[Posted 7:00 AM ET]
2006…and a look ahead
What an awful year. Of course if you worked on Wall Street, or
were fully invested in global equity markets and really didn’t
give a damn about the state of the world from a geopolitical
standpoint, you’d probably beg to differ. Thru 12/30, for
example, the Dow Jones World Index was up 19% for the year,
while the MSCI Europe Australasia and Far East benchmark was
up 23%. That’s a helluva year, and there were others such as
Russia and China where the returns were two to four times that.
But I’ll tell you what kind of year it was. I select a “Person of
the Year” from the political realm, unlike some of the farcical
selections you see elsewhere, such as Time magazine’s “You,”
and I opted not to go with a winner for the second time in six
years. You show me one significant world figure who is
deserving of the honor…………time’s up.
Glance at a map of the world, as I do about ten times a day, and
you’re reminded of the following:
The situation in Iraq deteriorated badly the past 12 months, Iran
is closer to having a nuclear weapon and has been wreaking
havoc in Iraq and Lebanon. Lebanon was close to civil war this
fall and remains in a very precarious situation; this after
Hizbullah went to war with Israel in the summer. In Palestine,
President Mahmoud Abbas could actually be a surprise winner of
“Person of the Year”…but in 2007…if he can rein in Hamas, but
thus far he hasn’t.
Going south the situation in Darfur is terrible and we just had an
invasion of Somalia by Ethiopia.
Heading northeast, Afghanistan is worse off than a year ago,
Pakistan has given in to Islamic militants in the territory of
Waziristan, and further east, North Korea tested a nuclear bomb.
In this last instance, President Hu Jintao of China is another who
might have been a “Person of the Year,” believe it or not, had he
convinced North Korea to give up its weapons program, but he
didn’t.
North of China and Mongolia, Russia under Vladimir Putin is
taking on a more autocratic bent than at any time since Brezhnev,
jeopardizing Europe’s energy needs along the way, while across
the Atlantic, and down near the equator, Venezuela, while still
relatively weak, is not only arming itself with Kalashnikovs and
other Russian weaponry, but is also becoming a haven for Iranian
operators of all stripes, perhaps the least understood factoid for
the average American.
But before I offer some thinking on 2007, as well as more
standard fare, let’s review the past week in Iraq, Iran and Israel.
[Note: I have nothing to say concerning the death of Saddam
Hussein. Your guess is as good as mine if this will lead to any
lasting spike in violence.]
President Bush stepped out of his Crawford ranch, accompanied
by his war council, including an increasingly out of place
Condoleezza Rice I must add, to reassure the American people
he was “making good progress” toward coming up with a “New
Way Forward” for Iraq.
I prefer to think of whatever the White House decides on as
“Starting Over,” because that sure as heck captures what needs to
be done, at least to the few of us who still believe we must give it
one final try before packing it in.
Senator Joseph Lieberman / Op-Ed Washington Post
“The American people are justifiably frustrated by the lack of
progress (in Iraq), and the price paid by our heroic troops and
their families has been heavy. But what is needed now,
especially in Washington and Baghdad, is not despair but
decisive action…and soon.
“The most pressing problem we face in Iraq is not an absence of
Iraqi political will or American diplomatic initiative, both of
which are increasing and improving; it is a lack of basic security.
As long as insurgents and death squads terrorize Baghdad, Iraq’s
nascent democratic institutions cannot be expected to function,
much less win the trust of the people. The fear created by gang
murders and mass abductions ensures that power will continue to
flow to the very thugs and extremists who have the least interest
in peace and reconciliation.
“This bloodshed, moreover, is not the inevitable product of
ancient hatreds. It is the predictable consequence of a failure to
ensure basic security and, equally important, of a conscious
strategy by al-Qaeda and Iran, which have systematically aimed
to undermine Iraq’s fragile political center….
“On this point, let there be no doubt: If Iraq descends into full-
scale civil war, it will be a tremendous battlefield victory for al-
Qaeda and Iran. Iraq is the central front in the global and
regional war against Islamic extremism….
“In Baghdad and Ramadi [ed. Lieberman was in the region
recently with John McCain], I found that it was the American
colonels, even more than the generals, who were asking for more
troops. In both places these soldiers showed a strong
commitment to the cause of stopping the extremists. One colonel
followed me out of the meeting with our military leaders in
Ramadi and said with great emotion, ‘Sir, I regret that I did not
have the chance to speak in the meeting, but I want you to know
on behalf of the soldiers in my unit and myself that we believe in
why we are fighting here and we want to finish this fight. We
know we can win it.’….
“I saw firsthand evidence in Iraq of the development of a
multiethnic, moderate coalition against the extremists of al-
Qaeda and against the Mahdi Army, which is sponsored and
armed by Iran and has inflamed the sectarian violence. We
cannot abandon these brave Iraqi patriots who have stood up and
fought the extremists and terrorists….
“As the hostile regimes in Iran and Syria appreciate – at times, it
seems, more keenly that we do – failure in Iraq would be a
strategic and moral catastrophe for the United States and its
allies. Radical Islamist terrorist groups, both Sunni and Shiite,
would reap victories simultaneously symbolic and tangible, as
Iraq became a safe haven in which to train and strengthen their
foot soldiers and Iran’s terrorist agents. Hizbullah and Hamas
would be greatly strengthened against their moderate opponents
….
“In Iraq today we have a responsibility to do what is strategically
and morally right for our nation over the long term – not what
appears easier in the short term. The daily scenes of death and
destruction are heartbreaking and infuriating. But there is no
better strategic and moral alternative for America than standing
with the moderate Iraqis until the country is stable and they can
take over their security. Rather than engaging in hand-wringing,
carping or calls for withdrawal, we must summon the vision, will
and courage to take the difficult and decisive steps needed for
success and, yes, victory in Iraq. That will greatly advance the
cause of moderation and freedom throughout the Middle East
and protect our security at home.”
I agree with Senator Lieberman, and I support the addition of
more troops, specifically for Baghdad, as I’ve spelled out not just
in past weeks but, on a broader scale, since the summer of 2003.
What appears to be emerging, however, is just how awful former
Secretary of Defense Donald Rumsfeld was, and how intimidated
the generals were by him. Now you’re hearing of generals such
as Casey, in charge of U.S. forces in Iraq, suddenly being
receptive to troop increases when he and others weren’t in the
past. This is frankly pitiful and why I’ve disagreed with retired
General Barry McCaffrey when he lumps all our military leaders
into one category, “world class.” They haven’t been. But listen
to those right below, like the colonel who spoke to Lieberman.
