[Posted 7:00 AM ET]
Wall Street
I’ll try and keep this week’s comments on the brief side. After
all, it was more of the same as concerns continue to mount as to
just how severe the mortgage securities/credit crunch crisis is
going to get. There are some who say we are right back to
August. Others say it’s even worse today.
What we do know is housing continues to worsen, whether you
are measuring indicators of future activity, such as collapsing
building permits, or actual home prices, dribbling down.
The Federal Reserve, after all, lowered its growth forecast for
2008 to an anemic 1.8 to 2.5 percent, but with just 2 percent
inflation. Right. 2 percent inflation. As for overseas, the
evidence is piling up that just about everyone is slowing. True,
in many cases it’s still respectable growth, but the trend is in.
The great trader/commodities expert Jim Rogers was on CNBC
and called Fed Chairman Bernanke and Treasury Secretary
Paulson fools, nay, idiots, for allowing the currency to slide.
Actually, Rogers, like the rest of us, finds it amazing that
Paulson allows himself to be used so, as in continuing to say “A
strong dollar is in our nation’s interest,” as he did once again
while overseas this week. What a stooge. And as Rogers said,
why would Paulson want to tarnish his legacy by playing the role
of village idiot? Then again, just what is the legacy of any Wall
Street chieftain, as Paulson was at Goldman Sachs prior to
becoming treasury secretary?
As Jim Rogers added, these days it’s all about reduced access to
credit, worldwide (including even in China, in case you haven’t
noticed), the negative wealth effect from the popping of the real
estate bubble, and soaring personal debt levels. Rogers even
mentioned my favorite topic for the first time. Real estate is
slowing, globally, he said. You got that right, Jimmy. It’s been
the real key all along. Keep your eye on the Big Picture, I say.
The daily noise on individual banks and their massive
writedowns isn’t what brings the world economy down, in and of
itself, nor even a financial accident due to derivatives (unless a
massive one), but rather the gnawing impact of everyone’s chief
asset having peaked and rolled over. It was a laugh riot to hear
Paulson this week admit housing defaults “will be significantly
larger” in 2008 than ’07. Brilliant. Here’s some ice cream as a
reward for seeing this only about a year late.
But the next few weeks we learn the true state of the American
consumer. Actually, since my recession forecast has always
been about 2008, I don’t believe we’ll totally roll over until the
first quarter, seeing as the job market is still solid, though at the
same time I can guarantee holiday sales will be closer to a 2
percent increase over last year than the average forecast of a 4
percent rise. Prices at the gas pump, now solidly over $3.00,
nationwide, and already $3.40 on average in California, don’t
help. Remember, for me gasoline ‘futures’ above $2.30 has been
the key. The level is now $2.45, after which you add your taxes
and a few pennies for Mr. Exxon and the man owning the station
where you gas up. And as crude oil almost touched $100 a barrel
before closing the week near $98, this also means the price of
heating oil is soaring.
Lastly, I was watching former SEC director and now chairman of
H&R Block, Richard Breeden, talk about the issues facing the
markets these days, in a discussion with Maria Bartiromo, when
he said this:
“Transparency is what makes the markets,” echoing a point of
mine lo these past few months. Breeden wouldn’t go further,
though, as in these days the U.S. capital market system is an utter
embarrassment. We’re a laughingstock around the globe. We
can bounce back, no doubt, and we will, but we need leadership
of a kind we haven’t seen in years.
Street Bytes
–If it hadn’t been for a strong rally on Friday, owing to nothing
more than the idiotic belief that crowds at the mall on the first
day of shopping season are indicative of the overall tone, as well
as thin, easily manipulated markets, the carnage on Wall Street
would have been far worse because Monday through Wednesday
was ugly. As it turned out, though, the Dow Jones lost a mere
1.5% to finish at 12986, its first weekly close below 13000 since
April. The S&P 500 fell 1.2% and Nasdaq declined 1.5%.
Early on, a Goldman Sachs forecast of an additional $48 billion
in writedowns the next two quarters in the financial sector, much
of these to originate with Citigroup, plus a world class quarterly
loss of $2 billion for Freddie Mac, caused stocks to swoon.
–U.S. Treasury Yields
6-mo. 3.37% 2-yr. 3.08% 10-yr. 4.01% 30-yr. 4.43%
Rates plunged anew as continued concern over hidden bodies
amidst the mortgage rubble outweighed fears of the still
tumbling dollar and inflation (and the threat the combination
could one day lead to higher, not lower, rates). The Fed next
meets Dec. 11.
–More real estate pain: The nation’s largest homebuilder by
volume, D.R. Horton, said 2008 will be worse than ’07. DRH has
lowered its average sales price 15% from a year ago. And the
commercial real estate market is showing signs of cracking.
