[Posted 7:00 AM ET]
Iran, Iraq and Israel
The mullahs in Iran told the world they have resumed uranium
enrichment (I would submit they never stopped) and have stated
they would not cooperate with International Atomic Energy
Agency inspectors. Surveillance cameras are being removed as a
first step. The next important date is March 6, the IAEA’s final
report on Iran’s nuclear program.
U.S. Sec. of State Condoleezza Rice: “It’s not just Iran’s nuclear
program but also their support for terrorism around the world.
They are, in effect, the central banker for terrorism.”
French Foreign minister Philippe Douste-Blazy: “No civilian
nuclear program can explain the Iranian nuclear program. So it
is a clandestine Iranian military nuclear program. The
international community has sent a very firm message by saying
to the Iranians: ‘Come back to reason. Suspend all nuclear
activity and the enrichment of uranium and the conversion of
uranium.’ They are not listening to us.”
Iran’s chief nuclear negotiator Ali Larijani: “I suggest that Mr.
Douste-Blazy use a diplomatic tone and avoid increasing the
tension.”
China’s Foreign Ministry spokesman Qin Gang: “It’s extremely
important for the international community to uphold the
consensus on resolving the Iran nuclear issue through diplomatic
measures.”
[China, of course, is cutting deals left and right for Iranian oil.]
Russia’s chief of general staff, General Yuri Baluyevsky, warned
the U.S. not to attack Iran. “It is hard to predict how the Muslim
world will respond to the use of force against Iran.”
For its part Iran also indefinitely postponed negotiations with
Russia on enriching uranium there. China said if negotiations
resumed, however, they want to be part of them. Terrific.
And then you have Iran’s President Ahmadinejad:
“I ask our dear people to prepare themselves for a great struggle.
Fasten your seat belts and pull up your sleeves.”
Ahmadinejad and the boys also can’t stop talking about the
Holocaust.
“In some European countries and in America, insulting Prophet
Muhammad is acceptable,” Ahmadinejad said. “But questioning
the Holocaust and formation of the Zionist regime is a crime.
This is a myth with which the Zionists have blackmailed other
countries and carried out their crimes for 60 years in the
occupied territories….
“The real Holocaust is happening in Palestine where the Zionists
are killing Palestinians. If you are looking for the crimes of
Holocaust, find them in Iraq.”
[Sources: Daily Star, New York Times, Financial Times]
A poll for USA Today / Gallup / CNN shows that 8 of 10
Americans believe Iran would supply a nuclear weapon to
terrorists to use against the U.S. or Israel.
Israel and the United States are also furious these days with
Russia for agreeing to meet with Hamas in Moscow. And the
aforementioned General Baluyevsky said Russia would be
willing to sell weapons to Hamas.
So we sit back and wonder why Russian President Vladimir
Putin won’t meet with Chechen rebels, but will meet with
Hamas, a group that has carried out 60 suicide bombings against
Israel since 2000.
Will Putin, though, demand Hamas recognize Israel and in the
process reclaim Russia’s influence in the region, which it lost
following the collapse of the Soviet Union? Putin has said in the
past few days, “We need to recognize that Hamas has come to
power as a result of a legitimate election and we need to respect
the will of the Palestinian people.” [London Times]
But to then offer Hamas military hardware in return for
recognition?! Wouldn’t be the first time Russia armed terrorists.
[See Iran and Syria.]
As for Hamas itself, there are stories that the organization is in
the process of amending its charter, but there is no way any
changes would be acceptable to the membership unless the
revised document maintained its call for Israel’s destruction. So
the best one can hope for is a continuation of the existing cease-
fire. The Palestinians new Hamas-dominated parliament is being
sworn in on Saturday.
Meanwhile, over in Iraq, after two months of stalemate following
the parliamentary election the new government is taking shape.
For starters, the ineffective Prime Minister Ibrahim al-Jaafari will
continue in his leadership position, thanks to the support of
firebrand cleric Moqtada al-Sadr, the same figure who has fought
U.S. forces twice and recently went to Tehran to pledge his
fealty.
As for the Kurds and Sunnis, the Kurds are miffed the secular
Shiite party of Iyad Allawi isn’t in the mix, while the Sunnis are
brooding…and that spells trouble.
Throw in the fact the Shia military and intelligence operations
have death squads targeting Sunnis, and that oil production is off
by a third from post-invasion peak levels, and that the
reconstruction overall has been a disaster, unless you scooped up
some loose greenbacks for partying in Dubai, and it’s your basic
mess.
But wait, there’s more! A video emerged showing British
soldiers beating Iraqi teenagers, new photos from Abu Ghraib
surfaced that are being distributed in DVD format, no doubt, and
our friends at the UN issued a scathing report on Guantanamo
without personally visiting the place. Oh, and Saddam is still
alive, making a mockery of his trial while his key aides refuse to
cooperate with the prosecution.
