Wall Street…and Europe’s Crisis
The headlines and commentary were virtually the same by Monday morning. Europe had bought itself more time with a $1 trillion rescue package for Greece, its sick brethren, and the euro currency. Global markets celebrated for, oh, about 72 hours, and then fell back into freefall, not exactly the length of time the continent was thinking of…most hoping for a year or two of stability before the next crisis, or for solutions to begin to work themselves out. Alas, it’s not likely to be that easy. Greece, Spain and Portugal may be able to refinance their bonds, but the long-term issues remain the same. Massive debt at the government and individual level, and you can throw in the likes of non-euro Britain, as well as the United States and Japan while you’re at it.
In a nutshell, what the European Union, European Central Bank, and International Monetary Fund (of which the United States is a rather prominent member, meaning American taxpayers have a stake in what happens in Europe whether we like it or not) did was to put a pile of money together; about $560 billion from the 16-nation eurozone, $320 billion from the IMF, and $80 billion from the European Commission. By mid-week, some money was flowing to Greece in preparation for its having to roll over a bunch of debt on May 19 (workers there have called for a massive strike on May 20 to celebrate), but the details of how, and when, the money will aid those who need it, and, just as importantly, who will pay what into the fund when these guys really do hate each other, has yet to be determined. Nothing I learned this week changes in any way my thesis that there is zero reason to be optimistic, about literally anything these days. It doesn’t help that British Petroleum is destroying the Gulf of Mexico and not for nothing, but any rational analysis of the picture in Afghanistan and Iraq should lead to one conclusion….we’re on the verge of losing both wars. We’ll officially realize this last fact by year end, around the time Iran, though its proxies, starts a region-wide conflict of its own.
I repeat what I’ve been saying all year. This negativity doesn’t mean we won’t have good months, or even years in the future when it comes to equities, and I have a large investment of my own in China that I still see working out by end of 2011, while I’m not rushing to buy gold like some of my friends, but the trend for Planet Earth is down.
But back to the here and now, as this is a ‘week in review’ after all, the ECB, as part of the rescue plan, will be buying the government bonds of Greece, Ireland, Portugal, Spain and Italy, even as this creates a moral hazard (other nations believing they can continue to take risks and avoid the pain since they know they, too, will just be bailed out). And former Federal Reserve Chairman Paul Volcker voiced his concern over “a potential disintegration of the euro. The essential element of discipline in economic policy and in fiscal policy that was hoped for” has “so far not been rewarded in some countries.”
At least Greece, Portugal and Spain, as well as the new coalition government in Britain, began to take the painful steps; cuts to public service pay and pension plans, increases in the retirement age, higher taxes (a “crisis tax” in Portugal, to be exact)…none of which are being well-received among the populous, especially the trade unionists whose increasing protests over the course of the summer will dominate our cable television screens (more fun watching riot police batter spoiled citizenry than one of those dumb L.A. freeway car chases, most of you would agree).
“Greece’s financial crisis is, unfortunately, an extreme example of a broader European problem. Investors have been looking nervously at debt-levels and budget deficits in Spain, Portugal and Ireland for months. But even Europe’s big four – Britain, France, Italy and Germany – are hardly immune from concern. Italy’s public debt is about 115% of GDP. Some 20% of this needs to be rolled over during the course of 2010. Britain is currently running a budget-deficit of nearly 12% of GDP, one of the largest in Europe. George Osborne [who took over as finance minister] has described Britain’s official economic forecast as a ‘work of fiction.’ The French government has not produced a balanced budget for more than 30 years. And one of the reasons for the deep bitterness in Germany at bailing out Greece is the knowledge that Germany is already struggling to balance its own books.
“It is true that the citizens of Latvia and Ireland have already swallowed actual cuts in wages and pensions. But these are both countries that have experienced real poverty in living memory, followed by massive and unsustainable booms. They know that the last few years have been a bit unreal.
“As the riots on the streets of Athens illustrate, however, not all Europeans will react so stoically to deep cuts in spending. Many have come to regard early retirement, free public healthcare and generous unemployment benefits, as fundamental rights. They stopped asking, a long time ago, how these things were paid for. It is this sense of entitlement that makes reform so very difficult….
“Yet if Europeans do not accept austerity now, they will eventually be faced with something far more shocking – sovereign debt-defaults and collapsing banks. For many Europeans that is the kind of thing that only happens in Latin America. The discovery that Latin Europe – and maybe northern Europe, too – can also hit the financial wall will come as a horrible shock.”
“The Depression was born in the geopolitical upheavals of World War I, which shattered a prosperous order led by Britain and built on the gold standard. The war left Britain weak, Europe mired in debt, and the gold standard in tatters, making attempts to rebuild the old order futile….
“There are eerie, if crude, parallels now. The welfare state is today’s equivalent of the gold standard. With aging societies, rich nations have promised more benefits than they can afford. Greece is merely the canary in the mine. And the United States is today’s Britain, its leadership eroding, replaced by a dangerous power vacuum. Witness the long delay in coming to Greece’s aid. No country acted decisively, even as markets grew nervous….
“[While some point to a normal recovery…the IMF still predicting global growth in 2010 and 2011], Other signs suggest deeper problems, particularly the burden of the welfare state, massive private debts, and the huge imbalances of global trade, most notably the American deficit and the Chinese surplus.
“Each of these problems could conceivably trigger another slump. Delivering the tax increases and spending cuts required to deal with big budget deficits could weaken recovery, but failing to do so could trigger a financial crisis. Spooked lenders would insist on higher interest rates on government bonds. The value of those bonds would drop, inflicting huge losses on banks and investors. The financial system might again seize up.”
The bottom line is the harsh austerity programs now being implemented are obviously not a recipe for growth, which also means that for a time, government revenues will shrink further and deficits increase until the likes of Greece hit bottom.
And then you have this omnipresent issue of terrorism. Here I wrote what I did on the topic last week, reinforcing my main theme for 2010, an event(s) that will crush sentiment, and the next day, “60 minutes” had a segment offering you zero reason for optimism on this front, including the issue of the 50,000 Somalis, many of whom are becoming radicalized, that now call Minneapolis home.
Also on Sunday, appearing on ABC’s “This Week,” academic and author Shelby Steele observed that the issue today is one of “Islamists being unable to deal with modernity.” What’s depressing is there is no solution, except we must all continue to remember that if we see something, say something.
