[Posted 7:00 AM ET]
Wall Street
The equity markets resumed their rally after a brief respite and
this time the S&P 500 joined the parade and hit a new all-time
closing high. Stocks shrugged off the minutes from the
Federal Reserve’s May 9 meeting to focus instead on…..well,
actually, I don’t know what the market was focusing on, to tell
you the truth, because one thing is for sure, the Fed is not about
to lower interest rates, as many had hoped, despite the revision of
first quarter GDP to a putrid 0.6% rate of growth. At the May
confab, according to the minutes, the Fed observed:
“The correction of the housing sector was likely to continue to
weigh heavily on economic activity through most of this year,”
or, “somewhat longer than previously expected.”
Well, readers of this column certainly weren’t surprised by the
correction in housing. The Fed continued in the minutes that
inflation remains “uncomfortably high” (though by the official
numbers it isn’t) and that it expects the economy to pick up in the
second half, “a little below (its) trend rate of growth through the
remainder of this year and then pick up to a rate broadly in line
with the economy’s trend rate in 2008,” trend being defined as
3%.
On this last bit, GDP, we’ll see. The first quarter is history and it
wasn’t good. But the economic numbers for April and May thus
far have been pretty solid, I’ll grant you, with manufacturing
indices improving across the board and consumer sentiment
looking as if it’s bottomed, at least for the moment. So it’s clear
that while inventories in the first quarter were scaled back, there
is some restocking going on in the second quarter. Thus GDP
could rebound, though it will hardly be off to the races after that.
I do have to add that we’ve had some fairly high-profile layoff
notices the past week…IBM another 1,500 (3,700 total thus far
in ’07), Motorola 4,000 (on top of 3,500 earlier), Pulte Homes,
2,000 (16% of their total work force), and Dell, 8,000.
Now with some of these it’s not immediately clear just how
many of the losses will be in the U.S., but they aren’t the kind of
headlines the average worker likes to see when they pick up the
newspaper….or read it splashed across Drudge next to
“Kevorkian Out of Prison!”
You also have this issue of suddenly rising interest rates. I don’t
mean to beat a dead horse but, yes, while rates are still at historic
lows, a 10-year at 5.00% doesn’t bode well for any recovery in
housing owing to the fact the vast majority of it, despite the
recent price declines in some areas, is still unaffordable; or at
least requires that the average American family stretch beyond
their means….which was the cause of most of our problems in
the first place. And don’t forget, we have this not so small issue
of mortgage resets to deal with the next 12-24 months. That
said, I continue to maintain that when it comes to the Federal
Reserve, they have to understand this and thus won’t raise
interest rates the rest of 2007. It would kill a large group of
Americans, which to me is far more important than concern over
my beer or Chex Mix going up another 50 cents.
Street Bytes
Both the S&P 500 and Dow Jones closed at all-time highs on
Friday, a very positive sign, with the S&P having pushed through
its March 24, 2000, high of 1527 to finish the week at 1536,
while the Dow Jones motored to 13668. Certainly continued
deal activity helped, as well as ongoing share buybacks and
decent earnings out of the likes of Dell
–U.S. Treasury Yields
6-mo. 4.97% 2-yr. 4.97% 10-yr. 4.96% 30-yr. 5.06%
Rates continued higher, despite the downward revision on GDP,
because the other data, such as in manufacturing, was stronger
than expected. Additionally, the May jobs report was solid
(157,000 new non-farm jobs) and there is also continued pressure
on bonds from those looking to diversify their holdings out of
U.S. Treasuries.
–Toyota led the way yet again in U.S. auto sales for May, up
14% to its best monthly level ever. GM had a solid month with
sales up 10%. Ford, however, which is continuing to cut sales to
rental companies, saw a decline of 7%, while Chrysler’s rose 4%.
–I found the following figures regarding foreign direct
investment in the United States to be a bit startling, as reported
by Barron’s Jim McTague. Representing money that foreign
companies invest in U.S. business operations, FDI peaked in
2000 at $321.3 billion, dropped to $64 billion by 2003, and has
recovered to just $184 billion.