Wall Street
Mr. Smooth, new Federal Reserve Chairman Ben Bernanke, had
his coming out party this week as he appeared before both the
House and Senate for an update on the economy. Of course this
semi-annual exercise is but another reminder of why a senator is
a senator, and a congressman a congressman. Let’s just say more
often than not one sounds like a college graduate, while the other
comes off as a subscriber to People. But I digress.
Bernanke is good…real good. And we can understand what he’s
saying, a gift that eluded his predecessor.
So what did he say? The economy is strong, Bernanke is not
concerned about an inverted yield curve, he is going to focus on
the hard economic data, perhaps more so than Alan Greenspan,
but one of his primary concerns is housing; that and the potential
for inflation to seep through the price chain as it has been in
some sectors.
Which means one thing. Bernanke is going to be hiking rates,
and possibly far more than yours truly thought possible last
December.
That won’t be good because there is no doubt the Fed is going to
overshoot. I would still submit that with the lag effect of past
rate hikes it already has.
Inflation hawks may have their day, but it will be brief and I
have never been more convinced than I am now that the U.S.
economy will flip on a dime, seize up, at some point in the
second half of the year.
Housing, of course, will be a major cause of this reversal and you
can throw out the January housing start numbers that showed
explosive growth in the sector. Heck, even I felt like building a
house this past month with temperatures in the 50s here in the
New York area. And it would appear many builders just told
their guys to throw stuff up, quickly, before more normal
weather set in.
[As luck would have it, we got 20+ inches of snow last weekend
but by Thursday it was gone…thanks to a resumption of the
heatwave.]
What amazes me is this leap of faith among the majority on Wall
Street, at least for this past week, that higher rates are no
problem, particularly when one looks at the mortgage sector.
Jonathan Laing of Barron’s had a terrific piece in the 2/13 edition
on the “sub-prime” market. These are the folks who should
probably be renting until they build up a little more capital but
the lending institutions take the risk, at future cost to the
homeowner.
For example, 10% of today’s mortgage debt is in sub-prime loans
that are in the process of resetting. As Laing illustrates, their
monthly payments could rise 50%, easily, over the next two
years due to the steep escalation in short-term interest rates.
Of even more concern is that if home values just stagnate, let
alone go down, these same homeowners will no longer be able to
tap into their equity in order to meet the much higher mortgage
payments.
But back to the January housing data specifically, yes, I’ve
always said never put too much stock in one month when it
comes to this arena, but at the same time I’ve said we’ve now
entered a period in housing where it’s three steps down for every
one up. Housing has peaked. The question is do values now fall.
I’ll go with stagnation until the economy begins to roll over, then
it gets dicey.
One last note on this issue. While some were bamboozled by the
January data, I chose instead to focus on a statement out of
Washington Mutual, a leading loan originator. They were laying
off 2,500.
Outside of housing there was good news, like in the case of retail
sales for January, up much bigger than expected, but here, too,
the consumer had no problem hitting the malls in such balmy
conditions.
Oil provided a big lift as crude, over $65 just two weeks ago, hit
$57 before bounding back up to the $60 level on Friday over
fresh concerns on the geopolitical front, including an unsettled
picture in Nigeria, a major oil exporter.
Inventories of all things crude and gaseous are plentiful, but you
can’t just wish away the risk premium. Sure, oil is where it is in
some part because of speculation, but until you can point to a
resolution of some of the hot spots, you’re not going to see $40
oil. [T. Boone Pickens reiterated this week you won’t see $50
oil again, ever. I wouldn’t go that far. I do have my depression
scenario, after all. It’s always in the ol’ back pocket.]
Bottom line, at the end of the day oil is still about supply and
demand. Currently, supplies are ample, but so is demand and on
that end China is expecting a rise of close to 6% this year and as
I mentioned before, all those drillers being employed for new
finds continue to come up largely empty. But those are good,
high-paying jobs, as our president would say.
All in all, though, except for Harry Whittington and the vice
president it was a pretty good week. Hope you enjoyed it.
Beware the Ides of March.
Street Bytes
–The Dow Jones and S&P 500 excelled, up 1.8 and 1.6 percent,
respectively, with the Dow closing over 11000 (11115). Nasdaq
rose 0.9% to 2282.
Hewlett-Packard’s earnings received a good reception as the
company’s comeback is complete, but Dell’s numbers weren’t
given two thumbs up as it gave a less than rosy scenario for the
current quarter.
But here’s a perfect illustration of how screwed up Wall Street
can be. When asked if Hewlett-Packard was winning market
share, Dell CEO Kevin Rollins replied: “They grew 5.6% year-
over-year on revenue. We just delivered 13%…We intend to
grow and take share.” [USA Today]
It’s all about the expectations game and massaging analysts who
then massage the rest of us. In this respect it’s just like the days
of the tech bubble. Rollins has a great point, but no one cares.