–Christine Harper had a well-publicized story for Bloomberg
News this past Monday.
“Shareholders in the securities industry are having their worst
year since 2002, losing $74 billion of their equity. That won’t
prevent Wall Street from paying record bonuses, totaling almost
$38 billion.”
The difference this go around will be that cash bonuses could be
far less, with firms paying an increasing amount out in stock, and
the money will be distributed less evenly. Those in the
mortgage-backed securities sector, the ones still with jobs, will of
course see far less than the past.
But as the years go by, and the gap between rich and poor grows,
there are increasing signs of blowback…as in it’s difficult for the
average American to identify with any of this. What do many of
these people actually create, for example, except engineered
financial products?
And as for the shareholders of the securities themselves, who
have taken huge hits to their own holdings, talk of bonuses
greater than the GDP of Sri Lanka is tough to swallow.
–The Bank for International Settlements reports that the
derivatives market has grown to $516 trillion, led by credit-
default swaps to protect investors against default. Of course not
all derivatives are bad, but I wonder what portion of this involves
parties actually knowing who’s on the other side of the trade?
Lots of room for accidents, in other words, speaking of the
above-mentioned financial engineering.
–For all the hype, online retail sales are still just about 3% of the
pie, though are expected to increase another 20% this November
and December. However, that would be less than last year’s
26% growth rate for the 2006 holiday season. Dec. 10 is online
retailing’s Black Friday, incidentally.
–The global real estate boom is still in place in a few nations,
such as Bulgaria. Last year when was I there, I hired out a
driver, Tony, to take me to a mountain monastery. What a great
kid, and very sharp. But I was thinking of him in reading a piece
on the surging Bulgarian market because Tony said he was
investing in local real estate. “Be careful,” I told him. Every
now and then I receive a note from him and I know from time to
time he reads this, so, Tony, take your profits!!
[The point of the article I perused is that rampant development is
destroying many of Bulgaria’s once-charming mountain villages
that are also wintertime ski resorts. It’s a classic boom/bust
scenario in a developing country.]
–Real estate in Moscow is totally out of control, speaking of
bubbles. People don’t buy and sell homes or apartments here;
they tend to rent instead and a decent place goes for $5,000 to
$10,000 a month! Of course few can afford this…legally, at
least, i.e., there is a ton of excess credit here just like everywhere
else in the world. [Pensioners have a far different deal; as in
state subsidized housing.]
–The strike by Broadway stagehands is a mini-disaster; not as
much in terms of the hit to New York’s economy, an estimated
$130 million in ticket sales if it goes through Christmas, but as
Mayor Bloomberg says, “I think what hurts more is our
reputation. It’s the psychic things rather than the dollars.”
I have to be honest; I have zero sympathy for the stagehands, like
I might in the case of striking musicians, teachers or postal
workers, for example. Talk about replaceable.
And then I learned in the New York Post:
“Stagehands make $100,000 to $150,000 a year. That’s a pretty
sweet deal, even by New York standards – and it’s made even
sweeter by the fact that stagehanding isn’t among Gotham’s
more demanding trades.
“Indeed, very few waiters, waitresses, busboys, bartenders and
retail workers make that sort of money. Yet these are the
working people who are taking a huge hit.
“They’re losing money during what should be a peak time of the
year – and they don’t have a strike fund to help offset the losses.”
Now I really don’t give a damn about these folks. You might
also call them idiots.
–On a related topic, I saw an NBC News report on Wednesday
talking about the surge in foreign visitors to the U.S. due to the
tumbling dollar, but this is highly deceiving. As Newsweek’s
Fareed Zakaria pointed out in his column this week, according to
the most recent statistics the United States has seen a 17%
overall decline in tourism since 9/11; the only major country to
see a drop during a period when global tourism is booming.
One of the chief culprits, and the point of Zakaria’s piece, is the
U.S. is making it inordinately difficult to come here, as in huge
delays for those countries where a visa is still required.
This is absurd. Our fears over terrorism have gone to extremes,
and as a result business travel from overseas is way down; not a
good thing. We’ve all learned there are other places to set up
shop these days, sports fans.
–Hewlett-Packard beat Wall Street’s estimates for its fiscal
fourth quarter, but 42% of its $2.63 billion in total operating
profits came from its Imaging and Printing Group, i.e., ink. I am
personally responsible for 10% of that figure and I’m
increasingly ticked off at sites such as Bloomberg.com that put
dumb images, all in black, on many of the pages that I print out.
Many sites are now doing this, whether it is advertising or not.
I’m printing the page not because I want to have a stupid stock
picture of Pakistan! What is the freakin’ purpose of this except
to waste my money?!
[Thanks, I needed to get this off my chest.]
