[Posted 7:00 AM ET]
Hot Spots
Iraq: As I go to post, it’s still not known whether those working
on an Iraqi constitution will produce a document by the stated
deadline, Monday. The issue was complicated in a big way by
the call of a Shia leader, Abdul-Aziz al-Hakim, for an
autonomous Shia state in the oil rich south. Evidently, this has
the blessing of Grand Ayatollah al-Sistani, as al-Hakim said
“What have we got from the central government except death?”
The Kurds say they just want the autonomy they had before, only
now they seek 65% of the oil revenues from the fields of Kirkuk;
which thus leaves the Sunnis with little, so their argument is a
federal, divided structure will only make them poorer. As for the
role of women it looks to be minimal and Islam could be the
basis of all law and legislation.
In other developments, the mayor of Baghdad was deposed, there
were serious riots in the supposedly peaceful south, and public
opinion in America is on the verge of collapse. According to the
latest USA Today / CNN / Gallup survey, 56% believe the war is
going badly and 54% say it was an outright mistake (up 8 points
in just two weeks). A Newsweek poll reveals 60% disapprove of
the handling of Iraq. It’s all about the heavy casualties we’ve
been taking. It’s heartbreaking….and will be even more so
unless we achieve some kind of victory, starting with the
constitution.
Iran: The mullahs ripped the seals off the vats, right in front of
the eyes of the International Atomic Energy Agency, and,
thumbing their noses at the rest of the world, restarted the
uranium enrichment process at Isfahan. Iran called the Euro-3’s
proposal “unacceptable” and then the IAEA adopted a resolution
demanding immediate cessation of all nuclear weapons-related
activity, but for now it failed to recommend going to the UN
Security Council.
An exiled dissident, who exposed the nuke activity in 2002 that
Iran had been hiding for 20 years, now says Iran has
manufactured 4,000 centrifuges the IAEA doesn’t know of. The
agency basically admitted as much this week in calling for more
time to snoop around. Regardless, the IAEA will be issuing two
reports in Sept. and Oct. For its part, the Euro-3 and Washington
hope to continue talks but other options are clearly being
discussed.
I’ve been saying Iran is much further along than we are being
told and I stand by this. Certainly, this week’s fevered activity
leads one to believe that the Washington Post story talking of 10
years before Iran has the bomb is utter nonsense. In an editorial
the same newspaper had the following a few days ago.
“The conclusion of these talks means that there is no excuse for
Europe and the United States not to act in tandem; neither should
they take any option off the table. It is no longer possible to
consider the Iranian nuclear threat as anything but deadly
serious.”
North Korea: The six parties agreed to a three-week recess.
Pyongyang wants reactors for civilian use but would never allow
the intrusive inspections the others would demand in return.
There is little reason to be optimistic.
Wall Street
The Federal Reserve raised interest rates a 10th time since
6/30/04 and the funds rate now stands at 3.5%. At least those of
us sitting on some cash are receiving a bit of recompense for our
caution. The Fed also left little doubt it would continue hiking
rates, saying “policy accommodation can be removed at a pace
that is likely to be measured.” Yes, you’ve seen this language
before. Easy work, being the Fed’s chief writer these days.
The Fed added “Aggregate spending…appears to have
strengthened” while core inflation is “relatively low” and
“longer-term inflation expectations remain well contained.”
So where does it all stop? Goldman Sachs now says the funds
rate will hit 5% by mid-2006. If this proves to be the case it
would crush those with interest-only or adjustable rate
mortgages, regardless of what the 10-year Treasury does in
response.
But let’s spend a minute on inflation. I maintain all we can do is
accept the government’s data on consumer and producer prices,
as well as various wage components, for what they are.
Chairman Alan Greenspan and the rest of the Fed respond to the
data, whether ‘real world’ or not, and anyone attempting to
forecast the future direction of rates must do the same. Inflation
is low and, when the economy flips, we will enter a deflationary
environment.
Of course every time I write this I get a few responses like
“What? Are you nuts? There’s inflation everywhere!” Yes, I
know. I pay for my own gas and healthcare just like the rest of
you. I’ve also said while official inflation data is tame, I use the
other figures to gauge where the economy may be headed.