China. My little specialty chemical/biodiesel company in Fujian province reported earnings on Friday and revenues soared, thanks to ramping up production at the new facility, though the bottom line was a little light. But on the conference call there was zero talk of any slowdown concerns, which I focus on extensively myself. It’s an example of how you have to separate some of the problems faced in the major urban areas of China, i.e., the real estate boom, with those of the broader country as a whole. Despite all the doom and gloomers on China, strategists and short-sellers such as Marc Faber and Jim Chanos that I’ve highlighted in this space, I maintain China will be successful in engineering a soft landing, even with the developing global crisis. But certainly China’s equity market, down roughly 20% year to date, is telling you a major slowdown is on the way. Can China, and Asia proper, survive while others go up in smoke? I’ve placed my bet on red…and sometimes I feel like I’m watching the ball spin endlessly around the roulette wheel…round and round and round…c’mon, land on red, baby…as I await the one quarter (now moved forward to August…at least) where the market reacts positively to a strong bottom line figure. But enough about me, except to add my play has significantly outperformed the overall Chinese market thus far in 2010.
China reported a number of key readings this week, such as exports for April up 30.5%, retail sales for the month up 18.5% over year ago levels, and industrial production up 18%.
But bank lending rose significantly, not exactly what the government wanted to see, while housing prices increased 12.8% in 20 major cities, and consumer prices rose 2.8%, with food leading the way, up 5.9%. It’s this last bit that has some spooked…rising inflation and how to prick the housing bubble. China continues to increase capital requirements on the major banks, and this is transparent, but less so is what’s going on with the local governments and their own high debts. This is not transparent, and a real problem for Beijing. What the government does know is that in some of the major cities, with all the levels of restrictions being mandated on housing, transactions were down 40% in April over March, though prices haven’t dropped…yet. They will, and some say up to 30%. It’s how the people and government handle that coming aspect that determines whether the communists do indeed engineer a soft landing.
As to the U.S. real estate picture, I have been remiss in not bringing to the table my own observations, as in the past few months I cannot believe how many homes finally have a foreclosure sale sign in the yard. You’d see the same places last fall looking increasingly uncared for, yards a mess, grass uncut, and knew the bank (once they could identify which one was really responsible) would eventually bite the bullet and my New York metro area is about the last in the nation to face reality; in keeping with the fact that Wall Street had a huge positive impact on housing here until the crash of 2008, unemployment, and reduced bonuses.
So I got a kick out of some of the national data on foreclosures this week. If you weren’t careful in reading the headlines (or all you did was read them), you’d have thought housing was recovering, perhaps, if you only looked at the rate of foreclosures dropping 2% in April from the pace a year ago. But that hides the truth, which is that home foreclosures hit a record in April, not down 2%, because the banks are finally taking the properties onto their books, though the official data can be skewed as they are being careful how many of the homes they put on the market at one time. With an official unemployment rate of 9.9%, and a more realistic one of 17%, there is zero cause for optimism….as if after my opening you thought I was going to give you any. As my West Coast housing expert, Josh P., and I were comparing notes on the topic, don’t even think about a real recovery in prices. [J.P. thinks we still have another leg down. I’m sticking with my Nov. ’08 forecast that once we bottomed, which I said was April ’09, we’d just sit there, and wouldn’t you know, one year later the National Association of Realtors said this week that the median first quarter 2010 home price was exactly the same as a year earlier.]
The bottom line on housing, especially with the expiration of the first-time home buyer credits, a putrid labor market, and a continuing crisis in confidence (of which last Sunday’s “60 Minutes” piece on “walking away” didn’t help), there will be no major housing recovery.
Incidentally, my new office faces three new homes that are being built…the same developer who put up the condo building I’m now in. I imagine he would beg to differ with me. I’ll let you know what they sell for, compared to what he would have received in 2007.
And if you’re talking about housing, you really have to bring up the issue of Fannie Mae and Freddie Mac, which mysteriously have no real part in financial reform regulation winding its way through Congress.
Alabama Republican Sen. Richard Shelby said of the legislation being crafted that it “touches nearly every corner of the economy. But these major contributors to the crisis are left unscathed….For years, Democrats blocked meaningful reform of Fannie and Freddie, and not much has changed.”
‘If you blinked, you might have missed the ugly first-quarter report last week from Freddie Mac, the mortgage finance giant that, along with its sister Fannie Mae, soldiers on as one of the financial world’s biggest wards of the state.
“Freddie – already propped up with $52 billion in taxpayer funds used to rescue the company from its own mistakes – recorded a loss of $6.7 billion and said it would require an additional $10.6 billion from taxpayers to shore up its financial position.
“The news caused nary a ripple in the placid Washington scene. Perhaps that’s because many lawmakers, especially those who once assured us that Fannie and Freddie would never cost taxpayers a dime, hope that their constituents don’t notice the burgeoning money pit these mortgage monsters represent. Some $130 billion in federal money had already been larded on both companies before Freddie’s latest request.”
Ms. Morgenson goes on to paint an even worse picture, such as a big pickup in serious delinquencies on Freddie’s portfolio, for one.
“The company’s inventory of foreclosed properties rose from 29,145 units at the end of March 2009 to almost 54,000 units this year.”
But I thought one of the headlines this week said foreclosures were down? Ever wonder why your editor attempts to read everything? There’s your answer.
Meanwhile, Fannie asked us taxpayers for an additional $8.4 billion in aid this week.
“Fannie Mae is the Cal Ripken of bad real-estate deals, reliably pouring taxpayer money into the housing market. Granted, Fannie faces tough competition from its toxic twin, Freddie Mac…
“Once the checks from Treasury clear, Fan and Fred will have consumed a combined $145 billion in taxpayer cash, and the end is nowhere in sight….
“The losses are unlimited because the companies are now run by the government not to make money, by deliberately subsidizing housing….
“The real joke is that the Obama administration and Senator Chris Dodd have collaborated on a financial regulatory-reform bill that includes no reform of Fan or Fred.”
Street Bytes
–Stocks rallied back after the previous two weeks’ swoon, though following Monday’s rocket shot after the European Union and the IMF agreed on a bailout package, without any specifics, the Dow Jones and S&P 500 ended the week lower than Monday’s close. Overall, however, the Dow rose 2.3% to 10620, the S&P added 2.2% and Nasdaq added 3.6%.
The economic news was once again solid, with April retail sales up a better than expected 0.4% and industrial production climbing a solid 0.8% for the month.