–France’s legislature, with President Sarkozy’s approval, is
proposing a government body that would monitor Internet piracy,
with a three-strikes-and-you-are-out policy against those who
download music and films without paying for them. Working
closely with Internet service providers, persistent offenders could
see their Net accounts suspended or terminated if they ignored
warnings. Good. [Remember, I’m the last one in the world who
actually goes to a music store and buys CDs. I expect some kind
of lifetime achievement award from the music industry one of
these days.]
–Thanks to congressional wrangling, mostly on the Democratic
side, the Alternative Minimum Tax “patch” won’t be signed into
law until December, which means it’s too late for the IRS to
program their computers in time to allow next year’s refunds to
go out on schedule. As columnist Robert Novak notes, the chief
culprit is Democratic Senate Majority Leader Harry Reid,
perhaps the worst to ever hold this position, by the way. That’s
my conclusion, not Novak’s stated one, though it clearly would
be. However, some Republicans are concerned they will be
blamed for the delay. Bottom line…Congress is well-deserving
of its abysmal approval ratings.
–It’s pretty clear the economy is going to be a big issue in the
presidential race. And it won’t be good for the elephants.
–I brought back lots of rubles from Russia, my hedge against the
coffee cans full of coins in my laundry room. [Don’t try and
break into my house because of this disclosure. I have crocodiles
and wolverines down there.]
–My portfolio: I’m going to comment further on my China
biodiesel play down below, but for those of you in it with me,
understand I was in contact with the company, expressing my
dismay over the lack of a financing deal for the plant expansion,
and I was urged to remain patient, that something should be
happening shortly. The stock isn’t likely to go anywhere until
then.
It’s also obviously been a tough time in the markets, overall, so
many of us haven’t been able to afford premium beer. Yes, it’s
been a period for domestic consumption only.
But I see that SABMiller, owner of Pilsner Urquell and Peroni,
purchased another of the great premium brands, Dutch brewer
Grolsch, to add to its stable of fine brews. We need the equity
markets to turn in earnest before we can celebrate this
acquisition.
–Lastly, back to the haves vs. have nots; rich vs. poor debate.
My last day in Moscow I was sitting at the hotel bar and trying to
figure out what this American guy, about 40, was doing with two
very cute Russian girls around 20. No, it wasn’t anything bad.
They were having a very animated conversation about politics,
the girls were clearly on their way to the U.S., and they were
pumping this fellow for information. You couldn’t help but hear
it, being as we were the only ones in the place at the time, when
this guy suddenly told this rather funny story. The guy prefaced
it by saying it was an illustration of the growing divide in
America.
It seems director Steven Spielberg’s private plane had some
mechanical issues and Spielberg, with a six-year-old daughter in
tow, was forced to hop on a commercial plane to get home. So
they’re sitting in first class, but the plane is full, and the six-year-
old turns to her very wealthy father and says, “Daddy, who are
all these people on our plane?”
I fly coach, by the way. But if I could afford it, I’d move up.
Foreign Affairs
Iraq: I was thinking the other day of how ridiculous it looks that
President Bush once handed out Medals of Freedom to the likes
of General Tommy Franks, L. Paul Bremer and George Tenet.
There is only one after over 4 ½ years I deem worthy, Gen.
David Petraeus.
Ralph Peters / New York Post
“Petraeus brought three vital qualities to our effort: He wants to
win, not just keep the lid on the pot; he never stops learning and
adapting, and he provides top-cover for innovative subordinates.
“By late 2006, mid-level commanders were already seizing
opportunities to draw former enemies into an alliance against al-
Qaeda. Petraeus saw the potential for a strategic shift. He
ignored the naysayers and supported what worked.
“Oh, and under Petraeus our troops have been relentless in their
pursuit of our enemies. Contrary to the myths of the left, peace
can only be built over the corpses of evil men.”
Editorial / Washington Post
“The evidence is now overwhelming that the ‘surge’ of U.S.
military forces in Iraq this year has been, in purely military
terms, a remarkable success. By every metric used to measure
the war – total attacks, U.S. casualties, Iraqi casualties, suicide
bombings, roadside bombs – there has been an enormous
improvement since January….Credit (belongs) in large part to
U.S. soldiers in Iraq, who took on a tremendously challenging
new counterterrorism strategy and made it work; to Gen. David
Petraeus, the architect of that strategy; and to President Bush, for
making the decision to launch the surge against the advice of
most of Congress and the country’s foreign policy elite.
“It is, however, too early to celebrate – as Gen. Petraeus and his
commanders in Iraq are the first to point out. The principal
objective of the surge was not military, but political.”
But, as the Post continues, if the surge was about buying time for
political reconciliation, “the Bush administration’s passivity is
even more disturbing.”