Even President Bush said as much this week when he offered
that the reason why his poll #s on the handling of the economy
aren’t any better is because Americans are concerned about the
costs at the gasoline pump and meeting medical expenses.
I would also throw in property taxes. Personally, my new bill
showed an increase of 10%. But in the town next door, thanks to
the real estate bubble and properties being revalued, some taxes
soared up to 35%!!! Yup, I’ll throw this into my economic
equation.
UBS’ Art Cashin is fond of saying Americans have been “mining
their home” and in doing so consumer spending, coupled with
housing, have been the engines of growth…the wealth effect. As
I’ve noted before, though, as housing and the consumer slow…
and they are…it’s up to business spending to finally carry its
share of the load and there are signs it is. [Though Dell and
Cisco’s sad earnings reports are another reason not to get too
giddy.] I have also suggested, however, that Corporate America
is more concerned with geopolitical events than the average
consumer and here the outlook is dreary, if not dismal.
But something else has been on my mind a lot recently as I
ponder my own recession forecast for early next year. It would
appear we are in a race against time, economically speaking. Is
it possible that the world, ex-U.S. and China, will finally carry its
share of the load in time to save the two big engines of growth
before they themselves take a header? Certainly Japan is stirring
and Asian stock markets have generally been rocketing higher,
$60 oil be damned. There are also some indications, perhaps ex-
the U.K., that Europe has bottomed. I have no real conclusions
but I’m wrestling with it all.
As for real estate, there’s no hesitation here. I told you last week
that we will soon see surprises from California and the next day
the Sunday Los Angeles Times trumpeted the fact the white-hot
San Diego market is cooling, with appreciation of just 6.3
percent year-over-year in June and, remember, here most of the
mortgages are of the interest-only variety. Real estate, in
general, is peaking before our very eyes and it will be felt in the
level of consumer spending by October.
Finally, there’s energy. The International Energy Agency cut its
supply estimate for critical producer Russia and other non-OPEC
nations, while there have been refinery issues all summer. Yes,
inventories appear ample but what of the winter? It’s amazing to
all of us who follow the market that the price of crude and
gasoline hasn’t had more of a negative effect. But unless oil
backs off in any significant way (and I’m not saying it can’t,
incidentally), corporate earnings will be hit. It’s also been hot as
hell this summer and the cost of air conditioning one’s home is
soaring. [In New York City, Saturday will be the 19th day of the
year where the temp hits 90. Last year there were only two such
days. Normal is 15.]
Street Bytes
–Stocks finished mixed with the Dow Jones up just 0.4% to
10600, the S&P 500 advancing 0.3% to 1230, but Nasdaq
slipping 1.0% to 2156 on the heels of the Cisco and Dell news.
While earnings in both were in line, the revenue outlook was
poor versus expectations.
–U.S. Treasury Yields
6-mo. 3.78% 2-yr. 4.03% 10-yr. 4.25% 30-yr. 4.45%
Rates fell across the board (except in the very front of the curve)
as the record price of crude led most traders to believe the
economy will be hit. Plus, the spread between the 2- and 10-year
is the narrowest it has been in this cycle…a worrisome
development for those who believe an inverted curve (say, 2-year
higher than the 10-year) foretells recession.
Meanwhile, China announced the composition of its basket of
currencies, though as you’d expect gave no actual weightings.
Predominant will be the dollar, euro, yen and Korean won, with
the coin of Singapore, Britain, Malaysia, Russia, Australia,
Canada and Thailand also in the mix. I’m surprised China didn’t
include the Zimbabwean dirtplug…Beijing thinking so highly
these days of Robert Mugabe and the terrific job he has done
with his country.
–Japan: On Thursday, the Nikkei hit a 4-year high on continuing
signs of a recovery in the economy, though it dipped some on
Friday when the latest data on GDP was slightly less than
expected. Nonetheless, there are more positive signs than
negative.
And the good news comes amidst the political turmoil
surrounding Prime Minister Koizumi’s decision to dissolve
parliament while calling for snap elections, Sept. 11, following
parliament’s move to defeat Koizumi’s plans to reform and
privatize the giant postal service.
This is not your standard mail delivery service, mind you, though
many of the 262,000 employees do just that. It also happens to
be the world’s largest savings bank with some $3.1 trillion in
assets and virtually every citizen has an account with it.
