[Posted 7:00 AM ET]
The War on Terror
Iraq: I wish the media would just take a breath now and then, or
at least get their sources straight. The New York Times was
blabbering last weekend that the Shiite clerics wanted Islam
recognized as the key to the new constitution; in other words the
adoption of Shariah law where women are treated like dirt. No
doubt some want this but the key figure, Ayatollah al-Sistani, has
given absolutely no indication he would allow it. In fact,
everything he has said over the years points to a secular Iraq
where, of course, Islam still has a major influence. But as an
article in USA Today perhaps put it best, the real question the
new national assembly must answer as it writes a constitution
is…
“Is Islam ‘the’ source or ‘a’ source of legislation?”
As you watch the news, read the papers, and catch the blogs,
unless you hear Sistani himself say otherwise, or, worst case,
learn of his demise, the rest is just blather. We are at the start of
a very long process. We don’t even know who the members of
the assembly will be as yet.
Better you spend your time worrying about the Kurds, who seem
hell-bent on declaring their independence. That would not be
good.
Iran: I’ve already given up. Iran is going to get the bomb and
history will look back on a period in time, 2002, and say the
Bush administration blew it. I’ll have to go back through the
archives but in those days, particularly autumn if memory serves
me right, there were pro-democracy rumblings among the masses
yet the White House said nothing. Now President Bush and
Condoleezza Rice are issuing threats when the mullahs are
undoubtedly less than a year away from being able to test a
nuclear weapon. At that point it will be a matter of national
pride and even democratic Iranians will be reluctant to give it up
in a neighborhood full of bad players. For its part, Israel would
then have a major problem on its hands…like its very existence.
This coming June, Iran is slated to hold another election, mullah
style, and former president Ali Akbar Rafsanjani is the favorite.
He may be someone we can at least attempt a dialogue with,
though in an interview with USA Today, Rafsanjani said he
expects Washington to unfreeze Iranian assets as a goodwill
gesture before he’d contemplate any negotiations.
North Korea: You certainly know where I’ve stood on this one
over the years. My latest guesstimate end of 2004 was that the
commies had 12 nukes. Or as the New York Times Nicholas
Kristof wrote this week, before Pyongyang announced it did
indeed have the bomb, “President Bush has been startlingly
passive as North Korea has begun churning out nuclear weapons
like hot cakes.”
Not only do we have zero clue where Kim Jong-il’s Orcs are
slaving away (we’re not much better off in the case of Iran), our
intelligence folks are scared to death as to whether the North has
passed off a bomb, or weapons-grade material, to a terror group
or state sponsor of same such as Iran. We’ve already learned
recently that North Korea supplied Libya with the latter.
We’ve also heard bluster and vicious rhetoric from the North
before but this is a little more worrisome. I’ve always wondered
why none of the world’s rogue leaders have ever crossed the line.
Heck, countless times even the U.S. and Soviet Union / Russia
have almost blundered into a nuclear exchange, like in
mistaking a flock of geese for incoming, so why hasn’t one of the
nut jobs taken down civilization with him?
But here’s another big concern. Last week I told you of 12 long-
range missiles that fell into the hands of Iran and China, 6 apiece,
via Ukraine. Well I learned more about this over the past few
days and it turns out Ukrainian authorities had been working on
the case a year, while President Kuchma was still in charge, but
this was just made public.
Particularly worrisome is that the manifests for the missiles, that
were transported to Iran and China from Ukraine but via Russia,
showed 20 missiles, not just 12. Are there another 8 of these
nuclear-capable market crashers out there in potentially rogue
hands?
And in thinking outside the box, though I’m assuming someone
in Langley is also following this line of logic, six are already in
Iran and Iran is Hizbollah’s sponsor. Hizbollah is known to be
stockpiling missiles of a different sort in Lebanon…hundreds,
if not thousands…but none are evidently nuclear-capable.
[Chemical and biological is a different story altogether.] Iran is
processing nuclear material and passes some off to Hizbollah,
along with one of those missiles. Hizbollah lobs it over the
border with Israel, that is if Iran doesn’t want to take a direct shot
itself.
Wall Street
Let’s see if we can get a handle on President Bush’s budget for
fiscal 2006, shall we? Frankly, I agree with the opinion of the
Washington Post that it’s a “farce,” but I suppose you’d like
more analysis than that.
