For the Week, 11/22-11/26

For the Week, 11/22-11/26

As the Trumbore family sat down to another great Thanksgiving

feast, my 5-year old nephew did his Tiny Tim rendition of the

standard holiday blessing. I realized later that we forgot to add

one thing, “Thank God we aren”t living in Chechnya.” So many

Americans walk around this great country totally clueless when it

comes to the outside world. Let me describe the scene Thursday

night, in Grozny, the Chechen capital.

For starters, Grozny is a city of a few hundred thousand people

living in bombed out buildings leftover from the war of 1994-96.

While many of the citizens have fled the current Russian

onslaught, tens of thousands remain, mostly the elderly and

infirmed. They live in dank, dark basements with no electricity or

running water. The long, awful winter is setting in. There has

already been some snow and lots of cold rain, turning the city into

one giant mud hole.

So it”s late Thursday night. You”re about to doze off as you

check on your crippled up mother for the last time of the evening.

You sleep on some wet cardboard and maybe some straw

when…BOOM…BOOM…BOOM…20 seconds of sheer terror

with 100 rockets falling on the city. Then a pause…you check to

see if everyone is okay…BOOM…BOOM…BOOM. 100 more

rockets in 20 seconds. You cry out to God, asking Him “Why?”

You hear a bomb has made a direct hit on the building next door.

You”re totally helpless. You grab onto your loved ones

and…BOOM…BOOM….BOOM…BOOM…100 more rockets

in, again, 20 seconds. Everyone is in hysterics. God doesn”t

seem to have an answer….BOOM…BOOM…BOOM…100

more follow…and again, and again.

[Seriously, look at a clock and count out 100 explosions in 20

seconds. Then multiply that by at least ten.]

That is exactly what happened in Grozny. An absolutely horrific

scene worthy of anyone”s worst depiction of hell. We”ll never

know how many civilians were killed. [If you watched the

national news on Friday night, NBC had exactly 5 seconds on it,

ABC, none.] But we need to care. The Russian army is doing

exactly what they said they would. They are encircling Grozny,

encouraging civilians to leave, through barbaric means, and soon

they will start dropping their secret weapons on the estimated

6500 Chechen rebels dug in the capital. More than one Russian

general has admitted his troops have gas masks. And the fuel-air

explosives I wrote of a few weeks ago will be introduced. I hope

the Chechens surrender to save themselves but that doesn”t seem

likely. I”m sure the rebels attitude is that the Russians would kill

them as prisoners so better to die in their trenches, on their own

soil.

Jim Hoagland had the following commentary this week. “The

Chechen war is determining the nature of the Russian state for the

foreseeable future….If they succeed in Chechnya, the Russian

generals will have more influence at the Kremlin than at any time

since the early days of Soviet rule. And these generals are not

only angry. They are also determined to redress and avenge the

successive demonstrations of Russian state impotence in the first

Chechen conflict, in Clinton”s politically driven rush to NATO

expansion and in NATO”s air war on Serbia over Kosovo.”

And a few final notes on this topic. Prime Minister Putin

continues to ride the wave over the conduct of the war. The polls

now show him with 37% in the race for President versus just 13%

for the Communist Zhyuganov, and only 9% for the former prime

minister Primakov. All three were basically even just a week ago.

And asked whether Russia should reinstate itself as a great

empire, 85% of the people vote yes, 7% no. The other 8% were

too drunk to mumble yes or no.

And what of Boris Yeltsin? The man who looked so robust and

engaged just one week ago at the international conference in

Turkey, suddenly was laid up again with “severe bronchitis.” The

timing is oh so curious. Grozny is about to meet its final end and

the day Yeltsin fell ill he was supposed to sign the long-awaited

reunification treaty with Belarus and their wicked President

Lukashenko. It”s virtually impossible to figure out what goes on

in the Kremlin, but I”ll keep trying.

More International Affairs

China launched its first unmanned spacecraft, a shuttle type

vehicle, and pledges to put a man in space next year. Of course,

they also immediately admitted that the rocket technology that

was employed has military applications.

Iraq rejected an extension of the UN”s oil-for-food program and

halted oil shipments as a way of seeking an end to sanctions. The

current system simply isn”t working and the UN (led by the U.S.)

has to understand that it”s more important to have arms

inspectors on the ground then to continue a failed policy initially

designed to encourage an overthrow of Saddam which, instead, is

only hurting children.

