[Posted 7:00 AM local time…Amsterdam]
Wall Street
I’ll keep the commentary light this week. Stocks continued their
recent surge, primarily on the heels of falling energy prices. The
temperatures in the critical heating regions of the Northeast and
Midwest have been well above normal most days the past few
weeks and that is fueling optimism the Christmas shopping
season won’t be so bad after all. Crude oil inventories continue
to soar, the International Energy Agency cut its demand forecast
yet again, and Exxon Mobil CEO Lee Raymond offered that
“speculation” accounts for about $20 of the current price per-
barrel of oil. Raymond has been a pessimist throughout this oil
boom, partly because it behooves him to be so, but at the same
time this wily veteran who is retiring soon has seen more than his
share of cycles. We’re heading lower, though I would argue it
will have as much to do with a slowdown in global economic
activity as anything else.
Stocks also took solace in an uptick in one of the leading
barometers of consumer sentiment.
But, on the other hand, you had a world record trade deficit for
September, a red-hot $66 billion, so let’s all take a bow. And the
deficit was a record $20 billion with China, though here
prudence dictates we whine.
And then there was our old friend, Mr. Housing Bubble. I have
been calling for stagnation in the real estate market all year and
stagnation is what we now have. This week, sector leader Toll
Brothers lowered its 2006 outlook as it sees “softening demand”
in some of its higher-end markets, with the CEO adding he has
noticed a “loss of confidence by the wealthy in terms of (both)
the economy and the country.”
There is also growing evidence that some markets are even
experiencing price declines. Josh P. reports that San Diego
County, where he resides, saw the median value decline 1.7% in
October from September’s level, while actual sales plummeted
18.5% for the month. And the Washington Post reported in its
Friday edition that home sales in the D.C. area are falling
sharply, while the level of unsold homes (inventory) is soaring.
We’ve hit the wall and the question now becomes when does the
bubble actually burst? Next year.
So with housing having been the prime driver of economic
growth the last few years as we used our home as a piggy bank,
pulling out equity and / or refinancing for a further source of
funds that were then spent on all manner of items, why are we
now so sanguine in the face of this assault on the wealth-effect?
Just wait 24 hours, as I’m fond of saying. It will take some time
before Americans recognize what is taking place.
Street Bytes
–The week saw the third straight solid advance for the Dow
Jones and S&P 500, fourth straight for Nasdaq. No doubt the
technical underpinnings of the market are greatly improved and
as one who cares about such things I certainly can’t dismiss this
tale of the tape.
But I still fail to see what’s so great on the earnings front. All
I’m gathering, from some key players, is that the outlook is tepid.
Sure, there are those, such as Monsanto on Friday, who argue
otherwise, but much of the talk is hardly the stuff of bull
markets.
That said, there is also no doubt falling energy prices could
provide a huge lift, but in the short-term, through Christmas, it’s
all about Mother Nature.
–U.S. Treasury Yields
6-mo. 4.29% 2-yr. 4.43% 10-yr. 4.53% 30-yr. 4.74%
The bond market was closed Friday, but rallied earlier in the
week on the positive reception for the Treasury auction.
Foreigners continue to scarf up our bonds, and it’s not as if the
yields aren’t increasingly attractive these days compared to the
alternatives overseas. [Which is also why there is no real
concern over the trade deficit, as yet.]
–Japan’s economy continues on the road to full recovery as it
reported growth for a fourth straight quarter, this time at an
annualized rate of 1.7%, with the consumer exhibiting renewed
vigor. They’re whipping out the wallet all over the land of the
rising sun.
–The fate of drilling in the Arctic National Wildlife Refuge is
hanging by a thread. The House culled it from a broad budget-
cutting bill (itself since pulled) and while a House-Senate
conference committee could still resurrect it, getting it out of the
Senate is no longer a certainty, either.
