[Posted from Paris, Friday PM]
Call me Mehmet.
So about an hour before touchdown in Istanbul, I thought it was
probably a good idea to learn a word or two of the language. As
I do in every country I visit, the first one I look up is for beer. In
Turkish, beer is “bira.” And having read some guidebooks, I
also knew that the local brew is Efes. Now I was set.
The arrival in Istanbul was the smoothest I have experienced,
anywhere. True, they clipped Americans for a $45 visa fee, but
even that was handled super efficiently, the bags were on the
carousel immediately, customs was non-existent, and the whole
process must have been 15 minutes, from landing to the taxi. I
was loving Turkey already.
Hopping in the cab, I quickly realized my driver spoke zero
English, but I thought I would attempt to converse anyway.
“Efes good bira?” I said, pretending to gulp one down.
“Efes? Bira?” he replied.
“Yes, is it good?” I said, now giving thumbs up or down,
Gladiator style.
“Efes?” he said, without acknowledging the hand signals.
Well, we were at a loggerhead, so I just smiled and he drove on.
Soon, though, it was apparent we weren”t heading into the city,
as Mr. Taxi Driver took an early exit into a little town. I knew
immediately my mistake. He was going to find me an Efes. It
was 10:00, Sunday morning. Well, he pulled over to a store and
a minute later produced a large can of it. I thanked him and we
proceeded on to the hotel.
And that little episode, folks, was about the worst thing (if you
can call it that) to happen to me in my five days in Istanbul.
Sure, it was a little surprising to awake Monday morning, turn on
CNN and see a report from my city concerning some Chechens
taking over a hotel that was two blocks away, but truthfully, all I
thought was, “Huh.” That stuff can happen anywhere. But I was
a bit concerned that my parents, who were also traveling, had no
idea what hotel I was at, wondered why the heck I was going to
Turkey in the first place, would see the report and not have a
great time themselves until the situation was rectified. Alas,
twelve hours later the deal was over. But prior to the conclusion,
for a split second I thought, “Gee, if I go over to the hotel and
volunteer to become a hostage, it would be good for site traffic!”
Then I realized, hey, I have my Bosphorus cruise in just an hour!
I”ll have much more on Turkey later. For the archives, let”s now
review the other major events around the world, as best as I
could keep up.
China
President Bush did what many of us wanted him to do, stand up
to the Communists. If you haven”t followed the potential
weapons sale to Taiwan up to this point, just know that while
some conservatives have railed that we should sell Taipei our
new Aegis anti-missile system, understand that this wouldn”t be
available to them until about 2010. By then, China could have
attacked the island about six times, treating Taiwan as its own
Vieques.
So instead, Bush and his advisors (who importantly reached a
consensus on this crucial issue) authorized the sale of what are
called Kidd-class destroyers, which can be operational for the
Taiwanese between 2003 and 2005. We also agreed to supply
them with submarines and anti-sub airplanes, as well as some spy
aircraft. The only problem regarding this whole arsenal is the
fact that the U.S. doesn”t manufacture diesel-powered
submarines anymore, only Germany and the Netherlands
currently do, and neither one of them wants to step up and do it.
[Actually, in this regard the Bush Administration didn”t
communicate very well with our allies.]
Well, as anticipated previously in this space, Beijing was none
too pleased, and even more so when Bush, in a series of
television and print interviews commemorating his first hundred
days in office, made it clear that there was a subtle change in
American policy when it comes to the China – Taiwan
relationship. Bush said that the U.S. had an obligation to defend
Taiwan, and that no longer would there be any ambiguity on this
issue. Specifically, he said the “(U.S.) would do whatever it took
to help Taiwan defend itself.”
This is a rather complicated issue, going back to the development
of our policy towards Taiwan, as formulated by Presidents
Nixon, Ford, and Carter in the 1970s; culminating in the Taiwan
Relations Act. In essence the U.S. recognized that there was one
China, but until the Taiwanese people were ready to unite with
the Mainland, in one form or another, the U.S. would provide
weapons to Taiwan, explicitly for the purposes of defending
herself, and not to be used in any offensive manner.
For its part, China has more or less put up with this policy.