–U.S. Treasury Yields
6-mo. 4.67% 2-yr. 4.66% 10-yr. 4.54% 30-yr. 4.51%
Rates dropped slightly on the week, despite Bernanke’s clearly
hawkish tone and a producer price index that was twice that
expected (up 0.4%, ex-food and energy). The Fed next meets to
raise rates on March 27-28.
–Bird flu is spreading across Europe and the H5N1 strain has
now been detected in Greece, Bulgaria, Romania, Germany,
Austria, Slovenia, Italy, Turkey and France. [France is testing
…but is expected to confirm the conclusion of initial reports.]
–Japan’s economy grew at a whopping 5.5% annual rate in the
4th quarter, propelled by soaring car exports and solid consumer
spending.
[Foreigners have recently been net sellers in the Tokyo stock
market, after being a huge contributor to the rally that saw the
Nikkei soar over 40%. And talk about a casino, which is what
the Nikkei has become, the index is moving 1-2% on a daily
basis.]
–Toyota Motor Corp.’s market value climbed above $200 billion
on Friday, more than Wal-Mart and the 9th most valuable
company in the world. Shares in Toyota are up roughly 60% in
less than a year.
–With soaring copper prices, thanks to demand from both China
and investment funds, Chile’s copper exports jumped 39% in
January, year over year. Copper is the mainstay of the economy
here and accounts for 43 percent of total exports. That’s a lot of
mining going on…and a lot of environmental issues as I’ve been
reading.
–Argentina’s economy grew at a 9.1 percent rate in 2005, the
fastest pace in 13 years and on top of growth of 9 and 8.8 percent
for the prior two; this after the nation’s depression. But inflation
is rising as well at about a 12-12.5 percent annualized rate.
–Chevron’s Vice Chairman Peter Robertson told a Saudi
audience in Jeddah that contrary to President Bush’s State of the
Union address, “This notion of being energy independent is
completely unreasonable. I don’t think anyone actually believes
that the U.S. can end its dependence on oil in the Middle East at
all….Saudi Arabia’s massive resources will continue to promote
international energy security and serve as a moderating force in
balancing supply and demand.” [Daily Star] Of course Chevron
has its own self interests here.
–G-8 finance ministers met last weekend and urged Gazprom to
give up its monopoly on natural gas exports. Gazprom’s reply?
“Nyet,” they won’t hand over access to their pipelines. And so,
sports fans, the issue of energy security continues to roil the
continent.
–Canada’s energy giant Encana noted in its earnings release:
“The inflationary pressures of 2005 are expected to continue this
year with cost inflation once again above 15 percent. Given
these circumstances, Encana has decided to reduce drilling in
areas where costs have increased the most, resulting in a $500
million reduction in its previously-announced 2006 upstream
capital investment forecast.” [Pritchard Capital Partners]
–Brad K., who owns a company that manufactures steel panel
swimming pools, is seeing large price increases across the board.
–The Bush administration can either extend the tax cuts or work
out a fix for the alternative minimum tax. It can’t have both in
the current environment and to abolish the AMT would result in
a projected loss of $1 trillion in revenue over ten years.
–Congress called officials from Microsoft, Yahoo, Cisco
Systems and Google to explain their relationship with the
Chinese government in doing business over there.
“Your abhorrent actions in China are a disgrace,” said
Representative Tom Lantos (D-CA). “I simply don’t understand
how your corporate leadership sleeps at night.”
A senior vice president and general counsel for Yahoo said the
company was “very distressed” at having to comply with
Chinese law.
Google’s vice president of global communications said Google’s
decision to censor its Chinese search engine was “not something
we did enthusiastically or something we’re proud of at all…We
have begun a path that we believe will ultimately benefit our user
in China.”
Republican Representative Jim Leach of Iowa said Google
seemingly acted “as a functionary of the Chinese government…
This is astonishing.” [South China Morning Post / AP]
Earlier, Yahoo’s Michael Callahan told the Financial Times,
“This is everyone’s dilemma: operate in a country and comply
with laws that lack transparency, or withdraw. No one company,
no one industry can tackle this on its own.”
Of course much of the above from the search engines is total
garbage, but to top it off, China, under the gun itself, sent out its
deputy chief of the Internet Affairs Bureau to say that the West’s
criticisms smacked of “double standards.”
“It is unfair…when (foreigners) criticize China for deleting
illegal and harmful messages, while it is legal for U.S. websites
to do so.”
But then he said no website in China has been shut down for
providing a few pieces of harmful information, adding, “No one
in China has been arrested simply because he or she said
something on the Internet.” [South China Morning Post /
Agence France-Presse]
Well that’s a rather big lie.
–Meanwhile, back in Google land, Barron’s Jacqueline Doherty
wrote a scathing article on how the shares, even after a
substantial fall from the highs, could tumble another 50% using
various financial metrics.
