For the week 11/16-11/20

Wall Street…looking ahead 

For me, 2009 has been all about the stock market. We’ve run substantially higher thus far, as I forecast, and I didn’t waver even at the heights of despair last March, but in looking ahead I am still trying to get my arms around the economy and thus I’m waiting until the last possible minute, like Dec. 31, before issuing any outlook for 2010. All I can tell you today is that the negatives outweigh the positives as I scratch it out on my legal pad.  

Federal Reserve Chairman Ben Bernanke gave an important speech in New York this week, reiterating that the economy, while off the carpet, still has some major hurdles to clear before we see sustainable growth of a variety that puts a real dent in the unemployment rate. Bank lending remains sharply constrained “and banks continue to tighten terms.” The consumer and small business in particular are most heavily impacted, with the former worried over both his job and the ongoing negative wealth effect from what had been his prime investment, his home. 

Bernanke hardly offered much hope for the future when it came to labor, pointing to the excess supply of it, “even greater than indicated,” and, as I’ve been pointing out the past few months corporations are in many cases cutting wages, so, again, household spending will remain restrained. While the chairman didn’t say it, let me. Those who continue to say the Christmas shopping season will surprise to the upside are nuts. 

Globally, what does the Organization for Economic Cooperation and Development say about the 30 developed nations it monitors? Glad you asked. In a nutshell, the OECD said “Growth has resumed,” but it would likely “fluctuate around a modest underlying rate for some time to come.” 

How modest? Try 1.9% for 2010 and 2.5% in 2011. Unemployment will rise to 9% next year and only drop to 8.8% in 2011. That’s what I call a putrid forecast. 

More specifically, both Japan and the 16-nation eurozone are expected to grow 1.8% in 2010 and 2.0% in 2011, while the United States is forecast to post positive growth of 2.5% and 2.8% in 2011 (which I’d take about now…downside risk in the stock market would be limited in that scenario). 

Then there’s China, which by most accounts has been carrying the world, either from a market standpoint or its purchases of others’ paper, like that of the United States where China, at last report, owns $797 billion of U.S. government debt. 

So against this backdrop President Barack Obama became the first U.S. leader to visit China in the first year of his term. I got a kick out of the likes of Bill O’Reilly who stupidly questioned why he was there. He better have gone, even if nothing of substance officially came of the entire Asian trip…as I told you would be the case. It’s about appearances, and symbolism, and frankly, groveling. 

It’s with good reason that the U.S. and China are now called the G-2, far and away the most important bi-lateral relationship with finance and peace inextricably linked, as both Obama and China’s leaders said during the visit. Obama got in his jabs on human rights, Tibet, and a free press (including free access to the Internet), but for the most part Obama avoided even the mildest of controversies. That’s what happens when you are no longer dominating the world as the United States has been used to since all of us have been on this planet. These days, Washington has little bargaining power. 

In 2008, China exported $337.8 billion to the United States. U.S. exports to China were $69.7 billion. 

In 2002, U.S. two-way trade with Japan, South Korea, Thailand, Indonesia, Malaysia and Singapore exceeded Chinese trade with those countries. In 2008, each of them traded more with China than with the U.S. 

Which brings us to the currency issue. China is killing not just the U.S. by pegging the yuan to the falling dollar, but its Asian neighbors and Europe as well. China has been scared to death that if it lets its currency appreciate, its export economy will collapse, throwing tens of millions more on the streets with the risk of rising unrest. But a stronger currency would boost the purchasing power of Chinese households and encourage domestic consumption and less reliance on exports. The Chinese government knows this is the direction they eventually have to take, but they want to do it at their own pace and with the global economy as fragile as it is, they are not about to take any drastic steps today to appease the rest of the world. 

The weak U.S. dollar, and yuan, are slamming Europe to the tune of 12.5% in revenues for the third quarter among eurozone companies. That’s huge. 

But Washington likes the weaker dollar at this moment because it keeps our own export industry from retrenching any further and the only thing that is going to change the attitude of investors when it comes to the greenback, aside from a geopolitical event (more below), would be a show of fiscal responsibility and declining deficits in the U.S. But when you have items such as a potential health care “reform” debacle, cap-and-trade, Congress’ inability to reduce spending of any kind, TARP, and expiring tax cuts yearend 2010 that threaten long-term business plans, let alone reduced consumer spending, it’s hard to see the rest of the world reaching the conclusion, “You know, those Yanks have finally gotten their act together.   They’ve recaptured their mojo.” I don’t think so. Not when you have the likes of economist Paul Krugman who believe, perhaps not inaccurately, that the economy requires further government help. 

“Unemployment is in double digits; we desperately need more government spending on job creation. Banks are still weak, and credit is still tight; we desperately need more government aid to the financial sector. But try to talk to an ordinary voter about this, and the response you’re likely to get is: ‘No way. All they’ll do is hand out more money to Wall Street.’” 

Krugman’s big complaint this week, as expressed from his perch at the New York Times, is that when government officials put together TARP and then rescued the likes of AIG, in their case to the tune of $180 billion, the government asked nothing in return from the bankers, “even though these bankers [Ed. read Goldman Sachs] received huge benefits from the rescue.” 

“For the AIG rescue was part of a pattern: Throughout the financial crisis key officials – most notably Timothy Geithner, who was president of the New York Fed in 2008 and is now Treasury secretary – have shied away from doing anything that might rattle Wall Street. And the bitter paradox is that this play-it-safe approach has ended up undermining prospects for economic recovery. For the job of fixing the broken economy is far from done – yet finishing the job has become nearly impossible now that the public has lost faith in the government’s efforts, viewing them as little more than handouts to the people who got us into this mess.” 

“So here’s the real tragedy of the botched bailout: Government officials, perhaps influenced by spending too much time with bankers, forgot that if you want to govern effectively you have to retain the trust of the people. And by treating the financial industry…with kids’ gloves, they have squandered that trust.” 

So what other issues do we have? This week the data on October housing starts was a bummer as the figure came in far lower than expected and, despite historically low mortgage rates for qualified buyers, mortgage applications continued to fall. 

Foreclosures also continued to rise, with a record 14.4% of all mortgages either delinquent or in foreclosure, and this figure is likely to rise higher still in 2010 because there is zero sign jobs are going to come roaring back. Economist Mark Zandi, who has been right throughout when it came to forecasting the real estate bubble, said, “I think we’re going to see another leg down.”  

[The only mild positive this week was that a key region, the six-county Southern California area, saw a further rise in the median home price for October, and I would say that nationwide my projection from last year that the bottom in terms of median home prices, this past April-May, will hold, though I concede it’s going to be close.] 

Then there’s this health care behemoth working its way through Congress, with a Senate vote probable on Saturday that will allow debate on their version, though it’s hoped the Republicans can block any vote on the legislation until cooler heads can prevail, like until the new year. 

Robert Samuelson / Washington Post 

“[Congress’] far-reaching overhaul of the health-care system…would almost certainly make matters worse. It would create new, open-ended medical entitlements that threaten higher deficits and would do little to suppress surging health costs. The disconnect between what President Obama says and what he’s doing is so glaring that most people could not abide it. The president, his advisers and allies have no trouble. But reconciling blatantly contradictory objectives requires them to engage in willful self-deception, public dishonesty, or both. 

“The campaign to pass Obama’s health-care plan has assumed a false, though understandable, cloak of moral superiority. It’s understandable because almost everyone thinks that people in need of essential medical care should get it; ideally, everyone would have health insurance. The pursuit of these worthy goals can easily be projected as a high-minded exercise for the public good. 

