Wall Street and Health Care
I’m sick of the health care debate, because half the time it seems we’re talking about anything but the real issues as the “national conversation” bounces from government takeovers, to death panels, to insuring our gardeners (i.e., illegals), to the awful care being provided to New York Mets players (a parochial topic, but important nonetheless given the incompetent medical staff the team employs).
President Obama is about as unfocused on this issue as any president I can recall in my memory, yet this is what he wants to build his legacy on? I mean the other day he wrote (or rather his aides did) a totally amateurish op-ed in the New York Times that included the following:
“(Reform) will finally bring skyrocketing health care costs under control, which will mean real savings for families, businesses, and our government. We’ll cut hundreds of billions of dollars in waste and inefficiency in federal health programs like Medicare and Medicaid and in unwarranted subsidies to insurance companies that do nothing to improve care and everything to improve their profits.”
Ah, Mr. President? The campaign is over. You can get away with such drivel while speaking to a bunch of obese folks at the Iowa State Fair prior to the primary (I was there…I know) where everyone is just shaking their heads in approval because the Fried Sludge on a stick has dulled the brain, but not now. Talk specifics, for crying out loud, with real life numbers that the experts can then pick apart for accuracy. Not this garbage.
No wonder Obama’s approval ratings are tumbling, particularly on this very issue. In an NBC/Wall Street Journal survey from this week, for example, only 41% approve of the Obama plan, whatever it is, and 47% disapprove. A Washington Post/ABC poll from Friday has 50% disapproving.
Obama himself is also issuing statements like “Whether we have a (public option) or not is not the entirety of health reform,” but he’s allowed his dwindling legions to run with that very issue, a government option that he then appeared to be abandoning even though as I’ll reiterate below, reform should be about real-life specific items that must be fixed, today.
Editorial / Washington Post
“Maybe the White House meant to signal that it was backing away from its commitment to a ‘public option’ as part of new health insurance exchanges. Or maybe the hedging words of administration officials were over-interpreted on an otherwise sleepy Sunday morning in August. It doesn’t much matter, because, either way, the reality is that, if the Obama administration wants to get health reform done, it’s going to have to back away from the public option sooner or later – and it’s getting awfully late.”
It’s about political nose-counting, and getting 60 votes in the Senate, as much as anything else these days, and the votes aren’t there. Period.
David Ignatius / Washington Post
“Talking to (Dr. Denis Cortese, CEO of the Mayo Clinic) this week, I heard two themes that cut to the heart of the debate. First, he thinks Obama has made a mistake in moving toward the narrower goal of ‘health insurance reform’ when what the country truly needs is health system reform. Imposing a mandate for universal insurance will only make things worse if we don’t change the process so that it becomes more efficient and less costly. The system we have is gradually bankrupting the country; expanding that system without changing the internal dynamics is folly.
“Second, Cortese argues that reformers should stop obsessing over whether there’s a ‘public option’ in the plan. Yes, we need a yardstick for measuring costs and effectiveness. But we should start by fixing the public options we already have.
“Cortese counts six existing public options that should be laboratories for reform: Medicare, with its 45 million patients and a fee-for-service structure that all but guarantees bad medicine; Medicaid, with an additional 34 million beneficiaries; military medicine, through which government doctors deliver state-of-the-art care; the Department of Veterans Affairs, which has improved performance at its hospitals by embracing new technology; the ‘Tricare’ insurance plan for military retirees; and the Federal Employees Health Benefits Program.
“Adding a new public option for insurance, as congressional reformers are demanding, would be useful. But it’s not necessary now, and it is creating a poisonous debate that’s underperforming the more important reforms – which are in the delivery system, not insurance.
“If liberals really want to show they are serious, they should begin with our existing single-payer behemoths, Medicare and Medicaid. Cortese argues that the White House should mandate that, within three years, these programs will shift from the current fee-for-service approach to a system that pays for value – that is, for delivering low-cost, high-quality care….
“This ‘pay for value’ approach would amount to a cultural revolution in American health care. It would take our bloated system and make it cheaper and better….
“Obama has been campaigning furiously in this crazy summer of bogus debates about ‘death panels,’ but he’s losing traction. Reformers aren’t helping by drawing a false line in the sand over a ‘public option’ when we already have one, in Medicare, that provides a laboratory for systemic change. I hope that Obama understands that his health plan is in mortal danger – and that it’s time to call for the doctor.”
Back on 7/11/09, I quoted from an op-ed in the New York Times by former Treasury Secretary Paul O’Neill. As the health care debate has intensified, O’Neill’s comments are worth repeating.
“Health care reform seems to be on the way, whether we want it or not. So I have been asking questions about the various proposals. Here is a sampling.
“Which of the reform proposals will eliminate the millions of infections acquired at hospitals every year?
“Which of the proposals will eliminate the annual toll of 300 million medication errors?
“Which of the proposals will eliminate pneumonia caused by ventilators?
“Which of the proposals will eliminate falls that injure hospital patients?
“Which of the proposals will capture even a fraction of the roughly $1 trillion of annual ‘waste’ that is associated with the kinds of process failures that these questions imply?
O’Neill also notes that Obama likes audacious goals. “Here is one: ask medical providers to eliminate all hospital-acquired infections within two years. This is hardly pie in the sky: doctors and administrators already know how to do it. It requires scrupulous adherence to simple but profoundly important practices like hand-washing, proper preparation of surgical sites and assiduous care and maintenance of central lines and urinary catheters.”
Just through these steps we’d save countless lives and tens of billions of dollars every year.
This week I learned a good friend who had prostate cancer surgery and was home recovering on Monday when I talked to him, was struggling for his life a few days later as a result of what appears to be an infection picked up in the hospital, forcing a second operation as a result of septic shock. Every single one of you has a similar story. I’ll never forget seeing an obituary of a young business executive here in Summit, NJ, a fellow in his late 30s, and asking a doctor friend of mine who worked at the hospital where the man was being treated what had happened. “Don’t ask,” she said.
Paul O’Neill is spot on. There are so many far more important things we need to do immediately on the health care front before we tackle the issues most heavily debated today. Leadership, though, requires going down the list one at a time, picking them off, and launching a national campaign on each to educate both us and health care professionals.
