[Posted 7:00 AM ET]
Frustration over the War
This week the Rasmussen polling people tracked me down and I
was asked the standard questions you’ve seen before. I gave
President Bush a poor grade in terms of overall job performance
and his handling of Iraq, but, as a Republican, I still said the
president and the Republican Party were better able to handle the
war on terror than the Democrats. So I’m a classic example of
the divergence that occurs with many voters when it comes to
Iraq and the broader conflict.
And so it was this week also saw the administration pound away
on the same themes it has for years now; that exiting Iraq would
be “disastrous,” as Bush put it, and that “We either fight them
there or we fight them here.”
But increasingly the public isn’t buying the linkage of Iraq and
the global war on terror as defined by 9/11.
Secretary of Defense Donald Rumsfeld had this to say in a
speech to the American Legion National Conference.
“We need to face the following questions:
“With the growing lethality and availability of weapons, can we
truly afford to believe that somehow vicious extremists can be
appeased?
“Can we really continue to think that free countries can negotiate
a separate peace with terrorists?
“Can we truly afford the luxury of pretending that the threats
today are simply ‘law enforcement’ problems, rather than
fundamentally different threats, requiring fundamentally
different approaches?
“And can we truly afford to return to the destructive view that
America – not the enemy – is the real source of the world’s
trouble?”
Rumsfeld then wrote in an op-ed for the Los Angeles Times on
Friday:
“We also should be aware that the struggle is too important – the
consequences too severe – to allow a ‘blame America first’
mentality to overwhelm the truth that our nation, though
imperfect, is a force for good in the world.
“Consider that a database search of the nation’s leading
newspapers turns up 10 times as many mentions of one of the
soldiers punished for misconduct at Abu Ghraib than of Sgt. 1st
Class Paul Ray Smith, the first recipient of the Medal of Honor
in the global war on terror.”
Here’s what’s frustrating to yours truly, as I’m sure has been
well apparent for over three years now in reading this column.
Republicans/neocons such as me feel abandoned and the
administration, in blasting critics of the war, acts like the
opposing fire is only coming from Democrats. Like the vast
majority of you (at least in the American audience), I agree
totally with the principles of why we are fighting as spelled out
by the White House, though where some of us disagree is that I
still support the mission in Iraq (barely).
But what’s unconscionable is that our president, as I noted
countless times while it was happening, was AWOL, particularly
during the critical summers of 2003 and 2004 when changing course
could have crushed the incipient insurgency in its tracks. And
we have a defense secretary who has flat out lied to the
American people and should have been tossed out years ago.
I wrote back in this space on 5/10/03 that while I was overseas
then I saw Rumsfeld proclaim the war in Afghanistan was over.
“Bull,” I thought. “He’s lying.” I then added that “Donald
Rumsfeld has lost me.”
I also need to make mention again of my opening for that same
column from over three years ago, a quote from Max Boot and
The Weekly Standard.
“Our armed forces have won a triumph, but an inept political
strategy can easily leave the fruits of victory to rot on the vine.”
That’s exactly what’s happened and it’s why our president has
such little credibility, be it over Iraq or Lebanon.
Iraq, continuing…
There was important hard news here this past week. A battle
between the Iraqi Army and the forces of Moqtada al-Sadr’s
Mahdi militia claimed 80 lives, many of whom were Iraqi
soldiers. Prime Minister Maliki has given his fellow Shiite Sadr
far too much room but Maliki feels he can’t have a semblance of
peace without Sadr’s support. Sadr of course knows he has
Maliki over a barrel. As Senator John McCain said, Sadr should
have been taken out long ago. Just as troubling, many of the
newcomers to the Iraqi Army (which we’ve been told is far more
effective and reliable than the corrupt and insurgent-ridden
police force) now refuse to fight against their brothers on both
sides, be they Sunni or Shia.
And that coordinated attack on Thursday on the apartment
complex that killed over 50 was particularly distressing. The
remote-controlled bombs were placed on the roofs for the
purpose of collapsing the buildings.
Also, we learned on Friday that the Pentagon has issued a
depressing report to Congress on the future of Iraq and the
upsurge in violence.
But, believe it or not, there was some good news that went
unreported except in the Financial Times, as far as I could
ascertain. The Iraqi government has begun hashing out an
agreement on the sharing of oil revenues, an item I mentioned
again just last week. There is a long ways to go, particularly
when it comes to items such as the Kurds and revenues from
“future fields,” but a solution to this critical issue would be a sign
of progress.
Iran
There really isn’t a lot to say about this one that hasn’t already
been said. The UN Security Council’s Aug. 31 deadline for Iran
to stop its uranium enrichment has come and gone, the
International Atomic Energy Agency has confirmed that Tehran
is indeed still enriching uranium (though on what kind of scale or
where is unknown), Iran said it would continue to do so because
“production of nuclear fuel is one of Iran’s strategic objectives,”
and President Bush said there would be “consequences” for
Iran’s intransigence, yet clearly none appear to be forthcoming in
the short run.
As Iranian President Mahmoud Ahmadinejad told his followers:
“The Iranian nation will not accept for one moment any bullying,
invasion and violation of its rights.”
So where does this leave us? In a stalemate, just as Iran prefers it
to be. The five permanent members of the Security Council
(U.S., Britain, France, Russia and China) plus Germany will now
discuss the levying of minimal sanctions such as travel
restrictions on Iran’s leadership and perhaps some financial
roadblocks, such as access to capital markets, but Russia has
already said it’s too early for sanctions, China will go along with
the Kremlin, and France is likely to call for further negotiations;
leaving the U.S., Britain and perhaps Germany with little option
but to attempt to go it alone and levy their own sanctions, which
would have zero impact.
What we did see this week was talk that Iran is stumbling in its
enrichment efforts, even though last week they opened up a
heavy water plant which could be a key source of fuel for nuclear
weapons in its own right. It is said that Iran may not be
advancing as rapidly as it had hoped in creating the vital
centrifuge cascades.
But there is absolutely no way anyone can know, whether it’s the
IAEA or the U.S. Remember, the IAEA missed Iranian nuclear
activity for 18 years (as did the U.S.) and it was the U.S. that was
shocked when Pakistan tested its atomic bomb. So when you
hear all these pronouncements, as were made yet again this
week, that Iran is at least five years away from having a
weaponized device, question them.
The Weekly Standard’s Fred Barnes offers an option.
“Russian and Chinese leaders have personally assured (Bush)
they would back sanctions if Iran refused (as it has) to stop
uranium enrichment. The president must hold them to their
word, warning that their relations with America will be
jeopardized if they balk.”