The $2.6 trillion spending plan calls for a hike of 4% in defense
spending, but for all other discretionary items, ex-defense and
homeland security, the president is asking for a cut of 1%.
Sounds good, right? I guess so, if all you saw was a Republican
flyer on the issue.
First, let’s look at the federal deficit #s.
2004 – $412 billion
2005 – $427 billion…projected
2006 – $390 billion…projected
Forget that the deficit was supposed to be far lower by now,
here’s what the above figures don’t include. The costs for the
war in Iraq and Afghanistan, a fix for the Alternative Minimum
Tax, and any transition costs should the president get much of his
Social Security reform plan enacted.
First off, the administration has requested another $80 billion for
the war on terror. Second, the cost to fix the AMT runs about
$500 billion over 10 years. Of course this should be fixed, but
then the government would have to forego an estimated $600
billion in revenue that the AMT would otherwise generate over
the same time period. As for Social Security, frankly, I don’t
think the private accounts idea has a snowballs chance in hell of
passing and I’ll be the first one cheering its demise.
So where does that leave us?
Many supporters of the White House, ranging from party hacks
to the editorial board at the Wall Street Journal, love to point to
the fact that as a percentage of Gross Domestic Product, the
deficit is less than 4%, historically insignificant. Of course they
conveniently leave out the aforementioned added costs, but to a
certain extent they have a point. A 3.5-4% deficit vs. GDP has
not been harmful. [Spending leads to employment, after all.]
But every $ of debt is also being added to the overall national
debt; now in excess of $7 trillion and climbing daily. That’s
roughly 70% of GDP and as I’ve noted many times in the past,
you’ll recall the Japanese example when its overall debt hit
130% of GDP. That economy stagnated for 13 years and some
would argue it still is in that state. The U.S. used to be in the
30% range not too long ago but 100% plus at this point is a
certainty, sooner than later, particularly if the president gets his
way on Social Security.
What does this really mean? Today we are paying $178 billion
in interest on the national debt and this is slated to grow to $314
billion by 2010. So, do you have a favorite program that’s about
to be cut? Want to know the real reason why?
Of course as the $7 trillion+ debt grows and grows, the risk of a
currency crisis grows commensurately and in this levered nation
of ours such a calamity could spell depression. I’m on record as
saying a crisis is not in the offing for 2005, but I’ll probably be
wagering on one for ’06 by this summer.
Finally, a few other thoughts on the process. The White House
received a ton of heat, deservedly so, for upping the estimated
cost of the Medicare drug benefit, once sold as a $400 billion
plan but now estimated to cost in excess of $700 billion, just for
starters, in the first ten years of the program.
As for President Bush himself, how can one listen to his budget
malarkey when he still hasn’t vetoed a single spending measure?
In fact, remember that highway bill; the one he said he needed to
limit to $256 billion? Turns out he’ll accept at least $284 billion,
the House version (the Senate remains at $318 billion).
Having said all this, it would be disingenuous of me if I didn’t
also add the following. The only thing that truly matters to yours
truly, as I’ve said from 9/11 on, is to win the war on terror.
Without success here, and the ability to prevent a WMD attack
on American soil or a major foreign capital, there is no economy
to talk of. Think up your darkest nightmares and that’s probably
the reality.
I don’t believe we’re spending nearly enough on homeland
security. Here in New Jersey, for example, few of our chemical
plants and ports are really secure. It costs $10s of billions to do
it right. I also believe in most of the Bush tax cuts and I think
there is no doubt they helped stimulate the economic activity of
the past two years. I’d like to see them made permanent, as the
budget attempts to do, but I believe most Republicans of my ilk
would be willing to listen to other proposals without gutting the
core.
My point is the following. I’ve always said get used to the
deficits and the impact on the financial markets, though at some
point we may tip over. There is no free lunch and what
investors need to remember is that no one ever guaranteed 10-
12% returns on equities long into the future.
This fiscal mess we are in is not a good environment, longer
term, for most financial assets. But we also have to win the war.
That’s paramount. If we have to sacrifice the ability to buy a 3rd
home or the latest super luxury car, that’s a small price to pay to
at least begin to secure our children’s, and their children’s,
future.
