[Posted 7:00 AM ET]
Iran and Iraq
“This is not the fight we entered in Iraq, but it is the fight we’re
in. Every one of us wishes this war were over and won. Yet it
would not be like us to leave our promises unkept, our friends
abandoned and our own security at risk. Ladies and gentlemen,
on this day, at this hour, it is still within our power to shape the
outcome of this battle. Let us find our resolve and turn events
toward victory.”
–President George W. Bush, State of the Union, Jan. 23, 2007
On many levels the debate now taking place in the Senate is a
good one and it’s only going to heat up this coming week. But
while I continue to support the troop surge, let me remind the
president that the reason why many are skeptical of success has
to do with the simple fact this administration has already been
given one opportunity after another and failed.
I take you back to the way I started out this column on Nov. 15,
2003.
“The stunning victory in the war to remove Saddam has been
followed by an almost equally stunning lack of seriousness about
winning the peace, despite the vital importance of creating a
stable, secure, and democratic Iraq.”
–William Kristol and Robert Kagan / The Weekly Standard
Washington Post columnist Jim Hoagland added that the mission
in Iraq is a “strangely unfocused U.S. campaign,” while Senator
Joseph Biden said Iraq is a “country in search of a strategy.”
All of the above comments were made early in the week, before
the White House suddenly shifted into hyper mode, sensing that
the operation was spinning out of control.
And the solution itself appears to be speed, by their way of
thinking; speed in shifting power to the Iraqi Governing Council,
or a reasonable facsimile thereof, as quickly as possible, while
signing up an Iraqi security force capable of replacing U.S.
soldiers by 2005. But as Senator Biden says, “The faster we go,
the more poorly trained and less legitimate the police and army
will be. Putting them in charge is a recipe for failure.”
[Washington Post]
Senator John McCain, also in a Post op-ed piece:
“If our troop deployment schedules are more important than our
staying power, we embolden our enemies and make it harder for
our friends to take risks on our behalf….President Bush speaks
frequently of the need to take the offensive in the war on terror
but in Iraq we too often appear to be playing defense.”
McCain adds, the existing troop levels “preserve the illusion that
we have sufficient forces in place to meet our objectives,” and in
the end “It is our responsibility to help create the security in
which Iraqi politics can flourish. We can leave it to the Iraqis to
decide what kind of tax code they should have.”
[Continuing, 11/15/03]
For those Iraqis and Washington leaders looking for a more
secure Iraq it was another debilitating week and I for one grow
weary of some of the “happy talk” being fed us. I have never
denied there is a ton of good taking place across Iraq, but you
can not just slough off the horrible bombing in Nasiriyah that
claimed 31 lives, including at last count 16 Italian policemen.
Coupled with a blast in Basra that killed 6 Iraqis, it’s quite
apparent violence is no longer limited to the Sunni triangle,
Nasiriyah and Basra being in the heretofore peaceful south.
Our president keeps telling us we will stay the course, and we
can not afford to lose, yet by his failure to send more troops and
recognize the problems in a post-war Iraq, we telegraph a mixed
message. At least this week the U.S. military counterattacked
with a vengeance and hinted at finally being able to identify just
who the enemy is. But in some respects it’s already too late as
nations who once pledged substantial troops to the cause, such as
Japan and South Korea, now want to hold off until the situation
on the ground improves. It will, but only when the president
decides to ignore the election cycle…the existence of which,
incidentally, screams for a constitutional amendment changing
the office of president to a single 4- or 6-year term. I can’t be the
only American ticked off to see our leader jetting about for all
manner of campaign stops during a time of war.
Lastly, I leave you with the observations of Arab affairs expert
Fouad Ajami from his op-ed in the November 17 issue of U.S.
News & World Report.
“It is idle to debate now whether this was a war of choice or of
necessity. We stand sentry here…having decapitated the old
regime and pledged to build a better one in its place. Our truth is
being redeemed in the most painful of ways – by predominantly
young men and women who carry the heaviest of burdens – so
many of whom have now made the ultimate sacrifice. The
question of whether a single national society exists in Iraq is yet
to be answered. The insurgency in the Sunni triangle is the
rebellion and the rear-guard action of a terrible breed of people
eager to restore their own hegemony and the reign of terror that
came with it. To a great, liberal country free of tribal and
sectarian feuds now falls the grim task of quelling a rebellion of
the darkest atavism. Imperial power has always carried with it
heartbreak. In the shade of these palm trees of Mesopotamia, the
best of our young people give the Iraqis their first exposure to an
army that does not plunder and terrorize. May our sacrifices in
that land not be in vain.”
—
That was 38 months ago. Sad, isn’t it? And to those whose
faulty memories continue to lead them to say John McCain is a
Johnny come lately to criticizing the war effort while calling for
more troops, I would also point you to my column of 8/23/03
where I reported on his comments from Iraq at that time.
But we are where we are, as everyone is so fond of saying these
days. We’ve also had a rough week in terms of American
casualties and it’s far too early to tell if the crackdown on some
militias we’ve been hearing of is a sign that Iraqi Prime Minister
Nouri al-Maliki gets it or if he’s just buying time for himself,
waiting out the United States until it begins to withdraw.
For now the surge, even as limited as some of us see it to be, is
coming and the impact this will have on the likes of Shia militia
leader Moqtada al-Sadr is also yet to be seen. Sadr has shown
signs of cooperating recently, but it’s more likely he too is just
trying to buy time as it appears he sent most of his forces to
ground.
As for the debate in the Senate and the nonbinding resolutions
working their way through various committees, it will be
interesting to see just how many Republicans turn against the
president aside from Chuck Hagel, John Warner, Susan Collins
and a few others. Sen. Warner of Virginia said “The American
GI was not trained, not sent over there, certainly not by
resolution of this institution, to be placed in the middle of a fight
between the Sunni and Shia and the wanton and just
incomprehensible killing that’s going on at this time. That’s a
mission that’s important…but it should be performed by the Iraqi
forces and not the coalition forces.” [Wall Street Journal]
Conservative commentator David Brooks of the New York
Times:
“I for one have become disillusioned with dreams of
transforming Iraqi society from the top down. But it’s not too
late to steer the situation in a less bad direction. Increased
American forces can do good – they are still, as David Ignatius
says, the biggest militia on the block – provided they are directed
toward realistic goals.
“There is one option that does approach Iraqi reality from the
bottom up. That option recognizes that Iraq is broken and that its
people are fleeing their homes to survive. It calls for a ‘soft
partition’ of Iraq in order to bring political institutions into
accord with the social facts – a central government to handle oil
revenues and manage the currency, etc., but a country divided
into separate sectarian areas to reduce contact and conflict.