But then Barnes adds, “It’s also time to make clear to Iran that
the military option is indeed an option. In short, Bush should not
wait for Iran’s unlikely compliance, allowing the United States to
look ineffectual, if not indeed a patsy.”
I would agree with this line of reasoning were it not for the fact
that our own military is not only a shell of its former self at this
moment because of the deployment in Iraq, but we have no clue
what to target.
At the same time there is the thought that we could at least set
back Iran’s program another five years or so (that is if they don’t
write any checks to North Korea or Pakistan and acquire the
nukes that way), but of course this would lead to blowback, and
in forms we perhaps can’t begin to imagine.
The time is drawing near when the United States Congress is
going to have to very publicly debate this on the House and
Senate floors. This is the paramount issue of our times and for
our leaders, from both sides of the political aisle, to now shirk
their responsibilities would be its own crime against humanity.
Lebanon
As I noted last week, Hizbullah leader Hassan Nasrallah
admitted that if he had known Israel would go to war over the
kidnapping of just two soldiers he wouldn’t have done it, which
led Israeli officials to crow that yes, indeed, Israel, not Hizbullah,
had won. I then pointed out, though, that it was still about
reaction in the Arab street, particularly in Lebanon itself.
This week the Washington Post’s Charles Krauthammer
commented.
“So much for the ‘strategic and historic victory’ Nasrallah had
claimed less than two weeks earlier. What real victor declares
that, had he known, he would not have started the war that ended
in triumph?
“Nasrallah’s admission, vastly underplayed in the West, makes
clear what the Lebanese already knew. Hizbullah may have won
the propaganda war, but on the ground it lost. Badly.
“True, under the inept and indecisive leadership of Ehud Olmert,
Israel did miss the opportunity to militarily destroy Hizbullah
and make it a non-factor in Israel’s security, Lebanon’s politics
and Iran’s foreign policy. Nonetheless, Hizbullah was seriously
hurt. It lost hundreds of its best fighters. A deeply entrenched
infrastructure on Israel’s border is in ruins. The great hero has
had to go so deep into hiding that Nasrallah has been called ‘the
underground mullah.’
“Most important, Hizbullah’s political gains within Lebanon
during the war have proved illusory. As the dust settles, the
Lebanese are furious at Hizbullah for provoking a war that
brought them nothing but devastation – and then crowing about
victory amid the ruins.”
Krauthammer concludes:
“In the Middle East, however, promising moments pass quickly.
This one needs to be seized. We must pretend that Security
Council Resolution 1701 was meant to be implemented and exert
unrelieved pressure on behalf of those Lebanese – a large
majority – who want to do the implementing.”
I agree with much of what Krauthammer says, but I disagree
with his take that Lebanese are furious at Hizbullah. They are far
more upset at Israel, at least for now, and as long as Iran can
keep the money flowing to Hizbullah, and Hizbullah can be seen
publicly aiding the reconstruction effort, they will still maintain
enough hearts and minds to fight another day. I can not envision,
for example, Hizbullah losing seats it already held in parliament
whenever that body holds new elections.
What we did see this week was a donor conference in Stockholm
for reconstruction aid and it will be interesting to see what
portion of the nearly $1 billion pledged is actually forthcoming.
In Iraq, for example, only $4 billion of an originally pledged
$13.5 billion has been forked over but that is likely a result of
anti-U.S. sentiment.
Speaking of Washington, the White House better hand over the
$170 to $230 million it has pledged to Lebanon…like on
Monday. Our popularity couldn’t be lower and as I documented
the past 1 ½ years the Bush administration ignored Lebanon
when the government of Fouad Siniora was crying for help
before the war started.
Editorial in Lebanon’s Daily Star, Aug. 30, 2006
“The current ‘talking points’ of U.S. officials include an
assertion that Washington’s ‘support’ for Beirut is dependent on
the latter’s taking bold steps to disarm Hizbullah. This is
accompanied by a tacit threat that if Sayyed Hassan Nasrallah’s
organization continues to exist in its current form, Israel will
resume its offensive against Lebanon – this time with even more
of a green light from an increasingly impatient America. During
the 34-day onslaught that ended on August 14, the U.S.
government appears to have experienced internal divisions over
the extent to which it should encourage and re-supply the Jewish
state, but the end-result was a policy of unconditional backing for
a campaign that primarily destroyed civilian lives and civilian
property. Any suggestion that the current administration is a
‘friend’ to Lebanon is therefore viewed with understandable
skepticism.
“From the perspective of many Lebanese, being America’s friend
carries precious few benefits. Prime Minister Fouad Siniora has
done his utmost to respect U.S. wishes on a variety of fronts,
only to be sent away empty-handed whenever he has asked for
anything in return. American policy vis-à-vis the devastating
war with Israel was no more than a highly purified version of this
formula, with Washington repeatedly claiming that it was
concerned about the stability of Siniora’s government but
simultaneously helping the Jewish state to mete out more and
deadlier punishment.
“Especially in this part of the world and particularly for a tiny
country like Lebanon, the absence of effective support means no
support at all. The presence, meanwhile, of active and
enthusiastic support – diplomatic, economic, military – for a
powerful invader is difficult to see as anything other than
unabashed betrayal.
“Lebanon and the wider Middle East need a powerful force to
help local fires from spreading across the region. The United
States has the might and the influence to supply such a
stabilizing influence, but it has thus far lacked two other
necessary qualities: even-handedness and consistency. This is
indeed a tragedy of the highest order, for what other nation on
the planet has so storied a history upon which to base its
credentials as an honest broker and a supporter of democratic
freedoms? Washington’s selective enforcement of both U.S. and
international law – always to the benefit of Israel – robs it of the
credibility it needs to be trusted by Arabs and Muslims, let alone
to call itself their ‘friend.’ The current situation in Lebanon is
just the latest episode of a long-running horror show of American
inconsistency, and the Lebanese need look no further than
Palestine for another recent one: the collective punishment and
economic strangling of a people who dared to elect a government
that defied Washington’s diktats.”
The above is what the likes of Charles Krauthammer just don’t
get. Sadly, the Daily Star is right in almost every respect.
And it leads to statements like that of Prime Minister Siniora this
week.
“Lebanon will be the last Arab country to sign a peace agreement
with Israel after 300 million Arab citizens sign it. There will be
no agreement with Israel before there is a global peace deal that
is just and lasting.”
At the same time Siniora is under increasing pressure to resign.
Michael Young / Daily Star, Aug. 31, 2006
“Where there is great trauma, wild ambition brings up the rear.