“Which of the reform proposals will eliminate the millions of infections acquired at hospitals every year?”
That’s where the outrage should be. America No. 1? Hardly. And as much as us Republicans want to see tort reform at the top of the list, you’re not going to until we begin to reign in the mistakes. Just my opinion.
Turning to Wall Street, a lot of us wouldn’t be surprised to see a decent-sized correction in the markets at any moment, but after a dip of less than one percent two weeks ago, the rally resumed and from a news standpoint there was legitimate cause for the bulls to celebrate, even if some in the bull camp may question valuation levels.
First the good news. On Friday, the National Association of Realtors reported that existing home sales soared in the month of July, far more than expected, to their best level since August 2007, and while the median home price of $178,400 was less than June’s, it was greater than May’s $174,700 (which I selfishly note as I said last year we’d bottom using this metric in the April-May time frame).
But when it comes to housing you have the flip side; that not only are 30% or so of the sales foreclosed properties (a figure that is stabilizing) but as the Mortgage Bankers Association noted in its latest survey, 13.2 % of mortgages on homes are in foreclosure or behind on the payments for the April-June period, up from 9% a year earlier. But now it’s prime loans that are accounting for the lion’s share of foreclosures and delinquencies as opposed to subprime, and that in turn hardly bodes well for consumer spending.
So you have this constant battle between the good and bad, though when you add it all up I would still offer that today it’s two steps forward and one step back for housing. But I’d also reiterate a prediction of mine from long ago that when we do bottom, which is now, we just sit there for a while when it comes to median home prices. I know I’ve said this 30 times before but I have to repeat; there will be no V-shaped recovery in housing. The progress we’ve seen is nonetheless welcome.
[I also consistently said that while there is this hue and cry over commercial real estate and its problems, this item would have no negative impact on equity prices and I’ve proven right here as well. Yes, small- and mid-sized banks will suffer but when it comes to market sentiment, you and I don’t stand around at cocktail parties talking about the value of the mall up the road, but we sure as hell talk about the home values in our neighborhood where the wealth effect plays with our psyches as well as consumer and market confidence. Period. Plus, there are actually some developing signs that commercial real estate is beginning to stabilize, at least in terms of office rents that appear to be in the bottoming phase.]
Meanwhile, Federal Reserve Chairman Ben Bernanke told a crowd of economists on Friday that the global economy is “beginning to emerge” from recession and that prospects for growth appear to be good.
Looking at the world economic outlook, far too much ink was spilled over China’s leading Shanghai market and a 20% correction after a 65% rally. China will do just fine, but from time to time it gets stretched a bit. More importantly, the government expects positive growth in exports by year end. I don’t know if I believe it, but should this turn out to be the case, that is a hugely positive development on all manner of levels, including it would mean the American consumer is bouncing back, so watch this data as much as any other indicator, worldwide, the balance of ’09. Or let me watch it for you…the level of Chinese exports having a probable impact on my own China stock play.
Elsewhere in Asia, Japan’s GDP rose 0.9% in the second quarter, officially ending its recession, though the number was less than expected and provided some angst in our markets early in the week, while there are some now saying that India will actually grow at a faster pace than China in 2010.
In Europe, the news was mostly positive as well. Eurozone manufacturing in August, as measured by the PMI data, jumped to 49.5 in August from the 45.7 level in July; so with 50 being the dividing line between growth and contraction, Europe is almost there. [In France the reading was 50.2; in Germany 49.0.]
But a word on inflation, or lack thereof. The July reading on producer prices in the U.S. was down 0.9%, or -6.8% the last 12 months, a six decade low. In the European Union, the PPI has collapsed at an eerily similar 6.6% pace, an all-time low for it, while Asia faces similar declines. Yet there are still some warning us, as they have for seemingly a decade, that inflation is on the way! Hide the wife and kids! Well, you haven’t heard such talk from your editor. Wake me when wages start rising in a meaningful way and pricing power returns. We’ll have plenty of time to act and buy gold, silver, cubic zirconium, whatever, when the evidence begins to point the other way. Today, concern yourself with deflation because that has a negative impact on earnings…and if it continues to be an issue it’s going to be tough rationalizing some of the earnings outlooks for 2010 that are seeping out, such as Goldman Sachs’ call for $75 on the S&P 500, a reasonable market multiple of 15 on a S&P of 1150. Personally, I still refuse to discuss next year. Too much uncertainty on the geopolitical front, as well as the potential for H1N1.
Speaking of which, the World Health Organization said on Friday that there will soon be a period of further global spread of the H1N1 virus and governments must step up preparations for a swift response. Many countries will see the number of cases double every three or four days for several months. Western Pacific director Shin Young-soo said, “At a certain point, there will seem to be an explosion in case numbers….We only have a short time period to reach the state of preparedness deemed necessary. Communities must be aware before a pandemic strikes as to what they can do to reduce the spread of the virus, and how to obtain early treatment of severe cases.”
Of course the developing world is going to get slammed as under-equipped and under-funded health systems crater under the strain. For my part I continue to watch the media response. The test will be when the next wave really hits and whether or not the panic can be mitigated.
–Thanks to Friday’s big advance on the housing data, as well as a surge in oil shares as crude hit its highest level since last October on the feeling, at least for this week, that a pick up in the global economy will lead to increased demand for oil*, the major equity averages all advanced about 2% and the S&P 500, at its highest mark since 10/08, is now up a stupendous 52% off the March 9 closing low. The Dow Jones, now at 9505, is also at its highest level since last October.
*Natural gas, on the other hand, hit a seven-year low of below $3.00.
Earnings reports from some major retailers such as Target, Home Depot, Lowes and Sears, were so-so at best, with Sears’ being abysmal, plus Hewlett-Packard, in its report, talked of the reluctance of corporations to upgrade. But it doesn’t matter these days. Stocks dip a day or two and bounce right back.