McTague further points out the troubling statistic that “The
number of Americans employed at foreign-owned, non-banking
firms in the U.S. declined from 5.7 million at the end of 2000 to
5.1 million at the end of 2005.” Output also declined despite a
fairly robust economy.
Bottom line, we continue to pay a big price for the Dubai Ports
World fiasco. For foreign investors, we’re often not worth the
trouble.
–China’s government came up with yet another measure in its
attempt to ease speculation in the stock market by tripling a tax
on share trades. The benchmark Shanghai Composite dropped
6.5% that day, Wednesday, though was basically flat the
remainder of the week.
Meanwhile, a Beijing court sentenced the former head of China’s
food and drug administration to death for corruption and
dereliction of duty. Zheng Xiaoyu, who was released from his
post in 2005, was convicted of accepting about $600,000 in
bribes to grant approvals on hundreds of medicines. Many of the
drugs proved to be non-effective, if not lethal.
On the tainted food front, however, another area in which Zheng
had oversight, China has caught a small break in the disclosure
by the U.S. FDA that melamine, the agent found in tainted pet
food, was added by a Toledo, Ohio, company named Tembec to
animal feed agents, so China can say it wasn’t the only offender.
But on Friday, the FDA also warned consumers to avoid using
toothpaste made in China because it may contain a poisonous
chemical used in antifreeze. So if your teeth suddenly turn
green, well, you’ve got a problem. [If you use a name brand, not
to worry.]
–India’s economy grew at a 9.4% clip in the first quarter, the
second fastest ever recorded there.
–Following is a tidbit from Lord Rees-Mogg and Strategic
Investments. Referring to a book by Hugo Bouleau titled “The
Final Crash,” Rees-Mogg cites Bouleau’s comments on the
growth of derivatives.
“In 2004, the market in credit derivatives increased by 123%,
creating an exposure of $8.4 trillion to these instruments of
insurance. In 2005, they grew by 105%, such that their so-called
notional value stood at $17.3 trillion, which is the excess of all
outstanding corporate debt on the planet. The total derivatives
market across all sectors is worth an incredible $298 trillion. To
put this into context, the value of such instruments was
equivalent to less than a third of the world economy in 1990 but
equates to nearly 800% of global GDP in 2006. Much like
Lloyd’s re-insurers, someone somewhere must be exposing
themselves to these credit risks.”
Rees-Mogg:
“What is certain is that nobody has any real understanding of
these risks, either in detail or globally. Their ultimate base, like
that of any bookmaker, must be that the banks that issue
derivatives keep their books balanced. In theory, as in other
forms of banking, every liability is balanced against an asset. But
– as we all know – bookmakers can go bust, and so can bankers.
If the counterparty responsible for matching the risk becomes
illiquid, then the whole system can be put at risk.”
–Josh P. passed along this tidbit from the San Diego area real
estate market. Foreclosures for the month of April 2007 were
525 vs. 85 for April 2006. And did you see the Sunday New
York Times piece by Abby Goodnough on the collapsing Florida
condo market? Goodness gracious; everyone and their mother is
trying to get out of their contract. One attorney said a client of
his abandoned a $340,000 deposit rather than close on a $1.6
million unit that lost its appeal.
Goodnough:
“The numbers suggest that it will only get worse. In Miami-
Dade County alone, 8,000 new condo units will be completed
this year and nearly 12,000 more in 2008.”
But the median price on existing properties is plummeting.
–John Henry, the owner of the Boston Red Sox, made his money
trading commodities and futures as a large hedge fund operator.
Remarkably, however, his firm’s assets have plunged from $2.5
billion to about $500 million as his largest individual fund is off
24% over the past 12 months, during a time the S&P 500 was
up 15%, as reported by Gregory Zuckerman of the Wall Street
Journal. According to a survey by Barclay Group, the same fund
has dropped 27% over the past three years while the average in
his category is up 10%. As a result of this severe slump,
disgruntled investors, including Merrill Lynch, are pulling out
their money at light speed.
–John Henry’s fund isn’t the only high-profile offering having
problems. Goldman Sachs’ flagship hedge fund fell 3.4% over
the first four months of this year, according to Bloomberg News,
at a time when the average hedge fund gained 4.9%. Talk about
overrated. Those wayward California humpback whales could
have done better.
