[Posted 7:00 AM ET]
Wall Street
In the minutes from its May 3 meeting, released this week, the
members of the Federal Reserve Board were found to be musing
about speculative excesses in real estate, and with good reason it
would appear. Home sales, as revealed by the latest data, are at
new records with the national median price now at $206,000, up
a whopping 15% year over year. But while Americans have
been using their houses as a piggybank, to the tune of $700
billion pulled out in 2004 (according to Economy.com)
compared to $266 billion in 1999, no doubt not all of this is for
such frivolous pursuits as a 2nd or 3rd home. Often it’s to pay off
higher-interest debt, a noble pursuit.
But of course that’s simply exchanging one form of debt for
another, even if it is at a lower rate. Christopher C. wrote last
weekend that I often forget to mention the usurious interest rates
charged by the credit card companies and how many folks use
theirs for home improvements. Of course he’s right and as
further proof I picked up this tidbit from a report by Steve Brown
in the Dallas Morning News as I was traveling in Texas this
week.
“The number of North Texas (Dallas – Fort Worth area) homes
facing foreclosure next month jumped 24 percent from a year
ago…
“Instead of the economy, poor credit choices are getting many of
the homeowners in trouble…
“ ‘People continue to find themselves with high credit card debts,
and they have gotten into too large of a home loan,’ said George
Roddy, president of Foreclosure Listing Service.’”
90% of the homes affected are priced $200,000 and less.
“ ‘It’s an indicator of the times we are in,’ said Roddy. ‘There
has been a huge amount of housing development, and it’s an
attraction to people to move up in their life and get a new home.
They qualify for the loan and then one little problem occurs and
it puts them in a bind.’”
I often talk of this three-legged stool that is the American
Economy; capital (business) spending, consumer spending and
housing. Cap spending fell off a cliff post-Bubble and 9/11, but
consumer spending held amazingly steady and you know what
the Fed did to juice real estate. It cut short-term interest rates to
all-time lows and mortgage rates, as well as the imagination of
mortgage lenders, followed suit. As long as 2 of the 3 legs are
holding up, we’re okay. But it’s obviously a fragile balancing
act and I would offer that while capex spending is picking up, the
consumer will finally slow due in no small part to stagnating, not
crashing, real estate. But you’re probably sick of me beating this
dead horse so here is what noted academic Thomas Sowell of the
Hoover Institution wrote in Thursday’s Wall Street Journal in an
op-ed on the topic. Sowell was addressing the situation in his
own San Francisco Bay Area where 66% of new mortgages are
now interest-only.
“Consumer spending depends on wealth as well as income, and
that spending can decline as people find themselves owning less
than they expected. Housing wealth is not simply transferred to
banks which foreclose on mortgages that are not being paid off.
The value of a house, like the value of any other asset, depends
on its prospects – and those prospects obviously look better
before a bubble bursts. Afterwards, there can be a net decline in
wealth and spending in the economy as a whole. How much of a
decline and how far the repercussions extend, if and when the
bubble bursts, is the big question.
“Let’s hope that Alan Greenspan is right about the housing
finance situation having just a little ‘froth’ rather than being a
real bubble. After all, just as a rising tide lifts all boats, so a
falling water level risks all boats trapped in the same harbor.”
—
As for other aspects of the U.S. economy, the figure for first
quarter GDP was revised upward as expected, to 3.5%, and the
inflation component was tame. The latest reading on durable
goods was up (though down ex-transportation) and personal
income and spending #s were up as well.
And on the revenue front, income tax receipts are 16% over
2003’s pace with overall federal tax revenues up 13.6%. Even
the states are reaping the rewards of an improved economy with
tax collections here up 7.2%. So both the Bush administration
and any governor running for reelection in 2006 should have an
easier time of it. Certainly the federal budget picture will
brighten, at least for a spell.
But I want to touch on another issue of great import, that being
France’s referendum Sunday on the E.U. constitution. The latest
poll shows it being voted down 54-46, and coupled with an
expected ‘No’ in the Netherlands on Wednesday the European
Union is faced with a real crisis. All 25 nations have to ratify the
constitution for it to become effective and only 9 of 25 have done
so, with Germany’s parliament having approved it Friday. A
French ‘No’ sends the continent into uncharted territory. French
President Jacques Chirac could just keep holding re-votes until
the people say ‘Oui,” but there is a 2007 ratification deadline.