–U.S. Treasury Yields
Treasuries were unchanged on the week, but we had some good news. The White House is reporting that the total budget deficit for the 2009 fiscal year will be $1.58 trillion, not over $1.8 trillion, because the financial industry won’t require hundreds of billions more in aid that was earmarked earlier thanks to the recovery in the sector. But the administration is also upping its 10-year deficit target to a cumulative $9 trillion.
–U.S. and Swiss authorities finally settled the UBS tax fraud case as UBS will be forced to divulge information on 4,450 accounts (holding around $18 billion in assets) that the IRS suspects have been evading taxes. UBS, in turn, will not pay a further fine (though back in February it agreed to a $780 million penalty in the first phase of the case) but will transfer the data to the Swiss government, which will then decide which info gets passed on to the U.S. This seems more than fair given the sensitivities involved, including Swiss law. The Swiss government, in turn, sold its nearly $6 billion stake in UBS, a position taken last year to help UBS rid itself of its toxic-asset dilemma, and earned a profit of $1.1 billion. Good for them.
[The IRS is using the UBS episode for a far-wider dragnet on offshore accounts.]
–According to a USA TODAY/Gallup survey, 57% believe Obama’s $787 billion stimulus program has had no impact on the economy or is making it worse; which doesn’t bode well for his health care initiative.
–Foreign direct investment in China declined for a 10th straight month in July, not good, owing to both global overcapacity as well as probable fallout from the Rio Tinto case, though regarding the latter we’ll see more of an impact in the fourth quarter, possibly.
–On Aug. 6, General Motors announced plans for a new Buick sport-utility vehicle, a plug-in hybrid version, but eight days later the company bagged the idea after potential customers told it the SUV lacked the “premium characteristics” they expect from the brand. Vice Chairman Tom Stephens said on a company blog that the speed of the cancellation shows the new GM “is listening and moving quickly.” The plug-in technology will nonetheless be used on a different model, yet to be introduced.
[I say, why didn’t GM do their research before they introduced the darn thing?]
–In announcing its disappointing earnings for the recent quarter, particularly on the revenue side, Hewlett-Packard said its critical printing and imaging division saw sales fall 20%. It’s the culture of businesses telling employees to watch what they are printing out, and to avoid color ink whenever possible.
–28-year-old Albert Gonzalez of Miami, who was already in custody for masterminding data thefts at the Dave & Buster’s restaurant chain, while under indictment for the 2005 data breach at T.J. Maxx, then the world’s largest identity theft, was charged on Monday with a world record series of digital break-ins, including the infiltration of a payment processor for 7-Eleven, as well as Hannaford Brothers, a regional supermarket chain. Gonzalez was said to be acting with two unnamed Russians.
The dirtballs placed “sniffer” programs on corporate networks and were able to intercept credit card transactions in real time and transmit the numbers to computers leased in the U.S., the Netherlands and Ukraine. Gonzalez faces life in prison (in China he would be sentenced to death, which is totally appropriate in this instance) as this is a guy who once complained to friends that he had to manually count thousands of $20 bills when his counting machine broke. [Brad Stone / New York Times]
–German authorities raided the offices of carmaker Porsche, seeking information on the alleged market manipulation of Volkswagen shares last fall and early this year, with the investigation centering on the former CEO and CFO, both of whom resigned last month. It was back in October that VW became the world’s biggest company by market value as its shares surged when hedge funds faced a massive short squeeze and were forced to buy the shares back to close their positions. Porsche then vowed to raise its stake from 50% to 75%, but never did due to the financial crisis. A merger of the two has been agreed to in 2011.
The issue is the mammoth profit Porsche made on its VW stake, some 6.84 billion euros in the first quarter of this year when total company profits were 7.34 billion. So as some have said, Porsche was nothing more than a hedge fund with a car company attached.
–Reader Jimbo, with whom I’ve played poker for about 35 years, took note of the hike in my insurance premium from $671 to $786 and said I need to look at it as a gambling process where I’m placing a bet of $8,000 to gain the security of being able to cover an $80,000 claim for coverage should it ever be required, though we hope we never have to ‘win the bet.’ But at the same time, more and more of us, while willing to continue going ‘all in’ on our own health care, tire of being responsible for everyone else.
–There was another large foreclosure auction in New York City last Sunday and investors snapped up nearly 150 properties, including one-acre+ oceanfront lots in the Bahamas, officially listed at $595,000 that were had for around $90,000. As one expert put it, for all the complaints these auctions generate, they’re clearing up inventory, and in yet another sign, perhaps, that the real estate market is bottoming, there were fewer attendees at this latest event than in earlier auctions in March and June, even as foreclosures in the five boroughs were up 14.8% in July from the same time last year.
–So I’m one of those that is fired up Jay Leno is coming to 10:00 p.m., beginning Sept. 14. But as Matthew Flamm of Crain’s New York Business notes, it’s not exactly a feather in NBC Universal CEO Jeff Zucker’s cap. While some have noted that Leno will cost about a fifth of what a scripted drama costs to produce, the program “will probably not become treasured entertainment like ER. And it is not likely to find an afterlife in ancillary sales for syndication and foreign rights.”
An executive at ad giant Starcom said, “Putting on Leno five nights a week is not the way you build a legacy. It’s a short-term play.”
I do believe Jay is going to be a huge success, though another executive told Matthew Flamm that “previous experiments in Monday-to-Friday programming – including ABC’s Who Wants to Be a Millionaire, which at its peak ran four nights a week – ultimately failed.” Or as ad executive David Scardino put it, “A show that’s on five nights a week (in prime time) can’t be an event.”
–The Fox Business Network is doing so poorly, partly because it’s available in only 50 million households vs. CNBC’s 97 million, that it is negotiating with Don Imus to simulcast his radio program in the 6:00-9:00 a.m. slot, which Nielsen says right now is rated so poorly, well, no one seems to know just how few actually watch it. Like maybe 6 or 7 people. As a Fox executive suggested, “We have to teach people we exist, and then convince them to find us.” Yes, a far cry from the experience of the Fox News division.
–New York City’s unemployment rate hit 9.6% in July, up from 5.4% in July 2008 (though as in the national jobless rate, it is undoubtedly understating the true picture when you add in those who have given up).
