[Posted 7:00 AM ET…from Chicago]
Wall Street
“In the battle of Iraq, the United States and our Allies have
prevailed.”
–President George W. Bush, May 1, 2003
Not quite. But the stock market has done nothing but go up. In
fact the S&P 500 was 916 on 5/1/03 and now resides above 1500
for a gain of over 60%. You’ll have to excuse me for being
perhaps a bit facetious, but it’s not as if the American people
were asked to sacrifice, so why shouldn’t we have partied?! It’s
basically what our president asked us to do, anyway. As for the
rest of the world, they’ve had little stake in the war themselves so
no wonder they have been celebrating too in terms of market
returns.
This week stocks rallied for a fifth consecutive time as all the
major averages either hit new all-time highs or six-year plus
ones, and you can say this about virtually every index across the
globe as well. Yes, it’s about excess cash, yen, yuan, euro,
pounds, you name it….those investing in the markets (some
would say gambling) have loads of it. And of course the last
thing these same folks want to talk about is the increasing divide
between the haves and the have nots, whether you’re in Dubai,
Shanghai, Moscow, London or New York. Some day, though,
there will be an event that puts us all back closer to balance, a
global regression to the mean, if you will. Maybe it’s next year.
Maybe it’s not for another decade. But these boom times won’t
last forever.
Of course if you’ve been speculating in real estate the past three
years or so you already know this. I’m on record as saying we
are in the fifth inning of the real estate debacle so I noted with
interest when Merrill Lynch chief economist David Rosenberg
told CNBC on Monday he saw it as just “the 2nd or 3rd.” I would
normally defer to Mr. Rosenberg’s guidance, he being far
smarter, but Rosenberg didn’t say anything about what I’ve been
bringing up.
It’s not as important to know what inning we’re in as it is to
know we are going to extra frames! Whenever we hit bottom,
that doesn’t then mean the game is over and it’s back to the
races. Instead we’re going to stagnate and it will end up feeling
like one of those famous New York Mets 1-0, 23- or 24-inning
affairs that they used to hold on a regular basis in their early
years. It also means the impact will grind away at the
consumers’ psyche as their #1 asset continues to tread water, at
best. After all, sports fans, you’ve received some terrific advice
on the real estate front in this space, even if I was a little early.
Here in Chicago, I was driving in from the airport on Tuesday
and it was one apartment/condo tower after another with “For
Sale” or “For Rent” signs, including one that read “Buy a condo,
get a car!”
We’re also beginning to see more foreclosure data and it’s not
pretty. In Clark County, Nevada (which encompasses Las
Vegas), for example, 1 in every 30 homes began the process
toward foreclosure last year. Of course these are largely the
flippers and speculators.
In San Diego County, Josh P. passed along his usual great info
(unless you’re the subject of it), such as the story of a model K.
Hovnanian development in downtown San Diego that was
completed between 2004-05, during the height of the bubble
there. Today, 52 of 383 units are either in foreclosure or on sale.
Josh, who lives in this general area, also noted that he is
incredulous when his neighbors still tell him they can’t lose
money on their homes.
[Friday, Hovnanian warned its earnings would be miserable and
that it was taking an additional $15 to $20 million in charges for
further forfeit of land deposits, another issue that continues to
bite developers in the butt.]
I also have to note that the Wall Street Journal ran an editorial
this week on the property tax topic I noted the other day, or
rather the burgeoning property tax revolt. As J.P. and others
have observed, we’re now in a situation in some parts of the
country where the actual market value of a home is lower than
the assessed value. As for city and municipal finances, the gravy
train is over.
But wait…there’s more…like the issue of derivatives and all
those mortgage-backed securities out there; the ones that haven’t
been stress-tested, as we say.
Cerberus Capital Management, one of the private-equity guys,
paid up last November for a share of GMAC Financial Services,
a division of General Motors, with GM retaining a large holding
itself. This week, just a little over five months later, GMAC
reported a loss of over $305 million. But they would have turned
a handsome profit were it not for the fact that they lost $910
million because of their subprime mortgage exposure; this after
the unit had made a profit of $200 million a year earlier. Now if
that doesn’t tell you how quickly the real estate market has
turned, I don’t know what will.