“It’s false for two reasons. First, the country has other goals – including preventing financial crises and minimizing the crushing effects of high deficits or taxes on the economy and younger Americans – that ‘health-care reform’ would jeopardize. And second, the benefits of ‘reform’ are exaggerated.   Sure, many Americans would feel less fearful about losing insurance; but there are cheaper ways to limit insecurity. Meanwhile, improvements in health for today’s uninsured would be modest. They already receive substantial medical care. Insurance would help some individuals enormously, but studies find that, on average, gains are moderate. Despite using more health services, people don’t automatically become healthier.” 

To digress…am I mistaken or have we not seen any Public Service Announcements, say from the likes of a LeBron James, on just general physical fitness? People laughed at Nancy Reagan and her “just say no” to drugs campaign, but it worked. 

It’s all so frustrating. Like the report that government paid out $47 billion in questionable Medicare claims the past year. Or a report from the Office of Management and Budget that the government made $98 billion in improper payments in fiscal 2009, though Director Peter Orszag was unable to provide a breakdown on how much of this was due to fraud. $98 billion! No one knows why it was disbursed, but it shouldn’t have been. It’s a disgrace. 

Lastly, Iran. The P5+1 (the five permanent members of the Security Council plus Germany) are to decide over the next few weeks whether to threaten Iran with further sanctions for its continued intransigence, though at a meeting on Friday they wimped out, which undoubtedly Israel took note of. The deceitful Iranians never have formally rejected the offer to enrich their uranium if they would just ship it out, as they choose instead to work the clock in their now all too familiar stall game. 

There are three existing Security Council resolutions, plus 5 other resolutions, all ordering Iran to halt enriching its uranium and they’ve just thumbed their nose, given us the finger, and threatened Israel with annihilation. 

This week Iranian Foreign Minister Mottaki dismissed the possibility of further sanctions. 

“Sanction was the literature of the 60s and 70s. I think they are wise enough not to repeat failed experiences.” 

President Obama said he wasn’t about to just continue talks forever without any actual resolution to the issue, and it’s true he said he had to give it until the end of the year, but that must be Obama’s line in the sand, regardless of what the others in the P5+1 do, because while it would appear Israel is not going to launch a preemptive strike this month, as I sincerely felt would be the case, it is beyond belief to imagine an Israel that just sits back and lets Tehran get the bomb. Unfathomable.  

Some in Israel have actually said the state needs to prepare for this day. Never. I have never been more sure of anything in my life, nor should you doubt for a second that Israel would let the Mullahs control their fate. It’s bad enough that a coup in Pakistan could one day be a source of nukes for terrorists, but Israel can not control what transpires there. It can, however, have a say in Iran’s nuclear ambitions and, yes, Israel will have to then brace itself for blowback when it does decide to set back Iran’s program for a couple of years. The target will be Natanz. 

I’ve read all manner of reports on how difficult it will be to carry through the mission, with or without U.S. help, including issues I’ve discussed in this space before such as what routes do the fighter jets and bombers take, seeing as there is no good one. 

But the United States has supplied Israel with the latest in our bunker-busting arsenal and while Natanz is not the lone critical facility, it is far and away where the most uranium is being enriched. 

E.J., a reader, passed along a terrific piece from Haaretz; a distillation of a study put together by strategists Tony Cordesman and Abdullah Toukan, and the author makes the following statement. 

“The regime in Tehran is certainly a bitter and inflexible rival, but from there it’s a long way to presenting it as a truly existential threat to Israel. Iran’s involvement in terror in our region is troubling, but a distinction must be made between a willingness to bankroll terrorists, and an intention to launch nuclear missiles against Israel.” 

Boy, this isn’t Benjamin Netanyahu’s position, and if it ever becomes the norm in Israel they can kiss their future good-bye. PBS’ “Frontline” had another outstanding segment this week, this time on the death of Neda, the female protester whose murder came to symbolize last summer’s protests in Tehran. Many of the Iranians are simply sick, totally nuts. There’s no other way to describe them. [At the same time, your heart goes out to those who just want to lead a normal life, with a modicum of freedom, but they don’t have the power.] 

So we’re back to square one. Trying to levy a new round of sanctions before Israel has to take actions into its own hands. If you’re looking for something mildly positive in terms of Russia’s position, last week it was the Iranians complaining the S-300 anti-missile defense system hadn’t been delivered as promised by Moscow. This week it was Russia’s announcement that they wouldn’t finish the Bushehr nuclear plant as scheduled. This is not merely a coincidence. Let’s hope that while China will balk over a new round of sanctions, Russia may yet agree to them. 

And of course I keep harping on all this because it has everything to do with our financial markets. I’d watch my dollar positions, for one. Any strike on Iran and the greenback soars. Most of you know what that would then mean for the commodity trade that has worked so well this year. And I have to repeat…for those betting that oil will spike to $130+ and stay there, I’ve been saying the Saudis would come to the rescue and flood the market with their ample spare capacity. 

–Stocks finished mixed, with the Dow Jones adding 0.5% to close at 10318, while the S&P 500 lost 0.2% and Nasdaq 1.0%. The outlook from the likes of Home Depot, Lowe’s and Target was so-so. 

[For long-term investors, Warren Buffett’s Berkshire Hathaway has recently taken stakes in Exxon Mobil and Nestle, according to filings.] 

–U.S. Treasury Yields 

Producer and consumer prices for October were in line with both up 0.3%, though ex-food and energy the PPI was down 0.6% and the CPI up 0.2%. Former Bush economic adviser Larry Lindsey added his voice to the deflation camp when it comes to the labor market. In a mildly positive sign, capacity utilization at the nation’s factories in October finally climbed back over the 70% level (70.7). We need this well over 80, however. 

As for those incredibly low short-term rates you see above, it’s about the risk trade and not wanting to take too much of it before yearend. Demand for short-term paper has been huge.  

–The jobless rate rose in 29 states in October, with Michigan at 15.1%, followed by Nevada at 13% and Rhode Island at 12.9%. California is at 12.5%. The rate actually fell in 13 states. 

–Japan is back in deflation for the first time since 2006, though the Bank of Japan is convinced this is not the start of another long-term trend like the country has seen before. Japan’s Q3 GDP rose at an annualized pace of 4.8%, far better than expected. 

–Singapore’s economy rose in the third quarter at a 14.2% annualized rate so its comeback from the brink continues, though the government here is forecasting only 3% to 5% growth in 2010, quite a comedown from the days when it grew at a consistent 8% pace. 

–And Australia never officially went into recession as throughout the entire global crisis, the Aussies had just one negative quarter, which is why the central bank here has been able to raise interest rates while the likes of the U.S., Japan and Europe keep short-term rates near zero. 

–Mexico’s economy grew 2.9% in the third quarter over the second. If I was down there I’d celebrate with a premium. “I don’t always drink beer, but when I do, I prefer Dos Equis. Stay thirsty my friends.” [Best commercial in the history of television.] 

–I’m going to have some extensive comments on gold next time. For now, it continued to hit new highs as hedge fund king John Paulson said he was starting a new $250 million fund, dedicated to all things goldilicious. 

–I have more on the mammogram issue below, but in terms of this section, after the disastrous handling of the new guidelines by Health & Human Services Secretary Kathleen Sebelius, and others, insurance companies contacted by USA TODAY said they will continue paying for annual checks as per before. 

–Commerce Secretary Gary Locke nailed it when discussing the U.S., China and alternative energy. If Washington doesn’t get their act together soon and pass some real legislation on this front, as President Obama promised during the campaign, China will clean our clocks in this critical sector. 