[Probably not coincidentally, my area has seen a major crime wave. On Wednesday, a jewelry store about 50 feet from my office was taken down by an armed robber (a fellow wearing a suit) and then the next day there were two bank robberies in towns next door.]
–This is disconcerting. There have long been rumors that working on nanoparticles could prove to be hazardous and this indeed appears to be the case. From mainland China comes a report that “seven young women suffered permanent lung damage and two of them died after working for months without proper protection in a paint factory using nanoparticles.” A U.S. government expert, however, said the case was simply more one of industrial hazards rather than any evidence nanoparticles pose more of a risk than other chemicals. [Reuters]
Well, you can see them not wearing protective gear, and this being the cause of their problems, but one thing is for certain; it is impossible to remove nanoparticles once they penetrate lung cells.
–This is kind of surprising. Lebanon is experiencing record numbers of tourists this year. Americans evidently represent about 13% of the total, the vast majority Lebanese ex-pats. It only takes one mistake by Hizbullah, though, to send Beirut back into the dark ages.
–Wind power is here to stay and I saw where a leading turbine maker, Vestas, is forecasting a 20% jump in orders over the coming year.
So I read with interest a story by Doug Rich of the High Plains Journal (I think I’m the only subscriber in New Jersey) concerning a wind farm project north of King City, Mo., the first in the state, that has 27 large turbines that will power 20,000 average-size homes.
Mike Waltemath has eight of the wind generators on land owned by his family and as opposed to those who are in an uproar when these things go up, Waltemath told Doug Rich:
“The cattle don’t seem to pay any attention to the towers unless the weather is hot….and when cattle are in a pasture with a tower, the cattle will stand in the shadow to cool off.
“Some people were worried about the noise the large blades would make, but Waltemath said that is not a problem….He originally noticed the whoosh-whoosh sound of the blades but he is used to it now. ‘You can stand right at the base of the tower and talk in a normal voice,’ he said.
“Bird flight patterns were taken into consideration when the wind farm was built. Waltemath said he has not seen any dead birds near the towers on his farm.”
–I didn’t realize some 3,000 family physicians practice a form of retainer-based medicine in the U.S., charging patients an annual fee ranging from $1,500 to as high as over $10,000 for round-the-clock access to physicians. “Doctors argue that this model cuts down their patient load, allows them to spend more time per patient and help save the system money.” [Parija Kavilanz / CNNMoney.com] Your insurance plan, including Medicare, would then pick up the costs of lab tests and other special services. Interesting concept.
–The Minnesota Vikings sold a record number of tickets since Brett Favre signed with the team on Wednesday, with more than 3,000 season packages and 10,000 single-game seats being scarfed up. The team had been struggling to avoid having some of its games blacked out due to lack of sellouts, but now they should be secure. [The Vikings’ first three home games this season are against teams that had a combined 6-42 record last season; Cleveland, Detroit and St. Louis. But then it’s the Steelers and the Packers.]
–I have no idea what FriendFeed is, but Facebook just acquired this important (so I’m told) application that acts as a clearinghouse for all social-media activities for $47.5 million. [Actually, I know a little about Facebook these days, but I’m low-profiling it for the time being.]
–Update: Last week I mentioned a promotional campaign by JetBlue to juice sales; unlimited flying for $599 from Sept. 8 thru Oct. 8. The program was so successful, succeeding all expectations, that the airline suspended it just one week after it became available. [Otherwise, those buying in may not find seats.]
–Columnist George Will of the Washington Post on the topic of Congress’ ongoing demonization of online poker; effectively outlawed when it became illegal for banks or credit-card companies to process payments to online gambling operations. Will:
“This was more than moral pork for social conservatives. It also blocked online competitors from poaching gamblers from the nation’s most aggressive promoters of gambling – state governments. They are increasingly addicted to revenue raised by lotteries – the 42 states that have lotteries spent $520 million in 2007 promoting them – and from taxation of other legal gambling.”
George Will continues: “Having turned gambling, which once was treated as a sin, into a social policy, government looks unusually silly criminalizing online forms of it. Granted, some people gamble excessively (although not nearly as many people as eat excessively). Granted, gambling becomes addictive to a small minority (although it is not nearly as addictive as smoking and drinking)….But never mind whether government should try to tightly circumscribe a ubiquitous human activity that generally harms nobody….
“It is a poker skill to know when to hold ‘em and when to fold ‘em. Congress probably should fold its interference with Internet gambling and certainly should get its 10 thumbs off Americans’ freedom to exercise their poker skills online.”
–Next week, I’ll explain in detail a little real estate move of my own. I’m selling! And moving to Summit from next door New Providence after 15 years, Summit being where my office is and the town I grew up in. But for the record, the clock started Aug. 19 and we’ll see how I do. For now, let’s just say it’s a no-brainer. It’s also part of a strategy for this site in 2010. More on that aspect down the road.
Afghanistan: What an election. Gee, only 26 poll workers were killed! And speaking of poll workers, I was watching another of NBC’s Richard Engel’s excellent reports as he talked of one polling station having all of one voter show up, the entire day, and I’m looking at the workers, thinking, who’s to say they themselves aren’t then telling the Taliban who voted so the Sons of Satan can then chop off their ink-stained finger, as threatened, or, more simply, blow them up?!
As of Wednesday, 32 Americans had been killed in August as a new record will be set in this regard, while the British toll is now at least 204 for the war, highly significant as with each death there the public grows increasingly weary. Americans, on the other hand, remain tolerant of the effort but as Secretary of Defense Robert Gates recently noted, our patience will wear thin by end of 2010 if there is no discernible progress. And let’s face it, when the Taliban continues to control large swaths of the country, there has been virtually zero progress. It’s sickening. But the Afghan people themselves have to rise up as well and there are no signs of this happening, particularly when their president, Hamid Karzai, who it seems won reelection, is as corrupt as they come.
Ralph Peters / New York Post
“Consider Afghanistan as an investment proposition. Initially, we had to make a short-term outlay to shatter a cut-throat competitor’s business model. But then, without even reviewing the books, we conducted a hostile takeover of a huge derelict factory (where our rival had briefly squatted) that had been a chronic money pit for every previous owner.
