Wall Street
This week President Obama unveiled a new round of infrastructure spending, plus business tax breaks, in the amount of $180 billion and didn’t say how all of it would be paid for. It was another big mistake, and, in fact, immediately some Democratic candidates could not run away fast enough.
Sen. Michael Bennet (sic), D-Colo., and in a tough race against Republican Ken Buck, said, “I will not support additional spending in a stimulus package.” Bennet suggested what probably 95% of Americans are thinking. Why not recycle “unused funds” from last year’s stimulus if he wants to “improve our infrastructure….We must make hard choices to significantly reduce the deficit.” [Washington Post]
That’s Obama’s own party, and a candidate scrambling to keep up with the surly, questioning mood in the country.
Of course you’d expect Republicans to pounce, as Sen. Orrin Hatch of Utah did.
“More taxes and more spending makes as much sense as throwing a drowning man an anvil.”
And as Richard Wolf of USA TODAY pointed out, in the case of Obama’s business tax credit, which allows businesses to deduct 100% of their new equipment investments through 2011, it’s the same idea offered by John McCain during the 2008 presidential campaign, while “the president’s plan to expand and make permanent the tax credit for research and development is similar to a proposal backed by Texas Sen. John Cornyn, who heads the Republican Party’s Senate campaign committee.”
“When it took office in 2009, many of us advised the Administration to focus on nurturing the recovery first and postponing social-policy priorities that would only add more economic uncertainty. All the more so given this recession’s unusual financial roots.
“Instead, Democrats embarked on the most sweeping expansion of government since the 1960s, imposing national health care, rewriting financial laws from top to bottom, attempting to re-regulate the telecom industry, and imposing vast new costs on energy, among many other proposals. Not to stop there, in January it plans to impose a huge new tax increase on ‘the wealthy,’ which in practice means on the most profitable small businesses.
“Central to Mr. Obama’s political strategy for passing these priorities has been trashing business and bankers as greedy profiteers. His Administration has denounced or held up as political or legal targets the Chrysler bond holders, Wall Street bonuses, Goldman Sachs, health-insurer profits, carbon energy investors, and anyone else who has dared to oppose any of its plans to ‘transform’ U.S. society.
“Only yesterday at a Labor Day event in Milwaukee, Mr. Obama was at it again, declaring that ‘anyone who thinks we can move this economy forward with a few doing well at the top, hoping it’ll trickle down to working folks running faster and faster just to keep up – they just haven’t studied our history. We didn’t become the most prosperous country in the world by rewarding greed and recklessness.’
“Whatever else one can say about such rhetoric, it is not the way to restore business confidence or turn a fragile recovery into a durable expansion. It has only spread fear and even greater uncertainty.
“As for blaming the Republicans, with only 40 and then 41 Senators they couldn’t stop so much as a swinging door. The GOP couldn’t even block the recent $10 billion teachers union bailout. The only major Obama priorities that haven’t passed – cap and tax and union card check – were blocked by a handful of Democrats who finally said ‘no mas.’ No Administration since LBJ’s in 1965 has passed so much of its agenda in one Congress – which is precisely the problem.
“To put it another way, the real roots of Mr. Obama’s economic problems are intellectual and political. The Administration rejected marginal-rate tax cuts that worked in the 1960s and 1980s because they would have helped the rich, in favor of a Keynesian spending binge that has stimulated little except government. More broadly, Democrats purposely used the recession as a political opening to redistribute income, reverse the free-market reforms of the Reagan era, and put government at the commanding heights of economic decision-making.
“Mr. Obama and the Democratic Congress have succeeded in doing all of this despite the growing opposition of the American people, who are now enduring the results. The only path back to robust growth and prosperity is to stop this agenda dead in its tracks, and then by stages to reverse it. These are the economic stakes in November.”
As for ObamaCare, last week I had a brain cramp and wrote that my own insurance renewal increased 19% to where I’m paying “$9300 a year.” Correction: It was indeed up 19%, 19.45% to be exact, but not $9300; rather from $786 to $939 a month, or $11,268!* Just me! No, I didn’t get a chance as I hoped to work on getting this down and checking out other options, but a big story this week was how some of the major insurers have asked for premium increases of between 1% and 9% to pay for extra benefits required under ObamaCare, and here I am, Joe Small Business Owner, getting whacked not 1%, not 9%, but 19%.
[*My increase gives you a sense of what is happening to business all across the country.]
And so is it any wonder that there isn’t one Democrat running for office this fall who is praising health reform legislation? Those Democrats who voted against it, to the contrary, are trumpeting this fact. ‘Don’t blame me! Just because I’m in the same party as our president doesn’t mean I think he’s good!’
“ ‘They’re betting that between now and November, you’re going to come down with amnesia,’ President Obama told a Milwaukee crowd on Monday, vilifying the Republicans who ‘helped devastate our middle class.’ But it seems as if the real case of amnesia – or maybe post-traumatic stress disorder – has struck the Democrats, who are now doing everything they can to help voters forget ObamaCare.
“This is a remarkable turn of events for Mr. Obama’s major domestic achievement that was also supposed to be a political winner. Facing a grim November, Democrats are now running on another quarter-baked stimulus plan and the specter of John Boehner’s perpetual tan, instead of the bill they spent more than a year debating and hailed as the triumph of the century. Democrats now barely mention ObamaCare on the trail – unless they’re trashing it….
“Democrats convinced themselves they could ram ObamaCare through Congress on the liberal noblesse oblige theory that the public would eventually come around, but their own campaign strategies now show how wrong they were. If Democrats are victims of their own success, so is everyone else – because despite the political second thoughts, the country is still stuck with this policy debacle.”
Of course if I was a public employee, what, me worry? I know a lot of you out there are just this. But publisher/real estate king Mort Zuckerman had the following in an op-ed for the Financial Times.
“There really are two Americas, but they are not captured by the standard class warfare speeches that dramatize the gulf between the rich and the poor. Of the new divisions, one is the gap between employed and unemployed that President Barack Obama seeks to close with yet another $50 billion stimulus program. Another is between workers in the private and public sectors. No guesses which are the more protected. A recent study by the Mayo Research Institute found that ‘private-sector workers were nearly three times more likely to be jobless than public-sector workers.’
“Political tension is bound to grow when jobs disappear faster in the private than the public sector, just as compensation in the former is squeezed more. There was a time when government work offered lower salaries than comparable jobs in the private sector, a difference for which the public sector compensated by providing more security and better benefits. No longer. These days, government employees are better off in almost every area: pay, benefits, time off and security, on top of working fewer hours. Public workers have become a privileged class – an elite who live better than their private-sector counterparts. Public servants have become the public’s masters.
“Take federal employees. For nine years in a row, they have been awarded bigger average pay and benefit increases than private-sector workers. In 2008, the average wage for 1.9 million federal civilian workers was more than $79,000, against an average of about $50,000 for the nation’s 108 million private-sector workers, measured in full-time equivalents. Ninety percent of government employees receive lifetime pension benefits versus 18 percent of private employees. Public service employees continue to gain annual salary increases; they retire earlier with instant, guaranteed benefits paid for with the taxes of those very same private-sector workers.
“More troubling still is the inherent political corruption. Elected officials tend to be accommodating when confronted by powerful constituencies such as the public service unions that agitate for plush benefits and often provide (or deny) a steady flow of cash to election campaign funds. Their successors will have to cope with the inherited debt burden – and ultimately the nation’s taxpayers are stuck with the bill.”
