[Posted 7:15 AM]
*Some of the following is harsh. It is but one man”s opinion,
coming from the heart.
“For years we have put our faith and trust in the dollar. We need
to put our faith and trust in God.”
–Reverend Franklin Graham
“(On Tuesday), the nation”s decade-long holiday from history
came to a shattering end.”
–George Will
On Tuesday morning I turned on the “Today Show” in my hotel
room in Sturbridge, Massachusetts to find that the lead story was
the return of Michael Jordan. “This is news?” I thought.
“Heck, I had reported it the day before in ”Bar Chat,” where it
belonged.”
I was heading up to Wellesley for a long-planned golf outing
with my friend Dave. As I flipped the radio dial while on the
Mass Pike, I settled on a country station. Within a minute the
traffic reporter said to the DJ, “Gee, I see that picture on your
screen. Is that the Trade Center?” “Something has happened,”
replied the DJ. “It appears a plane hit it.” My immediate
thought was I knew it was a beautiful day in the New York area
and that this was no accident. It was a terrorist attack.
I was soon calling my parents so they could describe what was
being shown on television. Both Mom and Dad were obviously
shaken. Then, “Oh no, there has been an explosion at the other
tower!” I hung up with them, sick to the stomach like every
American that morning, and proceeded to my friend”s office.
Shortly after my arrival, the first tower collapsed and I knew it
was time to go home. I wasn”t angry, yet. I was scared.
—
The genesis of this Web site, and specifically, this commentary,
was that there was a need for people to be able to combine the
hard news events of the world with the financial markets.
Many of you have been with me from the start, recognizing that
while we may not always agree, my job is to stimulate thought,
get people thinking about the broader world around them, get
people to understand that the price of Cisco might be important
to you one day, but a nuclear war between India and Pakistan, or
an Iraqi gas attack on Tel Aviv, could spring up the next. I call
them the wild cards.
Some of what follows is self-serving, but no one has combined
the study of international affairs with the financial markets like I
have. And while I obviously didn”t foresee the tragic events of
Tuesday in the manner in which they unfolded, I”m scared
because I understand where our new war could take us. I suspect
many of you now share this thought.
Little did I know when I wrote last week”s piece that instead of
my normal routine of lighting a candle in St. Patrick”s for myself
and my family, “I lit a candle for President Bush and prayed he
would be granted some wisdom.” I was thinking of the
economy, but also of the bigger picture.
Little did I know that when I wrote last week, “We need
leadership in Washington, Europe, and Japan,” how true that
would ring. President Bush and Prime Minister Blair have
already answered the call in grand fashion.
Little did I know that in writing about national missile defense
for the umpteenth time, the following was, unfortunately, never
more true.
“But to assume that abandoning, or severely limiting, NMD
makes the world a safer place is exhibiting a faith in humanity
that is far from rational.”
And little did I know that when I blasted some of our young
people for their seeming lack of respect for authority, like in the
case of our local police, those same kids just a few days later
would learn to appreciate what tremendous heroes our police and
firefighters are. Not just in New York, but throughout this great
land.
Week in Review, 8/18/01
“We have to understand the extremists are inches away from
taking control of the region. For instance, a senior Israeli army
officer told the Washington Post, ”Whenever you let a tiger go
free out of its cage, at a certain moment the tiger itself decides
what will be the next prey.””
WIR, 3/10/01
“After I posted last week”s review, I was watching the news and
the footage of the Taliban destroying the 1,500-year-old giant
Buddhas in Afghanistan. I got a sickening feeling in my
stomach, like they were destroying my own neighborhood
church. Thankfully, most Muslim nations (condemned) the
action. But it also reaffirms my belief that the future for the
Middle East gets bleaker by the day. And as I”ve written in this
space before, what would be truly catastrophic is if the extremists
topple the existing regime in Pakistan. The bomb would then be
at their immediate disposal. In the meantime, the American
people need to get prepared for some major action in
Afghanistan to wipe Osama bin Laden off the face of the earth.”
So now we have received our wakeup call. My initial thoughts
of fear, more than anger, are based on an understanding of how
quickly the whole situation can implode, on a scale that would
make even Tuesday”s toll seem small. Four airplanes caused
massive destruction. One true “weapon of mass destruction”
could take out millions.