The postal service has also traditionally been a giant patronage
vehicle for the long-time ruling LDP. Koizumi, though, is now
seeking to split it into four divisions; savings, insurance, mail
delivery and counter services. This proposal was defeated 125-
108 in the Upper House, thus forcing the prime minister to call
for elections as a way of seeking a new mandate for reform; a
huge gamble, even though his approval rating has been rising.
And don’t you wish elections in the United States were like this.
Campaigning begins Aug. 30 for the Sept. 11 vote.
[Separately, Japan filed a protest with China over the latter’s
apparent move to begin drilling for natural gas in waters claimed
by Japan. This bears watching and, indirectly, has an impact on
the six-party talks over North Korea.]
–In China, 50% of the people can’t afford medical care as the
government has moved away from cradle-to-grave welfare. As
you’d expect, this is leading to social unrest; best exemplified
this week when a terminally ill, 42-year-old farmer blew himself
up on a bus.
–A former executive for one of Germany’s largest banks pleaded
guilty to charges of conspiracy and fraud, the first criminal
charges resulting from the government’s investigation of abusive
tax shelters. Accounting giant KPMG is at the heart of the
inquiry that the IRS says deprived the United States of $1.4
billion in tax revenue. So far, KPMG has not been indicted as a
firm and the Bush administration is urging that it not be so.
Individuals, however, will be.
–Former WorldCom CFO Scott Sullivan was sentenced to five
years; a far lighter term than that earned by CEO Bernie Ebbers
because of Sullivan’s extensive cooperation in the investigation.
The presiding judge labeled Sullivan “the architect” of the largest
accounting fraud in U.S. history.
–Krispy Kreme wrapped up an internal 10-month investigation
into its accounting irregularities, concluding former CEO Scott
Livengood disregarded “essential requirements of public
company stewardship” as he put pressure on others to beat Wall
Street’s earnings expectations by a penny. Of course the vast
majority of corporations still play this game, though perhaps not
quite as aggressively as the donut-maker that employed rainbow
jimmies to spruce up its bottom line.
–The Wall Street Journal had a piece on soaring credit card late
fees which for regular cardholders are now as high as 24%.
Overall, U.S. plastic addicts paid $15 billion in such charges in
2004.
–Merrill Lynch agreed to pay $37 million to settle a dispute with
some of its brokers in California who claimed they weren’t
receiving overtime pay. Boy, I wish Merrill had called me first.
This, sports fans, is a joke. The brokers were all upset they
weren’t being paid for working more than 40 hours per week, as
supposedly mandated by law.
Last year, the federal Fair Labor Standards Act was changed to
exempt “white-collar” workers earning more than $100,000 a
year from overtime provisions. But as the New York Times’
Patrick McGeehan points out, “that $100,000 has to include at
least $455 a week in salary and the employee has to perform at
least some administrative duties.”
Merrill just threw in the towel on this one and now other suits
will undoubtedly be filed.
Whatever happened to the good old American work ethic? My
former boss, Jack L., taught me two simple lessons; the “24-hour
rule” and this adage, “I wouldn’t have hired you to do the job if I
didn’t think you could do it, so go do it.” And that I did….
regardless of how many hours it took me.
Folks, we aren’t talking assembly line or police work, where one
should be compensated for legitimate overtime. If you’re in the
“professional” category, as I would hope all stockbrokers would
want to be thought of, just shut up and do your job. In all
seriousness, this is about competing on the global stage.
–A judge ruled that Disney directors did no wrong in hiring, and
then firing, Michael Ovitz while handing him a $130 million
severance package. But the judge also reached these conclusions
regarding CEO Michael Eisner’s role:
“His lapses were many. He failed to keep the board as informed
as he should have. He stretched the outer boundaries of his
authority as CEO by acting without specific board direction or
involvement.”
And this:
“By virtue of his Machiavellian (and imperial) nature as CEO,
and his control over Ovitz’s hiring in particular, Eisner to a large
extent is responsible for the failings in process that infected and
handicapped the board’s decision-making abilities.”
But….