As in why the hell is Secretary of State Condoleezza Rice
wasting a minute of her time, now, on the Israeli-Palestinian
issue when she should be locking Iraq’s leaders in a room until
they reach some real consensus?! It’s great that some Iraqis are
beginning to return to their homeland, after basically being
forced out by Syria, but what are they returning to?
The New York Times’ Thomas Friedman writes:
“If you were President Bush and your whole legacy was riding
on the outcome of this war, wouldn’t you be sending your top
diplomat to Baghdad to work with Iraqis and their neighbors to
broker a political settlement and not let them grow complacent
that they have an open-ended commitment from the American
people?”
Ah, but we’ll stop there because Friedman just mentioned the
“legacy” word. Friends, I respectfully submit that Iraq is far
from the only item that will appear on Bush’s legacy when it
comes to foreign policy, yet so few get it.
Washington Post columnist Anne Applebaum almost nails it in
her Tuesday column.
“Though I don’t especially want to perpetuate any stereotypes
about the mainstream media, I have to say that this optimism
[over Iraq] is totally unwarranted. Not because things aren’t
improving in Iraq – it seems they are, at least for the moment –
but because the collateral damage inflicted by the war on
America’s relationship with the rest of the world is a lot deeper
and broader than more Americans have realized. It isn’t just that
the Iraq war invigorated the anti-Americanism that has always
been latent pretty much everywhere. What’s worse is the fact
that – however it all comes out in the end, however successful
Iraqi democracy is a decade from now – our conduct of the war
has disillusioned our natural friends and supporters and thrown a
lasting shadow over our military and political competence.
However it all comes out, the price we’ve paid is too high.”
Applebaum goes on to refer to the fact that because America has
been distracted by Iraq, we have steadily lost influence in far
more important Asia (as Fareed Zakaria has also written), plus
who is the key to nuclear negotiations with Iran? Not the United
States, but Britain, France and Germany.
But she is only partially correct, because Applebaum makes zero
mention of Russia or China, or right at this very moment, an
even more critical issue, Lebanon.
So let’s look at the Bush administration’s legacy, as measured
today, in the foreign policy sphere.
Iraq…a disaster, but could still emerge some kind of positive.
North Korea…could be a positive, but it will be a long time
before we really know.
Iran…a disaster to date, with less than a year to turn it around on
the nuclear weapons front before the United States and/or Israel
is forced to strike; which will not be good.
That’s your “Axis of Evil.” But then you have….
Pakistan…potentially on the verge of collapse, with terrorists
having free rein in the tribal areas. And Pakistan has nukes.
Afghanistan…zero improvement. The Taliban and its acolytes
(warlords on the take) are back to controlling half the country,
thanks to Pakistan’s inability to police its side of the border.
Lebanon…an unmitigated disaster almost totally due to the
inexcusable and virtually criminal neglect of the U.S. in the
critical six months following the 2005 assassination of Rafik
Hariri, which presented a tremendous window of opportunity that
the White House then failed to exploit. Part II of the disaster was
not telling Israel to cease with its 2006 war with Hizbullah.
Hizbullah, by Israel’s own admission, is even stronger today as a
result. And now the Lebanese people themselves are on the
verge of a civil war that would only benefit America’s enemies.
The Israeli/Palestinian issue…the same joke it has always been.
Russia: Vlad the Great, thumbing his nose at us…enough said.
China: I would submit that within a few months, most Americans
will understand our relationship with China has never been worse
in terms of the varied threats it poses. Far more below.
So let the Bush administration try to hoodwink you into talk of a
positive legacy. Readers of this column know otherwise.
—
More specifics on the Foreign Affairs front.
Iran: Our friends the Chinese scuttled talks over a new round of
sanctions because Beijing opposes them. And the International
Atomic Energy Agency’s Mohamed ElBaradei admitted his
people know less today about Iran’s activities than they did a
year ago. But you know what? Iran’s President Ahmadinejad
did say something accurate this week; the U.S. greenback is
indeed an increasingly “worthless piece of paper.”
Pakistan: President/General Musharraf’s new puppet Supreme
Court threw out the final challenges to Musharraf’s recent
election victory, so, in keeping with his past promises, he is
expected to step down as military leader this weekend, with a
long-time ally having already been tapped for the slot. [A man
who Washington seems to like.]
Earlier, Musharraf had released a few thousand prisoners, but not
the former chief of the Supreme Court who had defied him.
Two comments on the situation and U.S.-Pakistan relations.
Fouad Ajami / U.S. News & World Report
“The forces arrayed against Musharraf are a varied lot. There are
lawyers (not always sure friends of the rule of law) and liberal
professionals disappointed by the pace of reform and by the
power of the Army, but there are also in the streets agitators and
religious obscurantists (sic) who oppose Musharraf for his
alliance with the United States, for the greater realism and
moderation he brought to his country’s foreign policy.