It’s about not only losing autonomy to a monolithic European
bureaucracy, it’s also all about Turkey, whether some E.U.
members want to admit it or not. ‘No’ votes from both France
and the Netherlands, forcing all parties back to the bargaining
table, spell one thing; Turkey’s candidacy would be sacrificed in
the name of unity, or so the 25 existing members will then say.
Just my opinion. As a long-time supporter of the Turks I hope
I’m wrong.
Lastly, you have German Chancellor Gerhard Schroeder being
forced to seek an early general election, moving it up a year,
after his Social Democrats were trounced in a vote in their
traditional stronghold. Schroeder’s economic reforms are seen as
too business friendly while cutting into the welfare state. Much
of Europe refuses to give in when it comes to their cushy benefits
and it’s stifling growth as the continent falls further and further
behind both the U.S. and Asia. Add it all up and it shouldn’t be a
surprise the U.S. dollar is rallying against the euro.
Street Bytes
–Stocks finished up again, though on very light volume. The
Dow Jones added 0.7% to 10542, the S&P 500 tacked on 0.8% to
1198 and Nasdaq continued its winning ways in advancing 1.4%
to 2075. As analysts upgrade the tech sector, the Nasdaq has now
soared 8% over the past four weeks. Greenspan’s comments on
a pickup in capex spending also helped.
–U.S. Treasury Yields
6-mo. 3.12% 2-yr. 3.64% 10-yr. 4.07% 30-yr. 4.43%
Rates were largely unchanged on the week though the 10-year
probed the 4% level on more than one occasion. The Fed’s
minutes, as well as the comments of various Fed officials this
week, certainly point to further increases in the funds rate,
starting with the next meeting June 29-30. Maybe the 10-year
continues at historic lows (I think it will), thus perpetuating the
real estate bubble a bit longer. But that’s certainly not what the
Fed expected when it began its tightening regimen last June 30.
On the corporate bond front, rating service Fitch joined S&P in
lowering General Motors’ debt to junk status though this was
expected and market reaction was minimal. Fitch projects GM
will run through about $6 billion of its cash reserves in 2005.
But in a piece for the Financial Times on the overall junk market,
Steven Rattner opines that “Junk bonds have become
dramatically junkier….Last year, 42.5 percent of new high-yield
borrowing was rated B- or below, the largest percentage of truly
junk debt ever.”
“That should be worrying because low quality companies default
far more often. Since 1971, more than 40 percent of corporate
borrowers rated CCC stopped paying interest and principal
within four years of taking on the debt, compared with fewer
than 10 percent of those rated BB, the highest high-yield rating.
“When the tide goes out, the size of the investment losses may
prove staggering….there are now nearly $1,000 billion of
outstanding high-yield bonds.” [Thanks, Tony E.]
Buyers of high-yield bond funds should be particularly careful.
Don’t buy yield. Buy quality and ask your financial advisor to
break down the portfolio for you. [My friends at PIMCO,
incidentally, have a good ‘conservative’ junk fund, not
necessarily an oxymoron.]
Finally, on the derivatives front, most market watchers continue
to breathe a sigh of relief, as if they’ve escaped the worst
following the original GM downgrade and simultaneous
Kerkorian tender offer. Heck, you ain’t seen nothing yet. That
was a relatively mild dislocation compared to what can happen if
interest rates and currencies truly start whipping around at light
speed (though I’m not personally forecasting this as yet). In fact
former New York Federal Reserve Bank President Jerry
Corrigan, who spearheaded reform efforts following the Long-
Term Capital Management implosion, is so concerned with the
current state of derivatives and the potential exposure that he has
put together a new panel to examine the situation before a true
blowup occurs.
–Good news from Japan as retail sales for the month of April
were up big while commercial land prices in the six biggest cities
rose for the first time in 14 years following a 53% decline from
the 1991 peak.