I have ranted and raved for years on this topic. I’ve flown over
ANWR, read hundreds of articles, and just don’t get it. The
footprint of any drilling up there would be miniscule and whether
you like it or not, it’s going to be decades before we truly wean
ourselves off oil. We have to do everything; drill more,
conserve, adopt stricter fuel efficiency standards, use more solar
and wind power, nuclear power…you name it, we need to do it.
But all under a comprehensive strategy that still doesn’t exist.
ANWR would produce one million barrels per day, essentially
the amount of production lost in the hurricanes. It’s an insurance
policy. The caribou, the most overrated animal on the planet,
will survive.
–The International Energy Agency released its latest long-term
outlook and while it’s stating the obvious, the IEA’s chief
economist did remark that the growing dependence on Middle
Eastern oil “is not a sustainable energy future. (We) are ending
up with 95% of the world relying for its economic well-being on
decisions made by five or six countries in the Middle East.” I
would have added Venezuela to this mix.
Of 20 oil-supply cutoffs of more than 500,000 barrels a day in
the past 30 years, 17 have been in the Middle East.
The IEA also commented on carbon emissions, which are
expected to rise by 50% in the next 25 years. My guess is it will
be far higher than this unless China, in particular, gets a handle
on its problems. This week Beijing authorities urged everyone to
stay indoors as pollution rose to dangerous levels. Normally, this
isn’t a good thing for an economy, as Confuscious would say.
–I didn’t realize the extent of the damage to the energy industry
in the Gulf on the satellite telecommunications front. The
network, which operates the rigs, was severely disrupted by
Katrina and Rita. Microwave dishes, for example, are situated
30 miles apart, on the rigs themselves, and act as a chain of
communication. When one goes out, the chain is broken.
–As an example of the principle of inelasticity, “According to
Global Insight, a 1% change in the price of gasoline results in
just a 0.03% change in demand. The same 1% change in the
price of women’s clothing, by contrast, results in a far more
significant 0.8% change in demand.” [Wall Street Journal]
–The World Bank said bird flu could cost the industrialized
nations $550 billion if a true pandemic emerged. These days,
though, it seems every organization and official is just coming
out with stories to cover their butts. Of course it’s very serious,
but it boils down to whether or not the governments in China,
Indonesia and Vietnam can stop the inevitable first human to
human transmissions from spreading elsewhere.
–The U.S. and China agreed on a textile deal, a good thing,
which limits U.S. imports of China-made goods to annual growth
of 10-17% until 2008…at which point China will have taken
over the world so any further extension is moot.
–In the meantime, China is responsible for 2/3s of the fake
products coming into the United States; Internet piracy being the
worst.
–Peter Drucker died. He was 95. As former House Speaker
Newt Gingrich said, “He is purely and simply the most important
developer of effective management and of effective public policy
in the 20th century.” Drucker believed that dedicated employees
were key to the success of any corporation and that innovation
and marketing should come before concerns over finances. He
had a profound effect on the likes of Intel’s Andy Grove.
–UAL had reduced its flight attendants from 25,000 to 17,000
over the past few years, but in a small sign of a comeback, the
airline announced it was hiring back 2,000, though at greatly
reduced wages.
–Senate Republicans are taking Social Security reform off the
table until after the 2006 elections, at the earliest.
–General Motors is restating its 2001 income as the company
admitted it “erroneously” booked credits from suppliers. GM is
already under SEC investigation and the shares this week hit a
13-year low. But at least the UAW ratified the agreement
reached the other week on paring GM’s healthcare costs.
Unionized workers will now pay $752 for family coverage. I
just had my own hiked to about $4,800. Ergo, these guys got a
great deal.
–The New Jersey judge who oversaw Merck’s victory in the
second Vioxx trial wants the next ten cases in her state to involve
plaintiffs who took the drug 18 months or longer; making it far
more difficult for Merck to win these since 18 months was the
threshold the company itself used in its decision to pull Vioxx
from the market, as its own research revealed a significant
increase in risk at that level.