Our leaders also know of what I have said countless times. One
bullet to the head of King Abdullah of Jordan, or Egypt”s
President Mubarak, and we risk a wider war on an unfathomable
scale.
It was less than one year ago that I wrote of my pilgrimage to
Oklahoma City. Five years ago I went to Normandy, where at
the American Cemetery I walked into a chapel and jotted down
an inscription I now use every Memorial and Veterans
Day, one which also applies to Tuesday”s victims.
“Think not only upon their passing, remember the glory of their
spirit.”
But in listening to some of the comments discussing the financial
implications of the tragedy, I must say I”ve been disgusted.
Idiots (who will go nameless, for now) are saying things like,
“We”re all going to go out and buy a big ticket item to show the
terrorists they can”t beat down our spirit,” or, “It”s a long-term
buying opportunity.” This is nuts. We all want to buy
American, we all want to see the economy and the markets
rebound, but, now more than ever, as a people we need to face
the truth.
This is going to be a long, drawn out war, with many tragic
moments, and our emotions (and the markets) may swoon with
each one. This week, for example, as 17,000 passengers were
diverted to Gander, Newfoundland, I immediately thought of the
December 1985 accident there, which claimed 256 of our armed
forces. There will be accidents, there will be missions that may
not succeed, there will be more terrorist attacks around the
world; the point being that no one knows what the future holds.
As for the economy, as you listen to those who are saying the
future is bright, remind yourself of the tremendous dislocations
taking place, not just in the U.S., today, but around the world.
The most obvious example is the aviation industry. Midway, for
starters, shut down operations this week, throwing 1,700 out of
work. Every nation is going to be faced with the task of bailing
out their major carriers. The costs will be $tens of billions.
And you hear talk of the insurance industry and the losses they
face. One analyst came out yesterday and said, however, this is a
buying opportunity because once they get through this (stupidly
assuming Tuesday was it!) these companies will be able to jack
up their premiums. What if that were, indeed, the case? Who
bears the cost? Corporate America, that”s who, which then
passes it on, or, if not, sees reduced earnings.
Sure, we”re all going to go out and buy flags (and believe me,
I”m excited by this new burst of patriotism), and security and
defense companies should profit, but those who say the
American consumer will resume his or her normal buying
patterns simply don”t deserve one second of air time.
The premise of StocksandNews was to remind you that wild
cards were important for one reason; they could shatter
consumer confidence. And the lowering of confidence could
also have a big impact on the average American”s #1 asset, real
estate. Imagine what is going through the minds of people in the
New York area right now. It”s not just the high-end folks who
have been impacted. Those who died were from all walks of life.
And it”s not just confidence in America that has been shattered,
it”s the same story in Europe (where markets collapsed for a
second straight week), Canada, Mexico, and an already
crumbling Japan. As Morgan Stanley economist Stephen Roach
remarked, “The (very) underpinnings of globalization” are at
risk.
We have to deal with facts, and when it comes to Wall Street, the
fact is that right now, preservation of capital is paramount. Don”t
look to pick a bottom. Don”t try to be a hero. Don”t go out and
“Buy American” if you are already loaded up to your gills in
debt and run the risk of losing your job. Take care of your
family first, and let President Bush and our military take care of
the killers.
Volatility is going to be the order of the day, but, again, ignore
those who would have you believe that times of crisis are always
buying opportunities. First, that isn”t the case. Second, we now
face a situation unlike any other in our history. We may go
months with largely positive news on the war front and
then…bam!..another attack that will drop spirits to new lows.
Life has changed, and not for the better.
As to the war effort, there could be some exciting positive
developments. For starters, we have a tremendous opportunity to
forge a new relationship with Russia. The U.S. needs its help
and we have common interests in this fight. The good work that
President Bush has previously done in creating a relationship
with President Putin appears to be already paying off.
And the U.S. has a tremendous ally in Great Britain. Anyone
who didn”t cry when the “Star Spangled Banner” was played at
Buckingham Palace on Thursday, clearly doesn”t have a clue.
But while others like Germany and Italy will surely aid our
efforts, we”re soon going to find out who our real friends are,
especially in the case of nations like France, which it needs to be
remembered hosted Syrian President Assad just this past June. I
know the French people are behind us, let”s see if the
government follows. And in the Middle East, the Gulf War
coalition is a thing of the past. What real support will Egypt,
Jordan and Saudi Arabia give us as their own leaders fear for
their heads?
