[Posted 7:00 AM ET…Las Vegas]
Gloom and Despair
So seven of us from high school spent some time in Vegas this
week celebrating our collective 50th birthdays. It appears most of
us will survive to actually see them (mine is yet to come) after
having a little fun here. OK, a lot of fun, but if you’re looking
for specifics, not gonna go there…wouldn’t be prudent.
As you all know by now, not only is Las Vegas known for hot
action requiring an ample supply of cash, it’s also ground zero
for the real estate bubble. So on Thursday afternoon, after the
last of my friends had departed for points east and west, I hopped
in a cab, armed with an address outside the Strip to get a better
handle on the housing crisis here. Ironically, my driver had his
own place where we were headed so he provided some good
color.
For starters, though, I haven’t been to Vegas in about 11 years
and flying in I was amazed how far the sprawl stretches
compared to back then. But as new casinos and resorts were
built, that helped fuel a demand for housing that then got way out
of control. Prices peaked by most measures in 2006 and in the
case of the median home price have declined 21% since then
(17% since August) and also 21% for condos from their peak in
January ‘07. The pace of the decline is staggering and with all
manner of folks now facing negative equity and an inability to
refinance as their mortgages reset, it spells trouble.
Nevada is No. 1 for foreclosures these days, with 7 of the worst
100 zip codes in the nation for December represented in the Las
Vegas Valley alone. So driving along to Huntington-
Manchester, about 20 minutes from the Strip, you just see one
development after another with For Sale signs and new strip
malls where you can’t foresee a day when they are filled with
actual tenants. My cabbie (who thought I was an interested
buyer and didn’t know my true intentions as a humble reporter)
kept pointing out with pride all the new buildings that were going
up, or were planned, while I kept thinking ‘This is an
unmitigated disaster.’ I can guarantee that if I went back in two
years, the same strip malls won’t be filled with tenants and more
condo and housing projects will be in bankruptcy.
The local paper this week was filled with such stories, including
a number of luxury condo projects where the developers have
stopped construction and buyers can’t get hold of their deposits.
There was one auction listed where bidding on about 80 units
was starting at $79,000 for units previously listed at $233,000.
No doubt, if you had been fortunate to wait there are good buys
out there, but you have to understand two things: your
surrounding area may be blighted and don’t expect the value to
suddenly shoot up. A leading Houston-based study this week
said prices in Las Vegas won’t bottom until early 2009, but it
didn’t state that from there we just sit, no V-shaped bottom in
other words.
The bulls say, however, that with some huge new projects slated
to open in the next year, particularly on the Strip, that means
more jobs and increased demand for housing, so the bloated
inventory of homes will be worked down over time. That indeed
would be the case, but you’re also hearing of all manner of
projects facing increasing difficulties, such as the $3 billion
Cosmopolitan Resort Casino that I’ve written of before where the
developer recently defaulted on a $760 million pre-development
loan. One telltale sign, my friends and I all week identified one
crane that appeared to be in operation. The rest, sitting atop
massive shells, were silent.
Las Vegas says it’s in the midst of a $35 billion spending binge
to build 40,000 additional hotel rooms by 2012 (including a new
Trump condo-hotel of 1,282 units opening next month), but I’ll
believe it when I see it, and it also needs to be pointed out that
this town is expensive; very expensive. As the consumer
continues to slow their pace of spending, trips to Vegas,
particularly of the luxury variety, will become less and less
frequent.
As for Huntington-Manchester, a K.B. Home development of
about 1,400 single-family homes featured in BusinessWeek
recently, it was very pleasant, with a seemingly normal number
of For Sale signs that I could see. But as my driver said, he
bought in 2004 and is underwater big time already, with his five-
year ARM looking to reset in 2009. He seemed like he had a
good head on his shoulders but I couldn’t help but plead with
him, “Start talking to your banker now. Get this worked out
soon. Trust me.” He nodded his head but I’m not sure he was
really listening.
Nationally, homebuilder Toll Brothers, in issuing its latest
earnings report this week, said it’s “not seeing much light at the
end of the tunnel,” while D.R. Horton reported revenues declined
from $2.8 billion to $1.7 billion a year ago, another telling sign
of the brutal environment in the sector. And Crain’s NY
Business noted that even a $15 million East Hampton home is
now in foreclosure. In fact 80 homes in the Hamptons are in the
same boat. It’s not just subprime anymore.