They, too, recognized that the world was not about to let them
take Taiwan by force (plus, importantly, they haven”t been close
to having that capability until recently). But in the past 18
months, things have changed. Taiwan has a new leader, elected
in the most democratic forum yet since the formation of the
island government after World War II, and the ensuing Chinese
civil war that brought Mao to power. And by selling Taiwan this
new set of weapons, Beijing is worried that the pro-independence
movement, which gave Taiwan”s leader, Chen, his electoral
margin of victory, will be emboldened to seek an official break
from Beijing.
So it should come as no surprise that Beijing”s leadership this
week uttered statements like “This (move) will have a grave
impact (on U.S. – China relations), and it will bring devastating
damage.” President Jiang Zemin added, “We will never make
concessions in dealing with issues which involve national
sovereignty, territorial integrity and national dignity.”
To sum it up, President Bush has just taken the very important
step of telling the American people that there may come a point
in time when our nation will have to make some sacrifices to
defend Taiwan. Maybe it”s two years, four, or ten, but sometime
in the future, American lives could be lost over in this part of the
world. Better we begin to think about it now, than to wake up
one morning and be surprised by what greets us on the airwaves.
And I still haven”t read one article or op-ed piece which
addresses why Taiwan truly matters. But you all know what I”m
talking about.
It”s the economy, stupid. Democratic principles matter, too. But
Taiwan manufactures 16% of the world”s supply of computer
chips, and, depending on how you define it, about 50% of U.S.
production originates over there as well. The die has been cast,
and obviously your editor will have far more to write about on
this topic over the coming weeks and months.
More International Affairs
Japan: Junichiro Koizumi is the new prime minister. While he is
being painted as a radical reformer, he isn”t. However, the
change is refreshing and he certainly sent a message in selecting
his cabinet, one that contains five women, including Japan”s first
female foreign minister. It is unlikely that Koizumi will apply
the needed shock therapy to the economy, but we should all hope
he can somehow make a difference.
Middle East: The leading Arab terrorist figures gathered in
Tehran this week for a conference on how to exterminate the
nation of Israel. Yes, the leaders of Hezbollah, Hamas, Islamic
Jihad…all were there. And 30 Arab nations sent leading
parliamentary figures as well, giving the whole occasion a sense
of legitimacy. Now I just have to note what must be on every
good person”s mind. What the heck are our “smart bombs” for,
anyway?
[Actually, I arrived in Paris Friday afternoon and my plane from
Istanbul was met by policemen who whisked away two Arab
figures. A bit disconcerting.]
Iran”s Ayatollah Khamenei said that “combat” was the only way
to deal with Israel. And some get mad when Israel fights back
against the Palestinians? True, there are times when Israel takes
a provocative action that I would question (such as the building
of new settlements in disputed territories), but, at the end of the
day, no wonder they are more worried about the nation”s
existence than ever before.
India / Bangladesh: It turns out that 8 of the 16 Indian soldiers
who were killed recently by the Bangladeshi military were
tortured and murdered. India has shown amazing restraint in
reaching the conclusion that it was the act of a rogue unit, and
not sanctioned by the Government of Bangladesh.
Pakistan: Hundreds of opposition figures were rounded up in the
dead of night this week. And remember, those Islamic terrorists
in Tehran would love to get their hands on one of this nation”s
nukes.
Ukraine: Oops. Not so fast, Mr. Editor. Last week I said that
President Kuchma”s days were numbered. This week, his largely
handpicked parliament ousted the reformist prime minister. The
reformer has vowed to unite the nation”s opposition. Ukraine
still has a few nukes of their own, let alone the world”s deadliest
nuclear power plants.
Russia: Unfortunately, the little Chechen incident in Istanbul hurt
Turkish – Russian relations. Many Turks see the Chechens as
blood relatives (remember, the Caucusus is right on the border).
At the same time, the Turks are miffed that the Chechens
continue to pick Turkey as a place to fight their battles with
Russia, and Russia is upset that the Turks don”t do more to
prevent the Chechens from feeling free to operate against
Russian interests in the country.
France: Non. Non. Say it ain”t so? [I don”t have my French
dictionary with me.] President Jacques Chirac will not be
prosecuted for graft, dating back to his days as Mayor of Paris,
but, the prosecutor said that doesn”t preclude parliament from
calling him to explain his actions. I just saw a fellow on
television say that this could be “France”s Watergate!” Oui oui!