But there was caution on the earnings front, including from John Chambers and Cisco Systems. Chambers, who was so ebullient three months earlier, was a little less so this time around in discussing the rest of 2010 because he, like everyone else, can’t get his arms around the impact of Europe’s problems on the rest of the globe, let alone how a soaring greenback could hurt the bottom line of the big multi-nationals whose exports are now more expensive.
But I also found it interesting that in the case of Macy’s, Kohl’s and Nordstrom’s, all were pleased with first quarter results but at the same time offered that it was unclear just how the consumer would act the second half of the year, which has been my point all along, though I feel like I know how it will act, precisely. It will rein in spending anew. Kohl’s said its “customers are telling us they expect to spend less.” Another giant, Japan’s Sony, also issued caution in discussing its global outlook. It was just a few weeks ago that the likes of Caterpillar, DuPont and Dow Chemical were touting a rebound in the manufacturing sector, but the world has changed drastically since then.
As to the issue of what caused the market crash on Thursday, May 6, the SEC still doesn’t know, except it seems clear it wasn’t a “fat-finger” data-entry error, as first thought that afternoon, in yet another example of ‘wait 24 hours, you morons!’ If you were a trader with fat fingers that day, forget being given your Miranda rights….you were turned over to Jack Bauer and, well, I don’t even want to get into the details of what happened next.
What does seem clear is those daffy high-frequency trading systems (which by some estimates account for 70% of volume these days) played a large role and now, belatedly, the SEC is proposing to act in establishing new circuit breakers.
In a survey of economists for the Wall Street Journal, 42% now believe the Federal Reserve will not tighten until 2011 or later due to the risk of contagion, as well as deflationary pressures that are beginning to pop up. The economists also see an unemployment rate of 9.3% by December; hardly good news for Democrats come November as I discussed in detail last week.
–The Senate voted 96 to 0 to authorize an audit of the Federal Reserve’s emergency aid program and full disclosure of just who got the money, a plan that is targeting Goldman as much as anyone else.
–While the administration has expressed some optimism over the budget deficit coming down as the economy improves, should this prove to be the case, they can’t be encouraged by the fact that receipts from individuals in April fell to $107 billion from $137 billion in April ’09.
Both France and Germany’s first quarter GDP rose a putrid 0.1% over the previous quarter, while the 16-nation eurozone rose 0.2% as a whole. And Hong Kong’s GDP rose 8.2% for the quarter vs. year ago levels, the highest rate in 4 years as 5.5 million visitors from mainland China flooded HK. Even Russia reported a solid 2.9% rate of growth for the first three months of the year.
–California Gov. Arnold Schwarzenegger called for an additional $19 billion in cuts to the budget, including dismantling the state’s main welfare program for families.
–You’d have to be an idiot to place a big bet on the financial sector these days as efforts to regulate it in the Senate have become a total mishmash. For example, one proposal to find alternative rating methods, outside the likes of Moody’s and Standard & Poor’s, was approved, but so was another that would create a board, overseen by the SEC, that would randomly assign ratings agencies to provide initial assessments of securities. Confused? Another proposal would impose limits on the fees banks can charge businesses to process transactions on credit and debit cards. Banks took in $50 billion in such fees last year. Shares in Visa and MasterCard tanked on Friday as this amendment came to light.
And, of course you still have various ongoing investigations into the industry (see below), so keep your powder dry. If you miss a big move in financials, so be it. You’ll get another opportunity later on, perhaps in a different sector.
–The BP oil spill gets more and more depressing. No one knows how much is actually being spewed out of the ground…the common estimate being 5,000 barrels of crude a day, but now some say it could be as high as 70,000. The 5,000 figure comes about strictly through surface estimates taken by the National Oceanic and Atmospheric Administration, but there are some reports that a lot of the oil isn’t reaching the surface and thus can’t be measured. All efforts to plug the main leak continue to fail, and no one can tell us the impact of the chemicals being used on the spill to disperse it, though its use was approved anyway.
Furthermore, you had the pitiful congressional hearing this week wherein representatives from BP, Transocean and Halliburton all blamed each other for the disaster, while BP’s chief, Tony Hayward, admitted it was “probably true” that BP should have done more to prepare for such an emergency.
“It’s clear that we will find things we can do differently, capability that we could have available to deploy instantly, rather than be creating it as we go.”
We also learned the blowout preventer that failed had a hydraulic leak and a dead battery. Additionally, in the congressional hearing, investigators uncovered a 2001 report by Transocean, which operated the drilling rig on behalf of BP, that indicated there could be as many as 260 failure possibilities in the equipment.
[The Journal also reported that Transocean has a history of rig accidents. The company was involved in 13 of the 39 deep-water drilling incidents in the Gulf of Mexico from 2005 through 2007, generally in line with their percentage of deep-water rigs during the same period, but since a 2007 merger with GlobalSantaFe, Transocean’s accident rate is far higher than its operating percentage.]
–As to the impact all the above has had on public support for offshore drilling, a new NBC News/Wall Street Journal poll has six in 10 still backing more drilling for oil off the U.S. coast, with 53% agreeing with the statement that “the potential benefits to the economy outweigh the potential harm to the environment.”
–The Financial Times reported on yet another potential rift between the U.S. (along with the U.K.) and the European Union as the EU seeks to impose new rules on hedge funds that could possibly lock U.S. funds out of European markets.
“The Americans are going absolutely ape,” a person familiar with the negotiations told the FT. “There’s this overwhelming belief now in Europe that if we legislate first, then the U.S. will follow what we do.”
British officials, including the new coalition finance minister, George Osborne, have been begging France and Germany to go slow but it appears to be a lost cause. Britain is home to 80% of Europe’s private-equity and hedge fund operations.
The proposals are designed to limit leverage and increase portfolio disclosures, as well as to mandate assets be held with European banks. Managers and investors have said the proposal would force them to exit Europe.
–Morgan Stanley denied reports that the SEC was investigating the firm’s transactions in collateralized debt obligations, similar to the ongoing inquiry into Goldman Sachs’ activities in the CDO realm. Up to a dozen firms are being investigated for their mortgage bond businesses.
–But wait…there’s more! New York Attorney General Andrew Cuomo launched an investigation into eight banks, including Goldman, Morgan Stanley, UBS and Credit Suisse, to determine whether they were providing misleading information on the ratings front when humping their securities offerings, helped along by the incestuous relationship the banks had with the ratings agencies.
–AG Cuomo has been a busy beaver. This week his office also sued a hedge fund management firm, Ivy Asset Management, and two of its former executives, claiming they discovered all the way back in 1997 that Bernie Madoff couldn’t possibly be telling the truth about his operation, but they kept their suspicions quiet because they loved getting the juicy fees (some $40 million during the period in question) and living large; classic Wall Street behavior.