–Freddie Mac is restating its first half net income a couple
hundred $million due to a computer snafu, or so they say.
Bigger sibling, promiscuous Fannie Mae, also announced it
would have to restate yet again as it continues to turn up more
accounting errors of its own; houses of ill-repute not being very
accurate on the bookkeeping end of the business.
–In an e-mail to senior staff, Microsoft founder Bill Gates
expressed his concerns that the company was falling behind,
particularly when it comes to innovation and the Internet. Gates
relayed a memo from Ray Ozzie, the chief technical officer.
The Ozzie memo was titled “The Internet Services Disruption”
and outlined the challenges facing Microsoft in the areas of
broadband, wireless networking and a “new business model
around advertising-supported web services and software.”
[Financial Times]
Ozzie said Microsoft “must respond quickly and decisively. It’s
clear that if we fail to do so, our business as we know it is at
risk.”
Expressing his fears about the gathering giant, Google, Ozzie
added, “We knew search would be important, but through
Google’s focus they’ve gained a tremendously strong position.”
As CNBC’s David Faber so aptly put it, Google is “stockpiling
Ph.D.s.”
–Grokster, the file-sharing service that allowed users to illegally
download music, was shut down after losing a Supreme Court
decision last June. Grokster will pay the Recording Industry
Association $50 million and then hope to reemerge as a viable
pay service in an already crowded field. In September, it’s
estimated 6.7 million in the United States were file-sharing,
thanks in no small part to already having obtained Grokster’s
software.
–Wall Street firms will earn $24 billion in 2005. Street spouses
will spend about $6 billion of this; after-tax, that is. [This is
based solely on my own observations, living as I do amongst the
Wall Street glitterati.]
–I must say I’m having trouble understanding just what’s
happening with Refco. UK financial services firm Man
Financial has acquired the bulk of Refco’s assets, but it’s still
unclear where that leaves all the creditors; who are in turn going
after those who profited in the IPO, including the underwriters
involved in what proved to be a huge scam this past August.
Two of them have admitted to receiving subpoenas from the
SEC.
Separately, the amount of the fraud perpetrated by former CEO
Philip Bennett was raised to $720 million from its initial $430
million level.
–The Supreme Court unanimously ruled that companies must
pay workers for time donning “integral” gear and the time it
takes workers to then walk to the production area. This suit
originated at a Tyson Foods meatpacking plant where they
weren’t being paid for the walk to the production line once suited
up. Goodneses gracious. Kind of reminds me of the Four
Seasons and their 1963 #1 hit, “Walk Like A Man.” [You can
see the full story of the group on Broadway these days, in the
critically acclaimed “Jersey Boys.”]
–A Boeing 777-200LR jet set the world record for longest non-
stop commercial flight in traveling 11,664 miles over 22 hours
43 minutes, between Hong Kong and London (crossing by way
of North America rather than the traditional Hong Kong to
London via Russia route). All the passengers then died of deep-
vein thrombosis.
–Members of Kuwait’s parliament are proposing that each
family receive a $34,000 cash grant as part of a distribution of
the government’s $26 billion in oil surpluses. Talk about pork
…the legislators are up for reelection in 18 months. The
government is opposed and prefers to see the extra funds go for
Iraqi debt forgiveness. I’m telling ya, here in America we would
have been better off if we had just focused on developing our
own energy resources the last 100 years. Then the rest of us
could lounge around, waiting for a check.
–JP Morgan Chase is closing its corporate gyms, worldwide. As
Karl Malden would have said, “What will they do…what will
they do.”
–The Blackstone Group is acquiring the La Quinta hotel chain. I
wouldn’t expect this to have much of an impact on the décor.
–The weekly circulation of U.S. newspapers is down 2.6% for
the latest six-month period ending September.
–Update: Greg Maffei, who left his CFO position at Oracle last
week, became the CEO of Liberty Media; John Malone’s
company that counts among its assets the QVC home shopping
network.