And, on a different note, when you arrive in Paris, the first thing
you do is ask your cabby, “What strikes are on today, monsieur?”
My Vietnamese driver, who spoke good English, just smiled and
said, “They don”t like to work, do they?” Then he asked me,
“Do you?” “I think so,” I replied.
Oh, and by the way, a survey of the “Top Ten Most Competitive
Nations” was released this week and the U.S. was #1, followed
by Singapore at #2. France, no surprise, was not on the list.
Germany: Since I”ve mentioned the coming population /
immigration problem throughout much of the developed world
(particularly Europe) countless times before, I noted with interest
something from a Reuters story addressing the issue.
“Faced with predictions that Germany”s population could decline
by a quarter from its current 82 million over the next 50 years,
the country”s main parties have shifted away from their
traditional view that Germany is not open to immigration.”
I guess they now get it. But the workers are very upset at this
potential shift in government policy.
Northern Ireland: So much for peace. Evidently, the North is
worse off than they have been in the past three years, and the real
problem is that a “mafia-like virus” is spreading across the
country. The paramilitaries, while holding down the level of
political violence between Catholics and Protestants, have taken
to drug trafficking, insurance fraud (setting fires), and all manner
of other crimes. It is getting increasingly difficult to do business
there.
Philippines: Former President Estrada was led away in handcuffs
for allegedly siphoning $80 million from the nation”s treasury
and directing it to his mistresses, as well as indulging his
gambling habit. He is now eligible for the death penalty.
Wall Street
You”ll have to excuse the fact that I haven”t kept up in any great
detail with the goings on in the U.S. financial markets. I will list
the final weekly returns by Monday morning, and may add a
brief comment or two at that time.
What was obvious, even from Istanbul, is that the volatility
continued, as the tug-of-war between those who see withering
earnings as being a market depressant, fought it out with those
who eventually see the Federal Reserve”s concerted campaign to
reduce interest rates as having a positive impact on the overall
economy by the second half of the year.
But the most important story is the developing one concerning
the refusal of the European Central Bank to do the right thing
and lower interest rates. They are the only holdouts, in what has
been an otherwise global effort among the developed nations to
combat the slowdown.
ECB President Wim (there”s your problem) Duisenberg
continues to say that Europe will suffer only “limited” damage
from the U.S.”s economic problems, yet evidence to the contrary
keeps mounting, such as major layoff announcements from the
continent”s leading players, like German electronics giant
Siemens, as well as the closing of a Motorola plant in Glasgow
(despite the personal pleadings of Tony Blair). And this week,
the IMF issued a rare policy rebuke in urging the ECB to get on
board the lower rate train. The world economy, said the IMF”s
managing director, “is certainly in a quite critical phase,” and
they have slashed their own estimate for global growth in 2001
from 4.7% to 3%. The IMF added, “Worldwide, there is a self-
reinforcing downside element.”
Regarding the U.S., specifically, the IMF now calls for growth of
just 1.5%, vs. 2.4% in the Euro-zone. But the ECB is holding
steadfast, saying the inflation battle is far more important. This
could get ugly. It already is for the workers.
Yet I just saw where U.S. GDP for the 1st quarter came in at 2
percent! Great news for those of us who refused to buckle under
the official recession fears earlier in the year. And the housing
sector continues to exhibit amazing strength, even while
consumer confidence slid some more. But let”s switch to a dose
or two of “Street Bytes,” shall we? [My room service meal is
about to arrive. I”m in the mood for food.]
Street Bytes
–Tough go of it for bonds on Friday as the strong GDP number
will make it tougher for the Fed to reduce interest rates much
further. More next week.
U.S. Treasury Yields
1-yr. 3.87% 2-yr. 4.26% 10-yr. 5.32% 30-yr. 5.80%
–Telecom: The news could not have been worse as Japanese
telephone giant NTT DoCoMo announced it would postpone the
introduction of the 3rd generation (3G) cell phone network from
May to at least October. Obviously, this slows the introduction
of 3G telephones worldwide, particularly hurtful to those
European outfits that have shelled out $120 billion just for the
licenses alone. Are we happy?
