Stuff: Writing, talk, or ideas of little or transitory (passing) worth.
Two companies who invented nothing but have a lot of stuff
combined their assets in the largest corporate merger in history,
that being AOL and Time Warner. Not that there is anything
wrong with that. I”m just already sick of the “old media / new
media” schtick. Actually, I”m really bitter because I”m an AOL
shareholder and I saw my stake get whacked this week as
everyone put in their two cents as to what the new company is
worth. The bottom line is this. 13 million cable subscribers and
20 million AOL subscribers will now be able to access, through
various mediums, a lot of stuff. And somehow we”re supposed to
find the time to view it all.
As for the rest of the market, the news could not have been
rosier. Fed Chairman Alan Greenspan gave a speech wherein he
said the “American economy has never exhibited so remarkable a
prosperity for at least the majority of Americans.” And the
inflation numbers for December, and all of 1999, showed the core
rate (ex- the volatile food and energy components) to be running
at its lowest rate since 1965.
Corporate profits are anticipated to have grown by about an 18%
rate for the 4th quarter of ”99 and, if Intel”s strong report of this
week is any indication, this earnings season could be awesome.
Strong growth, low inflation, what”s not to love? So the markets
rallied and the Dow Jones hit another new all-time high, up 200
points to 11722. The Nasdaq and S&P 500 have now climbed
back to just below their respective highs as well.
But, as is his custom, in the same speech Greenspan offered a
cautionary note or two. He said the stock markets surge is
pushing the economy beyond its limits (the impact from the
”wealth effect”). And he urged Congress to keep its grubby hands
off the burgeoning federal budget surplus.
Well, all this talk had the bond market bewitched, bothered and
bewildered, with the yield on the 30-year Treasury climbing to the
6.69% level, the highest in about 2 + years. It is now expected
that the Fed will raise interest rates a + of one percent when they
meet in 2 weeks, but not the 50 basis points that was rumored
earlier in the week. [The other 25 will come in March, said the
editor].
Personally, I am continually amazed that wage pressures have yet
to appear. All I know is that the service I receive at the stores I
frequent gets worse and worse and as for stocks, when I read that
the average price/earnings ratio on the Nasdaq is 200 (trailing 12
months earnings) I gasp (well, not quite, but close to it). So I
don”t understand this new economy, this new era, or these new
valuations. I”ll just have to be content with my 50% cash and
hope my oil service stocks have one more big move in them.
Plus, I still own my garbage stock in case all hell breaks loose and
people start tossing lots of “stuff” out their windows.
One other corporate item of note (and it really doesn”t warrant a
special mention), that being Bill Gates decision to step down as
CEO of Microsoft, while retaining his chairman title. This is the
biggest non-event of the century (a safe bet since we”re only two
weeks into it). I can”t believe the huge media play it received.
The guy is still running the show, people. And he still heads up
the creative process. Geezuz. You”d have thought Tiger Woods
had decided to retire by some of the headlines I saw. As for the
rumors that the Justice Department will only accept a total
breakup of Microsoft (into 3 units), Gates and new CEO Steve
Ballmer were correct in finding it a little ironic that the
government is so concerned while at the same time AOL and
Time Warner are merging in a move designed to compete with
Microsoft.
Russia
Ten weeks until President Putin is formally elected. The latest
poll shows him 56-14 percent ahead of his only real challenger
(and I use the term loosely), Communist Gennadi Zhyuganov.
This week former prime minister Primakov announced he would
not run. So, the only thing Putin has to fear is….the Chechen
rebels. And the rebels spent the week counterattacking, wreaking
havoc on the conscripted Russian forces. Suddenly, many of the
Russian units are demoralized and for the first time since the
fighting began, the two state-controlled television stations hinted
strongly that the Russians were getting bogged down; shades of
the failed 1994-96 Chechen disaster. Yes, both Yeltsin and Putin
passed out war medals for a job well done a little too soon. It”s
kind of like rushing onto the ball field and handing a pitcher an
award because he has a no-hitter through 6 innings.
And how did the Russian army respond to the new realities?
They decided that all Chechen males between the ages of 10 and
60 would be rounded up and sent to camps where they will
undoubtedly be tortured for being Chechen. After all, that”s what
Stalin did. Plus, at week”s end the government warned the newly
independent media to go back to sticking to the facts, Russian
style.
On Friday, while the stock market rallied in the U.S., there was
another ominous development from Moscow. Putin signed the
new “Concept of National Security” into law earlier in the week
but the details were not released until yesterday. The doctrine
states, “The level and scale of military threats is growing” and it is
more flexible in the use of nuclear weapons to repel attacks. But
weren”t we told the Cold War was over?!