–Speaking of property, China has a different problem; a huge
bubble. So the government is levying a 5.5% tax on real estate
sold after June 1 and less than two years after its purchase in an
attempt to rein in speculation.
–Energy: The oil market overreacted to a drop in crude
inventories this week, rising to almost $52 from $48.65 the
previous Friday, even though we’re still basically at 6-year highs.
Gasoline supplies, though, rose again.
Meanwhile, of more import when looking at the longer term, the
Kremlin is tightening its hold on its oil interests as both state-
controlled Gazprom and Rosneft go after #5 oil producer Sibneft
in a move that will basically solidify Russia’s standing as a
second OPEC, allowing President Vladimir Putin to influence the
price of oil just as Saudi Arabia does today. And don’t you
know both he and his successors will. This is the real reason
why it’s bad for the West that the likes of BP and Exxon Mobil
will have limited opportunities here. Some exploration and
drilling joint ventures, yes. Actual ownership, nyet.
And there was another highly significant item this week when
looking at the supply / demand issue in the future, this one of a
positive nature for the West, that being the completion of a 1,000
mile pipeline from Azerbaijan, thru Georgia, to the Turkish port
of Ceyhan. Eventually up to 1 million barrels a day of crude will
head towards the setting sun.
Back to the Wild East, a former head of Yukos’ main production
unit was shot in an assassination attempt. He survived.
Finally, Warren Buffett’s Berkshire Hathaway made a major
acquisition in the utility sector when it bought Pacificorp.
Buffett said more energy-related transactions are to come. One
thing is for sure, though, they won’t be in Russia.
–Related to the above, President Yushchenko of Ukraine
disputed the claims of his Prime Minister Tymoshenko that
Ukraine’s fuel crisis was the result of Russian collusion.
Yushchenko blamed Tymoshenko and the price caps instituted
by her for the supply problem.
–New York Attorney General Eliot Spitzer filed civil charges
against AIG and two former executives, CEO Hank Greenberg
and CFO Howard Smith, for routinely “manipulating” the
company’s books to deceive shareholders. The two were
intimately involved in all phases of the fraud. Shares in AIG
rallied on the news because Spitzer didn’t file far more serious
‘criminal’ charges that could have threatened the firm’s very
existence, but a grand jury is still hearing evidence and should
eventually return indictments against Greenberg and others.
I was hard on Mr. Greenberg from day one and any doubters now
understand why. But just wait as some of his supporters rush
forward, again, to speak of his charity work. “This is a good
man,” they’ll say. No. He’s a crook and just like all the other
corporate dirtballs before him, Greenberg played us all for
chumps. Now it’s payback time.
–And here’s another for the Wall Street “Dirtball Hall of Fame.”
Alberto Vilar, president and founder of New York-based
Amerindo Investment Advisors, who along with an associate was
arrested and charged with stealing $5 million from a client. It
seems that Mr. Vilar was behind in his charitable obligations to
his alma mater, Washington & Jefferson College. Vilar, a 1962
graduate, pledged $18 million toward construction of the Vilar
Center for Technology. Being a bit short, he convinced an
investor to give him $5 million to invest and promptly stole it.
According to Bloomberg News (and other sources) “Vilar is the
biggest single patron of the Metropolitan Opera in New York, the
John F. Kennedy Center for the Performing Arts in Washington,
The Mariinsky (Kirov) Opera and Ballet in St. Petersburg,
Russia, and the Royal Opera House in London.”
Now do you see why I treat the Street’s charitable givers with
such contempt? Much of it has been at the expense of us
schleps. Remember that the next time you pass the Weill Cornell
Medical Center, or any other such institution.
–Chaotic week on the drug front including research that shows
AstraZeneca’s cholesterol-lowering drug Crestor has more side
effects than competitors such as Lipitor and Zocor. But
Genentech said its experimental drug Lucentis helped patients
with macular degeneration, though it won’t be on the market
until 2007. And speaking of the health of one’s eyes, the FDA
announced it was looking into scientific claims that Pfizer’s
Viagra can lead to blindness given certain pre-existing
conditions. Other impotency treatments may have similar
properties.