When the various groups in Bosnia finally separated, it became
possible to negotiate a cold (if miserable) peace.”
[Brooks acknowledges this is essentially the Biden plan.]
Editorial / Washington Post
“On Tuesday nearly every member of the Senate Foreign
Relations Committee warmly endorsed Lt. Gen. David H.
Petraeus, the new U.S. commander in Iraq, and a number wished
him success or ‘Godspeed’ in his mission. Yesterday some of
the same senators voted for a resolution that opposes the increase
of troops for Gen. Petraeus’s command – even though the
general testified that he could not accomplish his mission without
the additional forces and hinted that such a resolution could
encourage the enemy. Such is the muddle of Congress on Iraq:
A majority may soon go on record opposing the new offensive in
Baghdad even while encouraging the commander who leads it….
“But legislators need a better way to act on their opposition to
the current policy than the passage of nonbinding resolutions that
may cover them politically but have no practical impact – other
than, perhaps, the negative one suggested by the general.
“As it happens, Gen. Petraeus made his own suggestion at
Tuesday’s hearing, offering to report to Congress regularly about
the mission, including updates on the performance by Iraqis on
their commitments. ‘I want to assure you that should I determine
that the new strategy cannot succeed, I will provide such an
assessment,’ he said. Taking Gen. Petraeus up on that, and
closely and systematically monitoring the progress of events in
Iraq during the coming months, is probably the best contribution
that Congress can make to helping the new American
commander address what he calls a ‘dire’ situation.”
What we don’t need from President Bush right now is more talk
like that on Friday when he said “I’m the decision-maker.”
You’d think he’d have learned to tone down the rhetoric by now.
But when you talk of the war in Iraq and the broader one on
terror, while President Bush likes to compare himself to Harry
Truman, which many take issue with, Kenneth Walsh pointed out
a truth in U.S. News & World Report.
“(Scholars) admit that if there are no more major terrorist attacks
on the United States by the end of his presidency, Bush can argue
that he accomplished his most vital mission – keeping America
safe. That would be an accomplishment that historians couldn’t
ignore. Both Bush and Vice President Cheney have always
linked the war in Iraq to the global war on terrorism. They say
fighting in Iraq is keeping the ‘evildoers’ at bay and preventing
them from taking their battle into the United States.”
Turning to the issue of Iran, I have trouble with those who don’t
agree with the president on his pursuit of Iranian operatives in
Iraq, but the pressure is immense to make sure that any who are
captured or killed are indeed Revolutionary Guard members or
agents. It’s one thing to have a civilian casualty of war, it will be
quite another to have one that, say, the Iraqi government would
agree was a diplomatic operative or expert on the electricity grid.
It’s also clear that as I’ve written for months now, the period
between Feb. 11 and 20 is key; a time when I’m guessing
Iran will formally announce its latest successes on the nuclear
enrichment front. International Atomic Energy Agency chief
Mohamed ElBaradei said as much on Friday, while President
Mahmoud Ahmadinejad injected “Ten more UN resolutions will
not affect our economy.”
But clearly the UN sanctions and other moves by the West are
having their intended impact as Ahmadinejad faces increasing
pressure on the home front. Iran is drawing $52 billion in oil
revenues these days and from the stories I’m reading, what
upsets many of the mullahs and the Iranian president’s prime
rival, former president Hashemi Rafsanjani, is Ahmadinejad’s
use of the ‘rainy day fund’ to help pay for costly subsidies on
bread, medicine and energy. In other words, he’s bleeding it dry.
I have been urging the United States to talk to Rafsanjani, but in
terms of the nuclear weapons program I’ve also said it’s
probably too late. This week, however, Rafsanjani met with
British Ambassador Jeffrey Adams, even as Ahmadinejad lumps
Britain in with Israel and the United States when he issues his
threats.
According to the Tehran Times, Rafsanjani “stated that
confidence building during talks with the West on the nuclear
issue is possible but ruled out any preconditions for the
resumption of talks.” [That being the suspension of uranium
enrichment.]
Then Rafsanjani told Ambassador Adams, “If any efforts were
made to solve the problem through proper channels, Tehran
would be ready for any type of verification process conducted by
relevant authorities as a means to prove the peaceful nature of its
nuclear program.”
But with Iran’s economy in a stupor, despite all the oil wealth,
listen to Rafsanjani, as reported by the Tehran Times.
“Iran will not develop unless the Article 44 privatization plan is
implemented and the private sector becomes involved,
Expediency Council Chairman Rafsanjani said here on Monday.
“Supreme Leader Ayatollah Ali Khamenei issued a decree in
early July to privatize state industries by amending Article 44 of
the Constitution, which had banned private ownership of state
institutions.
“ ‘The Supreme Leader expects the Article 44 policies to cause
an economic revolution in the country,’ Rafsanjani told a
national seminar.
“ ‘The Leader has stated that after the (1979) Islamic Revolution,
the situation did not allow us to take an appropriate measure for
(future) economic developments, but at this stage we should
harmonize our economy with the global economy as soon as
possible,’ he added.
“As the Leader has said, Iran should become a center of
economic development in twenty years, he noted.”
“ ‘We should bring about a noticeable change in the country.
Otherwise, the countries which are less developed than us will
surpass us,’ the former president warned. ‘We should activate
the private sector in such a way that people can feel assured that
the government will fully support their major investments.’ He
went on to say that there is an enormous amount of capital in Iran
but ‘we have not been able to use it properly because we have
not adopted the policies necessary to encourage investment in the
country.’
“ ‘We should take the private sector seriously…We should draft
regulations to guarantee people’s (financial) security and
eliminate the laws that could create obstacles for them,’
Rafsanjani suggested.”
Because of statements like those above, it’s been long known
that of all the leaders in Iran, Rafsanjani is the most pragmatic.
He also remains virulently anti-Israel, but since it seems clear to
me he will soon take over for Ahmadinejad, the Bush
administration can either choose to deal with him or not. We
will be making a big mistake if we don’t.
I imagine, though, that few Israelis would like to see this, but
Vice Premier Shimon Peres, a veteran of 60 years of Israeli
history, as he himself put it this week, told the Herzliya
Conference, “I’m telling you – there have been harder days.
Israel will not fall – Ahmadinejad will fall.”
Peres disagrees with opposition leader and former prime minister
Benjamin Netanyahu, the latter comparing the current situation
to the eve of World War II.
“This is not 1938,” said Peres. “It’s not the way it was then. We
will not sit on the sidelines, but we also do not need to jump.”
[Jerusalem Post]
Peres emphasized there was already an agreement to transfer
90% of the West Bank to the Palestinians, and that Israel was
ready to deal. Of course Israel needs a partner on the other side
of the negotiating table. U.S. News & World Report’s Editor-in-
Chief Mort Zuckerman has his doubts.