–Water….can’t live without it…as any whale could tell you.
But with all my recent musings on the topic, I couldn’t help but
note that both Newsweek and U.S. News & World Report had
big features this week on the world water crisis. Nothing I
haven’t already told you, but over the coming years, companies
investing in water rights should do well…plus those making the
pipes to carry it.
Incidentally, in yet another example of the severe issues facing
China, authorities in Wuxi, Jiangsu province, face a crisis as the
city of 5 million can’t drink water that was contaminated by an
algae bloom in heavily polluted Tai Lake. The locals are scared
to take showers in it as well, for good reason.
–Staying on the topic, the New York Post reported that Mets
All-Star David Wright may have earned up to $20 million when
Glaceau – the company whose VitaminWater drinks he endorses
– was acquired by Coca-Cola for $4.1 billion. Instead of taking
cash, Wright took a 0.5 percent ownership stake in the company.
Good for you, David, but just hit .300 and drive in 100 runs,
know what I’m sayin’?
–In a big move for the brokerage industry, Wachovia acquired
AG Edwards, thus giving the combined operation the second
largest sales force at 15,000 financial advisers and $1.1 trillion in
client assets. Wachovia is hoping the merger will allow it to tap
into a larger segment of the affluent class.
–Health insurance giant WellPoint fired its CFO, David Colby,
for violating the company’s code of conduct. The CEO said
swift action was required after “concerns were raised” about
Colby’s behavior. While WellPoint didn’t enlighten us as to
what that behavior was, except to say it was not illegal, I’ll go
with ye olde hanky panky.
–Because of bad behavior, Jack in the Box is being sued by CKE
Restaurants, owners of Carl’s Jr. and Hardee’s, over Jack in the
Box’s characterization of Carl’s and Hardee’s Angus burgers.
As reported by Alana Semuels (sic) of the Los Angeles Times:
“In one ad, Jack, the mascot whose head looks like an upside-
down ice cream cone, is asked to point to a cow’s ‘angus area’
on a diagram. He says sheepishly: ‘I’d rather not.’….
“ ‘While Defendant may find humorous the aural and phonetic
similarities between the words ‘Angus’ and ‘anus,’’ the suit says,
the link is made to create ‘the erroneous notion that all cuts of
Angus beef are derived from the anus of beef cattle.’”
People, can’t we all just get along?!
–Lastly, the BBC reported “Experts at a biotechnology company
in New Zealand have discovered that some cows have a gene
giving them a natural ability to produce skimmed milk,”
specifically one that goes by the name of Marge, it seems.
So like I’m thinking this is potentially a classic private-equity
deal, after which investment bankers could then merge NZSM
(New Zealand Skimmed Milk) with Diversified Foods’ Bordens
division. Elsie the Cow, by the way, already has extensive
experience dealing with investors. During World War II, she
“helped raise 10 million dollars in war bonds.” And you can
look it up.
Foreign Affairs
Iraq: We’ve heard these stories before, that some Sunni militants
are cooperating with U.S. forces and that there are battles
between Sunni units and al-Qaeda, but then at the end of the day
actual progress is minimal. The month of May, after all,
represented the second straight one with a death toll among U.S.
forces exceeding 100 (at least 125). It was also distressing to see
the kidnap card played anew with the capture of five Britons in
central Baghdad; hauled away by men dressed in Iraqi police
commando uniforms.
And Turkey has made it clear it is prepared to stage an offensive
against the Kurdish rebel group, the PKK, as Ankara has sent
large contingents to the border with Iraq. At the same time,
Turkey is saying it will wait for the United States and the Iraqi
Army to rein the PKK in before acting unilaterally. This past
week, the Kurds are suspected in a bomb attack that killed six
Turkish soldiers. Turkey must know, however, that the U.S. will
not pressure the Kurds to cool it, and so this brewing crisis will
at some point boil over.
Iran: Tehran is playing its own hostage card and it’s time to call
it what it is…another hostage crisis as four Iranian-Americans
have now been placed under arrest by authorities for no other
reason than their American connection. The mullahs call them
spies, but as Sec. of State Condoleezza Rice says, this is nothing
more than a “perversion of the rule of law.”