This is what’s so frustrating about the past 3 ½ years. We didn’t
have to come to this point, but we are where we are.
So, yes, for President Bush it’s “Starting Over.” I urge him to do
it right this time. We need to secure Baghdad, one neighborhood
at a time, and then put the military, first the U.S. and then Iraqis,
in charge of the reconstruction effort. It’s about buying time
until some semblance of a true political agreement can be
reached and the country stabilized. Again, I know this is the
view of a shrinking minority in America, but let me shock you.
Despite the failed efforts of our president, leaders such as John
McCain, Rudy Giuliani, Joe Lieberman and Rumsfeld’s
replacement, Robert Gates, will spearhead the mission over the
coming year. I just urge my fellow Americans to not give in to
defeatism. We can turn this around…I truly believe this.
Iran
Today President Bush’s legacy is in tatters in no small part
because he has allowed Russia and China to dictate terms in the
case of both Iran and North Korea.
Last Saturday, as expected, the UN Security Council approved
Resolution 1737, a greatly watered down act that orders Iran to
cease with its uranium enrichment while prohibiting countries
from supplying Tehran with materials and technology that could
be used in both its nuclear and missile programs. Instead of a
blanket asset freeze on Iranian officials, the assets of just 10
companies and 12 individuals have been targeted and, in the case
of Iran’s key nuclear facility at Bushehr, it has been excluded
from any punitive action due to the fact Russia wants the $800
million it is owed when the plant is completed sometime in 2007,
at which point Bushehr will be “Weapons Central.”
Previously, the Security Council had ordered Iran to cease
enriching uranium by Aug. 31, which of course the mullahs
ignored. This time the International Atomic Energy Agency,
Mohamed ElBaradei’s organization, must report back to the
Security Council within 60 days to provide an update.
But what then? Should Iran continue to defy the world, as they
will, the next round of sanctions still would not include the use of
force. What’s the point then for this entire exercise? The United
States’ only option is to pursue tougher sanctions outside the UN
with the likes of Japan and Europe.
And while President Ahmadinejad’s own popularity at home is
on the decline, Iran does have a point when it comes to the entire
nuclear issue. Unlike Israel, Pakistan, India and now North
Korea, Iran is still a member of the 1970 Nuclear Non-
proliferation Treaty (NPT), which states that Iran has the right to
produce nuclear energy as long as it forswears pursuit of nuclear
warheads. [Which is why the others either never signed the NPT
or have since pulled out.]
So it’s up to the UN and the IAEA to prove to the world that Iran
is indeed pursuing nuclear weapons.
At the same time, Egypt and Saudi Arabia have already
announced they are pursuing “nuclear energy” and Egypt’s
foreign minister came to the defense of Iran the other day.
“The negligence of certain Western countries over questions of
non-proliferation, and the fact that they permit some states to
acquire a nuclear capacity while preventing others from doing so,
is nothing but double standards. That must stop. It is known that
Israel has a nuclear capability that is not subject to any control by
the IAEA.” [Tehran Times]
I’m just stating the facts, friends. We all know what Iran is up
to, and the scary consequences of success, but what is the Bush
administration, or Israel, going to do about it when Russia and
China keep blocking our efforts?
This week Iran’s parliament voted 161-15 to “revise its
cooperation” with the IAEA and accelerate its quest. President
Ahmadinejad said “You have to accept that Iran has the
technology of producing nuclear fuel. And it will celebrate it
in (February…11-20).”
Editorial / Wall Street Journal
“As his Presidency grows shorter, Mr. Bush is going to have to
decide how much longer he can afford to let diplomacy dominate
his Iran strategy. The mullahs in Tehran have made clear their
determination to build a nuclear weapon; the West has yet to
show any comparable determination to stop them.”
I would just add one other item, via a report by Johns Hopkins
and the National Academy of Sciences. According to experts at
both, Iran faces a dwindling revenue stream from its oil
production (a fact I pointed out a long time ago, actually), due to
soaring domestic consumption. In other words, you see sloppy
news stories that Iran can produce up to 4 million barrels of oil
per day, but seldom in the same report does it go on to say that
only about 2.8 million, or less, is available for export because
Iranians are using the rest. Oil exports represent 65% of
government revenues today. Iran needs nuclear power, that’s a
fact. What’s also a fact is the world today is lacking great
leaders who recognized this, thus missing out on an opportunity
to sit down with Tehran years ago, pre-Ahmadinejad, to
negotiate a viable solution. It’s too late now.
Israel
What a frustrating story, and again a lack of leadership in the
White House is hurting the cause of peace. Israeli Prime
Minister Ehud Olmert had a surprisingly productive meeting
with Palestinian President Abbas last weekend, with Israel
agreeing to remove scores of West Bank checkpoints that
severely hamper movement by Palestinians, as well as the return
of $100 million in tax revenues and arms shipments for Abbas’s
security forces, courtesy of Egypt (with Israeli and U.S.
permission). But then Israel’s Defense Ministry announced it
had given approval on a new settlement in the West Bank, which
is totally against the U.S.-backed “road map” for peace that come
hell or high water has to be the starting point of any viable
negotiations in the future.
Israel had pledged to freeze all settlement expansion, while the
Palestinians were to crack down on terrorist activity. Of course
neither side has followed through, but this tit for tat garbage can
not go on forever.
Never has there been a clearer instance for President Bush to
threaten the flow of funds to Israel unless they cease with the
settlements. Instead all we saw was a “rebuke” from the State
Department. As Abbas aide Saeb Erekat said, “What message
are they trying to send” after such a positive meeting a few days
earlier?
2007
But let’s look ahead, after a brief examination of how I fared in
’06 after last year’s predictions. I had a few good lines.
“It’s clear China is of zero help in dealing with Kim Jong-il as
Beijing also enjoys watching America sweat.”
“Russia’s true relationship with Iran will…become readily
apparent over just the next few months. The U.S. probably
won’t like what it sees.”
“Because both the U.S. and France were afraid to confront
Syria’s President Bashar Assad, the window (of opportunity in
Lebanon) closed and the bombs and assassinations have
resumed. For its part, Lebanon is too weak to confront
Hizbullah’s presence, and here Israel does the cause no favors
when it continually violates Lebanese airspace beyond targeting
Hizbullah along the disputed border.”
“(In Afghanistan) the tremendous success we’ve had could all be
for naught by end of 2006 unless NATO accepts the challenge.
Don’t hold your breath.”