“The crux, as it has been all along, is Hamas’s refusal to accept
Israel’s right to exist, which stems from a visceral hatred of
Israel, the blood lust of popular resistance, the destructive
influence of radical Islam, the interference of Iran, and the belief
in so many Arab hearts that sooner or later Israel will disappear
from the map because it has no right to exist.
“The U.S. role in this nightmare scenario ought to be clear,
though it is anything but. Washington is banking on the hope
that Palestinians will remove Hamas from power and strengthen
President Abbas and Fatah. That, this hopelessly wishful
thinking goes, would prepare the grounds for negotiations, which
would then be confirmed by a referendum, after which a
Palestinian state with temporary borders would be established.
“The presumption here is that Hamas will be contained and the
security threat it represents eliminated – not a chance! We were
foolish in believing that Hamas couldn’t win an election, and we
were dead wrong to overrule Israel’s desire to retain control of
the Gaza-Egyptian border, the source of so much of today’s
chaos.
“The American proposal for this spiraling crisis is worse than
premature. It will damage our credibility and our influence. The
last thing America needs in this increasingly dangerous part of
the world is yet another demonstration of its naivete.”
Newt Gingrich, addressing the same conference Shimon Peres
did.
“Israel is facing the greatest danger for its survival since the 1967
victory. Three nuclear weapons is a second Holocaust. We have
enemies who are quite explicit in their desire to destroy us. They
say it publicly, on television, on Web sites. We are sleepwalking
through this as though it is all a problem of communications, and
that somehow diplomacy will enable us to come together and
have a wonderful fiesta in which we will all learn to love one
another.” [Jerusalem Post]
There you have it. All sides of the Middle East debate. I would
just reiterate, again, that I understand why President Bush
doesn’t want to talk to the likes of Ahmadinejad, let alone Hamas
or Hizbullah. But to think that we can’t open a dialogue with
others is absurd. And I would suggest Bush missed a huge
opportunity during the State of the Union when he couldn’t find
space for one line addressing the Iranian people directly,
reaching out to them. Ahmadinejad is in trouble for a reason.
The people are restless. It’s time to talk to Rafsanjani.
—
Wall Street
Volatility picked up some, stocks fell a bit, and interest rates rose
to their highest levels since last August amidst fears the
economy’s strength could lead to higher, not lower, interest rates
down the road. Since most everyone has been counting on a cut
by the Federal Reserve the first half of the year, the first of many
depending on who you’re talking to, this has caused a bit of
indigestion.
Case in point, housing. Unbelievably, some took the December
data for existing and new home sales, mixed at best, as yet
another sign the all-clear signal has been issued. Wrong.
Existing home sales were slightly worse than expected and down
8.4% for all of 2006, the worst performance in over 20 years,
while new home sales were a little better than expected but still
off 17.5% for ’06, the worst performance here since 1990.
As for the important median sales price data, call both existing
and new home figures unchanged over the course of the past
year; which means some were up slightly, and some were down.
But recall the market really didn’t start topping out in a big way
until last spring and summer so the more meaningful
comparisons are yet to come.
For now, though, rely on what the homebuilders themselves are
saying.
Beazer Homes: We have “yet to see any meaningful evidence of
a sustainable recovery in the housing market.”
D.R. Horton’s CEO: “Most downturns are longer and deeper
(than people expect), and right now we are not seeing anything
on the horizon to change that opinion.”
WCI Communities’ CEO, WCI specializing in tower residences
and communities in Florida: We have seen a “higher level of
defaults than expected (and) cancellations are outnumbering new
orders.”
And this from a Goldman Sachs analyst: “The worst may be past,
but the housing market remains troubling.”
Additionally, defaults are clearly rising, substantially, as in up
145% in California for the 4th quarter. But to be fair this is a
poor comparison off what was still a solid market one year
earlier. Again, better ones will emerge later.
But think about it. Not only has the bubble cracked, but the
unease is in an environment where employment can’t get any
better. So what happens when the job picture gets truly iffy?
Plus this recent rise in rates is killing any chance of a sustainable
recovery. It’s still largely about affordability, remember.
I promised you a break on all the housing talk, though, and that
you’ll get the next few weeks until the data for January, figures
that mercifully won’t include summer-like December weather in
the northeast that distorted the true facts.
So let’s turn to energy, shall we? In his State of the Union
address, President Bush proposed a bunch of new government
programs designed to regulate what we drive and what fuels to
use, while at the same time not mandating new fuel-efficiency
standards; rather he made some assumptions that the auto
industry will become 4% more fuel efficient with each passing
year.
And then there’s ethanol. Watching Tuesday, you’d have
thought Iowa Sen. Chuck Grassley had won the lottery with the
jig he did in the aisle when Bush mentioned that ethanol was the
cure for all our nation’s ills, and by gosh, Grassley should be one
happy land crab because anyone with decent soil and any kind
of growing season, like Iowa’s, can now grow corn and profit
forever…or so we’ve been told. I’ve touched on it in the past,
but ethanol is a sham. Many have already figured this out and
countless others will in the near future. Other synthetic fuels,
some of which have yet to be developed to their potential, may
on the other hand be wild successes.
What is also increasingly clear, though, is the free market is
beginning to work, as it is wont to do, and Corporate America is
clambering aboard the Clean Energy Express. Yes, those multi-
millionaire CEOs are beginning to stir because they know if they
don’t act they’ll be passed by. This is a global movement, after
all, and this week even the Chinese government said one way to
cool its white-hot economy was to crack down on pollution
deadbeats and begin to close unnecessary smoke-belching
factories.
What’s also interesting to observe is seeing conservatives
suddenly jump on the gasoline tax bandwagon. They don’t come
any more conservative than the Washington Post’s Charles
Krauthammer and on Friday he wrote:
“There are three serious things we can do now: Tax gas. Drill in
the Arctic. Go nuclear.”
Sure, the free market will at the same time pursue other
alternatives, whether it’s hybrid cars, biofuels, and solar or wind
power, but in the immediate term even I have accepted that we
should tax gasoline.
Krauthammer:
“The president ostentatiously rolled out his 20-in-10 plan:
reducing gasoline consumption by 20% in 10 years. This with
Rube Goldberg regulation – fuel-efficiency standards, artificially
mandated levels of ‘renewable and alternative fuels in 2017’ and
various bribes (err, incentives) for government-favored
technologies – of the kind we have been trying for three decades.
“Good grief. I can give you 20-in-2: Tax gas to $4 a gallon.
With oil prices having fallen to $55 a barrel, now is the time.