But Ms. Doherty had some musings on my favorite topic, click
fraud and the advertising industry. Quoting an analyst:
“In some cases, pure-play Internet companies have shifted
advertising to TV, newspapers and branded alternatives on the
Internet, at just the same time that traditional offline media
buyers are heading to the Internet in droves. One industry
executive noted that the lifetime value of a customer acquired
through Google for his/her business had approached zero.”
Doherty:
“In other words, just as the smart money is pulling out of search
advertising, the dumb money is flowing in. But it’s probably
only a matter of time before everyone figures out the economics
involved.”
[I told you the above over a year ago.]
Doherty continues:
“Before search advertising can take hold for the long term, it
must candidly face up to click fraud. Each time an Internet user
clicks on an advertisement, the advertiser pays Google. But as
with any booming industry, an underworld has sprung up:
individuals and large, organized ‘click farms’ have started firing
off barrages of clicks, around the clock….
“Click fraud is something that everyone in the industry knows is
out there. By some estimates, up to 25% of all clicks are
fraudulent. But companies in the search-advertising business
won’t quantify how the fraud affects them. Not Google, not
Yahoo!, not eBay, which is believed to be the largest search
advertiser on the Net.”
Google, of course, denies this is a big issue. A spokeswoman
told Barron’s: “Our expert teams and technology filter out certain
invalid clicks before they even reach the advertisers’ bills. When
we become aware that customers have been charged for invalid
clicks, we work to refund advertisers as quickly as possible.”
Friends, that’s a bunch of bull. I won’t bore you with the details,
but I’ve seen how search engines (not Google or Yahoo) that I’ve
used, before I shut down my online advertising, would send me a
note saying they “captured” some fraudulent clicks. Try about
one dollar’s worth. Yes, a dollar. But the gullible think, “Oh,
wow, these guys are really on the ball.” It’s nothing but a ploy.
As for Google’s share price, now $368 and off the high of $475,
I’ve long argued it’s too tough to short because it’s been off in a
world of its own. I stand by that statement, but congratulations if
you picked the top and covered $100 later.
–NBC says it’s going to turn a solid profit on the Olympic
Games, but I’ve got to believe they are having serious thoughts
about locking up the broadcast rights through 2012. More
below.
–Merrill Lynch made a terrific move in acquiring a 49.8% stake
in BlackRock, a quality money manager. Merrill is handing over
its fund assets to BlackRock and the combined entity will now
have about $1 trillion to play with. As Al Pacino said in
“Scarface,” “The only problem I have….” [Oops, better not go
there.] Separately, PNC, which had owned 70% of BlackRock
(now 34% as new shares were issued to complete the transaction)
is another big winner, announcing it will record an aftertax gain
of $1.6 billion.
[Merrill Lynch also announced a settlement with 23 investor
lawsuits over whether it issued misleading research on Internet
companies. Henry Blodget and his cohorts cost Merrill another
$164 million in this instance.]
–The Senate by a 58-41 margin voted down an asbestos bill that
would have established a $140 billion compensation fund and
finally given affected businesses a bit of a break after years of
uncertainty on all fronts. But it wasn’t to be.
–Lucent shareholders, led by its retirees, voted to restrict
executive pay. If I’m reading it right, 75% of executive stock
grants will now be dependent on the telecom-equipment maker’s
performance. This was spurred by a combination of continually
reduced retiree benefits at the same time CEO Patricia Russo was
taking in some $60 million over four years.
–Merck won a major victory in court on Friday as the drug
maker was cleared by a federal jury of any responsibility in the
death of a Florida man who had a heart attack after taking the
painkiller Vioxx…the second such win for Merck.
–Sirius Satellite Radio announced its loss widened to $311
million in the 4th quarter on higher costs to acquire subscribers.
Earlier in the week, competitor XM Satellite Radio reported
similar losses and shares in both tanked.
–RadioShack announced it is closing up to 700 stores following
a disappointing Christmas season. Most of the retail outlets I’ve
been to are a mess…kind of like the way many Wal-Marts are
now looking. But RadioShack also has to deal with a lying CEO,
David Edmondson, who it just came to light falsified his
academic credentials. Edmondson apologized but is likely to be
dismissed.
–Carl Icahn ended his bid to upend the board at Time Warner for
the purposes of splitting the company up. Instead, he will have
some say over two new board members. Geezuz, this story
bored me to tears. But kudos to Time Warner publication Sports
Illustrated for another job well done on the swimsuit issue.
–According to Business Travel International, Moscow now has
the highest average corporate room rate in the world at $305.
New York is next at $281, while Bangalore surprisingly takes the
bronze at $271.
Foreign Affairs
Afghanistan: The death of four U.S. soldiers here in an attack on
a convoy helps crystallize how far we have to go in pacifying the
entire country and the mission is not going to be accomplished
without extensive NATO support. The U.S. death toll in the
forgotten war is now at least 209.