And, to beat a dead horse, the negative wealth effect is clearly
beginning to hit. I said it would take some time, which was part
of my 2008 recession forecast back in ‘06, but January was the
worst ever for retailers for the month, with Wal-Mart eking out a
0.5% gain in same-store sales, while the likes of Target,
Nordstrom’s, J.C. Penney, Kohl’s and Macy’s all reported
declines, many in the 6%-8% range.
Coincidentally, there has been a sharp slowdown in credit-card
debt as consumers tighten their purse strings. And you’ll find
increasingly that this is global, sports fans, though each country
is in different stages of retrenchment.
On housing and spending I note this item from the Sydney
Morning Herald.
“Kim Quick, senior valuer at property advisers Herron Todd
White, said increasing numbers of people were stuck in a
housing trap where their home was no longer worth what they
paid for it because it was over-valued when they bought it….
“The spiraling home loan crisis is causing people to rely
increasingly on credit cards and other forms of debt for everyday
expenses, which is adding to their financial problems. Personal
bankruptcy orders in (New South Wales…where Sydney is) rose
by 23 percent between 2006 and 2007.”
Credit-card debt totals here are staggering, up to $120,000US in
some cases. You’re reading that right.
Elsewhere, Cisco Systems CEO John Chambers said his
company saw a dramatic slowdown in January. “We are seeing
our U.S. and European customers become increasingly cautious,”
a rather predictable statement from a man who just about six
months ago was exceedingly bullish about the best global
economy he could ever remember. [Cisco is, however, still
doing well but revenue is projected to increase 10% the next
quarter vs. a normal goal of at least 12%-15%.]
Yes, the world slowdown is taking shape on the heels of my
long-called for global real estate bubble. Many of you saw the
front-page story in the Wall Street Journal this week on problems
in the U.K., which should have looked familiar to readers of this
space. And wouldn’t you know but the number of economists
falling into the recession camp back here is growing by the day.
It’s also why the economy, not Iraq or immigration, is the
number one concern of Americans these days and for this reason
Congress has acted with lightning speed on an economic
stimulus package. Many of you will receive checks of $600
($1,200 for a couple), or $300 for some senior citizens. Others
may qualify for a higher mortgage as limits with Fannie Mae and
Freddie Mac have been raised, as long as you qualify.
Will you spend that check? Will you be enticed to buy a bigger
home? Can you afford to? Merrill Lynch economist David
Rosenberg, who has been dead right in his forecasting, says
home values are going to decline another 25%. So do you just
wait longer? Do you feel secure in your job? Have you saved
enough in emergency funds in case the worst happens?
Americans have to think about these things everyday and many
of us look to Washington for leadership, where little can be
found. In Britain they yearn for another Churchill, I imagine,
someone who inspires. There really aren’t a lot of inspiring
figures around the world these days when you think about it; not
that the emergence of one can have too much of an impact when
it comes to a global real estate bubble that simply needs to run its
course. It’s time we paid the piper, and he’s growing impatient.
Street Bytes
–After a powerful rally two weeks ago, this past one saw the
return of dreadful price action as the major averages all swooned
about 4.5%, with the Dow Jones and S&P now off 14% and
15%, respectively, off their highs and the Nasdaq off 19% as it
bounces around the 20% mark that denotes a bear market. The
major culprit was the ISM’s reading on the service economy,
41.9 when 53 was expected. Anything under 50 denotes
contraction, or recession-level activity, though there were some
who said this had to be a mistake because ‘misses’ like this are
totally unheard of. But the ISM said the report was accurate and
was not revising it upwards.
It also doesn’t help the mood when the bond insurers continue to
have problems, despite some of the more high-profile ones
raising a bit of capital, while it appears the investigation into
subprime mortgages, involving some of our biggest names such
as Merrill Lynch, appears to be heating up with every
authoritative body wanting a crack at it.