–According to Forrester Research, U.S. online sales are
projected to rise 22% in 2005 to $172 billion. Travel, however,
represents $63 billion of this number. Ex-travel, online now
accounts for 5.5% of all retail sales, up from 4.6% in 2004.
–Milliman, a consulting firm, projects medical costs for the
average family of four will rise 9.1% in 2005 vs. increases of
10.1% in both 2004 and 2003.
–President Bush’s tax reform panel is tackling the alternative
minimum tax issue but to kill it would mean a revenue loss of
about $600 billion over a decade.
–There are 7.5 millionaires in the U.S. (ex-primary residence),
up 21% in one year.
–Disney’s ABC network had a stellar year with prime-time
audiences up 17% thanks in large part to hit “Desperate
Housewives.” [Gee, sorry to see Rex die; weren’t you?] NBC’s
audience for the 2004-05 television season plummeted 16%.
–When it comes to the business of NASCAR, a study by James
Madison University reveals that the average household income
for a NASCAR fan was $60,200 in 2004 vs. the national average
of $58,000 in ’03 (the last available Census Bureau data).
–So it would appear to this layman that I may have been a victim
of the counterfeit ring that worked its magic at Wachovia, Bank
of America and other institutions. But these two denied there
had been any actual customer losses. Anyway, last week I
praised Wachovia for the way they handled my check situation.
This week I have to praise Hertz for its exemplary customer
service. I rented a car in Dallas and marveled at the positive
attitude of all the employees. Someone in the training
department deserves a promotion.
–But following up on my comments from last week regarding
Maytag, reader Leah K. wrote in to say the appliance maker’s
customer service is dreadful. For starters, they have a “7 to 5”
window for house calls. C’mon. Tighten it up a bit, will ya?
[Speaking from experience, Sears is terrific in this regard.]
–My portfolio: So I took this trip to visit a carbon fiber
manufacturing plant in Abilene, Texas. Abilene is 180 miles
from Dallas / Fort Worth Airport and it isn’t the most exciting
drive. But I accomplished what I set out to do.
Carbon fiber is a composite that is stronger, stiffer and lighter
than other alternatives and historically it has been a product used
in the aerospace industry. Today, it’s becoming better known as
a key for the wind energy business, specifically for the blades,
and it’s also increasingly important in the manufacturing of
automobiles as well. BMW, for example, plans to build a car
with extensive carbon fiber content by 2008…or so the folks I
talk to say.
I never tout individual issues on this site and for good reason, but
suffice it to say I increased my exposure here this week. I have
made money in the company before but my current holdings are
at a net loss.
Here’s what I’m wrestling with. My total equity exposure is now
over 20%, the balance cash, but the carbon fiber deal is more of a
special situation…and a highly volatile one at that. It certainly
feels like more than 20%, overall.
My investment success the past 6+ years has been almost solely
in the energy field where I think I’ve had one losing position out
of about 20. It’s when I veer from what I know that I’ve had
trouble and some good-sized losers.
Bottom line: if you can figure out what I’m buying you’re on
your own. I’m confident in the company’s future success, but if
fortunes change I’ll be out of the stock in a flash and I feel like I
have more of an inside track than the average investor.
Foreign Affairs
Iraq: On one hand you might be thinking, why would the
Defense Ministry announce that it would be conducting a
massive operation to round up insurgents in Baghdad days before
it actually started? On the other hand, there’s no keeping a secret
here, anyway, so what’s the use in trying? I have my doubts as
to the level of success given the unreliability of the Iraqi security
forces.
Politically, the ruling Shiites have vowed to give the Sunnis more
of a say in the writing of the constitution; while for Americans,
May has been a bad month on the casualty front and, to put it in
stark terms, this is where the ultimate level of support for the
Bush policy lies. We must kill Zarqawi.
Afghanistan: President Hamid Karzai, who really needs to lose
the cape, came to Washington and defended his efforts to fight
the drug trade, Afghanistan now being the supplier of 90% of the
world’s opium. Karzai, when cornered, blamed the U.S. and
U.K. for not providing enough support in this arena and he’s
probably right to a large extent. On the issue of controlling
prisoners, Karzai was politely told that the U.S. will continue to
oversee them.