Pakistan: The violent cartoon protests in Pakistan are particularly
disconcerting for one reason; President Musharraf’s enemies will
hijack the issue for the purpose of mounting a campaign to take
him down.
Lebanon: A week ago, about 800,000 supporters of Hizbullah
rallied in Beirut and this week, to mark the one year anniversary
of the assassination of former prime minister Rafik Hariri, a
similar amount showed up as a sign of loyalty to Hariri and the
forces of good that seek to oust Syria’s lackey, President Emile
Lahoud. But the contrast between the two gatherings couldn’t
have been more stark in spelling out the differences that threaten
to engulf Lebanon in a new civil war, one that Druze leader
Walid Jumblatt observed could “last quite a long time. This is
the tragic destiny of Lebanon.”
But Jumblatt, emerging from hiding as did Hariri’s son Saad,
proclaimed to the throng:
“There is no real independence as long as the pro-Syrian symbol
of betrayal is residing in (the presidential palace). We tell him,
the terrorist Bashar (Assad) brought you to power, and the loyal
Lebanese people will throw you out.
“We came here to say there is no real independence and no real
sovereignty when the jurisdiction of the army and the state stop
at the borders of the southern suburbs and the refugee camps and
the South.” [Referring to Hizbullah’s presence.]
Saad Hariri, who like Jumblatt is under constant threat of
assassination himself, told the crowd:
“There are no Muslims and there are no Christians, there are only
Lebanese screaming ‘Lebanon first.’”
As for President Lahoud, his office issued a statement accusing
Jumblatt of launching a “direct threat to kill the president” and
that Lahoud is determined to carry out his term which expires
Nov. 2007. To remove him requires 85 votes in Parliament and
the March 14 forces, as they call themselves, are only at 71 at
this point.
Egypt: In a huge blow to the Bush administration’s democracy
efforts, even if in a twisted way, President Hosni Mubarak has
canceled local elections, originally slated for April, for two
years. The Muslim Brotherhood, which would have benefited
from the vote, is up in arms, while the White House is in a box.
Just as in the case of the Palestinian vote, democracy often
carries unintended consequences, and the dictator Mubarak can
claim that he is only preventing militants from making further
gains.
Malaysia: Prime Minister Abdullah Badawi is a “moderate” and
an Islamic scholar. In my ongoing attempt to present some of the
more important missives from the Islamic world, I posted a full
speech of his from last week on my “Hott Spotts” link.
Speaking at the Organization of the Islamic Conference in Kuala
Lumpur, Badawi blasted the “demonization of Islam” in the
West.
“The West should treat Islam the way it wants Islam to treat the
West and vice versa. They should accept one another as equals…
“Many in the West see Islam as synonymous with violence. The
Muslim is viewed as a congenital terrorist. They think Osama
bin Laden speaks for the religion and its followers. Islam and
Muslims are linked to all that is negative and backward.”
But he admitted the “senseless violence” committed by
extremists had made things worse between the Muslim world and
the West.
“I hold the strong view that in the case of Islam, those who
deliberately kill non-combatants and the innocent; those who
oppress and exploit others; those who are corrupt and greedy;
those who are chauvinistic and communal, do not speak on
behalf of Islam.”
Badawi also called on Muslims to oppose “the sweeping
denunciations of Christians, Jews and the West as well as
violence perpetrated by certain fringe groups,” adding, “In the
face of fanaticism and hysteria, we must take action to counsel
moderation and rationality.” [IslamOnline.net]
Turkey: I always thought Turkey’s bid for European Union
membership would be derailed by anti-Islamist forces in the EU,
and that may still prove to be the case. But the issue of Cyprus
could do so beforehand. Defense News reports that Turkey has
proposed a simultaneous “lifting of all embargoes on Cyprus’
Greek and Turkish sectors, along with a fresh UN initiative for
reunification talks,” which is welcomed by the United States and
Britain but rejected by the Greek Cypriot government.
The problem is Turkey, which sent its troops onto the island in
1974, still refuses to recognize the Greek Cypriot government,
which itself became a full EU member in 2004. And Turkey is
saying that if it opens its ports and airports to the Greek Cypriots
it would amount to diplomatic recognition of them as Cyprus’
sole legitimate government, “which in turn effectively (means) a
formal admission that Turkey’s occupation of northern Cyprus
violates Cyprus’ territorial integrity.”
Turkey’s stubborn refusal to recognize the Greek Cypriots could
easily cost them their bid.
Iraq: Just two items in addition to the opening comments. Karl
Zinsmeister is the conservative editor in chief for The American
Enterprise. In the March issue, he writes a generally glowing
report on U.S. progress in the war in Iraq and I will readily admit
on this one I’m cherry-picking because he also wrote.