And to those who would have you believe that the Russian
economy is in the midst of a great turnaround comes this report
from the Economy Ministry. The number of Russians living
below the poverty line grew to 50 million out of a total
population of 147 million last year. Now to be fair, how can this
be if the economy has truly shown some growth over the past 12
months? Well, it could be because many Russians don”t report
their true income in order to evade taxes. It”s been that way for
centuries and I”m continually amazed when outsiders expect it to
be otherwise.
International
The Clinton administration chose this week to slam China for its
human rights policy. They finally applied a little heat in order to
show Congress that they are hard on human rights before the
WTO debate heats up.
Elsewhere in Asia, Malaysia”s Prime Minister Mahathir had some
opposition figures arrested and in Indonesia, 80,000 Muslims
rallied in Jakarta, threatening to declare a holy war against
Christians.
But wait, you want a holy war? One of the 3 freed Muslim clerics
from the recent Indian hijacking gave another speech, this time to
about 30,000 in Pakistan. “There is no way open for us other
than to wage jihad against India for Kashmir”s liberation.” It”s a
lovely new century, isn”t it?
The White House announced a huge $1.3 billion military aid
package for Colombia to strengthen its forces against the narco-
terrorists. While I agree with this, generally, it is not out of the
realm of possibility that sometime in the next few years the U.S.
will commit actual troops to this nation (on top of the U.S.
advisors we already have in Colombia).
And the lovely President Chavez of Venezuela declined U.S.
military assistance to help in the aftermath of the great floods.
Suit yourself, Hugo. And watch your people suffer.
Opposition forces in Serbia may finally have come together,
rallying around Count Vuk Draskovic. [Admittedly, this is only
like the 10th time I thought this occurred, just to see each
coalition fail].
Israeli Prime Minister Barak faces a tough go of it at home
selling the people on accepting a withdrawal from the Golan
Heights in exchange for peace with Syria. Before the latest peace
talks, 59% were for giving up the Heights. After the talks, only
49% were in favor (with 44% opposed). If and when an
agreement is signed between the two countries, the people of
Israel must approve of it in a referendum. Americans, on the
other hand, must be prepared to accept a major long-term
commitment on the part of our military to protect the peace, both
in terms of military aid as well as troops on the ground.
And regarding the Israeli / Syrian peace talks, Turkey is warning
the U.S. not to cozy up to Syria as part of any peace plan. There
is bad blood between Istanbul and Damascus. And in a different
development, Turkey”s president traveled to the nation of
Georgia (which borders Chechnya) as a show of support. Turkey
has military alliances with Georgia and Azerbaijan, both of whom
are worried that Moscow may make a move against them.
Tensions have been heating up since the U.S. agreed to a new
Caspian oil pipeline that avoids Russia. *On another matter, the
Turkish government opted to suspend the death sentence against
Kurdish leader Ocalan. This was a necessary step towards
gaining full E.U. membership since, as the E.U. does not allow
the death penalty, Turkey couldn”t hope to join if it carried out
the sentence.
And our heroic President Clinton has decided that it”s important
to keep Iraq out of the spotlight for the sake of Al Gore”s
campaign. Politics over unimpeded manufacturing of weapons of
mass destruction.
Elian
According to a CNN/Time poll, 56% of the American people say
ship Elian Gonzalez back to his father, 36% say keep him here.
I”m with the majority and, frankly, I don”t give a damn. And how
about Judge Rosa Rodriguez, the family court judge who ruled he
could stay in the U.S.? No conflict of interest there. Who cares
if she had paid $63,000 to Elian”s advisor, Mr. Gutierrez, for
campaign advice in her last election? Just pitiful. And how about
the speed in which Janet Reno acted when she overturned
Rodriguez” ruling? Too bad she couldn”t be that decisive when it
came to the Waco aftermath or the campaign finance scandal. Or
maybe to placate the Cuban-Americans in the U.S., we could
keep Elian and send Castro Ms. Reno?
This Week in Politics
More on Al Gore”s campaign chief, Donna Brazile. I didn”t have
all of the quotes when I wrote about her last week. In bashing
Republicans, along with Congressman J.C. Watts and Colin
Powell, she said, “(They) would rather take pictures with black
children than feed them.” Watts replied to Gore, “Her racist
remarks are appalling. When these kinds of things are said by
Democrats, they”re (seen as) no big deal because a Democrat
surely can”t be racist.”
Speaking on the “Today Show” Gore, in defending Brazile, said
she was doing a “terrific” job and that she”s speaking the truth
because Republicans “haven”t had an economic agenda that lifts
up the poor and disadvantaged.” Spare me.
The polls in New Hampshire continue to show dead heats in both
races between Bush-McCain and Gore-Bradley. But nationally,
Gore leads Bradley, 59-30, while Bush swamps McCain, 63-18.
