its oil fields will yield less and
less just as the world needs more. That’s not how you get back
to $50 oil, folks.
But for now the world economy, despite the roadblocks being set
up in the form of higher fuel prices, rising interest rates and a
questionable housing market, keeps booming. And it’s definitely
a bubble.
China’s central bank, for one, recognizes this as it hiked its key
interest rate, surprising most everyone. But China was only
doing the prudent thing in this case in attempting to put the break
on runaway capital investment and ill-advised commercial
lending. But if China slows that doesn’t bode well for those
exporting to the country.
Meanwhile, the Bank of Japan said it will take it slow in raising
its interest rates for the first time in eons, but the recovery
appears for real and consumer prices are indeed rising. Hikes are
inevitable, yet another drag.
All of this spells bad news for the U.S. dollar and it’s been
slumping for months now. But like all movements in the
financial markets, it’s the rate of change, speed, that matters and
for now the decline is orderly.
Street Bytes
–The Dow Jones hit its highest level since Jan. 2000 before
closing at 11367, up 0.2% on the week. The S&P 500 lost a point
and Nasdaq declined 20 points to 2322, thanks in no small part to
Microsoft’s terrible earnings report late Thursday that led to a
decline in Mister Softy of $3, the worst performance since 2000,
the following day. Microsoft missed on its first quarter bottom
line and its future guidance was sloppy, owing to the fact it is
gunning for Google on the search side and that means much
higher spending and lower profits, at least for now. Otherwise,
overall, corporate earnings continue to be solid.
–U.S. Treasury Yields
6-mo. 4.91% 2-yr. 4.86% 10-yr. 5.06% 30-yr. 5.16%
The initial report on first quarter GDP came in at 4.8% versus
1.7% for the fourth quarter. But it’s time to think of the second
and all looks OK thus far, depending on oil’s impact on
consumer spending. [Any true slump in housing will begin to
bite in Q3 by my way of thinking.]
–The upcoming G-8 summit in St. Petersburg could be all about
energy security (as well as a little Iran talk) and this week the
chairman of Russia’s gas giant Gazprom blasted the European
Union for its efforts to deregulate and diminish the influence of
Gazprom and its pipelines that supply the continent with 25% of
its natural gas. Alexei Miller said his company can always shift
its focus to Asia and their booming needs, and the next day
Russian President Vladimir Putin echoed his buddy’s remarks.
In a meeting with German Chancellor Angela Merkel, Putin said:
“Think about it from our point of view. What are we to do when
we hear the same thing every day? We start to look for other
markets.
“When people come to us, it is investment and globalization, but
if we plan to go somewhere, then it is always the expansion of
Russian companies.”
Well, as Spock would say, “Logical, Vladimir, but also a bit
disingenuous.” In less than two months it could be a real tension
convention in St. Pete.
[For his part, Putin did do one thing right as he reversed course
and rerouted a key Siberian oil pipeline significantly away from
world treasure Lake Baikal, which contains 20% of the world’s
unfrozen fresh water. Also, Gazprom did sign a significant deal
with Germany’s BASF, giving up a significant ownership portion
in a Siberian gas field.]
–The U.S. Justice Department is investigating the shady energy
trading firm RosUkrEnergo that is half-owned by Gazprom. I
have written of the mob connections here, even more important
these days because RosUkrEnergo became the key middleman in
a recently brokered deal between Gazprom and Ukraine to keep
the gas flowing there. So RosUkrEnergo decided to release its
ownership structure this week, adding real faces to the murky
picture, and most would agree we still don’t know much about
these guys.
–Meanwhile, staying with oil, Chinese President Hu Jintao went
from America to Saudi Arabia where he signed a bunch of
energy deals with Saudi King Abdullah. What the Saudis like
about the Chinese in particular, aside from their money, is the
fact they don’t lecture the Kingdom on democracy. Yes, the
Saudis love this hands-off approach to their domestic policy, and
in the case of China it can also sell Saudi Arabia weapons
without first needing to gain parliamentary or congressional
approval.
Following his Saudi adventure, Hu then traveled to Nigeria
where he obtained all manner of exclusive drilling rights. “This
is fun!” Hu was heard to say. [Actually, I’m not exactly sure
what Hu said, but he had to be at least thinking it.]