Street Bytes
–The markets finished mixed with the Dow Jones registering its
3rd straight advance, +0.8% to 10796, while Nasdaq declined
0.5% to 2076. The Dow actually rallied about 135 points after
North Korea made its formal declaration of having nuclear
weapons. Isn’t that special? It spiked up Friday on a rumor Kim
Jong-il had been removed when it turns out all Kim did was tell
the people his son will replace him one day.
Dell and Cisco had a slightly negative impact on Nasdaq with
less than enthusiastic responses to their earnings reports, but the
big news was the ouster of Carly Fiorina as CEO of Hewlett-
Packard.
Actually, this just wasn’t that big a story in my book. After all,
over four years ago in this very space, 1/13/01, I wrote “Hewlett-
Packard’s CEO Carly Fiorina has been a bust and…her
credibility is shot.” Guess it took a while for the board to catch
on. Hey, she did a poor job, she had enough time, and it just
wasn’t working out. Now the only thing to be mildly interested
in is whether the company finally spins off the best asset, the
printer business.
–U.S. Treasury Yields
6-mo. 2.81% 2-yr. 3.32% 10-yr. 4.09% 30-yr. 4.47%
There was zero real economic news on the week but the long end
of the yield curve rallied for a few days because the market liked
the president’s budget, thinking it was fiscally prudent. The 10-
year traded below 4% on Thursday but finished the week
basically unchanged from the prior one. In other words, for the
umpteenth time it was much ado about nothing. What is
important, however, is that the 10-year remaining at such low
levels prevents the housing market from cratering. It’s why in
my mind housing values will stagnate over the course of 2005
rather than decline.
–The G-7 wants more information from oil producing nations
and oil companies when it comes to output and reserves, instead
of the current cloak of secrecy that forces analysts to do things
like physically count the number of tankers plying the waters in
order to come up with their estimates.
–Russia is going to bar foreign-owned companies from bidding
on new oil and metals deposits that the Kremlin is tendering.
Any bidder must be at least 51% Russian-owned. And on a
related note, the International Energy Agency reported Russian
oil output fell for the fourth straight month in January, a
worrisome sign for those looking for a let up in sky high crude
prices around the world. Of course longer term this trend
represents a potential disaster and by shutting out foreign
competition, and technology, Russia is only shooting itself in the
foot.
–Business confidence in Russia is obviously plummeting,
particularly following the Yukos debacle. Here is but another
example.
Frank Neumann, a U. S. businessman, owned a furniture store
chain in Moscow; that is until recently when some masked men
came a calling. According to the Moscow Times, Neumann
“told police that he was then forced to sign over the company’s
accounts to former managers (Russians), costing him $4.9
million.”
Now ordinarily you may look at such a report with a certain
amount of skepticism, but the European Editor for Newsweek,
Michael Meyer, brought this very case to the attention of Russian
political figures in Davos, Switzerland, two weeks ago.
–There is no doubt home price inflation in California is slowing.
In Riverside County builders are starting to lower their asking
prices on houses in subdivisions while in Los Angeles County
the market is showing signs of stagnation. [Los Angeles Times]
–Dell’s revenues were up 17% in the fourth quarter, year over
year, as it continues to grab market share. Fellow tech
heavyweight Cisco Systems saw its sales rise 12% for Q4 but it
forecast only an 8-10% increase in the current quarter. While
both stocks sagged a bit on the news, it’s clear Dell still finds
ways to generate growth but Cisco is totally reliant on business
loosening the purse strings and this still isn’t happening to any
great extent.
–China’s direct investment overseas rose 27% in 2004, much of
which was to secure access to natural resources.
–I’m not going to spend much time on the various trials of
corporate titans winding their way through the courts these days
but it was significant that former WorldCom CFO Scott Sullivan,
who has already pleaded guilty, implicated his boss, Bernie
Ebbers, in rather clear tones. Sullivan, though, has mega
skeletons in his closet and will be hammered under cross
examination. Look for him to be carried out of court on a
stretcher when the defense is finished.
–The talks between MCI and Verizon will be a big story this
coming week. MCI shareholders evidently don’t like the price
that’s being bandied about.
–Bank of America settled with regulators over its role in the
mutual fund trading scandal to the tune of $515 million,
including $140 million in penalties for its Columbia funds unit.