The European Union is playing games with Turkey again. Turkey

desperately wants to be part of the EU, which would help not

only to modernize the nation but also add stability to the region.

Yet the EU said it won”t consider membership if Turkey carries

out the death sentence against Kurd rebel leader Ocalan, a

sentence Turkey has every right to carry out without

recrimination.

President Clinton wrapped up his European trip by stopping in

Kosovo where his pleas for forgiveness between the Albanians

and the Serbs fell on deaf ears. Winter is setting in and aid

agencies fear a 2nd disaster in the territory. Due to problems with

food and shelter in rural areas, the population of the capital

Pristina has ballooned from a pre-war level of 600,000 to

2,000,000. Not exactly a good situation…and just another travel

destination to cross off your “must see” list.

Wall Street

Forgive me if I”m brief but I certainly have said my fair share on

the markets the past few weeks and, after all, my brain needs a

rest if I”m to gear back up for the Millennium. The Nasdaq was

where the action was, again, as on Friday the index hit its 16th

closing record in 20 sessions. For the week the average finished

up another 2.3% and is now up 57% on the year. The S&P 500

and the Dow Jones (10988) fell slightly.

Nothing typifies the action on the Nasdaq more than the story of

a heretofore small, money losing company by the name of Ariel

Corp. Oh, don”t you wish you owned some. On Tuesday, Ariel

shares traded at $3 a share. By Wednesday”s close the stock hit

$10 as the company announced that governments worldwide were

approving the use of its new modem card for Internet access.

After gorging themselves on turkey, day traders took the shares

even higher on Friday morning. $20…$30…$40…$50…finally

peaking at $56! By the end of the day the shares had settled at

$37. Oh, and by the way, Ariel isn”t expected to make money in

2000 either.

So there you have it, the friggin” feeding frenzy continues. If you

own the stuff, take your spouse or mistress (heck, take them

both) out to the finest restaurant. Rent a limo, drink the best

wines, tip the captain and waiter 40% (each), light a stogie and

say, “Thank God I”m in America.”

When does it all end? As I said last week, just keep your eye on

interest rates. They inched up some more with the yield on the

30-year Treasury finishing the week at 6.23%. Suddenly, many

folks are talking about the Fed raising rates again, maybe in

February!! Weren”t these the same characters who said less than

2 weeks ago the Fed was finished until at least next summer?!

All I see are retailers and e-tailers in desperate need of help,

offering all kinds of bonuses to folks with a 6th grade education.

“Hey, you, over there. You live on this planet? We”ll pay you

$10 an hour if you”ll just listen to complaints all day until

Christmas. Great. Here”s your smock.”

And speaking of e-commerce, Internet sales were $2.5 billion last

holiday season. The conservative estimate for this year is that

sales will approach $6 billion. Ernst & Young, however, is

projecting $12-15 billion.

International Business Notes

The London FT-SE index closed at a new all-time high on Friday.

Meanwhile, the European Union raised their estimate for the

regions growth to 2.9% for 2000 which would mark the fastest

pace of expansion since 1990. However, while inflation is well

below the European Central Banks target of 2%, they continue to

issue warnings that it is picking up. And in a very controversial

move, the German government of Chancellor Schroeder is bailing

out Germany”s largest builder with public funds.

Japan”s debt to GDP ratio now exceeds that of Italy”s. Now

that”s something NOT to be proud of. Nonetheless, many

Japanese equity watchers are convinced the signs of growth in the

economy are for real. Elsewhere in Asia, South Korea”s GDP

rose 12% in the 3rd quarter, a figure that is somewhat deceiving

since it is measured against 1998”s abysmal economic

performance. However, real progress is being made there.

This Week In Politics

–I saw something in Newsweek which got my juices

flowing…and also forces me to fess up as to who I have voted for

for President in my lifetime. 1976 – Ford, 1980 – Anderson, 1984

– Reagan, 1988 – Bush, 1992 – Perot, 1996 – Dole. Yes, despite

all my right-wing vitriol, I have an independent streak in me.

Back in 1980, I was a senior at Wake Forest University. John

Anderson had just declared he was going to run as a 3rd-party

candidate and he was making one of his first speeches on campus.

I helped organize it and I was enthralled by his performance. It

turns out I was probably one of only 2 or 3 who were. You see,

Anderson spent his whole speech educating us on the issue of the

day, the MX-missile (and how it should be based). I was sitting

there thinking, “Now that”s a President.” Everyone else was

bored to tears.