Lebanon: Voting commences on Sunday and will run through the
next few weeks as Lebanese elect a new parliament. But it’s not
as simple as selecting the democracy forces over those who favor
the old, Syrian-backed candidates. As I noted when I was in
Beirut a few weeks ago, this nation is all about factions,
specifically Shiites, Sunnis, Maronite Christians and Druze, with
Shiite-based Hizbollah as the wildcard. The election process has
long been rigged to protect each group and by constitution the
presidency goes to a Maronite Christian, the prime minister’s
office (#2) to a Sunni and the speaker of the parliament to a
Shiite; this even though the Shiites could be a true majority if
Lebanon would ever hold another census.
So what we will witness is a free but not necessarily fair election.
And even in the anti-Syrian opposition bloc there have been late
splits, such as that between former army commander Michel
Aoun and Druze leader Walid Jumblatt. Plus this week
Hizbollah leader Sheikh Nasrallah said there was no way he
would disarm his 25,000 man militia nor give up its 12,000
short-and medium-range missiles aimed at Israel. Despite all
this, however, the Lebanese people are going to the polls and
Syria’s influence will be drastically diminished in the new
parliament. That’s a good thing. Whether the politicians can
then put aside centuries old differences for the common purpose
of helping Lebanon achieve its full economic potential is another
story.
Israel: Palestinian President Mahmoud Abbas was hailed in
Washington by President Bush as Bush praised Abbas’ efforts to
date, showering him with additional aid while at the same time
urging Israel to stick to the roadmap and cease further settlement
expansion. Bush did add that Abbas must do more to dismantle
the terrorists but Abbas can’t be expected to do this without
direct aid for the Palestinian security forces.
Where Abbas has his hands full on the home front is in his call to
delay parliamentary elections slated for July. Abbas claims he
needs more time to organize it properly while Hamas, whose
support is growing, demands the vote proceed as scheduled. As
for Prime Minister Sharon, Israel is delaying its evacuation from
the Gaza Strip until mid-August which means this summer will
be highly volatile. On the issue of the settlements, Israel will
undoubtedly ignore Bush’s call to halt further construction, just
as Israel has ignored every other American leader for the past 30
years. Until the U.S. ties the settlements to further aid, it’s a
joke.
Iran: Early in the week the supreme Guardian Council rejected
all the reform presidential candidates for the upcoming election
but Ayatollah Khamanei urged it to reconsider. The current
president, Khatami, is ineligible for a third term though he’s been
a miserable failure anyway. Former President Hashemi
Rafsanjani, one of six thus far that would be on the ballot, is
considered the front runner. As I’ve stated before he’s an
interesting character and one the U.S. can do business with to a
certain extent. Regardless, turnout should be exceedingly low.
Iran’s moderates and democracy advocates have witnessed
nothing but disappointment for 8 years when true reform had
been promised. Disillusion is the watchword here.
And back to Rafsanjani, while the West may be able to work
with him, I remain convinced any elected leader will pursue the
bomb, regardless of what Iran says in discussions over its nuclear
program. It is in its best interests to have it, faced as it is with
neighbors already armed, and it would allow the country to be an
even bigger player on the international scene.
But at least for this week Iran pledged in discussions with the
Euro 3 – Britain, France and Germany – not to pursue nuclear
weapons, with the U.S. then allowing Tehran to apply for full
membership in the World Trade Organization as a reward. I
maintain, though, that Iran’s skunk works are in full operation.
Saudi Arabia: As I go to post, details are so sketchy as to the
health of King Fahd I don’t want to comment other than to say
succession plans have long been established. Whether there is a
renegade or two within the House of Saud is a different story.
China / Taiwan: According to a report by Elizabeth Rosenthal in
the New York Times, the Vatican is negotiating intensely with
Beijing for the purpose of establishing diplomatic ties. I wrote of
this at the time of John Paul II’s death and any formalization of
relations would be at the expense of Taiwan; though in this
instance it’s not as bad an issue as it sounds, with the Taiwanese
having long been prepared for this eventuality. But before the
Vatican accepts China’s terms, Beijing must agree that Catholic
bishops are independent. Currently, Chinese Catholics swear an
allegiance to Beijing rather than the pope. As for Benedict XVI,
there’s a rumor he might make a trip to China in the not too
distant future, a journey that would be both historic and of a
positive nature geopolitically.