The effect of a gas-tax hike will be seen in less than two years,
and you don’t even have to go back to the 1970s and the
subsequent radical reduction in consumption to see how. Just
look at last summer. Gas prices spike to $3 – with the premium
going to Vladimir Putin, Hugo Chavez and assorted sheikhs
rather than the U.S. Treasury – and, presto, SUV sales plunge,
the Prius is cool and car ads once again begin featuring miles-
per-gallon ratings.
“No regulator, no fuel-efficiency standards, no presidential
exhortations, no grand experiments with switch grass. Raise the
price, and people change their habits. It’s the essence of
capitalism.”
At the same time I’ve always agreed with Krauthammer’s second
conclusion…drill in the Arctic. Even if it’s ‘just’ a million
barrels a day it would be 5% of current consumption. We then
wouldn’t have to screw around with another of the president’s
proposals…increasing the Strategic Petroleum Reserve from its
current 55 day supply of net oil imports to closer to 100 days.
For starters, the White House is calling for this by 2027 and who
the heck knows what the situation will be then, or what new
technologies will be prevalent. I just note the 100 day figure
because that’s what the administration said, but it is deeply
flawed, just like any budget projection over one year is.
As for Krauthammer’s third suggestion, going nuclear, it is
amazing how many decades we’ve wasted on this topic. Last I
recall, no one died at Three Mile Island and in the intervening
years hundreds have perished crossing some of New York City’s
more dangerous intersections.
But back to oil, we can talk about alternatives and reducing
consumption through taxes and/or increased fuel efficiency, yet
the fact is we’re still going to be using gobs of it for decades to
come, as will the likes of China and India.
So while President Bush touts “energy independence,” oil expert
Daniel Yergin responds.
“How dependent is the U.S.? If we look at total energy –
including coal, nuclear and a small but growing share from
renewables – the country is over 70% self-sufficient (already).
Oil…is where most of the current dependence comes from. The
risks do not owe to direct imports from the Middle East, contrary
to the widespread belief. Some 81% of oil imports do not come
from that region. Thus, only 19% of imports – and 12% of total
petroleum consumption – originates in the Middle East.
“Our largest source of oil imports is Canada. It’s also the source
of most of our current natural gas imports, via pipelines. One
can hardly say that either Canada or energy imports from Canada
constitute a major threat to national security….Our second
largest source is Mexico, with which we are also in a dense
relationship.”
Well it gets more complex after that, thanks to Venezuela, but as
Yergin points out, “the source of imports is significant only up to
a point. Energy security is a global issue. Although oil around
the world varies greatly in terms of physical qualities and
transportation costs, there is only one world oil market. So
disruptions and loss of supply in one place radiate throughout the
global market – and global politics – affecting consumers
everywhere. Even if the U.S. did not import a drop of oil, it
would still be vulnerable to turmoil involving oil outside its
borders.”
One last note on crude. Those saying we are awash in it in terms
of future reserves (including Yergin, actually) are wrong. For
some time I’ve been talking about production issues in Norway
and Mexico, two rather important players, and my friends at
Strategic Energy Research dug up some great stuff concerning
Mexico’s all-important Cantarell field that is the source of 60%
of that nation’s proven reserves.
“The progressive decline in Mexico’s capacity to produce oil is
rapidly becoming more worrisome than the slump in global crude
prices,” notes El Universal. “According to estimates by the state
oil company, Pemex, petroleum exports will decline dramatically
during the Calderon administration.”
Pemex spent $4 billion on exploration last year and came up dry.
But as a former Pemex director put it, “it might be time for us to
learn from the experience of other international producers and
redouble our exploration efforts. It is impossible to ignore the
fact that our reserves are rapidly shrinking.”
Who benefits? One would think the drillers and oil-service
companies, wouldn’t you?
Street Bytes
–The major averages lost some ground with the Dow Jones
declining 0.6% to 12487 after hitting a new all-time high of
12621. The S&P 500 also lost 0.6% to 1422 and Nasdaq
dropped 0.7% to 2435. Earnings were important, as noted
below, but in the end it was about the Fed.
–U.S. Treasury Yields
6-mo. 5.17% 2-yr. 4.97% 10-yr. 4.88% 30-yr. 4.98%
Rates rose, in the case of the 10-year to its highest level since
August, on what was seen as better than expected news on
housing, a solid durable goods figure, and increased inflation
pressures. On this last point there is no inflation to be concerned
with, for crying out loud, but the bond market will latch onto the
fact that when the Fed issues its statement on Tuesday it will
leave the bias towards tightening in place.
–On the earnings front:
Ford’s loss for all of 2006 was a company record $12.7 billion
and the outlook for 2007 isn’t much better, though actual losses
shouldn’t approach 2006’s level due to the fact Ford has already
written off everything but the kitchen sink. [Meanwhile, General
Motors announced it was still trying to figure out its books and it
was delaying its report.]
It’s interesting to note, though, that Ford’s sales in North
America were just $15 billion in the 4th quarter vs. $21 billion a
year earlier, but while North America continues to account for a
lion’s share of the company’s red ink, Ford, like General Motors,
continues to earn money in Europe and South America.
Microsoft’s earnings numbers were decent as Xbox 360
videogame consoles flew off the shelves, accounting for a 76%
jump in revenue for the entertainment division, but otherwise it’s
all about the launch on Tuesday of the new Vista operating
system. This is the driver going forward and I would expect
Microsoft to have a bang up year, but at the same time the stock
isn’t cheap…over 20 times expected earnings…so the value
investor in me just doesn’t see much upside unless we enter a
stirring new bull phase for the market overall.
Yahoo’s 4th quarter topped estimates, though 4th quarter profit
declined 61% over a year ago. But shares rallied a bit on news
its upgraded advertising program is about to be launched. [I’m
underwhelmed by this new project.]
Advanced Micro Devices had previously warned its 4th quarter
results would be miserable, but it’s now apparent the price war in
the chip market is having a far greater impact than even the
company once thought as it reported the gross profit margin fell
to 36.1% from 46.4% a year earlier. Shares in AMD plummeted
anew.
But Sun Microsystems returned to profitability as the server king
earned 3 cents per share, $126 million, vs. a loss of $223 million
a year ago. Analysts, though, are waiting to see if Sun can have
two positive quarters in a row.
The new Alcatel-Lucent continued the tradition of the U.S.
partner as it warned 4th quarter revenues would fall far short of
expectations. CEO Patricia Russo, from the Lucent side, said “In
the past few months, (the merger) created short-term uncertainty
for our customers and for our people as we worked to develop
the combined company’s product portfolio and new organization
structure.” Well, that was to be expected, Ms. Russo. But you’re
still falling short by about 20%.