I also had my share of big misses in ’06.
“Europe: There will be another major terror attack and it will
spur an anti-Islamic fervor that will then be met head-on by
home-grown Islamists, making Paris’ recent troubles look like a
tea party.”
“Egypt: President Hosni Mubarak doesn’t finish the year and
Cairo erupts.”
“Bird flu: Watch out for spring when the infected birds migrate
back home. Tweet tweet!”
Oh well. Here are some for 2007.
It’s about 2008, really. In China the lead up to the Olympics in
Beijing and in Russia the lead up to a possible presidential
election should Putin actually step down. I still maintain he will
find a reason to hang on and the constitution will be amended by
next fall.
Energy security in Europe will of course remain a huge issue and
there will be some tense moments, including rumors of troop
movements at some point, most likely because of a Russia-
Poland spat.
[As for China, it missed its window for taking over Taiwan. This
subject is now closed until after the Olympics.]
Watch the Balkans as the issue of Kosovo gets center stage for a
spell. Nothing too deadly, but between increasing concerns over
Russia’s intentions and the need for vigilance in the Balkans as
well as what should be an increased presence in Afghanistan,
NATO is going to have to confront the fact it is turning
increasingly into a paper tiger and must, therefore, recommit
itself to the security of Europe and beyond.
France’s presidential election in April could lead to some
fireworks. It should be an exciting race between the comely
Socialist Party leader Segolene Royal and Conservative Nicolas
Sarkozy. Sarkozy will eke out a win.
Watch Colombia. A growing political crisis could encourage
Venezuela’s Hugo Chavez to grab some territory. Otherwise,
Chavez will be quiet but behind the scenes Iran will be spreading
its agents around the continent to plan for an explosive 2008.
The Dow Jones will have two dreadful days. One when Iran
tests a crude nuclear device. The second when there is a major
assassination in the Middle East.
North Korea will test another nuclear bomb, but otherwise will
remain the hermit kingdom as talks over its weapons program
continue to go nowhere.
Iraq will show solid improvement by July, but it may not be
enough to placate the American people as casualties continue to
mount.
Afghanistan will stabilize some after a bad 2006. The Taliban,
however, will only be regrouping in Pakistan, along with al-
Qaeda.
President Calderon in Mexico will prove to be a pleasant surprise
as he has some success in cracking down on crime internally,
though immigration will remain a white hot topic between our
two countries.
Castro will not die.
The United States will be increasingly irrelevant in many global
situations. But as depressing as I find this, attitudes will change
following the 2008 vote when we elect a president who once
again commands the world’s respect. The issue becomes can we
make it until then?
—
Wall Street
Well I got one thing right as I wrote a year ago in looking at
2006.
“The U.S. housing market will continue to stagnate in the first
two quarters, with some regions seeing slight declines in value,
but then things really begin to get dicey in the second half. I
would call for an outright crash, with values down 20% or more
in many areas, were it not for the fact that long-term interest rates
will remain at benign levels for much of the year.”
That wasn’t bad. And seeing as I was calling for the major
equity averages to be down 3% to 7%, as of July 14 I was doing
pretty well.
Dow Jones…10739…+0.2%
S&P 500…….1236…-1.0%
Nasdaq………2036…-7.6%
Ahem ahem. Of course that was July. Oil also peaked that week
at $78. Then crude fell back to more reasonable levels, gasoline
prices declined about 25%, and stocks roared. The economy has
been falling, from a 5.6% rate of growth in the first quarter to
2.0% in the third, but earnings remained strong.
Bottom line, stocks ended up having a terrific year. To wit:
Dow Jones…+16.3%
S&P 500……+13.6%
Nasdaq……..+9.5%
By comparison my model portfolio of 80% cash / 20% stocks (as
represented by the S&P), finished up about 6.5%.
But before we look ahead, let’s just review some positive data
that came out this past week. Both new home and existing home
sales for November rose more than expected, though in the case
of the former, year over year, new home sales are still off 15%,
while in the case of the latter, the median existing home price is
off 3% from November ’05.
Separately, a leading indicator of consumer confidence rose and
the closely followed Chicago Purchasing Managers index, a
barometer of manufacturing, climbed back above the key 50
barrier (52.4), after flashing a recession warning signal at 49.9
the previous month.
As for holiday sales, the only gauge I look at is that of the
National Retail Federation which rose 6% in Christmas ’05 but is
estimated to have risen 5% this year. [This could change a bit as
final figures come in.] So it wasn’t a super Christmas and
Hanukkah, but it wasn’t a lousy one either.
So what of next year? Those who are trying to convince us
housing has bottomed and that it’s soon back off to the races are
nuts. There is absolutely no way housing, at least as represented
by prices, has a good 2007.
Housing was in a bubble, period. Bubbles, witness Nasdaq in
1999/2000, don’t just pop and then return to old prices. But I’ll
grant you the housing sector could just stagnate for all of 2007,
though I believe instead we will see another leg down.
Remember, it’s still largely about affordability and not one of the
optimist shills ever brings this up. Prices have only retreated
slightly in the bigger bubble markets and, as represented by the
huge percentage of first-time and new-home buyers who are
taking out subprime mortgages the past 12-24 months, a large
percentage of Americans are still stretching way beyond their
means. And this is with historically low interest rates and a solid
job market. I also need to add that while rates remain low, this
recent tick up in yields (to a 6.20% level for a 30-year fixed)
isn’t helping matters.
So in our three-legged stool; housing, the consumer, and capital
(business) spending, housing remains a problem.
And it will increasingly wear on consumer spending. This hasn’t
happened as quickly as I thought it would, nor has the market
stagnated long enough for psychology to begin to wear thin. But
at some point in 2007 reality will begin to hit Americans in the
face; their leading asset has stopped appreciating, best case. The
reverse wealth effect will then come into play.
As for capital spending, I remain convinced this is to a large
extent hostage to the geopolitical scene because business leaders
are simply more in tune with what’s happening around them. If
Iran doesn’t pursue its weapons program, for example, and if
peace breaks out in the Middle East and oil drops below $50,
well then that’s a pretty positive scenario.
But if as is more likely the case the Middle East flares anew, oil
heads back over $70 and the global economy shudders,
particularly in Asia, capital spending will dry up faster than you
can say ‘backdated options.’
Bottom line, stocks will meander around the breakeven mark in
‘07, call it up or down 3% on the troika – the Dow, the S&P and
Nasdaq – when the final bell for the year rings next December.
But then all hell breaks loose in 2008.