“Musharraf may not be a devoted democrat, but in all fairness, he
has hitherto ruled with a light touch. There is in him a soldier’s
earnestness, a preference for order. His hero is not Lincoln but
rather Turkey’s soldier-founder, Kemal Ataturk. Musharraf had
picked that romance for Ataturk early in life, when his father was
assigned to Pakistan’s embassy in Ankara. The Musharrafs spent
seven years in Turkey, and the creed of Kemalism – for the
people, despite the people, the Army as a guardian of a nation’s
order, and ‘progress’ in the face of religious reactionaries – is
basic to Musharraf’s worldview.”
Robert Kagan / Washington Post
“Today, Pakistan’s Gen. Pervez Musharraf is playing the old
game [ed. the dictator’s self-serving sales pitch], as is Egypt’s
Hosni Mubarak, and it appears to be working. Substitute radical
Islamists for communists, and (it’s) the same: Apres moi, le
deluge. If you force me out, the radical Islamists will win. And
Musharraf is busily trying to ensure that this is the only option.
He cracks down on moderates with good democratic credentials,
and with far greater zeal than he has cracked down on al-Qaeda.
If he can hold on long enough, he may so radicalize the
opposition that no reasonably moderate alternative will be
available.”
On comparisons between today’s Pakistan to the fall of the shah
of Iran, Kagan writes:
“Musharraf is not even like (him). He is not the living
embodiment of a regime, as the shah was. He is not
irreplaceable. He is not the lone savior of a whole way of
governance. He is but a general, and not an especially effective
one at that.
“There are other generals. With all the billions of dollars in aid
the United States provides to Pakistan, it ought to be possible to
discuss with the Pakistani military alternatives to the man who so
poorly serves their interests. Musharraf may be willing to lose
American aid in order to remain in power, but that is unlikely to
seem attractive to the men who work for him. It ought to be
possible to find a general who is willing to let Pakistan return to
a democratic path and meanwhile to do a better job of fighting
Pakistan’s real enemies….
“If the (White House) cannot muster the courage or skill to
replace this eminently replaceable man in the name of Pakistani
democracy, all because it fears the alternative, then it had better
cease the absurd rhetoric about democracy promotion. It had
also better get used to a greater Middle East and Muslim world
where there are only two types of regimes: radical Islamists and
stubborn dictatorships. That, presumably, is not the legacy Bush
wants to bequeath to his successor.”
For the record, President Bush, who initially scolded Musharraf
when the general issued his emergency decree, suddenly
switched gears and said last week that Musharraf was “truly
somebody who believes in democracy.” This actually may have
had something to do with a New York Times story a few days
earlier that the U.S. was seeking to bribe tribal leaders to fight al-
Qaeda and the Taliban.
Lebanon: Friday’s deadline to come up with a successor for pro-
Syrian President Emile Lahoud came and went. Lahoud then
departed and a new vote among parliament members to replace
him has been scheduled for next Friday. But the two sides can’t
even agree on whether a state of emergency exists, let alone who
is truly in charge. One of the big problems is a two-thirds
majority is required for the election of a new president, but the
pro-West ruling bloc barely has a majority, thanks in no small
part to Syria assassinating a number of pro-West parliament
members.
China: U.S. Admiral Timothy Keating said he was perplexed and
concerned over China’s last-minute decision to deny the USS
Kitty Hawk a long-scheduled four-day visit to Hong Kong.
Hundreds of family members had flown there to spend
Thanksgiving with the sailors, but then China denied it access.
[China later reversed course but not until the ship was well out to
sea and back on its way home. Keating was right in not turning
the vessel around.]
Earlier, two U.S. minesweepers, seeking to refuel and avoid
rough weather in the South China Sea, had asked for permission
to enter Hong Kong and China denied their request as well. Just
a few weeks ago I told you Secretary of Defense Robert Gates’
trip to Beijing to meet with his Chinese counterparts was “largely
a waste of time.” [WIR 11/10/07] Point proved.
Understand something about China, at least its leadership. It
doesn’t give a damn about you…whether you are in Japan,
Namibia, or the U.S. It also doesn’t give a damn about its own
people, in the traditional sense that you or I care about our fellow
man. Get used to me being more of a Cold Warrior when it
comes to this topic. It’s the result of an accumulation of
evidence, both gathered from personal experience as well as
through my wealth of sources. And if you aren’t troubled by an
example like the Kitty Hawk, you should be.
As you know, I have this shareholding near Fuzhou, China….my
biodiesel company…and the plant during the summer was hit by
one storm after another. I’d check up on whether there were any
production delays through my personal contact, and always say
something about the workers, as in “congratulations to your
workers for weathering the storm,” or, “I hope you are rewarding
your workers, etc.”