–New York City is emblematic of the issues faced by municipalities. Mayor Bloomberg is slashing costs 4% in the 2010 fiscal year, with a further 8% in 2011. You can only accomplish this through job cuts, which Bloomberg has been loath to do, but you can see how such action will restrain the pace of any true economic recovery. 

[It’s possible the City of New York could, however, catch a revenue break with Wall Street’s bonuses and the resultant tax take. Such as….] 

–Good news…New York City’s securities industry added 3,600 jobs in September, the biggest jump since 2002. This follows a cumulative decline of 32,000 since January 2008. Initially, most experts saw a job loss in excess of 45,000 for the industry here. 

But…New York City as a whole shed 15,600 jobs in October – the worst one-month figure since last December, and according to this report, 1,700 securities jobs were shed in the month, which, coming off the September uptick, makes for some confusion, especially if like me you are looking at various sources. Overall, the Big Apple’s unemployment rate remains at a 16-year high, 10.3%. 

–Bad news…The homeowner vacancy rate, measuring the percentage of units that are owned but either for sale or empty, was 2.6% in the third quarter. In past recoveries the vacancy rate averaged 1.4%. Rental vacancies are a record 11.1%, compared with 6% in past recoveries. Yours truly is all over these stats, having a place for sale and an empty unit. It’s so exciting! [Actually, one of these issues is about to be rectified which will make my life a bit easier…and a little less stressful…but enough about me.] 

–More bad news…TransUnion’s database shows that mortgage delinquencies remain highest in the four states where the bubble hit hardest: Nevada, where the delinquency rate reached 14.5% in the quarter, Florida, 13.3%; Arizona, 10.4%; California, 10.2%. The national average is 6.25%. 

–Good news, part deux…that is if you happen to manufacture Fords, Subarus or Volkswagens which took the most spots in the insurance industry’s annual listing of the safest new vehicles. Only 27 were named this year, due to a new roof strength evaluation, and Ford, together with its Volvo unit, received six awards, followed by Subaru and VW/Audi with five apiece. Separately, the Ford Fusion picked up Motor Trend’s prestigious “Car of the Year” award.    I’ve commented a few times that I loved this car when I put 2,000 miles on a rental while tooling through the West a year ago. 

In fact I was hoping to buy or lease a Fusion, but instead picked up another Honda last week because it was too easy for me. Plus chicks dig the Accord’s reliability and side airbags. 

–Sign of the Apocalypse: Suddenly there are television commercials in the New York area to buy the Iraqi dinar. “It’s gone up since 2004!” Average Americans are supposed to be messing with this trade?! Are we that stupid?! [Yes.] 

–Microsoft has sold twice as many copies of Windows 7 since its launch than any previous version of the operating system, but CEO Steve Ballmer, in calling the initial reception “fantastic,” didn’t cite specific sales figures. 

–But Dell Inc., the world’s third-largest maker of PCs, missed analyst earnings and sales estimates by a mile as the company continues to struggle to get a handle on costs, which Dell now says will take another 18 months to rein in. Truly pitiful. Dell trails not only Hewlett-Packard these days, but also Taiwan’s Acer in the global PC market. 

–Goldman Sachs News…CEO Lloyd Blankfein, speaking at a conference, apologized for Goldman’s role in some of the activities that led to the financial crisis. 

“We participated in things that were clearly wrong and we have reason to regret and we apologize for them.”  

Like what? Blankfein didn’t say. Then, related to an initiative to help small business, Blankfein said Goldman’s leaders always ask themselves, “What are we going to do to fulfill our commitment and our obligation to the world to be good allocators of capital and make sure we’re doing the right thing, making sure we’re helping the country pull out of recession, grow businesses that help generate jobs?” So they are teaming up with Warren Buffett in some kind of attempt to help small business. 

Meanwhile, what did you do that was wrong, Lloyd? As to your claim you are always asking yourself what you can do to best allocate capital and help the world, the answer has been that you don’t care. It’s about trading. The numbers prove it, Lloyd. So just shut up, take the pain, continue to pay your employees whatever you feel like, and after you’re dead and gone the whole era will have finally blown over; because for the next two to three decades, at least, the average American has an unshakable opinion of your outfit. 

[And by the way, as the New York Post’s Terry Keenan pointed out, when it comes to managing the Goldman Sachs Foundation, foundation assets fell by more than a third in 2008 – even after $22 million in charitable disbursements…whoopty-damn-do – plus the Goldman Foundation paid the parent $3.86 million in management fees. Slime …pure slime.] 

–But then you have the issue of Goldman and its bonuses and Friday’s Wall Street Journal had a story on how shareholders are increasingly miffed that more of Goldman’s income isn’t falling to the bottom line, i.e., earnings per share, which are expected to be 22% lower in 2009 than in 2007 because of 100 million new shares being issued to bolster Goldman’s financial position and capital. Excluding temporary employees and consultants, the average compensation per employee is slated to rise to $775,000 this year. 

–So you know those interest-rate swaps that helped take the system to the brink of Armageddon? The Delaware River Port Authority, operator of toll bridges and a commuter rail line between southern New Jersey and Philadelphia, has now lost $160 million on various swaps sold to it by UBS and Lehman Brothers. The authority’s CFO said they will not be considering them in the future. In the case of these guys as well as countless municipalities around the country it was about interest rates hitting record lows and being on the wrong side of the trade, as well as not understanding what the heck was being peddled. The salesmen, on the other hand, won’t have any clawbacks when it comes to their compensation. 

–California exports were up 3.2% in September over August, though still down 16.3% from a year ago. It’s a start. 

–Deflation Watch / Property Bubble Redux: The prestigious Dakota apartment/condo building in Manhattan (think John Lennon) has witnessed massive price reductions, according to the New York Post. A four-bedroom, four-bath condo is in contract for $11.5 million – less than half its former $24 million asking price (2008). 

–I’ve noted in my missives on Ireland that they weren’t facing facts when it came to their property bubble, as bad as any in the world. Most official data says residential prices are off no more than 20-30 percent here. But in a recent article I saw where a luxury complex in Co. Kildare was offering two-bedroom apartments for 110,000 euro that came on the market in 2007 for 322,000. I’d say that’s a rather sizable decline. 

–In another sign of the times in Russia, a lawyer representing embattled investment fund Hermitage Capital died in a Moscow jail where he had been held 11 months, “asking him to fabricate testimony against Hermitage,” according to a partner at a law firm where Sergei Magnitsky worked. This all goes back to the case of Hermitage founder William Browder, who by 2005 was one of Russia’s largest foreign portfolio investors.  

Browder was an outspoken critic of the massive corruption in the Russian system and was then barred from the country in 2005, with authorities claiming Hermitage evaded taxes. Hermitage, in turn, said Russian officials used the company’s founding documents – which they had seized – for the purposes of defrauding the Russian government of $230 million in taxes that Hermitage had paid. Magnitsky was merely representing his client’s interests and was said to be in ill health. He asked for treatment and was evidently denied. The Council of Europe has alleged the Kremlin is involved at the highest level. 

–Good lord…Ukraine’s economy contracted 15.9% last quarter on an annualized basis, but this was better than the second quarter’s 17.8% rate. And inflation stood at 14% in October. At issue is the country’s disastrous political system and the lack of a fiscal policy that would confront the problems head on. [More below.] 

–In what Dr. Steven Nissen, chairman of cardiovascular medicine at the Cleveland Clinic, described as “the third strike,” research is raising questions yet again about the effectiveness of popular cholesterol drugs Zetia and Vytorin, both made by Merck. Niacin, a cheap vitamin, is deemed more effective in helping unclog arteries in people already taking statins. 