–Boy, here in Seoul the big story is the scandal that has claimed
Hyundai’s chairman who was arrested and charged with
embezzling over $100 million that he used for illegal lobbying
and bribery. The chairman’s son, who runs Kia Motors, has not
as yet been charged with any wrongdoing himself but is still
under investigation.
–In another case of CEOs gone bad, former Computer
Associates CEO Sanjay Kumar, one of the true dirtballs in his
sport, pleaded guilty to massive accounting fraud. I mean this
lying weasel was so directly involved he was flying around the
world at quarter end trying to close sales…and if he didn’t, he
booked them anyway…in order to hit Wall Street’s earnings
estimates.
–And in Tokyo, where I spent some time in Narita Airport, there
is the incredibly awful story of a leading architect, developer and
others who falsified earthquake data and put up some 200
buildings (including apartments and condos) where officials now
realize they would collapse under just a moderate quake in
Tokyo. You don’t get any more criminal than this.
[By the way, the difference in security at Narita vs. TSA in the
U.S. is truly laughable. The Japanese’ professionalism is to be
admired…and copied.]
–Honda Motor Co. reported revenues rose 21% in the first
quarter. Honda’s profit also exploded and it now receives 75%
of this from its North American operations. The comparable
figure is 60% for Nissan while Toyota garners 43% of its profits
from the U.S. and Canada. Much of this is due to the weak yen
vs. dollar relationship, which helps the Japanese when the dollars
are translated back into yen, as well as the fact they have a good
product. But the currency angle could be about to change.
–Microsoft’s Bill Gates was treated like a rock star in Vietnam
this week, while the company agreed to purchase $700 million of
Chinese hardware over the next five years; this after Hu Jintao’s
visit to Gates’s place and a subsequent agreement by leading
Chinese PC maker Lenovo to install $1.2 billion worth of,
hopefully, bug-free Windows operating systems.
But at the end of the day…putting on my best CNBC anchor
voice… “While Bill Gates received rock star treatment in Asia,
investors on Wall Street greeted Microsoft’s first quarter
earnings announcement with jeers.”
[If I were the Vietnamese, I’d rather see Bono.]
–Here’s a better tech story I gleaned from a local Korean paper.
LG Phillips LCD is a Korean-Dutch joint venture formed in 1999
between LG Electronics and Philips Electronics. So on Thursday
the two officially completed the world’s largest LCD flat panel
manufacturing plant in the world here near Seoul; one that will
churn out 90,000 panels a month by year end. The production
line is the size of six soccer fields and will eventually employ
some 25,000 directly and 42,000 indirectly. Good for them.
–South Korean workers spend more hours on the job than
anywhere else in the world, an average of 2,390 per person. I
saved this note from a while back because it really pertains to
France as well…where they work only 1,431 hours, lowest
among nations that should matter.
–My portfolio: At first, my carbon fiber play continued to hit
new highs, but then on Thursday, whap! Down $3 and another
$1.50 on Friday. But don’t fret for yours truly…it’s still
premium beer for the kid. [Just this year, this volatile sucker has
gone from $9 to $31 and now back below $26.]
–Sounds like Kenny Boy, former Enron chairman Ken Lay, is
having a difficult time on the witness stand. Yes, there is a god.
–Yikes, I see shares of Lucent are now fetching about $2.75, or
less than the cost of a good Sunday paper. At least the paper
might contain an idea or two that is more profitable, including
post-merger with Alcatel.
–Goldman Sachs is receiving some unfavorable publicity across
the pond in the UK. It seems the investment banker is playing all
sides and can’t possibly be acting in its clients’ best interests
when it appears to be prospecting competitors at the same time.
–The nightmare that is the Refco bankruptcy continues. The
trading giant went under in October yet 17,000 clients of its
futures and foreign exchange divisions still can’t access their
accounts, even though they were told long ago that the funds
were segregated from the bankrupt unit. Nonetheless, the court
has frozen the assets.
–Sun Microsystems’ CEO and co-founder Scott McNealy
stepped down and slid into the comfy chairman seat,
relinquishing his post to ponytailed Jonathan Schwartz. Sun
Micro’s revenues peaked in 2001 at $18 billion and fell all the
way to $11 billion for the 2005 fiscal year. McNealy, who likes
to duke it out with Microsoft, should have just walked away
totally.