And on the issue of those derivatives based on bonds backed by
subprime mortgages, some investors are learning, in the words of
Scott Simon of PIMCO, “It looks like a great trade but it isn’t a
profit if you can’t get out. Investors had a naïve belief in
liquidity thinking just because you buy it, you can sell it.”
In other words, you can drive a truck through some of the
spreads on these instruments these days, and in this kind of
market you’ll have lots of victims, whether it’s GMAC or the
just dumped hedge fund unit at UBS that was supposed to make
a killing in this stuff. Incredibly, the ratings agencies, such as
Moody’s and S&P, who were behind in their analyses of the
sector, have finally been playing catch up and bonds that were
rated “investment grade” just last fall are now being reduced to
“junk” status.
But I imagine many of you are saying about now, yeah, we
understand the real estate sector is slumping but the rest of the
economy is doing fine so why should I panic? You have a point,
only I’d remind everyone that this isn’t like the bubble bursting
on Nasdaq in March 2000; a sudden, violent crash.
The unwinding of the real estate bubble is taking its own sweet
time in finding its way into the mindset of the consumer, but this
week you had one of the first admissions by the auto sector that
the housing slump is impacting sales there. Some executives
said the figures [Ford down 13%, GM off 9.5%, and even Toyota
down 4%] were a “direct result” of the slump.
Lastly, I want to switch gears a bit and pound the table yet again
on another favorite topic of mine, the lack of water in many
critical parts of the world.
On Friday, the New York Times’ Thomas Friedman finally got
around to addressing the issues Australia faces, though his
column was an incredibly weak one and didn’t begin to provide
the information that any Aussie schoolchild could give the rest of
us.
I’ve long noted Australia was Ground Zero on the climate
change front and if you want to be scared out of your wits, check
out the words of Tim Flannery, “Australian of the Year” for his
pioneering environmental work. Flannery says his country’s
drought will only get worse.
Mr. Flannery said the drought meant two of Australia’s largest
cities, Brisbane and Adelaide – home to a combined total of
almost three million people – would run out of water by year’s
end unless the so-called ‘Big Dry’ ended, as reported by Agence
France-Presse.
“We could see a catastrophic situation developing by the end of
the year. It’s become a huge issue,” he told AFP.
“Even a year ago this would have been unthinkable. I think it’s
the most extreme and the most dangerous situation arising from
climate change facing any country in the world right now.
“We have a situation where, if there are no flows in the Murray-
Darling (river system), Adelaide, a city of one million people,
has only 40 days worth of water left in storage. If we don’t get
any rain, this year Adelaide and Brisbane may be facing
diabolical problems.”
AFP adds: “The impact on rural communities has been
devastating. Many farmers have been forced off the land and
counseling services have reported unusually high levels of
suicide.”
Researchers even warn the koala bear could be driven to
extinction within a decade and the million-plus feral camel
population is causing quite a stir because it has been rampaging
through villages looking for water.
A few weeks ago I described similar situations in China as well,
and even here in America, there is an undercurrent that is
troubling.
While some of us praise the benefits of ethanol (I’m not one of
them, that’s for sure), consider the fact the production of it
consumes massive quantities of water. And the water table in
some parts of the Midwest is going down so quickly that
according to the High Plains Journal, many a Nebraska farmer
doesn’t know if they’ll be farming even 10 years from now.
Forget the production of corn for ethanol, there won’t be enough
water to support any kind of farming. [To give you an example
of what we could be facing, Australia, the second largest
exporter of wheat next to the U.S., saw its wheat crop decline
60% in 2006-07 from a year earlier. 60% in one year!]
Of course many parts of the U.S., like in New Jersey, have ample
water so maybe folks there will begin knocking down their
condos to grow wheat. Then the banks will be going around,
scratching their heads, thinking, “Goodness gracious, I thought
there was a house in that spot where we had a loan out and now
all I see is farm land!”