–Interesting note from Alan Abelson’s column in Barron’s. The
above mentioned David Rosenberg of Merrill Lynch points out
“in the 2000-2002 bear market, there were no fewer than 16
rallies of at least 5% in the S&P, each lasting on average about a
month, and no fewer than 35 bounces of 5% or more in the
Nasdaq (which still managed to wind up losing nearly 80% of its
value).” This week saw the positive results of another bounce go
out the window.
–U.S. Treasury Yields
6-mo. 2.10% 2-yr. 1.93% 10-yr. 3.64% 30-yr. 4.42%
Rates declined further on the short end out of fear, but rose on
the long end out of concern inflation is becoming more and more
entrenched.
–Speaking of inflation, the price of wheat hit one record after
another, $10.93 a bushel and up the limit, or 16% this week
alone. It’s all about surging world demand, the lowest U.S.
inventories in 60 years, and droughts and record rains in key
producer nations Canada and Australia.
–Farmland in Iowa, Nebraska and elsewhere rose 20%-23% in
2007, thanks in no small part to the demand for grain and corn;
read ethanol, too.
–A number of stories on the biofuel controversy this week as
further studies are pointing out that in converting natural land for
crops, even beyond the known effects of the destruction of rain
forests, the whole process is actually carbon negative, not
positive, in terms of global warming. The industry begs to differ.
–President Bush unveiled his latest budget, the first one to call
for over $3 trillion in spending ($3.1 trillion). The deficit is
projected to shoot back over $400 billion the next two years, but
the president proposes $208 billion in entitlement savings over
the next five years and there is no way that will fly in an election
year. But I won’t waste a lot of space on the topic because we
are a long ways from any resolution in Congress and the hotter
topics such as the alternative minimum tax and war funding.
–Since Lucent’s North American headquarters is blocks from
my home, I can’t help but notice when the combined Alcatel-
Lucent reports a further $3.8 billion loss and the suspension of its
dividend as more Lucent assets are written off. What a sad, sad
story for the employees and retirees here who continue to see
their pension and healthcare benefits slashed. It also obviously
doesn’t help my local real estate market.
–The next round of consolidation in the airline industry is
getting closer as Delta is expected to hook up with Northwest (3rd
and 5th largest), which would then be followed by United (UAL)
and Continental (2nd and 4th largest). All I care about is the
treatment of my frequent flyer miles…and my luggage arriving
where it should. In terms of being on time, ¼ of all domestic
flights failed to arrive when scheduled in 2007, the 2nd-poorest
performance on record.
[Separately, UAL announced it will charge $25 to check in a
second bag due to the rising cost of jet fuel. More weight equals
higher fuel usage.]
–Interesting tidbit in USA Today. The number of U.S. ski
resorts has declined from 727 in 1985 to 485 today.
–Congratulations to my old friends at PIMCO Funds for garnering
the No. 1 ranking for fixed income in the annual Barron’s fund
family survey. Rock and roll time for the wholesalers.
–Barron’s Andrew Bary had a piece on Blackstone Group and
the battle between the bulls and bears over its stock. Recall the
IPO of the private-equity giant run by Stephen Schwarzman
came out at $31 and is now trading around $18. So is it
undervalued?
Mr. Bary writes of “the danger in Blackstone’s reliance on
performance fees, as well as the possibility that these fees,
derived mainly from gains in the firm’s private-equity and real-
estate funds, could dry up if difficult conditions persist in the
economy and financial markets.”
But what I didn’t know is that the Blackstone funds have a “claw
back” feature, “requiring the company to refund investors
already-booked incentive fees if subsequent investments suffer.”
So Blackstone could earn $200 million on one deal, but if
another deal goes bad, could lose a like amount. So the $200
million would then be repaid to the clients; something important
to be aware of when analyzing potential earnings for an outfit
like this. And of course the private-equity world is fraught with
danger these days in light of the fact over $200 billion in
proposed deals still haven’t been consummated, which also
heavily impacts those investment banks involved in the financing
that are now left holding the bag.
–Speaking of proposed deals, Yahoo is still mulling over the $31
Microsoft bid, with major Yahoo investors looking for more.
The concern is that institutions (such as mutual funds) may own
both and if the value of their Microsoft holding goes down (as it
has since the announcement), can they then offset it with the gain
in Yahoo. On the other hand, Yahoo may explore opportunities
with Google.