Some other bits and pieces.
–Deficits do matter, but will remain largely a non-issue in ’07;
ditto for the dollar. Deficits matter for the simple reason that
China just so happens to be financing an increasing portion of
ours and they will use these burgeoning dollar reserves as a
weapon; I just don’t see this happening yet because the Chinese
government will manage its internal problems well enough to
avoid needing to play the nationalism card in ‘07.
–I have been so very wrong on emerging markets, but I can’t see
playing them next year to make up for lost opportunities.
–Yes, Virginia, there will be a big time hurricane or two again in
the Gulf and oil and gas will soar anew. As I note below, with
my own investment dollars I’m getting back into the sector at
some point.
Street Bytes
–For the week the Dow Jones tacked on 1.0% to 12463 after
crossing 12500 for the first time earlier in the week. The S&P
500 added 0.5% to 1418 and Nasdaq picked up 0.6% to 2415.
–U.S. Treasury Yields
12/31/06
6-mo. 5.08% 2-yr. 4.82% 10-yr. 4.72% 30-yr. 4.80%
12/31/05
6-mo. 4.36% 2-yr. 4.40% 10-yr. 4.39% 30-yr. 4.54%
The 10-year actually hasn’t moved much in years, finishing
12/31/03 at 4.25% and 12/31/04 at 4.22%. Of course that’s a big
reason why housing did as well as it did.
But after missing my 2005 prediction on the 10-year by a mere 9
basis points (I had 4.30%), this year I said we’d finish at 3.99%.
The consensus among economists, incidentally, was 5.00%. For
2007 it’s 4.88% according to an extensive survey in Business
Week. I’ll go with 4.50% by yearend.
The same BW survey is pegging growth at 2.6% for ’07. I’ll say
1.5%.
As for inflation, I just don’t see it; outside of the energy sector
which will have another run by summer to new highs on both oil
($80+) and gasoline futures ($3.00…remember, tack on 60-80
cents for your pump price in most states).
–For the archives, I want to throw out some strategist predictions
on the market. Abby Cohen of Goldman Sachs is calling for a
12/07 S&P 500 of 1550; Ed Keon of Prudential is at 1630;
Richard Bernstein of Merrill Lynch is at a surprisingly bullish
(for him) 1570; and Tobias Levkovich at Smith Barney has
pegged the S&P at 1500. [This last guy, though, changes his
mind as frequently as Madonna changes outfits at a concert.]
–Uh oh…this may sound familiar. China’s stock markets ended
the year at record highs on Friday, with the Shanghai Composite
Index soaring 4.2% that day alone and bringing the full year
return to a staggering 130%. So I glance at the South China
Morning Post and see the headline “Bull run fuels blind rush for
funds.”
From reporter Jane Cai:
“In big mainland cities, the traditional greeting of ‘Have you
eaten today?’ is being replaced by ‘Have you bought into any
managed funds lately?’”
Almost three times as many accounts were opened this year over
2005. One person told Ms. Cai that she withdrew 20,000 yuan
from her time deposit account to invest it in funds, “leaving only
700 yuan” in her pocket. “We’ll use that to put food on our table
this month.”
Yup…shades of Nasdaq and the rush into tech funds at the end
of 1999, early 2000. Maybe China will have to play the
nationalism card earlier than I think after all….when a market
crash sends people into the streets wondering what happened to
all their wealth. “It’s America’s fault,” the government will say.
“We’ll sell some bonds and roil their markets.”
–Every few days I look up the 10-day weather forecasts for
places like Minneapolis, Winnipeg and Toronto to get a sense if
any Arctic cold is about to envelop the lower 48. Consider this
tidbit. For the first time since 1877, New York City will not
have seen a single flake of snow for the month of December. So
while Denver has been hit hard with a series of big storms, the
rest of us are liking the trend; at least those who aren’t big skiers
in the northeast.
Of course with the warm temperatures the price of natural gas
has plummeted from the mid-$8 range just a few weeks ago to
about $6 today…a nice break when it comes to our heating bills.
But while perhaps natural gas continues to slide towards the $5
mark, or maybe even $4, just understand the cycle will at some
point reverse. As my friends at Strategic Energy Research
pointed out the other day:
“Beginning with the 2007 drilling season, the domestic
Exploration & Production managers will slow the level of capital
spending to reflect lower margins, especially in light of escalated
service costs over the past 18 months. This has become the self-
correcting mechanism for the natural gas market. This has also
been evident recently in Canada where Canadian producers have
reduced spending and rig rates are coming under pressure.”
I’m smelling an opportunity to get back into the drilling sector at
some point, following a hoped for correction in the share price of
many of the operators. Sorry, just being selfish, you understand.
[And on a more personal note, best wishes to George Ross, Doug
Foulsham and Mark Kellstrom as they launch Strategic Energy
Research in Summit, New Jersey…a block from my own offices.
These are good people, with a lot of experience in the field. And
frankly I’m just happy it will be easier to sit down and have an
adult beverage with them from time to time, as I pick their brains
for information I can then pass on to you.]
–So remember how Russia agreed to pay Royal Dutch Shell
$7.45 billion for its controlling stake in the Sakhalin-2 project,
Gazprom’s deal? Now Shell and two Japanese partners are being
hit with $3.6 billion in cost overruns. Much more on Russia and
Gazprom below.
–The 6.7-magnitude earthquake off Taiwan this week showed
just how vulnerable some of our communications links truly are.
At least a dozen fiber-optic cables that cross the ocean floor
south of Taiwan, carrying traffic between the island itself and
China, Japan, Korea, Southeast Asia and even the United States,
were damaged.
But in reading a piece from the AP, I found this remarkable.
“ ‘Pretty much everything south of Taiwan has been reported at
fault,’ said Frank Cuccio, vice president of marine services at
Morristown, N.J.-based Tyco Telecommunications.
“Cuccio expects (a cable-laying ship) to be in position in a few
days. It then takes three to five days to repair each cable, but
mudslides set off by the earthquake can complicate matters by
covering the cables, making them harder to retrieve from the
bottom.
“Cuccio said the ruptures are more than 10,800 feet below sea
level, too deep for the remote-controlled submersibles that
otherwise would find the cables. Instead, the ship will drag
grapnels along the bottom to find them.”
And how large are these cables? Try two-thirds of an inch, “a
testament both to the immense data capacity of optical fiber and
the fragility of the links that form the global telecommunications
network.”