And remember Erik Gustafson, a portfolio manager who was on
CNBC about three times a week during the Bubble? Turns out
he was part of this mess and has been suspended from the
industry for one year. I was wondering where he had gone off to.
–And then there is business commentator Courtney Smith,
another fixture on the financial airwaves. He was arrested on
fraud charges for taking up to $1 million from a marketing
company to tout stocks without disclosing the conflict of interest.
–Wal-Mart closed its first unionized store in North America,
Quebec, because of the contract demands being put forward by
the 190 workers. Wal-Mart refused to buckle under. That’ll
teach ‘em.
–Nicholas Negroponte, a tech wizard at MIT, told a crowd at the
recent Davos World Economic Forum that what the people of the
developing world need most is a $100 laptop, something he is
working on. Doesn’t anyone learn? Remember when Bill
Clinton and Al Gore wanted to wire Africa? Boy that was
incredibly stupid. Try booting out dirtballs like Robert Mugabe,
or improving farming techniques and relaxing some of the
West’s protectionist tariffs so these poor people can sell some
goods, first, before flooding the emerging markets with cheap
laptops so they can surf the Net for porn.
–American Airlines is doing away with pillows on all but
international flights as a way to save $375,000. Who uses these
gross things, anyway? Or the restrooms? Or eats anything off
those filthy trays? Basically, flying is just one gross experience.
Except on Singapore Airlines. Now they’re first class.
–France’s parliament is attempting to roll back portions of the
law restricting workers to a 35-hour week. Zut alors! Originally,
the socialist legislation was enacted to reduce unemployment,
giving employers a tool to hire more workers. But the economy
remained punk.
Under the new proposal, overtime limits will be raised and
workers would be able to trade vacation time for OT. But the
existing law can’t be totally scrapped because then the unions
would raise hell.
–Talk about a mess, what a fiasco the PNC-Riggs Bank
attempted merger has proved to be. First, PNC made a bid last
summer for Riggs at $24.25, while acting like a then ongoing
investigation into Riggs and money laundering wasn’t such a big
deal. Of course it was and Riggs was basically sent to
Gauntanamo to be roughed up by the Feds. Then early this week
Riggs sued PNC when PNC said it wanted to renegotiate the
terms. It seems some news came up that PNC hadn’t thought
about in the interim, like the original investigation, for crying out
loud. But on Thursday the two parties made up and the merger is
proceeding, though at a reduced price of about $20 per share of
Riggs stock.
–Jeff Immelt, CEO of General Electric, has joined Bill Gates in
denouncing the current student visa policy in the U.S. In
London, Immelt said “This is a case where our policy to close
down on access boomerangs. It moves jobs out of the U.S. and
creates less incentive for people to study in the U.S.” [Financial
Times]
–I just found the following from Crain’s New York Business
interesting. According to reporter Matthew Flamm,
“Independent television stations are running out of reruns.”
It seems that half-hour sitcoms are in seriously short supply and
the pipeline for syndication is drying up. Staples such as
“Seinfeld” and “Friends” are also “wearing out.”
For example, “Seinfeld” drew about $7 million an episode last
year for its third cycle of repeats. But at the same time the
Nielsen ratings for the program are plummeting. In New York
reruns posted as high as an 11.1 rating back in 1996, the first
season, but this January were down to 3.4. Said one analyst,
“It’s gotten to where ‘Seinfeld’ fans can pretty much recite the
dialogue.”
The problem with the networks these days is that “the high costs
of launching sitcoms, as well as their high rate of failure have
made them too risky a bet,” writes Flamm. For instance, NBC
had 18 comedies on the air in 1997; last fall, NBC, ABC and
CBS combined had the same number.
–Congratulations to my friends at PIMCO for being rated the #1
large mutual fund family in an annual survey for Barron’s.
–My portfolio: Wudda cudda shudda. That’s been my feeling
the last few months in particular regarding the energy sector. I
did extremely well investing in this arena from Feb. 1999
through April 2004, trading in and out of a handful of issues, but
then I largely abandoned ship, to the point where I have but one
oil stock left in the portfolio. Of course I missed a huge run as I
was looking for the big correction that never materialized. There
are days when I’m sick about it because I felt like I knew this
sector cold and should have known better. But enough of true
confessions. I have never chased performance. Some people can
do it, I can’t.