–Pfizer said previously announced job cuts would amount to
10%, or 10,000 workers, as a result of generic drug competition,
expiring patents and a pipeline of new medicines that is expected
to generate just half the revenue lost from the older drugs. By
2008, Pfizer is expected to have 48 plants overall, down from 93
in 2003.
–Americans have been driving less. Per-driver mileage was
down 0.4% in 2005 and Los Angeles-area mass transit ridership
is up 6%
–The European Union is increasingly concerned with Russia’s
attempts to forge a natural gas cartel with Algeria; Russia
supplying 25% of Europe’s needs while Algeria is responsible
for 10%.
–Chinese authorities are warning of a stock market bubble as it
was announced the economy grew 10.7% in the 4th quarter.
Price-earnings multiples on the Shanghai Exchange are double
the average of other emerging markets following a 130% rise in
2006. The government cautioned “blind optimism” is driving
gains.
Separately, China’s number of Internet users could surpass that
of the United States in two years. Last year the number surfing
the Web in China hit 137 million vs. 210 million in the States.
But, President Hu Jintao vowed to “purify” the Net. The
Communist Party had to “strengthen administration and
development of our country’s Internet culture,” Hu said. “We
must promote civilized running and use of the Internet and purify
the Internet environment.” [South China Morning Post]
–Home Depot announced it would pay Robert Nardelli’s
successor, Frank Blake, up to $8.9 million this year assuming he
meets certain performance targets. Nardelli was paid $225
million over his six-year term, plus he left with a $210 million
severance package. Blake’s contract, aside from not only being
fair considering the size of the operation he’s handling, does not
contain a severance package. So hat’s off to Home Depot.
–Merrill Lynch CEO Stan O’Neal is taking home $48 million for
his efforts last year, a cool 30% hike from 2005. Of course by
my back of the beer coaster calculation, O’Neal is earning about
1,000 times the average American worker’s pay.
–Last week I wrote of the layoffs at Time Inc., but I just saw
where Detroit’s automakers had slashed their advertising budgets
with Time’s offerings by more than $100 million last year, with
General Motors responsible for almost half of this total.
–Electronic trading has hit the floor of the New York Stock
Exchange with a vengeance and the specialist firms are slashing
staffs. One of the larger ones, Van der Moolen Holdings, said it
would cut its work force by about 30%. It’s getting
embarrassing for CNBC to be broadcasting from there and I’m
thinking I might use some of the now-empty space to store my
books.
–In a piece on the divide between the haves and have nots,
Barron’s Michael Santoli had this tidbit. According to the
Economic Policy Institute, “the richest 1% of Americans had net
wealth 190 times that of the median household, up from a ratio of
168 in 1998 and 131 in 1983. The top 1% owned 37% of all
domestic stocks held by individuals in 2004, and the top 10%
owned 79% of all stock.”
Santoli doesn’t mention this but the above helps prove my point
that the dividend tax cut should be done away with, while
keeping the Bush tax cuts on income and capital gains.
–According to Bloomberg News, Apple CEO Steve Jobs has
been questioned by the SEC about the backdating of stock
options issue. Assuming there has been some wrongdoing here, I
still like my idea of suspending Mr. Jobs for a year. It wouldn’t
kill Apple or hurt its shareholders that much, but it would
certainly send the right message.
As for the backdating issue in general, a study by academics at
Portland State University and the University of Utah estimated
that by 2002, over 40% of corporations in America were
backdating options; the authors having gleaned this by focusing
on boardroom behavior. Specifically, the fact so many members
are on multiple boards and if you found backdating at one
corporation you could assume the chances were good it existed at
other companies where a tainted board member sat. [Mark
Hulbert / New York Times]
And along these lines, Broadcom announced it would be
restating financial results by $2.24 billion to account for what the
Journal described as “slapdash options-granting procedures”
from 1998 to 2003. Today’s investors didn’t seem to care,
however, even though prior ones were being fed fraudulent data.
–Last week I noted it was amazing what General Electric got
away with in its earnings statements, so by way of follow-up I
have to cite some passages from a piece by the Journal’s Kathryn
Kranhold that I saw after I posted my own thoughts.
“(GE’s) 4th quarter earnings…caused concern among investors
and analysts who noted that the company again got a boost from
a lower-than-expected tax rate….
“Analysts estimated that lower tax rates at GE’s industrial and
financial business boosted earnings by three to four cents. ‘A
Rubik’s Cube may in fact be easier to figure out’ than the
meaning of GE’s results, wrote Scott Davis, an analyst with
Morgan Stanley.”
GE, you’ll recall, had also restated earnings back to 2001 due to
a new way of looking at the accounting of its derivatives
positions. “GE believed it was following proper procedures. But
the SEC’s chief accounting officer disagreed, prompting the
restatement.”
–Sam Ali of the Star-Ledger (N.J.) had a story on real estate
commissions and the disputes that can arise and I have to admit I
had no idea of the following regarding brokers and buyers.
“For example, have you ever called an agent or a broker for
information about a listing? Given an agent your contact
information? Toured one or more homes with one or more
salespersons?
“Then you may have unknowingly gotten married to that agent,
says Tom Wemett, a founding member of the National
Association of Exclusive Buyer Agents…
“Even typing your e-mail address over the Internet to receive
information about a listing from an agent can result in a claim by
that agent to be paid a commission, even if you wind up buying
that property through another agent, or even the seller.”
Bottom line…if you’re at an open house don’t give out any
information except perhaps your name. J. Fred Muggs would
probably do the trick.
–New York City’s financial picture continues to get better by the
minute as a result of Wall Street’s riches. Now the budget
surplus is expected to be $4 billion. But the ever cautious
businessman/mayor, Michael Bloomberg, is defraying at least
$1.4 billion to deal with projected shortfalls in 2009.
–Some of us are getting a real kick over the flap concerning
CNBC’s Maria Bartiromo and her relationship (all business,
we’re told) with recently-fired Citigroup executive Todd
Thomson. For starters, Thomson was a poster-boy for arrogance
and hubris on Wall Street.
From the Wall Street Journal:
“An angry (Citigroup CEO Chuck) Prince told Citigroup
directors last week that the expense (of giving Ms. Bartiromo a
lift on the corporate jet) was among a number of lapses of
judgment by Mr. Thomson – from improper use of Citigroup’s
plane to installing a wood-burning fireplace in his office to
spending Citigroup money on functions featuring Ms. Bartiromo,
according to a person familiar with the situation….
“Inside the bank, Mr. Thomson’s friendship with Ms. Bartiromo
became an issue. When (senior executive Robert) Druskin, then
Citigroup’s investment-banking chief, took his management team
to a holiday dinner in 2005 at the ritzy Daniel restaurant, he
spotted Mr. Thomson having dinner with the CNBC anchor,
according to people familiar with the situation. Word of the
sighting spread through Citigroup the next day.”