–On Thursday, the Financial Times reported someone at Apple
Computer had falsified records related to CEO Steve Jobs
receiving an options grant; specifically that a board meeting had
taken place to approve the remuneration when in actuality the
meeting never occurred.
But on Friday, Apple said an internal investigation (headed up by
former Vice President Al Gore, incidentally) found no
misconduct by current management, including Mr. Jobs, though
he was aware of some favorable grant dates. Mr. Jobs, however,
did not financially benefit from the grants. Something tells me
this case isn’t over…even as the share price rallied almost $4 on
Friday on the seemingly positive news.
–Google will pass both Yahoo and Microsoft as the most visited
Web site in 2007.
–This just in…Wisconsin’s revenue agency said it sent as many
as 170,000 forms to taxpayers with mailing labels mistakenly
printed with their Social Security numbers. Idiots.
–The New York Times reported that Microsoft has potentially
serious flaws in its new Vista operating system as computer
security researchers and hackers have begun their work. Once
again it appears there could be a browser flaw where malicious
software infects a computer simply by visiting a booby-trapped
site; this despite Microsoft’s assurances on Vista’s improved
reliability.
–Texas Pacific Group was the world’s most prolific buy-out firm
in 2006 in transacting 17 deals with an aggregate value of $101
billion, according to the Financial Times. Overall, private-equity
announced deals rose to a record $700 billion, more than double
the record set in 2005. There is no reason not to believe there
will be even more of a rush in ’07, culminating in the acquisition
of the entire African continent. The private-equity guys will then
suck out all the minerals for themselves, before attempting to
fool the public with an IPO for what’s left, including the
wildebeest.
–New York City will host a record 44 million tourists in 2006,
up 7% from 2005, pumping $24 billion into the local economy.
1.2 million British tourists have swarmed the Big Apple, taking
advantage of the weak dollar, while overall 7 million foreign
visitors have crammed the sidewalks.
–Legg Mason portfolio manager Bill Miller saw his super 15-
year streak of outperforming the S&P 500 go down in flames in
’06; underperforming the blue-chip benchmark by a whopping
10% on a total return basis. I mean for crying out loud, that’s
like Joe DiMaggio following his record 56-game hitting streak
with a 0-for-48 at the plate!
–Marsh & McLennan is selling its Putnam Funds unit to
Canadian outfit Power Corp. Putnam’s assets have declined
about 50% since 2000.
–The FDA approved the sale of milk and meat from cows, pigs
and goats after ruling the products were safe to eat and could be
sold without labeling. I recognize some have problems with this
on the basis of ethical and religious reasons, so I’ll defer
comment; except to say, frankly, I’m far more concerned with
the quality of my tap water in New Jersey, cancer central, than
anything else these days.
–If you want a good look back at the Gerald Ford years from an
economic standpoint, check out a series I did for my “Wall Street
History” link…beginning with the 7/28/06 piece.
–Barron’s Jim McTague had the following comment concerning
the FBI’s recent report for 2006’s first half indicating an ongoing
increase in our nation’s violent crime rate.
“Based on FBI reports going back to 1972 and the business-cycle
chart compiled by the National Bureau of Economic Research, it
looks as if violent crime trends upward at the beginning of a
contraction and generally stays up through the initial phases of a
recovery. The same pattern emerges when you overlay historical
statistics for robbery alone from the Bureau of Justice Statistics.
Holdups increased noticeably in 1973, 1980, 1981, 1990 and
2001, years in which recessions began….If the robbery stat is
higher when the FBI issues a full-year report in late summer or
early fall, take some profits.”
Hey, sounds better than the failing Super Bowl indicator, eh?
–Finally, the other day I was half-watching a CNBC rerun of a
show Liz Klayman did with Warren Buffett and caught one item
that Buffett said was critical to one’s financial success, that being
to invest in yourself.
So I’m then reading a story by Michael Daly in the New York
Daily News concerning singer James Brown. Wouldn’t you
know at a critical time in his life Brown did just that.
“Today, James Brown returns to the Apollo Theater, where he
bet every penny he had on himself nearly half a century ago.
“In doing so, Brown divined a truth that others of us with
outsized dreams would do well to embrace as we enter a new
year and all its possibilities.
“The future Godfather of Soul was just beginning to make a
modest name for himself in 1962 when he told his record
company he wanted to make a live recording of an upcoming
concert at the Apollo Theater. King Records boss Syd Nathan
responded without even pulling the cigar from his mouth.
“ ‘Forget it!’
“Brown replied that he would reach into his own pocket and go
ahead anyway. He put up $5,700 to rent the theater and cover the
recording.
“ ‘Which was every bit of coin I could lay my hands on,’ Brown
later wrote in his memoir….‘I knew I wanted a live album so
people could at least hear what kind of show I had.’”
That evening, James Brown, “a man who had been so
impoverished as a child he was expelled from school for
‘insufficient clothes,’ hit the stage. He was on this night wearing
what might have been called a leopard-print tuxedo if leopards
came that elegant. He was risking a tumble back into being
broker than broke as he wailed a greeting to the audience.
“ ‘You know, I feel all right….’
“ ‘Yeah!’ the audience replied.
“ ‘You know, I feel all right, children…’
“ ‘YEAH!’
“ ‘I feeeel allll riiiiiiiiiiight!’”
The resulting LP, “James Brown: Live at the Apollo,” became a
monster hit and is considered by some the greatest live album
ever.
“The hardest accomplishment is always the first,” Brown wrote
of that long-ago concert that changed everything. “Like that first
baby step you take in your long walk through life.”
—
Foreign Affairs…this week’s developments
Russia: As noted above, energy security remains a big issue as
we close out 2006. Russia and Belarus are heading towards a
collision with major implications for the entire European
continent. As I go to post, Gazprom is threatening to cut off
supplies of natural gas on Jan. 1 unless Belarus gives in to its
demands.
Just last week it appeared Presidents Putin and Lukashenko had
agreed on a new price structure and deal for control of
Beltransgaz, Belarus’ pipeline network, but then talks broke
down amidst recriminations on both sides.
Gazprom was offering to restrict the price of natural gas for
Belarus to $80 per 1,000 cubic meters in return for control of half
of Beltransgaz. Belarus, which currently pays $47, wants to buy
at the price paid by the neighboring Russian region of Smolensk,
where industrial customers pay $54.
Gazprom then said Belarus needs to pay $200 next year, or $110
for the next four years and sell Gazprom half of Beltransgaz.
Gazprom agreed to value the pipeline at $5 billion, a satisfactory
price to Belarus at one point. But Belarus turned this down.