–Did you see on “Desperate Housewives” that one of the
characters bought her husband a new set of golf clubs with
“carbon fiber shafts”? Unfortunately, this didn’t have any
impact on my carbon fiber stock play. And so I mope.
Foreign Affairs
Iraq: I happened to catch President George W. Bush’s Veterans’
Day speech on the war on terror and Iraq, shown in its entirety
on BBC World, incidentally.
“While it’s perfectly legitimate to criticize my decision or the
conduct of the war, it is deeply irresponsible to rewrite the
history of how that war began.”
Earlier in the week, however, Senator John McCain took off on
the Bush administration, calling for an additional 10,000 troops
in Iraq as he continues to argue the “stakes are higher than they
were in Vietnam,” while adding we must recognize “the benefits
of success vs. the consequences of failure.” McCain admits this
is a painful choice and could result in even more U.S. casualties,
but he also insists the White House tell the truth about progress
on the ground. To that end Secretary of State Condoleezza Rice
was in Iraq this week, attempting to showcase where progress
has indeed been made.
Yes, there is some. For starters we have an electoral process and
political dialogue. It’s just the content of much of the dialogue
that is so troubling. Like the reemergence of Moqtada al-Sadr, as
he seeks an alliance with the leading religious Shia party. Sadr is
fielding an extensive slate of candidates for the Dec. 15 vote on a
national assembly, while separately his militia is implicated in
the death of another defense attorney in the trial of Saddam
Hussein and his cohorts. The bottom line is, while a new
assembly will undoubtedly be seated in January, will it be a
highly radicalized one? The answer today, it appears, is yes.
And this week’s al-Qaeda inspired attack in Amman, Jordan is
but another offshoot of the conflict in Iraq. While King
Abdullah plays both sides, just as his father did, Jordan is
nonetheless an avowed ally of the United States and after foiling
a number of other plots, this time its vaunted security apparatus
came up short in failing to stop the coordinated bombings of
three U.S.-owned hotels that resulted in the deaths of at least 56.
Jordan has always walked a tightrope, what with its own
Palestinian refugee problem threatening to come apart at any
moment, but now the locals have a new scapegoat (aside from
Israel); Iraqi refugees that are flooding into the country and
taking jobs. Plus al-Qaeda claims four Iraqis carried out the
bombings.
Syria: President Bashar Assad spoke to his people on the UN
investigation into Rafik Hariri’s assassination, arguing his nation
is innocent on all counts. And in an attempt to project strength,
while also appearing conciliatory, Assad said he would cooperate
with the UN only so long as it didn’t impact national security.
Draw your own conclusions. Assad also called for a timetable
for withdrawal of U.S. forces in Iraq, in a further effort to shift
the debate away from his own complicity in terror around the
region.
Iran: The mullahs appear to be on the defensive following
President Ahmadinejad’s recent call for Israel to be wiped off the
map, and are sending signals they are prepared to compromise on
their nuclear program. The International Atomic Energy Agency
meets on Nov. 24 and could vote to refer the issue to the Security
Council without signs of cooperation from Iran. The U.S. and
the Euro-3 have offered to allow a limited nuclear program (that
would supposedly fall short of giving Iran a bomb-making
capability, though in actuality it wouldn’t) in exchange for
moving Iran’s uranium enrichment processing to Russia where it
can be more effectively monitored.
France: Authorities finally cracked down on the violence,
enforcing curfews in some spots and projecting more of a police
presence throughout, and the number of incidents dropped
significantly. All of the accompanying commentary is about
France’s failure to assimilate its Muslim population, about 6
million or 10%, and there is renewed talk of adopting programs
to more effectively bring the Muslims into the mainstream; from
already failed government handouts to Interior Minister Nicolas
Sarkozy’s appeal for broad-based “affirmative action” that would
more effectively give Muslims a voice in the political process.