Yes, in the months ahead, we”re all suddenly going to become
foreign policy experts. Just remember your editor was there first.
My challenge now is not just to be different, but to add value to
the debate.
Street Bytes
The human losses in the Wall Street community are huge and
far-reaching, and it will take a long time to heal the pain. I
hope the powers that be know what they are doing in attempting
to open the market on Monday. It would still appear to be a real
mess down there, from a purely logistical standpoint. And to
NYSE President Richard Grasso, cut the crap. Your rhetoric is
pitiful.
Any corporate pronouncements made prior to the attack are, in
my mind, meaningless in this New World. But lost in the news,
post-attack, were some awful statements from the likes of GE
and Ford. And on the mutual fund side, I want to caution those
of you planning on transacting business this week to remember
that you get the net asset value at the day”s closing price. The
volatility should be extreme, so if you can wait until later in the
day to put in an order, you may be able to avoid being
whipsawed. A 5% up move in one day could equate to half of
your expected return for a year, for example. Not necessarily a
good thing, if that was the day you bought in.
U.S. Treasury bonds and notes hit historic lows, with the two-
year trading below 2.90%. With the federal funds rate at 3.5%,
you can see what kind of aggressive move in interest rates the
market is forecasting. It is anticipated that the Fed will move
sometime next week, once it is clear when equities will open.
We will resume our normal market coverage next week, and I
will post figures for both weeks at that time.
International Affairs
[Of course, other news got lost in the tragedy this week, but there
was some.]
Israel: The conflict with the Palestinians escalated further, with
at least 16 being killed over a two-day period as Israel
aggressively pursued its objectives of pre-empting as many
attacks as possible.
But there is possibly far more to the story. Defense News is
reporting, again, that Israel is gearing up for a full-scale regional
conflict. The narrowing theory is that Syrian-backed Hizbollah
guerrillas will launch an offensive from South Lebanon, Israel
will retaliate, Syria will attack Israel, and it escalates from there.
Japan: The Nikkei index continued to collapse and the economic
situation grows more dire by the day. S&P downgraded Japan”s
credit outlook to “negative” and no one has a handle on just how
bad the banking situation is. In addition, Prime Minister
Koizumi is now practically being spoken of as “ex-Prime
Minister.” Many are giving him just 6 months. And then the last
thing this nation needed was a mad cow scare, but it has one, as
the first case was uncovered. And, unfortunately, there will be
many more to come throughout Asia.
Turkey: Istanbul had its own bout with terror this week as a
suicide bomber blew himself up near a group of policemen in
Taksim Square. The culprit is part of a group protesting prison
conditions in the country. But the attack hit close to home
because the giant square was a block from the hotel where I
stayed when I visited there this past spring. I loved the place and
I feel for the people.
As I”ve stated before, Turkey is a crucial ally. In the days and
months ahead, we will undoubtedly be launching aircraft from
the country”s Incirlik Air Base. And if we had to go into Iraq
with force, Turkey could be right there with us. They have a
proud military tradition. We should welcome their support.
Nigeria: In another bout of ethnic strife, the Red Cross is
reporting that at least 165 have been killed in clashes between
Christians and Muslims. The Muslims want to impose strict
Islamic sharia law in many parts of the nation. The Christians,
led by missionaries from the Jesuit Mission Bureau in New York
City, are the good guys. My friend, Father Bill, has spent years
in Nigeria and I pray for the safety of the Jesuits in service there
today.
Random Musings
–As if we didn”t have enough problems, the 9/17 issue of U.S.
News (pre-attack) reported that terrorists are targeting U.S.
nuclear plants. Separately, I always thought they might target
Canada”s hydroelectric facilities (which would severely impact
the Northeast U.S.), but my friend Harry K., who lives near
Toronto, assures me the kind of folks we”re talking about would
stick out too much where the plants are located. But Canada IS
swarming with terrorists, and the Canadian government of Jean
Chretien has, in Harry”s words, done a “miserable and feckless”
job when it comes to this crisis. Mr. Prime Minister, get your
friggin” act together.