“A fundamental rethinking of the public workforce is necessary. Americans cannot maintain their essential faith in government if there are two Americas, in which the private sector subsidizes the disproportionate benefits of this new public sector elite.”
So what have I been saying the past few months regarding Europe? That those claiming the European sovereign debt crisis was over since the EU and IMF $960 billion bailout package was passed were nuts. I’ve also said it’s not rocket science. As European nations launch needed austerity programs, there will be massive protests against even the smallest cuts in entitlements, consumer confidence will plummet, and growth well into the future will be anemic at best, which is hardly what’s needed to slash some of the massive deficits of the likes of Greece, Spain, and Ireland.
And what did we have this week? Massive protests in France, again, over President Nicolas Sarkozy’s plan to raise the minimum retirement age from 60 to 62, and the age at which a pensioner can receive full benefits from 65 to 67, otherwise, France goes bankrupt. In Britain, where the Cameron government (and our sympathies to the prime minister for the loss of his father, who sounded like a truly remarkable man) has begun initiating some of its severe public sector cuts, there was a transit strike. Such actions will continue to spread across the European continent and as I’ve also noted, admittedly ad nauseum, beware rising nationalism and the scapegoating of immigrants.
It’s this rising nationalism, however, that is key to the debt crisis as well because while European leaders smugly say, oh no, we could never have a problem in coming to the rescue of a fellow EU member, this isn’t the U.S. Federal Reserve and one national government. This is 16, or 25, depending on how you slice it, different entities.
“Greece Default Risk Is ‘Substantial,’ PIMCO’s Bosomworth Says”
“Greece is insolvent,” Bosomworth, Munich-based head of portfolio management at PIMCO, said. “I see it as being quite a substantial risk that Greece eventually defaults or restructures.”
“Debt servicing as a share of government revenue will increase substantially, particularly if current yield levels do not decline,” Bosomworth said. [During the week, the yield on Greek 10-year paper hit 11.80%. As Bob Uecker would say, ‘Just slightly higher than the German 10-year of 2.40%.]”
JPMorgan Chase weighed in this week and said Greece may need to extend a $140 billion bailout from the EU and IMF by an extra three to six years to avoid a default.
Here’s the thing. As is the case with so many of Europe’s large banks, Greece has yet to come clean on its true financial position. They act like they have, but they haven’t. So how the hell do you know what the true exposure is?
And in my beloved Ireland, while there has been a bit more transparency as they struggle with their severe financing crisis, no one there can tell you just how much the government is in the hole with its nationalized Anglo Irish Bank. [More on Ireland in a second.]
But this weekend we have a meeting of the Basel Committee on Banking Supervision, the global financial rule-making body that is setting minimum capital requirements on banks, as well as a timetable for reaching the standards. Basel will not prove to be as tough as once feared, but nonetheless many of the European institutions are sorely lacking in capital, let alone transparency, so this ongoing recapitalization could roil their markets some. U.S. banks, on the other hand, at least the larger ones, are well-capitalized. [I have zero desire to own any, however.]
Finally, back to Ireland, I started going here in 1989 with some golfing buddies and was just over for my 18th trip, each time either beginning or ending in Lahinch (or to be totally accurate, a few times in the nearby town of Ennis). I know Lahinch well, and after all these years have made some good friends in town.
One fellow, Paul, the starter at the club, opened up on the economy this time (with little prodding). Understand I’ve known Paul since ’89 (and he hasn’t aged one bit while I’ve deteriorated at lightspeed) and he said it’s a disaster these days, not that I didn’t already know this as I called the Irish bubble years ago.
So I want to get down some random thoughts that taken as a whole will give you a picture of the deepest recession in this country since the Depression. In fact, by some measures Ireland has had the deepest recession of any developed country since the 1930s.
The Celtic Tiger boom commenced in the late 1980s, owing to smart use of EU money and the slashing of corporate tax rates to encourage foreign investment by the likes of Dell and growth accelerated big time in the mid-1990s. Each year I came over I saw progress, and an increasing cockiness that it would be nirvana forever. Back in 1995, I came close to buying a two bedroom townhouse in Lahinch that was going for the equivalent of $60,000 and by 2007 it was $400,000. Today, I looked in a realtor’s window in town and saw a different home on sale for $240,000 that I knew just three years earlier was going for $600,000. It’s been a horrible round trip.
What has killed the Irish is leverage, even more so than in the U.S. Americans were not the only ones allowed to buy homes with no money down, as I constantly told you in this column with all my travels. The Irish were just as bad, and in the case of Anglo Irish Bank, the financial institution that still threatens to take the entire country down, it was king of the 100% loan for property developers.
In fact Anglo Irish was known for giving developers 110% loan-to-value, expecting prices to march ever upward, 8, 10, 12 percent a year.
Only one thing. What was the real value? It started out as raw land, passed down generation after generation until finally, in the 1990s, the 25- to 40-year-olds in particular got control of the family holdings and went to town.
The end result, with all this free money flowing out to the developers was the building of two homes for every one for which there was actual demand. This is not much of an exaggeration. Hundreds of hotels were also built for which demand was limited, and hundreds have either already gone under or are in the process of doing so.
And back to Anglo Irish, no one really knows what the cost to the government will be, it having nationalized the bank in 2009, but the current estimate is anywhere from $30 to $34 billion, but this seems to just be a starting point. Now Allied Irish Bank is on the verge of being nationalized as well. Anglo Irish’s liabilities equate to at least 15% of the entire country’s GDP at this point.
The unemployment rate in Ireland is now 13.8%, and as an editorial in the Irish Independent put it recently, there is “no obvious plan to get out of this mess.” The coordination between government, business, and the universities that existed in the late 1980s, which spurred the tech and pharmaceutical boom, is gone.
One place that is emblematic of the Irish bust is the K Club, which some of you may recall was the site of the 2006 Ryder Cup. [Ireland has some of the world’s best links courses, like Lahinch and Ballybunion, but they insisted on staging the Ryder Cup, and on an ongoing basis, the Irish Open, mostly at the new parkland tracks that have zero charm, but their ‘once’ wealthy owners can command the date.] Anyway, the K Club’s revenues have fallen from 20 million euro to 14 million, and it needs to pay back a loan, soon, of 55 million euro.
Speaking of deficits, Ireland’s government debt is nearly 15% of GDP, just as bad as Greece (the U.S. is down this year from 9.9% to 9.1%). Ireland’s economy contracted 11% in two years.
The national mood in Ireland is somber, even seething; the latter because of the criminal sums that the developers were given, plus the bonuses bank executives paid themselves, as well as taking astronomical personal loans. One fellow loaned himself $100 million! I kid you not. Needless to say he is not in a position to repay it.
3/4s of the Irish public believe Anglo Irish Bank will bankrupt the country and bring down the government, according to a recent poll. So why not just shut it down rather than assume the bad loans? Because the feeling is leading developers would simply stop repaying. It’s the too-big-to-fail syndrome. It’s also about maintaining some level of confidence in the system for future investors. When you have a place dominated by no more than five financial institutions, it’s not an easy decision for a government to make. [See Iceland]
Plus while some say, just let Anglo Irish’s bondholders pick up the tab, a bond default could lead investors to force the courts to liquidate the entire bank and there are 56 billion euros of other bank borrowings and deposits to deal with. But real estate values are still falling, so Anglo Irish will need more cash.