But while it’s popular these days to bash the French, a la Bill
O’Reilly, especially in light of their smug criticisms of us, I have
stayed away from that game. Instead I have maintained France
could still be a critical ally in the war on terror, particularly in
Syria and Iran. More than ever, it is clear France has as much to
fear from a nuclear-armed Iran, for example, as anyone else,
including Israel.
However, I’m also amazed how virtually every commentator and
political leader is missing the broader point when discussing the
rioting. I’ve been all over the topic for years and alluded to it
again last week.
The unrest in the Islamic community is not just an issue for this
particular minority, it is a growing one for the far-right forces;
both in France and elsewhere across Europe to use as its own
recruiting tool. Among those I read regularly, only Ralph Peters,
writing in the New York Post, recognized that “French voters
will turn hard right at the next election.”
Jean-Marie Le Pen, the leader of France’s far-right National
Front who was in a run-off for president the last election, said his
party has been “besieged by membership requests” in light of
today’s violence.
We are ignoring the dangerous dynamic involved here and it
goes to the root of the anti-immigrant hysteria that has been
festering throughout Europe, and which today has been given
new voice. Here in the U.S. we have the “Minutemen,” a small
group of like-minded individuals who seek to secure our borders,
or a Pat Buchanan who expresses his outrage on an issue he’s
been trumpeting for years.
But as yet we don’t have an anti-immigrant political party that
could capture more than a few percent in any nationwide vote.
In Europe, however, virtually every nation has such parties that
regularly garner 10%+ and their numbers threaten to increase
exponentially.
I don’t have an answer, but I know the result. This is bad news
for Europe, as it will only heap fuel on the fire of the Islamic
neighborhoods that are now listening to their own merchants of
hate with renewed dedication. And anything bad for Europe is
bad for America; of this all can be certain.
Israel: The oldest leader in the Knesset, 82-year-old Shimon
Peres, was ousted as Labour Party leader; defeated by a socialist
firebrand, Amir Peretz, who has vowed to pull Labour out of the
coalition with Prime Minister Ariel Sharon. It was Peres who
proved decisive in backing Sharon’s Gaza withdrawal plan.
Peretz now says that with this project complete, it’s time to take
the party back to its roots. Early elections appear to be a
certainty and the resulting campaign could be quite explosive.
[As an aside, I was watching Palestinian representative Hanan
Ashwari on the BBC, Friday, and the reporter asked her why so
few showed up on the anniversary of Yassir Arafat’s death. “I
think they’re all still reeling from shock,” she said. Yeah, right.]
China: That spy case I noted the other day, the one in which four
Chinese nationals were accused by the U.S. of stealing data from
a subsidiary of L-3, is now being described by Washington
officials as perhaps the most damaging in two decades. The spy
ring had access to our aircraft carriers. Of course this is all so
predictable.
Mary C. Fitzgerald, a research fellow at the Hudson Institute, had
the following comments in Defense News.
“The central principle driving the modernization of national
defense (in China) is reliance on science and technology to
strengthen the armed forces.
“The ultimate objective of this particular revolution in military
affairs, say the Chinese, is to win the future ‘information war’ –
which can only be won by achieving space dominance.”
Military leaders also appear bent on “conducting an anti-carrier
campaign against the United States” should there be a conflict
over Taiwan. Chinese President Hu Jintao is on record as
boasting, this war “will not obstruct the holding of the 2008
Olympic games.”
[I have not personally seen this remark, but I defer to Ms.
Fitzgerald. If true, it should have been replayed across the world
as a sign of Hu’s true intentions. President Bush travels to China
this coming week.]
And watch Hong Kong. As I mentioned previously, there is a
democracy protest slated for Dec. 4, just days before the WTO
summit, Dec. 13-18. Organizers are downplaying the size of the
demonstration but these two events, taken together, could make
for a rather combustible mixture. The WTO talks, however,
could unravel beforehand over preliminary negotiations on
agricultural subsidies as Brazil, spearheading the effort on behalf
of the developing nations, is expressing its ire with the European
Union for their failure to budge on the matter.