Elsewhere, China’s relations with Japan took another turn for the
worse as Vice Premier Wu cancelled a meeting with Prime
Minister Koizumi after Koizumi’s latest comments at his
nation’s war shrine. Wu just used it as an excuse to stir up the
nationalists back home.
Russia: In a state-controlled media poll, when asked to identify
the main threats to their personal safety (from a pre-selected list
of 20 potential ones), 36% chose “a terrorist attack on a strategic
facility.” Curiously, 2nd was “depopulation” and 3rd was “fear of
famine.” I don’t think many Americans worry about these latter
two. [Moscow Times]
I didn’t see if “power failures” was on the list but it would have
been up there after the massive one that shut down Moscow the
other day. President Putin immediately blamed one-time
political rival Anatoly Chubais, head of the state-controlled
power monopoly, and Chubais was forced to apologize publicly.
[Chechen rebel leader Basayev later claimed credit for the outage,
though the veracity of this can not be determined as yet.]
Pakistan: A Shiite mosque was bombed, killing about 20, in
another example of sectarian violence. But while the Shiites
should have been blaming Sunnis, instead there were chants of
“Death to America” in the crowd.
Chile: Last December I wrote of how beautiful it was to fly over
the Andes on my trip to Chile and Paraguay. But I could also
imagine the fury of the storms in winter and weathermen are
calling the blizzard, or “snow tsunami,” that struck about a week
ago the worst in 30 years. Unfortunately, at least 30 soldiers on
maneuvers died.
As the story hit last weekend I wrote this could create a political
crisis, owing in part to the legacy of Pinochet and his military
dictatorship. A presidential election is being held here at year
end but in a gesture of solidarity the four candidates supported
the head of the army. However, the commanders of the units
involved face prison sentences due to the fact the soldiers, most
just 18- and 19-years of age, were both ill-trained and ill-
equipped for the weather.
Australia: There is only one story here these days; that being the
plight of 27-year-old Schapelle Corby who was sentenced to 20
years in jail by an Indonesian court for drug smuggling. Corby,
living out every foreign tourist’s worst nightmare, alleges the
marijuana was planted in her luggage. Prime Minister John
Howard is appealing to Australians to accept the verdict and trust
Indonesia’s judicial system. The foreign minister is working
with Jakarta to allow Corby to serve her sentence in Australia.
Random Musings
–Robert Samuelson, in a Washington Post op-ed, commented
that concerns Americans have about losing out to China and
India are overblown. Those, like myself, who make too much of
test scores, for example, are missing the broader point.
“On being overtaken, history teaches another lesson. America’s
economic strengths lie in qualities that are hard to distill into
simple statistics or trends. We’ve maintained beliefs and
practices that compensate for our weaknesses, including:
ambitiousness; openness to change (even unpleasant change);
competition; hard work, and a willingness to take and reward
risks. If we lose this magic combination, it won’t be China’s
fault.”
Can’t argue with the logic, but the test scores, particularly on the
history front, are still important. We may be a nation of
entrepreneurs, but we can also be a rather naïve bunch, to say the
least.
–I can’t be interested in every issue that comes down the pike
and so it was with the Senate debate on judicial nominations and
the threat to do away with the filibuster. I think this whole deal
was way overblown, but at the same time we saw the leadership
of Senators John McCain and Joe Lieberman, among others, in
pressing for a compromise, however fleeting it may prove to be.
These two would still make for a helluva fusion ticket in 2008,
recognizing the chances of this happening are nil.
–Among the pork barrel spending items in the House’s $284
billion highway bill (now in conference) is $223 million for a
bridge connecting the island of Gravina (pop. 50) to the
community of Ketchikan (pop. 8,000) in Alaska. [USA Today]
Personally, I’d put a few grizzlies on Gravina, drive the people
off, and spend the money elsewhere….maybe award the grizzlies
with a year’s supply of trout.
–So I spent most of Wednesday and Thursday either stuck in an
airport, in the air, or driving; not exactly the best use of my time.