Thomson had been told to reduce his contact with Bartiromo, but
he always had an explanation as to why it was good for business.
The payoff, though, was a flight in the corporate Gulfstream that
Bartiromo took with Thomson from Asia last year. While CNBC
compensated Citigroup for the lift, Thomson bumped senior
executives from the flight at the last minute so that he could fly
solo with Bartiromo. Well, you can imagine the daggers were
out then. For her part, Maria said it was all about “source
development.”
I have to admit I feel a little sorry for her. Certainly Bartiromo’s
career trajectory has been one to admire, but she’s exhibiting
some very poor judgment. [Meanwhile, Todd Thomson was
replaced as head of the Global Wealth Management division by
Sallie Krawcheck, who had been Citigroup’s CFO.]
–Wohhh…if you’re an investment banker in Britain and just had
a banner year in terms of your bonus (over $17 billion in bonuses
were handed out to London bankers in ’06), you don’t want to go
through a divorce in Britain, according to Bloomberg News. A
judgment involving an antique dealer and his wife “may let ex-
wives claim a portion of payouts awarded long after a breakup,
burnishing London’s reputation as a top venue for big-money
divorce settlements.” A court ruling classified bonuses earned
“at least” 12 months after separation as marital assets. That
leaves it open for wives to claim half of future bonuses. And
pre-nuptial agreements aren’t binding in the U.K., as we’ve
learned from various celebrity breakups there, right sports fans?
Foreign Affairs
Lebanon: What a horrible week as two separate incidents
claimed at least seven lives in clashes between pro-government
and Hizbullah-led forces. In his State of the Union address,
President Bush once more referred to the plight of Lebanon,
tying it to the theme “nothing is more important than for America
to succeed in the Middle East,” a statement that while true
continues to infuriate me because of the White House’s total
disengagement following the Cedar Revolution in the wake of
the assassination of former prime minister Rafik Hariri. And I’ll
say again, the Bush administration’s failure to intercede in the
conflict between Israel and Hizbullah was criminal and
obviously helped sow the seeds for the crisis that followed.
This week we had a general strike on Tuesday, called for by
Hizbullah’s Sheikh Nasrallah, which resulted in the death of
three protesters in clashes in the heart of Beirut’s financial
district. Then on Thursday, two students, one Sunni and one
Shia, got into an argument at Beirut’s Arab University, one spat
at the other, and within minutes it escalated into a brutal riot,
with vigilantes carrying chair legs, pipes and chains. Snipers
also manned rooftops and the result was four dead and over 150
wounded, including many members of the Lebanese Army which
has been rather busy lately.
All of this was occurring as Prime Minister Fouad Siniora, who
has heroically refused to buckle under Hizbullah pressure, was in
Paris seeking donations for the rebuilding of his country
following the war, as well as debt relief; Lebanon owing a
staggering $41 billion to its creditors. Despite Thursday’s
violence some $7.6 billion was pledged, most of it by Saudi
Arabia (a major backer of Rafik Hariri), the U.S., France and the
EU. Lebanon faces default on a $7 billion interest payment at
the end of this current quarter.
Rami Khouri / Daily Star (Beirut)
“In Lebanon the Siniora government and the Hizbullah-led
opposition are fighting an intense battle on many fronts, just as
the Hamas and Fatah camps square off in Palestine. They do so
as part of a local political power struggle, but also explicitly as
part of the wider confrontation between the U.S. and Iran-Syria.
The fact that these face-offs now occur with Arab countries,
rather than between different countries, reflects a bizarre reality:
Most Arab countries – in some cases half a century or more after
their birth – still have not achieved stable statehood based on the
collective allegiance of satisfied citizens. Different groups not
only compete for political control of the government, but for the
even more basic ideological definition of the state and its
policies.” [As best exemplified by the clash between Hamas and
Fatah.] “There is simply too large a gap between Hamas’ refusal
to recognize and deal with Israel and Fatah’s insistence on
resuming peace talks with Israel for this to be bridged by a vague
national unity government agreement whose main advantage is
diplomatic imprecision.”
[One sidebar to the Lebanese aid effort; kudos to Cisco Systems’
CEO John Chambers who is pledging $10 million to expand
computer training that he hopes generates up to 3,000 new jobs
over the next few years.]
China: For over 10 days China said nothing about its successful
test to destroy one of its satellites and some wondered if
President Hu Jintao himself even knew of the timing of it. As the
New York Times’ David Sanger and Joseph Kahn reported, “The
mysteries surrounding China’s silence are reminiscent of the
Cold War, when every case of muscle-flexing by competing
powers was examined for evidence of a deeper agenda.”
Eventually, the Chinese issued a statement that “this was not
meant as a threat against anybody and it’s not meant to spark a
race to militarize space.”
But Peter Brookes noted the following in an op-ed for the New
York Post as to why the “satellite-killer” launch caused so much
heartburn.
“The missile test, launched from the Xichang Space Center in
central China, was unannounced and appeared to have taken
place without the prior consultation of other countries with
space-based assets, such as the United States.
“The destruction of the target created a major debris field –
‘space junk’: hundreds of metal objects that could damage other
space vehicles that come into its path, including satellites or even
the space shuttle.
“China has long pushed for a ban on space-based weapons and
voiced strong opposition to any ‘weaponization of space’ at the
United Nations – and elsewhere. This launch totally flies in the
face of all that rhetoric.
“The successful test means China not only can track but also can
destroy low-Earth-orbit satellites, such as weather,
communications, surveillance and global-positioning satellites.
This could seriously hamper U.S. military operations.
“The Pentagon believes Beijing is developing laser and/or radio-
frequency weapons, which would enhance its ASAT capabilities.
Thus, China could eventually threaten other critical orbiting
military satellites, including high-value spy-sats. Beijing may
have ‘lazed’ – pulsed with a high-intensity laser – one of our
imagery satellites last year.”
North Korea: Once again we are seeing optimistic statements
regarding the prospects for a resolution to the nuclear weapons
program stalemate. South Korea’s foreign minister said
Pyongyang was showing “flexibility” to a “proactive” offer by
the U.S. and the South. We’ve heard this before, and we all
know it’s really up to China…so we wait 24 hours.
Afghanistan: The New York Times’ Carlotta Gall had a
powerful piece last Sunday on the support Pakistan’s intelligence
agencies are giving the Taliban in strongholds such as Quetta.
“The Pakistanis are actively supporting the Taliban,” one
Western diplomat told Ms. Gall in Kabul. [Ms. Gall was also
roughed up by what were presumed to be ISI agents.]