In a statement, Cuomo said of Ivy, which is now owned by Bank of New York Mellon Corp., that it had “informed its clients that it saw the trouble with Madoff coming around the bend, but instead of guiding their clients through the financial waters, they sold them down the river.”
–Australian Prime Minister Kevin Rudd is proceeding with his plan to heavily tax mining profits as part of his new budget, which as you can imagine has this powerful sector up in arms. The miners, such as BHP, are rapidly scaling back projects in preparation for it passing parliament.
–Toyota bounced back in the first quarter after its severe troubles in reporting a profit of $1.2 billion, while projecting a $3.3 billion profit for the fiscal year through March 2011. But the automaker faces a new investigation by the U.S. National Highway Traffic Safety Administration into a steering defect in 2005.
–From time to time I’ve stated my position on gold. I’m totally ambivalent. I know many who are gold bulls, such as longtime friend Ted Turner (we like to say the real Ted Turner), and my friends at Strategic Energy Research and Capital, but while I’ve noted the price each and every week since the start of this column, I haven’t been excited about the shiny metal hawked by the likes of G. Gordon Liddy ever since PIMCO Funds got rid of our gold offering when as sales manager I seemed to be its only proponent. That was back in the mid-90s.
My problem the past year or so with the gold story, however, has been the inaccurate information that’s being foisted on the public. It is not a hedge against inflation, as I’ve proved in this space on many an occasion. If you want to invest in it because the world is going to hell, then that’s a different story. Congratulations to those who have gotten this one right thus far.
–As for oil, it’s had a tough go of it, not just because of the stronger dollar, but because of fears global demand may not be as strong as once thought and this week the IEA lowered its demand forecast, this as inventories continue to rise as well.
–The Royal Bank of Scotland is slashing 2,600 jobs in Britain, bringing the total number cut since the crisis began to 22,600. RBS is now owned by the state.
–A leading housing expert in Ireland says prices there will eventually bottom 60% below their peak.
–And it’s not a good time to be a bartender (publican) in Ireland as it’s now estimated 5,000 outside Dublin will lose their jobs if the current rate of pub closures continues. This is on top of 15,000 losing their jobs in the industry already over the last year and a half.
–Four investment banks, Bank of America, Citigroup, Goldman Sachs and JPMorgan Chase pitched perfect games in the first quarter in terms of their trading desks, making money each of the 61 days for the three months, not that I give a damn.
–German software giant SAP made a bold move in making a $5.8 billion play for U.S. rival Sybase. But critics say SAP is paying too much, with some analysts seeing Sybase as a “dusty” and “broken” company. One analyst, Paul Guely, told the FT:
“SAP has made no secret of wanting to do a meaningful deal, but not many would have guessed it would be Sybase. They need to strengthen their middleware offering, but instead they have bought a database vendor that competes in a market dominated by Oracle.”
SAP argues, though, that Sybase gives them cutting edge technologies, like in the cellphone arena; Sybase being a market leader in software for placing business applications onto mobile devices. Makes sense to me.
–Disney’s blockbuster “Alice in Wonderland” took in $962 million in worldwide box office sales, helping the company boost net income in the first quarter, but attendance at its theme parks and resorts remained flat over year ago levels.
–The Wall Street Journal reported that Procter & Gamble “is scrambling to put out an Internet wildfire over the safety of its new Pampers diapers, a crucial brand that accounts for about 11% of the company’s revenues.” Good lord. 11%?!
It seems that mothers have opened up a Facebook page to detail claims of the diapers causing rashes and “chemical burns,” which would kind of suck if you’re a baby, just learning about the dollar/euro relationship, Greece, and then this happens.
–Meanwhile, Heinz is facing a bit of grief for changing its recipe for its flagship ketchup this summer, reducing the salt content by 15%. The critics are jerks. Good move, Heinz!
–Payscale.com released its survey of the highest-paying college degrees.
1. Aerospace engineering: $59,600 starting median salary ($109,000 mid-career median)
2. Chemical engineering: $65,700 / $107,000
3. Computer engineering: $61,700 / $105,000
If you want to be a social work major…well, plan on a miserable life of poverty and despair. Median career salary is but $41,600. My advice, marry way up.
–Abercrombie & Fitch CEO Michael Jeffries didn’t have to worry about median salaries as he took home compensation valued at $36.3 million last year, up from $23.2 million the previous one, even though the company’s performance worsened.
–When Jay Leno was bombing in his 10:00 p.m. Eastern timeslot, it was the local affiliates who were most up in arms as their own ratings for the local news following him plummeted as well. So it’s interesting that in the case of NBC’s New York flagship, with Leno now back at 11:30, the 11 p.m. newscast’s ratings were up 91% in April.
–El Nino, the Pacific Ocean warming phenomenon, will disappear by June and La Nina, or cooling, may take its place according to the U.S. Climate Prediction Center. El Nino was credited with making the 2009 Atlantic hurricane season the least active in 12 years, as it promotes wind shear that tears hurricanes apart. Ergo, look for more activity this coming season, which officially begins June 1. [All the more reason why I think my small bet in the natural gas sector will work out well…I’m up thus far, though this has nothing to do with the coming hurricane season as yet.]
Foreign Affairs
Afghanistan: The caped one, President Hamid Karzai, made his goodwill tour to Washington and Congress this week, Karzai vowing to fight corruption while both he and President Obama said tensions between the two were exaggerated, as Obama insisted his timetable to begin withdrawing forces from the country in July 2011 was still on schedule. Obama warned, however, that there was hard fighting ahead over the next several months as the campaign to take Kandahar, the Taliban’s spiritual center, gets underway in earnest.
The Washington Post asked experts for their appraisal of the Afghan war and following are two of them.
Gilles Dorronsoro / visiting scholar at the Carnegie Endowment for International Peace
“The surge in Afghanistan is not working. The only place where the counterinsurgency strategy has been tried so far is in Marja, where its results have been disastrous. The Taliban is still there, and the population neither supports the local government nor collaborates with U.S. forces. The Taliban has enough spies to kill people suspected of aiding the Americans, while the local Afghan government has no political capital.
“The consequence is that at least a few thousand U.S. troops will stay in this marginal district to contain the Taliban when they are needed to resist the coming Taliban offensive in the north and east.