–This is scary. Investigators probing the crash landing of the
British Airways Boeing 777 aircraft at Heathrow the other week
are looking into the idea that there was fuel-system
contamination, perhaps from small particles of ice. As reported
by Andy Pasztor and Susan Carey of the Wall Street Journal:
“Such a finding could call into question longstanding aviation-
industry assumptions and safeguards regarding jetliner fuel
systems and internal icing hazards on some long-distance flights,
particularly in extreme cold conditions.”
Investigators increasingly suspect some kind of blockage
interrupted the fuel flow, causing the simultaneous shutdown of
both engines. But tests showed the jet fuel used on this and other
flights that day met specifications.
–If you are technically/mechanically inclined, you may want to
consider the wind farm industry. With all the turbines going up
(3,200 installed last year alone in this country), someone has to
maintain them and the companies are having trouble finding
qualified workers. You need a knowledge of hydraulics,
computers, even meteorology and the willingness to climb 200
feet in the air in all kinds of weather. Wind energy graduates
from training school generally earn $20 to $25 an hour, with
supervisors earning far more.
–Advertisers for the Super Bowl should be happy as a record
audience watched the game, 97.4 million, with over 100 million
viewing it late in the contest. Nice play by Eli and David Tyree,
eh?
–Lastly, what an interesting story concerning the promotion of
Pfizer’s anti-cholesterol drug Lipitor and spokesman Dr. Robert
Jarvik, inventor of the artificial heart. Congress and the FDA are
now involved because it seems there are serious concerns about
Dr. Jarvik’s qualifications to pose as an expert. For starters,
while he holds a medical degree he is not a cardiologist or
licensed to practice medicine, rather important items since
Lipitor is the world’s single best-selling drug. And here’s the
payoff…Pfizer’s ad agency used stunt doubles in those spots
where Jarvik is rowing.
Foreign Affairs
Iraq: Grand Ayatollah Ali al-Sistani hasn’t been seen in public
since 2004 and as he remains the most influential Shiite cleric,
there are questions who will replace him as his health is clearly
deteriorating (Sistani is said to be 79 or 80). Moqtada al-Sadr is
one obvious possibility.
This week Republican presidential frontrunner John McCain
reiterated we will have troops in Iraq just like we do today in
Kuwait, South Korea and Bosnia. Of course Hillary Clinton and
Barack Obama say otherwise were they to be in the White
House.
Afghanistan: Secretary of Defense Robert Gates said of NATO,
“I worry a great deal about the alliance evolving into a two-tiered
alliance, in which you have some allies willing to fight and die to
protect people’s security and others who are not.” Currently,
while 26 nations have some form of presence in the country, only
the Americans, British, Aussies, Canadians, Dutch and Danes are
really putting their troops in harm’s way. The Germans are the
biggest disappointment in not wanting to step up and share the
load. May I remind my friends there that Frankfurt and Berlin
are as big a target as New York, London or Madrid.
Pakistan: Scotland Yard has concluded that Benazir Bhutto was
indeed killed by the suicide bomb blast and not an assassin’s
bullet, just as the government initially maintained. But in the
run-up to the February 18 parliamentary election, it is expected
that Bhutto’s party will win, profiting from a sympathy vote,
while another party led by former prime minister Nawaz Sharif
should do well too. The party of President Musharraf, however,
is increasingly split as many leaders opt to defect.
In the battle against the Taliban, a truce was declared between
the Army and insurgents in the lawless tribal area, running
directly counter to what the Bush administration demands, an
ongoing crackdown.
Iran: Parliamentary elections remain on for March 14, while Iran
launched a rocket this week designed for its first locally-made
satellite. It could just as easily be used to carry a nuclear
warhead.
Israel: A suicide bomber got through to kill one Israeli woman in
Dimona, the first such attack of the year after just one in 2007.
There were 53 suicide attacks in 2002. What was truly
terrifying, though, were the pictures of the discovery of a second
bomber, who was wounded and trying to detonate his bomb belt
before a doctor treating him understood what the situation was.
Troops killed the terrorist before he could succeed.
Lebanon: Watch this coming Feb. 14, the third anniversary of the
assassination of Rafik Hariri. His son, parliamentary leader
Saad, is calling for a mass protest against Syria and Iran for
continuing to meddle in the nation’s affairs. I’m uneasy about
the consequences of this.