At the end of the 34-day war between Lebanon and Israel, there
were those calling for a grand transformation of the political
system. The thinking was that since a major overhaul of the
country was in motion, then why not toss out the corrupt political
class with the debris of Bint Jbeil and Qana? This reasoning was
shallow, particularly with regards to a new Cabinet. Negotiating
a fresh division of power would be so divisive, so certain of
leading to prolonged deadlock, that Lebanon would be unable to
adequately manage the aftermath of Israel’s onslaught….
“How can Siniora defend his government? For one thing, he
needs to put reconstruction of Shiite areas on a fast track.
Hizbullah is trying to exploit public disgruntlement with the slow
pace of rehabilitation by turning it against the state. No one can
compete in terms of speed with cash handouts from Hizbullah
suitcases, but more can be done by the government to explain its
reconstruction strategy and tell people in demolished areas what
to expect. Hizbullah knows that the support it enjoys depends on
its efficiency in addressing Shiite distress; the state should be
making the same calculation, if only because it cannot afford to
face a large community of angry Shiites, backed by an armed
organization that will exploit this to advance its own parochial
objectives.”
As for Israel, Prime Minister Ehud Olmert rejected a far-reaching
inquiry into his government’s handling of the conflict, choosing
an internal investigation instead. But then his defense chief,
Amir Peretz, called for an independent one, so the internal chaos
here continues. Regardless, Israel needs to lift the blockade of
Lebanese waters, immediately, as it’s killing Lebanon’s fishing
industry and only further aiding Hizbullah.
Wall Street
It’s still largely about housing. This week the National
Association of Realtors’ pending home sales index plunged 7%
in July, the biggest such monthly decline in five years.
Following are two opinions, the first from Karl E. Case and
Robert J. Shiller, with Shiller having also famously called the
crash in tech stocks.
“Looking back at past housing booms, the first sign of the end is
when a goodly share of buyers stop making offers and eventually
stop looking, seeming to just disappear. In the spring of 1987,
during another U.S. housing-market boom that was starting to
lose speed, Nora Moran, president of the Greater Boston real
estate board, said ‘someone blew a whistle that only dogs and
buyers heard.’
“Across America today, it is as if the whistle has again been
blown….
“This incredible boom has been fueled in part by favorable
demographics, low interest rates, a very liquid mortgage market
with low down payments and borrower-friendly underwriting
(option arms, interest-only, stated-income, etc.), a baby boomer
generation with a special taste for housing, a substantial volume
of foreign demand, and the poor overall performance of the stock
market.
“But beyond all these factors there is the simple psychology of
expectations that is part of any speculative boom. These
expectations can turn suddenly when alert home buyers get the
sense that something might be amiss. Among respondents to our
questionnaire survey of home buyers in April and May of this
year, the median expected 12-month price increase in Los
Angeles was only 5%, compared to 10% in early 2005. In
Boston, the median expectation was down to 2% from 5% last
year….
“As always, the future is uncertain. Many of the underpinnings
of the boom are still strong, and the soft-landing scenario so
widely promoted by economists and industry leaders is a
possibility if the U.S. can avoid a generalized inflation, if long
rates don’t rise a lot, and if the rest of the economy stays strong.
But that possibility is not enough to give great comfort to all
those who worry today about the housing market.
“Unfortunately, there is significant risk of a very bad period,
with slow sales, slim commissions, falling prices, rising defaults
and foreclosures, serious trouble in financial markets, and a
possible recession sooner than most of us expected.
Deterioration in that intangible housing market psychology is the
most uncertain factor in the outlook today. Listen hard and
watch out.” [Wall Street Journal]
Gerard Baker / The Times (of London)
“The thing with bubbles, to paraphrase Joni Mitchell, is that you
don’t really know you’ve got one till it’s gone.
“When the air is expanding inside a speculative balloon,
stretching the film of credibility that contains it to an ever-more
improbable thinness, you can always find someone to explain
why this time it’s different – why technological/demographic/
astrological factors justify valuations today that have always
proved historically unsupportable.
“Until the bubble actually starts to deflate or burst, there’s just
enough doubt about whether prices really will revert to their
historical mean to keep us all guessing….
“But it looks now as though we can say with some confidence
that the long American housing bubble is over….
“If the housing market really is in retreat, the two important
questions are: how far will it fall, and how much damage will it
do to the U.S. and, by extension, the world economy? It is not an
exaggeration to say that the buoyant U.S. economy has been kept
afloat in the past five years by its housing sector. The first and
most obvious effect has been the direct contribution a booming
real estate market has had on employment and income.
“If you dissect the official employment data over the past five
years, and lump all the housing-related stuff together –
construction, estate agents, mortgage broking, home
improvement, housing insurance – you get some staggering
numbers.
“By some estimates all this housing activity has accounted for
more than 40% of all the jobs created in the U.S. since 2001.
Now, all these new jobs are not going to disappear in a housing
slump. But even if residential real estate activity falls by half in
the next year or two it will represent a sizeable blow to the labor
market that could, if there is nothing else to take up the slack,
push unemployment significantly higher, and income somewhat
lower….
“In previous periods of weakness in property markets there have
been huge institutional collapses. The savings and loan debacle
of the early 1990s is the most recent example. Today, again
thanks to increased financial efficiency, the risk of such a
massacre seems smaller. The securitization of the nation’s
mortgage market has spread the geographical and sectoral risks
to the broader economy.
“But there will still be many financial institutions with
significantly impaired balance sheets as the value of their
mortgage-backed securities declines sharply over the next year.
All in all, even on the most optimistic assumptions, post-bubble
conditions in the housing market would be highly uncomfortable
for America and could seriously sap demand in the world.
“Of course, that is what the pessimists said about the collapse of
the tech bubble in 2000. But back then, like a guardian angel,
along came the housing boom just in time.
“Is there anything that might do the same for the U.S. in the next
few years? There’s not much room for fiscal support.
Unfortunately, and though interest rates have edged lower in the
past few weeks, inflation pressures may limit the potential for
support here. A further decline in oil prices would be useful, but
can hardly be counted on. Which may leave the U.S. in the
unaccustomed position of hoping that the rest of the world can
come to its rescue with a period of really strong demand growth.
Who would bet the house on that?”
And I came back home from the office on Friday to pick up my
Business Week and see the following on the cover.
“How Toxic Is Your Mortgage?”
“Deceptive loans. Phantom profits. And coming soon: A wave
of defaults.”
[Time prevents me from commenting on this specific piece
today. I’ll pick up on it next time. And thanks for the alert, J.P.]
Of course sometimes Business Week covers have been known to
be contrarian indicators, but not this one. Earlier this week I
purchased long-term ‘puts’ (Jan. ’08) on a leading mortgage
originator. I’m already making money on the position.
As for the rest of the economy and Wall Street in general, there
was a ton of economic data this week and traders added it all up
and decided it was nirvana…as in a ‘soft landing.’