And as noted last week, the White House is preparing a package
of aid for Afghanistan in the amount of at least $7 billion mostly
for infrastructure projects. The U.S. and its NATO allies are
concerned about a spring Taliban offensive.
I just have to add that at least the White House recognizes the
importance of good roads when it comes to development
anywhere. I think back to the Clinton administration when it
would promote buying PCs for Africa; one of Al Gore’s pet
projects. Good roads and clean water had to come first! I wrote
back then. Let alone the fact that in those days it was pretty hard
to foster computer usage where there was no electricity.
Serbia: One of my predictions for 2007 was that the Balkans
would reemerge as an issue and Sunday’s election results in
Serbia certainly don’t dispel this thesis. The Radicals, who once
ruled together with Milosevic, captured the leading share, 28.7%,
to give them 81 seats in Serbia’s 250-seat parliament. While it’s
still expected a pro-Western coalition will emerge, it needs to be
noted the Radicals are led by Vojislav Seselj, who is awaiting
trial at The Hague for war crimes.
With this vote, however, attention will now be focused on
Kosovo, with the U.S. and its European allies supporting
Kosovo’s permanent secession from Serbia under international
supervision; which could occur as early as this summer. Under
the plan NATO would continue to patrol the new state to help
protect minorities, particularly the remaining Serbs who face
Albanian retribution. [Albanians comprise 90% of Kosovo.]
For its part, Serbia’s leaders have campaigned against separation
and have been relying on its protector, Russia, to veto the matter
when it’s presented to the UN Security Council for a vote.
But as reported by R. Jeffrey Smith in the Washington Post,
Moscow “is prepared to support (separation) in exchange for
U.S. and European acquiescence to the formal secession of two
Russian-backed regions of Georgia.” Thankfully the White
House opposes this, but it will be interesting to see how it plays
out.
Russia: Speaking of Georgia, the Kremlin lashed out at a report
that Tblisi foiled an effort by a Russian man to sell weapons-
grade uranium, which casts doubt on whether Russia can secure
its nuclear materials.
What has come to light is an effort about a year ago where U.S.
and Georgian authorities set up a sting operation that led to the
arrest of a Russian citizen with 3.5 ounces of highly enriched
uranium, suitable for use in an atomic bomb, though not nearly
enough to pull it off. It appears the story was released to the AP
to build up Georgia’s image as an ally of the United States, and
also to showcase Russia’s status as a nuclear supermarket.
But Russia had a great week on the nuclear power front. While
Washington and New Delhi recently concluded an agreement to
share civilian nuclear technology for the purposes of helping
India build modern nuclear reactors, Vladimir Putin concluded
his own deal with his Indian counterpart, Manmohan Singh, to
build at least four here in a deal worth over $10 billion.
The package is not complete, though, without India receiving the
approval of all members of the Nuclear Suppliers Group – 45
countries that possess nuclear technology and regulate
international trade in the field. Washington may now decide to
delay its cooperation until it can ascertain which sites may be
applicable for its own deals with Delhi. While the Russia-India
agreement is a blow to the U.S., it can still gain its fair share of
what promises to be a huge market.
Venezuela: President Hugo Chavez told his weekly radio and
television audience that the U.S. can “Go to hell, gringos!” while
calling Condoleezza Rice “missy” in attacking U.S. intentions in
the Middle East.
“What does the empire want? Condoleezza said it. How are
you? You’ve forgotten me, missy…Condoleezza said it clearly,
it’s about creating a new geopolitical” map in the Middle East,
Chavez said. [USA Today]
Looks like Hugo will be in the running for “Dirtball of the Year.”
Chavez also said his government will not pay market value for
Venezuela’s largest telecommunications company, CANTV, of
which Verizon holds a 28.5% stake. “I’ll pay when the law
dictates and in the form the government decides.”
Turkey: This is a troubled place these days and this spring’s
elections could be volatile, but at least there was a bit of good
news in the fact that 100,000 mourners turned out for the funeral
procession of Hrant Dink, the Armenian journalist gunned down
in Istanbul. Most were on hand to show support for a more open
and liberal Turkey, but the nationalist movement in the country is
still a most powerful, and dangerous, one.
Mexico: President Felipe Calderon is off to a good start, at least
in the eyes of many in America, as he extradited four major drug
traffickers to the U.S. in a sign he would deliver on a promise for
more cooperation in fighting cross-border crime. U.S.
Ambassador Tony Garza said “I cannot say enough about the
extraordinary leadership, courage and conviction demonstrated
by President Calderon.”
Libya: It’s been a long time since I mentioned this place, which
is normally a good sign. Today, though, if you are a government
worker here you’re on pins and needles. Col. Muammar
Qaddafi’s regime is prepared to lay off 400,000, or more than a
third of its work force, to ease budget pressures and stimulate the
private sector.
Actually it’s not too bad a deal. “Each public employee who is
laid off will be given a full salary for three years or will be
granted up to $40,800 in loans to start a business.” No word on
whether there is a third choice, the curtain where Carol Merrill is
standing.
France: The race for president is a hot one and I got a kick out of
a gaffe by Socialist candidate Segolene Royal. As reported by
Adam Sage in the London Times, Royal was asked how many
ballistic nuclear missile-carrying submarines France possessed.
“One,” she said. “In fact, it is seven,” said the journalist
interviewing her. “Ah yes, seven,” she replied. Page reports the
true figure is four.
Random Musings
–Since I’ve quoted former President Jimmy Carter and his
controversial book “Palestine Peace Not Apartheid,” I need to
note his appearance at Brandeis University the other day where
he was correctly confronted on a line from page 213:
“It is imperative that the general Arab community and all
significant Palestinian groups make it clear that they will end the
suicide bombings and other acts of terrorism when international
laws and the ultimate goals of the Roadmap for Peace are
accepted by Israel.”
The students said the sentence suggested suicide bombing was an
acceptable tactic of war. We should take President Carter at his
word when he says, “The sentence was worded in an absolutely
improper and stupid way. I apologize to you and to everyone
here…it was a mistake on my part. I’ve written my publishers to
change that sentence immediately in future editions of the book.”
–The BBC did its annual survey of 25 countries to gauge
attitudes on some of the hot topics of the day and only majorities
in Kenya, Nigeria, the Philippines and the U.S. thought America
was playing a positive role in the world. So we hereby nominate
Kenya, Nigeria and the Philippines for StocksandNews
“Nation(s) of the Week”. Congratulations. You will receive a
visit from moi, spending all kinds of dollars on food and drink,
over the coming years…………………..err, maybe not. But the
support is nonetheless appreciated.