–And now….your list of biggest ports in the world, based on
shipping container volume.
1. Hong Kong
2. Singapore
3. Shanghai
4. Shenzhen (China)
5. Busan (South Korea)
6. Kaohsiung (Taiwan)
7. Rotterdam (think wooden shoes and windmills)
8. Los Angeles (think plastic surgery)
9. Hamburg (think hyped up hot dogs, not burgers)
10. Dubai (think Bush administration incompetence)
–Inflation Watch: Trader George said the frozen peaches he
uses for his morning shake are up 20% in three months! Geez, I
never knew my friend was such a health nut.
Foreign Affairs
Israel: The government, in showing amazing restraint following
the Tel Aviv suicide bombing that Hamas claimed was a
legitimate act, is courting international support and thus far it
appears to be the right choice.
Taiwan: Officials here breathed a sigh of relief following
President Bush’s meeting with China’s Hu Jintao. From
Lawrence Chung of the South China Morning Post:
“The island has been nervously watching the (talks), fearing the
American leader would punish Taiwan by making a statement
that could hurt Taipei’s interests…
“But in their meeting (April 20), Mr. Bush simply restated the
long-held U.S. stance that his administration would continue to
deal with cross-strait issues in terms of the three communiqués
between Washington and Beijing as well as the Taiwan Relations
Act.”
Premier Su Tseng-chang said “We appreciate President Bush for
his insistence in upholding the global mainstream values of
democracy and freedom.”
Bush basically said a lot of nothing, but in the dangerous game of
chicken and semantics, that’s often enough.
Solomon Islands: What? Well, there has been a lot of violence
in these poverty racked islands in the South Pacific and it all
started because some claimed that a recent vote to elect a new
prime minister was fraudulent and based on money pouring in
from Taiwan to prop up its favored candidate.
None of the charges have yet been proved, but what’s interesting
is that Taiwan is still recognized by 25 nations, including the
Solomons, the Marshall Islands, and bigger countries such as
Panama and Costa Rica.
China and Taiwan have been battling over these 25 through
checkbook diplomacy and China this week said it was fed up
with Taiwan maintaining legitimacy in the eyes of the world as
an independent state. Just another sidelight to the heated debate
between these two.
Nepal: Yes, this place does matter and a good idea of just how
much so is the fact the U.S., India and China were all intimately
involved in quelling the violence and getting King Gyanendra to
step aside and reinstate parliament. The next key was to get the
Maoist rebels to stand down and they agreed to a three-month
ceasefire to observe how the political process takes shape.
France: As predicted by your editor, the National Front far right
party of Jean-Marie Le Pen is making big strides in opinion polls
following all the recent unrest in France, especially the
immigrant riots. Overall, though, in the drive for next year’s
presidential election, Socialist Party candidate Segolene Royal is
in the early lead with a 34% ‘approval’ rating (not ‘who would
you vote for’). Nicolas Sarkozy is at 30%, Dominique de
Villepin 29%, and Le Pen at 21%.
Lebanon: For the first time since the assassination of former
prime minister Rafik Hariri in Feb. 2005, Syrian President
Bashar Assad was interviewed by UN investigators. It’s not
known what he said, but if Bashar is anything like his father it
was four or five hours of nothing but seeing whose bladder
would give out first.
Japan: Prime Minister Junichiro Koizumi just celebrated his 5th
year in office though he’s slated to step down in September. So
the locals are reflecting on his lengthy tenure, especially by post-
war standards. An editorial in The Asahi Shimbun concluded the
following:
“(What) has he actually done for the nation?
“He has stabilized Japan’s relations with the United States by
falling into step with the George W. Bush administration.
Another positive achievement was that he brought to Japan some
victims of North Korean abductions and their families. But he
has made a complete mess of Japan’s diplomatic relations with
China and South Korea.
“We would not say Beijing and Seoul are completely blameless.
But it was ultimately Koizumi’s five visits to Yasukuni Shrine
that effectively shut down the channels of dialogue, not only with
the Chinese and South Korean leaders but also with their foreign
ministers.
“Koizumi’s stance has emboldened those at home who believe in
the legitimacy of Japan’s actions in World War II, and aroused
unease and suspicion even in Japan’s most needed ally, the
United States. Japan’s estrangement from China and South
Korea is certain to weaken Japan’s presence in the international
community.”