Russia: Vladimir Putin accused the West of unleashing a new
arms race on Russia’s borders and said “we are forced to
retaliate.”
China: The nation is slowing returning to some semblance of
normality following the awful series of winter storms. The city
of Chenzhou, some four million, went 12 days without power, at
least, as gas stations closed and banks ran out of money. I was
also reading a story about some of the horrific train journeys for
the migrants who couldn’t move for days. When the tracks were
finally cleared, in some cases you had 60 people crammed into a
compartment designed for 20 and the toilets didn’t work. If that
isn’t the ultimate nightmare, I don’t know what is. As for the
economic cost, it is incalculable and you’re unlikely to get the
truth out of the government anyway.
Meanwhile, regarding Taiwan, the government there has
announced it will proceed with two referendums on March 22 on
joining the United Nations, the same date as the presidential
election. Taiwan hasn’t been a member of the UN since 1971,
when it lost its seat to China. One referendum will ask whether
voters “agree that the government should seek to join the UN in
the name of Taiwan to express Taiwanese people’s will and
enhance Taiwan’s international status.” The opposition KMT,
favored in the presidential vote and wishing closer ties with
China, will propose whether the island should seek to “return to
the UN with a pragmatic and flexible approach.”
The U.S. strongly opposes both parties’ proposals, calling it a
“provocative policy.” Of course you know where China stands.
And, separately, Taiwanese President Chen Shui-bian
inaugurated a runway on one of the disputed Spratly Islands,
insisting the archipelago belonged to Taiwan rather than China
and other Asian nations seeking them, including Vietnam and the
Philippines.
Mexico: Give President Felipe Calderon credit for what seems an
almost impossible task, cracking down on police corruption.
Army troops have confiscated weapons from 300 police along
the Texas border who were under investigation and hundreds of
drug suspects have been arrested. But one of the big problems is
police pay. In Mexico City, a beat officer earns $700 a month,
while a government clerk makes $900.
Australia: The government released gruesome pictures of
Japanese hunters harpooning whales and dragging their bleeding
carcasses onto a ship near Antarctica, calling it evidence of the
“indiscriminate” slaughter of the animals. One photo showed a
mother and its calf being killed, but Japan denied these were
from the hunt and accused Australian officials of spreading
propaganda that could damage ties between the two. Australia’s
Environment Minister Peter Garrett countered: “To claim that
this is in any way scientific is to continue the charade that has
surrounded this issue from day one.”
Kenya: In another depressing sign of a country sliding into the
abyss, the Peace Corps announced it is pulling its remaining
volunteers. At least 1,000 Kenyans have died in the violence
thus far with another 300,000 forced to flee the ethnic cleansing
taking place in some cities and villages.
Random Musings
–After Super Tuesday, one thing is abundantly clear, it should be
a close presidential election between John McCain and either
Hillary Clinton or Barack Obama. But first, as this column is a
running history I do need to note some results in a few key states.
New York…Clinton over Obama, 57-40. McCain over Romney,
51-28.
New Jersey…Clinton, 54-44. McCain, 55-28.
California…Clinton, 52-42. McCain, 42-34.
Illinois…Obama, 65-33. McCain, 47-29.
Georgia…Obama, 66-31. Huckabee 34 McCain 32 Romney 30.
Mitt Romney immediately dropped out, having failed to connect,
while for his part Huckabee vowed to stay in a little while longer,
buoyed to a certain extent by the fact he took five states;
Georgia, Alabama, Arkansas, Tennessee and West Virginia. The
emergence of Huckabee as a legitimate candidate clearly killed
Romney as the latter lost the battle for the conservative hearts
and minds to the former Arkansas governor.
On the Democratic side, what is so confusing is the delegate
count with every news service coming up with different tallies.
Using the AP’s calculation, Hillary leads Obama 1,045 to 960
with 2,025 needed to win nomination. Hillary, though, is
suddenly low on cash and was forced to lend her campaign $5
million. Donations have since picked up some.