“Despite all of the legitimate criticisms that may be leveled at
Eisner, especially at having enthroned himself as the omnipotent
and infallible monarch of his personal Magic Kingdom, I
nonetheless conclude, after carefully considering and weighing
all the evidence, that Eisner’s actions were taken in good faith.”
[Los Angeles Times]
–The Seattle Times reported of multiple instances where doctors
leaked drug research information to Wall Street firms in return
for cash, though it’s a fine line whether this really constitutes
illegal activity such as insider trading. If the physicians violated
confidentiality agreements, however, then it would appear it is.
–China had another mining disaster this week, this one resulting
in the deaths of over 120 who were trapped when the mine was
flooded. As a result of this latest disaster, with a massive local
corruption trail, the State Administration of Worker Safety
ordered more than 7,000 coal mines around the nation to halt
production for safety examinations. [South China Morning Post]
–Yahoo has taken a 40% stake in China’s biggest online retailer,
Alibaba.com. “Open sesame!” said Yahoo CEO Terry Semel.
But upon entering the cave, one he thought would be filled with
gold (per legend), he found instead 1,000 programmers whose
sole job was to steal all of Yahoo’s secrets. And then, when he
attempted to break out, the stone door closed in front of him and
he was forever after at the mercy of the Communists. Or so the
updated story goes.
–Jupiter Research says online ad sales will hit $18.9 billion in
2010, double ‘05’s pace.
–Following is some basic market commentary that I stumbled
upon in perusing Lebanon’s Daily Star newspaper. It’s by
money manager Henry T. Azzam. Mr. Azzam is addressing the
equity bubble in various Middle Eastern markets, one I really
wasn’t that aware of, but it contains a generic lesson or two.
“One of the most visible signs of a bubble is when people start
coming up with all sorts of justifications as to why share prices,
which are already high, would rise further. For example, with a
trailing price-earnings ratio of 40, people are still buying the
Arab Bank based on a rumor that the bank is going to distribute
free shares to celebrate its 75 years in operation….
“There are enough indications suggesting that the stock markets
of the region have become overvalued in the past six months.
Dividend yields have dropped to less than 2 percent, way below
the current monthly deposit rate on the local currencies. Price-
earnings ratios, on a trailing basis, for Qatar, the U.A.E., Saudi
Arabia and Jordan range between 30 and 35. In developing
countries, average P/E ratios are normally half that level….
“The performance of the Chinese stock market is a good example
of how stock markets can adjust lower even when the macro-
economic environment is quite healthy. If the starting point is
high valuations, stock prices could trend lower despite the fact
that corporate profits are still rising and economic growth is quite
solid. From July 1994 till June 2001, the Chinese stock market
index had risen 700 percent, propelled by China’s double-digit
growth rates and surging corporate profitability. Valuation
soared with price-earnings ratios reaching an average of 60 in
August 2000. The markets adjusted downward in the following
five years, cutting P/E ratios back to the 15 level.”
–General Mills has just come out with a new variety of Chex
Mix, your editor’s favorite food…..Chocolate! Goodness
gracious, this is tasty. I would expect shares to soar as I begin
buying truckloads in restocking my fallout shelter.
–My portfolio: I purchased more of my carbon fiber play this
week. It’s a long-term move as the product continues to find its
way into more and more applications.
Foreign Affairs
Israel: By the time many of you have read this, the situation here
could have turned quite chaotic as disengagement from Gaza is
to begin at midnight on Sunday and massive protests are planned
for Jerusalem.
Last weekend, finance minister Benjamin Netanyahu resigned
over the pullout in a highly calculated power play for the top
Likud Party slot. Of course it’s a little late in the game for Bibi
to be doing this and Prime Minister Ariel Sharon’s withdrawal
will proceed apace this week. But Netanyahu said it’s “an
irresponsible move” that would harm Israel’s security. Later, he
added the following.
“Twenty years ago, when I was Israel’s ambassador to the UN, I
was informed that the government was about to okay a release of
more than 1,000 prisoners [in return for several Israeli POWs in
Lebanon]. I thought it was a terrible move.
“I wrote to my superior, then foreign minister Yitzhak Shamir,
and said that releasing prisoners would create an even greater
wave of killings. And that’s exactly what happened….
“If we thought that the capitulation to terror damaged us when it
came to the (1985) Jibril agreement, then what we are about to
do here is far more damaging.”