“The imminent U.S. offensive in Kandahar will also fail, because the coalition cannot reform the local government. Ahmad Wali Karzai, half-brother of President Hamid Karzai, remains the local strongman, and the United States will not remove him, meaning it has no reliable partner to work with in Kandahar. Taliban forces have infiltrated that city in great numbers and are already targeting Afghans who work with the government or the Americans.”
Andrew J. Bacevich / professor of history and international relations at Boston University
“In making Afghanistan the centerpiece of its retooled war on terrorism, the Obama administration overlooked this fact: The global jihadist threat has no center. ‘Winning’ in Afghanistan, however defined, will neither eliminate nor even reduce that threat. What’s more, past Western military forays into the Islamic world served chiefly to exacerbate violent jihadism. This pattern persists today. For evidence, look no further than neighboring Pakistan….
So we’ve learned Marja has been a big failure and that there is no Afghan government ready to move in to provide better security and governance. So why would we think Kandahar, much bigger, will be any different?
“(We) wind up supporting yet another disdained ‘president’ because we insist that a tribal society must subject itself to a strong central government defended by an American-model army that refuses to be built. This is not a formula for success.
“Another sign that Afghanistan’s in ‘beaucoup deep kimchee’ (as a former NCO of mine used to say) is that the pundits are already assigning blame.
“On a TV panel on Tuesday, a prominent conservative voice insisted that the loss of Afghanistan would be Obama’s fault for not sending enough troops (and this when barely half the surge forces have arrived). The speaker couldn’t bear the thought that he had gotten the Afghan equation wrong.
“If anything, our inexperienced president can be blamed for agreeing to send more forces to a country where the resistance grows in direct proportion to the visibility of foreign occupiers. Our problem all along in Afghanistan hasn’t been the lack of troops, but a lack of understanding. We didn’t just invade Afghanistan – we invented it. The country we’re struggling to save doesn’t exist.”
[Separately, on Tuesday, up to 18 American missiles slammed into Taliban sanctuaries in Pakistan close to the Afghan border, killing 14 alleged insurgents in the third strike since the failed car bombing in New York. I give President Obama credit for this ongoing campaign, especially seeing as how the Pakistani government remains loath to mount any kind of meaningful offensive in North Waziristan.]
Iraq: I quoted Michael Young of the Daily Star as extensively as I did last time because it was the single best analysis of Iraq I had yet read. One particular passage bears repeating in light of the disastrous week we just witnessed.
“(U.S. officials) took great pride in saying that they had not interfered in the election process. What, precisely, was the thinking here? That America would be rewarded by some cosmic moral supreme court? That Iran and Syria would gasp at American uprightness and refrain from exploiting Iraq for their own purposes? Does the administration imagine that international politics unfolds like a Frank Capra film, so that like Mr. Smith in Washington the world would dissolve into tears of affection for Mr. Obama in Iraq?”
So look what happened after the administration opted not to get involved; an incredibly coordinated series of attacks on Monday that killed at least 110, including one situation where two bombs went off at a clothing factory at closing time, and then a third and fourth just as the emergency personnel arrived and the inevitable crowd had gathered. In all, an estimated 60 bombs and shootings ripped through the country. While the government blamed al-Qaeda (weren’t we just told they were decimated?), its Iraq’s security forces that face increased scrutiny.
Iyad Allawi, who gained the most seats in the March 7 election, said the country is descending into a new sectarian war. He added that if the U.S. doesn’t safeguard Iraq’s nascent democracy, “This conflict will not remain within the borders of Iraq. It will spill over and it has the potential to reach the world at large, not just neighboring countries. I feel…the international community has failed this country.”
Iraq and Afghanistan…both lost, barring a miracle. History is going to judge both Presidents George W. Bush and Barack Obama very harshly in this regard.
“Overstatement in the service of truth is no vice, some might say. But where is truth, or indeed overstatement, in the observation that we may be witnessing the beginning of the end of America’s 60-year domination of the Middle East, unless the Obama administration reverses its policies? Alarmingly, no one has any answers….
“And let’s add one more item to the bleak mix: Washington’s listlessness actually increases the chances that it will enter a war with Iran, which Obama has been so understandably keen to avoid….
“(Chances are that by end of 2011), Obama will have presided over two major military withdrawals while allowing Iran to become a major adversary in the Middle East.
“But there is another possible scenario. Obama may realize that he’s been cornered by Tehran, and resort to the one thing he can still call upon with some sense of superiority, military power. Having stood down in Iraq, Afghanistan, Lebanon, and in all probability on the Palestinian track; having seen his major allies becoming steadily more marginal; having seen all this, the president may finally decide that enough is enough, and go to war. Whatever happens, Obama’s bad choices today are pushing him in the direction he most dreads.”
Iran: President Obama and Russian President Medvedev called for speeding up negotiations in the UN Security Council on a new sanctions resolution against Iran over its nuclear program, but you can be sure the Kremlin isn’t about to allow anything of real substance, seeing as it has rather substantial commercial and military ties to Tehran, beginning with the Bushehr nuclear facility and the sale of anti-aircraft systems. Plus you have Brazil’s President Lula heading to Tehran this weekend to help mediate the nuclear issue, which will be of zero help. Both Brazil and Turkey are currently on the Security Council and want Iran to send low-enriched uranium abroad and receive a higher grade in return, but this has been a straw man for years now. And yet another complicating factor is that Lebanon holds the rotating presidency of the Security Council this month and doesn’t want a resolution in May because it would be forced to abstain, seeing as how Iranian-backed Hizbullah is in the Lebanese government.
Israel: Prime Minister Netanyahu accused Iran of stirring up a war between Israel and Syria, telling his military’s Northern Command that Iran was “spreading lies in order to escalate tensions.” Russian President Medvedev was in Syria himself this week, saying that “Tensions in the Middle East threaten to lead to a new explosion or even a catastrophe.”
Britain: This nation is now in uncharted territory, a coalition government of two totally disparate parties, the conservative Tories and the Liberal Democrats, headed by David Cameron and Nick Clegg, respectively, this after Prime Minister Gordon Brown, who really was a miserable soul, pitifully tried to hang on. In a nutshell, the state of British politics is in deep disarray.
But Cameron and Clegg are nonetheless giving it the old college try and in a joint policy statement laid out the crisis facing Britain, namely that reducing the deficit was “the most urgent issue.” Bank of England governor Mervyn King praised the Cameron plan to immediately cut spending by $9 billion (out of a record $273 billion budget deficit).