But on the economic front, despite the recovery, the Asahi
Shimbun conducted a telling poll. After five years of Koizumi,
42% said their lives have gone downhill and only 18% say their
life has changed for the better. This is startling, but then I also
pointed out recently that just as in the U.S. and elsewhere, in
Japan there is a growing divide between the ‘haves’ and ‘have
nots.’
Separately, there’s another issue on the foreign policy front, the
disputed islands claimed by both South Korea and Japan, what
some call the Liancourt Rocks, but which I’ve discovered are
better known as Tokto in Japan and Dokdo in Korea.
I need to get a better handle on this one and will comment further
next week, but for now evidently South Korean President Roh
heightened tensions when he said in a nationally televised
address an “amicable relationship between South Korea and
Japan can never be established as long as Japan continues
glorifying its history and claiming rights to the territory.”
In Japan, they’re supposedly saying nothing can be settled until
Roh is out of office.
[I saw this morning that a U.S. Air Force map from the 1980s
shows the islands being in South Korea’s exclusion zone, not
Japan’s.]
Seeing as I have to fly between the two one more time, I urge
that they sit down over a beer and chill out until I’ve left the
region.
Sri Lanka: Does civil war here really matter to the rest of us?
Long ago I used to draw the analogy that a car bomb going off in
Sri Lanka doesn’t, but one in Tel Aviv does. That’s still the way
I feel, except that the Tamil Rebels are some of the fiercest
terrorists in the world – many say the best – and we don’t want
them passing along their knowledge to others, as they already
have.
Brazil: It’s below the radar but Brazil appears to be proceeding
with its own nuclear program, including enriching uranium.
What concerns some is that Brazil won’t allow unlimited
inspections, a la Iran, even though it too is a member of the
Nuclear Nonproliferation Treaty. I’m not worried.
Guam: Well, it’s not a nation and instead is a U.S. possession,
but when I arrived on Monday, the headline in the local paper
read “The Marines Are Coming!” 8,000 of them in addition to
the thousands already here, all part of the Pentagon’s troop
realignment efforts.
The U.S. has 50,000 soldiers in Japan and these 8,000 are
coming from Okinawa; a complex negotiation with Japan
wherein Tokyo is ponying up a lion’s share of the cost of
relocation. It’s a huge shot in the arm for Guam, of course, and
this island of 154,000 will see its population increase by up to
30,000, including troops’ families, by 2012.
One other note on Guam, where I’ll be spending a few days
again before heading back home this week, the day before I first
arrived the U.S. Surgeon General was here to discuss bird flu
preparations. But because Guam is so far from any significant
land mass, most experts believe that any bird already ill would
never make it here in the first place.
Random Musings
–In the latest NBC News / Wall Street Journal survey, 67% of
Americans believe the country is headed in the wrong direction.
–One of the prime reasons for President Bush’s declining
approval rating is the healthcare issue and a new study doesn’t
help the White House. 41% of moderate income folks are
without health insurance, up from 28% in 2001.
–A bipartisan Senate committee has recommended abolishing
FEMA and starting from scratch.
–There is a growing controversy over the reconstruction of
Jefferson Davis’s Mississippi home of Beauvoir, a victim of
Katrina. The NAACP is rather miffed, while Oklahoma Rep.
Sen. Tom Coburn says it’s far from an emergency compared to
other uses of funds. Meanwhile, the National Parks Service has
approved an application for the KKK to march at Antietam
National Battlefield, site of the bloodiest day of the Civil War
and a reason, following a Union victory, why President Abraham
Lincoln then issued the Emancipation Proclamation.
–In picking up a newspaper in Honolulu where I had a brief
layover the other day, I saw where local officials are still dealing
with the aftermath of all the rain they had recently and sewage
run-off potentially fouling Waikiki Beach…to which I mused,
‘what beach?’ There’s nothing there. No offense, my Hawaiian
friends, but I’ve always found it hard to find sand to walk on.
Now Marco Island, Florida, or Kiawah, South Carolina; those are
real beaches.
