[Posted 7:00 AM ET]
A New Alliance
I wrote the following in this space on 3/29/03:
“Time for a new supra-alliance consisting of the U.S., Britain,
Japan, Australia and India. It’s also time to speed up the debate
on whether we want to see Japan rearm, including nuclear
weapons. I don’t think we do, yet, especially since India can
counterbalance China, but it’s contingent on how far we allow
North Korea to get with its own nuke program.”
I was pleased to see President Bush finalize an agreement on the
nuclear front with India that will allow this budding nation to
share in our civilian technology which in turn can help power its
future growth. And while India is not a signatory to the Nuclear
Nonproliferation Treaty, this at least opens up 14 of its reactors
to international inspection; albeit not the ones deemed most
useful for its nuclear weapons program.
French President Jacques Chirac hailed the agreement, citing
India as “a responsible power,” while the International Atomic
Energy Agency’s Mohamed ElBaradei praised it as well.
It has long been a time for new thinking with regards to the
largest democracy in the world and as I was writing three years
ago, now more than ever we need India as an ally and
counterweight not just to China but also Muslim extremists
throughout the region. No doubt, a big part of the agreement
reached this week is a new military alliance which will be played
down publicly but exists nonetheless. That is good.
Of course critics will have a field day, however, and many of the
arguments raised against the nuclear pact will be good ones. I
don’t purport to be an expert on the minutiae and I’m sure there
will need to be further haggling on the details.
You can also be sure, as I’ve written the past few months, that
Iran in particular will talk about the double-standard at work
here. “Why can’t we have the same technology India is
receiving? We just want a peaceful program and they already
have nuclear weapons!” Sorry. We know what you’re up to and
your track record isn’t the most pristine in world history.
Monday will see the release of the IAEA’s long-awaited final
report on Iran’s nuclear program and we already know Mohamed
ElBaradei will point to Iran’s lack of cooperation in answering
his inspectors’ questions, along with detailing where Iran is
expanding its program against the dictates of the world
community.
Russia learned firsthand that all Iran ever wanted it for was to
pick the Russians’ brains and the bottom line is Iran keeps
insisting on enriching some uranium on home soil and the UN
Security Council can not let this stand. It’s time for the
international community to act. But look for Iran to attempt to
continue stalling.
Iraq
Here are the facts. Ten weeks after the Dec. 15 vote to elect a
new parliament, we appear to be no closer to forming a
government than we were on Dec. 16. There is growing
opposition to the nomination of Prime Minister al-Jaafari among
the Kurd, Sunni and secular parties and the Shia alliance doesn’t
have the votes to ram their choices down the others’ throats.
Following the bombing of the Golden Mosque, well over 1,000
have been killed. Some estimates now exceed 1,500; a
staggering figure. One senior UN official told BBC News that of
the bodies he has seen lined up in the morgues, 75% showed
signs of torture or execution.
An Iraqi defense official said the militias would be disbanded
and weapons confiscated unless they are part of the security
forces, but who is going to enforce that?
Then you have a Zogby poll of U.S. soldiers in Iraq. 72% of the
troops say we should pull out within one year and, incredibly,
85% said the U.S. mission was mainly “to retaliate for Saddam’s
role in the 9/11 attacks.” As John Zogby said, he found this
“bewildering.” I would call it deeply disturbing.
What I’m hearing from some fellow conservatives is also
stupefying. For example, Ret. Lt. Col. Ralph Peters (whose
enlightening thoughts on China I quote in my current “Hott
Spotts” column) loses all perspective whenever he writes about
Iraq. This week, in a series of columns for the New York Post
from the field, he writes “Things are going far better than you’ve
been told.”
Mr. Peters, I know you love our military, as do I, and the terrific
job they’re doing on an individual basis, but don’t treat the rest
of us like a bunch of morons.
One conservative who has been as balanced as any throughout
this post-9/11 era is George Will. Writing in the Washington
Post this week he offered up the following:
“When late in the spring of 1940 people of southeastern England
flocked across the Channel in their pleasure craft and fishing
boats to evacuate soldiers trapped on Dunkirk beaches, euphoria
swept Britain. So Prime Minister Winston Churchill sternly told
the nation: ‘We must be very careful not to assign to this
deliverance the attributes of a victory. Wars are not won by
evacuations.’