In their first joint appearance, Cameron said, “Compromise, give and take, reasonable, civilized, grown-up behavior is not a sign of weakness but a sign of strength.” For his part, Clegg acknowledged there would be “bumps and scrapes” along the way, but he insisted, “This is a government that will last.” Then, in his first cabinet meeting, Cameron ordered a 5% pay cut for his ministerial team.
As for the new lineup, aside from Clegg being deputy prime minister, the two names you need to become familiar with (if you are to get a passing grade in my class) are William Hague, foreign secretary, and the aforementioned finance minister (Chancellor of the Exchequer) George Osborne.
No one expects this shotgun wedding to work. Here’s hoping for the good of the West it does.
Germany: Chancellor Angela Merkel’s center-right coalition suffered a huge defeat on Sunday in a critical regional election just days after parliament voted to aid Greece. Merkel’s Christian Democratic Union won 34.6% of the vote in North Rhine-Westphalia, 10 points less than in the state’s last election in 2005, as the Social Democrats picked up 34.5% and the Greens 12.4%. In national elections last year, the SPD vote was a postwar low of 23%. So Merkel, like David Cameron, is forced to compromise.
Thailand: A dissident Thai general was shot in the head while being interviewed by journalists, thus precipitating a new round of violence. The general, who went by the name of She Daeng, was a lunatic but had taken control of security for the Red Shirt protesters. Many in the Red Shirt movement, however, didn’t like She Daeng so it was far from certain the assassination attempt was carried out by Thailand’s military, which denies it did. As I go to post, violence appears to be widespread in Bangkok with at least 18 dead. This is one of the stupider revolts of the past century, but in keeping with the idiotic times we live in.
North Korea: The following is from an editorial in Global Times, a Chinese government mouthpiece.
“North Korea is dancing haphazardly along the nuclear tightrope, fraying the nerves of every world power. It is apparently proud, believing that it has played a dominant role.
“But North Korea fails to realize that the most dangerous role is the one that country itself is playing.
“Like a prancing tightrope walker, North Korea has sought to hold its audience’s attention by jumping about in supposedly daring feats. But ultimately, it has only increased its own risk factor.
“It must be born in mind by North Korea that it is playing a dangerous game with Northeast Asian powers while relying on its considerably weak national strength.
“It has successfully found leverage in bargaining with the rest of the world time and again, but it still lacks the strength to truly take advantage of that leverage….
“North Korea should not continue to increase the strategic risks it faces. There are two critical factors necessary for the current nuclear game to continue.
“First, the powers involved in the North Korean nuclear crisis would have to be willing to continue playing the game because it would be in their own interests. That is certainly not going to happen.
“Second, North Korea could realize economic independence, and further isolate itself from the rest of the world. Or, it could reform its current system and keep getting economic aid from outside. Undoubtedly both are beyond its reach.
“As soon as possible, North Korea should jettison the nuclear risks the country faces – risks it will not be able to bear in the long term.
“Doing so would show that North Korea is taking responsibility for the system it has created, and is serving the interests of its own people.
“It would also benefit the Chinese people, who have shown nothing but friendship and goodwill toward North Korea for many decades.”
As for South Korea, it has moved closer to officially accusing the North of torpedoing one of the South’s naval vessels back in March, an incident that killed 46. If may formally publish details of its investigation next week. The North has denied involvement and it’s not known how they will react to any finding that it is responsible.
China: A trade deal with Taiwan is still slated to be signed in June, though there are problems with the wording, specifically China’s wishing to use the word “liberalization” as Taiwan fears this spells too-rapid an influx of Chinese goods.
Philippines: Benigno Aquino III is this country’s next president following elections. Aquino’s father was assassinated while opposing Ferdinand Marcos’ dictatorship and then his mother led the 1986 “people power” revolt that restored democracy. Mr. Aquino has his work cut out for him as a third of the nation’s inhabitants earn less than $1 a day, let alone there is a history of massive corruption and insurgencies.
But guess who else won? Imelda Marcos, now 80, won a seat in the Philippine Congress. Her son, “Bongbong,” is headed for the senate. Lovely.
Serbia: A new mass grave of 250 Kosovo Albanians was discovered, victims believed to have been killed during the 1998-99 conflict when Serbian forces fought ethnic Albanians in Kosovo. The grave was near the border with Kosovo. There are still 1,200 missing from this dark period.
Russia: A mine disaster claimed the lives of 90 at Russia’s largest underground operation in Siberia. Nearly 300 managed to escape.
And regarding the recently signed New START treaty signed by Russia and the United States, former defense secretary James Schlesinger, who served under Richard Nixon and Gerald Ford, said the U.S. made too many substantial concessions to the Russians, adding he would only support Senate ratification if the U.S. could build new weapons not prohibited by the treaty. Stephen Rademaker, an assistant secretary of state under George W. Bush, said “The treaty obligates the U.S. to reduce [its arsenal]. The Russians don’t have to do anything. They are there already. Every hard issue in the treaty is favorable to the Russians.”
Random Musings
“One of the most troubling tics of Team Obama is the frantic rush to declare that every terror attack on American soil is carried out by an isolated individual with no connection to al Qaeda or other groups. It was the gist of their rapid response to the failed airline bombing on Christmas Day, to the Fort Hood shooter and, most recently, to the plot by Faisal Shahzad to set off a car bomb in Times Square.
“On the surface, the aim is obvious: to minimize the fear that radical Islamic organizations have penetrated homeland defenses. The working assumption is that Americans will be less frightened of isolated individuals who appear not to be capable of large-scale mayhem of the kind that rocked the nation on 9/11.
“It’s a reasonable theory, but it has a problem. The claims have been dead wrong in all three cases.
“Each ‘lone wolf’ was quickly shown to have had contacts with or received training from a terror group abroad.
“The result is the opposite of what the White House wants. Instead of calming fears, the links provoke suspicions that officials don’t know what they are doing or are intentionally hiding the deadly overseas connections. Either option serves to ratchet up public fear and decrease confidence in the government.”
“Why is the Obama administration now taking terrorism so seriously?
“In the immediate aftermath of the May 1 Times Square bombing attempt, Homeland Security Secretary Janet Napolitano – in typical fashion – rushed to minimize the plot, calling it a likely ‘one-off’ attack.
“But scarcely a week later, Attorney General Eric Holder is seeking a significant rollback in suspects’ Miranda rights – so as to better head off the next one.
“President George W. Bush was savaged by Obama’s liberal allies for supposedly ‘shredding the Constitution’ in the War on Terror, but he never called into question the 44-year-old Supreme Court decision that formalized an American’s ‘right to remain silent’ while in police custody. (Just imagine if he had!)