In the meantime, I bought back into my carbon fiber play,
increasing the exposure here to about 6% and am now roughly
22% equities / 78% cash, overall.
Foreign Affairs
Israel: As expected, a cease-fire agreement was signed by
Palestinian President Mahmoud Abbas and Israeli Prime Minister
Ariel Sharon in Egypt, with both sides pledging to cease all acts
of violence against the other. Does this signal an end to four
years of war that claimed over 4,000 lives? Of course not. But if
both Abbas and Sharon can be kept alive, amidst constant
assassination threats, there is hope real progress can be made.
No doubt Hamas and Islamic Jihad will continue to do their
thing, though, after which Israeli authorities may be forced to
retaliate, but one can assume Abbas and Sharon will do their best
to keep negotiations moving forward despite the occasional
setback.
Two major hindrances remain, however. Can Sharon tame
Israeli settlers who are about to be displaced and can Abbas gain
enough concessions from Israel to placate the majority of
Palestinians? No one can supply the answers yet. The
assassination threat, remember, is from within in both cases.
Lastly, as noted in my opening remarks, Iranian-backed
Hizbollah is potentially the real wild card in this region.
China: According to Jane’s Defense Weekly, the military has
been loading up on Russian high-tech weaponry, including
supersonic fighters. While the U.S. and the Euro nations debate
the arms ban that has been in place since Tiananmen (1989), its
increasingly clear China couldn’t care less since it has a ready-
made supply nearby. Europe, which desires to lift the ban in the
hope it will receive all manner of future orders, is probably
grossly overestimating the potential sales. As for the Bush
administration, it believes lifting the embargo sends the wrong
message to China on the issues of human rights and the fate of
Taiwan.
Russia: Watch Feb. 23. The Communist Party is attempting to
organize large demonstrations for that date in support of the
military and against the benefits cuts that have put the Putin
government in such hot water. If you see tens of thousands in
the streets that signals the opposition in Russia is truly back.
[Smaller protests are scheduled for today, Saturday.]
The opposition did get a boost this week when it grilled Prime
Minister Mikhail Fradkov in the Duma, again on the benefits
issue. While Fradkov handily survived a ‘no confidence’ vote,
he was described as “visibly nervous” and rambling. Opponents
interrupted his comments with laughter and one shouted “Look,
he just woke up!” [Moscow Times] President Putin could not
have been pleased by what he saw.
Turkey: Prime Minister Erdogan is in some hot water.
Remember, he is the head of an Islamic party in secularist
Turkey. There have always been doubts about the true direction
Erdogan wants to take the country but thus far he has been a
model of Western rule. That is until this week when he made a
comment, caught on tape, that he was prepared to lift a ban on
the wearing of headscarves in universities and government
offices. This may not seem like much but the rule goes back to
the days of Ataturk, the founder of the modern state and a
vehement champion of tilting Turkey to the West.
Northern Ireland: An independent panel looking into the $50
million bank heist in Belfast last December has backed the views
of both the British and Irish governments; that senior members of
the IRA’s political wing, Sinn Fein, sanctioned it. Sinn Fein
leaders Gerry Adams and Martin McGuinness remain nothing
more than terrorists. [Full disclosure: Your editor is Roman
Catholic]
Spain: The Basque Separatist group, ETA, is similar to the IRA
in many respects. This week it exploded a bomb outside
Madrid’s convention center but at least telephoned a warning
beforehand, its normal modus operandi. It’s possible the
intended consequence was to derail Madrid’s bid for the 2012
Olympics. IOC officials were there just one week earlier to
examine the facilities and game plan and the IOC can’t feel too
good about the security issue.
Mexico: President Vicente Fox has been forced to beef up his
personal security amid increasing signs he could be a target of
assassination because of his battle against the drug lords.
Togo: In case you needed further evidence of what a joke much
of this continent remains, look no further than this place. The
president died after almost 40 years at the top, but instead of the
parliament speaker taking over, per the constitution, the son did.
Gotta tell ya, I’ve been to a lot of places but never had a
burning desire to visit here. [Actually, I just looked it up on a
map to remind myself where Togo is. Two doors to the west of
Nigeria, sports fans.]