“Americans in Iraq have seen the dereliction of duty that results
in Iraqi police chiefs stealing body armor and weapons from their
own men to resell for personal profit on the black market. They
have seen the selfishness that causes Iraqis to argue against the
extension of sewer and water pipes to their neighbors, because
that might slow the satisfaction of their own wants. They have
endured a level of dishonesty which makes it impossible to take
the word of almost any local. Iraqis lie easily to Americans, but
they also lie habitually to each other, because that is an accepted
way of gaining advantage in their dog-eat-dog world.”
Separately, as part of the ongoing cost of the wars both in Iraq
and Afghanistan, the Army is asking for $9 billion to “reset”
war-depleted stocks; to repair and replace tanks, helicopters and
vehicles. For example, since 2003 the Army’s combat losses in
Iraq include about 20 M1 Abrams tanks, 50 Bradley fighting
vehicles, 20 M113 armored personnel carriers and 250 Humvees,
plus hundreds of heavy and medium trucks and trailers. Aircraft
losses, including in Afghanistan, total about 85 helicopters.
[Defense News]
China: 13 Chinese academics and editors have written President
Hu Jintao with regards to the demotion of two editors at a
popular weekly that was reinstated by authorities after it had
been closed five weeks. In the open letter, the group described
the closure and demotions as “illegal, unwise, depriving citizens
of their most fundamental right to free speech and constitutional
right to press freedom.” [Reuters] This took guts.
Britain: We almost lost Prime Minister Tony Blair the other day.
As his plane was roaring down a runway in South Africa, there
was a loud bang as an engine blew out. The pilots were able to
abort takeoff at the last second. But the issue has become his
transportation. You see, in Britain there is no such thing as
Blairforce One. Instead, so as not to appear to be spending the
public’s money on lavish jets, Blair (as was the case with leaders
before him) was using a 36-year-old DC-8, with engines that
were 16-years-old.
Chile: Follow-up on last May’s tragic accident in the Andes,
where 44 conscripts died in a blizzard because of improper
clothing. A court found five officers guilty but only one will
serve any prison time, five years for manslaughter. The families
of the victims are furious.
Venezuela: Sec. of State Condoleezza Rice accused Venezuela’s
Hugo Chavez of leading a “Latin brand of populism that has
taken countries down the drain.” Rice added that Venezuela’s
relationship with Cuba is “particularly dangerous.” President
Chavez called Rice’s remarks “crazy.”
Random Musings
–I’m thankful I had a little more than 24 hours to formulate
some thoughts on Vice President Cheney, quail hunter. I feel for
conservative columnist John Podhoretz of the New York Post,
for example, who had to pen his piece on Tuesday.
“On Monday, I wrote a short squib on a conservative blog
suggesting that the vice president needed to come out and make a
statement expressing his contrition at the accidental shooting of
his friend – and that if he failed to do so he would be damaged
goods.
“There were two especially disturbing aspects, I said – the
incident itself and the fact that there was an 18-hour interlude
before news of the incident was released.
“Within hours, I had received 275 e-mails from conservatives, all
but 15 of which expressed disbelief that I, a fellow conservative,
could possibly have written such drivel. It was a meaningless
hunting accident, I was informed, no more serious than a football
injury or a minor fender-bender – a fact that an effete New
Yorker like me could not possibly understand.”
Mr. Podhoretz, I know what you mean.
I hadn’t watched Bill O’Reilly in weeks but turned him on
Monday night to see what his spin was at that time, two days
after the accident and with no sign of a statement from the vice
president.
O’Reilly, true to form, saved it for the very end as his “most
ridiculous item.” To those of you who need a memory check,
recall that it was the same O’Reilly who in the first days of the
Iraq invasion said, ‘so we’re taking a few casualties…what’s the
big deal?’ I’ll never forgive him for that. But enough about him.
Of course I myself lose readers every time I question my
conservative brethren who march in lockstep with the likes of
Rush and Sean. I voted for President Bush twice, but my respect
for this administration plummets with each little “incident.”
The vice president should have come forward earlier. He’s the
vice president, people. He accidentally shot a man. And there
was absolutely nothing that Cheney told Brit Hume (who did an
excellent job himself) on Wednesday that he couldn’t have told
Hume, and us, Sunday evening. No, it wasn’t about
Whittington’s condition, as Cheney claimed. Any one of you
could have written a proper statement for him to make. If he had
done so, the issue would have been a fraction of what it turned
out to be.
And for those of you who are now seething yourselves over the
above, understand I’m fully aware the White House press corps
is a most loathsome lot and that NBC should have suspended
David Gregory the very day he bullied Scott McClellan like
some fourth grader.
But that doesn’t excuse the vice president’s disdain, not just for
the press, but for us.
We’ll move on now, and thankfully a good man, Whittington, is
OK. But I’m really tired of this White House, from the top on
down. I’m tired of a president who hasn’t had the courage to
veto one single piece of legislation. I’m tired of a president who
takes forever to respond to important events, save 9/11. I’m tired
of a president who’s pushing so many wrong buttons, as in
missed opportunities for his State of the Union as I’ve tried to
point out.