“The 1966 ruling in Miranda v. Arizona deemed inadmissible in court any statement a defendant made before cops verbally informed him of his rights.
“Yet Holder on Sunday said he wants legislation expanding an exemption to the rule, to apply when investigators interview terror suspects like Times Square bomber Faisal Shahzad, a naturalized citizen….
“It’s an incredibly fraught subject. While one could make the case that the original Miranda decision gave defendants more rights than the Constitution requires, it’s a fixture of the U.S. legal system….
“What’s noteworthy – and welcome – is that Team Obama seems to be starting to realize that the nature of the threat requires hard choices to be made.
“After all, these were the folks who not too long ago were insistent on trying ruthless foreign terrorists as civilians in Lower Manhattan (though, sadly, Holder still hasn’t ruled that out).
“So something really must have frightened them.
“Something big is happening. Big enough to alarm the White House. So big that the administration did an abrupt about-face regarding terrorism….
“A week ago, failed Times Square bomber Faisal Shahzad wasn’t even a Muslim, but a 40-something white male and, as Mayor Bloomberg insisted, probably an opponent of ObamaCare.
“Then, after Shahzad’s apprehension, we were told that he was just another ‘one-off’ in the tradition of Islamist terrorists who aren’t really Islamist terrorists at all, but distraught homeowners unable to meet mortgage payments or victims of our prejudice….
“Even generals who knew better lined up to deny that Shahzad was part of a terror network.
“Then wham! Over the weekend, the Obama administration unleashed a reverse-course media offensive….
“Instead of Shahzad being a one-off, (terror czar John) Brennan tied him to the Pakistani Taliban and stressed to TV viewers that there are dangers we’re ‘taking very seriously.’….
“So what does this startling policy shift mean for you?
“First, the administration has plainly realized that the terror danger is much higher than it believed one week ago.
“Second, it means that Shahzad really has been talking – almost certainly tipping us that there are more America-bound terror trainees out there (or already here) and letting us fit together important pieces of the intelligence puzzle.
“Third, the White House obviously fears more terror attacks sooner rather than later….
“Some revelation about the terrorist threat has shocked the president. It’s about time.”
“The young man (Shahzad) who would do his best to secure an American education before succumbing to the call of the jihad is a man in the grip of a deep schizophrenia. The overcrowded cities of Islam – from Karachi and Casablanca to Cairo – and those cities in Europe and North America where the Islamic diaspora is now present in force have untold multitudes of men like Faisal Shahzad.
“This is a long twilight war, the struggle against radical Islamism. We can’t wish it away. No strategy of winning ‘hearts and minds,’ no great outreach, will bring this struggle to an end. America can’t conciliate these furies. These men of nowhere – Faisal Shahzad, Nidal Malik Hasan, the American-born renegade cleric Anwar Awlaki now holed up in Yemen and their likes – are a deadly breed of combatants in this new kind of war. Modernity both attracts and unsettles them. America is at once the object of their dreams and the scapegoat onto which they project their deepest malignancies.”
–But on Thursday, President Obama came to New York for a fundraiser and in so doing, stopped by to praise New York City police for their efforts in the Times Square case. Only one problem. Washington, it was learned this week, is cutting terror aid to the Big Apple. So that elicited the following editorials on Friday.
“There is a well-known saying that all politics is local. The same has become true of terror. We in New York absorbed this bitter lesson all too well. For we read it in blood, and we remember it in tears, and now we have learned that we must carry on with lonely resolve.
“You visited last night. Felicitations. Like so many others, you mined the riches that New York has to offer, and then you left, trailing a sense of betrayal. That’s a harsh word, but a well-considered one in that skywritten by the contrails of the presidential jet was the message.
“America’s defense is your highest duty, and you are a wartime President. You are the commander in chief on the front lines of the fighting abroad, and no less the commander in chief on the front lines of the battle that has come to these shores.
“The battle that has come, the battle that has come here over and over again, the battle that keeps coming to your country’s largest city, the battle that is growing exponentially more dangerous as a dispersed and driven enemy searches out new avenues of attack and more lethal weaponry.
“And yet you do not do all in your presidential power to stiffen the guard. You leave it to us, the locals, to build and to man and to woman the barricades, providing only such monies as you deem appropriate, regardless of whether they are sufficient.
“Blah-blahing about stimulus funds and bomfogging about congressional appropriations gives the issue a smell of pork and demeans New York as one more special pleader. The insult is palpable, particularly because the NYPD has devoted enormous resources and extraordinary ingenuity to preventing attacks.
“By all rights, Mr. President, you should long ago have summoned Commissioner Ray Kelly and all the other local generals to a war council so that you could find out what they need and deliver it in service of the national defense.
“That was the message Team Obama sent – loud and clear – yesterday in slashing anti-terror funding for the city.
“The local congressional reps…have been such lapdogs for President Obama (at New York’s expense) why wouldn’t his team feel free to hang the city out to dry?
“Under the plan, the feds will slice Gotham-area funds for transit and port security by $53 million – 27 percent….
“Never mind that the city suffered far more than anywhere else on 9/11 – and today remains Target No. 1 for jihadists….
“And since attacks on New York are meant to hurt the whole nation, Washington has a duty to provide it.”
“About a decade ago, one began to notice a profusion of Organization Kids at elite college campuses. These were bright students who had been formed by the meritocratic system placed in front of them. They had great grades, perfect teacher recommendations, broad extracurricular interests, admirable self-confidence and winning personalities.
“If they had any flaw, it was that they often had a professional and strategic attitude toward life. They were not intellectual risk-takers. They regarded professors as bosses to be pleased rather than authorities to be challenged. As one admissions director told me at the time, they were prudential rather than poetic.
“If you listen to people talk about Elena Kagan, it is striking how closely their descriptions hew to this personality type.
“Kagan has many friends along the Acela corridor, thanks to her time at Hunter College High School, Princeton, Harvard and in Democratic administrations. So far, I haven’t met anybody who is not an admirer….
“Yet she also is apparently prudential, deliberate and cautious. She does not seem to be one who leaps into a fray when the consequences might be unpredictable….
“What we have is a person whose career has dovetailed with the incentives presented by the confirmation system, a system that punishes creativity and rewards caginess. Arguments are already being made for and against her nomination, but most of this is speculation because she has been too careful to let her actual positions leak out.