“As we try to modernize the Afghan plant, local managers steal us blind and the workers sabotage our efforts. Even if we break the Taliban ‘union,’ the labor is unskilled and the product line is worthless. We’ll have to subsidize this factory forever.
“Really, what does the Obama administration hope to do in Afghanistan? Establish a stable democracy in a land where blood vendettas last for centuries and tribal loyalties trump all? Force a secular constitution on a society that prefers religious law? Develop a modern economy where running water is a rarity? Why?
“Even if we achieved each of those goals, would the result be worth the cost in blood, money and time? Don’t we have better things to do with our strategic capital? Al-Qaeda is a global franchise – yet we’re concentrating our investment on the Taliban, the equivalent of a local chain of blacksmith shops.
“If it were only a matter of wasted tax dollars, that would be bad enough. But our troops suffer grievous wounds or die because neither the Bush nor the Obama administrations did the basic calculations you’d do before buying shares in a mutual fund….
“When it comes to our troops, the left’s hypocrisy is beyond contempt. But some Washington conservatives also act as if we have to macho out our mistakes….
“We shouldn’t leave Afghanistan entirely. But we need to balance our investment with the potential return, maintaining a compact, lethal force to continue killing our enemies. But let’s not sacrifice more soldiers because our leaders decline to think things through.
“In war, soldiers die. But our soldiers shouldn’t die because politicians put less thought into our wars than you put into your retirement account.”
[For the record, I don’t agree with all the above…but as Secretary Gates says, we better show some progress over the coming year or I will whole-heartedly join the Peters camp. Mr. Peters, for example, doesn’t mention the Taliban’s import to Pakistan and its nuclear arsenal in his latest piece. But I guarantee that Afghanistan, not some domestic issue, including health care and the economy, will be the prime debating topic in Washington in 2010…or perhaps in tandem with Iran, and maybe Iraq. 9/11 was in 2001. What has really changed since then?]
Iraq: It’s been mere weeks since the United States pulled out of Iraq’s cities and towns per the security agreement with the Iraqi government and since then the violence has spiked considerably, with Wednesday being the bloodiest day in the country since February 2008…at least 95 having been killed.
Iran: President Ahmadinejad selected his cabinet and nominated three females, a first for the Islamic Republic, though you can be sure these aren’t exactly Sen. Kay Bailey Hutchinson or Dianne Feinstein types. But parliament is not about to rubber stamp Mahmoud’s picks and as many as 7 of the 21 may not be voted in. Parliament speaker Ali Larijani, for example, says some of the nominees lack experience.
As for the opposition, one of the presidential candidates, Karoubi, continues to defy Ayatollah Khamenei in calling for a full investigation into alleged rapes of protesters while in custody. Karoubi and Mousavi are showing immense courage as at any moment they could be hauled off and executed. [Same with Hashemi Rafsanjani.]
On the nuclear front, Israeli President Shimon Peres told Russian President Medvedev, “The problem with Iran is not only the desire to produce nuclear weapons, but also the character of the regime…From my point of view, a nuclear weapon in Iranian hands has only one meaning – a flying death camp. The fact that Iran is investing billions of dollars in the development of long-range missiles, in parallel to its nuclear project, is clear indication of its intent.”
But Iran said this week that it was ready for talks with the U.S. without preconditions, and then lifted a yearlong ban and is allowing International Atomic Energy Agency inspectors back into the Natanz facility, which no doubt is simply because September is a critical month. The Obama administration has stated Iran must sit down for serious talks by month end or face a new round of severe sanctions, while Iran is trying to split the Security Council, specifically to peel off Russia and China who will both find it easier to give Iran more time. It’s yet another brilliant move on Tehran’s part.
[On a related issue, Saudi Arabia has announced it is working on its first nuclear power plant, with others in the region having long expressed an interest, but this isn’t a problem as long as the likes of the United States and France, the latter being the true expert in the field, supervise construction.]
Israel: Hizbullah leader Sheikh Nasrallah continues to threaten Israel, specifically Tel Aviv, should Israel attack his forces in Lebanon, while Israeli Prime Minister Netanyahu maintains that if Hizbullah strikes first, Israel is in its rights to bomb Beirut, assuming Hizbullah formally becomes part of the new government there.
But, on one of my favorite topics, the disposition of Shebaa Farms (also spelled Shaba), a UN diplomat for Lebanon said there had been some progress on the issue. Again, Israel should take the step to call Hizbullah’s bluff and give Shebaa back to Lebanon, thus taking away Hizbullah’s raison d’etre. Hizbullah then says, no, we will continue to keep our arms, as the UN then says to Lebanon, you are violating Res. 1701. Lebanon is forced to disarm Hizbullah and Hizbullah balks, but this exercise helps to isolate the militants. It’s a similar process to what Israel needs to do on the settlement front. Compromise to further expose the sham policy of the Arab nations. This week, Egyptian President Mubarak told President Obama in Washington that Arab nations will not make any confidence-building gestures toward Israel unless Israel first freezes settlement construction. So let Israel take the first step and when the Arabs don’t follow with moves of their own, the topic can be shelved for the next 20 years.
North Korea: The chairwoman of the powerful Hyundai Group was in Pyongyang for a week and it appears her mission bore some fruit as the North eased restrictions on cross-border travel and some tourism has resumed. In addition, North Korea sent a delegation to meet with New Mexico Governor Bill Richardson, he having negotiated with them in the past, while Pyongyang sent a high-level group to South Korea to join in national mourning for former president Kim Dae-jung, Kim having held the first-ever inter-Korean summit in 2000 during his presidency, an act for which he won a Nobel Peace Prize.
But lest you think there has been a change in heart with commie leader Kim Jong-il, Indian authorities continue to examine a North Korean freighter that was mysteriously in Indian waters, supposedly with nothing more than a cargo of sugar. Indian scientists are scouring the vessel, which was bound for Myanmar, for any signs of biological, chemical, nuclear or radioactive materials. The crew of 38 is also being questioned extensively.