But, yes, at the end of the day if America isn’t the victim of a
catastrophic attack during the next few years, George W. Bush
and Dick Cheney will deserve a ton of the credit. That’s really
all that matters in the grand scheme of things. Everything else
that we face as a nation we can deal with, over time. That’s
life… that’s America.
–From an editorial in the London Times:
“Relations with America are complex. They are ill served by the
pretence of simplicity, or the fatuous notion that the relationship
is one big, rolling quid pro quo. Political leaders who have
slapped Uncle Sam around to satisfy the prevailing prejudices of
their electorates, such as Jacques Chirac and Gerhard Schroeder,
have generally ended up looking foolish.
“If Europeans want the US to take more account of their
concerns, they should take more trouble to appreciate America’s
instinct and intent. Neither is always right, but there is far more
thought in U.S. policy than the moaners would credit.
“There is a grave danger in this visceral hostility. The number of
Americans who believe the U.S. should mind its own business
and let other countries get along on their own has leapt in only
three years from 30 percent to 42 percent. Mr. Bush has set
himself against this new isolationism and against trade
protectionism, for which there is an increasingly powerful lobby
in the U.S. The worst that could happen is that critics of
American engagement might just get their wish.”
–Former Vice President Al Gore, at a conference in Saudi
Arabia:
“The worst thing we can possibly do is to cut off the channels of
friendship and mutual understanding between Saudi Arabia and
the United States.” Arabs in the U.S. have been “indiscriminately
rounded up, often on minor charges of overstaying a visa or not
having a green card in proper order, and held in conditions that
were just unforgivable.”
“Unfortunately, there have been terrible abuses and it’s wrong. I
do want you to know that it does not represent the desires or
wishes or feelings of the majority of the citizens of my country.”
I wanted to get a fuller context of Gore’s comments than what I
saw on Bill O’Reilly’s show Monday night and I was also
curious to see which papers played it up. The above is from the
Tehran Times. Gore’s supporters would tell you that the vice
president was simply reaching out. My conclusion is that in this
time and place, Gore’s charges against the Bush administration
can only do us harm and for him to make this statement in Saudi
Arabia, of all places, is despicable.
–I noted a few weeks ago that conservatives George Will and Pat
Buchanan were among those taking off on the Bush White
House. This week Will wrote the following in his Washington
Post column concerning the wiretapping issue.
“The administration’s argument about the legality of the NSA
program also has been discordant with the administration’s
argument about the urgency of extending the Patriot Act. Many
provisions of that act are superfluous if a president’s wartime
powers are as sweeping as today’s president says they are.
“And if, as some administration supporters say, amending the
1978 act to meet today’s exigencies would have given to
America’s enemies dangerous information about our capabilities
and intentions, surely the 1978 act and the Patriot Act were both
informative. Intelligence professionals reportedly say that the
behavior of suspected terrorists has changed since Dec. 16, when
the New York Times revealed the NSA surveillance. But surely
America’s enemies have assumed that our technologically
sophisticated nation has been trying, in ways known and
unknown, to eavesdrop on them.
“Besides, terrorism is not the only new danger of this era.
Another is the administration’s argument that because the
president is commander in chief, he is the ‘sole organ for the
nation in foreign affairs.’ That non sequitur is refuted by the
Constitution’s plain language, which empowers Congress to
ratify treaties, declare war, fund and regulate military forces and
make laws ‘necessary and proper’ for the execution of all
presidential powers. Those powers do not include deciding that a
law – FISA, for example – is somehow exempted from the
presidential duty to ‘take care that the laws be faithfully
executed.’”
–USA Today’s Matt Kelley broke the story that Pennsylvania
Rep. Senator Arlen Specter’s legislative assistant for
appropriations, Vicki Siegel Herson, helped Specter “earmark”
13 projects worth $48.7 million for six clients represented by her
lobbyist husband, Michael Herson and a firm he founded,
American Defense International. Yes, the system is broken.
Specter said he’d investigate her actions. How about your own,
Senator?
–A congressional report on Hurricane Katrina blasted Homeland
Security chief Michael Chertoff for delaying responses by up to
three days. President Bush was also faulted for not responding
quickly enough.
Separately, a court ruled that FEMA no longer has to pay hotel
bills for the homeless as of this week. Last Christmas, I said it
was awful that FEMA was about to cut off families and an
extension was later granted. But now I agree. At a certain point
you have to move on. We reached it. [And this doesn’t preclude
the families from getting other aid, including a trailer…but the
handling of the trailer program is yet another disaster.]
–I was reading Travel & Leisure magazine and there was a
terrific article on reconstruction ideas for the Gulf Coast; the best
being the use of storm debris for landfill, raising elevations in
low-lying areas.
–If it comes to pass that President Bush really does know Jack
Abramoff, as some reports have it, and the president lied to us,
it’s over for the White House. [Not impeachable…just over.]