“Or by curfews, such as the one that cooled the furies that
engulfed Iraq after the bombing last week of a Shiite shrine.
Wars are not won simply by facing facts, but facing them is a
necessary prerequisite.
“Last week, in the latest iteration of a familiar speech (the enemy
is ‘brutal,’ ‘we’re on the offensive,’ ‘freedom is on the march’)
that should be retired, the president said, ‘This is a moment of
choosing for the Iraqi people.’ Meaning what? Who is to
choose, and by what mechanism? Most Iraqis already ‘chose’ –
meaning prefer – peace. But in 1917 there were only a few
thousand Bolsheviks among 150 million Russians – and the
Bolsheviks succeeded in hijacking the country for seven decades.
“After Iraqis voted in December for sectarian politics, an
observer said Iraq had conducted not an election but a census.
Now America’s heroic ambassador, Zalmay Khalilzad, one of
two indispensable men in Iraq [ed. the other being Ayatollah al-
Sistani], has warned the Iraqi political class that unless the
defense and interior ministries are nonsectarian, meaning not run
as instruments of the Shiites, the United States will have to
reconsider its support for Iraq’s military and police. But that
threat is not credible: U.S. strategy in Iraq by now involves little
more than making the Iraqi military and police competent. As
the president said last week: ‘Our strategy in Iraq is that as the
Iraqis stand up, we’ll stand down.’ …
“Today, with all three components of the ‘axis of evil’ – Iraq,
Iran and North Korea – more dangerous than they were when
that phrase was coined in 2002, the country would welcome, and
Iraq’s political class needs to hear, as a glimpse into the abyss,
presidential words as realistic as those Britain heard on June 4,
1940.”
Dubai Ports World
Well, I’m in a distinct minority on this one, having expressed my
support last week. In a USA Today / CNN / Gallup survey,
Americans are against the DPW deal by a 66-17 margin. A CBS
News / New York Times poll had 70% against. Conservative
commentator Pat Buchanan called the issue “a first-rate political
disaster” for the president while Sen. John McCain, a supporter
of DPW taking over selected operations at six terminals, said
“UAE is freer than China.”
Meanwhile, there was this story in the Jerusalem Post that DPW
participates in the Arab boycott of goods from Israel and some in
Congress jumped all over it.
But talk about much ado about nothing, yes, DPW may deny
some goods but how many know this boycott goes back to 1951
and is circumvented on a regular basis, with many a ‘wink
wink’? In fact, Saudi Arabia dropped the primary boycott in
order to join the World Trade Organization. Wouldn’t want the
facts to get in the way of a good story now, would we?
Last week I attempted to spell out that the main issue was not
who has control of the ports, but just who is doing the packing on
origination. I also noted that despite my own support for the
deal, 9/11 Commission co-chair Thomas Kean was against it.
So this week Kean appeared on Chris Matthews’ “Hardball” and
echoed the exact point I was making. Each cargo container may
make “10 or 11 stops” along the way before it reaches the U.S.
There’s your real concern, he concluded.
Expert Stephen Flynn wrote the following in an op-ed for the
New York Times:
“At the end of the day, America’s port security challenge is not
about who is in charge of our waterfront. The real issue is that
we are relying on commercial companies largely to police
themselves. Both Congress and the White House should
embrace a framework of ‘trust but verify,’ in President Ronald
Reagan’s phrase, based on real standards and real oversight.
When it comes to the flow of goods around the planet, we need
to know what’s in the box.”
Hassan M. Fattah and Eric Lipton had a piece in last Sunday’s
Times titled “Gaps in Security Stretch From Model Port to U.S.”
Following are just a few excerpts:
“The trouble is not focused at the end of the line – the port
terminal at the American shore. It is spread up and down the
supply chain at critical points across the globe, no matter what
the United States government and partners like United Arab
Emirates have so far tried….
“The security efforts in Jebel Ali (Dubai) begin 24 hours before
cargo headed to the United States is loaded onto a ship.
Manifests detailing the contents of containers are submitted
electronically to port authorities and customs. At a screening
center in Virginia, federal officials try to identify containers that
might present a risk by considering the origins of the cargo, its
route, the sender and any changes in typical patterns.