Netanyahu is convinced Israel is granting the Palestinian
militants a “giant terrorist base.”
But while a survey of Likud Party voters revealed Bibi gets 42%
and Sharon 28% (with the rest undecided), there is a 3rd potential
candidate for the leadership position, Uzi Landau. Supporters of
both Netanyahu and Sharon are urging Landau not to run, but
Uzi responds:
“I recently saw a poll that indicated that people support Sharon
even though they consider him corrupt. When did the public
stop insisting on honesty? Is [Sharon’s] corruption and scoffing
at the public the legacy we want to leave to our children?”
[Netanyahu, of course, is far from a paragon of virtue himself.]
“Should the leader of the Right be the man who voted for the
disengagement plan or the man who led the campaign against it
without zigzagging? I am here for people who want a leader
who is consistent and not a man who makes major decisions
based on his own caprice and polls taken every other day.”
Nice use of the word ‘caprice,’ don’t you think? Seriously, just
thought it was important to highlight some of the debate taking
place here.
Finally, it should be noted Netanyahu had done a terrific job in
his post as finance minister, particularly in terms of increasing
the number of privatizations, and so it was no surprise that the
stock market dropped 5% the day of his announcement.
[Jerusalem Post]
Afghanistan: Six U.S. servicemen were killed this week, bringing
the toll here to more than 170.
India / Pakistan: Last week the two trumpeted the creation of a
hotline to lessen the chance of an accidental nuclear war. Then
on Wednesday, Pakistan tested its first cruise missile without
telling India because, as Pakistan put it, the hotline doesn’t cover
cruise missiles, only the ballistic variety. No matter that nukes
fit just as nicely on a cruise missile as they do on a ballistic
device. In a formal statement, the generals declared:
“By the grace of Allah, all design parameters for the flight were
validated.”
Britain: An extremist cleric, afraid of being arrested for treason
under Prime Minister Tony Blair’s new efforts to curb terrorism,
fled to Lebanon; which means he left the country without being
detected…truly pitiful. Lebanon initially arrested Mr. Bakri but
then released him.
Saudi Arabia: King Abdullah ordered the pardon and release of
three political dissidents; hopefully a sign of things to come.
Venezuela: President Hugo Chavez accused the U.S. Drug
Enforcement Administration of using its agents to spy on the
government so he suspended cooperation with the DEA. I’ve got
to hand it to Chavez. Thanks in no small part to $60 oil, he’s
playing his cards far better than I expected and he’s likely to be
around a long, long time…much to the dismay of the rest of us.
Brazil: President Luiz da Silva is in deep political trouble as a
congressional inquiry revealed his Workers’ party received $6
million under the table and in an offshore account in the
Bahamas in 2002 to finance part of his campaign. Da Silva
failed to accept direct responsibility in a nationwide address.
Russia: Three sons of Russian diplomats were roughed up late
one night in Warsaw. President Vladimir Putin, weighing in on
what appeared to be a simple, local matter, labeled it “an
unfriendly act that cannot be characterized as anything other than
a crime.” Well, yeah, but that doesn’t mean they were targeted
because they were Russian, Vladimir. Russia nonetheless
retaliated (my reading of it) and within four days, two Poles
working at the embassy in Moscow (one a contractor, the other a
diplomat) were themselves beaten. This is no small matter as
relations between these two have been deteriorating for the past
few years. It’s big news in both countries, trust me.
Italy: From the Times of London’s Richard Owen.
“Torching cars and motorbikes in quiet residential areas is the
latest craze to hit Rome.
“In the past month 76 parked cars and 104 motorcycles have
been set ablaze during the night, with engines exploding and
flames damaging buildings. Heat has cracked windows as high
as the third floor of apartment blocks, causing anger among
residents, who have been going into the streets in their
nightclothes to find cars reduced to smoldering ruins….
“Police say that gangs are responsible for the crime wave as yob
culture intensifies….”
Italian youths starts drinking at age 11 these days, versus a Euro
average of 14 ½. The arsonists pour petrol on the car hood,
throw lit matches and escape on motorbikes as the fires spread
and the gas tanks explode. This is absolutely sick.