Thailand: Prime Minister Thaksin became the first to win re-
election here due to Thailand’s solid economic performance and
Thaksin’s handling of the tsunami disaster. He received zero
support, however, in the southern provinces where Islamic
militants are battling the government.
Random Musings
–Secretary of State Condoleezza Rice has had quite a trip
abroad. I got a kick out of this description from the AP.
“Rice is displaying a sophisticated style right at home on the
streets and in the salons of taste-making capitals such as Rome
and Paris.
“Her custom-made suits have included a black boucle number
with gold brocade that probably cost more than your first car.
She favors chic Italian heels, nipped waists and understated
jewelry.”
More importantly, while Rice received the star treatment it is far
too early to tell if she has changed opinions. What transpires
with the negotiations over Iran’s nuclear program will be telling.
–Publisher Mortimer Zuckerman on the Social Security issue:
“Of course, the idea of Bush’s ‘ownership society’ is to change
the relationship of Americans to government so they look less to
Washington than to themselves (and, just maybe, vote more
Republican). No doubt some Americans could build savings and
more wealth and have a nest egg for retirement. No doubt there
is value in savings and self-reliance, planning ahead and
increasing distance from the government. But there are other
values in the very title of the program – Social Security. ‘Social’
surely implies a contract to help manage poverty among the old
and to know that our society provides a minimum income for all
in the retirement years. And ‘security’ means buffering the
harshness and cruelty of the markets so the well-being of the
elderly is not dependent on shrewd stock picks and hot mutual
funds.
“Privatization thus gets things upside down. Social Security was
not meant to re-create the free market; it was intended to insure
against the vagaries and cruelties of the market and to permit
Americans to count on the promise that the next generation will
take care of them in their old age.” [New York Daily News]
–Economist Robert Samuelson weighs in on the same topic:
“Give Bush credit for broaching, however indirectly, (it).
Criticize the Democrats for their limp ‘how dare you’ response.
But recognize that Bush’s chosen vehicle for overhauling Social
Security – ‘personal’ investment accounts – distracts from what
ought to be the central question: How much should younger and
poorer taxpayers be forced to pay for older and richer
beneficiaries?
“People talk about potential benefit cuts as if they would be war
crimes. The unspeakable truth – unspeakable because hardly
anyone speaks it – is that benefit cuts are inevitable, because the
baby boom’s retirement costs will force them…. ‘Personal
accounts’ don’t come close to closing the gap. Sooner or later,
chances are there will be a political backlash or a budget crisis.
The wiser policy is not to wait; it is to pare benefits now….
“(And) we ought to nudge these programs back toward their
original purpose as safety nets – and not retirement subsidies.”
[Washington Post]
–Commentator Ralph Peters on the flap over Marine Gen. James
Mattis and his recent statements on loving war.
“We lionize those who embraced war in the past, but condemn
those who defend us in the present. George S. Patton was far
blunter than Jim Mattis – but Patton lived in the days before the
media was omnipresent and biased against our military.
“The hypocrisy is stunning. Gen. Mattis told the truth about a
fundamental human activity – war – and was treated as though he
had dropped a nuclear weapon on an orphanage. Yet when some
bozo on a talk show confesses to an addiction or a perversion in
front of millions of viewers, he’s lionized as ‘courageous’ for
speaking out.” [New York Post]
Personally, I do wish Mattis had substituted a word or two, given
the times Peters refers to.
–The issue of driving and cellphones appears to be exploding
again, especially with recent studies that lay out the case for
banning the practice. Dan Carney, an automotive writer, had the
following in an op-ed for the Washington Post.
“Exxon Mobil prohibits its employees from talking on the phone
while driving company cars. It did so after conducting a study
finding that the braking reaction time of phone drivers is three
times longer than that of drunk drivers. Exxon Mobil researchers
also found that phone drivers are as likely to rear-end the car
ahead as drunks, and that they are unable to maintain position in
their lane. As with all other studies, Exxon Mobil found that it
makes no difference whether the driver uses a hands-free phone.”
–Guess what’s popular in Indonesia’s Aceh province? The
Turkish flag. It turns out it bears a striking resemblance to the
rebel flag long since banned by the Indonesian government. So
the Acehnese loved it when the Turks arrived as part of the
tsunami relief effort and they saw the similarity. Now it’s all
over the place, especially on t-shirts.