The jobs report for August was in line with expectations, an
addition of 128,000 non-farm positions accompanied by a tame
average hourly wage gain of just 0.1% (good for stocks and
bonds…bad for humans), various manufacturing indicators
continue to decline but not more than expected, construction
spending was down big, and consumer confidence by various
measures was also down.
Then you had mixed sales reports from the nation’s retailers,
though in keeping with a slowing economy as exhibited by the
revision of second quarter GDP, 2.9% vs. the 5.6% clip in the
first quarter.
But you also had figures on personal income, up 0.5%, and
personal consumption, up 0.8% in July. So everyone
immediately took out their “Don’t ever underestimate the ability
of the American consumer to spend” plaque. I don’t buy it, but
even if you do by most measurements we have a negative
savings rate so either we’re massively in debt or Iran is stuffing
our pockets with cash. Since the latter isn’t likely, I’ll go with
the former and just say the day of reckoning continues to draw
near when it comes to the consumer. As I said last time, Santa
will be traveling light this year. [Plus he has to discard all his
liquids.]
Of course when you tally up the above you’re supposed to come
up with a take on corporate earnings and the second quarter GDP
report contained an interesting nugget on the subject. The
government releases a broad-based estimate, covering both
public and private operations, and it states profits in Q2 rose just
2.1% vs. a 14.8% increase in Q1.
But looking ahead, if one just takes the S&P 500, its profits in
Q3 are expected to increase 15% with another 14% rise in the
fourth. That just isn’t going to happen and I expect earnings
warnings season, which will begin in another two weeks or so, to
be quite active.
Lastly, the Federal Reserve released its minutes for August and it
proved to be a major catalyst for the positive action in stocks and
bonds as the majority of participants said there was no urgency to
raise interest rates further, but it was still a “close call” to pause
last time. Inflation does, however, remain a concern but the
expected economic slowdown could in itself take care of any real
price pressures. One member of the FOMC did offer that he was
concerned pricing power would yet become entrenched. Moi?
I’m beginning to dust off my old deflation story.
Street Bytes
–Stocks rallied back to their highest levels since May, with the
Dow Jones adding 1.6% to 11464 (just 260 points shy of its all-
time high), while Nasdaq gained 2.5% to 2193. As for the S&P
500, aside from its own gain of 1.2%, it rose 2.4% for the
summer period overall (5/26-9/1).
–U.S. Treasury Yields
6-mo. 5.10% 2-yr. 4.76% 10-yr. 4.73% 30-yr. 4.87%
The rally continues, helped along by all the soft landing talk and
the growing belief the Federal Reserve is finished. But at a
certain point a bond rally has to cause some stock jockeys to say,
hmmm, is this signaling recession, especially because the yield
curve is now heavily inverted between the 6-mo. and the 10-
year?
–Another positive catalyst on the week was falling gasoline
prices (which if it continued could be a huge boon for
Republicans come November), and to a lesser extent oil (back
below $70) and natural gas ($6.00), amid talk of lessening
demand on the top of already ample inventories.
But the Farmer’s Almanac is predicting a cold, cold winter. I
hate cold……..brrrrrrrrrr……so I’m going to head out west and
slaughter a couple of buffalo for the purpose of making some
nifty blankets and coats.
–Auto sales for the month of August were mixed, with General
Motors surprising, up 4%, while Toyota gained another 17%
over last year’s pace. But DaimlerChrysler’s were off 4% and
Ford’s tanked 12%.
–According to new Census Bureau data, for the first time since
1999, household income rose faster than inflation in 2005. But
the median hourly wage for American workers, after inflation,
has dropped 2% since 2003; the first time this has occurred over
a three-year period since World War II.
Even in the good news on last year, though, income rose only
because more in each household worked (like rescue dogs…
……………just kidding), although at lower-paying jobs.
Ergo, this remains a potent political issue for November and
2008. As political analyst Charlie Cook told the New York
Times, “There are two economies out there. One has been just
white hot, going great guns. Those are the people who have
benefited from globalization, technology, greater productivity
and higher corporate earnings. And then there’s the working
stiffs, who just don’t feel like they’re getting ahead despite the
fact that they’re working very hard. And there are a lot more
people in that group than the other group.”
–New Jersey has the highest median household income in
America, with that of whites and Asians up big, but blacks’ and
Hispanics’ far less so in a further expansion of the gap between
the haves and have nots. What’s happening in my home state,
though, is the white middle class is fleeing at a rapid clip,
ostensibly because of our outrageous property taxes.
–For all the talk (my talk, admittedly) about potential third party
candidates for 2008 (Michael Bloomberg’s name has been
bandied about…aside from the McCain / Lieberman scenario),
perhaps the most realistic candidacy would be that of California
Republican Governor Arnold Schwarzenegger. Only one
problem. There’s that little matter of the constitution.
But why does the governor appear in Street Bytes? Because this
week he broke with the national Republican Party in
spearheading legislation that makes California the first state in
the nation to fight global warming by slapping emissions caps on
industry.
Big Business is up in arms, of course, claiming costs such as for
electricity will soar and that employers could take their plants
elsewhere, but for now it’s the same garbage we’ve heard from
industrial polluters for 100 years. And by my reading of the law,
limits on greenhouse gas emissions (such as on carbon dioxide)
would begin to take effect in 2012 so there’s not only time to
plan ahead, the legislation itself is purposefully vague so that
problems in implementation can be worked out.
In the meantime, as the Washington Post editorialized,
“California has begun an experiment of tremendous importance
to the rest of the nation. It has asserted that talk and study are no
longer sufficient – that bold action is possible and necessary.”
Of course it’s also about getting Asia to adopt similar
restrictions, seeing as much of California’s pollution has ridden
the winds from there. And on this front China has definitely
begun to recognize the mammoth problems its own economy and
people face unless it addresses the issue. This is also where
staging the 2008 Olympics in Beijing actually helps speed up the
process.
–And speaking of polluters, don’t you know two of the largest in
the world are Russian Aluminum’s Glencore and SUAL, the
world’s third- and sixth-largest producers of aluminum,
respectively, that are now merging to form the world’s largest,
ahead of Alcoa and Canada’s Alcan.
RusAl is headed up by Roman Abramovich, Russia’s richest man
with an estimated net worth of $18 billion. [No limits on
sturgeon for him, eh?] And you can be sure the Kremlin, as it
seeks to control all of Russia’s natural resources, isn’t about to
slap any emissions limits on the combined behemoth.
–The strike at the world’s largest cooper mine, Escondida in
Chile, is over. BHP, the majority owner, will not only give every
worker a 5% wage increase, but also a special one-time bonus of
$17,000. Not too shabby. Chilean wine for everyone!