Commented the Herald Tribune, “Just another high-tech
marketing campaign that promised more than it could deliver.”
But I want to know when my flight is delayed, darnit! Actually,
on the streets of Istanbul they were selling mini-satellite dishes,
like you see “hot” cell phones being displayed on New York
street corners. The way I read it, there is some real cheap
technology out there that will quickly put to shame these multi-
billion dollar networks. Ask me if I”d buy a telecom bond right
about now?
–S&P 500 profits are now expected to decline over 9% for the
full year. Back in January, market strategists were calling for a
gain in excess of 5%. [Abby Cohen saw growth of 7%! Just
another reason why Ms. Cohen is now officially irrelevant.] J.P.
Morgan Chase”s Doug Cliggott, about the best strategist there is
these days, is calling for S&P earnings to fall 11%.
–The layoffs continue to mount, with JDS Uniphase announcing
it was giving a whopping 20% of its workforce the opportunity to
drink beer in Istanbul. The only problem is that the workers may
not see it that way. Separately, Morgan Stanley Dean Witter
confirmed previous reports that it was reducing its staff by 1,500,
unfortunately, a harbinger of things to come on the Street.
–But Exxon Mobil reported another quarter of stupendous
earnings, taking in some $5 billion for the first three months of
the year. That”s twice what Cisco recently wrote off in
inventory. Old vs. New. I think Old is winning.
–And there”s more from Cisco. A former executive was arrested
for embezzling $10 million in stock of an Internet security
company.
–Sun Micro announced it was forcing all employees to take a
week off in July in an effort to cut costs. The Francification of
Sun! [Yes, I just made up that word. You are welcome to use it
yourself, however.]
–Remember a few weeks ago when I questioned the veracity of
Oracle”s claim that it had saved $1 billion from using its own
software? Well, this week primo-dirtball Larry Ellison confessed
that the savings were closer to $500 million. He blamed the
economy. Clearly, Ellison graduated summa cum laude from the
Bill Clinton School of Lying.
–The dimming global outlook clearly discourages investment in
emerging markets, which is another reason to stay away from
them. [Unless it”s Turkey! And regarding its own debt crisis,
Argentina is hanging in there.]
–Energy: Prices took off again, mainly due to refinery problems.
Like, man, we don”t have enough capacity. Blame Bill Clinton.
He was chasing skirts while claiming he “was doing the people”s
business.”
Foot-and-Mouth / Mad Cow
I saw an anti-globalization poster, which said, “McDonalds Kills
Cows;” and very well, thank you.
Actually, here Britain was saying that foot-and-mouth was under
control when suddenly this week the big story concerned the
spread to humans. Now before you all go foaming at the mouth,
yourselves, it is important to note that contracting the human
form only leads to “flu-like” symptoms…that and the necessity
to be shorn after three months. But listen to the official
government explanation for why one man may have contracted
the disease. [It”s pretty graphic…but they wanted it released to
prove how difficult it was to get F and M.]
“The man was moving the carcass, it exploded and the fluid went
into his mouth.”
Since that report, however, at least five more may have come
down with it. And having watched a ton of British reports this
past week, also consider the controversy that is spilling over
concerning the burning of the carcasses. Just recently I wrote of
the pending EPA report concerning the disposal of animals in the
U.S. and the spread of dioxin. Well, guess what? The animals
being burned in Britain may be spreading it as well! Couple this
with a report from an international travel group that says Britain
is the worst place to go (issued before the animal contagion) and
you have a pretty bleak scenario for their tourism industry.
[Have you been to Britain lately? The average hotel room sucks.
Pack your shoehorn.]
Meanwhile, on the mad cow front, I arrive in Paris to the report
that a 3rd person has just died from the disease here. [In Britain,
the death toll is 90.]
Random Musings…It”s all about Turkey
[Before I continue, seriously, I am now a huge fan, but I also am
well aware of the history, i.e., if you are Armenian or Greek, you
may have a different viewpoint. Understood. Greeks should
know, however, that the Turks I spoke with were excited about
the prospects for continuing improvement in relations between
the two.]