Zetia and Vytorin reduce cholesterol, but there is no evidence they prevent heart attacks, strokes and other cardiovascular issues, which the drugs were initially marketed as being beneficial for. Plus prior studies showed a greater risk for cancer compared with those taking only statins. A Yale University cardiologist, Harlan Krumholz, said, “This is a very expensive drug being used without any strong evidence that it’s benefiting patients.” 

–Fidelity said the average balance on customers’ 401(k) accounts has returned to September 2008 levels when taking into account third quarter investment gains plus contributions. 

–Inflation Watch: Tuition is rising 32% for the University of California system in an effort to close a huge budget shortfall. 

–CBS has sold out 90% of its spots for the upcoming Super Bowl, meaning only 6-12 30-second spots are left at an estimated $2.5 million to $3.0 million a piece. Hyundai has signed up, the automaker doing well in the States these days. And GoDaddy.com is back. 

–Interesting development involving my old employer, PIMCO. Bill Gross and Co. were selected by the National Association of Insurance Commissioners to estimate losses in insurers’ holdings of mortgage paper (some 18,000 different bonds) which will determine to a great extent the capital requirements for the insurers. Previously the NAIC had used ratings agencies, now in disfavor. 

The issue becomes, though, the potential for conflicts of interest; the same which BlackRock and a few of the others selected to advise on various government programs face. Valuations given can impact the value of holdings in PIMCO’s or BlackRock’s client portfolios. In the case of PIMCO, they insist they have strict “walls” to maintain the integrity of the assignment. 

But let me tell you, if I had my old position there I can just imagine how the wholesalers in the field are salivating. Talk about an easy sale. “The National Association of Insurance Commissioners had the opportunity to pick any manager for this critical assignment and who did they select? PIMCO. So who would you want to run your clients’ allocation to fixed income?” [Drop a few prospectuses and some sales literature and rush to the next office.] 

–Air France-KLM is cutting an additional 1,700 jobs next year after posting a worse-than-expected quarterly loss. The airline had already axed 2,700. 

–Air India lost $1.2 billion for the year ending March (just released), due to a drop of 12% in revenues. This is a major albatross for the Indian government, which has insisted on cuts but every time they demand them, the pilots threaten to go on strike. 

–From the Sydney Morning Herald: “Cosmic rays are being considered by air safety investigators as a possible cause of a Qantas plane plunging twice in quick succession on its way from Singapore to Perth in October last year,” an incident that left one flight attendant and 11 passengers with serious injuries. 

The cosmic or solar rays can interfere with the “air data inertial reference unit,” which gathers info from outside and feeds it into the cockpit. The Airbus A330 was flying at 37,000 feet when it plunged 650 feet before recovering to its original height, then plunged 400 feet, at which point I would have commenced reciting The Lord’s Prayer 60,000 times until landing. 

–AOL plans to cut 2,300-2,500 jobs following its spinoff from Time Warner in December. The company is looking for volunteers before Dec. 4. Merry Christmas. 

–A survey by UC Davis of California’s 400 largest publicly traded companies found that women held just 10.6% of executive positions and board seats. It would be interesting to track stock performance for those companies employing the most, though I didn’t see that this was part of the survey. 

–New York Mayor Michael Bloomberg is donating $125 million to road safety programs in middle and low income countries, such as Brazil, China and India. He has made similar donations for Vietnam and Mexico in the past for efforts such as reducing speeding and drunk driving, as well as increasing the use of motorcycle helmets and child safety seats. 

Bloomberg should be giving some of his money to Russia. This week President Medvedev launched his own war on auto safety, adding that in terms of the global economy the annual damage is $500 billion. Last year, a staggering 30,000 people died on Russia’s roads. The World Bank estimates that 12 people worldwide die in car accidents every minute. 

[Separately, in a survey of economic crime in Russia, of 86 companies doing business there, 71% said they had been subjected to at least one major economic crime in the past 12 months…the highest percentage in the world. The crimes mostly involve “asset misappropriation,” bribery and corruption. Source: PricewaterhouseCoopers] 

–The Postal Service reported a loss of $3.8 billion last year (despite a reduction of 40,000 full-time positions and other cost-cutting measures), or $1 billion more than a year ago before the moves. 

–A local jerk was indicted for stealing a Web name and then selling it to NBA player Mark Madsen for $111,000. This is a significant case in that it sets a legal precedent, finally. Madsen was unaware “P2P.com” had been stolen by the dirtball who hacked a GoDaddy account of three Miami entrepreneurs and transferred the domain information. Not sure what the guy faces, but he deserves life in prison. [Notice how I’m not mentioning the crook’s name…Momma didn’t raise no fool.] 

“I think climate change is real. You don’t? That’s your business. But there are two other huge trends barreling down on us with energy implications that you simply can’t deny. And the way to renew America is for us to take the lead and invent the technologies to address these problems. 

“The first is that the world is getting crowded. According to the 2006 U.N. population report, ‘The world population will likely increase by 2.5 billion – passing from the current 6.7 billion to 9.2 billion in 2050. This increase is equivalent to the total size of the world population in 1950, and it will be absorbed mostly by the less developed regions, whose population is projected to rise from 5.4 billion in 2007 to 7.9 billion in 2050.’ 

“The energy, climate, water and pollution implications of adding another 2.5 billion mouths to feed, clothe, house and transport will be staggering. And this is coming, unless, as the deniers apparently believe, a global pandemic or a mass outbreak of abstinence will freeze world population – forever…. 

“ ‘What happens when developing nations with soaring vehicle populations get tens of millions of petroleum-powered cars at the same time as the global economy recovers and there’s no large global oil supply overhang?’ asks Felix Kramer, the electric car expert who advocates electrifying the U.S. auto fleet and increasingly powering it with renewable energy sources. What happens, of course, is that the price of oil goes through the roof – unless we develop alternatives. The petro-dictators in Iran, Venezuela and Russia hope we don’t.  They would only get richer.” 

–So I’m reading the latest issue of Crain’s New York Business and if I tell you the Trump Organization is the New York area’s second-largest privately held company, ranked by revenues, what is number one? Try Transammonia Inc., which had 2008 revenues of $11.2 billion through its trading, distribution and transport of fertilizer, petrochemicals, liquefied natural gas, and oil products.  

–Seeing as I haven’t played a video game in decades, save Wii bowling, and I have no children, it’s up to Jimbo to inform me that every 12-year-old in the world is fighting the bad guys via Call of Duty: Modern Warfare 2. 

[Maybe I’ll come up with a game. Domestic or Premium: Repairing the Global Economy.] 

–But wait, there’s more! I was perusing the American Heart Association Convention news alerts and I see that “Active Wii sports video games [bowling, boxing, golf, tennis, and baseball] and some Wii fit activities [yoga, resistance and strength training, light beer lifts] may increase adults’ energy expenditure as much as moderately intense exercise.” Then again, the study was funded by Nintendo. 

–Back to the Trump Organization, freshly wed Ivanka and hubby Jared Kushner are both third-generation real estate mavens. Jared’s father, Charles, went to jail in 2005 for tax fraud, witness tampering and election violations, plus he once hired a prostitute to seduce his brother-in-law and arranged to have a videotape of the encounter sent to the man’s wife, his sister, but enough about Charles. 

These days, Ivanka and Jared, now known collectively as “Javanka,” are trying to carve out their own fortunes. But already Jared’s track record is spotty, having purchased a majority stake in the New York Observer newspaper at the worst possible time, 2006. 

Anytime Ivanka, though, makes it on television is a good day, as we say around here. 

–Back to The Donald, he and Ivanka settled with creditors who were battling the two for control of the bankrupt Trump Entertainment Resorts, which controls the three Atlantic City casinos employing the name. The Trumps get to keep their name in lights and retain a 10% interest in a reorganized company. 