“If the computer system identifies a container as high risk,
customs agents ask a customs team in Jebel Ali to request that
local officials screen the shipment with the giant gamma-ray
machines, which produce an image similar to that of scanners for
carry-on bags at the airport. New movable scanners set atop
trucks can also move around the port for speedier checks that,
port officials say, are more accurate….
“Auditors visiting some of the 42 ports participating in the
Container Security Initiative have found a variety of problems.
“Containers identified as high risk sometimes were sent on to the
United States before agents on the ground could find them, a
2005 report by the Government Accountability Office said,
although it did not specify if the problem occurred in Dubai.
Port officials in Dubai insist containers cannot be placed on a
ship bound for the United States if they are not approved by
customs agents….
“The manifest information that the government gets is often
incomplete or inaccurate. And customs officials may overlook
dangerous cargo because currently they have no reliable way of
ensuring that a container was not tampered with after it was
stuffed or inspected….
“…the biggest risk is not in the main ports where security agents
keep watch but in small vessels that can easily sneak below radar
and dock anywhere….
“Mr. Flynn, the former Coast Guard official, said the best model
he had seen was in Hong Kong. Every container in a pilot
project there was scanned and checked for radiation before it was
loaded onto a ship. The data on each container was then stored.
“The cost of such a system is well worth it, Mr. Flynn said. ‘If
we get this wrong, we shut down the global trade system.
Knowing that, I have to wonder, why isn’t this treated like
an emergency?’”
Wall Street
The news on the economy was mixed, at best, as were the major
equity averages. In the case of our three-legged stool – housing,
the consumer, and capital spending – housing sales, both new
and existing, for January were down while inventories were up;
the latest reading on personal consumption was up big (more so
once again than a sizable gain in personal income); and a survey
by the Business Roundtable revealed that our nation’s executives
are increasingly likely to loosen the purse strings in terms of
capital spending.
So using that broad-brush approach, two of three would appear to
be up, with the other down.
But when you look more closely, many retailers disappointed in
the month of February, as released this week (after a weather
induced binge in January), consumer confidence is down and
readings on manufacturing were mixed. Plus auto sales for
February showed further declines for Ford and General Motors,
while Japanese carmakers continue to see gains in both sales and
market share. Additionally, the latest annual survey by
Consumer Reports shows that when it comes to quality rankings,
Japan takes top honors, hands down.
Back to real estate, in an interview for Business Week, Angelo
Mozilo, CEO of mortgage lender Countrywide Financial, sees
declines in home values of 5-10% in 2006, with the hotter areas
falling 20-30% within 1-1 ½ years. Economist Robert Shiller
sees declines of as much as 40% in the more speculative regions,
with both agreeing that if you bought recently in Miami, Ft.
Lauderdale, Phoenix, Las Vegas and just about all of California,
adjust your mindsets accordingly.
Last weekend, Federal Reserve Chairman Ben Bernanke said the
U.S. economy has absorbed the oil shock (one can’t argue with
that), and that his Fed won’t focus on asset price bubbles.
Commenting on Bernanke’s challenges, former Fed chairman
Paul Volcker said, “How would you like to be responsible for an
economy that’s dependent upon $700 billion of foreign money
every year?” in reference to the current $726 billion trade
imbalance.
This week long-term interest rates rose to their highest levels in a
year and the culprit was news from both Japan and the European
Central Bank. Japan’s consumer price index rose in January for
the third straight month, giving credence to the Bank of Japan’s
belief that the deflation fight is over. [Prime Minister Koizumi
disagrees.] The BOJ meets next week and the market believes it
will signal a change in direction on money supply and eventually
interest rates. That causes some consternation amidst bond
traders and hedge funds taking advantage of Japan’s low
borrowing costs, though it should hardly be a surprise. Nor
should the ECB’s move to raise its short-term benchmark another
¼-point, though in this instance many question why the ECB
would continue to do so, as the bank has already stated, since the
economy is still projected to grow at just a 2% clip this year with
2% inflation.
But the above aside, I remain focused on geopolitics and as I’ve
pointed out before I take what emanates from the Business
Roundtable with a grain of salt because corporate CEOs are the
most fickle when it comes to spending plans. A problem in a key
hot spot may not stop the average American in their tracks, but it
will have an impact in the boardroom. And there’s also no doubt
housing is going to start impacting some key data points. Not a
disaster, but once we get through this upbeat first quarter the
numbers will begin to turn decisively down.