Escondida accounts for 9% of global production.
–Industrial production for the last reporting period unexpectedly
dropped in Japan when it was supposed to rise and thereby offer
further confirmation the recovery is for real. So now future data
will be examined even more closely. Japan is being counted on
to help carry the water should the U.S. become incapacitated.
–I missed the Fannie Mae decision last time so I just need to
insert for the archives that the Justice Department declined to
prosecute Fannie for its massive accounting fraud. What a joke.
Our only hope now is that the SEC could still slap around
individuals like former CEO Franklin Raines. It’s unfathomable
to think Fannie’s dirtballs will escape scot-free. Then again, it’s
called “politics.”
–I’ve mentioned this topic before but because the Journal had a
story on it it’s an excuse to bring it up again. Homeowners could
be significantly underinsured unless they make sure their
policy reads “guaranteed replacement cost,” not “extended
replacement cost,” the latter simply adding a set amount, like
20% to the original value. As one who has overseen the books
on my townhouse complex for years now, this is a topic near and
dear to my heart.
–Intel is expected to announce a further restructuring on
Tuesday, including anywhere from 10,000 to 20,000 layoffs.
–Real Estate, Part XLCV: KB Home, the nation’s fifth-largest
home builder, sold off a 49% stake in a massive master-planned
community in the Antelope Valley of Southern California where
sales have dropped 41% from year ago levels.
–Mark K. of Pritchard Capital Partners was in Illinois this past
week and noticed a story in the Chicago Tribune detailing
soaring construction costs: steel structure +80%, copper wire
+289%, diesel +244%, asphalt +44%, rebar +50%, and concrete
+30%.
–As Aaron Elstein wrote in Investment News, it’s important to
remember that as the trial over former New York Stock
Exchange Chairman Richard Grasso’s pay begins in October,
there is another ongoing series of court actions taking place
today that reflects on Grasso’s general tenure and none of it
paints a pretty picture.
Elstein is talking about the government’s case against a large
number of NYSE specialists who are accused of the worst in
self-dealing, placing their orders before clients’.
David Robbins, a New York securities lawyer and former
compliance director at the American Stock Exchange, says “The
pay trial speaks to Grasso’s greed. But the specialist trials in
some ways are more important, because they speak to the kind of
exchange Grasso ran.”
Aaron Elstein:
“Some experts who follow the NYSE say that Mr. Grasso was
indifferent to what happened on the floor because the then-
closely-held institution was owned by the specialists and other
floor traders, who paid his salary. The traders were loyal to him
because they thought the charismatic chairman was effectively
promoting the exchange and keeping competitors such as Nasdaq
at bay.”
I can’t wait for his trial.
–Speaking of hubris and arrogance, the New York Times’
Gretchen Morgenson reported on a study conducted for the
Times by Measuredmarkets Inc., an analytical research firm in
Toronto, that looked into mergers with a value of $1 billion or
more for the 12-month period ending in July.
“41% of the companies receiving buyout bids exhibited
abnormal and suspicious trading in the days and weeks before
those deals became public.”
Morgenson writes: “Moreover, many investors are troubled by
what they now see as rampant insider trading, saying it fosters
the perception that insiders can profit in the markets at the
expense of outsiders.”
Not that any of this is new, and a New York Post piece from
Friday told of how insiders profited from the just-announced
merger between two mining giants…Goldcorp and Glamis Gold.
Just about ten days before the announcement on this one, volume
on Glamis call options soared, after which Goldcorp announced
its intent to buy Glamis and Glamis shares rose $7.26 to $46.12.
It’s an ongoing theme here at StocksandNews that there has
never been a level playing field; that Wall Street is nothing more
than a casino…and it’s only getting worse. Heck, program
trading is consistently over 50% of daily volume, for starters, and
while it’s not all of the 1987 variety that helped lead to the
Crash, the Street is still just a bunch of lemmings and the rest of
us schmucks get swept up and thrown over the cliff with the
others.
–CNBC promotes its show “Fast Money” with the tag line “The
best on the Street are sharing their trade secrets.”
Yup, that would be insider-trading secrets.
–Drugmaker Schering-Plough pleaded guilty to conspiracy to
mislead the government and agreed to pay a fine of $435 million,
ending a six-year Justice Department investigation looking into
Schering’s pricing and marketing practices. What was
disappointing to me was that CEO Fred Hassan, who inherited
the problems and is viewed as a sort of turnaround artist, also
settled with the SEC for his “selective disclosure” of information
to investment analysts. From time to time I’ve dabbled in these
shares, but not today.
–ComScore Media Metrix is the main tracker of Internet traffic
and recently the company changed the way it computed users on
a global basis. The impact was to drastically lower some
statistics. For example, Mexico’s estimated active monthly users
was cut in half from 18 million to 9 million and India’s tally
dropped 70%! This same gauge impacted individual sites, too,
as both the New York Times and New York Post reported in the
case of Forbes.com, which heretofore touted itself as the #1
business site but evidently only has 7.3 million unique visitors
compared to an earlier figure of 15 million.
–I got a kick out of this hack for the private-equity industry who
was on CNBC the other day, talking about how the firms are
“extraordinarily disciplined and seek a specific rate of return.”
Depends on how you define that. What’s come to light is that so
many of these deals are geared solely for the partners at the
private-equity shops, and the target’s senior management, and
then they just slice it up and take all these special dividends.
The excuse to go private in many cases has been Sarbanes-
Oxley and excessive regulation of public companies, but then the
private-equity folks just turn around and send Co. X back out to
the public sphere, at which time the bankers take another layer of
fees and dividends.
–Huge win for Lockheed Martin Corp. as it was selected over a
team from Northrop Grumman and Boeing to build the new
generation of manned spacecraft that will eventually see us back
on the moon…at least that’s the plan…and later Mars as soon as
we train the snowboarders. The contract is valued at more than
$8 billion.
–Real Estate tidbit, from Braden Keil of the New York Post.
“NBC ‘Dateline’ anchor Stone Phillips had to drop the price of
his co-op just off Central Park West over $1 million to $4.45
million before he was able to unload it earlier this month. He
first listed it last fall for $5.5 million.
“Britney Spears had to wait even longer before someone snapped
up her NoLita apartment, which she listed for $5.5 million in
2004. The 4-level pad eventually went to contract a few weeks
ago for about $4.45 million.”
I don’t know…$4.45 million seems to work. Maybe I’ll put my
place on the market for that.
–Mike Clowes, the editor of Investment News, told of a personal
tale involving his McAfee security software that I’m sure all of
you can relate to.
Clowes’ problems started when he installed an upgrade, but then
he couldn’t access the Internet. The real nightmare, though, was
in dealing with McAfee.