Well, this week comes word that Jesse Ventura has held

discussions with 77-year old John Anderson about running for the

Reform Party nomination. I haven”t seen or heard much of

Anderson in years but if he can walk and chew gum at the same

time, dammit, I”m going to give him some ink. Go for it,

Mr. Anderson.

–Speaking of the Reform Party, Pat Buchanan did his best to

combat charges that he was an isolationist. In a speech to the

Libertarian CATO Institute, he urged a dialogue with Iran and

Iraq (I agree), said that we should set a date for withdrawal of all

American forces from Europe ( I disagree, especially while Russia

is behaving the way they currently are), and he calls

“interventionism” in crises like Kosovo, an incubator of terrorism

(I agree).

–From the 11/22 issue of The Weekly Standard comes the

following comical (and at the same time pitiful) account.

“As reported by the German press agency Deutsche Presse-

Agentur: ”U.S. President Bill Clinton tried to look up an old

girlfriend this week while visiting Oslo for the Mideast summit,

the Israeli tabloid Yedioth Ahronoth claimed Friday.”

”U.S. diplomats turned Oslo upside down to find the woman

Clinton had not been able to forget since touring Europe as a

student 30 years ago. When they found her, she thought hard and

said: ”Clinton? I don”t recall ever meeting someone of that

name,” Yedioth reported. Israeli Minister for International

Relations Shimon Peres said Clinton had described how he asked

Ambassador to Norway David Hermelin to see if he could find

the former contact, the paper said.””

–According to the Washington Post, Clinton and Gore haven”t

had lunch since August 10th. How could they get together when

Clinton is still chasing skirts? I mean, give the Prez a break. He”s

busy!!

–As some New York Democrats called Hillary Clinton”s

campaign a “wreck” the Hillster announced unofficially, officially,

that she was running for the Senate. In her comments to reporters

Hillary announced that the Clintons both have “unfinished

business,” a statement which was enough to set columnist

Maureen Dowd off.

“One would think that 8 years running this country is a pretty

good shot at getting your business done. But there”s something

so rootless and chaotic about the Clintons. They seem like a virus

or alien that needs a host body to survive. They”ve invaded our

national psyche and we”re going to have to keep living with their

weird marital problems and tangled ambitions forever and ever.

Their business will never be finished. They will be in our faces,

exhausting us with their ”we want to do good so we can break the

rules when we need to” ethos.”

–At the Thanksgiving dinner table I said I was also getting tired

of Chelsea. At this I was ripped into by my brother, sis-in-law,

and Dad. Only Mom was on my side. [The 5 and 12-year olds

had no real opinion, especially my nephew who after the blessing

was wrapped up in Pokemon.] So having been shot down, 3-2, I

will hold my pen for another day.

–The latest Newsweek poll has Gore narrowing his deficit against

Bush. Bush now leads, 49-43 (it had been 53-39). Bush

continues to slaughter McCain, nationally, 62-13, while Gore has

widened his national lead over Bradley to 49-27 (CNN/USA

Today has it 56-34). One gets the sense that both Bradley and

McCain may have had their 2 weeks in the sun. It”s awful tough

to get the momentum back, unless the leaders stumble badly.

–I may have given Bill Clinton too much credit when I said he

kicked the Republican”s butts in budget negotiations.

Congressional Quarterly reports that Clinton prevailed only 36%

of the time when Congress voted on an issue where his position

was clear. He also didn”t get anything he asked for in his State of

the Union message, including overhauls of Social Security and

Medicare (not that Republicans can take any particular credit for

this mutual failure in governance.)

Random Musings

–NBC had a report on a WW II vet, Pete Montalvo, who was on

the USS Yorktown, a ship that was sunk in the Battle of Midway,

1942. Hundreds lost their lives but Montalvo, who was severely

injured, survived. Today, each Tuesday evening, he calls the 260

remaining survivors. The phone rings once and then he hangs up.

He has sent his message of gratitude.

–According to the Cigar Association of America, sales of

premium cigars have fallen 27% this year.

–Arnold Palmer”s wife, Winnie, died last Saturday and it received

zero publicity. Arnie would be the first one to say that Winnie

played a huge role in his success.