The middle class is joining “the dole queues in droves.” The number of homes in negative equity is staggering.
Many Irish workers who still have jobs have seen pay cuts of 10 to 15 percent, yet their taxes are skyrocketing to pay for the bank bailouts.
Two leading economists, Simon Johnson and Peter Boone, said that if the Irish government continues its current policies “the calamity of the Irish banking system will lead to a much deeper recession and the consequences will be felt for decades.”
It seems as though it’s a lock the consequences will already be felt for decades.
“It’s a bit like the Irish personality,” said one commentator. “They had a great party, but now there’s a monumental hangover.”
Street Bytes
–Stocks finished up fractionally, with the Dow Jones adding 15 points to 10462, the S&P 500 up 0.5% and Nasdaq up 0.4%. [Small and midcap stocks fell a bit.] Aside from a Fed beige book report on regional economic activity that said what we already knew – the economy is decelerating – there was little of significance. National Semiconductor and Texas Instruments did issue weaker than expected guidance for the current quarter.
But next week we have key reports on consumer and producer prices, as well as retail sales and industrial production.
–U.S. Treasury Yields
6-mo. 0.18% 2-yr. 0.56 10-yr. 2.79% 30-yr. 3.87%
Bonds yields rose a bit on the feeling that a double-dip is off the table and thus there was a mild return to the risk trade and out of bonds. Activity was so light this week, however, that it would be stupid to make too much of it.
–Corporations, however, are rushing into the bond market for a different reason, to take advantage of the record low rates and spreads, while at the same time meeting the demand of investors who are desperately searching for product with a yield for their savings; like try $51 billion worth of both bonds and leveraged loans on Tuesday and Wednesday alone, according to S&P. It’s a no-brainer for Corporate America.
–Meanwhile, PIMCO’s Mohamed El-Erian told Bloomberg that the massive flows into fixed income funds (and out of stocks), $120 billion year to date at the end of August (of which PIMCO is obviously receiving the lion’s share), is troubling.
“The average investor is de-risking their portfolio, moving from equities into cash and bonds and that is not a good sign for the economy if people become more and more risk-averse.”
–Inflation: I said I would revisit my comments of early August, but I realize with this week’s price data coming out I’ll hold off until next time. For now, seeing as some view gold as an inflation hedge (it isn’t), the shiny stuff hit a new closing high of $1257.50 this week and is headed towards its 10th straight annual gain.
–On the global economic front, China’s industrial production is estimated by government officials to slow to 10% the balance of the year from a 17.6% growth rate the first half, while imports in August suddenly surged 35%. But then on Saturday (just caught this), the government said industrial production in August gained 13.9%, better than expected, while retail sales increased 18.4%. Consumer prices, though, rose 3.5% and I’ll have more on all this next time.
Japan revised second quarter GDP upward to 1.5% from 0.4%, an encouraging sign.
India’s industrial production for July was above estimates, up 13.8%, as it continues to speed along.
Germany’s exports fell 1.5% in July from June, while July factory orders were down 2.2% from the prior month, both surprises.
And in the U.K., home prices have now actually risen 9% from April 2009, but are still off 16% from the peak of Aug. 2007. Britain also received some good news on the inflation front as producer prices for August were unchanged from the prior month.
–Analyst Meredith Whitney sees Wall Street layoffs of between 40,000 and 80,000 next year amid slowing revenues and higher costs; the latter from regulatory reform. One only need look at trading volume the past few months to know the Street is in trouble.
–BP’s internal review of the Deepwater Horizon blowout and explosion on April 20 found that eight separate failures triggered the catastrophe that killed 11, but BP blames decisions by contractors, such as rig owner Transocean and cement supplier Halliburton. Transocean immediately called BP’s investigation a self-serving attempt to cover its butt, with the real cause being “BP’s fatally flawed well design.”
And as Congressman Ed Markey (D-Mass.) said, “Of their own eight key findings, they only explicitly take responsibility for half of one. BP is happy to slice up blame, as long as they get the smallest piece.”
Robert Gordon, an attorney representing more than 1,000 fishermen, hotels and restaurants affected by the spill, said:
“BP blaming others for the Gulf oil disaster is like Bernie Madoff blaming his accountant.”
–The Environmental Protection Agency has requested that nine companies drilling for natural gas using the hydraulic fracturing method give more details about the impact of the chemicals they are using on drinking water. The process has been used for decades (and the industry estimates 90% of the more than 450,000 operating natural gas wells employ hydraulic fracturing), but the past few years, as drilling has exploded in parts of western New York, northeastern Pennsylvania, and West Virginia, communities in these areas have become increasingly concerned.
–Former Hewlett-Packard CEO Mark Hurd didn’t wait around long after being booted from HP amid sexual harassment and other allegations. Nope, Hurd took an $11 million a year offer to work for his buddy Larry Ellison at Oracle as co-president, even as HP filed a legal challenge, ostensibly not to prevent him from moving, but rather to recoup some of the $millions they paid Hurd in severance. Ellison called HP’s suit “vindictive” and accused it of making it “virtually impossible” for Oracle and HP to cooperate in the future. Evidently, Hurd did not have to sign a non-compete clause for his severance deal, but he signed agreements not to divulge trade secrets.
–Apple, amid growing fears over an ongoing antitrust investigation, as well as growing competition from Google’s Android based phones, unexpectedly allowed outside developers to create applications for Apple’s handheld products. Android’s smartphone marketshare has exploded from 1.8% to 17.2% this year, according to tech research firm Gartner, while Apple is at 14.2%. Apple’s announcement this week really targets Adobe and its Flash technology, which heretofore Apple CEO Steve Jobs had declared war on.
–Google introduced an instant search feature that gives users results as they type in requests in an attempt to stay ahead of the competition. In July, Google had 65.8 percent of searches in the U.S., down from 66.2 in June, according to ComScore. Yahoo! added share.
–McDonald’s is a terrific global economic barometer and its same-store sales for August rose 4.9% over year ago levels, slightly below estimates; but most importantly increased just 2.2% in Europe. [4.6% in the U.S.]
–Goldman Sachs was fined $31 million by British regulators for not disclosing it was being probed by U.S. regulators in the “Abacus” deal.
–Many in Britain are upset American Bob Diamond was named CEO of one of Britain’s biggest banks, Barclays. Among the concerns is the fact Diamond is from the investment banking side of the business, which of course was the source of much of the problems. The Liberal Democrats, part of Britain’s ruling coalition, want the big banks to split themselves into two, separating risk-taking arms from the more stable parts of the business that focus on savings and mortgages. The Lib Dems talk of protecting the British taxpayer from systemic risk.
–In the annual ranking put out by the World Economic Forum, the United States fell to 4th in terms of global competitiveness, behind Switzerland, Sweden and Singapore. Germany is No. 5.
“The [U.S.] public does not demonstrate strong trust of politicians,” said the WEF, while the business community “considers that the government spends its resources relatively wastefully. There is also increasing concern related to the functioning of [U.S.] private institutions, with a measurable weakening of the assessment of auditing and reporting standards as well as corporate ethics.”
Bang on. Our ethics suck. But not nearly as bad as Russia’s, that country ranking No. 63.
–Taipei-based Foxconn (or Hon Hai), the world’s largest contract manufacturer of electronics, said its annual sales growth target, essentially 30% a year for more than a decade, would be cut to 15%. But as Chairman Terry Gou, Taiwan’s richest man, said, “How many companies have grown this big and still grow 30%? 15% is also big.”