Street Bytes
The Dow Jones is in the midst of its best streak since the middle
of 1955, if you can believe that…up 23 of 26 days. No doubt
there was some solid economic news this week, even if the above
has you wondering if the world is ending in November (or Nov.
2008), but personal income for the latest period was up 0.7% and
various national indices on manufacturing and the service sector
came in better than expected and far from flashing recession
signals. But Friday’s employment report (88,000 new non-farm
jobs added in April) was less than exciting and, overall, it was
just last week that word came in the economy grew at a tepid
1.3% pace in the first quarter.
What continues to move the market, however, is the
aforementioned liquidity, the merger / takeover / private-equity
game, and respectable earnings.
For the week the Dow Jones tacked on another 1.1% to close at a
record 13264, while the S&P 500, at 1505, is now just 22 points
from its all time mark. Nasdaq, up 0.6%, sits at 2572. All three
are up 6% on the year.
–U.S. Treasury Yields
6-mo. 5.01% 2-yr. 4.67% 10-yr. 4.64% 30-yr. 4.81%
The new buzzword is “agflation,” inflation in the agriculture
sector such as we’ve seen in corn prices and the carry on effect
straight to the grocer’s shelf. Gasoline prices are also going
through the roof. But overall the core indicators of inflation
remain tame and the chief economists at Merrill Lynch, Goldman
Sachs and UBS have banded together to urge the Federal
Reserve not to play around with interest rates, or at least
consider lowering them. Inflation is not an issue, period. More
importantly, all three say the housing slump could yet drive
the economy into recession and that should be the Fed’s
preeminent concern at this point. Needless to say, I agree.
–Chinese authorities detained the head of one of the companies
accused of selling contaminated wheat gluten as the U.S. FDA
steps up its own investigation. Imported feed containing the
metal melamine has now been reported as being used in some
feed for chickens and hogs in six states, though it’s unclear if any
entered the market as yet. [It is not deemed a threat to humans.]
Regardless, former FDA commissioner David Kessler said the
food safety program “is broken.” As noted weeks ago in this
space, it’s worse than that in China.
–It was media week on Wall Street as Fox’s Rupert Murdoch
made an unsolicited bid for Dow Jones, parent of the Wall Street
Journal and other properties. But the ruling Bancroft family
spurred the $60 offer for now, which is nuts. Then on Friday,
Thomson of Canada said it was going after Reuters and Reuters,
the sexy leftist, said, “Take me! I’m yours!” A combined
Thomson-Reuters would rival Bloomberg in the financial news
dissemination market.
–British Petroleum CEO Lord Browne, at the helm since 1995,
resigned after he was unable to prevent details of his private life
from being released. Browne also lied to a court about his
relationship with partner Jeff Chevalier as stories surfaced
Browne may have been using company funds in caring for him.
It doesn’t appear to this scribe that what Browne is alleged to
have done was anything egregious, but more importantly BP has
suffered under his watch the past few years, including gross
mismanagement at the Texas City refinery that led to scores dead
when the lack of maintenance caught up with it.
–A significant meeting was held in Saudi Arabia this week
involving both Middle Eastern oil producers and Asian
consumers of crude with demand continuing to soar in Asia and
the likes of China, Japan and South Korea needing to secure the
supply to meet it. In turn, Western oil partners are finding it
increasingly difficult to access new supply of their own for a
variety of reasons, mostly political. But, lest one think the
United States is in immediate danger of losing key sources to
meet its own demands, remember that the likes of China, Japan
and South Korea can not guarantee the safety of Saudi and other
Gulf states’ crude like the American military can and that is not
likely to change for at least another decade until China greatly
increases the abilities of its nascent blue water navy. Of more
import in the short term for the U.S. is our relationship with
Venezuela and Russia, as well as the rapidly declining fields in
Mexico.
–Vacation home sales rose 4.7% in 2006, but sales for
investment (flippers/speculators) plunged 28.9%. 2nd-home sales
account for 36% of all existing- and new-home purchases.