Street Bytes
–For the second straight week the Dow Jones registered a
fractional loss, 0.4% to 11021, while the S&P 500 lost just two
points, 0.2%, to 1287. Nasdaq, though, added 0.7% to the 2302
level.
Early in the week semiconductor stocks staged a sharp rally and
Cisco Systems’ move above $20 was significant from a technical
standpoint for that once key barometer of the tech sector. But on
Friday, Intel issued a revenue warning for the quarter and that
put a bit of a damper on activity, though Intel’s problems are
Advanced Micro’s gain as the latter continues to pick up market
share at a seemingly accelerated clip.
–U.S. Treasury Yields
6-mo. 4.75% 2-yr. 4.75% 10-yr. 4.68% 30-yr. 4.66%
The yield on the 10-year Treasury rose 11 basis points to its
highest level since last spring amidst the aforementioned move
by the ECB and the perception the Bank of Japan is preparing to
act. Departing Federal Reserve Vice Chairman Roger Ferguson
offered that economic growth is solid and core inflation “has
remained moderate,” giving some hope the Fed won’t raise rates
forever.
–In a survey for the Los Angeles Times and Bloomberg News,
by a 60-37 margin people disapprove of the way President Bush
is handling the economy. This has to drive the White House
crazy, but it’s all about globalization, the feeling that we are
living beyond our means, both individually and in Washington,
healthcare and perhaps just a general unease that there’s another
shoe to drop. Or maybe that last one is simply my own excuse
for sleeping with one eye open.
–93 humans have died worldwide from bird flu since Dec. 2003,
though as the H5N1 virus makes its way around the globe we
still have zero evidence of a human to human transfer. Perhaps
the most worrisome development of this past week was the death
of a cat in Germany, the first mammal in Europe to succumb.
And poverty-racked Niger joined neighbor Nigeria on the bird
flu list and it’s not as if these nations are prepared to cope with
any widespread outbreak.
I’ve been saying watch out for the spring when the birds migrate
back home (or to their vacation spots) and so we should expect
some further distressing news in the second quarter, including
the arrival of avian flu to the United States.
U.S. poultry farms are already being hit hard in terms of falling
prices (including share prices for those that are publicly traded)
before the flu even reaches here, and should H5N1 mutate to the
human level, the travel industry will crash with word of the first
quarantines and restrictions.
That said, investors should have time to plan accordingly, though
the last thing I would be is bullish on airline stocks. Better to
wait to see what the spring brings, and maybe miss further upside
in that sector, than to get blindsided one morning that overnight
some Asian country announced the first human to human
transmission.
–And as the birds return in the spring, we already have our first
mention of “the summer driving season” on the oil and gas front.
But while inventories for all things gaseous and crude remain at
or near record levels, the price of oil is still held hostage to
geopolitical concerns; Nigeria, Iran and Saudi Arabia for starters.
Regarding the Saudis, five suspected terrorists linked to the
attempted bombing of the world’s largest oil facility a week ago
were killed in a shootout. Unfortunately the terrorists seem to
mutate faster than bird flu has.
–BlackBerry users rejoiced late Friday as maker Research In
Motion finally reached a settlement with NTP in its patent
dispute. RIM then issued an earnings warning, but the stock
soared nonetheless in after-hours trading as the uncertainty has
been lifted.
–Russia’s Economic Development and Trade Minister German
Gref warned the nation’s stock market could be on the verge of a
crash. The RTS Index has doubled in the past year amidst record
flows into Russian equities. Gref said the government was “very
afraid of a so-called bubble forming.” He joins a chorus of
officials voicing similar concern. [Moscow Times]
[Tourism to Russia, incidentally, is falling off a cliff due to
soaring prices, lack of Western-style hotel rooms, and a poor
image. Most estimates put the decline at 20% over just the past
year.]
–The U.S. and Colombia reached an agreement on a trade deal
after 21 months of intense negotiations, a good thing; but now
both the U.S. Congress and Colombia’s legislature must approve
it.
–Another auto parts maker filed for bankruptcy, 102-year-old
Dana Corp., thanks to cutbacks at Ford and GM.