The company is now a $60 billion operation (with 1 million workers, including 900,000 in China), and it is suffering, relatively, due to falling PC demand, which isn’t being met by rising demand for the Apple iPhones and iPads that it manufactures.
Gou, 59, founded the company in 1974 and said he would stay on until his 1-year-old daughter gets married.
–Season tickets for the NFL have declined a third straight year, though the final figure for 2010 is down only 1-2 percent, not bad given the economy. Average regular season attendance also dropped from 2006 (68,774) to 2009 (67,509). The bigger issue for fans this year is some franchises, such as Jacksonville and Tampa Bay, face blackouts.
–Last Christmas season, Toys “R” Us set up 90 temporary mall-based stores. This year it’s going for 600 pop-ups. Said Gerald Storch, CEO, “Our customers told us they liked the convenience of buying toys where they were shopping for other holiday gifts.”
This story just strikes me as being brilliant, for some reason. The idea of taking advantage of vacant mall space, but only for the prime selling-season. Love it. Good for them. Hope they kick ass. [Of course the concept really started with pop-up Halloween stores and Christmas ornament boutiques.]
By the way, the company claims it takes less than a week to open and close a temporary store.
But while Toys “R” Us will be hiring 10,000 temporary workers, most major retailers plan on hiring the same number as last year.
–Deflation Watch: CEO Jamie Dimon of JPMorgan Chase first listed his Chicago mansion at $10.5 million. Now it’s down to $6.95 million. At least Dimon purchased it in 2000 for $4.7 million. It was built in the late 1800s and has eight bedrooms and nine full baths. Actually, it was first listed in April 2007 for $13.5 million, as I read further. [For you Chicago residents, it’s near Lake Michigan and Oak Street Beach, on the corner of Astor and Banks streets, 25 E. Banks Street, to be exact.] So go ahead…knock on the door and ask if you can use the bathroom. When the caretaker says, “No,” reply, “Hey, I know you have nine!”
–The following isn’t necessarily surprising, given market trends, but worth noting nonetheless.
Annual revenue collected by U.S. hotels from phone calls dropped to an average of $178 per room in 2009 from $1,252 in 1999, a decline of 86%, according to Colliers PKF Hospitality Research and the Los Angeles Times. Income from in-room movies and games dropped to $126 per room from $171.
Matt Greene, general manager of the Hard Rock Hotel in San Diego, said in-room entertainment “revenue is gone. It’s nonexistent.” Instead, consumers are demanding free Internet access and iPod docking stations, and 55% of U.S. hotels offer online access at no charge. So how is it I always seem to be staying where they do charge?!
–The London Times reported that Prince Charles took a bath on a big real estate play involving assets for his Charities Foundation. He’s totally ethical, as are his advisers, but they stupidly purchased “Dumfries House” for like $60 million in 2007 and then the market crashed. Said Sir Michael Peat, the Prince’s principal private secretary, “We were a little unlucky. We did not spot the crash in development land prices.” I’m offended Sir Michael wasn’t reading StocksandNews.
–Spending on newspaper ads declined 5.6% in the second quarter, according to the Newspaper Association of America, though at least the rate of decline is narrowing on a year-over-year basis. Gannett, for example, the largest U.S. newspaper publisher, said in July that print-ad revenues fell 6%.
Online ad spending rose 14% in the quarter, after a 5% improvement in Q1. Online now represents 12% of overall newspaper advertising revenues.
–According to an internal survey, six in 10 Americans ages 18 to 25 couldn’t identify Colonel Sanders as the founder of KFC from the logo. Five in 10 believe he’s a made-up icon.
So by god, KFC is taking action. It’s turning to Facebook, Twitter and such to reach out to the younger folks.
But as Bruce Horovitz of USA TODAY pointed out, part of the problem is KFC’s own doing as they “ping-ponged back-and-forth from fried-chicken-maker to grilled chicken specialist. In the logo, it put the colonel in a red apron instead of his iconic white suit. And it turned its Kentucky Fried Chicken name into KFC.”
–Happy Birthday, Hallmark Cards. 100 years of sappy sentiments. The company has been struggling, owing to electronic media, though I don’t know about you, but it’s been awhile since I’ve seen an e-card.
–John Kluge, founder of Metromedia, passed away at the age of 95. Talk about a giant. Metromedia was the nation’s first major independent broadcasting entity with seven television stations, 14 radio stations, the Harlem Globetrotters, the Ice Capades (when this was a big deal), billboards, and mobile phones.
In 1922, at the age of 10, the German immigrant took his first job as a payroll clerk for his stepfather in Detroit. At 37 he was a millionaire. And in 1984 he became a billionaire when he took Metromedia private in a leveraged buyout, and then liquidated the company, more than tripling his take. Among the moves was his sale of WNEW in New York for $2 billion to Rupert Murdoch, and the rest is history. To give you a further idea of Kluge’s investment acumen, he acquired the Globetrotters and Ice Capades, together, for $6 million, and sold them for $30 million.
Kluge wasn’t without his critics, including shareholders, but in 1986, Forbes listed him as the second-richest man in America after Wal-Mart’s Sam Walton. This year, Kluge was worth $6.5 billion, 109th. Among his many philanthropies was giving a half-billion to alma mater Columbia, and he was a major contributor in the restoration of Ellis Island.
–Piers Morgan is taking over for Larry King in January (last day for King being Dec. 16, which I’m sure even I’ll watch for the obligatory meltdown).
Foreign Affairs
Afghanistan: The fallout from Pastor Terry Jones’ potential actions spread before a match was lit, as is the case on all such matters these days, whether it’s the threat of burning a Koran or drawing a cartoon making fun of Islam. General David Petraeus, in condemning Jones, said, “It could endanger troops and it could endanger the overall effort. It is precisely the kind of action the Taliban uses and could cause significant problems. Not just here, but everywhere in the world we are engaged with the Islamic community.” Sure enough, there were deadly riots in Kabul, and more as I go to post.
This was also a week where the problems at the leading financial institution in Afghanistan, Kabul Bank, was front and center as a run by depositors led to $300 million of $500 million being pulled out before a freeze was initiated. Even though only 5% of Afghans have bank accounts, this is a critical event as it leads to a further loss of confidence in the Afghan government and President Hamid Karzai, whose brother is a major shareholder in the bank.
On the war front, the number of foreign troops killed in Afghanistan this year exceeded 500, compared with 521 in all of 2009. 80 were killed in August (57 Americans), 88 in July, and 102 in June. Since the start of the war in 2001, over 2,060 foreign troops have lost their lives.
These next few months are critical, by Gen. Petraeus’ own admission, as he recognizes there is a need to show progress before the next review for President Obama in December.
Iraq: Combat operations were to have ended on Aug. 31, but on Sunday, Sept. 5, the United States was called on to come to the aid of Iraqi soldiers under attack in Baghdad, while a few days later, an Iraqi wearing an army uniform killed two American soldiers.
Iran: What has President Ahmadinejad been up to? The same old, same old.
“Any offensive against Iran means the annihilation of the Zionist entity. Iran does not care much about this entity because it is on its way to decay,” said the guy with the Members Only jacket.
This as the International Atomic Energy Agency, under the auspices of the United Nations, said Iran has increased its uranium stockpile.