–No, I”m not going to Taiwan today. [And it was to be by way
of San Francisco, to boot.] I think I”ll wait a few months before
attempting this trip again. But in my not traveling there, you also
have a classic example of the far-reaching impact of the terrorist
attack. I was going to be in Taipei 5 nights, probably spending
about $2500 just in that city. Start multiplying that by the
thousands of others who, like me, will say it can wait. As I”ve
written, Taiwan”s economy is already in recession, and with the
increased pressure from Beijing and the Taiwanese business
community to forge a new alliance, in a small way even my
singular act of staying away hurts the cause of independence
over there.
–There is truly something spiritual about rescue dogs. The
interaction between man and the animal kingdom, in the cause of
all that is good, amazes me.
–I heard more than one person in the New York area this week
say, it”s time to reset my priorities. I feel the same way.
–Some of you must wonder what I think of Bill Clinton these
days, after all I have written over the years. I need to temper my
remarks. But at this point in the history of our nation, many of
us can only hope that God has a special place in mind for him,
one where it”s uncomfortably hot, where there are no women,
and where the only cameras are broken.
–As I drove back from Wellesley, MA on Tuesday, by way of
Albany, NY because I didn”t want to deal with crossing the
Hudson River closer to New York City, I was able to follow
events on the news stations. The weather was so beautiful and
western Massachusetts is as pretty as any place in the country.
My thoughts were all over the place, but I found comfort in
simple things, like coming upon NASCAR driver Matt Kenseth”s
crew. I felt compelled to give the driver a thumb”s up, which he
returned.
I teared up for the only time that day (the floodgates opened up
Wednesday) when I heard stories of blood donations coming
from overseas tourists who happened to be in Manhattan. I
passed by Stockbridge and thought about visiting Norman
Rockwell”s “Four Freedoms” painting, but I had been there just a
few years ago and desperately wanted to get on the other side of
the Hudson.
When I finally made the New York State Thruway, I proceeded
to hit a few stops on the way south. At the Ulster rest area, I just
sat in the parking lot for a moment, admiring this tractor trailer
from Jacobson Transportation of Des Moines, Iowa. To me it
represented the best of America at that moment.
At mile marker 69, a road sign read, “New York City closed.”
And as I sped down to New Jersey, I passed a little train station,
Arden, that has always been a symbol for me of a simpler time.
Back in the summer of ”75, before my senior year in high school,
my friends Dave, Tony and I spent a few days on the
Appalachian Trail in the area of Arden. The first day we got to
Lake Tiorati and there were some older kids sitting around
drinking beer. Now the three of us were goody-two-shoes at that
time, but we bummed 2 brews from these guys and split them 3
ways. Party down, eh?
My ride then took me to I-287, and down through the western
part of New Jersey. At Kinnelon, I got to the top of the hill and
looked east. There it was, at least 30 miles away, this giant cloud
of smoke, but no towers. It was then the enormity hit home. The
stories you”re seeing on television are true. For those of us who
live in the area, the World Trade Center wasn”t just a place of
commerce, it was a beacon for the region and all of America.
–Finally, within a day or two after posting this piece, I often
already have an idea of what I want to write about the following
week, and as of this Tuesday morning I was prepared to spend
some time discussing Condoleeza Rice.
As I watched this incredibly talented and strong woman on
“Meet the Press” last Sunday, I actually got angry. The reason
was because I thought of the bastards at that racism conference in
South Africa, which had wrapped up the day before. The only
purpose of this gathering was to blast Israel and the United
States. How dare they knock America, which has a record of
racial tolerance unmatched by any country in the history of
mankind. And where else but in America could a white guy like
myself watch a black woman, get goose bumps, and think, “I will
vote for her for president someday.”
To me, the most touching pictures from New York this week were
those of whites helping blacks, blacks helping Hispanics,
Hispanics helping Asians, in the rush to get out of harms” way.
Man”s humanity for his fellow man.
We are a great nation. We are a great people. We will win,
because we are right.
May God bless our children, especially those who have lost a
parent.
God bless President Bush, and give him the wisdom to lead.
God bless the men and women of our armed forces, and may the
American people always support them.
God bless the rescue workers, the police and firemen, and may
our young people grow up with a newfound respect for the role
these brave men and women play in our society.
God bless Britain and our other allies, which we pray will be
shoulder to shoulder with us.
And may God bless America, land that we love.
Brian Trumbore
*To those of you who wrote this week, I am grateful for your
support and input.