Granted, I was just in Istanbul for five nights, but, geezuz, I
loved the place. What follows may be more than a bit rambling,
but it”s random musings, after all, and I have a lot to say.
Regular readers should not be surprised that I went here. On
more than one occasion I have written of the importance of
Turkey, as an ally and as a beacon of hope in the Arab world.
But it”s really the geography that makes them critical to world
peace. After all, Turkey borders Syria, Iran and Iraq.
And it”s important to note the following. Turkey is a Muslim
nation (98% of the population), though I learned that only about
40% practice the faith. Thanks to the founder of the modern
state, Kemal Mustafa (Ataturk), Turkey is nonetheless a secular
society.
I had a certain preconception of what Istanbul would be like.
The city has 12 million people after all, and I expected it to be
polluted and a bit dirty. Wow, was I wrong. While I”m told that
July and August can be pretty unbearable (as is New York and
much of the U.S. for that matter), the weather was delightful, the
sky was blue, the water clear, and the streets were cleaner than
any major U.S. city I have been to over the past few years.
That”s for starters.
I also expected to be harassed quite frequently. That wasn”t the
case. Sure, in the bazaars I was, just like any tourist, and that”s
the merchants” job, anyway. [The Grand Bazaar has 3,000
shops!] But, in all honesty, I thought the people were
tremendous, and they have a great sense of humor, which one
learns even from just simple observation. I truly feel as if I made
some new friends there.
And the food? Well, I knew going in that I was in for a treat. I
had been reading up and I was never more excited for dessert!
Oh, baby, you gotta love it! Man, if you have a sweet tooth, go.
And the prices, thanks to Turkey”s plummeting currency, were
unbelievable. Yes, the hotels are still expensive…slightly below
major U.S. city prices for room and meals. But I had some of the
most spectacular dinners of my life away from the hotel, 4 and 5-
course affairs (with 4 beers…I”m allowed), for a total of $10-
$17! Again, including drinks!
But before I get into more serious topics, some other quick
observations.
–What did I buy to bring back? Only Iranian saffron (supposed
to be the best) and Turkish Apple Tea (out of this world).
–I took over 20 cab rides, because they were so incredibly cheap
and convenient. [And the traffic is not bad at all, amazing for a
city that large.] 5 or so of the drivers spoke good English, and it
was fun conversing with them. So one goes, “Who is your
favorite American president?” “Reagan.” “I like Bill Clinton.
Bill Clinton is a sexy man.” “But he was a liar,” I said. “Yes,
but all of our politicians are liars. Why should yours be any
different?” Then he goes, “Is that Monica stuff real?” I kid you
not. The cabbie in Istanbul knew all about Monica. This is what
he knows about America. Thank you, Bill.
–The women…of Turkey: So here”s the deal. Turkish women
are beautiful. But you won”t see any mini-skirts or revealing
outfits. That doesn”t mean they are all covered up. I”d say less
than 1% of those I saw were. I better leave it at that. I want to
be able to go back, know what I”m sayin”!
–Back to Clinton, I have been to so many museums in my life
that I really don”t need to see another 3rd century pot, or an
example of 18th century porcelain. But at Topkapi Palace there
were some pretty awesome displays of the latter. And my
immediate thought was, “See, hundreds of years from now, our
own collection will be missing that which Bill and Hillary took!”
–Turkey has a wickedly free press. Man, they are vicious, and
their corrupt leaders deserve the shelling.
Back to dessert. Turkish delights, they call them. Homer
Simpson would never leave. And one tale I”ll always cherish. I
was walking across the Galata Bridge, where all the men go to
drop their fishing lines into the Golden Horn (all of the fish is out
of this world), when I walked past this vendor selling some cake.
After about twenty paces, I thought, “Gosh, that looked
awesome,” and walked back to the man. To say he was not well
off would be an understatement. I ordered it, lemon cake,
drenched in honey. A big slab…for 20 cents!!! 20 cents! And I
was handing him the equivalent of $4, at which point he could
have ripped me off, but he was an honorable man. As I stood on
the bridge, munching the cake from heaven, I thought, “Life is
good.” Now if we could only find a way to make it good for all
of Turkey.