“The passage of time and the possible deterioration in the availability of some relevant information increases the urgency of this matter. Iran has not provided the necessary cooperation to permit the Agency to confirm that all nuclear material in Iran is in peaceful activities.”
“The IAEA has also sounded the alarm on Iran’s growing refusal to cooperate with inspectors, allow access to nuclear sites and answer its questions – for example, about its nuclear warhead program. It says it can’t confirm the quantity of certain nuclear materials and wasn’t provided information it sought about plans for new enrichment facilities. The IAEA says it ‘is concerned that the repeated objection to the designation of experienced inspectors hampers the inspection process and detracts from the agency’s ability to implement safeguards in Iran.’ No doubt.
“By now this is Groundhog Day, the Persian movie classic. The Iranian secret enrichment plant at Natanz came to light in 2002 and the illegal underground facility near Qom last year. Information about Iran’s consistent attempts to build warheads and procure ballistic missile technology and hardware has come out in steady bits. As Iran now pulls a longer shroud over its nuclear work, how can anyone not consider anything Iran does in the nuclear field a significant proliferation threat?”
Former British Prime Minister Tony Blair said you cannot rule out military action against Iran, saying any attempt to contain it, should Iran obtain nuclear weapons, wasn’t worth the risk.
“I had someone say to me… ‘Come on, look, supposing Iran gets the nuclear weapon, it’s not the end of the world. I mean, why should they want to use it? Why would they want to cause all that destruction?’ It’s a perfectly sensible argument you hear. And who knows, they may be right. All I know is, if I was a decision maker, I wouldn’t take the risk….
“I would tell them they can’t have it, and if necessary, they will be confronted with stronger sanctions and diplomacy.”
[On the threat posed by radical Islam, Blair said: “This extremism is so deep that in the end they have to know that they’re facing a stronger will than theirs.”]
Israel: Direct talks between Palestinian President Mahmoud Abbas and Israeli Prime Minister Netanyahu are to begin Sept. 14-15 and then take place every two weeks thereafter, but the settlements moratorium expires Sept. 26 and if it’s not extended, it is highly unlikely there would be a round two.
“The prospects are dim but the process is right. The Obama administration is to be commended for structuring the latest rounds of Middle East talks correctly. Finally, we’re leaving behind interim agreements, of which the most lamentable were the Oslo accords of 1993….
“Hence the wisdom of how the Obama administration has shaped the coming talks: No interim deals, no partial agreements. There are no mutual concessions that can be made separately within the great issues – territory, security, Jerusalem, the so-called right of return – to reach agreement. The concessions must be among these issues – thus if Israel gives up its dream of a united Jerusalem, for example, the Palestinians in return give up their dream of the right of return….
“The obstacle today, as always, is Palestinian refusal to accept a Jewish state. That has been the core issue of the conflict from 1947 through Camp David 2000, when Arafat rejected Israel’s extraordinarily generous peace offer, made no counteroffer and started a terror war (the Second Intifada) two months later.
“A final peace was there to be had. It remains on the table today. Unfortunately, there’s no more sign today of a Palestinian desire for final peace than there was at Camp David….
“Indeed, this week Abbas flatly told al-Quds, the leading Palestinian newspaper, ‘We won’t recognize Israel as a Jewish state.’ Nice way to get things off on the right foot….
“Abbas will walk out if the freeze is not renewed on Sept. 26. You don’t need to be prescient to see that coming. Abbas has already announced that is what he’ll do….
“The talks are well designed. Unfortunately, Abbas knows perfectly well how to undermine them.”
Separately, Foreign Minister Avigdor Lieberman, a bad guy, told activists from his party that a peace agreement was not achievable for generations, in a further reflection of just how difficult the times are for Netanyahu if he is to stay in power.
So Kadima leader Tzipi Livni took advantage of Lieberman’s hawkish talk and challenged Netanyahu to reach an agreement with Abbas.
“Kadima wishes the prime minister success, unlike his own ministers. The ministers are already talking about failure before the talks have even started. I say to them that they have no right to take hope away from the citizens of Israel. An end to the conflict is achievable if the prime minister wants it. There is no such thing as ‘I can’t.’ There is only ‘I don’t want to.’”
Of course on the other side you have Hamas, which at every step is undermining Abbas in saying he does not represent the Palestinian people.
As for President Obama, at his press conference on Friday, he said Israel should keep the moratorium in place as long as the talks continue, which makes perfect sense.
Lebanon: Five years after the assassination of former prime minister Rafik Hariri, it’s troubling how Syria is worming its way back into Lebanon, though this time with the support of the Hariri family’s prime benefactor, Saudi Arabia, because the Saudis see Syria as a balance against Hizbullah, Iran’s private army, and the Saudis are trying to put a wedge between Damascus and Tehran.
Rafik’s son and current prime minister, Saad, this week dropped his accusation that Syria was involved in his father’s murder.
“We made mistakes in some places; at some point we accused Syria of assassinating [Rafik Hariri] and this was a political accusation.” False witnesses, Saad continued, who “mislead investigations did harm to Syrian-Lebanese ties by politicizing the murder….A man should be pragmatic to build ties on solid grounds and he has to re-evaluate the past years to avoid repeating past mistakes. Thus we did a reevaluation of mistakes from our part toward Syria.”
Meanwhile, the Special Tribunal for Lebanon continues under the direction of Prosecutor Daniel Bellemare, and it’s not known which direction he will end up going in. Place some blame on Syria, Hizbullah, and/or both? Or does he punt? Hariri’s comments were seen in some quarters as an attempt to defuse any tensions that arise as a result of Bellemare’s final verdict.
“Hariri’s calculation was probably to retain some semblance of leverage over Hizbullah. The Syrians, playing both sides of the aisle in order to advance their own interests in Lebanon, have been encouraging their Lebanese megaphones to discredit the tribunal and call for its dissolution, even as they have avoided putting direct pressure on Hariri to end cooperation with the institution. The Syrians are still thinking of using an indictment in ways that expand their power, but they, like Hizbullah, ultimately want the tribunal to be killed from the Lebanese side, so that it won’t harm them.
“It is difficult to see how Hariri can come out of this convoluted maneuvering with anything in hand. His comments this week, particularly on the ‘false witnesses,’ were early steps on a slippery slope that can only wreck the tribunal’s effectiveness. The prime minister may want to retain leverage, but his chances of succeeding are diminishing by the day, and the Syrians win either way. What weakens Hariri helps them; what weakens Hizbullah helps them; and a dispute between Hariri and Hizbullah helps them, too.”
“The prosecutor can no longer pretend that there is an isolated, unadulterated judicial process on the one side and politics on the other. The two are bleeding into each other, and the politics are decisively contaminating Bellemare’s investigation. The trial process will be doomed unless the prosecutor acts. And the only card he really holds is to make the Security Council assume its responsibilities.”
In an exchange of notes this week, Mr. Young, who has lived in Beirut basically his entire life and has seen it all, said we know who killed Hariri and who participated, but should Bellemare have the guts to act accordingly, will it be in a form that will hold up in court?
One other aside…President Ahmadinejad is scheduled to make his first trip to Lebanon in mid-October. This won’t be helpful. Good chance to take him out, though….on a little cruise along the coast, I meant.
Pakistan: For all the criticism of President Obama, give him credit for the unrelenting drone attacks on militants, four in a 24-hour period this week and far more than President George W. Bush approved.