–And speaking of New York area businesses, we note the passing of Sy Syms, pioneer of off-price designer labels who was best known for his commercials, that deep voice, and the proclamation that “An educated consumer is our best customer.” Can’t say I ever shopped there, but others (such as former New York Mayor Ed Koch) swore by it. Today, Syms Corp., led by daughter Marcy, operates 52 stores. 

Afghanistan: President Hamid Karzai took the oath for a second term, behind closed doors, not out in the open due to security concerns, and vowed he would crack down on corruption, at which U.S. and British diplomats in attendance coughed into their mouths, “Bulls—.” I mean what do you say about a story that emerged this week that the Afghan minister of mines accepted a $30 million bribe to award a development project to a Chinese company, according to a U.S. official familiar with intelligence reports? It’s also pretty discouraging when the same week, Transparency International comes out with its annual report on the world’s most corrupt governments and two of the fop five are Afghanistan (no. 2) and Iraq (tied for 4th with Sudan), seeing as the United States government, and U.S. taxpayer, have invested $100s of billions in these two countries. 

And speaking of costs, President Obama continues to dither over what to do with troop levels in Afghanistan where the estimated cost per G.I. is $1 million a year, or $40 billion (minimum) for the additional 40,000 troops that General McChrystal has recommended. [Other estimates have the cost of 40,000 pegged at $65 billion a year.] With the government already hemorrhaging money at an astronomical rate, Obama is under pressure from those on the left to keep any additional troop commitments to a bare minimum. The American people are also split down the middle on whether to add a large force or merely a small one focused on training the illiterate Afghan military. 

Israel: The United States and the UN were furious with the announcement from a government ministry that 900 extra housing units had been approved for East Jerusalem, but there were also stories this week that Prime Minister Netanyahu would declare a 10-month moratorium on settlement construction as a way of jumpstarting peace efforts. At the same time, Netanyahu warned the Palestinians not to take unilateral steps to ask the United Nations to endorse an independent Palestinian state. 

Meanwhile, Palestinian activist Marwan Barghouti, who has been in prison for five years, is urging Hamas and Fatah to come together to form a united front for independence. Barghouti, serving five life sentences for murder, is nonetheless respected by the Israelis and has long been viewed as potentially the Palestinians’ best leader and one the Israelis could work with. [It’s very complicated, and also fascinating.] Israel is currently intensifying its efforts to get soldier Gilad Shalit freed in negotiations with Hamas. I doubt this will happen but it wouldn’t be a total shock if Barghouti is part of an exchange…certainly down the road he will be, just maybe not in this instance. 

As for the threat posed by Hizbullah, an Israeli newspaper published excerpts from an alleged Hizbullah document that suggests the group knows everything about Israel’s military on the Lebanese border; Hizbullah supposedly having successfully infiltrated the Israeli Army. 

But back to the Palestinian issue, Rami Khouri of Lebanon’s Daily Star had an interesting op-ed the other day that read in part: 

“The astounding thing is that the Palestinian leadership over the years has not woken up to the fact that however just and powerful is the cause of Palestine, it is not an inexhaustible well of emotional and political support in the Arab region or abroad. We are likely to witness this demonstrated again in the Arab and international shrug of the shoulders in response to the latest Palestinian idea of seeking Security Council recognition for the political fact and formal borders of a Palestinian state. It is hard to imagine a more unrealistic and fanciful idea than this, given that Israel controls the actual land where the borders should be drawn, and the United States, with its veto, controls the decision-making capacity of the Security Council. 

“It would have been much more productive for the Palestinian leadership to go to the UN and fight for adoption of the Goldstone Report on the atrocities committed mostly by Israel during the Gaza War last year. Having flip-flopped on the report and now threatening to make a meaningless approach to another UN body, the current Palestinian leadership persists in its legacy of living in a dream world. It is deeply detached from its own and fellow Arab people who should be its core support, totally disrespected by the Israeli government, and largely ignored by the rest of the world. 

“This prevails at a time when Israeli war crimes [Ed. I do not agree with the preceding] and colonization continue unabated, but are escaping attention politically because of the incompetence of the Palestinian leadership.” 

Iraq: In a worrisome development, one of Iraq’s two vice presidents vetoed the country’s new election law, putting the January parliamentary vote in question. Tariq al-Hashemi revoked an article that would have limited the number of seats for Sunni Arabs living abroad, many of the Iraqis displaced since the start of the war in 2003 being Sunni. So parliament has to take the legislation up again, this while under the constitution the vote for parliament must take place in January. Hashemi said it shouldn’t be a big issue. In Iraq there are no small ones. 

North Korea: South Korean President Lee, following meetings with President Obama in Seoul, said the two were prepared to offer Pyongyang a “grand bargain” of security guarantees and economic assistance in exchange for Lil’ Kim’s dismantling of his nation’s nuclear weapons program. A U.S. envoy will visit Pyongyang in a few weeks in an effort to restart multilateral talks among the Group of Six, including South Korea, China, Japan and Russia. 

China, part II: President Obama said of the U.S.-China relationship that the United States does “not seek to contain China’s rise,” but “we welcome China as a strong and prosperous and successful member of the community of nations.” The Washington Post, for one, questioned the use of the word “welcome” in an editorial. 

“China’s behavior around the world during the past decade has often departed dramatically from that of the world’s democracies. It has unblushingly backed dictators, including Zimbabwe’s Robert Mugabe and the genocidal regime of Sudan; it has crudely sought to lock up sources of natural resources in Africa and Latin America; it has repeatedly threatened Taiwan with war; and it has systematically taken advantage of the West’s attempts to pressure rogue regimes – vastly increasing its trade with Iran, for example…. 

“ ‘My hope is that the United States and China together can help to create international norms that reduce conflict around the world,’ said Obama.” 

But it’s hardly likely “the United States and China will agree on new ‘international norms,’ since Beijing will not support any that flow from democratic principles. The United States has no choice but to recognize China’s rise as a great power, and Mr. Obama may be right that a policy of containment would be counterproductive. But ‘welcome’ a dictatorship to global influence? It’s hard to see why that is a necessary or sensible stance for the U.S. president.” 

Separately, U.S. Navy intelligence, as reported by Bloomberg, believes China is close to fielding the world’s first anti-ship ballistic missile, one with a range of 900 miles that could be fired from land-based launchers and is “specifically designed to defeat U.S. carrier strike groups.” I’m thinking 2012, when Chinese President Hu is slated to step down and chooses to leave a real legacy, the ‘acquisition’ of Taiwan, as I brought up a few weeks ago. Having this missile capability would certainly impede U.S. efforts to go to Taiwan’s defense. In turn, though, the Navy is building more Aegis-class destroyers that would be equipped with the newest radar and missiles of their own. 

[On the issue of Taiwan, at least the mainland and Taiwan concluded a memorandum of understanding that will pave the way for banks on both sides to invest in each other. And more economic ties should be concluded over the succeeding year. But Taipei will be very leery to go any further and thus are a long ways from any political discussions between the two.] 

Ukraine: Moscow and Kiev reached agreement on a new gas deal that should lessen tensions on this front for at least a year as Ukraine struggles mightily with its economy. 

But it’s all about the Jan. 17 presidential election, with former prime minister Viktor Yanukovych, a staunch supporter of Russia, leading in the polls with 29% to 20% for current Prime Minister Tymoshenko. Since neither is likely to gain the required 50%, they are headed to a February runoff as Russia picks up a former client state with a probable Yanukovych victory. 