The U.S. and Iran did hold direct talks in Baghdad this week, the
first such interaction since 1979. There was no progress on the
issue on the table, that being Iran’s support for terrorists in Iraq,
though none was expected.
Meanwhile, various news sources are talking about the ongoing
CIA operation to harass, though not overthrow, the Iranian
regime, in what has become a covert war between the CIA and
Iran’s elite Revolutionary Guard Unit, the Quds Force.
On the nuclear weapons program front, talks between Iran and
the European Union were fruitless.
Internally in Iran, the price hike in gasoline for Iranian
consumers is only 8 cents thus far (though that’s a 25% increase)
and there have been no real protests as yet. Actual fuel
rationing, though, is slated to begin this coming week and I can’t
imagine the public will take kindly to it.
Iran’s state bank, however, did something that one domestic
newspaper called “Economic suicide,” that being the move to cut
interest rates to the 12% to 14% range from 17%, this despite the
fact the Central Bank has predicted inflation will rise to 17%
over the coming 12 months from the current 13% to 14%. The
last thing you want to do is stoke it further. Said one official,
“The economy minister and the head of the Central Bank have to
explain this decision since this decree is incomprehensible for
economists.” [Daily Star]
Lebanon: Finally, some good news to report. Russia and China
abstained from a UN Security Council vote on establishing an
international criminal tribunal to examine the assassination of
former prime minister Rafik Hariri. It was feared the two would
veto the resolution. Lebanon’s parliament must now adopt its
own tribunal by June 10 or the UN-sanctioned one, complete
with a majority of judges from outside Lebanon, will take over.
Of course pro-Syrian factions, such as Hizbullah, are not pleased
and it’s feared Lebanon will see yet another spasm of violence as
Syrian agents attempt to intimidate the forces of good here. But
it’s important this all come to a head, just as it’s vital the
Lebanese Army crush the terrorists outside Tripoli.
Russia: The pictures out of this week’s G-8 summit in Germany
are going to be absurd, causing everyone to comment once more,
“Remind me…just why is Russia a member of the club?” After
all, relations with both the U.S. and Europe are at their worst
level since the Cold War, and this week we learned that President
Bush is hosting Russian President Vladimir Putin (who is
devolving into Vlad the Impaler) in a tete-a-tete at the Bush
family compound of Kennebunkport, Maine, July 1-2. It’s not
known if Vlad is bringing one of his spiffy new multiple warhead
ICBMs with him, though after the U.S. customs agent let TB
Man across the border the other week, one shouldn’t be confident
that customs will find Putin’s missile, let alone the launcher.
[Note to agents: If you see a 60-foot carryon bag, check to see
what’s inside.]
You see, this week Putin ratcheted up the rhetoric another sixteen
notches when he warned the U.S. missile shield risked turning
the European continent into a “powder keg” and would trigger a
new arms race. Then he tested the ICBM, capable of carrying 10
warheads and overwhelming any missile shield.
“(Our partners) are stuffing Eastern Europe with new weapons,”
said Putin in defense of Russia’s actions. “A new base in
Bulgaria, another in Romania, a site in Poland, radar in the
Czech Republic. What are we supposed to do? We cannot just
observe all this?” [BBC News]
But the biggest immediate issue actually involves Kosovo. I
wrote the following prediction for 2007 in my “Week in Review”
of 12/30/06.
“Watch the Balkans as the issue of Kosovo gets center stage for a
spell. Nothing too deadly, but between increasing concerns over
Russia’s intentions and the need for vigilance in the Balkans as
well as what should be an increased presence in Afghanistan,
NATO is going to have to confront the fact it is turning
increasingly into a paper tiger and must, therefore, recommit
itself to the security of Europe and beyond.”
While a draft UN resolution on Kosovo will evidently soften the
language on potential independence for the Albanian majority
there, Russia continues to threaten to veto any Security Council
act that calls for Kosovo to achieve statehood, allowing them to
leave Russian ally Serbia’s clutches.