Democrats are miffed at President Clinton as fundraising has
fallen dramatically. And the Dems are worried that the
Republicans 3 to 1 advantage in unregulated soft money will lead
to a blizzard of issue ads (too bad, it”s pay back time, donkeys).
Clinton has neglected his own party as he has been involved with
raising funds for Hillary”s campaign, his presidential library, and
his legal defense fund.
In the New York senate race, Rudy Giuliani is maintaining the
exact same 49-40 lead over Hillary Clinton that he had last
September (Marist poll). What is fascinating is that 89% of
voters have already made up their minds, something that doesn”t
bode well for the Hillster. And Giuliani”s 9-point lead is in spite
of the fact that blacks flock to Hillary by a 90-6 margin! In all
honesty, it”s the economy, stupid; plus the fact that old traditions
die hard and blacks simply love the President. And he”s such a
role model, to boot!
As for Hillary”s appearance on David Letterman, which I stupidly
stayed up for, if you were from Mars (having returned the Mars
lander to NASA) and didn”t know any better you would say,
“My, what a charming First Lady.” Of course, that”s not the
case.
And to David Letterman, yes, Hillary is the First Lady and you
have to treat her with respect but to just roll over like you did
was disgraceful. More importantly, I was reminded just how
unfunny you are. [Gosh, I miss Johnny Carson!] But it”s tough
to beat a man down when he”s just had quintuple bypass surgery.
Finally, one more reason not to vote for Al Gore. Both Bradley
and Gore were asked the same question. What is your post-
debate beverage of choice? Gore replied, “Decaf coffee.”
Bradley responded, “A beer.” For that response, Dollar Bill is
selected for the Bar Chat Hall of Fame. Note to patrons: Just
watch your wallet. His proposed spending programs are rather
hefty.
Random Musings
–At the beginning of the 20th century, 95% of war casualties were
soldiers. Today, 95% are civilians. Between 1987 and 1997, war
killed 2 million children.
–In his first 71 tour starts Tiger Woods has 16 victories,
including two majors. Jack Nicklaus won 11 times with three
majors in his first 71 tournaments.
–I have complained a lot about the deer problem in my home
state of New jersey (there are 177,000 of the giant rodents). So
the other day, two people were killed when their car hit a deer
right at dusk (the most dangerous time for drivers and deer).
Shortly thereafter the Star-Ledger, the state newspaper, had an
editorial titled, “Ready. Aim. Fire.” As they correctly pointed
out, “This is a public policy no-brainer. The deer present a
hazard. And they taste good (so let”s donate the meat to food
banks). Let the harvest begin.” It can”t happen soon enough.
–Ted Turner is a pig. If you saw the AOL/Time Warner press
conference you know what I”m talking about. Too bad Jane
Fonda left him. I wanted her to be miserable the rest of her life.
–The progress in mapping human genes (with the benefits that
will undoubtedly result) is occurring much faster than anticipated.
–Can”t someone come up with a way to show English League
Football (soccer) live, without pay-per-view? In all my trips to
Europe, there is nothing better than watching a good Arsenal vs.
Manchester United match at your neighborhood pub.
–After my piece on AIDS in Africa last week, you may have
noticed that this was Newsweek”s cover story as well. According
to the report, 5,500 die each day and 10 million children are
already orphaned. Picture some of the mothers who have lost 10
or 11 children to the disease…in one family! It truly is the worst
health disaster since the Black Plague. And then there is Al Gore.
Appearing on the “Today Show,” the day he was giving a
presentation on the topic to the U.N., Katie Couric asked him
how we should deal with the problem? Gore danced around for 3
minutes, with Couric clearly agitated, without saying one thing of
value. Leadership…thy name ain”t Gore.
–A new study taken by the U.S. military shows that a
combination of cutting troop levels by a 1/3 and increasing
overseas deployments by 300% has “created a profound stress on
the armed forces.” The soldiers also complain about over
supervision and micromanagement.
–Williams College became the first school to freeze the cost of
tuition, room and board next fall due to a bulging endowment
(which has risen from $333 million in 1990 to more than $1
billion today due to the bull market) and also because they just
think it”s right. Tuition increases across the land were 4.6% last
year, basically double the overall inflation rate. So let”s hear it for
the Fighting Epps (their nickname). [Detractors say you get the
same impact by increasing financial aid.]
–Ex-Chilean dictator, Augusto Pinochet, will soon be heading
home after a British court ruled he was too ill to stand trial for
human-rights abuses. He was under house arrest for 15 months in
the U.K.
–Jesse Jackson can”t claim victory in Decatur, Illinois. A judge
ruled that the school district was right to suspend 6 students for
fighting at a high school football game. Jackson had protested
the district”s “zero tolerance” policy. Personally, I have zero
tolerance for thugs.