“There’s about to be a backlash against the Ivy League lock on the court. I have to confess my first impression of Kagan is a lot like my first impression of many Organization Kids. She seems to be smart, impressive and honest – and in her willingness to suppress so much of her mind for the sake of her career, kind of disturbing.”
–President Obama’s job approval rating has stabilized right around 50%, which frankly is better than it deserves to be. Not because of his domestic policy, which you’d think would garner the support of Democrats and the disdain of Republicans, but rather his foreign policy has been disastrous and is taking us down a path of despair and terror.
But in the polling, what’s fascinating these days is that in both the case of a Gallup survey and an NBC News-Wall Street Journal poll, in a generic vote for a Republican or a Democrat, both show a tie (45-45 in one, 44-44 in the other). As Karl Rove pointed out in his Journal op-ed, however, back in 1994 at the same point in the year, the GOP was nearly five points behind. The Democrats would go on to lose 54 seats.
Independents, though, according to the Journal survey, favored Democratic control of Congress by a 40% to 24% margin in 2008. In this week’s poll, independents favored the GOP, 38% to 30%.
Meanwhile, in the same NBC/Journal poll, 44% call the health plan a bad idea, 38% a good one.
And then there’s immigration. 64% said they strongly or somewhat support the Arizona law, compared with 34% who strongly or somewhat oppose it.
But among Hispanic respondents, 70% opposed the law, while 69% of whites in the survey supported it.
In a separate AP-Univision survey of 1,000 adults of all races from the general population, plus 900 Hispanic adults, 74% of Hispanics said the country’s estimated 12 million illegal immigrants mostly contribute to society. Just 35% of non-Hispanics agreed with that, with 60% saying illegal immigrants are mostly a drain. 67% of Hispanics said they oppose the Arizona statute. Just 20% of non-Hispanics oppose it, with 45% favoring it and 30% neutral.
[My friend Mark R., out of the Philadelphia area, said he called the Arizona Dept. of Tourism to express his support and to tell them that this was one guy who was planning a vacation to the Phoenix area. I said I couldn’t include this tidbit because it was too political.]
–In 2006, Utah Republican Senator Robert Bennett earned a 93% approval rating among Republican primary voters. Last weekend, Bennett, going for a fourth term in office, lost in the state’s Republican Party nominating convention as tea party faithful claimed victory. Bennett had approved President Bush’s 2008 TARP bank bailout and had the temerity to work with a Democrat on health-care reform.
–In a Rasmussen survey of Alaska voters, 48% said they would vote against Sarah Palin if she ran for president in 2012; 41% said they would vote for her.
–Pope Benedict XVI, in a thorough admission of the Catholic Church’s guilt in the sex abuse scandal, said the greatest persecution of the institution “is born from the sins within the church,” and not from a campaign by outsiders.
“The church needs to profoundly relearn penitence, accept purification, learn forgiveness but also justice. Forgiveness cannot substitute for justice.”
–Susan Anderson, national director of Australia’s Heart Foundation, said there was insufficient evidence to recommend eating chocolate, drinking coffee, red wine or other alcoholic drinks or the use of antioxidant supplements, such as vitamins E and C. Instead, she said people were best advised to eat at least two servings of fruit and five of veggies every day.
However, Ms. Anderson said tea was confirmed as helping to lower the risk of a heart attack.
–Uh oh…in a study of more than 10,000 British civil servants, published in the European Heart Journal, people who added three or more hours to a seven-hour work day had a 60% greater risk of heart attack, angina and death from cardiovascular disease than those with no overtime work.
–I wrote the following on 4/10/10 in this space, once again anticipating an issue:
“President Obama stupidly called out Rush Limbaugh and Glenn Beck for being purveyors of ‘vitriol,’ which will only cause them to be more, you know, vitriolic. Instead, at least in the case of Limbaugh, Obama should invite Rush to go golfing with him, Rush loving the sport. He couldn’t possibly turn him down.”
So this week we learned Obama was asked if he would indeed play a round with Rush, and the response, as relayed by a top Democrat, was “Limbaugh can play with himself.”
Nice, Mr. President. What many of us find increasingly irritating is your talk of bipartisanship out of one side of your mouth and this b.s. out of the other.
According to Zev Chafets in his new book, “Rush Limbaugh: An Army of One,” due out May 25, Chafets reports he encouraged Limbaugh to reach out to the president after last summer’s “Beer Summit.” “You guys are both golfers,” Chafets told Limbaugh. “Would you play a round with the president and show the country that there are no hard feelings?”
“He’s the president of the United States,” Limbaugh told Chafets. “If any president asked me to meet him, or play golf with him, I’d do it. But I promise you that will never happen. His base on the left would have a s—t fit.”
But Rush allowed Chafets to ask, and through the senior Democratic official got the response. The New York Post, which reported the story, says that Limbaugh then quipped on-air after seeing the item, “Now, wait a second, they must have me confused with Bill Clinton.”
–Lastly, former Indiana basketball coach Bob Knight had some of the following advice for graduates at Trine University, a private school in northeast Indiana.
“Preparation is the key to victory in any game that you play. The prepared people win a lot more than the unprepared people. You can never spend too much time on preparation. The will to prepare to win is far more important than the will to win….
“Satisfaction is the first step toward defeat. Don’t ever forget that. Never be satisfied. There’s always something better.”
Knight asked the veterans in the crowd to stand to be recognized and urged the graduates to go out and work to make the country a better place for them.
“For you graduates, it’s men and women like those that just stood and those that will stand in the future that have given us – you and me, all of us – a life in the greatest country in the world. We owe it to them to do everything we can to improve things, to make things better, to make things possible for those people who spent time in the military, giving us that opportunity.”
But in the case of Iraq, and to a lesser extent Afghanistan, it’s our leaders who let our troops down. The troops have done all that was requested of them. The leaders, not only our presidents but also the likes of Gen. Tommy Franks, failed them miserably.
Pray for the men and women of our armed forces, and all the fallen.
Gold closed at $1227 in hitting a new high this week
Oil, $71.61…back to the level of early February
Returns for the week 5/10-5/14
Dow Jones +2.3% [10620]
S&P 500 +2.2% [1135]
S&P MidCap +4.3%
Russell 2000 +6.3%
Nasdaq +3.6% [2346]
Returns for the period 1/1/10-5/14/10
Dow Jones +1.8%
S&P 500 +1.8%
S&P MidCap +8.6%
Russell 2000 +11.0%
Nasdaq +3.4%
Bulls 47.2…huge drop, as you’d expect
Bears 24.7 [Source: Chartcraft / Investors Intelligence]