–The Dolan family of Cablevision fame (including ownership of
Madison Square Garden) is taking the company private.
–It would appear Microsoft is not going after Yahoo, despite a
Friday news story that sparked a rally in Yahoo shares.
–The U.S. Supreme Court gave businesses new protections from
patent suits, siding with the likes of Cisco Systems and
Microsoft. Bottom line, in one of two rulings the justices
unanimously said too much power has been granted developers
of trivial technological improvements. As Justice Kennedy
wrote for the court, “Granting patent protection to advances that
would occur in the ordinary course without real innovation
retards progress.”
–A Credit Suisse Group investment banker was charged with
insider trading for allegedly leaking details on nine mergers,
including the $32 billion buyout of Texas utility TXU. Hafiz
Naseem, 37 and a Pakistani citizen, was believed to be tipping
off a trader/banker in Pakistan who then earned $7.5 million by
acting on the advance knowledge.
–In a highly important item for those of you who travel and may
on occasion use a hotel business center or Internet cafe, the FBI
is warning that the computers are increasingly being targeted by
gangs employing keystroke-logging programs that in turn capture
your password for online brokerage accounts. Of course it can
also be dangerous to check your online account in airports or
other locations that employ WiFi.
–Finally, we note the passing of Warren Avis, 92, the founder of
Avis Rent A Car, the nation’s first rental business to be located at
airports.
Avis was a decorated bomber pilot in World War II when he
formed his company in 1946 at two locations in Miami and
Ypsilanti, Mich., utilizing just two employees and 200 cars. He
got the idea when he was a pilot and couldn’t find ground
transportation once he arrived at airports.
Avis became the world’s largest rental system until it was
overtaken by Hertz, though he sold his interest in the business for
$8 million in 1954.
Someone always has to be first…and more often than not these
ideas still originate here in the good old U.S. of A.
Foreign Affairs
Iraq: The administration now wants to wait until September
before weighing whether or not progress has been made with the
surge, while Democrats have largely agreed to attempt to
compromise on the war-funding bill after failing to override the
president’s veto.
[I thought it wouldn’t come to this; that the Democrats would
follow the lead of Sen. Carl Levin and compromise at the
beginning instead of sending a bill to Bush that they knew would
be thrown back in their face.]
But now Senators Hillary Clinton and Robert Byrd have
proposed that the initial authority to invade Iraq, granted
President Bush five years ago, be repealed. Interesting scheme, I
must say, but it would get bogged down in a debate over the
constitution.
The president says timetables are a “prescription for chaos and
confusion” yet the fact remains the Iraqi government has
woefully underperformed, while being given every chance to
succeed. Republicans and Democrats will end up agreeing on a
series of non-binding benchmarks at the end of the day.
What does remain clear is that Sunnis are ready to quit the
government, both Kurds and Sunnis are now complaining about
the oil revenue-sharing legislation approved by the Cabinet in
February, and there are stories that Prime Minister Maliki has
been dismissing senior officers who were aggressively
combating Shiite militias. Add to that the story that the Iraqis are
not maintaining (and/or looting) the projects that the U.S. has
spent $billions on and it’s easy to just throw up your arms and
say “It’s yours.”
But wait until the American people see that the Iraqi parliament
is about to take a two-month recess! That’s the word from the
foreign minister, as told to CNN’s Wolf Blitzer last Sunday. I
may have missed it, but I’m surprised this hasn’t been splashed
across every one of our newspapers. Should this turn out to be
the case, if I were General David Petraeus I’d march into the
Oval Office and give the president a piece of my mind.
And since I have been highly critical of the abysmal performance
by America’s generals since 2003, I can’t help but note President
Bush’s unbelievable comment the other day when addressing the
issue of who should be responsible for war policy.
“The question is, ‘Who ought to make that decision? The
Congress or the commanders?’ And as you know, my position is
clear – I’m the commander guy.”
Oh brother.