–On Tuesday, if you went out for a smoke and were an investor
in Google you may have been startled to find that your shares,
which had run up to $397 after the open, were suddenly down to
the $340 level in a matter of minutes. The culprit was a
statement on a company Webcast that Google needed other
avenues of revenue on top of search in order to generate
substantial growth levels. Sounds like the truth to me, but
coming from an outfit that offers zero in the way of guidance it
was a call to ‘sell’ and ask questions later.
Well, the next few days Google reassured analysts it was still a
significant growth story, despite increased competition, and the
stock finished the week at $378. It was $381 four weeks earlier.
–According to a suit filed by shareholders, former Fannie Mae
CEO Franklin Raines “dispensed grants exceeding $12 million
from the Fannie Mae Foundation to groups such as the
Brookings Institution and John F. Kennedy Center, discouraging
directors tied to the organizations from challenging policies that
led to $10.8 billion in accounting errors, the complaint alleged.”
[Bloomberg News]
The filing said, “In more than 78 board meetings, 48 audit
committee meetings and 38 compensation committee meetings,
defendants never raised any opposition to Raines, enabling and
fostering the perpetuation of his schemes.”
Raines and former CFO Timothy Howard walked away with
$135 million in severance after their ouster in December 2004,
according to the suit.
Well, long-time readers shouldn’t be surprised at any of this. I’m
sure when Mr. Raines attended a concert at the Kennedy Center,
patrons whispered to each other, “Look, there’s Franklin Raines.
He’s done so much for this place. What a great man.” It makes
me sick.
–In Atlanta, International Management Associates LLC is a
hedge fund through which some current and former NFL players
invested, as well as other wealthy sorts. The CEO a number of
weeks ago claimed the $150 million fund was being hit by a
massive wave of redemptions, so it suspended operations. But
authorities have only tracked down $150,000 in assets as of a
few days ago.
–In a piece for the New York Times, Alexei Barrionuevo and
Kurt Eichenwald spelled out just how far Enron’s Ken Lay has
fallen. Once worth $400 million, it’s now estimated he is down
to $650,000, max. Other assets of his, including a trust fund, are
tied up in court cases.
–Citigroup CEO Charles Prince’s total compensation for 2005
was $23 million, which considering his title and the fact it’s
Wall Street is about what we’ve come to expect these days. But
Chairman Sandy Weill, who is retiring in April, received $21
million, a totally outrageous sum for a man who does little these
days, especially considering all the malfeasance that occurred
under his watch over the years. Weill, 72, did say he told the
board that he would require use of the corporate jet for just 10
years, not until death as had been his original agreement. Very
magnanimous of him, I think you’d agree. Oh, and the SEC has
expanded a long-running probe looking into Citi’s activities in
Argentina going back to 1997.
–The SEC has launched a serious investigation into short-selling,
but it is being hijacked because of the prime example it appears
to be holding up as evidence, Overstock.com and its wacky CEO
Patrick Byrne. The case has also gained a lot of publicity as
initially the SEC’s enforcement division, without the knowledge
of its new chairman, former Congressman Christopher Cox,
subpoenaed three journalists, including CNBC’s Jim Cramer.
The SEC wanted to investigate the ties between journalists and
hedge funds and any possible collusion in launching ‘bear raids’
on a company’s shares. But given the constitution’s guarantee of
a free press, the SEC thought otherwise and for now has
withdrawn the subpoenas.
–CBS is suing Howard Stern for his promotion of Sirius Satellite
Radio while still on his CBS Radio-affiliated show, a patently
absurd suit. CBS claims it deserves much of Stern’s gargantuan
pay package, including stock in Sirius, for in essence being his
negotiating vehicle.
Separately, I purchased my own XM Radio this week as I gear
up for baseball. But I’m a little disappointed in the music
selections.
–Some interesting tidbits regarding coal, courtesy of Trader
George and my friends at Pritchard Capital Partners, as well as
National Geographic. [And welcome to the firm, Chris E.]
Reserves: 1 trillion tons of coal are available, worldwide. The
U.S. has 27%, Russia 17%, China 13%, India 10%, Australia
9%, So. Africa 5%, Others 19%.
Global consumption: 5.440bn tons annually. China burns 1.5bn,
Europe 1.117bn, U.S. 1.094bn, India 431mm, Russia 251mm
Projected use by 2025: China 3.2bn, U.S. 1.5bn, Europe 853mm,
India 736mm, Russia 288mm, Others 1.6bn [net increase of
51%]
–My portfolio: Still recommending 80% cash / 20% equities, at
least for the remainder of the quarter unless there is a significant
move in share prices, either way, or something new on the
geopolitical front. My own equity holdings remain concentrated
in the carbon fiber play, which is doing quite well. Pilsner
Urquell could be on tap this weekend as I watch Tiger and Phil
battle it out at Doral.