But the Taliban have now renewed attacks on girls’ schools in northwest Pakistan, once again providing evidence, if any more was needed, that a U.S. pullout from the region would be catastrophic for women in both Pakistan and Afghanistan.
China: Various tidbits…
National Economic Council Director Lawrence Summers and deputy national security adviser Thomas Donilon paid a visit to Beijing in an effort to smooth over existing tensions, and “sound” and “stable” was how a Chinese official later described the two countries’ relationship. I have been urging President Obama to spend more time on this front and at least this is a start.
A collision between a Chinese fishing vessel and the Japanese coast guard near disputed islands in the East China Sea has caused a stink. Japan arrested the captain of the fishing boat and China is demanding he be released. Japan accuses the captain of deliberately steering his boat into one of the patrol boats.
Taiwan expects to have its missile defense shield ready next year, including six batteries of Patriot III missiles that form the backbone of the system. Relations with China may be on the upswing, but the government cannot ignore the estimated 1,600 missiles targeting Taiwan from across the Strait.
Indian Prime Minister Singh levied a rare critique of China in saying, “China would like to have a foothold in South Asia and we have to reflect on this…We have to be aware of this. There is a new assertiveness among the Chinese. It is difficult to tell which way it will go. So it’s important to be prepared.” At the same time, however, Singh said he believed the world was large enough for India and China to “cooperate and compete.”
But Russian President Vladimir Putin said Russia has nothing to fear from China amid concerns China will one day occupy vast swathes of Russian territory in the Far East, calling the potentiality of this overblown. “We have been neighbors for hundreds of years. We know how to respect each other.” Russia recently opened a pipeline last month carrying Siberian oil to China as Moscow is keen to diversify away from dependence on the West.
Lastly, China may relax its one-child policy as its rapidly aging population is going to create tremendous stresses in the future.
North Korea: The Korean Worker’s People’s Congress is underway and it is expected that Kim Jong-un, son of Kim Jong-il, will be designated the latter’s successor, though it is also expected that since Kim Jong-un is ‘twenty-something,’ his father’s brother-in-law, Chang Song-taek, will act as regent until the younger Kim can build a power base.
But Kim Jong-un’s inexperience could lead to major instability, and in this part of the world, that is not good.
Russia: A suicide car bomber hit a market in the North Caucasus, killing at least 16 and wounding 130, many of whom were in grave danger, in one of the worst attacks in the region in years. As of this writing, no one has claimed responsibility but in the same region in 2004, Chechen militants took hundreds hostage in the Beslan school crisis, which resulted in the deaths of more than 330.
Australia: Prime Minister Julia Gillard secured a second term in office after winning the support of independent lawmakers to form a minority Labor government, with Gillard now vowing to move ahead with a new mining tax while working on a plan to force major polluters to pay for their carbon emissions.
But Gillard has a whopping one seat majority (out of 150), with one independent saying he reserved the right to vote as he so chose, including moving a no-confidence motion in the government if need be. 56% of Australians prefer another poll; 66% in the mining-heavy west of the country.
Gillard did tab former Prime Minister Kevin Rudd to be foreign minister in a rather bizarre move, Ms. Gillard having stabbed Rudd in the back to gain power in the first place.
Japan: Ahead of a September 14 Democratic Party of Japan (DPJ) leadership election, 2/3s of Japanese voters prefer Prime Minister Naoto Kan to firebrand Ichiro Ozawa. Kan has seen a comeback in public opinion as Ozawa has been plagued by scandal. However, when it comes to how party lawmakers will vote, some say the outcome is too close to call.
Spain: ETA, the Basque separatist group, declared a cease-fire, though the group which is responsible for at least 800 deaths in its 41-year separatist campaign did not offer to lay down its weapons, so the interior minister said the claim was nothing but a crock. Alfredo Perez Rubalcaba said, “I don’t trust this one bit.” ETA has previously called for cease-fires that then collapsed. More likely, the reason for its announcement now is that it is struggling under pressure from a number of sides (including French police) and is hoping that by taking some heat off, it is has time to regroup.
Germany: Chancellor Angela Merkel, her coalition government sliding in the polls ahead of key elections early next year, cut a deal with the nuclear power industry to extend the lifespans of nuclear power plants in the country by 8-14 years, depending on the age and technology used for each facility. Environmentalists want them closed down, but seem placated that the deal also steers more public and private support to the renewable energy industry. The 17 plants in the country were to have been all shut by 2021 under previous agreements.
Separately, an update on a story I noted the other week. Thilo Sarrazin, a member of Germany’s Bundesbank, has resigned amid the uproar caused by his anti-Muslim and Jewish statements.
South Africa: Trade unions here ended a three-week-old strike by hundreds of thousands of government workers that had largely crippled the country, closing schools and causing chaos in the health care system, among other things. Labor leaders are now examining the latest government proposal for a 7.5% wage hike vs. the 8.6% the unions were demanding. The “suspension” in the work stoppage is expected to last weeks until members have been polled.
Nigeria: Here’s some not so good news. As many as 800 Muslim extremists escaped from a federal prison after an attack by gunmen from a sympathetic radical sect. Those who fled were from a sect that was responsible for 700 deaths in July 2009 rioting. The group, Boko Haram, is calling for the implementation of Shariah law across Nigeria. A dozen states in the Muslim-dominated north already have it in place.
Somalia: Score one for the good guys. U.S. Marines retook a German-owned vessel that had been hijacked by pirates off the Somali coast. The 11-man crew had sealed itself off in a safe compartment and the nine pirates were captured with no casualties. This marked the first time the Marines seized a pirated vessel here.
Mexico: President Obama and Secretary of State Hillary Clinton may be having a cup of coffee together soon concerning conflicting remarks made by the two regarding the security situation in Mexico. First, Clinton said the drug war in Mexico was showing increasing signs of morphing into an insurgency like the one that plagued Colombia 20 years ago.
Mexico vehemently denied they had lost control over parts of the country, saying the only thing Mexico and Colombia’s conflicts share is the high demand for drugs in the U.S.
“Mexico is a vast and progressive democracy, with a growing economy, and as a result you cannot compare what is happening in Mexico with what happened in Colombia 20 years ago.”
But on Friday the Wall Street Journal reported that the administration was indeed treating the violence in Mexico as a growing threat to national security, with the Pentagon and Department of Homeland Security assessing what further resources can be employed to combat the drug cartels, including increased use of aerial surveillance. But in terms of sharing intelligence and resources with their Mexican counterparts, U.S. agencies are wary because it’s no secret many Mexican authorities are on the payroll of the cartels. And, even those in the government who would welcome more assistance from the U.S. recognize that a large segment of the Mexican people would see further involvement as a breach of its sovereignty.
Meanwhile, another Mexican mayor was assassinated, at least the seventh this year, while the cartels have been terrorizing key crude oil and natural gas operations of giant Pemex, kidnapping at least 35, including both locals and Pemex workers.
And then on Friday, we learned that 85 prisoners, mostly cartel members, escaped from a jail near the U.S. border with Texas (McAllen), while it was announced that in the border town of Ciudad Juarez, across from El Paso, gunmen killed 25 people on Thursday, including the deaths of 15 when attackers stormed four homes in three hours. In one, gunmen killed two young men, then four others for being witnesses. Ciudad Juarez, a city of 1.3 million, has seen over 2,100 killed this year. In 2009, 2,700 were killed. To try and put this in perspective, at the height of New York’s crack epidemic, there were 2,200 murders, but in a city of about 8 million then.