North Korea: Guess what? The latest round of talks on
Pyongyang’s nuclear weapons program, the one intended to
finally produce some real progress, broke off after just three days
and zero movement. It remains all about who goes first. The
North continues to maintain it wants a light water reactor before
it will dismantle its weapons program. The U.S. insists the
commies freeze their activities at the plutonium processing plant
before it will consider handing out some carrots. So much for
China’s help on this one.
Russia: Gazprom wants to renegotiate its long-term gas delivery
contract with Poland that was to run from 1996-2022. Well, I
predicted this one, sports fans. Poland imports 2/3s of its gas
from Russia (42% from Gazprom). As relations deteriorate
between these two countries, Russia will play its energy card.
Meanwhile, Russia’s National Unity Day, also as expected,
deteriorated into the largest demonstration by nationalists in a
decade. Holding banners that read “Russia for Russians” and
“Sieg Hiel,” one human rights activist said of the far-right
protesters, they were like “fascists. It’s like the 1930s in
Germany.” [Moscow Times] The kids also have a strange grasp
of history.
Latin America: A Zogby poll revealed that 80% of professionals
in Latin America don’t like President Bush due to the war in
Iraq, military exercises in Paraguay, and support of Colombia in
its drug war. Speaking in Brazil, Bush said the continent needs
to choose between two competing futures – an American
supported “vision of hope” versus another that “seeks to roll
back the democratic progress of the past two decades.”
Chile: The question across all of Latin America these days is will
real leaders emerge before it’s too late? Chile holds a key
presidential election on Dec. 11 and the leading candidate is
Michelle Bachelet, a center-left adherent. She has a shot at
getting the 50% needed to avoid a run-off, but the far-left leader,
while no threat to win, is gaining some strength recently. This is
a fellow who calls Bush “the world’s biggest terrorist.”
Venezuela: Along the lines of the above, President Hugo Chavez
called Mexico’s President Vicente Fox a “puppy of the empire”
for supporting the free trade agreement for the Americas.
Peru: Former President Alberto Fujimori, who fled to Japan in
disgrace a number of years ago, reemerged in Chile this week
while vowing he would run for president in Peru in 2006. Chile,
though, arrested him on an outstanding warrant with Interpol and
this has set off an extradition battle between the two
governments, plus Japan itself. Peru is saying Tokyo is standing
in the way of returning Fujimori (who has joint Peruvian /
Japanese citizenship) and has pulled its ambassador.
Britain: Prime Minister Tony Blair suffered a crushing defeat in
the House of Commons as his proposal to increase the time terror
suspects could be held without charge was voted down, 322-291.
Currently, suspects can he detained just 14 days and Blair wanted
to increase it to 90, arguing authorities often need more time to
examine closed-circuit television pictures and encrypted
messages. While few believe Blair will step down before 2008,
his own announced timetable, there is growing pressure in some
quarters for him to do so, which would be a big blow to the U.S.
Australia: 16 suspected terrorists were arrested, evidently on the
verge of conducting a major attack. But in watching television
pictures from here, it was the terrorists’ friends who did the most
harm in terms of public opinion as they bloodied a cameraman in
a vicious, unprovoked assault. It was sickening and I imagine all
Australians were livid. Expect no mercy for any of those
arrested. Feed them to the crocodiles.
Indonesia: Arrests were made in the beheading of the three
schoolgirls on the island of Sulawesi, an attempt to reignite
religious violence there. Separately, the government pulled off a
real coup with the killing of one of the region’s worst terrorists,
the bombmaker responsible for various attacks, including Bali.
What’s equally important in examining this case is that the
Indonesian special forces who carried off the operation had U.S.
training. Money well spent.
Netherlands: A Dutch citizen of Moroccan descent and six co-
conspirators were arrested upon discovery of a plot to shoot
down an El-Al airliner at Schiphol Airport here in Amsterdam.