China: Last week I wrote of the Pentagon’s latest concerns with
China’s military program, which Beijing later blasted. An
editorial in the May 28 issue of Defense News spells it out even
further.
“Beijing is pursuing…single-minded policies in the military
sphere. In the past year, (the Pentagon notes), China tested an
anti-satellite weapon, accelerated development of land-and-sea-
based ballistic missiles, and stepped up work on nuclear missile
submarines and mobile launchers.
“Beijing also has probed U.S. defense computer networks for
weaknesses, putting into action Chinese strategists’ contentions
that destroying an enemy’s cyber-infrastructure is as important as
physical attacks.
“A decade ago, only a handful in official Washington regarded
China as an emerging threat. Two who did were Andrew
Marshall, head of the Defense Department’s Office of Net
Assessment, and Michael Pillsbury, who wrote two books in the
1990s that argued that China was studying U.S. military
vulnerabilities to draw its own modernization roadmap.
“Over the years, both have been derided as alarmists, especially
by those who argued that military confrontation was
unimaginable for close trading partners….Besides, they said,
Chinese defense spending was a fraction of the U.S. total.
“Now, however, Marshall and Pillsbury appear prescient.
“China is spending plenty – certainly more than it admits – to
develop capabilities that go far beyond mere self-defense. It is
militarizing commercial technologies – abetted by decades of
close trade with European and other nations on ‘non-lethal’
defense systems – and embracing asymmetric approaches to
future war….
“As a nation known for detailing its strategic plans – for
transport, for industry – China’s silence on its military future sets
the stage for a destabilizing arms race….
“Does Beijing, as it claims, merely want a military
commensurate to its rising global economic status? Or is it, as
some fear, seeking the asymmetric teeth to secure economic
resources or dictate global economic terms by force, if
necessary?”
This last point is one I’ve been making for years, particularly
with regards to the fate of Taiwan. Today, the U.S. would
simply stand by while China moves in, and after, oh, about four
weeks of worldwide condemnation and suspension of trade, the
world, sans the U.S., would resume relations like nothing
happened.
One other item on the China front, this from China Daily.
According to a just released study by the Chinese Academy of
Social Sciences, between 1978 and 2006 “about 1.06 million
Chinese went to study overseas. Of those just 275,000 returned
home during the period.” The author of the report said:
“Against the backdrop of economic globalization, an excessive
brain drain will inevitably threaten the human resources security
and eventually the national economic and social security of any
country.”
The report “urged the establishment of a talent security alarm
system to monitor the flow of domestic talent.” Gee, I’d be kind
of bummed if I wasn’t given an ankle monitoring system of my
own. ‘Ya got no future, kid.’
North Korea: I wish there was something new to report here, but
the bottom line is Pyongyang continues to jerk everyone around
and get away with it.
Japan: Prime Minister Shinzo Abe is under intense pressure as a
result of two suicides of high-profile government officials within
days. Agricultural Minister Toshikatsu Matsuoka hung himself
after he became the target of a corruption scandal, and then
Shinichi Yamazaki threw himself from his apartment building
amidst an investigation into bid rigging while he was the head of
a government-affiliated company in charge of contracts for
forestry work.
Where the prime minister suffers, particularly in the case of
Matsuoka, is in his vocal support of a disgraced official which
shows an incredible lack of judgment. Abe admitted
responsibility for Matsuoka’s death. “As the one who appointed
minister Matsuoka to the post, I feel responsibility for the action
taken.” Abe’s party’s approval rating is now 36%, down 8% in
just one week.
Thailand: Ousted Prime Minister Thaksin Shinawatra and 110
members of his party were banned from political office for five
years. Thaksin was ousted in 2006 by a military coup on charges
of massive corruption.
Separately, at least 10 Thai soldiers were killed in another bomb
attack in southern Thailand by Islamic militants. I’m telling you,
especially my European friends, think twice about vacationing
here the next year or so.
Back to Thaksin, it hasn’t been a great stretch for him. Earlier,
he stopped for a meal at a Moscow McDonald’s and had his
briefcase stolen which contained his passport and $9,000.