–Y2K Update: Internally, I keep waffling on this issue. One

minute I think it”s no problem (domestically), the next I wonder

just how much cash and water to stock. Locally, this week Bell

Atlantic screwed up again, the 3rd time in about 2 months. No,

the region”s economy didn”t come to a screeching halt but the

reason for the outages (which luckily didn”t take down my site)

was “installation of new software.” I”ve said this before and I”ll

say it again. Your own company has no real idea if proper fixes

have been made. In most cases the CEO can rely only on the

word of the programmers, many of whom are independent

contractors. Sabotage seems inevitable in a few high profile

cases.

As for the situation overseas, forget it. Even yesterday, the

government of Australia announced they were shutting down two

important commercial shipping ports over New Year”s because

they had no confidence that tankers will be compliant. Decisions

like these are not made lightly. [It”s been interesting to me, also,

that for whatever reason Australia and New Zealand have been on

the Y2K watch list for years now. And it”s the reason, frankly,

why I canceled a trip there for this New Year”s.]

Also, a Congressional panel reported that our own air traffic

control system “remains at risk of failure.” The administration

was miffed at this warning. We are assured all is okay. Did I say

I was staying home?

–“Y2K the Movie:” I was one of 4 people in the country who

watched this terrible flick last Sunday night. [I did take care of

my bills, though.] In the end the characters are trying to save a

nuke plant in the Pacific Northwest from a meltdown. The token

nerd makes a comment about the hero, Nick. “Who do you want

to take care of this, Nick or Homer Simpson?” I voted for

Homer.

–It”s been awhile since I had a “Dirtball of the Week.” Actually,

that”s because Latrell Sprewell could have personally retired the

award. Anyway, a native Hawaiian rights activist by the name of

Mililani Trask gets it this week. Mililani called Sen. Daniel

Inouye a “one-armed bandit” and threatened to “kick Inouye”s

yellow ass.” Inouye, a Japanese-American, lost his arm to a

grenade in WW II. [If you”re also wondering why I didn”t give

the award to Carolina Panthers receiver Rae Carruth, I”m saving

him for Monday”s Bar Chat.]

–Deer are now responsible for 1.5 million road accidents a year.

These giant rats must be exterminated.

–Serious crime in America declined in the first 6 months of this

year to the lowest level in 25 years.

–The NFL has thankfully banned the throat-slashing gesture that

players like Keyshawn Johnson had adopted as a means of

celebrating a big play. Just incredibly idiotic behavior. So the

New York Jets Bryan Cox, once a wildman and now a pretty

good guy, had the following unfortunate comment on this issue.

“White America doesn”t understand the black athlete. When a

guy does something like that, he”s basically saying, ”You”re cut

off, there”s nothing else going to happen here today.””

Interesting…and very stupid.

–Last July 17th I wrote of Leon Smith, a Chicago high school

phenom who was drafted by the Dallas Mavericks of the NBA.

Because of his poor attitude at a rookie camp, I said he was “a

new dirtball waiting in the wings.” Well, unfortunately, Leon has

some major problems. He tried to commit suicide last week.

–I was watching Alabama – Auburn the other day. One of

”Bama”s players, Chris Samuels, is majoring in “Human

Performance.” Not having ever known this was available, I”m

assuming it”s the study of those who act human…and those who

don”t. If you hear of one of those correspondence schools

offering graduate work in this discipline, I”d love to know. This

is how I could get a Masters!

Gold closed at $299 [see comment below]

Nymex Crude Oil, $26.87

Returns for the week 11/22-11/26

Dow Jones -0.1%

S&P 500 -0.4%

S&P Midcap -1.5%

Russell 2000 -0.5%

Nasdaq +2.3%

Returns for the period, 1/1/99-11/26/99*

Dow Jones +19.7%

S&P 500 +15.2%

S&P Midcap +8.5%

Russell 2000 +8.8%

Nasdaq +57.2%

Bulls 52.1%

Bears 29.1% [Source: Investors Intelligence]

*Not including dividends.

**If you”re a gold bug, you”ll enjoy this week”s installment of

“Wall Street History.” I reprinted a speech that my good friend,

gold expert Harry Bingham, made to a London audience last

week.

***There are over 700,000 web sites selling something. But at

StocksandNews, we don”t sell anything. Instead, we are giving

away the S&N coffee mug. Just click on the icon at the top of

the page. Here are some comments from recipients.

“My, that mug is something special.” –Lauren Bacall

“The quality, the craftsmanship, it”s all there.” –Lee Iacocca

“I CAN”T BELIEVE IT”S FREE!!” –Regis Philbin

Brian Trumbore