Russia: A horrific suicide-bombing in the Ingushetian capital killed at least 20 as President Medvedev blasted local officials for failing to prevent the attack; officials having received a tip days before that an attack was planned, including the exact model of vehicle that was to be used. Chechen rebels are being blamed and as Ingush leaders and police are being picked off, one by one, including an assassination attempt on the president, the police in particular are now gun shy. The president, who is recovering from his severe wounds, also blames the U.S., Britain and Israel, saying they have a vested interest in instability in his region.
Then you have this bizarre case of the Arctic Sea, a Russian cargo ship supposedly carrying $1.8 million in timber bound for Algeria, but then hijacked in waters between Finland and Sweden, after which it traveled to the Cape Verde islands off the coast of West Africa, not exactly the quickest route to Algeria. Finally, after three weeks, the ship was discovered and the Russian navy boarded it and took eight hijackers from Russia, Estonia and Latvia into custody while debriefing the crew of 15…all unharmed. Russian authorities said they knew where the vessel was all this time but didn’t want to publicize the whereabouts over fears the hijackers would blow up the ship. But why would they?
From the Moscow Times:
“When Navy officials searched the ship, they found bags with ammunition and explosives, the spokesperson said….
“The lumber’s value, $1.8 million, hardly justifies an attack that would amount to the most blatant act of sea banditry in European waters in centuries.
“Yet the official version of what transpired is fraught with inconsistencies, prompting observers to suggest that Russian authorities are trying to cover up a smuggling or trafficking operation….
“Further complicating the picture are Swedish media reports suggesting that the Arctic Sea was hiding a second, smaller vessel while sailing off Sweden’s east coast.
“Data from an automatic vessel tracking system showed that the Arctic Sea’s crew constantly tried to hide one side of the ship from being visible to other ships in the vicinity….
“Also, Malta’s Maritime Authority [the vessel was registered there] acknowledged Tuesday that the ship ‘had never really disappeared,’ seemingly confirming a claim by Moscow’s NATO representative that disinformation ‘was used intentionally in order not to hamper the military’s work.’
“Speaking by telephone from Brussels, a NATO spokesman confirmed Wednesday that the Western alliance had used its tracking system to assist Moscow in finding the ship….
“Tarmo Kouts, an Estonian lawmaker and former commander of the Estonian armed forces, said that the ‘strange story’ surrounding the ship could only be explained by illegal arms trade.
“ ‘You can easily hide an alley of cruise missiles under a lumber stockpile,’ Kouts told the Postimees newspaper in comments on Wednesday.”
Others say the ship was transporting weapons to Iran or Syria via Algeria, possibly of the anti-aircraft or even nuclear variety. There was a story that the ship was retrofitted for two weeks in Kaliningrad before the voyage that commenced around July 24. So is it a massive cover-up?
Then there is the disaster at a Russian hydroelectric plant where up to 80 workers were killed after a machine room flooded following an explosion, knocking out power to vast parts of Siberia and causing a panic near Russia’s largest dam. Damage is undoubtedly in the $hundreds of millions and could take as many as four years to be completely repaired, though officials swear there is no threat to the dam itself. Repairs were being done in the room when the pipe burst, destroying two of the station’s 10 power units with two more put out of commission. On Friday, Chechen fighters claimed responsibility, saying they had employed an anti-tank grenade on a timer, causing “much stronger damage than we could have hoped for.” This isn’t likely but nothing can be ruled out.
China: An awful story has been developing over the past few weeks as China has been forced to close one smelter after another following reports hundreds of children had developed lead poisoning. In the latest case, over 1,300 have evidently been taken ill. This is unfathomable but at least, finally, the Chinese government realizes it must tackle its environmental and health issues; first, to damp down rising anger, and, second, because the nation’s very future is at risk. It was a year ago that Beijing was dealing with the tainted milk powder issue. Anyone who has traveled to China, in the rural areas in particular, as I have, knows of the severe problems the country faces and it’s one reason why I still believe my investment there, which manufactures environmentally friendly specialty chemicals, as well as biodiesel, can be successful.
[Imagine, in one of the smelting cases, 615 of 731 children tested positive for lead poisoning, with “levels in some children more than 10 times the level considered safe by mainland health regulations.”]
Libya: It is truly a travesty that the Lockerbie bomber, Abdelbaset Ali al-Megrahi, was released from a Scottish prison on “compassionate grounds.” President Obama called the move “a mistake” and needless to say some relatives of U.S. victims are furious. It didn’t help matters that Libya granted Megrahi a heroes welcome in Tripoli. But one complicating factor is all the commercial interests in Libya, especially the oil companies competing for some of the last mega fields in the world.
Megrahi, who never showed any remorse as he professed his innocence, hopefully descends to Hell within a few weeks. Should he be alive a year from now, however, this case will erupt all over again and the folks in Scotland need to understand there could be an economic impact there, especially in its critical tourism industry.
Burma: And then there is this one. Convicted American John Yettaw came home with U.S. Senator Jim Webb (D-Va.), with Webb saying, “I believe it was hurtful to the person that (Yettaw) thought he was trying to help, but at the same time for humanitarian reasons I asked to bring him out.” Left under house arrest, Nobel Peace Prize winner Aung San Suu Kyi, who did nothing wrong except house this strange guy who suddenly swam up to her place one day. I wrote last week that Yettaw was “hardly a hero” and that “it was incredibly reckless of Yettaw to put Suu Kyi in such a terrible spot,” before we learned he was being released. I certainly stand by this opinion. Yettaw should have been forced to stay in Burma while Webb should not have left without Suu Kyi.
I mean this guy, Yettaw, is a nut case. Upon arriving back in the U.S., he said, “If I had to do it again, I would do it a hundred times, a hundred times, to save her life. That they locked her up, it just breaks my heart.”
There have been a lot of upsetting events and developments the past few weeks that have irked me to no end and this jerk’s actions are at the top of my list. He is deserving of nothing but contempt, and Webb did Suu Kyi no favors himself.
Indonesia: President Obama is slated to travel here before an APEC conference in Singapore in November and authorities believe they have uncovered an al-Qaeda financed operation to have snipers fire on Obama’s motorcade, part of an ongoing investigation into the July 17 hotel bombings. What’s scary is the potential scope of all the operations, including a new revelation that two handlers from Yemen may have checked into the Marriott, posing as airline crew, at the same time as the suicide bombers.