You know, sometimes it might seem corny when an American
leader, such as President Bush, says something to the effect that
“America’s greatness is in its people,” or the strength of America
is in its workers. Our leaders have been saying things like that
since the beginning of this nation. It’s also true.
Any good business leader always praises the efforts of those
below them. I know in my own experience when I rose to my
last senior post and was responsible for our sales force, I was
nothing without the help of those working for me, and I’d like to
think I let them know that. I was also no different than any good
boss in going to bat for my people.
I know I’m going off on a tangent here, but it really pissed me
off the other day when I told my China contact to thank the
workers for me, as a fairly large shareholder, and his reply was
cold as a fish. Remember, just last spring I visited the place. I
saw the workers. I know their living conditions. I have an idea
what they are paid. [Actually, I know exactly what they are
paid.] I give a damn about these people, as a caring human
being. But China’s leaders don’t care. Nor did they have the
decency, after hundreds of United States families had flown all
the way to Hong Kong, for crying out loud, to spend a few days
with loved ones, to allow the Kitty Hawk to dock. What a bunch
of bastards.
This is the same regime, broadly speaking, that continues to
poison its own people. No doubt, every nation on earth,
including our own, has had its Industrial Revolution type
moment where there was a period of time when progress came at
a price to the health of its people.
But this is 2007. And I’m not even talking about the excessive
use of dirty coal in China. Some of that has not been preventable
as yet. No, it’s about flooding their water system with sewerage
and chemicals. Or the Three Gorges Dam project, perhaps the
biggest mistake of the past few hundred years on the
environmental front, just wantonly destroying centuries of
history along with the forced removal of millions for a structure
that increasingly looks like it has the stability of something built
out of straw by the Three Little Pigs.
I warned a few weeks ago that the real clash with China is
coming over pollution. Then, I was referring to air pollution that
is carried by the jet stream to our air and soil. But there is
another movement coming, and that is about the evil China will
increasingly be perceived to represent. And I haven’t even
touched on the military aspect (or toys for that matter).
But to end this rant on a hopeful note, a provincial government
adviser and true Profile in Courage, Wang Zhaojun, called for
political reform the other day; specifically lifting the ban on
religious groups and parties such as Falun Gong, as well as a
reappraisal of the Tiananmen Square massacre. Wang also
recommended depoliticizing the People’s Liberation Army and
allowing multi-party politics; all of which are taboo topics.
According to Reuters and the South China Morning Post:
“Asked why [an official of his stature] risked political
repercussions, he told reporters that he was frustrated with the
bureaucracy when he paid a courtesy call on the cabinet’s State
Environmental Protection Agency.”
Wang also praised democracy on Taiwan. It may be chaotic, he
noted, “but it is out in the open and better than the scheming and
intrigues of palace politics and the sound of sharpening knives.”
Wang Zhaojun thus becomes a candidate for “Man of the Year.”
God’s speed.
North Korea: Sometimes you just can’t make this stuff up.
Apparently, Kim Jong-il has tabbed as his successor his second
eldest son, Kim Jong-chol. This guy supposedly has a disease
that causes him to produce excessive female hormones.
Israel: Talk about a waste of time; that is exactly what this
coming week’s parley in Annapolis, featuring Israeli and
Palestinian leaders, is. There will be no actual negotiations,
rather the talks are designed to establish a process for future
ones. But I’ll try and keep an open mind.
Russia: I couldn’t have had a better week than I did in Moscow,
including after I posted my column last time, but what to say
about a government that forces former Yukos chairman Mikhail
Khodorkovsky and his business partner, Platon Lebedev, to
literally read tens of thousands of pages of “evidence” against
them as part of their prison terms? If they don’t, prosecutors
could extend the sentences in their money-laundering cases.
Each has to read 130 volumes that number more than 30,000
pages. They began in February, but had to pause two months
because prosecutors trumped up some other cases related to
theirs. Both, though, have to finish the readings by Dec. 22. If
you’re thinking this is something out of Solzhenitsyn, you’re
right. It also has to do with putting them on new trials before
March’s presidential election.
Meanwhile, I missed by just a few days possibly seeing President
Putin at his first big campaign appearance prior to the Dec. 2
parliamentary vote. Then again, I can’t possibly imagine I would
have been allowed into the stadium where Putin addressed
thousands of youth. [Unless I died my hair and took a crash
Berlitz course the evening before. “Me? Ah, I joined the Nashi,
err, just a few hours ago.”]
Putin attacked Russia’s opposition, calling them agents of
foreign governments.
“Unfortunately there are still those people in our country who act
like jackals at foreign embassies…who count on the support of
foreign funds and governments but not the support of their own
people.”
In an apparent reference to Ukraine and Georgia, Putin added:
“They want to go out into the streets, they’ve learnt from
Western specialists. They’ve trained in neighboring republics.”