Here’s the problem as far as Europe is concerned. About 80% of
Russian exports to Europe are pumped via Ukraine (last
December’s New Year’s gas crisis, you’ll recall) and the other
20% through Belarus. A full one-quarter of Europe’s natural gas
needs come from Russia.
Belarus’ Lukashenko, who just a few months ago was
supposedly close to firming up a date for reunification with
Russia, needs the multi-billion subsidy he currently receives
from Gazprom.
Gazprom has told some in Europe not to worry; that it has ample
storage at sites in Germany and Austria to meet any curtailment
in the flow of gas, at least for several weeks. But these are the
last people I’d trust.
Meanwhile, Russia’s Prosecutor General’s Office is claiming
that a former Yukos official, Leonid Nevzlin, may be involved in
the murder of former KGB officer Alexander Litvinenko. Can
you say Stalin / Lavrenti Beria? At the same time the Kremlin is
looking into filing money-laundering charges against former
Yukos CEO Mikhail Khodorkovsky, already serving time for tax
fraud, which could add 15 years to his current sentence that
doesn’t end until 2012. Prosecutors say Khordorkovsky stole oil
revenues from Yukos and then donated them to Open Russia, a
philanthropic foundation established by MK. As a strategist at
Alfa Bank, Chris Weafer (sic), told Carl Schreck of the Moscow
Times, “The money-laundering charges would give authorities a
chance to portray the Yukos dismemberment as the Russian
equivalent of the United States’ Enron case rather than a state
assault on a private firm.”
Back to Mr. Nevzlin, he recently arrived in Newark, N.J., on a
visa from Israel, where he had fled to avoid prosecution by the
Kremlin over his connection to Yukos. According to Steven Lee
Myers of The New York Times, Nevzlin did indeed have contact
with Litvinenko a few weeks before his poisoning, but it was to
provide Litvinenko with a dossier that “shed light on most
significant aspects of the Yukos affair,” according to Nevzlin,
who also said he provided the same material to British officials.
Lastly, this week represented the 15th anniversary of the breakup
of the Soviet Union. It’s a time, perhaps, to reassess Boris
Yeltsin.
Stephen Sestanovich / Op-Ed Washington Post
“At the end of 1991, Yeltsin was the only Soviet politician with a
popular mandate to act. He was the democratically elected
president of Russia. No one else was in a position to deal with
the three crises that had broken his predecessor – ethnic division,
economic chaos and a failed political system. But did his
response end up weakening Russia’s democratic prospects?
“His first and most dramatic step – agreeing with the president of
Ukraine and leaders of other Soviet republics to dissolve the
Union – still gives Russians nostalgic pangs. Even so, history’s
verdict is likely to be that it was Yeltsin’s most important
achievement and a piece of simple good fortune for his country.
By disbanding the empire, Russia freed itself from a gigantic
burden on its national energies. It shed responsibility for
countless problems that it could not possibly have managed well,
and it reduced the risk that popular politics would turn into a
Milosevic-style dictatorship.
“By not trying to prevent Baltic or Ukrainian independence, by
not being the arbiter of war between Armenia and Azerbaijan, by
staying on the sidelines of other conflicts, Yeltsin greatly
reduced Russia’s involvement in post-Soviet violence. His
success can be measured in part by looking at those cases in
which Russia did not fully turn its back on empire. It propped up
separatist enclaves inside Georgia and Moldova and sought to
crush radical separatism in Chechnya. The results were
predictable: quasi-criminal satrapies, military brutality, deeper
ethnic hostility. Had the Soviet Union been kept intact, we’d
have seen this pattern everywhere.”
Other aspects of the Yeltsin years will be dealt with less
charitably, such as his “shock therapy” for the economy.
Somalia: I really don’t know what to think about the chaos here.
Neither Ethiopia nor the UN-recognized government in Somalia
is run by good guys, and of course the Islamists, who fled
Mogadishu as Ethiopia’s military moved in, harbor al-Qaeda.
But this week’s mini-war can’t possibly have made things any
better and it’s not as if U.S. troops, with not so good memories of
this place, will get involved.
Editorial / Washington Post
“For the Bush administration there was both good and bad news
in these developments. The Islamic Courts movement poses a
potentially serious security threat to the United States: Its
leadership includes a U.S.-designated terrorist, and it is known to
be harboring al-Qaeda militants, including several who helped
carry out the 1998 bombings of U.S. embassies in Kenya and
Tanzania….
“Ethiopia’s actions, however, are problematic. The country’s
autocratic government and a slight majority of its population are
Christian; this has fueled resistance to its intervention from
Somalis and Muslim governments that might not otherwise
support the fundamentalist Courts. According to U.S. and UN
reports, millions of dollars in funding and arms have flowed to
the Islamists from Saudi Arabia, Egypt and other Arab states,
while neighboring Eritrea, a bitter adversary of Ethiopia, has
deployed its own troops….
“Maybe the Ethiopian forces will crush the Islamists and their al-
Qaeda allies and thereby rescue the United States from its
predicament. More likely, the administration will have to
prepare for much more active U.S. engagement in what is
emerging as a hot new front in the war on terrorism.”
Any volunteers?
China: Defense spending will exceed $36 billion this year, as the
communists modernize the 2.3 million strong People’s
Liberation Army. Spending on average has grown 9% a year
over the past decade. But while a government white paper said
the buildup was defensive in nature, and that “China will not
engage in any arms race or pose a military threat to any other
country,” the facts say otherwise. In particular, China continues
to rush ahead with plans for an offensive naval capability, let
alone further development of its abilities to invade Taiwan, if
ordered.
Brazil: Goin’ to Rio for New Year’s? You really want to? On
Wednesday a wave of gang attacks killed at least 18, including
one incident where seven passengers on a bus were burned to
death after gunmen attacked and torched it. Authorities say the
attacks were planned by gang leaders already in prison who
wanted to send a signal to the new state governor being sworn in
January 1. At least 12 police stations were attacked with
grenades and automatic fire. Lovely.
Zimbabwe: I wouldn’t go here either. Over 16,000 were
arrested and their shacks demolished as the government of
Robert Mugabe targeted settlements that have sprung up around
mining fields. Due to the incredible poverty here, tens of
thousands have turned to mining after the collapse in agriculture.
The BBC reports that “people dig or pan for gold or diamonds,
risking their lives in shallow mines which frequently collapse.”
During the raids, officers supposedly recovered 500,000 kg of
gold and 5,000 diamonds. So, are you sure you know where
your diamond came from? [The suspects were all released after
paying a bribe.]