Workers of neighboring office buildings were enlisted in the
plan. Meanwhile, the threat of assassination hangs heavy in the
air as Islamic extremists have vowed to take out those who
express any kind of outrage against the cause. Various
professors, for example, have armed guards after speaking out
against terrorism and killings such as that of filmmaker Theo van
Gogh, one year ago this week.
[As I just arrived Thursday and spent Friday working, I haven’t
had a chance to do much exploring in and around Amsterdam.
But I did have a bite to eat at a pub Friday night and struck up a
good conversation with the bartender. “You want something to
write about? Find out why we have such a mob war these days.”
I had read of this upon arrival and it appears the Russians are
moving in, as they have been all over the world.]
Pakistan: The death toll in the earthquake is now estimated to be
87,000.
Liberia: Eileen Johnson-Sirleaf, Harvard educated, has become
the first woman to be elected president anywhere in Africa. So
we quaff an ale to this disciple of Margaret Thatcher.
Random Musings
–In case you thought I was exaggerating about the level of
acrimony in New Jersey’s gubernatorial race, Tim Russert
commented, “This is one of the dirtiest and most expensive races
in political history.” Senator Jon Corzine won, 53-44, and,
coupled with a Democratic legislature, some of us are hiding
under the sheets. Republican Doug Forrester was a poor
candidate, but what gets me is the fact Corzine truly believes he
can continue on to the White House some day. Hell, I didn’t
think he’d get this far. It’s amazing what $10 million here and
$10 million there can do.
I don’t believe, however, that Corzine’s win had anything to do
with an anti-Bush backlash, but clearly that was the case in
Virginia where the Republican candidate was also defeated in a
race for governor. An NBC / Wall Street Journal survey now has
Americans wanting the Democrats to prevail in next year’s
congressional elections by a 48-37 margin. The elephants can
only take solace in the fact they have a year to recover, but then
we all know the economy is going to be in the dumper next fall
so the concern is warranted. It also doesn’t help that the same
survey says 57% believe Bush “deliberately misled” the public in
making the case for war. [Which was the prime reason for his
particularly hard-hitting speech on Friday.]
–Meanwhile, in New York City, it’s a love fest between New
Yorkers and Mayor Michael Bloomberg. Hizzoner secured an
historic triumph, a record-breaking margin of 20%, 59-39.
Bloomberg’s victory was so decisive he picked up 50% of the
African-American vote. To get some perspective on this
achievement, consider that the first time Rudy Giuliani ran for
mayor in 1993, he received just 5%.
–California voters rejected all four of Governor Arnold
Schwarzenegger’s proposals to change state government and
reform the education system. Actor Warren Beatty hogged the
limelight in the end as he eagerly snapped up face time in
criticizing Ahnold. And once again Beatty toys with the press in
getting them to bite on his own prospects for 2006 as
Schwarzenegger seeks reelection.
–The New York Times’ Judith Miller resigned. Good riddance.
–Former Secretary of State Madeleine Albright is said to be
contemplating a book on the story behind her brooches. Just
shoot me.
–My friend Ken P. and I were bemoaning the state of America’s
national park system the other day, particularly the desecration
caused by off-road vehicles. But a new federal rule hopes to put
an end to this and has received the support of both environmental
groups and the off-road community. From here on, all of the
national forests “will be required to designate roads, trails and
areas for off-road use and then restrict off-highway vehicles to
those routes.” [Bettina Boxall / Los Angeles Times]
The problem is there is no money to enforce the rule, let alone no
money to pay the overburdened good people of the National Park
Service who somehow exist on wages that rival those paid at
McDonald’s and Wal-Mart.
–The New York Times’ Thomas Friedman, who is in the midst
of a true love affair with China, including its form of
government, on Friday blasted Ronald Reagan, calling him “the
most overrated president in U.S. history.” This coming from the
most overrated journalist in history.