Putin reassured his followers “In the months to come we will
have a total renewal of the top leadership of the state.”
United Russia, the party that Putin is fronting, has seen its
support rise back up to 64 percent. The Communists, at 7
percent, are the only other ones who meet the threshold, on the
number, for representation in parliament.
Russia affairs expert Marshall Goldman, a senior scholar at
Wellesley College and Harvard University, had the following as
part of an op-ed in the Moscow Times.
“In the long run…it would be better if Putin decides that for the
good of his country, he should establish the precedent that even
the most popular president must not only adhere to the
Constitution, but step down after two terms and make way for a
new leader. Putin would do well to follow George Washington’s
example. Popular as he was, Washington realized that it was
important that the country’s leaders not stay in office too long.
He therefore refused to stay on for a third term, leaving
government service completely.
“If he really cares for the well being of his country, Putin should
do the same.”
Nice try, Mr. Goldman.
In a separate item, Russia is building a space complex near the
border with China capable of launching both civilian and military
rockets. This isn’t totally without reason, though. Currently,
Russia uses a Soviet-era base, Baikonur, in Kazakhstan. It needs
its own. But it nonetheless may be a bit unsettling to China,
which isn’t necessarily a bad thing.
France: President Nicolas Sarkozy had his hands full with the
nation’s transit strike, but the people are solidly behind him and
the strike has largely fizzled out. Score a huge victory for our
new hero. Sarkozy also vowed that those who sabotaged the
country’s high-speed rail line would be punished with “extreme
severity.” The guillotine might be appropriate, mused your
editor.
One Paris resident told the BBC that when it came to the strikers,
“This is ludicrous! They are all a bunch of lazy people, and I am
personally both enraged and ashamed at their behavior!”
Touche! Some of these workers can currently retire on full
pensions as early as age 50, and all Sarkozy is attempting to do is
bring their benefits in line with others.
Kosovo: Remember…watch this little place. A former guerrilla
leader emerged as prime-minister-designate after recent elections
and he’s calling for independence, as did all his opponents. By
Dec. 10, when UN status talks are slated to end, there could be
trouble. As reported by David Charter of the London Times,
both ethnic Albanians and the minority Serbs are armed and
ready for a brawl. Recall that Russia is backing Serbia’s claim to
keep Kosovo in the fold.
Venezuela: President Hugo Chavez’s “revolution” could receive
another boost on Dec. 2 with a referendum that is designed in
essence to formally make him president for life and allow him to
massively revise the constitution to turn his country into a purely
“socialist” one. Chavez would then control all aspects of
commerce. Aside from the oil angle, Americans need to care
because Venezuela is no doubt becoming a base for Iranian
agents, with Venezuela but a two hour flight from Miami.
Zimbabwe: Geezuz, there are a lot of bad people in the world
these days. Like President Robert Mugabe, who is seeking to
mortally wound his country’s economy by taking over the last
viable businesses; those involved in the mining of fuels and
minerals. Mugabe is proposing to take 25 percent of the
operations without paying for them, while paying minimally for
26 percent, with the method of payment, of course, not specified.
He did the exact same thing to white-owned farms in 2000, with
disastrous consequences.
Britain: Not a great week, that’s for sure. First, the soccer team,
only needing a tie against Croatia to advance to next year’s
European Cup Championship, lost 3-2. [The coach was
immediately fired.]
But, perhaps more importantly (at least in some circles), two
computer disks containing detailed personal information on 40
percent of Britons went missing after they were being delivered
by a simple transport service, unregistered.
Australia: Aussie voters go to the polls on Saturday. Four-time
incumbent John Howard is expected to go down to defeat with
Kevin Ruud becoming the new prime minister. But while Ruud
wants to withdraw Australian troops from Iraq, he’s otherwise
pro-American.
Random Musings
–Yup, the 2008 presidential race is all about Iowa on the
Democratic side, with the Washington Post/ABC News poll
showing Barack Obama surging ahead of Hillary Clinton, 30-26,
with John Edwards at 22. I agree with the experts, though, that if
Hillary wins it’s over.
On the Republican side, Mike Huckabee has become the story as
the same survey has him in second with 24 percent to Mitt
Romney’s 28. But for the elephants, it’s not just Iowa, it’s also
about New Hampshire where John McCain is staking his
campaign.
For his part, because of Huckabee’s sudden success, he will now
become a target and his record as governor is far from pristine. I
still say he’s the perfect veep candidate, though. And for Ron
Paul addicts, he polled at 6 percent in Iowa; not that bad,
actually. Paul has vowed he will not run as a third party
candidate, which you’d expect him to say at this point, but he’s
going to come out of Iowa and New Hampshire with ample cash
and his legions could force him at that point to drop out of the
race to focus on an independent bid.