After a frustrating look for help on McAfee’s corporate site, he
called tech support where he was given four options. Clowes
chose one offering an 800 number and a $2.95 per minute
charge.
“I dialed the number and was informed that after two minutes of
wait time, the $2.95 per minute charge would begin, even if a
technician had not picked up. The automated voice on the phone
suggested that if a technician had not picked up in two minutes, I
should hang up and dial again.
“That’s correct – McAfee was going to charge me $2.95 per
minute for waiting. Even my doctor doesn’t charge me for
waiting to see him, at least not overtly….
“I timed the two minutes, and hung up and dialed again. Again,
no tech after two minutes. So I hung up and dialed again. This
time, I realized that hanging up each time was probably putting
me further and further down the response chain, so I decided to
hang on until my call was answered.”
Finally a technician picked up and Clowes explained he couldn’t
uninstall the program.
“Each time I had tried, I got a message saying that a particular
file was missing….
“More than an hour later, he finally succeeded in removing it by
e-mailing me a patch of some kind.
“Voila! The problem was solved, and I could again access the
Internet, though I had to reinstall McAfee Security Center.
“A week later, I got the bill from McAfee: $180. That’s correct.
McAfee charged me $180 to fix a problem caused by their
software.”
Clowes wondered if others, like Symantec’s Norton, were just as
bad.
Well Mike, they are because I had the exact same issue with
Norton you did on a brand new Dell PC. But rather than go
through the incredible hassle, I called Dell and purchased a new
one. That’s right….I took a loss on about my 13th or 14th Dell
since I started StocksandNews. I’m an idiot for continuing to
buy from them and one of these days I’ll wise up.
But Clowes’ tale also points out that the software industry is
basically running a scam. None of their crap is reliable…none of
it. And we’re the suckers for not raising hell about it.
–Goodness gracious. Electronic Arts reported that in its first
week sales of Madden NFL 2007 grossed $100 million.
–It’s time to build more prisons because Ryanair, Europe’s low-
cost carrier, announced it will be equipping its fleet with an
onboard mobile phone service. Aghhhhhhhhh!
“If you want a quiet flight, use another airline,” said Michael
O’Leary, CEO. I think I shall, mused the editor.
Foreign Affairs
Mexico: On Friday night, President Vicente Fox was forced to
abandon his final annual address by left-wing deputies, alleging
vote fraud. Fox then was to have delivered it on national
television instead.
Mexico is a tinderbox and it could blow at any minute thanks to
Andres Manuel Lopez Obrador and his refusal to concede last
July’s presidential election to Felipe Calderon. Mexico is
already ungovernable in many respects, with cities ruled by drug
lords and militants. And when the electoral court confirms
Calderon as the winner on Sept. 6, there are many who believe
all hell will break loose as Lopez Obrador has called for
revolution and the establishment of an alternative government,
even as the court issued a preliminary ruling last Monday that
there was no evidence of fraud in the vote.
The repercussions for the United States are massive and this is
clearly a sleeper issue leading up to our own mid-term election.
And one other item not yet discussed in the media. You know
how there are an estimated 10.5 to 11 million illegal immigrants
in America? Mark my words…about one million will be
returning home to Mexico, and south, as the construction and
homebuilding industries collapse, unless Mexico’s in a state of
revolution, that is.
Turkey: This week’s terror attacks in the coastal resorts of
Antalya and Marmaris that claimed at least three lives are
significant. Kurdish separatists were once again the culprits and
it points back to Iraq and the problems Turkey has been having
with the Kurdish rebels on the border. This dispute is only going
to get worse and the U.S. needs to step in soon and control the
Kurds.
Afghanistan: There are some incredible acts of heroism taking
place here. For example, this week I read of a 25-man British
platoon that was under fire for eight weeks before finally being
extracted. 6 Brits were killed in Afghanistan in the month of
August, and another on Friday.
Meanwhile, NATO is balking at sending more much-needed
troops, especially in the critical southern province of Helmand
where the worst fighting has been taking place.
Taiwan: No topic frustrates me more than this one and the way
the Bush administration talks of spreading democracy but then
tiptoes around the fact China now has 800 missiles aimed at
Taiwan.
So Mortimer Zuckerman, editor-in-chief at U.S. News & World
Report, wrote a piece this week titled “Don’t Fear the Dragon.”
Just as he wrote a glowing portrayal of Fidel Castro following
Fidel’s surgery, Zuckerman concludes his piece on China with
the following.
“Taiwan is the last key – and the last remaining symbol of
humiliation, such that no Chinese leader can be seen as the one
who lost it. The Chinese look to Washington to discourage
Taiwan’s formal secession and to refrain from selling
sophisticated weapons that embolden it to resist political
reconciliation and economic integration. Seven American
presidents of both parties have recognized China’s claim that
Taiwan is a part of China.
“Fortunately, China is not trying to spread an ideology, unlike
what the Soviet Union did and the Islamo-fascists do today. This
should enable us to work together to strengthen regional security,
fight terrorism and international crime, and stabilize Afghanistan
– and most critically, to stop Iran from acquiring nuclear
missiles. Our goal, as Robert Zoellick, then deputy secretary of
state put it, is for China to become a ‘responsible stakeholder’ in
the world. And in our dealings with this remarkable country, we,
above all, must avoid a tone of imperial condescension.”
Where does one start? Who the heck is the aggressor here?
You’d think it was Taiwan, from this passage. And in
Zuckerman’s entire piece, no mention of the missiles.
And it’s not as if China has been cooperative on the North Korea
and Iran fronts, right? Oh, they can still make amends, quickly,
but for now “this remarkable country” has thoroughly enjoyed
jerking us around while Taiwan wonders what each morning will
bring.
But to be fair, the U.S. does have legitimate beefs with Taipei
from time to time. No one said the world was simple, after all.
For instance Taiwan has requested 66 F/16s, but the U.S.
National Security Council and State Department are urging the
Bush administration to reject Taiwan’s request. Why?
“There’s too much to risk in the relationship with China, and
little willingness to take the hit with the Chinese when the record
of getting major systems through in the end, given the local
political climate, is not good,” a U.S. defense source told
Defense News.
“In other words, an approval would draw punishment from
Beijing – i.e., canceling contracts with U.S. companies and going
French or German, etc. – and then it pisses people off in D.C.
when Taiwan gets the political brownie points – i.e., showing
Beijing how much the U.S. loves it – but then doesn’t follow
through with the actual procurement,” said the U.S. source.
Yes, Taiwan’s President Chen Shui-bian isn’t exactly in favor
back home and it’s been difficult getting any increased defense
spending through parliament.