Foreign Affairs
Israel: Top Hamas officials were in Moscow on Friday and
Hamas remained steadfast in its opposition to Israel, as political
chief Khaled Mashaal, who hangs out in Damascus, said “There
can be no peace if occupation continues.” But whereas Russia
initially received heat for inviting Hamas, in the end it further
helped expose, and isolate, this vile group, and for its part Russia
acted appropriately. President Putin, out of deference to the
other members of the Quartet (Europe, U.S. and the UN) did not
participate in the talks.
Earlier, Palestinian President Mahmoud Abbas said “I will not
continue sitting in this place, against and in spite of my
convictions.” To Israeli officials, Abbas has long been
irrelevant.
But the Europeans approved a $140 million aid package to the
Palestinians, to be distributed by the UN, a move the United
States didn’t exactly discourage.
China / Taiwan: President Chen Shui-bian of Taiwan disbanded
the politically symbolic unification council, but used the words
“cease to function” rather than abolished. Set up in 1991, it was
established to keep some sort of dialogue going between the two
sides.
Beijing immediately went ballistic. Chinese President Hu Jintao
said Taiwan’s move was a “dangerous step on the road towards
Taiwan independence.” Premier Wen Jiabao declared, “This
move (is) a serious blow to peace and stability in the Taiwan
Strait.” China’s Taiwan Affairs Office said “Taiwan has become
the most urgent task” facing the mainland.
President Chen, whose term expires in 2008, is hell-bent on
declaring Taiwan’s independence at some point and he wants
Taiwan admitted to the UN under “Taiwan.” But Chen doesn’t
have a majority in parliament and domestic opposition is
mounting.
For its part, the Bush administration initially tried to massage
Chen’s move but by week’s end a State Department spokesman
said, “We expect the Taiwan authorities publicly to correct the
record and unambiguously affirm that the announcement did not
abolish the National Unification Council, did not change the
status quo, and that the assurances remain in effect.”
Washington believes Chen overplayed his hand.
Recall that just last year China’s National People’s Congress had
authorized force if Taiwan ever declared independence and the
communists are playing the nationalism card in a big way.
Two other items of a different nature.
Amnesty International issued a report saying purse snatchers in
Guangdong province can face the death penalty, so if you plan
on snatching anything there you may want to think twice.
And then there is the incident in Beijing I read about in the South
China Morning Post.
An American woman was murdered in an exclusive Beijing
compound favored by wealthy expatriates, but authorities are
saying she died of a heart attack instead. Residents and workers
at Le Leman Lake Villa all say Tina Tai was stabbed to death
during a robbery, but the police wouldn’t even let her husband
and son into their home for two days after the body was found.
What is suspected is that a domestic worker overheard Tina and
her husband discuss the fact she needed to withdraw $2,500 for a
furniture delivery. And that’s China today.
Russia: Equally disturbing are events in this nation. For
example, Chechnya, where 29-year-old Ramzan Kadyrov has
been named prime minister. Kadyrov’s father was president in
2004 when he was assassinated and Russian President Vladimir
Putin has taken a liking to the son. When Ramzan turns 30 in
October it is expected he’ll be named to his father’s former
position.
Aside from his age this is one scary looking dude and know this;
he is currently head of a 1,000-man militia that has been linked
to hundreds of kidnappings, torture and killings in Chechnya.
But wait, there’s more! From Yulia Latynina of the Moscow
Times.
“On May 17, 1896, Muscovites began to gather on Khodynskoye
Pole, where a lavish program of entertainment was planned to
celebrate the coronation of Emperor Nicholas II. By 5 a.m. on
May 18, several hundred thousand people were milling around
the pavilions, and police were unable to maintain order. In the
ensuing crush, nearly 1,400 died and 1,300 more were seriously
injured. The emperor saw no reason to call off the festivities,
however. That evening, as scheduled, he attended a ball.