After my critique of last week, however, I read a story by
Thomas Wagner of the Associated Press concerning Lt. Col. Paul
Yingling, an active duty officer and deputy commander of the 3rd
Armored Cavalry Regiment, who had some of the following to
say in an article he wrote for the Armed Forces Journal, which is
published by Army Times.
“For reasons that are not yet clear, America’s general officer
corps underestimated the strength of the enemy, overestimated
the capabilities of Iraq’s government and security forces, and
failed to provide Congress with an accurate assessment of
security conditions in Iraq.
“In 2007, Iraq’s grave and deteriorating condition offers
diminishing hope for an American victory and portends an even
wider and more destructive regional war…
“The intellectual and moral failures common to America’s
general officer corps in Vietnam and Iraq constitute a crisis in
American generalship,” said Yingling, who has served two tours
in Iraq as well as the Gulf War.
“Given the lack of troop strength [until the surge], not even the
most brilliant general could have devised the ways necessary to
stabilize post-Saddam Iraq.”
And on the issue of reform and the process for selecting and
promoting generals, Yingling said:
“We still have time to select as our generals those who possess
the intelligence to visualize future conflicts and the moral
courage to advise civilian policy makers on the preparations
needed for our security.”
Israel: Prime Minister Ehud Olmert is under intense pressure to
resign, as called for by foreign minister Tzipi Livni and about
150,000 Israelis protesting in the streets on Thursday.
Olmert was blasted in a report by a government commission,
appointed by Olmert himself, for “severe failures” in the opening
days of last summer’s war against Lebanon and Hizbullah. The
commission, led by retired judge Eliyahu Winograd, blamed
Olmert for a failure to exercise “judgment, responsibility and
prudence.” The report also lambasted defense minister Amir
Peretz and the chief of staff at the time, Lt. Gen. Dan Halutz,
who resigned a while back. Both Olmert and Peretz vowed to
stay on, however.
Among the report’s findings:
“In making the decision to go to war, the government did not
consider the whole range of options, including that of continuing
the policy of ‘containment,’ or combining political and
diplomatic moves with military strikes below the ‘escalation
level,’ or military preparations without immediate military action
– so as to maintain for Israel the full range of responses to the
abduction. This failure reflects in strategic thinking…
“The prime minister made up his mind hastily, despite the fact
that no detailed military plan was submitted to him and without
asking for one.”
You know you’re in trouble when Hizbullah’s Sheikh Nasrallah
praises the findings.
But what gets me is that in all the editorials back here in the U.S.,
at least the mainstream ones I read, not one mentioned the role of
President Bush. As I’ve noted many a time since the start of the
Israeli-Hizbullah conflict, it was criminal that Bush didn’t pick
up the phone and call Olmert once throughout the war. The
United States also lost, big, by letting this go on.
[And in line with the above, Secretary of State Condoleezza Rice
held talks with her Syrian counterpart on cooperation in
preventing jihadists from crossing the border into Iraq. One
wonders, though, just what she is saying on the critical issue of
the tribunal to look into the assassination of Lebanon’s Rafik
Hariri. Will President Bashir Assad ever be brought to justice?
No. Can Lebanon succeed without first having the tribunal?
No.]
Russia: In a big blow to the Bush administration’s plans for a
missile shield in Europe, a congressional committee has blocked
funding for the project; this after Georgia announced it would be
interested in having some components of the radar system based
on its soil, which only ticked off Russia further.
But the big story on the week was the removal of a Soviet war
memorial in Estonia, a statue of a soldier designed to honor the
heroism of those who defeated the Nazis. After rioting in Tallinn
and other Estonian cities by ethnic Russians (who make up about
25% of the population here), Estonia was forced to close its
consulate in Moscow and pull its ambassador as it came under
threat from various extremist groups. The Kremlin called the
removal of the statue “blasphemous and inhuman.”
Not today, but under a President Sergei Ivanov in 2009 or 2010,
an incident like this could be the tripwire in a future conflict with
NATO.