Nigeria: The new president took over…Umaru Yar-Adua…and
pledged to quell the violence. He also asked for the people to
rally around his agenda for improving the infrastructure. But
since a majority of the people don’t believe the recent election
was free and fair, there is little hope for lasting peace.
Sudan: President Bush ordered fresh sanctions on the Sudanese
government in a final attempt to get it to stop the bloodshed in
Darfur. The sanctions target 30 government-controlled
companies and individuals accused of involvement in the
genocide. The U.S. had been working with the United Nations,
but with little movement on this front, Bush felt compelled to act
more forcefully. Too little, too late for 200,000 who have died
since 2003, but better than just sitting back and letting the likes
of Russia and China dictate terms. In the case of the latter,
Beijing continued to put up one roadblock after another because
it needs Sudan’s oil. As the Washington Post editorialized, “In a
just-concluded tour of the region, Chinese ambassador Liu Guijin
said he ‘didn’t see a desperate scenario of people dying of
hunger.’ He couldn’t have been looking very hard.”
Venezuela: Interesting development here as President Hugo
Chavez shut down RCTV, the country’s oldest private
broadcaster first founded in 1953. RCTV was the only
opposition network with national reach remaining. In 2002, it
broadcast calls to overthrow Chavez.
The dictator’s move is already backfiring on a broader front as
lawmakers in Brazil and elsewhere in Latin America have
criticized Chavez harshly. No one ever said the guy wasn’t an
idiot.
Mexico: No doubt, the treatment of Miss USA at the Miss
Universe pageant in Mexico City wasn’t good, but in a classic
example of ‘wait 24 hours,’ in this instance for cooler heads to
prevail, you have to focus on the Big Picture. Yes, Mexico has
been a loser nation in many respects, having squandered its
immense oil wealth, for starters. But while there are many in the
U.S. who are tired of the anti-Americanism on display at every
opportunity, this is the case throughout virtually all of Latin
America these days.
The bottom line is we need both Mexico and Colombia, in the
worst way, to balance out the likes of Venezuela and Bolivia, and
Mexican President Felipe Calderon has thus far been a stalwart
in the war against his nation’s drug cartels. Calderon has already
extradited 15 drug kingpins to the United States this year and
unlike all his predecessors, he thus far has exhibited incredible
courage in taking them on. In the first five months of 2007,
1,000 have died of drug-related violence and if Calderon is
unsuccessful in his efforts, the tally will grow much higher.
Tourism, for one, would dry up and we would have a totally
failed state on our border exacerbating all the existing problems
we have between our two countries. You think illegal
immigration is bad today? Believe me, it can get much, much
worse.
As it is, the Wall Street Journal reported that Acapulco already is
becoming known “more for severed heads than for coconut-rum
drinks.” So while many in Mexico blow off steam at events like
the Miss Universe pageant, the White House must bite its lip and
support Calderon as much as possible…and quietly. We need
him on our side, now more than ever.
Spain: Authorities arrested 15 North Africans, including 13
Moroccans, who were members of a cell that was allegedly
sending money and fighters to different terrorist organizations in
North Africa and the Middle East.
Ukraine: A crisis was averted, for now, as the two Viktors,
President Yushchenko and Prime Minister Yanukovych, agreed
on early elections for Sept. 30. We were just hours from
probable bloodshed last weekend as thousands of Interior
Ministry security forces were on the move to Kiev under the
orders of Yushchenko. It was the Interior Ministry that had
played a critical role in the 2004 Orange Revolution.
Random Musings
–President Bush did a total about face on global warming,
Thursday, in an attempt to mitigate the flak he will be taking at
the G-8 summit this week.
“Science has deepened our understanding of climate change and
opened new possibilities for confronting it,” he said. “By the end
of next year, America and other nations will set a long-term
global goal for reducing greenhouse gases.”
Germany and the European Commission, however, were furious
because Bush appeared to be opening a new process that would
circumvent existing negotiations at the UN, as the president is
seeking a series of multilateral meetings, including the likes of
China and India, to explore separate emissions targets.
Now this is almost laughable. Not because I disagree with Bush
(on the contrary I’m glad to see him say this), but I can’t help but
point out statements I made all the way back in 2001. At the
time I was a lone wolf among my fellow conservatives and the
following are examples of how Boy Genius, Karl Rove, ill-
served not just this president, but the country.