–So one of the more significant stories on the week was the
ambush of some American tourists and their guide at a wildlife
sanctuary in Sierra Leone by 70 chimpanzees. Officials there
know that “Bruno,” the alpha-male, is responsible for the
insurrection that led to the death and mutilation of the guide and
severe wounds on four others. Bruno then escaped with about 20
of his compatriots. It was obviously well thought out in advance.
So am I the only one who finds this both fascinating (apologies
to the victim’s family) and more than a bit troubling? Like in the
case of today’s youth, are chimps spending too much time
surfing the Web and watching cable?
–The Chinese Golf Association is claiming it invented the game
of ‘hit ball’ in 1282, citing a rule book it says is indistinguishable
from St. Andrews’ of 1754. Actually, I always thought that if
you looked at some of Flemish artist Pieter Bruegel’s works from
the 16th century, you’d find the Dutch invented golf, only it was
first played on ice (and it wasn’t hockey!). So I don’t know what
the Chinese were doing, but I’m sticking with my hypothesis.
–That great role model for our youth, Snoop Dogg, a fellow once
on trial for murder (acquitted) as well as numerous drug and gun
offenses, was traveling through London’s Heathrow Airport with
his posse of 30(!) when he entered British Airways’ first-class
lounge. The others then tried to follow and BA politely told
them ‘No.’ At which point the posse, many of whom weigh 300
pounds, tore up a duty-free shop, terrorized employees and
innocent passengers just strolling by, and hurt seven police
officers before they were subdued. Remind your children of this,
next time they’re watching this dirtball get some award or star on
a sitcom; unless you think this is acceptable behavior.
–Finally, I have been involved with the Jesuits in New York for
over ten years concerning a project of mine on the island of Yap
in the Federated States of Micronesia. Years ago I sought the
Jesuits out and asked if they needed help somewhere and was
told that this island, a little over an hour’s flight southwest of
Guam, just lost a church to a typhoon. It was a wooden one so I
said, “Let’s build a better one.”
So over time, very slowly, a stone church on Yap’s Rumung, a
separate island reachable only by boat, is taking shape. The great
news was two years ago it survived Yap’s worst typhoon ever,
while other structures weren’t as fortunate, and last Wednesday I
visited my friends there for the third time.
It’s a funny place. 8,000 of the best people in the world, so
generous and kind, yet they have nothing. But I thought you’d
get a kick out of this. After the storm, FEMA (FSM is a U.S.
protectorate) actually did a great job here supplying immediate
assistance…including tarps. It also paid the locals to clear debris
and help in the reinstallation of essential services.
But my friends said as outsiders sent in money, the locals all
decided they needed cars and the number doubled from 2,000 to
4,000…as if they didn’t already have enough. Of course most of
these folks can’t drive so invariably the first time they get behind
the wheel their car ends up in a ditch. Thankfully, the maximum
speed limit is 25 mph so few are seriously hurt in this fashion.
Gasoline, though, is now $3.99 a gallon, so picture the hardship
on an island where the minimum wage is $0.80…and there are
gas lines at the two petrol stations.
Anyway, my church is getting there…just needs tiling and a
sacristy…but considering that I’ve been struggling with my own
faith the past few years, Sister Joanne, Margaret Gootinag,
Senator Ted and all the other kind folks here have given me far
more than I can ever give them. God love them all and they’re
forever in my thoughts and prayers.
—
Pray for the men and women of our armed forces.
*I have to add, the aforementioned Private Quinones from Jersey
City truly represented the best of America. I told him how proud
I was of him and his service and we ended up having a great
chat. But I had to ask, “So, are you a Mets or Yankees fan?”
“Yankees.” He saw the look of disgust on my face. “Yeah,
Mets,” I replied. Where I live, it always comes down to this.
God bless America.
—
Gold closed at $656
Oil, $71.58
Returns for the week 4/24-4/28
Dow Jones +0.2% [11367]
S&P 500 -0.1% [1310]
S&P MidCap -0.7%
Russell 2000 -1.0%
Nasdaq -0.9% [2322]
Returns for the period 1/1/06-4/28/06
Dow Jones +6.1%
S&P 500 +5.0%
S&P MidCap +8.8%
Russell 2000 +13.6%
Nasdaq +5.3%
Bulls 45.4
Bears 25.8 [Source: Chartcraft / Investors Intelligence]
Have a great week. I appreciate your support.
And shout out to LT!
Brian Trumbore