But at least I got to see a part of Texas I hadn’t explored before.
Then again, it’s an incredibly dull drive from Dallas to Abilene so
there was only one thing to do…listen to a lot of radio. The
Dallas / Fort Worth area has better classic rock stations than New
York, for example, and lousy country stations. Go figure.
But I have a bone to pick with the great Paul Harvey. I don’t
listen to him during the week up here in New Jersey but I caught
a few of his news bits this week and it’s disappointing how he
treats his sources…as in he doesn’t give any of them credit! For
example, he told the story of how baseball bats are being broken
at an increasing rate in the major leagues these days and never
mentioned where he got it…USA Today. No one else had it,
Paul. I had just read it myself that morning. So give up the
source, for crying out loud.
I have this problem all the time with StocksandNews. Some
news is commonplace…such as the government releasing an
economic statistic. Other stories are covered by every media
outlet over the course of a day, normally making no one source
necessarily unique. But when it’s something different, such as a
Moscow Times survey or a New York Times piece on China /
Vatican relations, well you have to source it. That’s just my
opinion. Good day!
–A J.D. Power and Associates study (via the Wall Street
Journal) concluded 1 out of 3 cellphone calls still have quality
problems. It’s really pitiful. So in driving across I-20 I’m
listening to this radio station give away a trip to Hawaii. They
call the winner.
“Omigod! Omigod! You’re kidding me! I’m going to Hawaii?”
“Yes you are, Doris. Now hang on whi……” click
They call Doris back.
“Don’t hang up on us, Doris. We were about to give the trip to
someone else.”
“I’m so sorry. My cellphone cut out.”
–Finally, this Memorial Day weekend we honor those who gave
their lives for this country, those who served in all our nation’s
wars including the current one. But at the same time I can’t help
but note the despicable way our military treated the death by
friendly fire of Pat Tillman. Pat’s mother Mary Tillman told the
Washington Post:
“Pat had high ideals about the country; that’s why he did what he
did. The military let him down. The administration let him
down. It was a sign of disrespect. The fact that he was the
ultimate team player and he watched his own men kill him is
absolutely heartbreaking and tragic. The fact that they lied about
it afterward is disgusting.”
I am increasingly distressed at what is clearly a failure of
leadership at the top levels of our military establishment. There is
something very, very wrong. And I’m sick of the apologists, the
Bill O’Reillys of the world. Yes, that Amnesty International
report was an abomination but to then continue to brush off Abu
Ghraib and Guantanamo is also wrong. I nailed O’Reilly for
what he is right at the start of this war….a total fraud who’s
intellectually corrupt. Unfortunately, many don’t just watch him
(I do from time to time because I view it as part of my job); they
take everything he says as gospel. And that’s sad.
I saw Laura Bush on “Today” the other morning and in response
to a question on prisoner abuse, the First Lady responded:
“Americans (are) held to a higher standard…we need to make
sure we’re living what we say.”
Amen. You should have read that before in this very space.
I’m sure my attitude is no different from many of you. Some
days I feel like we’re making real progress in this war, others I
feel like we’re losing. I pride myself on staying focused on the
big picture…but when it comes to the war on terror it’s easier
said than done. We need to be honest with each other…starting
with both our civilian and military leadership. We owe nothing
less to the heroes who have given their lives in defense of our
freedom, going back generations. This we owe Pat Tillman…
and to him I dedicate this column.
—
Pray for the men and women of our armed forces.
God bless America.
—
Gold closed at $422
Oil, $51.85…up $3.20
Returns for the week 5/23-5/27
Dow Jones +0.7% [10542]
S&P 500 +0.8% [1198]
S&P MidCap +1.1%
Russell 2000 +1.2%
Nasdaq +1.4% [2075]
Returns for the period 1/1/05-5/27/05
Dow Jones -2.2%
S&P 500 -1.1%
S&P MidCap +1.0%
Russell 2000 -5.3%
Nasdaq -4.6%
Bulls 46.7
Bears 26.1 [Source: Chartcraft / Investors Intelligence]
Enjoy the holiday. I appreciate your support.
Brian Trumbore