Soccer Wars: What? you ask. You see, Egypt defeated Algeria 2-0 last weekend in a World Cup qualifier in Cairo and 32 people were hurt following the match, plus the next day Egyptian businesses in Algiers were ransacked. But because Egypt and Algeria were deadlocked in their ‘group,’ the two faced off against each other again in a playoff, Wednesday, only this time in Khartoum, where Algeria won 1-0 and secured the berth in the finals with Egypt going home.  

So Egyptians rioted in Cairo, near the Algerian embassy, on Friday, and Alaa Mubarak, the son of President Hosni Mubarak, made a rare public statement calling for a “tough stance” to be taken against Algeria. 

“When you insult my dignity…I will beat you on the head,” Alaa said. Why that’s lovely. You raised your son well, Hosni. 

Egypt recalled its ambassador and Sudan summoned the Egyptian envoy in Khartoum because the Sudanese were furious with the media coverage of the game’s aftermath, where Egypt claims 21 of its citizens were injured. 

And then you had the World Cup qualifier between France and Ireland, which France won despite a deliberate handball by the French captain, superstar Thierry Henry, that resulted in the clinching score. France thus qualified for South Africa; Ireland was denied. Ireland’s Prime Minister Brian Cowen pressed French President Sarkozy for a rematch (across the pond they call it a “replay”) and there is precedence for such a move, but soccer’s governing body, FIFA, decided against one on Friday. For his part, Henry’s reputation, heretofore a good one, is forever tarnished and he himself was calling for a playoff, but there are those who say he should have admitted to cheating right away during the match.  

[And as if soccer didn’t have enough troubles, German prosecutors revealed a sweeping probe of some 200 European football matches in a match-fixing scheme where it is alleged (hell, it’s true) that a criminal gang bribed players, coaches, referees and officials; all of the matches evidently taking place this year and three of them in the Champions League…the league in which the likes of Manchester United, Liverpool and Chelsea play, along with top teams in other leagues, but not the actual Premier League.] 

European Union: What a bunch of wimps. Nicolas Sarkozy, Angela Merkel and Gordon Brown were afraid the new EU president would overshadow them so they selected Belgian Prime Minister Herman van Rompuy, with Britain’s Catherine Ashton as foreign minister. Ergo, the likes of Barack Obama and Dmitry Medvedev will continue to deal directly with Sarkozy, Merkel et al and not waste their time with Rompuy. You see, had it been Tony Blair, the situation is totally different, Mr. Blair having quite a bit of heft in these parts. This whole process was a joke, but I suspect in the future this will change because it’s all about the U.S. and Asia, increasingly, whether Europe wants to accept this or not. The more unified a bloc they have, the more influence. 

Health and Human Services Secretary Kathleen Sebelius did more to undermine the effort to pass a health care reform bill than the entire Republican Party in her reversal on the mammogram issue, while at the same time throwing the advisory panel under the bus.  

“A government panel’s decision to toss out long-time guidelines for breast cancer screening is causing an uproar, and well it should. This episode is an all-too-instructive preview of the coming political decisions about cost-control and medical treatment that are at the heart of ObamaCare…. 

“The task force concedes that the benefits of early detection are the same for all women. But according to its review, because there are fewer cases of breast cancer in younger women, it takes 1,904 screenings of women in their 40s to save one life and only 1,339 screenings to do the same among women in their 50s. It therefore concludes that the tests for the first group aren’t valuable, while also noting that screening younger women results in more false positives that lead to unnecessary (but only in retrospect) follow-up tests or biopsies. 

“Of course, this calculation doesn’t consider that at least 40% of the patient years of life saved by screening are among women under 50. That’s a lot of women….” 

And then you have the recommendation to cut off all screening for women over 75.  

“In other words, grandma is probably going to die anyway, so why waste the money to reduce the chances that she dies of a leading cause of death among elderly women?” 

But we’re about to enter an era where it’s about choosing people’s lives or money. 

“More spending on ‘prevention’ has long been the cry of health reformers, and President Obama has been especially forceful. In his health speech to Congress in September, the President made a point of emphasizing ‘routine checkups and preventative care, like mammograms and colonoscopies – because there’s no reason we shouldn’t be catching diseases like breast cancer and colon cancer before they get worse.’ 

“It turns out that there is, in fact, a reason: Screening for breast cancer will cost the government too much money, even if it saves lives.” 

But as the Washington Post’s Steven Pearlstein notes, it’s also a very worrisome repudiation of evidence-based medicine. There are two sides to this story. The rationing argument will certainly win out, but on this and other issues there must be a cost-benefit analysis at some point down the road. Look at some of the statements on prostate cancer screening of the past few years, for example. As in some experts say it’s not worth it after a certain age. To say the least, it’s complex but our society can not continue to believe it gets everything, every time it wants, without some costs. That’s my opinion. Pearlstein notes: 

“The political argument from the White House was that it was necessary to duck this fight over evidence-based medicine in order to save it. The better approach would have been to see this as one of those teachable moments that could be used to reaffirm the entire rationale for reform. For while debate continues over whether some women may be getting too many mammograms, there is evidence that there are women who, because they lack insurance, are getting too few – and dying unnecessarily as a result. What health reform is about is correcting that imbalance while devising new mechanisms for improving health outcomes and getting better control over costs.” 

Pearlstein concludes it would have been better for Sebelius to have announced that she was delaying implementation of the task force recommendation for a year in order to build more consensus. “That would have made clear that the administration remained committed to a health-care system driven by the best medical evidence but one that is also sensitive to broad public opinion. This is a tough-love message the country, and the Congress, need to hear.” 

Bottom line, the timing was awful. But as the Washington Post’s Kathleen Parker also notes, it’s a “clarion call” to the health care industry “to deliver a lower-cost, more-effective screening tool.” 

–The debate over the decision to bring Khalid Sheik Mohammed (KSM), the self-professed mastermind of 9/11, to trial in New York City, blocks from Ground Zero, has set off a firestorm that is not likely to end for years, or the suspected length of judicial proceedings. Some opinion, from all sides. 

Charles Krauthammer / Washington Post 

“September 11, 2001 had to speak for itself. A decade later, the deed will be given voice. KSM has gratuitously been presented with the greatest propaganda platform imaginable – a civilian trial in the media capital of the world – from which to proclaim the glory of jihad and the criminality of infidel America. 

“So why is Attorney General Eric Holder doing this? Ostensibly, to demonstrate to the world the superiority of our system, where the rule of law and the fair trial reign. 

“Really? What happens if KSM (and his co-defendants) ‘do not get convicted,’ asked Senate Judiciary Committee member Herb Kohl. ‘Failure is not an option,’ replied Holder. Not an option? Doesn’t the presumption of innocence, err, presume that prosecutorial failure – acquittal, hung jury – is an option? By undermining that presumption, Holder is undermining the fairness of the trial, the demonstration of which is the alleged rationale for putting on this show in the first place…. 

“(And) civilian courts with broad rights of cross-examination and discovery give terrorists access to crucial information about intelligence sources and methods. 

“That’s precisely what happened during the civilian New York trial of the 1993 World Trade Center bombers. The prosecution was forced to turn over to the defense a list of 200 unindicted co-conspirators, including the name Osama bin Laden. ‘Within 10 days, a copy of that list reached bin Laden in Khartoum,’ wrote former attorney general Michael Mukasey, the presiding judge at that trial, ‘letting him know that his connection to that case had been discovered.’…. 

“Holder himself told The Post that the coming New York trial will be ‘the trial of the century.’ The last such was the trial of O.J. Simpson.” 