Back to the delegate issue, since the race promises to extend
another few months, with Maryland and Virginia among the big
contests next week and Ohio and Texas slated for March 4, you
suddenly have this issue of the superdelegates, 796 strong, who
are usually elected or party officials and who have the right to
vote for the party nominee come convention time. This was a
concept proposed decades ago and in the past they’ve been
irrelevant, choosing to go along for whichever candidate their
state or congressional district preferred. But this is the last thing
Democrats want; a nominee chosen in smoke-filled rooms after
all the people have voted.
As for McCain, some conservatives are apoplectic over his
apparent nomination. Following is a little assorted opinion.
Daniel Henninger / Wall Street Journal
“The fear is that one of the strongest impulses in a McCain
presidency will be payback, and that he might sell out
conservatives on taxes and the judiciary. That is possible,
though by now it would require an act of deep duplicity by Mr.
McCain….
“The idea of a concession on national security by conservatives
is especially troubling. After six years of blood and treasure, and
with the counterinsurgency working, to consciously turn over
Iraq to Hillary Clinton or Barack Obama…words fail.
“This isn’t an apologia for the senator. Unlike Reagan, he is too
self-preoccupied. There is a danger his presidency would be
mainly about legacy, and therefore disorganized. This is a call to
play the cards on the table. Conservatives are not in the
wilderness. They should get back in the game.”
Editorial / L.A. Times…in endorsing McCain [from a liberal
viewpoint]
“McCain’s suitability for the presidency at this moment begins
with how he would conduct the nation’s foreign affairs. As
noted, we do not support his determination to fight on in Iraq, but
we welcome his insistence that America’s military posture be
matched by its moral purpose. Alone among Republican
candidates, he would close the detention center in Guantanamo
Bay, Cuba, which has become an international symbol of U.S.
arrogance. He has waged a principled and persistent effort to
end the Bush administration’s embrace of torture as a weapon of
war, a frightening concession to terrorism and an abdication of
basic American values. He alone among the Republican
candidates has condemned torture in all its forms; he alone
among all the candidates in this race has endured it….
“McCain is committed to free trade, a welcome alternative to the
protectionist views of leading Democrats. He is clear-eyed about
the imperiled futures of Social Security and Medicare, and
though he has yet to say precisely what he’d do about those
looming crises, he has placed them near the top of his domestic
agenda. He has opposed pork-barrel spending in the form of
undisclosed earmarks and has been a lonely, determined voice
against the government handing out cash to stimulate the
economy.
“Then there is an issue on which McCain has broken from the
mainstream of his party and on which the party would do well to
rejoin him: immigration. As the Republican field indulged this
campaign season in an orgy of ignorance on immigration,
McCain stood his ground, sponsoring legislation that would
provide a route to citizenship for the 11 million to 12 million
immigrants here illegally. His rivals have argued for mass
deportations and strong border fences. McCain too backs
toughened enforcement, but he has defended the humanity of
those at the center of this debate. ‘We are all God’s children,’ he
says with conviction….
“We do not agree with John McCain on every issue. But we
admire his conviction and stand with him on those issues that
matter most right now.”
But then you have the following on McCain’s temperament,
something that bothers me even as I continue to support him.
Editorial / Wall Street Journal
“(It’s obvious) McCain takes politics personally, which can
shade into self-righteousness when people oppose his positions.
One of our colleagues called Mr. McCain’s performance on
Wednesday (in the debate ten days ago) a ‘victory snarl,’ which
was about right. Should the Senator sew up the Republican
nomination, none of this is the way to unite his party, or to
reassure conservatives that his fall campaign will be about more
than his personal honor or renegade habits of mind.”
Peggy Noonan / Wall Street Journal
“Mr. McCain seems to me to have two immediate problems, both
of which he might address. One is that he doesn’t seem to much
like conservatives, and never has. They can’t help admire him,
but they’ve disagreed with him on so many issues, and when
they bring this up his demeanor tends to morph into the second
problem: He radiates, he telegraphs, a certain indignation at
being questioned by people who’ve never had to vote in
Congress and make a deal. He’s like Moe Greene in ‘The
Godfather,’ when Michael Corleone tells him he’s going to buy
him out. ‘Do you know who I am? I’m Moe Greene. I made
my bones when you were going out with cheerleaders.’ I’ve
been on the firing line, punk. I am the voice of surviving
conservatism.
“This doesn’t always go over so well.”