–And finally, a few thoughts from Richard Nixon. Yes, the
former president. I was perusing his great book, “In the Arena,”
and came up with some passages that pertain to today’s political
discourse, including France. To wit:
“Appeals to our highest ideals have inspired Americans to
support great causes. For half a century, we have poured efforts
and resources into building a safer and freer world not only for
ourselves but also for others. But we should not rest content.
Now that the Communist threat appears to have diminished, we
must not simply withdraw into a satisfied isolationism….
“Some say that we have done enough, that we have carried the
burden too long, that we should let others shoulder the costs of
defending freedom and promoting progress. They point out that
our European and Japanese allies spend less per capita on
defense and therefore can direct more resources to winning the
economic competition. While we should insist that others share
the burden more equitably, we must recognize that no country
can step into our shoes. None possess the military, economic,
and political capabilities of a superpower. Only the United
States has the power to ensure the security of the free world.
“We should engage in this cause not just for others but for
ourselves. De Gaulle once said, ‘France was never her true self
unless she was engaged in a great enterprise.’ I have always
believed this was true of the United States as well. Defending
and promoting peace and freedom around the world is a great
enterprise. Only by rededicating ourselves to that cause will we
remain true to ourselves.
—
“De Gaulle once observed, ‘War stirs in men’s hearts the mud of
their worst instincts. It puts a premium on violence, nourishes
hatred, and gives free rein to cupidity. It crushes the weak, exalts
the unworthy, bolsters tyranny…[but] had not innumerable
soldiers shed their blood there would have been no Hellenism, no
Roman civilization, no Christianity, no Rights of Man….War is
the worst of plagues but has made the world as we know it.’
“This observation touches upon a profound truth. We must
devote ourselves to the cause of peace and freedom in the world,
but maintaining the will and the capability to employ force
remains indispensable toward that end. Our readiness to resort to
force to defend our security and interests deters those who would
use force for aggressive purposes. To the defeatists who chant
that we are ‘better red than dead,’ we should answer that if the
United States meets its responsibility for leadership, we can be
alive and free.
“We need never fear that American leaders will cavalierly take
the nation to war. It was a decision no President took lightly and
a burden none shouldered easily. Two weeks after the signing of
the Paris Peace Accords in 1973, I met with the next of kin of
Lieutenant Colonel William B. Nolde, the last American who
had been killed in action in that war: his widow, a nineteen-year-
old son, and a seventeen-year-old daughter. I tried to express to
them the appreciation of the nation for his sacrifice and my
profound personal sympathy for them in their time of grief. I
have seldom seen such brave and courageous people.
“At the close of our meeting, I shook hands with them and
started to escort them to the door. The girl stopped suddenly and
asked, ‘May I kiss you?’ At that moment, a wave of emotion hit
me with the force of a sledgehammer. I thought of the 55,000
Americans who had lost their lives in the war. I thought of their
parents, their wives, and their children, and I thought of this girl
and her brother who would no longer have a father to turn to in
times of sadness or to share experiences in happier times. I never
hated the war in Vietnam more than I did at that moment.”
Friday was Veterans’ Day. Pray for the men and women of our
armed forces and remember those who have given their lives in
the defense of our country.
God bless America.
—
Gold closed at $470
Oil, $57.53…first weekly close below $60 in four months.
Returns for the week 11/7-11/11
Dow Jones +1.5% [10686]
S&P 500 +1.2% [1234]
S&P MidCap +0.7%
Russell 2000 +1.3%
Nasdaq +1.5% [2202]
Returns for the period 1/1/05-11/11/05
Dow Jones -0.9%
S&P 500 +1.9%
S&P MidCap +8.5%
Russell 2000 +2.3%
Nasdaq +1.2%
Bulls 50.6
Bears 24.7 [Source: Chartcraft / Investors Intelligence]
Have a great week. I appreciate your support.
And as I’m on the road, a shout out to LT.
Brian Trumbore