El Salvador: And here’s another awful story from south of our border. The Mara 18 and Mara Salvatrucha street gangs (with many a chapter here in the U.S.) are terrorizing the country as they have told transit operators to observe a shutdown, or face the consequences. Thousands of troops have been deployed to protect bus drivers and commuters.
This stems from an anti-gang law that was introduced in July after gang members torched a bus, killing 17. The law would make membership in a gang a criminal offense. It also describes the two gangs in particular as “social extermination groups.”
President Mauricio Funes said he would not be intimidated and would sign the law.
Giving into the extortion, 80% of public transport has been suspended. El Salvador has one of the highest murder rates in the world.
Cuba: Fidel Castro told Jeffrey Goldberg, national correspondent for The Atlantic magazine, and an expert on Cuban affairs with the Council on Foreign Relations, that his country is in need of change, and that “The Cuban model doesn’t even work for us anymore.”
This isn’t necessarily big news, seeing as brother Raul has echoed similar sentiments in calling for gradual reform, but perhaps more importantly, the 84-year-old Castro was described as being in vigorous form.
Remember how years ago our CIA said Castro was near death and I said that wasn’t the case?
Chile: As if the trapped miners here don’t have enough problems, hopefully they are not too aware of some of the issues transpiring above ground. Relatives have proven to be a royal pain in the ass, as they squabble over who gets what relief supplies. Additionally, in some cases the wife is fighting it out with the mistress.
“One miner’s wife and lover were both keeping vigil at the camp. When the two realized they were both praying for the same man, they had a very public argument, and the wife tore down a poster with the miner’s photo that the mistress had set up.”
It’s all about who gets the salaries while the miners are underground. At least relief agencies appear to be handling donations in the correct manner.
Canada: Go Ca-na-da! Conservative Prime Minister Stephen Harper is looking to acquire 65 F-35 Joint Strike Fighters, using the threat posed by Russian incursions into domestic airspace, while the opposition says the purchase isn’t necessary. The government’s public relations offensive has included the release of what would normally remain secret intercepts of Russian aircraft, though the Russians and the joint U.S.-Canadian North American Aerospace Defense Command (NORAD) said the flights are routine and that Harper is unnecessarily saber-rattling. I say, the stronger Canada’s military capabilities are the better it is for the U.S.
Random Musings
When voters are asked whether they prefer that November’s vote produce a Congress controlled by Democrats or by Republicans, they split evenly, 43% favoring Democrats and 43% Republicans.
But, just as all the recent polls show, among those likely to vote, Republicans carry a 49-40 advantage.
On the economy, just 26% think it’s getting better (it was 47% a year ago). Only 39% approve of President Obama’s handling of it, while 61% believe the country is on the wrong track.
Obama’s job approval rating in this survey is now just 45%, with 49% disapproving.
Republicans are favored 47-45 when voters are asked who they would back in their congressional district, but, again, among those likely to vote this fall, in this poll the margin swells to 53-40.
And get this. Four years ago, a month before Democrats won control of the House, 55% of all voters said most Democratic representatives deserved another term. Today, just 34% believe this should be the case.
[Among the key independent voter bloc, 59% say they would prefer to have Republicans in charge of Congress.]
Obama’s overall job approval rating is at a new low for the ABC poll, 46%, with 52% giving him negative ratings.
Democratic leaders understand there is virtually nothing that can transpire over the final seven weeks to significantly change any of the above. The key is, as always, turnout and Republicans will. And one key bloc for the donkeys, the black voter, will in no way turn out anywhere close to the numbers for Obama in Nov. 2008.
What Republicans, particularly its leadership, have to do is avoid a major mistake. You also have the unpredictability of an October surprise on the geopolitical front, but this isn’t 2012, it’s 2010, and an event that would lead to the nation rallying around its president wouldn’t you think then translate into more support for congressional Democrats.
[By the way, in 1994, President Clinton’s job approval rating was 46% and the Democrats lost 54 House seats. This year Republicans need to gain 39, and/or 10 in the Senate.]
Finally, I am going to be out of town on Nov. 2, so I just got things moving on my absentee ballot. It’s been a while since I needed one and not to insult your intelligence, but if you are going to be away, get the ball rolling sooner than later by contacting your county authorities.
“President Obama spent Labor Day reminding Americans that he’s the cool one, the ‘Yes, we can’ one, the rolled-up-sleeves one. He never named Ohio Republican Rep. John Boehner explicitly, but he clearly was aiming for the man who, if things go as they seem to be going, will be the next speaker of the House.
“Speaking to Laborfest in Milwaukee, Obama referred to ‘the Republican who thinks he’s going to take over as speaker…I’m just saying, that’s his opinion.’
“His shirt sleeves rolled up as workingman politicos always do, Obama all but said: ‘Pay no attention to the man with the fake tan.’
“And, he said: ‘Somebody out here was yelling, ‘Yes, we can.’ Remember that was our slogan?’ (Yes, we remember.) ‘Their slogan is ‘No, we can’t!’ Nope! No! No! No!’
“Except, oh dear, yes they can. And ‘no’ is a pretty sound position when the nation is careening off a cliff.
“Obama’s Midwestern jobs push carries a hint of the little boy doing cartwheels to get attention. He has a playlist of favorite songs and he keeps hitting replay in hopes of resurrecting the old magic. It’s not working….
“The moral of this tale is that Obama is out of touch with the American people – and he still just doesn’t get it. They are sad and mad, and the disappointer in chief is banging pots at a bogeyman that doesn’t exist….
“When the nation is punch-drunk with promises, and even the young – jobless and disenchanted – have been tilting right, change really is in the air.”
–President Obama made a huge error at the above-mentioned Laborfest when he told an audience that Washington lobbyists “talk about me like a dog.”
Former Democratic strategist Larry Sabato told the London Times, “He shouldn’t have said it. You never want to let them see you sweat. Presidents are supposed to take the criticism and come up smiling.”
David Frum, former speechwriter for George W. Bush, called the remark “a terrible mistake. The idea that a President would complain in public about hostile opponents shows you’ve lost the plot. You live in a mansion. You have a big plane. Suck it up. It goes with the job.”
–Editorial / London Times…in discussing items such as the Ground Zero mosque and Pastor Jones.
“All of these show a country wrestling with moral and philosophical conundrums that are far more complex than the wider world is often prepared to credit. For all that, Mr. Obama is coping with them remarkably badly. During his election campaign in 2008, he was often accused of seeking to be all things to all men. His reputation today is the antithesis of this. His traditional opponents consider him a greater threat to their America than ever before. His traditional supporters, meanwhile, consider him an increasingly poor cheerleader for theirs.
“The United States is a country unlike any other, and the battleground of tensions that those who live elsewhere can often struggle to comprehend. It is at once a beacon of liberty, democracy and the rule of law, and a conservative, traditionally minded, predominantly Christian nation, with a reverence for the military.
“Such were the threats posed by Islamist terrorism after 9/11, the Administration of President George W. Bush considered the tempering of some traditional American values a price worth paying as a means of safeguarding the rest. Since his election, Mr. Obama has consistently fudged on Guantanamo, failing to either come up with an adequate means to try those detained, or a justification for their continued detention.