Turkey: The Constitutional Court annulled last Friday’s
parliamentary vote for president (which fell short) due to the fact
there was no quorum. The military put increasing pressure on
the ruling Islamic party (AKP) to mend its ways, quick, and
Prime Minister Erdogan called for new elections in July, thus
speeding up the process with a vote having been previously
scheduled for November. Erdogan also vowed to change the
constitution to allow for the election of president (the head of
state) by popular vote.
Meanwhile, Turkey threatened it would cut off the United States’
supply route to Iraq if the U.S. Congress proceeded with a
resolution labeling the conflict with the Armenians back in 1915
as genocide. [60% of U.S. supplies pass through Turkey.]
Saudi Arabia: There are still a lot of questions surrounding the
highly publicized breakup of various terror cells in the kingdom.
According to the Interior Ministry, 172 were arrested, with 120
coming from two cells and the other 52 from five others. The
thing is the arrests supposedly occurred months ago, even as
initial reports said they were all made on April 27 and that $32
million was captured along with the arms cache when it was
closer to $5 million. The government claims the cells were
acting independently.
But in reading through the Saudi papers to try and get a handle
on this, I thought the following passage from an editorial in Arab
News was slightly encouraging.
“It is high time that the government and the Saudi people took
back the reins of the religious and ideological discourse that has
been hijacked by extremists who preach their hateful ‘Takfiri’
thought through which they think they can decide who is a true
Muslim or not. More activities must be introduced to keep our
youth gainfully engaged such as better education, training,
extracurricular activities, and jobs so that they do not even have
the chance to become idle and thus fall easy prey to those
actively plotting against our security and well-being….
“(A) more basic form of vigilance is needed in speaking out
against twisted ideologies that say it is OK to kill other Saudis
and foreigners just because one disagrees with them. This
intolerance is mistakenly allowed to grow among us because we
naively believe that it will not be used against us in acts of
bloody murder.
“Saudis of all ages and all walks of life have to stand up and
speak out against these terrorists and their acts of violence. The
truth is that this cancer is here among us and if we don’t do
anything to vanquish it now, it will eventually eat us all up.”
Afghanistan: We have a real problem here with the continued
incidences of civilian deaths as a result of U.S. and NATO
airstrikes and other action against suspected Taliban. President
Karzai is livid as it obviously makes it all the more harder for
him to maintain stability in his own government.
Pakistan: In yet another reminder of just how fragile the
leadership is here, the Interior Minister, seen as an ally of the
U.S., was targeted for assassination but emerged largely
unscathed in a suicide bombing that otherwise claimed 27 lives.
Venezuela: President Hugo Chavez took control of four large oil
projects, most involving Western ownership by the likes of
Exxon Mobil, Conoco Phillips, and Chevron. These companies
and others will maintain some interest but the state will have
ultimate control. Related to the above story on the Saudi-Asia
meeting, China is also stepping up its efforts to secure crude
from Venezuela, with Chavez needing private investment to get
more out of the ground, but loath to get it from the U.S.
The dictator was busy this week, too, as he pulled out of the IMF
and World Bank because of their Washington connections
(though this was largely symbolic…Venezuela having long paid
off its debts), and Chavez threatened to nationalize his nation’s
banks.
France: Segolene Royal attempted to take down Nicolas Sarkozy
in their final debate, a tense affair lasting 2 ½ hours, but Sarkozy
stayed calm and courteous. The result is he now has a 7-9 point
lead going into Sunday’s runoff.
Britain: Prime Minister Tony Blair said he would be leaving
office in weeks, probably at the end of June. Meanwhile, the
country is in an uproar over the findings released in the case of
five convicted bombers tied to the 7/7 attack. It seems
authorities knew of the 7/7 ringleader, Mohammad Sidique
Khan, one year before but blame lack of resources for their
inability to tie the clues together. Those just convicted were
planning on blowing up a shopping mall or nightclub with a
fertilizer bomb.
China: A Labour Day march turned violent in Macau, the worst
mass violence “in decades,” as natives are increasingly upset
over their low wages and seeing mainlanders flooding in to take
the construction jobs.