Japan: All the recent opinion pieces on Prime Minister Junichiro
Koizumi’s apparent successor seem to be titled “Honest Abe” in
discussing Shinzo Abe. [Pronounced Ah-bay]
By all accounts this is a good man who promises to pick up on
Koizumi’s legacy of a more vigorous foreign policy while
pursuing changes in Japan’s post-World War II constitution that
would allow for a more ‘offensive’ military force; the key
provision you’ll hear a ton about over the coming months being
“Article 9” which states Japan “forever” renounces war and “the
threat or use of force” in settling disputes.
Article 9 has already been circumvented to a large extent as
Japan has offered various forms of support in both Afghanistan
and Iraq, including the first deployment of Japanese troops to a
war zone since 1945 (Iraq).
Mark Kissel of The Wall Street Journal wrote:
“Mr. Abe has indicated that he’ll deepen relations with other
like-minded regional democracies such as Australia and India.
This makes sense, not least as a way of creating a strong
counterweight to China.”
So my long sought after dream alliance of the U.S., Britain,
India, Japan and Australia is not dead after all!
Of course all of the above makes Japan’s neighbors more than a
bit queasy, particularly South Korea and China. And the long-
running oil and gas dispute between Tokyo and Beijing continues
to simmer as China has begun production in waters in the East
China Sea claimed by Japan.
Separately, five executives of a Japanese manufacturer were
arrested on suspicion they were preparing to export equipment to
Iran that could be used in the making of nuclear weapons.
North Korea: Secretary of Defense Rumsfeld, in comments
made in Alaska, said South Korea need not fear a conventional
attack from North Korea. On this I largely agree with the
secretary, helped by my own observations from my trip to the
DMZ last May. With all the obstacles in place (minefields, tank
traps, gates for tunnels and highways) I just don’t see how the
North could launch a successful invasion.
But you still have the issue of the artillery, let alone a suicidal
nuclear threat. It does need to be noted, though, that Rumsfeld is
also in the process of cutting troops in South Korea from over
30,000 to 20,000. I agree with this policy as well.
Canada: Prime Minister Stephen Harper announced plans to add
1,400 border guards and Mounties. And beginning next year
border security officers will be armed…finally. Already, the
change in government here is benefiting the United States.
President Bush shouldn’t hesitate to reciprocate in some fashion.
Venezuela: President Hugo Chavez received a hero’s welcome
in Syria this week. Lovely. And now golfers in Caracas will
have to make do with computer games because the government
is appropriating three exclusive golf courses to build homes for
the city’s poor.
Caracas’ Mayor Juan Barreto called his plan a justified attack on
the “putrid middle class,” saying “It’s shameful to see people
playing golf when right there in front of them is a shantytown.”
FORE!!!!
Random Musings
–Yes! The U.S. succeeded in its most extensive anti-missile
test to date. We’re getting there…thank you, Ronald Reagan.
–I see Saturday’s Washington Post has a big story on real estate
in Ireland. They’re a week late, eh?
–The nation’s police chiefs gathered in Washington, D.C., for
the National Violent Crime Summit. As I’ve been reporting
violent crime appears to have reached a “tipping point,” in the
words of the executive director of the forum.
Los Angeles Police Chief William Bratton told the group, “We
are here to say, America, we have a problem. We need to
refocus on this gathering storm of crime.”
Dean Esserman, police chief of Providence, R.I., added “We are
turning the country over to our young people, and they are killing
each other. Violence has become gratuitous. Where is the moral
outrage?”
Anthony Braga, criminologist at Harvard University said
criminals’ “rules of engagement” changed in the 1990s, when
teenagers were increasingly shooting each other over petty
disputes and perceived slights. [Allison Klein / Washington
Post]
And then there is the culture that threatens and kills those who
cooperate with police. It’s scary, particularly because the gang
population continues to explode.
I’ll tell you one thing that needs to be done…start identifying all
the criminals by name under the age of 18. Why the heck do we
continue to protect these dirtballs through anonymity? The age
of innocence died in the 1960s.
–New York City Police Commissioner Ray Kelly held a
conference call with various agencies on combating the threat of
attacks on trains and subways. He allowed a reporter with NBC
News to sit in and the reporter asked “Isn’t this something that
should be done through the Department of Homeland Security?”
Kelly responded that DHS hadn’t held one and that he basically
was just picking up the ball and running with it. He then added
that in the case of Amtrak, they have 300 police officers….for
the entire nationwide network. Unbelievable.
–Historian and New Orleans native Douglas Brinkley noted this
week that “Mayor Ray Nagin is the real problem in redeveloping
New Orleans.” The whole country knows this, all except the
idiots in New Orleans who reelected him.
–This piece from Crain’s New York Business needs to be run in
its entirety.
“Yvette Clarke’s bid for Congress seemed to be picking up
momentum early last week when it was suddenly overtaken by
Diplomagate. ‘The Crain’s Insider’ reported on Wednesday that
the city councilwoman from Brooklyn, whose Web site says she
was an honor student who went to Oberlin College on a
scholarship, had not earned a degree. The report triggered
several days of embarrassing newspaper coverage and blog
discussion.
“Ms. Clarke’s attempts to minimize the damage only made
things worse.
“A campaign spokesman initially told ‘The Insider’ that 41-year-
old Ms. Clarke graduated in 1986, a claim the candidate herself
had made in a sworn statement to the Campaign Finance Board
last year.
“Then Ms. Clarke said she had left Oberlin several credits short
and later passed the necessary makeup courses at a Brooklyn
school, but forgot to forward the paperwork to Oberlin. That
wasn’t true, either. Hours later, Ms. Clarke acknowledged that
she was still two classes short. Then word leaked that she had
failed one makeup course and dropped another.
“Ms. Clarke blamed a faulty memory.”
Sounds like she’d fit in real well in Congress, don’t you think?
She should also eat some salmon. It’s food for the brain.
–Newsweek’s Michael Isikoff announced that former State
Department official Richard Armitage was the man who leaked
Valerie Plame’s name. I said from day one this was a non-story
and now it’s even more so.
But what we do learn is that Armitage’s boss, Colin Powell, did
nothing to clue in the White House as it was making all kinds of
pronouncements on the investigation.
So it got me thinking about how Colin Powell ended up being
such a big disappointment, and this comes from one of his
biggest supporters over the years. I kept thinking that the leader
of the Gulf War would rise to further greatness and he didn’t. He
could have been a soaring role model for America’s youth, for
instance, but he wasn’t. And when he correctly forecast the
problems in post-war Iraq, rather than fight the administration he
just sat back doing nothing.
–In the past I’ve written numerous stories on Jon Corzine and his
donations to those who can help him politically. Back in the
spring of 2004, when he was senator, he “loaned” $50,000 to the
Rev. Reginald Jackson’s church, Jackson being an influential
preacher in these parts.