“The linked cases of the New York mosque and the Florida Koran-burning expose similar tensions. Neither are the clear-cut, slam-dunk cases of moral right and wrong that they could appear elsewhere. Respect and liberty are not easy bedfellows. In the U.S., unlike Europe, the inclination has historically been towards the latter. Laws on this side of the Atlantic, which prohibit incitement, are widely considered grotesque in the land of the First Amendment.
“While burning the Koran would be considered offensive by almost everyone, there are plenty who would consider a prohibition against doing so more offensive still. As Michael Bloomberg, the Mayor of New York, put it, perhaps warily, ‘the First Amendment protects everybody.’
“His clarity in elucidating the American contradiction stands in stark contrast to the handwringing incoherence of Mr. Obama, and not for the first time. The President conveys an academic detachment from the popular passions these cases have stirred. Unlike the tub-thumping defense offered by Mr. Bloomberg, Mr. Obama vaguely supported the New York mosque while vaguely seeking to appease its opponents, pleasing nobody. On the Koran burning, he has focused on practical considerations about retaliatory attacks on troops. This is a stance that will have struck those who agreed with him as weak, and those who did not as exactly the sort of appeasement that this idiotic stunt considers itself to be taking a stand against.
“President Obama was supposed to be the unity candidate, but on his watch America has only grown more polarized. Had he brought this about by delighting his base and enraging his foes, that would be bad enough. Worse, he has appeared to watch it happen with a growing bemusement. In his campaign for election, he embodied his country’s dreams. Nine years after 9/11, he increasingly embodies its divisions.”
**I’m invoking my ‘wait 24 hours’ dictum in commenting further on Pastor Jones until I see what happens this weekend, including activity at the proposed Ground Zero mosque. For now I repeat my stance that the mosque should not be built at this location and that I want to know more about Imam Rauf and where the funding for the project would come from. In a nutshell, I have been given zero reason to trust him, even if he has been working with our State Department.
–White House chief of staff Rahm Emanuel is licking his chops after Chicago Mayor Richard Daley announced he would not seek re-election next year. Emanuel has made it quite clear over the years he would love the job so he’s expected to leave the administration to pursue the office, though many in Chicago wonder if he’s really a favorite among voters there. The filing deadline is Nov. 22 and he’d have to get 13,000 signatures between now and then so he needs to decide soon whether to go for it.
–WikiLeaks co-founder Julian Assange, the face of evil, is under pressure from within his organization to step down after prosecutors in Sweden reopened a rape investigation. The Director of Public Prosecutions there said the other day, “There is reason to believe that a crime has been committed.” For his part, Assange can no longer claim this is all part of some smear campaign when his own people want him out.
–The death toll on the nation’s roads fell 9.7% in 2009 to 33,808, the lowest since 1950. Florida and Texas led the way, with 422 and 405 fewer deaths, respectively. The economic downturn may have played a role, though miles driven were flat in 2009 vs. 2008.
So, you’d have to say ongoing campaigns to encourage seat belt use, along with more cars that have side air bags, have been a huge help.
–The vuvuzela has been banned from European and Champions League soccer games. It’s about freakin’ time.
–USA TODAY had a story on the booming bird population. For example, since 1990 the number of eastern U.S. and Canada geese that have decided to stay rather than go home when their work visas expire has tripled to nearly 1 million. I’m surprised it hasn’t quintupled.
But I didn’t realize the black vulture population, particularly down south, has become such a big issue as well. In Everglades National Park, for example, “officials plan to use an arsenal of water guns, laser lights and noisemakers to scare off native vultures around parking lots. The birds rip the rubber off windshield wipers and sunroof seals.”
To quote Ebenezer Scrooge, “Are there no prisons? Are there no workhouses?” [Just throwing out the more humane options, not wanting to totally upset my animal rights activist readership.]
–There were a lot of headlines such as the following this week:
A new study purports that high doses of B vitamins may halve the rate of brain shrinkage in older people experiencing the early signs of Alzheimer’s.
“The average brain shrinks at a rate of 0.5% a year after the age of 60. The brains of those with mild cognitive impairment shrink twice as fast. Alzheimer’s patients have brain shrinkage of 2.5% a year.
“The team, from the Oxford Project to investigate Memory and Ageing, found that on average, in those taking vitamin supplements, brain shrinkage slowed by 30%.
“In some cases it slowed by more than 50%, making their brain atrophy no worse than that of people without cognitive impairment.”
But before you go rushing to buy massive quantities of B vitamin supplements, understand vitamin B in high doses may have separate health risks, and for starters, B vitamins are found naturally in foods such as meat, fish and eggs.
–The New York Post had a story on fighting the common cold, a war that can’t be won, basically. The average adult gets 2 to 4 a year (up to 12 for children), and we sleep 23 minutes less when we have one, which doesn’t help.
But “What’s the only cold remedy scientifically proven to work?”
It was actually first recommended in the 12th century, according to the paper, because it “offers hydration, flushes out the nasal passages with its aromatic steaming, and, studies have found, the amino acids present in the chicken break down the bonds in the proteins that create mucus, reducing its thickness and stickiness [not to gross you out.] Chicken soup also dampens inflammation by reducing the movement of white blood cells that are drawn to infections, according to a study by University of Nebraska Medical Center.” The veggies in chicken soup also help.
–So did you see the publicity shot of Bristol Palin for “Dancing With The Stars”? Mother Sarah came out in support of her daughter after she was compared to “DWTS” contestant Kate Gosselin, who was a most troublesome sort, with Sarah tweeting:
“Wow, media goofballs rearing heads this wk, big time! Wonder what’s up? Taking the cake: ink re: Bristol=a diva? Silly; obviously have nvr met her.”
–A report out of Stanford University notes that in the initial aftermath of a nuclear strike on a major urban area, airborne radiation would place evacuees in greater danger than individuals who remain deep inside buildings or underground areas. Congestion along possible evacuation routes would force people attempting to flee the site of a nuclear attack to withstand long periods of exposure to radiation, unless they learn of an impending strike well in advance, UPI quoted a Society for Risk Analysis statement as saying:
“The logistical challenge of an evacuation appears to be beyond current response capabilities,” said professor Lawrence Wien.
Here’s the bottom line. A full reaction by federal authorities could not be expected in the first 72 hours after an attack.
“Unlike a bioterror or chemical attack, it may not be possible for the government to provide timely advice to the populace after such an event,” says the report, which employed complex mathematical calculations in producing its conclusions. [Global Security Newswire / UPI]
So I’m thinking it’s yet another reason to stock up on Chex Mix and domestic, plus in my case I’ll also have the full “Leave It To Beaver” DVD set available.
The University of Baltimore is offering a class in Zombie studies.
Pray for the men and women of our armed forces, and all the fallen.
Gold closed at $1247…after hitting the high of $1257
Oil, $76.48…key Midwest pipeline was shut down
Returns for the week 9/6-9/10
Dow Jones +0.1% [10462]
S&P 500 +0.5% [1109]
S&P MidCap -0.4%
Russell 2000 -1.1%
Nasdaq +0.4% [2242]
Returns for the period 1/1/10-9/10/10
Dow Jones +0.3%
S&P 500 -0.5%
S&P MidCap +5.1%
Russell 2000 +1.8%
Nasdaq -1.2%
Bulls 33.3
Bears 32.2 [Source: Chartcraft / Investors Intelligence]
Have a great week. I appreciate your support.
Dr. Bortrum has a new column up, the long-awaited start of his memoirs.
Brian Trumbore