WIR 3/31/2001
“Over 100 nations signed (the Kyoto Accords of 1997) and the
U.S. agreed to the terms in principle that call for the U.S.,
already responsible for 25% of the earth’s greenhouse gases, to
begin cutting back on emissions. This week President Bush said
the U.S. will renege on the agreement.
“Bush has made a huge mistake. Heck, its Politics/Diplomacy
101. He could have stalled for months, even years, parceling out
a little here and a little there, just enough to please some folks
and keep it off the front page. Instead he blew the issue wide
open. The excuse the Administration has given is a good one; we
have an energy crisis in this country, the economy is suffering,
and the last thing we want to do is increase the costs of doing
business. Fine. We can agree on this. But as I noted in the
beginning of this review, we’re all in this new era of
globalization together. The president needs to at least act like he
knows it.”
WIR 4/21/2001
“Now you know why I thought the Bush Administration’s
handling of the Kyoto Accords a few weeks ago was such a
disaster. That set the tone for the current debate over the
environment and now they couldn’t be backpedaling faster on all
manner of issues…and it was all so preventable. The
Republicans are doomed in 2002 if they don’t repair the breach.
This is a topic that resonates with the soccer moms. And note to
the Wall Street Journal. You guys couldn’t be more wrong on
this one. Heck, Corporate America is taking the lead and
changing its own policies. They aren’t waiting around
for Washington to act. All I’m saying is keep the lines of
communication open.”
I wrote a lot on this topic back then and it was about foreign
policy more than climate change. In all my travels, both then
and now, I can’t begin to tell you how many conversations I’ve
had with Europeans, in particular, on this singular decision from
back in 2001 that shaped public opinion. True, Republicans won
in 2002 and 2004 (and in this respect I was wrong), and we now
know conclusively the president’s stance on the issue wasn’t the
reason why. But our standing around the world was hurt, big
time, and this clearly impacted our ability to shape a stronger
coalition when we went into Iraq, for starters.
It wasn’t about whether or not Kyoto is a good treaty. It isn’t.
It’s deeply flawed. But this incompetent White House didn’t
understand how to play the game and instead immediately came
off, just months after assuming office, as an arrogant bunch of
jerks.
–I have to admit I’m all over the board on the immigration issue.
I’ve seen my own community change drastically in just the past
five years, and not for the better; though at the same time I’ve
long touted success stories such as that of New York City.
But these days, I increasingly get a kick out of the standard
statement “We don’t have enough Americans to fill unskilled
jobs.”
Of course we do. Start with the worthless rapper generation in
the inner cities of America. My blood was boiling as I read a
piece by Andrew Jacobs in last Sunday’s New York Times on
the almost impossible task faced by Newark, New Jersey’s
police, an experience that can be extrapolated all over the
country.
Just as in the “60 Minutes” story of a few weeks ago, the issue is
how the hip-hop culture’s “stop snitching” mantra has become
ingrained into the heads of these dreadful losers.
Jacobs cites Capt. Sheilah Coley, “the commander of the blood-
soaked Fifth Precinct.”
“I don’t know what frustrates me more,” Captain Coley said.
“These knuckleheads killing each other, or the residents who
won’t cooperate with my officers.”
Then there’s the case of Atlanta Falcons quarterback Michael
Vick, who faces possible indictment on charges of dogfighting.
This story is beyond despicable, but what makes it worse is that
it’s coming to light there is a large segment, again, in the hip-hop
community that for some sick, twisted reason glorifies this
“sport.” And wait until America fully understands that the
leaders come from the NBA and NFL, though we aren’t talking
Peyton Manning or Steve Nash, if you catch my drift.
So, yes, we do have enough Americans to fill many of our
unskilled jobs. But a lot of those eligible would rather pursue a
life of crime, debauchery and cruelty.
–I watched Democratic presidential candidate Bill Richardson
on “Meet the Press” last Sunday and I know one reader at least,
Scott P., who will be pleased by my conclusion.