For you see, Turkey has major problems, but, as I left on Friday,
there were two developments that could have very positive
ramifications. First, the IMF has approved a $10 billion package
to help it out of its latest economic crisis, and, second, the
energy minister, wrapped up in a huge corruption scandal,
resigned, when he had earlier threatened to fight the charges.
Turkey is one of those countries where corruption rules the day.
Its political leadership over the past few decades has generally
been awful. But at the same time, I have been frustrated by the
West”s seeming lack of regard for a nation that can do us all a
ton of good. They want to be part of us, not the Muslim world.
They want to be members of the European Union (but it”s the
politics that has held them back in this regard) and Turkey is
already a longstanding member of NATO.
And regarding this last bit, what they do have going for them is a
powerful military; one for which we should be very thankful.
You can be sure ally Israel is. After all, it”s because Syria has to
post a large portion of its own military force on the border with
Turkey that Israel can breathe a little easier concerning the
Syrian threat. And while the army establishment has brought
down (directly or indirectly) four governments since 1960, my
knowledge of them is that they fully understand the new world
order. They are the one institution respected by the whole
nation. They also stand between a modern European society, and
one ripped apart by Islamic Fundamentalism. [The
Fundamentalists make up about 8% of the population, and the
army keeps very close tabs on them.]
What was particularly sad about the little Chechen terrorist
episode this week at Swissotel, is that it could discourage tourists
from coming. I”m here to tell you, go. As I write this I just
heard on CNN that the Turkish stock market was up 13% today
(Friday) because of the IMF plan and a seeming solution to one
of their political sticking points. This is a nation with immense
potential.
And it”s a proud country. I”ll leave you with another moment I
won”t soon forget. The military museum is not high on the
guidebook list, but it was just a few blocks walk from my hotel
so I checked it out. I also heard that each day there is a little
concert from the army band. The museum itself ended up being
one of the best I”ve ever been to. Forget the military theme, this
place had an absolutely fascinating display of weapons from the
15th century.
And there was another great exhibit of gifts that foreign heads of
state have given to Turkey”s leaders. Just as you would expect,
the Arab nations gave incredible swords or daggers. Then, in the
last 20 years or so, leaders like those from Pakistan would offer
gold-plated submachine guns! While the U.S., on the other hand,
gave pictures of Turkey, as taken from the space shuttle, or, in
the case of our Defense Department, a simple plate. Those gifts
spoke volumes about the respective societies.
So after leaving the exhibit area, you proceed to this large indoor
amphitheater. The museum is connected to the war college, so I
was sitting there with a few soldiers and about 500 school kids
who appeared to be about 10 years of age. You are shown a 20-
minute film of the role of the band in Turkish Army history.
At the end of the presentation, this giant wall (where the screen
was), rolls back, revealing the spectacular outer courtyard. And
then in the distance, you hear the band. It slowly approaches the
stage; with this awesome sound that gave me goose bumps. So
from the outside they walk into the theatre, with the children
roaring their approval. And me too! The band gave a patriotic
concert and then marched back out. I was blown away.
Yes, you had to be there, but as I left my seat, a few of the bolder
kids said “Hello,” to test my response. “Merhaba,” I smiled
back. The look on their faces was priceless. I also shook hands
with some of the soldiers, good-looking, proud men. And as I
walked home I kept having the same thought. This is no
“vaunted Iraqi Republican Guard” outfit. The West should give
the Turkish Army $50 billion and say, “Go get the Syrians,
Iraqis, and the Iranians, and crush the Fundamentalist elements.”
Granted, they”re not likely to want to do that, but I guarantee the
world would be better off. Long Live Turkey!!
Gold closed at $264
Oil, $28.27
Returns for the week, 4/23-4/27
Dow Jones +2.2%….[10810]
S&P 500 +0.8%
S&P MidCap +2.7%
Russell 2000 +3.7%
Nasdaq -4.1%….[2075]
Returns for the period, 1/1/01-4/27/01
Dow Jones +0.2%
S&P 500 -5.1%
S&P MidCap -1.9%
Russell 2000 +0.1%
Nasdaq -16.0%
Bulls 43.9%
Bears 41.8% [Source: Investors Intelligence]
Yardiminiz iain tesekkur ederim! [Thank you for your support.]
Brian Trumbore