–The Star-Ledger (NJ) ran an extensive story detailing Senator
Jon Corzine’s bid to become my state’s next governor and the
staggering amount of money he is throwing around. Corzine, the
mega-millionaire via Wall Street, spent $342,000 of his own
fortune in a 10-day period last October on 16 Democratic County
organizations. Five received the maximum allowed, $37,000, as
Corzine successfully headed off a primary fight from Acting
Governor Richard Codey. But as if that wasn’t enough, Corzine
even had his 89-year-old mother, who lives in Illinois, give
$37,000 to Bergen County.
But wait, there’s more! Corzine gave $1 million…$1 million
…to a church for its community outreach program. Of course it
just so happens the pastor, the Rev. Calvin McKinney, is a most
influential politico in these parts. Corzine has basically become
a mob boss.
But back to Codey, whose approval rating is ironically sky high
after taking over for that other guy, the “Gay American.” Guess
what he is contemplating as a way of helping to close our state’s
huge budget deficit? Codey may propose taxing 401 (k)
contributions…as they are made! Can you imagine that?
And then we learned on Friday, again in the Ledger, that Codey’s
brother, a state prosecutor, has suddenly received “an unusual
salary boost” related to a new assignment. Bottom line, he is
now making $20,000 more than that of his direct supervisor and
136 other deputies who rank above him. But get this…because
of the move the brother is now eligible for an annual pension of
$98,500 – “about $36,000 more than he would have received had
he retired just one year ago.” The guy, now 55, can retire any
time hereafter.
I’m moving. Anyone want me?
–Follow-up to a story I did last week concerning the New York
City Fire Department. They will now be reissued the safety
ropes that former commissioner Thomas Van Essen took away.
–And regarding our continuing coverage of bird flu, Alan
Sipress had a story in Sunday’s Washington Post that contained
the conclusion of the medical community. “(It’s) only a matter
of time before the flu strain remakes itself, unleashing a disease
that is both highly lethal and as easy to catch as an ordinary flu
bug.” What makes it all seemingly inevitable is the exploding
poultry population in Asia.
–So much for President Bush’s much ballyhooed 2004 proposal
to go back to the moon and then Mars. NASA isn’t receiving
nearly enough in the ’06 budget to pursue these plans. The repair
of Hubble is also very much in doubt.
–I never heard a word about Ward Churchill until the past few
weeks and this wacko would never have seen the light of day if
the media had not gotten hold of his story and made a martyr of
him. Did you see his appearance this week? Did those look like
storm troopers at his side? Future Tim McVeighs, I mused.
–Michael Isikoff of Newsweek reported on a pitiful story, that
being the fact that one of the FBI’s e-mail networks, the one used
to communicate with the public, was seriously hacked into a
while back. Despite the fact it was the public network,
undoubtedly secrets have been passed as agents are often too
careless in discussing cases. It’s so serious that FBI Director
Robert Mueller had to brief the president.
–The Wall Street Journal’s Daniel Henninger had an interesting
thought…award this year’s Nobel Peace Prize to Iraq’s voters.
It’s a little early for that but he could yet be bang on.
–Attorney Lynne Stewart was convicted of giving material
support to terrorists, such as the blind sheik, Omar Abdel-
Rahman. I toast the jury for their courage and judgment.
–I’ve always been a supporter of Britain’s Royal Family but I
can’t get too excited over Charles and Camilla, know what I’m
sayin’?
—
God bless the men and women of our armed forces.
God bless America.
—
Gold closed at $422
Oil, $47.16
Returns for the week 2/7-2/11
Dow Jones +0.8% [10796]
S&P 500 +0.2% [1205]
S&P MidCap +0.2%
Russell 2000 -0.4%
Nasdaq -0.5% [2076]
Returns for the period 1/1/05-2/11/05
Dow Jones +0.1%
S&P 500 -0.6%
S&P MidCap -0.1%
Russell 2000 -2.6%
Nasdaq -4.5%
Bulls 54.6
Bears 23.2 [Source: Investors Intelligence / Chartcraft]
Happy Valentine’s Day to my mother, Dale and Linda!
Have a great week. I appreciate your support.
Brian Trumbore