Japan: As expected, Prime Minister Shinzo Abe called for a
“bold review” of his nation’s pacifist constitution, meaning the
removal of post-World War II restrictions on the military’s
activities. He also wants to “instill confidence and pride among
Japan’s children.” For the first time, a majority of the people
desire to see the constitution amended.
Zimbabwe: Inflation is now running over 2,200%.
Caribbean: The Wall Street Journal had a story on Friday on the
crime wave sweeping the entire region, fueled by the drug trade.
As reported by Joel Millman, “The social and economic costs are
growing and are compounded with each generation, feeding
further cycles of violence.” Jamaica, for one, is emerging as the
murder capital of the region, “while the Caribbean…now ranks
as the world’s most crime-ridden area, excluding places torn by
civil war,” according to the World Bank. 48% of Caribbean
adolescent girls also say they have been raped.
The result is less direct foreign investment, down 9% last year
alone. The only growth industry, aside from the unpredictable
tourism trade, is personal security.
It’s all about rampant narcotics trafficking as the Caribbean
serves as the way-station for drugs going from Latin America to
the U.S. and points beyond.
Ergo, if you travel in the region, keep your eyes wide open.
Deadlines: Let’s see…both North Korea and Iran continue to
thumb their noses at the international community as resolutions
and agreements designed to dismantle their weapons programs
expire with nary a peep from those imposing them.
Random Musings
–I just have to comment on the Republican debate Thursday
night. I was disturbed by Sen. John McCain’s helter-skelter
performance, Rudy was mediocre at best, and I was reminded
just how good former Gov. Jim Gilmore is. I would have no
problem voting for him.
As for Mitt Romney, I just don’t get it. Both Republican and
Democratic commentators on MSNBC acted like he won it and I
keep going back to the fact this guy has already lied to the
American people on a number of simple issues, like whether or
not he is a regular hunter, that go straight to his character. This
isn’t about politics, but whether or not you simply trust the guy.
He also gave me the creeps because you could hear him
chuckling at every single comment even though there wasn’t
one thing said that was remotely funny the entire evening.
Romney is a fraud with the sound of a used car salesman, or the
kid you couldn’t stand in college.
–Watergate reporter Carl Bernstein is coming out with a scathing
book on Hillary.
–Funny tussle between Barack Obama and the MySpace crowd
over his official page. Why he’d let anyone control it in the first
place is beyond me.
–U.S. News & World Report states New York City Mayor
Michael Bloomberg is definitely not running for president. I say
he is…and there is absolutely no hurry. Yes, it can be difficult to
get on some state ballots late in the game but this doesn’t become
a concern until next spring. Some are comparing the problems
faced to that of Ralph Nader in 2004 but suffice it to say,
Bloomberg has far more resources than Mr. Corvair ever had.
–New Orleans’ lower 9th ward residents say they’ve been
forgotten and, surprisingly, the Rev. Jesse Jackson is not blaming
the White House, rather he’s blasting the state government in
Baton Rouge.
Separately, the cost of Hurricane Katrina is now up to $125
billion, according to the Washington Post, though much of the
foreign aid that was pledged to the U.S. hasn’t been distributed
(of that accepted). For example, the UAE sent $100 million in
cash of the $126 million received ($454 million pledged), but
little is being disbursed. Kuwait got so frustrated it redirected
much of its $100 million pledge to the Bush-Clinton relief fund
and the Red Cross.
–Randall Tobias, the deputy secretary of state for foreign aid,
said he called some “gals” over for massages, but not sex! Alas,
it was too late for him and I imagine after he was forced to resign
in disgrace, the tension has returned to his neck area.
–Paris Hilton is going to jail. This ought to be fun.
–Former New Jersey Governor Jim McGreevey continues to
torture us. Instead of just disappearing, now he has been
accepted into the Episcopalian seminary. This is turning into a
horror flick…. “McG of Christopher Street, Part IV”.