Japan: The opposition Democratic Party of Japan appears set to put a big hurt on the ruling Liberal Democratic Party in Aug. 30’s national election, with the DP being ahead of the LDP by a two-to-one margin in most polls.
Swaziland: This is undoubtedly a first for this little hellhole, but I have to mention a piece from the London Times that speaks of King Mswati III sending his “favorite wives on a million-pound shopping jaunt through Europe, the Middle East and Asia” as his people, among the poorest on the planet, suffer. In May, the king purchased 20 armored Mercedes at a cost in excess of $200,000 each.
–Talk about consistency, sometimes the polls are all over the place but when it comes to President Obama’s approval rating, this week three major ones, the Gallup tracking poll, one from the Pew Research Center, and the NBC News/Wall Street Journal survey all had Obama at 51%. However, a Washington Post/ABC News survey released Friday has him at 57%, which is nonetheless down 12% from its April peak.
“Judge Sonia Sotomayor becomes the first Hispanic justice to the Supreme Court as she was confirmed by a 68-31 vote, including nine Republicans. Significantly, the lone senator not to vote was Ted Kennedy. And why is that significant? Because his health is that poor and his vote could be critical in any potential health-care votes. It’s easy to say, well, he fought for reform his entire Senate career so they’ll wheel him in if they have to but I wouldn’t be so sure. Ditto, Sen. Robert Byrd, another ailing Democrat who should have been put out to pasture decades ago.”
So this week we learned Sen. Kennedy is seeking to change his state’s election law that calls for a special vote to be held 145 to 160 days after a seat is vacated (i.e., upon his death) because he is concerned about the chances for health care legislation, seeing as he could be the critical 60th vote to break a Republican filibuster, 91-year-old West Virginia Sen. Robert Byrd (a wheel-chair bound rolling advertisement for term limits) being yet another essentially on his death bed.
Understand the law was changed in Massachusetts in 2004 in order to prevent then Republican Gov. Mitt Romney from appointing a Republican in this otherwise Democratic state. But now, when it suits his purposes, Kennedy wants to change the law back to what it had been. Alas, state legislators, recognizing how bad this looks, may balk at doing so. Sorry, Teddy.
–Paul Krugman / New York Times…a liberal viewpoint on Obama.
“On the issue of health care…the inspiring figure progressives thought they had elected comes across, far too often, as a dry technocrat who talks of ‘bending the curve’ but has only recently begun to make the moral case for reform. Mr. Obama’s explanations of his plan have gotten clearer, but he still seems unable to settle on a simple, pithy formula; his speeches and op-eds still read as if they were written by a committee….
“It’s hard to avoid the sense that Mr. Obama has wasted months trying to appease people who can’t be appeased, and who take every concession as a sign that he can be rolled.
“Indeed, no sooner were there reports that the administration might accept co-ops as an alternative to the public option than G.O.P. leaders announced that co-ops, too, were unacceptable.
“So progressives are now in revolt. Mr. Obama took their trust for granted, and in the process lost it. And now he needs to win it back.”
–Michael Barone / New York Post
“There are more conservatives than Republicans and more Democrats than liberals. That’s one of the asymmetries between the parties that helps to explain the particular political spot we’re in.
“The numbers are fairly clear. In the 2008 exit poll, 34 percent of voters described themselves as conservatives and 32 percent as Republicans; 39 percent described themselves as Democrats, only 22 percent as liberals….
“The exit poll showed that though the GOP label had lost support since 2004, conservatives didn’t lose their edge over liberals. The health-care debate has shown that the economic distress caused by the financial crisis and recession has not, at least so far, moved significant numbers of Americans to change their views on the proper balance between markets and government.
“ ‘I don’t want the folks who created the mess to do a lot of talking,’ Barack Obama said on a campaign stop in Virginia on Aug. 6. ‘I want them just to get out of the way so we can clean up the mess.’ When a politician tries to stop debate, it’s a sign he’s losing the argument.
“Obama seems to have let the House Democrats overplay their hand. He ignored the fact that in our system neither party ever has all the advantages.”
“The president seemed like a man long celebrated as being very good at politics – the swift rise, the astute reading of a varied electorate – who is finding out day by day that he isn’t actually all that good at it. In this sense he does seem reminiscent of Jimmy Carter, who was brilliant at becoming president but not being president. (Actually a lot of them are like that these days.)
“Also, something odd. When Mr. Obama stays above the fray, above the nitty-gritty of specifics, when he confines his comments on health care to broad terms, he more and more seems…pretty slippery. In the town hall he seemed aware of this, and he tried to be very specific about the need for this aspect of a plan, and the history behind that proposal. And yet he seemed even more slippery. When he took refuge in the small pieces of his argument, he lost the major threads, he seemed almost to be conceding that the specifics don’t hold.
“When you seem slippery both in the abstract and the particular, you are in trouble.”
–In more local politics, New York’s 2010 gubernatorial race, Attorney General Andrew Cuomo has an incredible 61-15 lead over Gov. David Paterson in a potential Democratic primary matchup. Cuomo also leads prospective Republican nominee Rudy Giuliani, 48-39.
–Talk about pitiful, can you believe Republican Sen. John Ensign of Nevada? Ensign, in making his first public appearance in his home state since acknowledging in June that he had an extramarital affair, told supporters/idiots that his affair was different from Bill Clinton’s because Ensign didn’t lie under oath. What a jerk. “I haven’t done anything legally wrong,” he told a roaring crowd of 100, according to the Associated Press.
“Today, the great American public-health problem is indeed obesity. The statistics have become rote, but consider that people in their 50s are about 20 pounds heavier on average than 50-somethings were in the late 1970s. As a convenient point of reference, a typical car tire weighs 20 pounds.
“This extra weight has caused a sharp increase in chronic diseases, like diabetes, that are unusually costly. Other public-health scourges, like lung cancer, have tended to kill their victims quickly, which (in the most tragic possible way) holds down their long-term cost. Obesity is different. A recent article in Health Affairs estimated its annual cost to be $147 billion and growing. That translates into $1,250 per household, mostly in taxes and insurance premiums….