“Let me (be) precise. After eight years in which the views and interests of, inter alia, the Port Authority, NYPD, MTA and EPA, the several governors of New York and New Jersey, lease-holder Larry Silverstein, various star architects, the insurance companies, contractors, unions and lawyers, the families of the bereaved, their self-appointed spokespersons, the residents of lower Manhattan and, yes, even the fish of the Hudson river have all been duly consulted and considered, this is what we’ve got: a site of mourning turned into a symbol of defiance turned into a metaphor of American incompetence – of things not going forward. It is, in short, the story of our decade. 

“Barack Obama, energetic and smart, was elected largely to change all that. But the thrust of his presidency so far has been in the direction of bloated government, deficits and health-care bills; paralysis over Afghanistan and Iran; the convulsions over Gitmo and the CIA torture memos. And now this: An effort to demonstrate the purity of our methods and motives that is destined, as all these things have been, to wind up as the legal equivalent of Ground Zero. Khalid Sheikh Mohammed, for whom no real justice will ever be meted, understood his targets well.” 

John Yoo, official in the Justice Department, 2001-03 / Wall Street Journal 

“Even more harmful to our national security will be the effect a civilian trial of KSM will have on the future conduct of intelligence officers and military personnel. Will they have to read al Qaeda terrorists their Miranda rights? Will they have to secure the ‘crime scene’ under battlefield conditions? Will they have to take statements from nearby ‘witnesses’? Will they have to gather evidence and secure its chain of custody for transport all the way back to New York? All of this while intelligence officers and soldiers operate in a war zone, trying to stay alive, and working to complete their mission and get out without casualties.” 

Michael Daly / New York Daily News 

“Some still so doubt our system they do not want Mohammed brought here for trial. Others also continue to elevate Mohammed and his bunch. 

“ ‘We would not have tried the people who attacked us on Pearl Harbor in a civilian court in Hawaii,’ former Mayor Rudy Giuliani told Fox News. 

“Rudy, Rudy, Rudy. Mohammed and his pals mounted a cowardly attack, but they were not soldiers and their target was not military. They were a small band of fanatics seeking to murder as many everyday people as they could. 

“Mohammed has said he wants to plead guilty in a military tribunal. Why grant his wish? If he decides to plead guilty in Manhattan Federal Court, he will do so as a criminal afraid to face the judgment of everyday people. 

“Today, those jurors-to-be are living their everyday lives with no way of knowing they will be chosen. They could be anybody on the voter lists. 

“And that will make them represent us all when they walk into the courtroom. Let’s just hope the marshals are ready to give Mohammed a little help if he is slow obeying when the clerk calls out, ‘All rise!’” 

Editorial / New York Daily News 

“ ‘Let him look around and see with his own eyes that, for all his dirty work, this town thrives. Let him recognize that he has been brought to inevitable justice on the soil of the United States of America.’…. 

“That said, Obama erred in calling upon New York to host Mohammed as a run-of-the-mill criminal defendant in Manhattan Federal Court. 

“The President and Holder are wrong to treat the worst attack on American soil as a crime, not as an act of war. The al Qaeda leadership, soldiers in an army that had declared war on the U.S., should rightly face justice as enemy combatants. They are war criminals. They belong before a military tribunal, easily convenable in New York. This is no small distinction.” 

“Most Americans, we suspect, can overlook the legal niceties and see this episode through the lens of common sense. Foreign terrorists who wage war on America and everything it stands for have no place sitting in a court of law born of the values they so detest. Mr. Holder has honored mass murder by treating it like any other crime.” 

–When it comes to corruption, and theft, it’s hard to beat the government’s claim on Monday that the main food supplier to troops in Iraq, a Kuwait-based group called the Public Warehousing Company, recipient of $8.5 billion in contracts thus far, was “systematically overcharging for burgers, chicken and crustaceans, among other products.” I mean the indictment unsealed by the Justice Department was 60 pages long. 

But while the prosecution has not put a number on the size of the alleged fraud, on just one count of the indictment, Justice lawyers found overbilling of more than $62 million. 

Couple a story like this with what we know, say, on the Medicare fraud front and the potential cost to us all is beyond staggering. We have got to start lining people up against a wall and give them a last cigarette. There is no other way we will even remotely begin to get a handle on it. What sets these crimes apart from your average mugger is the premeditation involved and how on so many different levels, the individual has the opportunity to say, “No, this is wrong. Count me out.” Of course in many respects you could say the same thing about much of what went on during the bubble on Wall Street. And some of them should be lined up too. 

“U.S. Navy investigators have placed the blame for a March 2009 collision in the Gulf on ‘ineffective and negligent’ leadership of the submarine involved. Fifteen sailors were injured when the nuclear-powered USS Hartford collided with the USS New Orleans, a navy ship. 

“Sleeping, slouching and a radio room with music speakers were tolerated on board the submarine, the report says. 

“Five submariners would routinely sleep on watch, and the navigator took an exam while listening to his iPod.” 

Thankfully, the USS Hartford’s commanding officer, Cmdr Ryan Brookhart, was immediately relieved of his command. He should have been thrown in jail. 

“Two years ago, Lawrence Sanchez of the New York City Police Department’s intelligence division told the Senate Homeland Security Committee that the Internet is ‘the most significant factor in the radicalization that is occurring in America.’ Mr. Sanchez described this process as ‘self-imposed brainwashing.’ 

“In New York Times reporter David Rohde’s account of his captivity by the Taliban, he wrote that ‘watching jihadi videos’ was his guards’ favorite pastime. He describes them as ‘little more than grimly repetitive snuff films’ of executions.” 

Mr. Henninger goes on to write of the Hasan case and what the Army knew about his radical Islamic sympathies: 

“The argument is that the Army should have mustered him out of the service and thereby avoided the 13 murders. Really? After kicking him out of the Army, there was no probable cause for authorities to surveil a civilian Nidal Hasan. In time he as easily could have killed 13 Americans in a suburban Texas mall…. 

“First Amendment law has never dealt with a widely distributed ideology that has as its raison d’etre the mass murder of Americans and destruction of American property. 

“For now this is the way it is: Future Hasans get jacked up all day on kill-the-Americans Web sites, and we have to wait until they put in motion a conspiracy like Fort Dix or the Colorado jihadists. Or until they start shooting…. 

“In the wake of Hasan’s 13 dead people, revisiting the limits of our vulnerability has to be on the table in next year’s congressional elections, and then a presidential election.” 

–Jim Hoagland / Washington Post on Fort Hood: 

“We repeat reflexively that it is not about anybody’s religion. 

“Which is one way for reporters and citizens alike to rush past the obvious – to avoid saying that the deaths by gunfire of 12 active-duty soldiers and one civilian at Fort Hood are terrorist acts that, at least indirectly, raise important questions about Islam and U.S. wars abroad today. 

“Terrorists intend to punish, intimidate and force society to change, whether they operate as networks of multiple suicide bombers or as lone gunmen. Their grievances and goals are much larger than their available targets. The degree of calculation and coordination – the presumed measures of both terrorism and the assassin’s sanity – is less important than the effect of the acts. 

“And we uneasily rush past the question reportedly raised by Maj. Nidal M. Hasan, who has been charged with the Fort Hood killings, about the relationship of the U.S. wars in Afghanistan and Iraq to his religion, Islam. Hasan told superiors that the Army should realize that a good Muslim would not kill other Muslims for U.S. goals. He demanded reflection, explanations and a pass from being sent to Afghanistan. He got none of the three. 

“But the war in Afghanistan is inescapably about the struggle within Islam over that religion’s direction. The radical version of al-Qaeda, the Taliban and their associates in jihad – and probably at some point of Hasan – preaches that it is a good Muslim’s duty to kill infidels and Muslims who stray from the fundamentalist path. That is why they are in Afghanistan. 