But on a more positive note, here’s an opinion on the election in
general from Ralph Peters / New York Post.
“Just stop. For a couple of minutes, stop listening to the vanity-
stricken talking heads, the madcap ideologues and the party
hacks who believe you should jump to attention when they tell
you who to vote for.
“Stop and look at this primary season. In both parties. Set aside
your political preferences for a moment and consider the field of
candidates.
“As Americans – Republican, Democrat or Independent – we
should all be proud. This is, by far, the most all-American
primary season we’ve ever had.
“Who’s running for a chance to run? A woman. An evangelical
Christian. A black. A war hero. A Mormon. A William
Jennings Bryan populist. And, although they recently dropped
out, we also had a new son of the Old South and an Italian-
American mayor in the mix.
“Intolerant zealots howl, as they always do, that we’re facing
doomsday. But we, the people, have never had such a
remarkable range of choices during the quadrennial process of
paring down the also-rans until we pick a president.
“That doesn’t mean that every candidate deserves to be
president. We each have our favorite horse. I support Sen. John
McCain – for the straightforward reason that I believe he’d make
the best president for all of America.
“But I respect the voters, Republican and Democrat, who’ve
thumbed their noses at the party machines to make this a real
race. We, the people, refused to let the back-room boys make our
choices for us.
“This is democracy at its best.”
But as I noted above, let’s hope the back-room boys don’t decide
the Democratic nominee.
–USA Today had an editorial concerning the accidental
overdose death of actor Heath Ledger. Prescription drug abuse is
at least as dangerous as illegal street drugs, these days, as
unintentional poisoning deaths in the USA, 95% of them drug
overdoses, nearly doubled from 1999 to 2004, the latest year in
which data is available. “During that time, prescription drugs
overtook cocaine and heroin combined as the leading cause of
lethal overdoses.” In fact, drug overdoses of all kinds were the
second-leading cause of accidental deaths, after automobile
crashes, in 2004. Ledger had six kinds of painkillers and
depressants in his system, the coroner found.
–Not a good time to be involved in the Gambino crime family as
over 60 members, many from the top, were arrested in both New
York and Italy in a coordinated sweep. The family has been
decimated.
–The second deadliest tornado outbreak since 1900 killed at least
59. Try and pick a community affected and help in any way you
can. Or give to the Red Cross. The local fire departments and
EMS units are often a good cause if vehicles or headquarters
were damaged.
–Retired ABC News reporter John McWethy, 61, died in a freak
ski accident in Keystone, Co., as he missed a turn and hit a tree,
chest first. This happens far more than most know.
–And some last Vegas tidbits:
Derek Jeter was seen playing $200 to $800 hands of blackjack at
the Playboy Club (Palm), while we struggled at times to find a
$15 table.
Celine Dion recently closed out her run at Caesar’s, 717 shows
that generated $400 million in ticket sales plus $100 million in
sponsorships and merchandise…or about $697,000 per show.
But now Cher is hoping to fill the bill, having signed a three-year
contract. Cher is 61, by the way. Not the brightest bulb on the
planet, but you have to admire her flare for the dramatic.
Macao will overtake all of Nevada this year in terms of total
casino revenues, having passed the Vegas Strip last year ($10.4
billion).
Lastly, we went to the Cirque du Soleil “Love” show at the
Mirage. Absolutely spectacular and worth the $130 ticket. We
also learned from a cabbie that a ton of the performers are
seriously hurt, but the company does a good job of covering this
up.
—
Pray for the men and women of our armed forces.
God bless America.
—
Gold closed at $925
Oil, $91.73…Friday surge over production concerns in Nigeria.
Returns for the week 2/4-2/8
Dow Jones -4.4% [12182]
S&P 500 -4.6% [1331]
S&P MidCap -3.6%
Russell 2000 -4.3%
Nasdaq -4.5% [2304]
Returns for the period 1/1/08-2/8/08
Dow Jones -8.2%
S&P 500 -9.3%
S&P MidCap -7.5%
Russell 2000 -8.8%
Nasdaq -13.1%
Bulls 41.6
Bears 32.6 [Source: Chartcraft / Investors Intelligence]
Have a great week. I appreciate your support.
Brian Trumbore