“On Feb. 23, 2006, the Basmanny market collapsed. All day
long, the main television stations fed us programming devoted to
Defenders of the Fatherland Day. Meanwhile, people were
buried alive under the ruins of the market, calling desperately for
help. Rescue workers slowly pulled them out. A fire broke out
and was extinguished. Those trapped in the ruins who escaped
the blaze froze to death. At least 66 people died.
“No one thought to call off the celebration of Defenders of the
Fatherland Day, however. Why not? As Mayor Yuri Luzhkov
noted, there were two Muscovites among the dead. The rest of
the people in the market at 5:40 a.m., when it collapsed, were
foreign traders, mostly Azeris. Why cancel the gala televised
concerts on account of the death of a few dozen people whom the
defenders of the fatherland hassle every day outside railway
stations?”
Belarus: On March 19, the people of this Russian ally go to the
polls to re-elect dictator Alexander Lukashenko. As leading
opposition leader Alexander Milinkevich says, Lukashenko is
destined to receive 75%…a nice figure that shows both support
and a free vote, at least that’s what they’ll sell the West.
So on Thursday, another presidential candidate, Alexander
Kozulin, was beaten and detained after he tried to enter a
conference chaired by the president. Three of Kozulin’s aides
were also beaten, while overall, 60 dissidents were rounded up
across the capital of Minsk. U.S. National Security Adviser
Stephen Hadley blasted Belarus’ actions. “We would like [the
vote] to be free and fair, and a prerequisite of free and fair
elections is that you don’t beat up opposition candidates or
opposition supporters and throw them in jail.”
Earlier in the week, authorities in Belarus claimed Milinkevich
was planning a coup following announcement of the election
results.
It has long been rumored that Lukashenko will allow his pitiful
nation to be swallowed up by Russia as Putin attempts to recreate
the old Soviet Empire, the two being best buddies.
But what’s equally significant is that it was Lukashenko, with
Putin’s blessing, who moved up the election so that it would fall
before Ukraine’s critical parliamentary vote on March 26, the
following week; the feeling being that if Belarus held its election
after Ukraine, as originally scheduled, it could help stir up
opposition forces aligned against Lukashenko.
Your intrepid reporter is going to be in Kiev the week between
these two votes to get a better sense of the political climate.
Lebanon: The next ten days could be critical as the various
political parties and tribes hold a “national dialogue” in an
attempt to address all the issues this country faces. Rafik
Hariri’s son, Saad, met for seven hours the other day with
Hizbullah leader Nasrallah. Better they talk than not, I guess.
Beirut is in a total lockdown.
For starters, the leaders must address the presidency of Syrian
lackey Emile Lahoud, as well as how to disarm Hizbullah.
Philippines: President Gloria Arroyo lifted the state of
emergency following the arrest of at least 16 involved in a coup
plot.
Serbia and Montenegro: The embarrassing inability of the
government here to turn over Gen. Ratko Mladic is going to cost
the Serbs dearly. The European Union has said if Mladic is not
turned over to The Hague soon to face war crimes charges,
Serbia and Montenegro’s bid for EU membership is history. So
the Serbian defense minister said they’d pick him up well before
the end of the year, while the EU said, “Try March.”
Ireland: What a bizarre, and depressing, scene in Dublin last
weekend as a few hundred members of an IRA splinter group
came down from the North to confront some Protestants who
were planning a rare parade in Dublin to honor those who had
died during The Troubles. The parade, in the predominantly
Catholic Republic of Ireland, was bound to inflame passions but
the IRA went nuts before it even got started, rioting in Dublin’s
most popular shopping district. Sinn Fein, the political arm of
the IRA, disavowed any connection to the violence and for once
I believe them.
Random Musings
–President Bush’s approval rating hovers in the 34-38 percent
range and to put it in Wall Street terms, he’s hitting lower lows.
The Katrina video certainly doesn’t help but I’m not about to
give Michael Brown a second chance. Once an incompetent
jerk, always an incompetent jerk.
Washington Post columnist Jim Hoagland had the following
thoughts re: the Bush presidency.
“Laugh or cry? Hard to choose when it comes to the descent of
the Bush White House into total incoherence over the Dubai
Ports World contract. Once again we turn from weighty matters
to ask: What did this president not know and when did he not
know it?
“From his vice president spraying a hunting buddy with birdshot
to the negotiation of the politically charged ports contract,
George W. Bush has had his spokesman fall back on his father’s
lame defense in Iran-contra: Me? I was out of the loop.