[Iowa is Jan. 3. New Hampshire Jan. 8.]
–Since everything is on the Net these days, I have to come clean
that I maxed out my contribution to the McCain campaign the
other week. I said last spring he was history, and I still
essentially believe this, but after all this time he remains the only
one I feel like voting for.
–In a survey for U.S. News & World Report, authored by
Yankelovich Inc. and the Center for Public Leadership, more
than three quarters of the respondents say they believe the
country is going through a leadership crisis, while 51 percent
believe the United States is falling behind other nations.
As you would expect, Americans by a wide margin have the
most confidence in military leaders, with 40 percent having a
“great deal” of confidence in them, while 9 percent…9 percent
…say they have a great deal of confidence in Congress. [The
executive branch comes in at 19, by comparison.]
So Americans would support a coup…………….just kidding!
–The apparent milestone in stem cell research where mature
human cells have been reprogrammed to behave like embryonic
ones is obviously something to note, particularly as it could
bypass the debate over the morality of destroying embryos. But
as in all other medical breakthroughs we hear of these days, we
are years from any real application. That said, congratulations to
the scientists who achieved this feat; further proof that the only
exciting developments taking place in the world these days are
indeed in the field of medicine.
–I’m tired of the Japanese and their latest whaling expedition.
Here’s hoping Greenpeace disrupts it.
The mission’s goal is to kill up to 50 humpbacks in what is being
called the first large-scale hunt since a 1963 moratorium in the
Southern Pacific put the whales under international protection.
[The Japanese have conducted numerous operations in the
Northern Pacific.] And aside from the humpbacks, the goal is to
kill as many as 935 minke whales and up to 50 fin whales.
Laughably, the Japanese always say these missions are necessary
to “conduct research on their reproductive and feeding patterns.”
Such scientific hunts are allowed by the International Whaling
Commission, but recall this body has gone through episodes
comparable to FDR’s attempt to pack the Supreme Court. Japan
lines up a bunch of allies when no one else is looking. The IWC
moratorium on commercial whaling took effect in 1986, but
Japan has obtained enough “research” permits to kill over 10,000
mostly minke whales since then.
Of course the other week I wrote about the Chinese and their
penchant for ivory, thus the ongoing slaughter of elephants on
the border of Chad and Sudan. God can’t be happy, though I
always suspected He’s more bemused than anything else.
–Related to the above, from Cynthia R. Fagen of the New York
Post:
“Manmade production of carbon dioxide…is rapidly turning the
Earth’s oceans into toxic seas with dire consequences for human
health, a UN report by world scientists warned.
“The loss of marine life could have a catastrophic impact on the
world’s food chain, causing widespread famine.
“The acid kills the fragile coral-based eco-systems and the
calcium carbonate needed for marine animals to grow protective
shells to survive.”
The Intergovernmental Panel of Climate Change, a group of
2,000 scientists that shared the Nobel Peace Prize with Al Gore,
says the acidification of the surface water could triple by the end
of the century.
–Bill Carter of the New York Times had a piece on Fox News’
Shepard Smith and his new contract, an estimated $7 million to
$8 million a year; in line with the salaries being taken down by
Brian Williams and Charles Gibson. [Katie still beats them all
handily. You remember her, don’t you? Katie Couric?] So we
congratulate Shep, who is still benefiting from his outstanding
work in New Orleans, post-Katrina.
–Did you see the LSU-Arkansas game on Friday? Is this the
best college football season of all time or what?!
–This is so unbelievable it just has to be noted. Tawana
Brawley’s mother and stepfather, 20 years after a state grand jury
concluded their daughter’s rape claim was a giant hoax, want to
resurrect the case.
“New York State owes my daughter. They owe her the truth.”
Oh brother. This nation truly is peopled with idiots.
–At least New York City is headed for its lowest murder rate in
more than 40 years, 427 as of Monday. And what’s more, the
police have determined a relationship between the victim and
assailant in nearly half of the slayings. The motives in the
remainder are still being analyzed. In other words, go to New
York! And tell the stagehands to get real.
—
Pray for the men and women of our armed forces.
God bless America.
—
Gold closed at $825
Oil, $97.86
Returns for the week 11/19-11/23
Dow Jones -1.5% [12986]
S&P 500 -1.2% [1440]
S&P MidCap -2.0%
Russell 2000 -1.9%
Nasdaq -1.5% [2596]
Returns for the period 1/1/07-11/23/07
Dow Jones +4.2%
S&P 500 +1.6%
S&P MidCap +3.7%
Russell 2000 -4.1%
Nasdaq +7.5%
Bulls 47.9
Bears 26.6 [Source: Chartcraft / Investors Intelligence]
Have a great week. I appreciate your support.
Brian Trumbore