On a more detailed level, 73% of those polled (57% in the U.S.)
disapproved of the war in Iraq, which is frankly lower than I
would have thought.
–More criticism of Condoleezza Rice’s flip-flop in the Middle
East, this time from Jackson Diehl of the Washington Post.
“Last week (Egyptian Foreign Minister) Aboul Gheit and Rice
again appeared side by side….Once again each offered a
summary of the talks – which this year, unlike last, included
President Hosni Mubarak. This time Iran loomed large in their
discussions, as did Iraq. But it was Rice who neglected to
mention something: ‘democracy and reform.’….
“The reversal this represents is staggering – especially to
Egyptians who have closely tracked Rice’s visits to their country.
After all, her first notable act on moving to the State Department
two years ago was to cancel a visit to Egypt in order to signal
U.S. displeasure with the arrest of one of the country’s leading
liberal democratic politicians, Ayman Nour. Thanks in part to
Rice’s gesture, Nour was released and Mubarak announced a
multi-candidate election for president in which Nour was eligible
to participate.
“When Rice did get to Cairo, in June 2005, she delivered a
speech at the American University that was a clarion call for
democracy across the Middle East….And she warned Mubarak
against using fraud and thuggery to manipulate the promised
elections….
“In the succeeding months, Mubarak did the opposite. He did
use fraud and violence to control the presidential and
parliamentary elections. After they were over, Nour was again
arrested, and he was sentenced to prison on patently bogus
charges.”
Last February, Rice talked about “disappointments and
setbacks.” Mubarak nonetheless canceled a scheduled
parliamentary vote. Opposition leaders were arrested and
tortured. Nour’s appeals were denied. Then in recent days some
videos were released on the Internet capturing Egyptian police
torturing innocent citizens. This time Rice said nothing.
“Instead, she praised the ‘important strategic relationship’ with
the 78-year-old Mubarak. In Rice’s new parlance, Egypt has
suddenly become part of a ‘moderate mainstream’ in the Middle
East….
“Rice has made no real attempt to explain the somersault in her
policy, which comes across as a feckless attempt to simplify the
increasingly chaotic and dangerous situation across the region….
“Five-and-a-half years after Sept. 11, the cancer is still growing
in Egypt, and elsewhere in the ‘moderate mainstream.’ But Rice
and her president, it seems, have gone back to sleep.”
–Yes, some polls do matter, even at this early stage of a
presidential election, and it’s fascinating that both Time and
Newsweek had identical results for prospective Clinton/
Giuliani/McCain match-ups.
Newsweek has Clinton defeating McCain, were that to be the
race, 48-47. But Giuliani beats Clinton 48-47. Time has
McCain and Hillary tied at 47.
A Washington Post/ABC News survey has Clinton with 41% of
the Democratic vote to Barack Obama’s 17% and John Edwards’
11%. Time has Hillary at 40% with Obama at 21%.
And President Bush’s overall approval rating, as noted in three
polls I looked at, ranged from 28% to 35%.
Particularly worrisome for Republicans and 2008 is one result of
a NBC News/Wall Street Journal survey that has Independents
coming down against the troop surge, 71-26.
Finally, in just glancing at the Democratic field, there is but one
conclusion. Bill Richardson is a lock for vice president, unless
you’re talking a Hillary-Obama ticket. Assume Hillary gets the
nod, for example, that then eliminates other northeast candidates
such as Senators Dodd or Biden. Tom Vilsack would be a
possibility, I guess, but Edwards obviously wouldn’t accept the
second slot again…or if he did, there’s something wrong with the
guy. So you keep coming back to Richardson. If it’s Hillary it’s
smart, geographically, and obviously with the Hispanic vote, and
if it’s Obama, well, Richardson is a lay-up with his wealth of
experience both at the cabinet level and in foreign policy. And
so we hereby crown Bill Richardson #2. Everyone else can go
home now.
–According to Britain’s Natural Environment Research Council,
America’s greenhouse gases boost Britain’s ozone levels by
20%-30%. And did you know that when our urban pollutants
rise into the upper atmosphere and catch the jet stream, they then
cruise to the British Isles at a speed of 150mph? Boy that’s fast.
Actually, on behalf of all Americans I’d like to apologize to our
staunch allies. Of course China’s pollution is doing the same
thing to California and our west coast.
–So I go on the Drudge Report and see a link to a story about
Sen. John McCain falling asleep during the State of the Union. I
watched it that evening and there was no doubt he was simply
reading the text, though as more than a few of you remarked to
me afterwards, you were falling asleep yourselves.
But the link on the Drudge Report was to YouTube and I read
some of the comments on the message board accompanying the
video. Here is what “Meat45” wrote [spelling and punctuation is
correct]:
“McCain is a traitor who will never win a national election. He
has done nothing but got in the way and created distractions for
the last 6 years. He is a sour grapes loser. He won’t get enough
Mexicans to vote for him. Dream on John!”
Suffice it to say Meat45 is a most pitiful character on many
different levels, as is our education system that now allows many
of our kids to rush through school without learning any of the
basics, or caring about them.
–Kimi Yoshino of the L.A. Times had a good piece on the cruise
industry and its efforts to cover up crime that occurs on its ships.
Bottom line, it’s greatly underreported. But did you know “at
least 17 people fell overboard or simply disappeared while on
cruises throughout the world in 2006”?
–I imagine I’m not the first person to notice this, but for
followers of the show “24,” Michelle Obama bears a striking
resemblance to Sandra Palmer; at least that’s my conclusion after
seeing a picture of Ms. Obama in the Jan. 29 issue of Newsweek.
Coincidence? I think not.
–Bring ‘em on! Girl Scout cookies, that is. I just saw that all of
this year’s edibles contain no trans fats for the first time. Which
means you can safely eat a box of thin mints with every meal….
at least by my way of thinking.
Then again, I was watching a CBS “Sunday Morning” segment
on the benefits of walking and learned that the average American
is 25 lbs. heavier than 1960, so you’re on your own if you’re
thinking of eating a box of cookies. Or you could go for a six-
hour walk to work it off.
—
Pray for the men and women of our armed forces.
God bless America.
—
Gold closed at $651
Oil, $55.20
Returns for the week 1/22-1/26
Dow Jones -0.6% [12487]
S&P 500 -0.6% [1422]
S&P MidCap +0.3%
Russell 2000 +0.4%
Nasdaq -0.7% [2435]
Returns for the period 1/1/07-1/26/07
Dow Jones +0.2%
S&P 500 +0.3%
S&P MidCap +1.9%
Russell 2000 +0.1%
Nasdaq +0.8%
Bulls 52.7
Bears 20.9 [Source: Chartcraft / Investors Intelligence]
Have a great week. I appreciate your support.
Brian Trumbore