–Yes, the Baseball Hall of Fame continues to be cheapened with
the admission of Carlton Fisk and Tony Perez to the shrine. I
thought they were both terrific players but not Hall members.
Having said that, I find it difficult to keep them out given the new
standards (i.e., Don Sutton and Richie Ashburn…sorry, in
particular, to my Philadelphia friends). So let”s admit Gary
Carter! And what about Ron Santo? Or my main man, Dave
Kingman? Well, O.K., maybe not Kingman.
–La Nina, the weather condition that caused the record warmth
across the country last year, will continue for at least another 6
months. CBS News had a bit on the explosion of jellyfish due to
the warm water in some areas, like Florida, which could impact
tourism in the affected areas. I love the beach but I don”t like to
swim in the ocean so my bottom line is that when the jellyfish
develop legs and learn to walk, then I”ll be concerned.
–Check out the 1/17 edition of “Bar Chat” for a little different
spin on the John Rocker situation. Thursday, Andrew Young and
Hank Aaron met with Rocker and came away feeling that Rocker
had made a dumb mistake but that he should be given another
chance. At the same time I read this other piece which really
opens your eyes to an aspect of the case that deserves a hearing.
–There appears to be some Vatican intrigue taking place in the
form of rumblings that Pope John Paul II is being urged to step
down because of his frail health. The Pope has vowed to stay on
and is planning on keeping his commitment to go to the Holy
Land this spring. If he”s able to go, it is sure to stir up real
controversy as he is planning on visiting Palestinian sites, thereby
incurring the wrath of Israeli”s. One other item, Cardinal Arinze
of Nigeria is one of the finalists to be the next Pope, whenever
that time is. Arinze”s nephew starts for the Wake Forest Demon
Deacon basketball team (a shameless plug as I”m a Wake Forest
alum).
–So the Chicago Tribune had a report that some of our spy
satellites were actually out 3 days, not the 3 hours our Pentagon
said they were, due to Y2K glitches. That means we had no
coverage, or oversight, in the areas the satellites are responsible
for. Left unsaid is the fact that the Russians are also “flying
blind,” so to speak, for a large portion of the world at any given
time due to budget constraints and a shortfall in working
satellites. When you can”t see what the other is doing, that”s how
accidents happen let alone, in the not too distant future, the ability
of an Iran or Iraq to launch a long-range missile without being
detected.
–CD Universe was the victim of a serious extortion plot by a
cyber-terrorist of Russian origins. The individual, who goes by
the handle “Maxus,” attempted to extort $100,000 from the web
site and, when CD chose not to give in, he released 300,000
credit card files onto the Net. This is part of our exciting new
century and it should send shivers throughout the etailing
community. It is unsettling knowing all of your personal
information is available to those with a warped value system. My
suggestion? Launch a highly visible effort through INTERPOL
and begin to throw these guys (and they are all guys; girls don”t
do this) in the slammer…preferably in a hell-hole like Chechnya.
–Ah yes, it”s great to have “NYPD Blue” and “The Sopranos”
back on the air. Don”t try contacting me Tuesday or Sunday
evenings.
–Another sign that we are at “full employment” in this country. I
just noticed the oil change sticker on my car, the one that tells
you when you should next have the car serviced. It reads
“2/30/00.”
–And finally, rapper Sean “Puffy” Combs, indicted on weapons
charges Thursday, said, “I”m innocent and we will prove it. I am
putting my faith in God and I know my name will be cleared.”
Puffy, you force me to alter my normal prayers at church. “Dear
Lord, isn”t there anything you can do to rid us of this jerk?”
Gold closed at $285
Nymex Crude Oil, $28.02 [9-year high as it is increasingly
apparent that OPEC will stick to its production cuts. Check
out my “Hott Spotts” piece, “The Future of Energy Prices:
Part II.”
Returns for the week, 1/10-1/14
Dow Jones +1.7%
S&P 500 +1.6%
S&P Midcap +2.7%
Russell 2000 +3.9%
Nasdaq +4.7%
Returns for the period, 1/1/00-1/14/00
Dow Jones +2.0%
S&P 500 -0.3%
S&P Midcap +0.9%
Russell 2000 +0.6%
Nasdaq -0.1% [All that volatility for this!]
Bulls 54.5%
Bears 26.4% [Source: Investors Intelligence]
Coffee Mugs: I”m pleased how many of you are ordering our free
coffee mug. Once ordered, you should have it within two weeks.
If the mug is damaged, please drop me a line at “Contact Us,”
listed on the home page. We”ll gladly send out another one.
Also, YOU MUST LIST A STREET ADDRESS
(no P.O. boxes) or UPS can”t deliver. And if you give an office
address, we need the company name. To RD at One State Street
Plaza, NYC, please send that to me.
And to those of you who are spreading the word about this site I
am forever grateful.
Brian Trumbore