–Bond king Bill Gross of PIMCO was quoted in an article for
Business Week on strong executive marriages.
“Never stop dating each other.”
–Congratulations to Steve Fossett for his latest exploit…the
longest solo flight without refueling…23,389 miles over 3 ½
days. This guy is a true American hero.
–This Sunday “60 Minutes” will have an authority on climate
change to discuss, among other things, the fact that hurricane
intensity is only going to strengthen due to our warm waters in
the Northern Hemisphere; not that anyone with half a brain
couldn’t already deduce this.
And from an article by Shankar Vedantam in the Washington
Post:
“In 1996, the amount of water produced by melting ice in
Greenland was about 90 times the amount consumed by Los
Angeles in a year. Last year, the melted ice amounted to 225
times the volume of water that city uses annually.”
Yikes.
–So I saw a headline with the word “Spotsylvania” in it and I’m
thinking, ‘Must be one of those stories on how development is
encroaching on another Civil War battlefield.’ Turns out it had
to do with Spotsylvania County’s practice of allowing
undercover detectives investigating the region’s massage parlors
to receive sexual favors themselves.
–I’m not commenting further on the above…in case you were
waiting for something else.
–To rent a pair of giant pandas from China can cost as much as
$2 million a year, plus you don’t know what kind of secret
transmissions they’re wired for…zoos being a popular spot for
spies to exchange information and drop off cables.
–I said it first four years ago and I’m now forced to say it again
with the Games in Torino. If we’re looking for candidates to go
to Mars, look no further than the snowboarders, dudes.
But as to the Games themselves, it’s over. No one gives a damn
about the Olympic experience outside of the competitors, their
immediate families and some creepy coaches.
Kill the games and focus on elevating the annual world
championships in each sport. As a track and field fanatic myself,
I’ve always been miffed that sport doesn’t receive the publicity it
deserves outside of once every four years. And let’s face it; half
of the sports that pass for Olympic events are really just activities
and nothing else. Good ways to get some exercise and share
some fun with friends.
And note to snowboarder Lindsey Jacobellis, who had gold
wrapped up before deciding to showboat; whereupon she lost the
top slot. Don’t look for sympathy here, kid. Another life lesson
learned, one hopes.
–Stanford University raised the most of any of our institutions of
higher learning in 2005…$603.6 million. Personally, I vow not
to give a single dime to my alma mater this year, Wake Forest,
because of our hideous play on the hardwood this winter; Wake’s
men’s basketball team being 1-10 in ACC play.
As an alum from a Division I school, I only ask that we be
competitive in football and basketball; because nothing else is
more important…right guys?
—
Pray for the men and women of our armed forces.
God bless America.
—
Gold closed at $553
Oil, $59.88
Returns for the week 2/13-2/17
Dow Jones +1.8% [11115]
S&P 500 +1.6% [1287]
S&P MidCap +1.2%
Russell 2000 +1.9%
Nasdaq +0.9% [2282]
Returns for the period 1/1/06-2/17/06
Dow Jones +3.7%
S&P 500 +3.1%
S&P MidCap +5.0%
Russell 2000 +8.6%
Nasdaq +3.5%
Bulls 48.9
Bears 27.7 [Source: Chartcraft / Investors Intelligence]
This week marks 7 years for StocksandNews, a feat I’m most
proud of. In fact I still have missed just one “Week in Review”
over that time…though I vow to take another off at some point
this year.
Coupled with the other articles I do, this wasn’t exactly what I
had in mind when I walked away from my cushy job on Wall
Street back in Feb. 1999. And it was only supposed to be for
three years.
Well, I can tell you now, unequivocally, that I’m going to be
doing this for a long time to come. Ten years is a lock, for
starters.
So that means I’ll continue to build the single best history of the
world for these tumultuous times, and in all sincerity that’s
what keeps me going.
I saved a blurb from The Weekly Standard, written by William
Kristol, upon their 10 year anniversary last year for my own
occasion because it describes StocksandNews to a certain extent.
“Early on, back in the ‘Permanent Offense’ days, I remember
lamenting aloud at an editorial meeting that there was one article
in the otherwise terrific issue we’d shortly be printing that was
okay, but wasn’t really at the highest level of quality. Fred
Barnes immediately set me straight about this. Perhaps it wasn’t
the best imaginable piece of writing, Fred said of the essay in
question. But the best imaginable piece of writing, in this case,
did not exist, he pointed out. And the piece we had in hand, by
contrast, possessed what Fred considered among the most
important journalistic qualities: ‘the quality of doneness.’”
So in my case, here’s to 7 years of doneness!
And a special thanks to our contributors, my brother Harry and
Dr. Bortrum (who once a year I get to say also passes for my
father). And to Roj and the gang at Web Epoch, I appreciate
your hard work in keeping this site running as smoothly as it has.
Have a great week. I appreciate your support.
Brian Trumbore