Random Musings
–Yes it’s early but the presidential polls can make a difference.
In both Iowa and New Hampshire, Senator John McCain and
Rudy Giuliani are tied, while on the Democratic side, John
Edwards and Barack Obama are essentially tied in Iowa, with
Obama and Hillary Clinton tied in New Hampshire. Edwards,
who just formally announced with a New Orleans backdrop, is
pinning everything on winning Iowa and then carrying
momentum from there. I watched his interview on “Hardball”
with Chris Matthews a few weeks ago and I simply don’t like the
guy.
I’ll also come clean on having contributed a fair amount this
week to Sen. McCain’s ‘exploratory committee.’ This is my first
contribution to a presidential candidate since I wasted my money
investing in Bob Dole in ’96. I promise not to be obnoxious
about my support of McCain during the coming year, and
hopefully well into ’08, and when I disagree with him you’ll
know.
–The average age of incoming Democratic House committee
leaders is 67, six years older than the Republicans they are
replacing. In the Senate, the average age of Democratic
chairmen will be about 68.5, a year older than the Republican
leaders who lost their majority. Robert Byrd, 89, will be head of
the Senate Appropriations Committee. John Dingel, 80, will be
chairman of the House Energy and Commerce Committee. And
in the case of Byrd, he’s just starting another six-year term.
–It got buried on Christmas Day, but The Washington Post had
a story on the tangled web surrounding Democratic Congressman
John Murtha (Pa.), a charity for the disabled and federal support
for defense contractors. Five of the latter are on the board of
directors for the Pennsylvania Association for Individuals With
Disabilities, with an advisory council that includes three
lobbyists. The lobbyists, in turn, have contributed $125,000 in
the past three election cycles to Murtha’s reelection efforts. Not
that any of this is particularly surprising these days.
–One topic that could heat up in 2007 is the reconstruction effort
on the United Nations’ headquarters building in Manhattan. The
estimated cost has skyrocketed to over $1.9 billion, with the
United States’ share pegged at $400 million as we pick up 22%
of the regular UN tab.
–The earth in many respects appears to be warming up at light-
speed. For example, researchers have confirmed a giant ice shelf
the size of 11,000 football fields has snapped free from Canada’s
Arctic. The event happened 16 months ago about 800 kilometers
south of the North Pole, but no one was there to see it at the time.
Satellite photos have now confirmed the event.
Warwick Vincent, who studies Arctic conditions, could not
believe what he saw.
“This is a dramatic and disturbing event. It shows that we are
losing remarkable features of the Canadian North that have been
in place for many thousands of years. We are crossing climate
thresholds, and these may signal the onset of accelerated change
ahead.”
The collapse was so powerful it set off earthquake monitors 250
kilometers away.
Another researcher, Luke Copland, offered:
“What surprised us was how quickly it happened. Even 10 years
ago scientists assumed that when global warming changes occur
that it would happen gradually so that perhaps we expected these
ice shelves just to melt away quite slowly, but the big surprise is
that for one they are going, but secondly that when they do go,
they just go suddenly; it’s all at once, in a span of an hour.”
This particular shelf is a concern because it could drift south into
shipping lanes in the Beaufort Sea and impair oil and gas
development as well. [Rob Gillies / AP]
–Stuart Taylor, Jr. and KC Johnson, from an op-ed in The Wall
Street Journal on the case of Durham, North Carolina, prosecutor
Michael Nifong and the Duke lacrosse rape case.
“The case is now unraveling so rapidly as to be ridiculed on
‘Saturday Night Live.’ Mr. Nifong is on his way to being
disbarred, unless North Carolina’s legal establishment wants to
be held up to national scorn. He faces lawsuits and at least a
remote risk of federal criminal investigation. As for Durham’s
black leaders, many in the media, and much of Duke’s faculty,
history will mark them down as enablers of abusive, dishonest
law enforcement tactics. They will share responsibility for the
continued use of such tactics, mainly against black people, after
the Duke lacrosse player’s innocence has become manifest to all
serious people and the spotlight has moved on.”
–The following is a terrible story I read on the wires that speaks
volumes about segments of our society these days.
“Dallas: A 2-year-old girl left with a dozen other children in a
home without adult supervision was stabbed to death, and police
suspect a 9-year-old boy was responsible.
“No charges have been filed so far in the death of Damya
Jefferson and police were still trying to piece together what
happened when the girl was stabbed Friday night….
“Damya’s 17-year-old mother, Tiara Jefferson, had asked a
friend’s mother to care for her 2-month-old daughter and the
toddler. The caretaker, Detress Richmond, then left 11 of her
own children along with Jefferson’s children with a 15-year-old
baby sitter, police said, though they did not say where Richmond
had gone. Jefferson said she believes Richmond left to play
bingo.”
–British Prime Minister Tony Blair really can be a piece of work
in terms of how he and Mrs. Blair love to mooch off celebrities
for their holiday travels. This week the Blairs have been staying
in Miami at the home of pop star Robin Gibb, but there is a
question as to whether or not the Blairs are paying. They say
they are. Robin’s wife Dwina, however, says it’s free.
The whole deal wouldn’t matter one lick except it’s absurd the
Brits are getting two different stories. And consider this; Mrs.
Gibb is a “bisexual Druid priestess from Northern Ireland.”
Robin Gibb has said in the past that his marriage is “totally open.
We like to cruise and we like to watch.”
Sounds like Tony Blair will have quite a time with his old pal
Bill Clinton when Blair leaves office next year.
–Traces of cocaine can be found on 94% of banknotes in Spain,
where cocaine use is obviously rather heavy. Colombian
paramilitaries, who need money for weapons, are said to be
targeting Spain as a major entry point to Europe for its
smugglers.
–According to a BBC survey, only 44% of children in the UK
between the ages of seven and 11 know that Christmas
celebrates the birth of Christ.
–For the record, and for the purposes of “Week in Review,” the
“Person of the Year” must go to a political figure; the
consequences of governance, or lack thereof, being central to
what we explore here in this column. Having started this award
in 2001, if I can’t find anyone deserving I won’t hand it out. I
struggled mightily this time but if you can convince me
otherwise, I’ll at least mention it in my next column.