But the debt was wiped off the books Jan. 1, 2005, a month after
Corzine declared his candidacy for governor. As Josh Margolin
of the Star-Ledger noted, “It was also three weeks after Corzine
forgave a $470,000 loan to a state-worker union leader (Carla
Katz) whom he had dated.”
The key is “The gift to Jackson was disclosed for the first time in
the 2005 tax return for the Jon S. Corzine foundation, released
(Wednesday) by the governor’s office…
“If the loan had been forgiven one day earlier, the gift would
have had to appear on the foundation’s 2004 return, which came
under public scrutiny during last year’s campaign.”
Corzine is just a bad, bad person, sports fans…it’s as simple as
that.
–Another bad person is Warren Jeffs, leader of the
Fundamentalist Church of Jesus Christ of Latter Day Saints in
Arizona and Utah, who was on the FBI’s Ten Most Wanted List
for all manner of misconduct involving minors and arranged
marriages and was arrested this past week in Las Vegas.
Members of this church believe a man must marry at least three
wives in order to ascend to heaven.
If you want to look for domestic terrorism candidates, look no
further than the 10,000-strong FLDS. They are a scary group
and it’s highly unlikely this cult dies with Jeffs’ arrest.
–The U.S. lost to Greece in the World Basketball
Championships. Greece didn’t have one player on an NBA
roster.
–You know who just seems like a good guy?…John Scherer, the
fellow who does the commercials for Video Professor.
–NBC’s Brian Williams interviewed President Bush down in
New Orleans and once again I was disturbed by Bush’s
performance. But it’s funny to see how proud Bush is of
himself.
“We’re addicted to oil….that’s a pretty strong statement coming
from a Texan!” Oh brother.
And then there’s this moronic line of his, “The presidency is a
job where you make decisions.”
Later I’m watching a commercial for Bosley Hair Restoration
where one of the guys says of the process, “It has to be one of the
best decisions I’ve ever made in my life.”
[In case the president thought he had a monopoly on decision-
making.]
Of course on a more serious note, Bush also told Brian Williams,
“America is sacrificing…we pay a lot of taxes.” Hardly World
War II-type stuff on the home front, I think you’d agree.
–When I wrote last week’s column after my trip to Ireland, I
wasn’t aware of Pluto’s demotion to dwarf status by the
International Astronomical Union. I imagine they’re taking it
hard there and I wish them the best.
More importantly, the Roman god Pluto rules over not only the
dead but he’s also the god of wealth. Ergo, with this single move
by the IAU a global market crash would appear to be a certainty
as Pluto, the god, seeks his revenge over the dissing of his
namesake.
Perhaps this is also why, however, a group of American
scientists is protesting the IAU’s move. I bet the average
allocation to stocks in their respective portfolios is 80% or more.
–John Mark Karr got his fifteen minutes of fame, thereby
confirming that we are truly a nation of idiots.
–Edvard Munch’s masterpieces “The Scream” and “Madonna”
were recovered after being stolen in August 2004. The subject of
the former appeared shell-shocked over his captivity.
–I caught snippets of the MTV Music Video Awards and was
once again appalled. There was that great role model, Snoop
Dogg, wishing he had “something to smoke,” and he wasn’t
talking about a Marlboro.
And of course all the rappers were grabbing their crotch and the
girls looked like a bunch of whores.
I don’t know what’s going to turn around this sick subculture of
ours, but at least in terms of music there is hope on the horizon.
Last year’s three-time Grammy winner John Legend (“Ordinary
People”) is coming out in October with what is already being
called a mainstream masterpiece. [Rolling Stone and
Newsweek] We need to airdrop millions of copies into urban
America.
–This is depressing. As reported by Ching-Ching Ni of the Los
Angeles Times there are only 50 wild tigers left in China thanks
to poaching and the commercial exploitation of tiger parts. The
government did, however, attempt to ban the practice in 1993 but
it was already too late. Tiger ‘farms,’ however, are thriving,
though these animals are ground up and used in the making of
tiger wine.
You know, you can easily build a case that the human race really
isn’t all it’s cranked up to be.
–Illinois Senator Barack Obama received glowing coverage for
his return home to Kenya….CNN gushed “It’s Obama Mania!” I
have to give the senator credit, though, for blasting government
officials there for being among the most corrupt on the planet
and he encouraged everyone to get tested for HIV….as opposed
to Major League Baseball which needs to test its players for
HGH.
But Sen. Obama should have been excoriating the Masai tribe of
southern Kenya; for according to USA Today I learned the Masai
have been killing off the lions (110 since 2001) that help fuel
tourism. This industry brought in $670 million in revenue, 78%
of which is a result of wildlife or safari tourists. If the damn
Masai (who are taking away the lions’ land) keep it up, the lions
here will be extinct. So here’s hoping the lions kick butt.
–….as well as the elephants in Chad. Sadly, 100 carcasses were
found on Wednesday not far from Sudan’s Darfur region by
Mike Fay, a noted conservationist.
A survey of Chad’s Zakouma National Park counted over 3,800
elephants just last year but now the number is estimated to be
below 3,000 as poachers go after the ivory. So here’s hoping the
last elephants launch a stampede against the dirtballs in
Khartoum that have helped cause the misery in Darfur and in the
process set up a true Animal Kingdom.
[I’d go see that movie….wouldn’t you?]
–And finally, as if animals didn’t already have a tough enough
week, Jimbo noted that the New York Times decided to
humiliate the manatee (one of which was in the Hudson River
recently) in doing a profile that disclosed the manatee has the
lowest ratio of brain size to overall weight in the world.
As Jimbo said, “Was this really necessary? We run them over
with our boats and strangle them with our discarded plastic
beverage straps and then the Times trashes them.”
Further proof the paper has an agenda.
—
Pray for the men and women of our armed forces.
God bless America.
—
Gold closed at $633
Oil, $69.24
Returns for the week 8/28-9/1
Dow Jones +1.6% [11464]
S&P 500 +1.2% [1311]
S&P MidCap +2.5%
Russell 2000 +3.2%
Nasdaq +2.5% [2193]
Returns for the period 1/1/06-9/1/06
Dow Jones +7.0%
S&P 500 +5.0%
S&P MidCap +2.1%
Russell 2000 +7.2%
Nasdaq -0.6%
Bulls 42.1
Bears 33.7 [Source: Chartcraft / Investors Intelligence]
Have a great week. I appreciate your support.
*Next week I won’t be posting until around 2:00 PM ET on
Saturday. Sorry, but the rest of the year I should be on my
normal schedule.
Brian Trumbore