In all my years of watching this program, I have never seen a
worse performance than the New Mexico governor’s. I just kept
thinking, “What a mess.” If Richardson was gaining a bit of
traction, as some polls suggested, I can guarantee any positive
momentum was stopped dead in its tracks.
So then I read a piece by Margaret Carlson for Bloomberg News
and it turns out I wasn’t the only one watching who reached the
same conclusion.
“No person of sound body and mind would be inside watching
television on a holiday weekend [hey, watch it Margaret!], so
you can discount my conclusion if you’d like. But while
everyone else was out playing the sport of their choice, I saw…
Bill Richardson get rattled, come undone and finally condense
into a puddle on the studio floor of ‘Meet the Press.’”
Richardson can also kiss any hopes of being the running mate
goodbye. I mean for crying out loud he couldn’t even give a
straight answer when asked what his favorite baseball team was.
–I watched HBO’s “Bury My Heart at Wounded Knee” (superb,
by the way) and right in the beginning, there he is, President Fred
Thompson. Well, actually, Thompson was playing President
Grant, but I’m surprised how this week everyone ignored this
and instead continued to focus on his role in “Law and Order.”
Then again, U.S. Grant wasn’t one of our better presidents,
though all the scandals in his administration had little to do with
him directly, Grant being an honest man..…but I digress.
So Fred is running. Right off the bat, John McCain can exit
stage right of center, Thompson being a younger version of the
Arizona senator that I supported with my campaign dollars, a
move I’ve regretted ever since. I love McCain, it’s just that his
time has passed, sadly.
–Long-time Bush adviser Dan Bartlett resigned. Good riddance.
A total B.S. artist.
–Happy 77th Birthday to Clint Eastwood. I watched his “Letters
from Iwo Jima” this week and it’s an excuse to also thank him
for leaving future generations a phenomenal account of this
battle as well as an accurate presentation of ‘the other side.’
What an amazing career Clint has had…a real American
treasure.
–The situation in my home state of New Jersey grows worse by
the day. The state has been investigating the $80 billion pension
system and it appears officials missed at least $8 billion in
payments since 1997, which would mean officials misled bond
investors during this time.
–Yes! Gordon Holmes, a 55-year-old lab technician from
Yorkshire, has footage of the Loch Ness monster. “I couldn’t
believe my eyes when I saw this jet black thing, about 45 feet
long, moving fairly fast in the water.” Marine biologist Adrian
Shine (now that’s a classic name for a straight to video Sci-Fi
Channel character) hopes to properly analyze it in the coming
months.
No need for analysis, Dr. Shine. It’s real…and it ain’t no eel, I
tell ya. Why even the stodgy BBC aired the video. Now if we
could just film it devouring a bunch of pleasure crafts, we’d have
conclusive proof.
–Finally, StocksandNews had its cassette recorder at the Scripps
National Spelling Bee and captured the following as contestant
Seo Su Mi stepped forward.
“Your word is ‘dirtball.’”
“Dirt-ball….dirt-ball……..can you use it in a sentence, please?”
“Andrew Speaker, the 31-year-old Atlanta lawyer who ignored
warnings from federal health officials after being diagnosed with
an extreme form of tuberculosis and flew anyway, thus
endangering passengers around him, is a dirtball.”
“Thank you…dirtball…d-i-r-t-b-a-l-l…dirtball.”
—
Pray for the men and women of our armed forces.
God bless America.
—
Gold closed at $676
Oil, $65.08
Returns for the week 5/28-6/1
Dow Jones +1.2% [13668]
S&P 500 +1.4% [1536]
S&P MidCap +2.8%
Russell 2000 +2.8%
Nasdaq +2.2% [2613]
Returns for the period 1/1/07-6/1/07
Dow Jones +9.7%
S&P 500 +8.3%
S&P MidCap +14.6%
Russell 2000 +8.3%
Nasdaq +8.2%
Bulls 53.8
Bears 21.5 [Source: Chartcraft / Investors Intelligence]
NOTE: The site will be down for maintenance from
approximately 7:00-10:00 p.m. ET on Wed., June 6.
Next time…a “Black Diamond” commentary. What’s a black
diamond review? Let’s just say you may want to have your
security blanket handy.
Brian Trumbore