“For them, Afghanistan is not about nation-building, counterinsurgency, troop levels or other topics that have dominated the 20 hours of ordeal-by-review that President Obama has put himself and his aides through in their increasingly bitter internal debate over U.S. goals and methods. 

“One idea that has taken root in the review is that Taliban forces can be ‘politicized’ through de facto local truces and amnesty, and thus split off from al-Qaeda and its jihadist ideology. But this either ignores or discounts the identical religious doctrine of the two groups on what a good Muslim is and does. 

“Like the George W. Bush administration, this White House is uneasy in describing or planning the war in religious terms. For moral and tactical reasons, U.S. political and military leaders resist even looking at that notion. So the Army had no ready answers for Hasan’s initial challenge about his faith and his subsequent hostile attacks on the American military presence in Islamic nations. 

“The responsibility for Hasan’s acts lies solely with himself and no one else. But initially, he was raising the right question. He was asking the national command to look at this war from the point of view of the Muslims who are both its chief protagonists and its chief victims. Until this happens, we will have a hard time figuring out why we are in Afghanistan and how we get out.” 

[This week Defense Secretary Robert Gates called for a “unified” inquiry into the Army’s inability to recognize warning signs in the Hasan case, but on two tracks. One a short-term, 45-day investigation into making sure the bases are secure; the second to address longer-term issues.] 

–Meanwhile, President Obama admitted he will miss his deadline for closing Guantanamo Bay by at least a year, which is kind of funny since just two days after his inauguration he set a deadline of a year for closing it and distributing the 215 detainees to whoever would take them. 

–A U.S. District judge ruled that the Army Corps of Engineers was responsible for much of the flooding during Hurricane Katrina in failing to properly manage the levees and channels and this opens up the possibility the government will have to settle with up to 100,000 residents and businesses that had filed claims against Washington. It also impacts how other communities will view their own levees that the Corps may have designed and who is culpable should there be a problem. One Tulane University law professor viewed the ruling as “the biggest blot on the corps in its history.”   The corps will probably appeal the ruling and it could easily rise to the Supreme Court. Heck, it would be one of the more interesting cases in our lifetimes. Another good research project for you college students out there. Take a look at past floods where the corps has been involved and how the community handled it, how long it took the corps to remedy the situation, legal fights, etc. 

–I don’t have the strength anymore to blast Sarah Palin. Just watching her wears me out, as I caught Sarah this week on Oprah and with Bill O’Reilly. I will never understand how this self-professed “ordinary American” actually has some hoodwinked into thinking she would make for a good president. For starters, I want an extraordinary American for president, not an ordinary one. Look at some of the ordinary ones we had between Andrew Jackson and Abe Lincoln (save for James Polk). That certainly didn’t do us any good. And George W. Bush was as ordinary as they come…and it’s why he’ll be scraping the bottom of rankings of the presidents 200 years from now, perhaps alongside Barack Obama. 

And I’m weary of Republicans/Conservatives acting as if only liberals can’t stand Palin. Speak for yourself, guys and gals. 

But Palin’s star is going to dim…that’s an early prediction for 2010. For now I’ll leave you with this quote of hers from her interview with Barbara Walters that I saw in the Jerusalem Post. 

“I disagree with the Obama administration. I believe that the Jewish settlements should be allowed to be expanded upon, because that population of Israel is going to grow. More and more Jewish people will be flocking to Israel in the days and weeks and months ahead. And I don’t think that the Obama administration has any right to tell Israel that the Jewish settlements cannot expand.” 

You want her to be president? The same person who tells us she’s “not a quitter,” even though that’s exactly what she did in Alaska? She’s full of it. She’s a walking cliché, a Bazooka Joe comic strip, and if you recall from your childhood these were not in the least bit funny. Bottom line…Sarah Palin is a fraud. 

–I saw where Vice President Biden was on Jon Stewart Tuesday night and am I the only one who expected him to stay in Washington while the president was in Asia? Or is that too rational? I mean we are at war, aren’t we? 

–There was a quote in Newsweek’s “Perspectives” column from a Franklin County, Ohio, official who said, “We are rapidly becoming overwhelmed,” referring to bedbug infestations. In the past week, infestations have been highlighted in two communities in New Jersey as well as the usual stories out of New York. I’m tellin’ ya, the freakin’ critters are taking over the country faster than Usain Bolt in the 100. 

–Dear Oprah, what’s the point in picking Sept. 9, 2011, for your last show, two days from a rather important anniversary? I mean I can see you want to wait until after Labor Day, but why not Sept. 16?  

–Back to Oprah, on Friday she said: “These years, with you, our viewers [sniff sniff], have enriched my life beyond all measure.”  

Heck, I can measure it. It’s said you’ve been enriched to the tune of $275 million a year…not that there is anything wrong with that.

–Speaking of fat, Joe Queenan had the following thoughts in a Journal op-ed. 

“It’s all well and good to say that excess weight puts a strain on the heart, leads to many premature deaths, and dramatically inflates our national health-care bill. But the very same arguments can be applied to workaholics, alcoholics or garden-variety idiots, none of whom violate any specific law by indulging in a lifestyle others deplore. And once a society starts down the slippery slope toward deciding which behaviors are acceptable and which are not, it’s time to assemble kindling for the funeral pyre of democracy. First they told people to stop smoking. Then they told them to lay off the hooch. They then told them to stop eating between meals. And then they told them to stop being neurotic. Pretty soon, no one in New York City could be seen in public anymore. 

“I am not making the argument that obesity is to be encouraged, much less extolled. What I am saying is that in many cases carrying a few extra pounds may make an individual more productive and even happier. And quite often society is the principal beneficiary of this added ballast. Without the pleasingly plump Catherine the Great, Russia might have remained a benighted backwater forever. Without the king-sized C.C. Sabbathia, the New York Yankees would not have won the World Series this year. And without the roly-poly Winston Churchill, whose icy aplomb in the face of the Nazi onslaught made him the most admired public figure of the 20th century, we might all be speaking German…. 

[I can’t help but add that baseball fans would also point to 1968 and Detroit’s Mickey Lolich, who won the Series for Motown that year…one of my favorite players of all time who was a bit on the portly side.] 

–West Virginia Senator Robert Byrd, former Klan member, has now been in Congress a record 56 years…which is 56 years too many. 

–Finally, since according to the Mayan calendar the world will end on Dec. 21, 2012, I hope you all are putting together your bucket lists. In my case it’s more of a sports wish list. We only have three Super Bowls left, for example, and it’s not looking good for my Jets to win one in that timeframe. Only three more baseball seasons, so ditto the Mets. And my alma mater Wake Forest probably doesn’t have a chance at a national title in basketball, but I’ll know more a year from now when another supposedly strong recruiting class comes in. I’d also like to write a book on shark attacks and how the International Shark Attack File folks have understated the carnage by about 42,000. And, let’s see, what else….oh, I’d like to sell my townhome in the next three years, and it would be kind of neat to capture and put bin Laden to death by then, don’t you think? Other than that, at least we won’t have to worry about global warming, budget deficits and a shoddy infrastructure, right sports fans? 

Pray for the men and women of our armed forces, and all the fallen. 

Gold closed at $1146…+$100 in 3 weeks
Oil, $77.74 

Returns for the week 11/16-11/20 

Dow Jones +0.5% [10318]
S&P 500 -0.2% [1091]
S&P MidCap -1.5%
Russell 2000 -0.3%
Nasdaq -1.0% [2146] 

Returns for the period 1/1/09-11/20/09