“It’s also worth noting that the obese, as well as any of the rest of us suffering from a medical condition affected by behavior, already have plenty of incentives to get healthy. But we struggle to do so. Daily life gets in the way. Inertia triumphs.
“The question of personal responsibility, then, ends up being more complicated than it may seem. It’s hard to argue that Americans have collectively become more irresponsible over the last 30 years; the murder rate has plummeted, and divorce and abortion rates have fallen. And our genes certainly haven’t changed in 30 years.
“What has changed is our environment. Parents are working longer, and takeout meals have become a default dinner. Gym classes have been cut. The real price of soda has fallen 33 percent over the last three decades. The real price of fruit and vegetables has risen more than 40 percent.
“The solutions to these problems are beyond the control of any individual…They depend on the kind of collective action that helped cut smoking rates nearly in half. Anyone who smoked in an elementary-school hallway today would be thrown out of the building. But if you served an obesity-inducing, federally financed meal to a kindergartner, you would fit right in. Taxes on tobacco, meanwhile, have skyrocketed. A modest tax on sodas – one of the few proposals in the various health-reform bills aimed at health, rather than health care – has struggled to get through Congress.”
–The U.S. Geological Survey, in the most comprehensive examination of mercury contamination in stream fish, “found that 27% of the fish had mercury levels high enough to exceed what the Environmental Protection Agency considers safe for the average fish eater, those who eat fish twice a week.” Previous research was about levels in ocean and lake fish. Interior Secretary Ken Salazar said, “The science sends a clear message that our country must continue to confront pollution, restore our nation’s waterways and protect the public from potential health dangers.” [USA TODAY]
“The greatest threat to America’s fragile drinking-water system is not terrorism or climate change, according to scientists, but an invasion of tiny, zebra-striped mollusks, each one barely the size of a thumbnail.
“The quagga mussels first came to America in the ballast of ships from Ukraine and other parts of Eastern Europe in the 1980s. It was not until recently, however, when the mollusks turned up in Lake Mead, which supplies drinking water to Las Vegas and other large desert cities, that the catastrophic scale of the invasion became clear….
“There are now believed to be at least three trillion of them in Lake Mead, and scientists say it is only a matter of time before they spread throughout the West’s vast network of reservoirs and aqueducts, causing damage estimated at billions of dollars.
“At the Hoover Dam there are sometimes 55,000 mussels per square foot in the intake towers, hampering the facility’s electricity-generating equipment.
“Things are likely to get worse. ‘Over time, I would think eventually they’ll be almost around the [entire] country,’ predicts Amy Benson, a fishery biologist with the U.S. Geological Survey in Florida.”
–It is pitiful that the CIA resorted to an outside contractor like Blackwater to locate and assassinate top al-Qaeda operatives. What the heck are we using a bunch of cowboys, on foreign soil, to do the CIA’s bidding? Do the freakin’ job yourself, Langley! The liabilities are unbelievable.
–As an editorial in Defense News notes, “While other members of the nuclear club continue to field newer weapons, America’s arsenal remains stagnant. Congress has steadfastly blocked proposals to develop new U.S. weapons.”
And so our force is being degraded. But while the Obama administration is working to reduce the size of the 7,000-weapon nuclear arsenal through new negotiations with the Russians, at least the White House recognizes that it’s OK to have fewer nukes as long as what remains is better. It’s just that actual investment has been slow in coming. I said end of last year that in 2009 this would be a critical debate and it remains so.
“And that’s the final answer to a question about what women say they would rather do when given a choice between saving $50 a week or having more sex. Sorry, boys. It’s the economy.
“A national survey conducted by AOL’s Shortcuts.com and Allyou.com found that, in these hard times, most women were happy to have more spending money than spending more time in bed.”
So I guess that means, guys, that if you paid for [deleting a few words to protect my International Web Site Association license], you’d kill two birds with one stone.
–The past few weeks has witnessed the passing of some giants of the media world, the latest being Don Hewitt and Robert Novak. Whenever I think of Hewitt, it’s “60 Minutes producer Don Hewitt.” You couldn’t just say his name. You always had to attach the label. But the number of television producers who became both household names and giants in their industry can be counted on one hand. Roone Arledge, Don Hewitt, and, err….
While Hewitt’s career goes back to the early days of television, he’ll forever be known for that ticking clock and the 3,500 segments produced under his watch from 1968-2004. As he put it when discussing the success of 60 Minutes, Hewitt said:
“The formula is simple, and it’s reduced to four words every kid in the world knows: Tell me a story. It’s that easy.”
Robert Novak passed away after fighting brain cancer the past year. He was 78. Talk about a Washington insider, I was always a fan of his when he co-hosted CNN’s Crossfire, one of the more entertaining shows of its kind, back in the day, and the forerunner to what you see on MSNBC and Fox these days, though far better.
And I loved how Novak described his modus operandi in his memoir, “The Prince of Darkness: 50 Years Reporting in Washington,” Novak being known as the hardest-working print reporter around who also had the best sources.
He gave politicians a choice. Either become a source, or face being a target.
–Some of us want to see manned missions to Mars in our lifetime but the prospects of it being an American venture are diminished by the day. Now we learn that the European Space Agency has signed a deal with its Russian counterpart Roscosmos to cooperate on two Mars exploration projects, the precursors to a manned mission, possibly around 2020, I’m guessing. America has lost its edge. I seriously doubt in my lifetime we’ll get it back, and we are all to blame.
–Finally, the CDC reports life expectancy in America has hit a new high of 78, to which I say it’s not right to bring a child into a world where the water level could be two feet higher 78 years from now………….JUST KIDDING, SPORTS FANS!
Pray for the men and women of our armed forces, and all the fallen.
Returns for the week 8/17-8/21
Dow Jones +2.0% [9505]
S&P 500 +2.2% [1026]
S&P MidCap +2.1%
Russell 2000 +3.1%
Nasdaq +1.8% [2020]
Returns for the period 1/1/09-8/21/09
Have a great week. I appreciate your support.