–Current New Jersey Gov. Jon Corzine emerged from his
hospital bed to apologize for not setting a good example by
failing to wear his seatbelt; then his caravan sped away at 70
mph in a 55 zone as he returned to the governor’s mansion for
extensive rehab.
And the New York Times ran a story that prior to the accident, of
Corzine’s first 450 days in office he was out of state for 111 of
them, not including the nights spent in New York City with his
girlfriend.
–The Liverpool, NY, (outside of Syracuse) school district is
abandoning the use of laptops for its students, calling them
worthless. Said the school board president, “After seven years,
there was literally no evidence it had any impact on student
achievement – none.” During study halls, the students were
doing little but downloading porn.
–What the heck is going on at Duke University? In a massive
cheating scandal at the esteemed business school, nine have been
expelled and at least another 34 punished. Nice reflection on our
nation’s ethics as a new crop of future leaders tries to figure out
the easy path to riches. My advice to these dirtballs?
Bust your ass and treat those working around you with respect.
And don’t ever go home without returning every phone call!
Whatever success I had in the business world was built around
those simple principles.
–Speaking of ethics, the Army has just released a highly
disturbing study. Among the findings, 2/3s would not report a
team member for mistreating a civilian or for destroying civilian
property unnecessarily.
–Nothing special on why I’m in Chicago. In all my years I’ve
just never spent any quality time here and so I’ve been doing
some sightseeing and catching up with friends. I’ve also never
been to Wrigley Field so that’s where I’m headed in a few hours,
if the weather cooperates. I’ve got my bleacher seat but they’re
calling for rain. As Charlie Brown would say, “Drat!”
–In yet another study touting the benefits of nuts, volunteers who
ate three ounces of pistachios a day for one month lowered their
total blood cholesterol by 8.4%.
–In the history of television comedy, you still can’t beat the
writing on “The Simpsons.” So last week Bart muffs a pop up
that would have ended a critical Little League game, he’s booed
unmercifully by overzealous parents, of which there are millions
these days, and then the scoreboard flashes:
“Boy’s Error Weakens Dollar”
You can laugh at that one, Mitt.
–Lastly, Mick Hume of the London Times had the following
thoughts on space travel and the likes of Stephen Hawking.
“The cry ‘the end of the world is nigh’ now comes not from
religious nutters with sandwich boards, but from respected
scientists with the media to carry their message. Worse, it seems
they can support space travel only by depicting other planets as a
cosmic Costa del Crime, where wicked humans can escape
punishment for raping and pillaging the Earth.
“What about the case for manned space exploration as a positive
expression of the human spirit? Whatever happened to
conquering ‘the final frontier’ – for the imagination as much as
science – by striving ‘to boldly go where no man has gone
before’?
“Speaking of Star Trek, shortly after Professor Hawking’s trip,
the ashes of the actor who played Scotty, chief engineer on the
USS Enterprise, were blasted into space from New Mexico. Sir
Richard Branson plans space tourism flights from there,
lightening punters’ wallets by $200,000 for six minutes of
weightlessness.
“The way we see space at any moment reflects how we think
about life down here. That manned space exploration has fallen
out of favor, other than as an outlet for fear, funerals or fun-
flights, suggests a loss of faith in the future, a black hole where
the belief in humanity should be. It is almost enough to make
those Daleks seem like progressive-minded humanists.”
—
Pray for the men and women of our armed forces.
God bless America.
—
Gold closed at $689
Oil, $61.93…biggest drop in four months
Returns for the week 4/30-5/4
Dow Jones +1.1% [13264]
S&P 500 +0.8% [1505]
S&P MidCap +0.7%
Russell 2000 +0.4%
Nasdaq +0.6% [2572]
Returns for the period 1/1/07-5/4/07
Dow Jones +6.4%
S&P 500 +6.2%
S&P MidCap +10.9%
Russell 2000 +5.7%
Nasdaq +6.5%
Bulls 51.7
Bears 24.7 [Source: Chartcraft / Investors Intelligence]
Have a great week. I appreciate your support.
Brian Trumbore