2001 – George W. Bush
2002 – no one…I cited then “unfinished business in Iraq”
2003 – George W. Bush, Tony Blair and John Howard for their
extraordinary leadership…as I wrote at the time
2004 – Afghanistan’s Hamid Karzai for defeating seemingly
insurmountable odds
2005 – Israeli Prime Minister Ariel Sharon…and then shortly
thereafter he had his stroke
2006 – no one
StocksandNews “Dirtball of the Year” is awarded to the one
person who has negatively impacted the lives of millions while
shunning accepted standards of behavior. Further explanation
shouldn’t be required when you look at this list.
2000 – Robert Mugabe
2001 – Osama bin Laden
2002 – Robert Mugabe
2003 – Saddam Hussein and bin Laden
2004 – Abu Musab al-Zarqawi
2005 – Zarqawi
2006 – Mahmoud Ahmadinejad
–Some thoughts on the passing of Gerald R. Ford, 38th president
of the United States.
President Bush:
“President Ford was a great man who devoted the best years of
his life in serving the United States. He was a true gentleman
who reflected the best in America’s character.
“Before the world knew his name, he served with distinction in
the United States Navy and in the United States Congress. As a
congressman from Michigan, and then as vice president, he
commanded the respect and earned the goodwill of all who had
the privilege of knowing him.
“On August 9, 1974, he stepped into the presidency without ever
having sought the office. He assumed power in a period of great
division and turmoil. For a nation that needed healing and for an
office that needed a calm and steady hand, Gerald Ford came
along when we needed him most.
“During his time in office, the American people came to know
President Ford as a man of complete integrity who led our
country with common sense and kind instincts.
“Americans will always admire Gerald Ford’s unflinching
performance of duty and the honorable conduct of his
administration, and the great rectitude of the man himself.
“We mourn the loss of such a leader. And our 38th president will
always have a special place in our nation’s memory.
“President Ford lived 93 years, and his life was a blessing to
America. And now this fine man will be taken to his rest by a
family that will love him always and by a nation that will be
grateful to him forever.”
Gerald Ford, Aug. 9, 1974
“I am acutely aware that you have not elected me as your
President by your ballots, and so I ask you to confirm me as your
President with your prayers….
“If you have not chosen me by secret ballot, neither have I
gained office by any secret promises. I have not campaigned
either for the Presidency or the Vice Presidency. I have not
subscribed to any partisan platform. I am indebted to no man,
and only to one woman – my dear wife – as I begin this very
difficult job….
“My fellow Americans, our long national nightmare is over.
“Our Constitution works; our great Republic is a government of
laws and not of men. Here the people rule. But there is a higher
Power, by whatever name we honor Him, who ordains not only
righteousness but love, not only justice but mercy.
“As we bind up the internal wounds of Watergate, more painful
and more poisonous than those of foreign wars, let us restore the
golden rule to our political process, and let brotherly love purge
our hearts of suspicion and of hate.”
Editorial / Wall Street Journal
“Perhaps President Ford’s greatest achievement was in
demonstrating to a nation angry and dispirited over Watergate
and Vietnam that its political system was resilient and the Office
of the Presidency still worthy of respect. In that sense his
Presidency was a triumph of Ford’s personal character – not the
first, or last, time America has been fortunate in the leaders our
democracy has produced.”
Former Secretary of Defense Melvin Laird / Wall Street Journal
“(The) most emotionally satisfying stamp of approval regarding
(the decision to pardon Richard Nixon) came five years ago in a
small scene out of the public eye when Sen. Edward Kennedy
admitted that Jerry had been right. The Kennedy-Nixon rivalry
was the political equivalent of the Hatfields and McCoys, so the
admission had strong emotional resonance. The occasion was
the Kennedy family presentation of the John F. Kennedy Profile
in Courage Award to Ford, precisely for the pardon. Sen.
Kennedy praised him that day for going against the tide of
popular opinion. ‘I was one of those who spoke out against his
action then. But time has a way of clarifying past events, and
now we see that President Ford was right,’ Sen. Kennedy said.
“Jerry’s reply on that occasion in Boston is something all
Americans should take to heart as we mourn his passing: ‘The
ultimate test of leadership is not the polls you take, but the risks
you take. In the short run, some risks prove overwhelming.
Political courage can be self-defeating. But the greatest defeat of
all would be to live without courage, for that would hardly be
living at all.’”
Thomas DeFrank, Washington Bureau Chief, New York Daily
News and a man who covered Ford for decades.
“Four days after becoming the 38th President amid Watergate’s
carnage, Gerald R. Ford was fiddling with the speech he would
make to a joint session of Congress in less than two hours.
Suddenly, Ford looked up from his text and his martini.
“ ‘Have you had dinner?’ he asked Cmdr. Howard Kerr, the
naval aide who had delivered the final draft to Ford’s modest
home in suburban Alexandria, Va.
“When Kerr said he hadn’t eaten, Ford bounded from his easy
chair, led the officer into the kitchen and plucked the remains of
the new First Lady’s tuna noodle casserole from the oven.
“ ‘Have some dinner,’ he said. ‘I’m going to go work on the
speech.’
“That is the Jerry Ford I remember: an ordinary guy in the
noblest sense of the word, a steady, solid Michigander whose
old-fashioned virtues were the perfect antidote for a fractured
country desperate for stability and healing….
“He was utterly uncomplicated, lacking in artifice or pretense.
He didn’t like opera or ballet and didn’t care who knew it. He
never developed a taste for fancy food, preferring steak and
butter pecan ice cream to almost any other menu combination.
He always counted being the first Eagle Scout President one of
his proudest moments.”
In January 1977, Jimmy Carter took the oath of office and began
his inaugural address: “I want to thank my predecessor for all he
has done to heal our land.”
Finally, a special note of appreciation in her time of sorrow to
Betty Ford, who in her own way has contributed greatly to our
nation.
—
Pray for the men and women of our armed forces.
God bless America.
—
Gold closed at $638…$519 on 12/31/05
Oil, $61.05…$61.04 on 12/31/05…All that worrying over a
lousy penny.
Returns for the week 12/25-12/29
Dow Jones +1.0% [12463]
S&P 500 +0.5% [1418]
S&P MidCap +0.3%
Russell 2000 +0.9%
Nasdaq +0.6% [2415]
Returns for 2006
Dow Jones +16.3%
S&P 500 +13.6% [approx. 16.0% including dividends]
S&P MidCap +9.0%
Russell 2000 +17.0%…beat S&P 500 for 8th straight year
Nasdaq +9.5%
Bulls 56.5
Bears 19.6 [Source: Chartcraft / Investors Intelligence]
Thank you for all your support over the past year.
Have a healthy and prosperous 2007.
[A few final predictions next time.]
Brian Trumbore