Greece: Stay away from Meligala, a small village 150 miles
southwest of Athens, come September 16-18. Called “Eurofest
2005,” far-right, neo-Nazi outfits from all over the continent will
be descending here.
“The event coincides with one of Greece’s grimmest
anniversaries: the 1944 massacre of 1,400 women and children
by Greek Communist insurgents in Meligala. Organizers said
the choice of dates for the event was intentional.” [Anthee
Carassava / New York Times]
Local officials are outraged and the town’s mayor will attempt to
block it. What a lovely world we live in, don’t you agree?
Random Musings
–The $64 billion oil-for-food investigation has reached some
conclusions, with more to follow in Sept. and Oct. reports. What
we know thus far is that a top Russian official pleaded guilty to
three counts of wire fraud and money laundering, while the
former head of the program, Benon Sevan, is alleged to have
taken $150,000 in cash bribes. Sevan cut all ties to the UN just
hours before the report on his culpability was issued. It is also
known that about 2,250 companies reportedly paid kickbacks.
–Last Sunday, the headlines were all about a new vaccine to
protect humans against bird flu, but as I noted weeks ago, sure,
you may come up with a vaccine but last I checked there are
something like 6.5 billion people on this planet and, maybe, we
could produce 300 million doses in time to fight a pandemic.
Ergo, by my back of the beer coaster calculation, that leaves 6.2
billion unprotected. Meanwhile, in Britain they have been
readying emergency measures that would require those infected
be quarantined.
— I meant to include this last time, from Business Week and The
Bordes Group Inc.
If you’re thinking of hiring a private security detail when
traveling to the Middle East, it’s….
$1,000 for airport pickup in an armored Cadillac Escalade, an
English-speaking driver and armed escort.
$3,000 gets you all of the above, plus a separate surveillance
vehicle with driver and “shooter” for eight hours.
$6,000 for a third “chase” car, and bodyguards in hotel room and
hallway, for 24 hours.
Multiply all by three if you’re traveling to Iraq.
–I basically agree with the following from a Washington Post
editorial concerning the dismissal of four-star General Kevin
Byrnes.
“According to his attorney, Gen. Byrnes, who is now divorced,
stands accused of having had an extramarital affair with a
civilian who is not his colleague, is not his subordinate and has
no connection to the military…
“From this incident, it is possible to draw only one conclusion:
It’s okay for officers to oversee units that torture civilians and
thereby damage the reputation of the United States around the
world, do terrible harm to the ideological war on terrorism and
inspire more Iraqis to become insurgents. Having an affair with
a civilian, on the other hand, is completely unacceptable and will
end your career.
“It’s true, of course, that we don’t know all the details of this
case, and it is possible that some aspect of it will justify the
dismissal of Gen. Byrnes. But if there is a justification, it had
better involve national security at the very highest level. As it
stands, the case reminds us of nothing so much as Voltaire’s
paraphrase of a British justification for the pointless execution of
an admiral in the 18th century: ‘In this country it is found
requisite, now and then, to put an admiral to death, in order to
encourage the others to fight.’”
–The Defense Department, in developing its terror plans, has a
worst case scenario of three simultaneous attacks, at which point
it may be necessary to call on active duty forces to restore order.
Of course the problem is the real folks who should be involved in
such efforts, the National Guard, are fighting in Iraq and
Afghanistan – and now suffering their worst casualties of the war
– because the military is stretched so thin.
–Lobbyist Jack Abramoff was finally indicted on six counts of
fraud and conspiracy and could face up to 30 years if convicted.
–District attorney Jeanine Pirro has decided to run against
Hillary Clinton for the senate in 2006. While I have long felt
Ms. Clinton would not run (and now Dick Morris is saying it
does her absolutely zero good as she prepares for her presidential
bid), Pirro made a fool of herself the other day in announcing her
candidacy. As told by the Daily News’ Greg Smith and Joe
Mahoney.
“On the first official day of her U.S. Senate campaign, the
Westchester district attorney was slamming Sen. Clinton in
Manhattan when she suddenly stopped reading from her prepared
comments.
“ ‘Where’s page 10?’ Pirro finally asked after going silent for 32
seconds.”
Now granted, in New York the Daily News represents the left,
while the New York Post weighs in on the right; but Jeanine
Pirro is in over her head.