“That’s not a defense, Mr. President. This is confirmation of our
worst fears – especially when that declaration of prior ignorance
follows an immediate, defiant threat to exercise the first-ever
Bush 43 veto. That’s shooting yourself in both feet….
“But where was White House chief of staff Andrew Card as the
ports contract moved through the bureaucracy? Or Karl Rove,
who is paid to be Bush’s political early warning system? From
Hurricane Katrina on, they have let Bush down. No, let’s be
more precise: They have melted the Bush presidency down to a
nub.
“This incredibly sustained oblivious staff work – and Bush’s
incredibly sustained enabling of it – carries a high price, for Bush
and the nation.”
–A report commissioned by the Italian parliament has concluded
the Soviet Union was behind the assassination attempt on Pope
John Paul II in 1981. Analyses of photographs using the latest
technology prove that a top Bulgarian official, long suspected of
hiring Mehmet Ali Agca, was at the scene and not in his office as
he has long claimed.
–When Jon Corzine was elected governor of my state of New
Jersey, he chose Congressman Robert Menendez to replace him
in the Senate. Menendez is now running for a full-term against
former Governor Tom Kean’s son, Tom Jr., this fall.
But talk about good fortune, along comes the Dubai Ports issue
and Menendez has received a ton of free press as he stands
alongside Corzine, Hillary and Charles Schumer. Yes, he looks
like a senator and my friends and I are already writing this race
off. [Menendez is not a good man and in the same mold as
Robert Torricelli. But that’s par for New Jersey.]
–Speaking of Hillary, it’s pretty funny that Bill has been offering
Dubai leaders advice on how to handle the ports deal, even as she
blasts it. Hillary claimed she didn’t know what her hubby was
doing, even though he made $450,000 in 2002 giving speeches in
Dubai and the UAE reportedly donated between $500,000 and
$1 million to Clinton’s presidential library.
–The new investigation into Princess Diana’s death has taken a
little turn from the standpoint that France has had to admit driver
Henri Paul worked for the secret service. But France won’t turn
over his medical records and many feel there still is no definitive
answer to the question, was Henri Paul actually drunk?
Investigator Stevens, though, still believes it was an accident.
–The NBA is in deep trouble for a variety of reasons, and a piece
in USA Today talked about how the league needs to quickly
address the “hostilities” that exist between players / coaches and
the referees before someone is hurt badly.
I haven’t watched too much college or pro basketball this season
(a direct reflection on the play of my alma mater, Wake Forest,
which is having its worst season since the adoption of the shot
clock…or so it seems), but it does appear the coaches and
players are angrier than normal and the act is getting tired.
Then there are the fans. I saw the end of the Florida State –
Duke game and while FSU pulled off a great upset at home, the
reaction of the Seminole faithful was outrageous as they stormed
the court. A bunch of folks are going to get hurt one of these
days…not that I’ll really care, come to think of it. So let’s move
on…shall we?
–The other day New Orleans Mayor Ray Nagin was on “Today,”
being interviewed by Katie Couric, and Nagin sported a 4-
star general uniform. What the heck was that all about? As
Trader George said, “Isn’t that illegal?”
–Andy Rooney: “Dogs don’t disappoint you the way people
friends do.” Boy, ain’t that the truth.
–Why is it that the “Do not call” list already seems to have run
its course? I’m receiving more solicitations than ever.
–Finally, Newsweek had the following sub-headline:
“Torino was rife with falls, feuds and frustration. Yet as always,
there were a few great moments that will be long remembered.”
No there weren’t.
—
Pray for the men and women of our armed forces.
God bless America
—
Gold closed at $567
Oil, $63.67
Returns for the week 2/27-3/3
Dow Jones -0.4% [11021]
S&P 500 -0.2% [1287]
S&P MidCap -0.1%
Russell 2000 +0.3%
Nasdaq +0.7% [2302]
Returns for the period 1/1/06-3/3/06
Dow Jones +2.8%
S&P 500 +3.1%
S&P MidCap +5.7%
Russell 2000 +9.7%
Nasdaq +4.4%
Bulls 42.6
Bears 30.8 [Source: Chartcraft / Investors Intelligence]
Have a great week. I appreciate your support.
Brian Trumbore