–Speaking of local politics, and pure gossip, this week we
learned that New Jersey Senator, and gubernatorial candidate,
Jon Corzine and his former gal pal, Carla Katz, live in the same
apartment building in Hoboken…a terrific party spot, I might
add. As for his Republican challenger Doug Forrester, I’m still
trying to figure out how this guy makes his money and it turns
out Eliot Spitzer is investigating a company Forrester deals with.
–I’ve decided that if the federal government can spend $100
million on a bridge from Ketchikan, Alaska (pop. 8,000) to
Gravina Island (pop. 50), it can surely cough up $200 for a
plywood bridge spanning my creek out back so that I can pick up
garbage on the other side without getting my feet wet.
–It’s been one year since the “gay American,” Jim McGreevey,
stepped down as head of my state. He has yet to grant a single
interview and reportedly sought mental help. I actually golfed
with his top advisor the other day, by chance, but I opted not to
bring up the governor seeing as my golf game is far more
important than McGreevey’s problems.
–The chances of my state holding another bear hunt are
increasing with approval this week by the Fish & Game
Commission. But long-time friend Ken P. has already warned
officials not to grant me a license as he correctly concludes it
would endanger others; yours truly never having fired a gun.
Actually, scrap my proposal for a bridge across the creek. It
would only make it easier for bears to break into my stash of
Chocolate Chex Mix.
–In the biggest heist in Brazil’s history, and possibly for the
entire planet, 6 to 10 people tunneled 650 feet to reach a branch
of the central bank, where they removed $68 million over the
weekend. This exceeds the amount stolen by Britain’s “Great
Train Robber” Ronnie Biggs, who fled to Brazil. Back in 1963,
Biggs and his accomplices made off with $53 million in today’s
dollars.
–Congratulations to NASA for bringing Discovery home safely.
Now we get to follow the mission of the Mars Reconnaissance
Orbiter which will circle the red planet for four years; a precursor
to a Mars science lab in about 2010.
–From the AP:
“A cannon misfired during a weekend re-enactment of a
Napoleonic battle in Austria, critically injuring a Czech man…
“The accident happened near Hollabrunn in the province of
Lower Austria, where hundreds of war enthusiasts…had
gathered in period costume to re-enact an 18th-century battle…
“Participants stopped the mock battle while a helicopter landed
in the field where it was being staged to airlift the man to the
hospital.”
I didn’t know they had helicopters in Napoleon’s time.
–Two of 12 jurors in the Michael Jackson trial said Jackson was
guilty but they felt pressured to decide otherwise, thereby
offering further proof that we are truly a nation of idiots. One of
the two was that woman who during the post-trial interview said
of the demeanor of one of the prosecution’s chief witnesses, the
accuser’s mother, “Don’t snap your fingers at me, lady!” This
same juror now says “God has forgiven me and now I’m going to
have to forgive myself.”
Come to think of it, both God and Allah are awful busy these
days. We’re talkin’ one is involved in the development of cruise
missiles while the other administers to wacko jurors trying to sell
books to a brain dead citizenry.
–And finally, we have the death of anchorman Peter Jennings of
lung cancer. While I wasn’t a regular viewer of his newscasts,
being an NBC man myself, he is in some respects a role model of
mine, for there is no doubt he had a curiosity for the world
around him unlike most others in his profession.
—
Pray for the men and women of our armed forces.
God bless America.
—
Gold closed at $451
Oil, $66.86…$48.65 on 5/20
Returns for the week 8/8-8/12
Dow Jones +0.4% [10600]
S&P 500 +0.3% [1230]
S&P MidCap +0.5%
Russell 2000 -0.4%
Nasdaq -1.0% [2156]
Returns for the period 1/1/05-8/12/05
Dow Jones -1.7%
S&P 500 +1.5%
S&P MidCap +7.3%
Russell 2000 +1.3%
Nasdaq -0.9%
Bulls 59.1*
Bears 19.3 [Source: Chartcraft / Investors Intelligence]
*Bull reading highest since January 7; bear reading lowest since
June 24. Reminder, this is a contrarian indicator…and just one
of many that should be used in attempting to forecast the market.
Have a great week. I appreciate your support.
Brian Trumbore
