Wall Street
The other day, President Barack Obama was talking up financial reform regulation (the Rose Garden presentation where the rat scampered around, doing his errands, as rats, or voles, as the case may be, are wont to do) when I received an email from Trader George saying he was officially now as tired of Obama as he was of George W. Bush in his second term. I replied the only way I could…they both [will go down as two of the worst presidents in history.]
Oh, I know how the political pundits are saying what an historical year it’s already been in terms of a president passing two massive pieces of legislation, first health care, and soon, financial reform legislation, and no doubt both are significant. One will prove to be a disaster, longer-term; the other, financial reform, I believe will be largely good, though not as good as it could have been.
But both legislative “victories,” as Obama’s supporters will be touting, are…and will be…soon overshadowed by a global picture that is increasingly dark.
Think about it. Unless you tell me the Iraqis form a government one of these days that is favorable to the United States, as well as stable and a beacon of democracy, we’ve lost that war.
We are losing, by any reasonable barometer, the war in Afghanistan.
As I spell out further below, Iran is running roughshod over the United States and its Western allies.
China is making tremendous strides, not always to our benefit (such as in ripping off our intellectual property), while being absolutely no help whatsoever when it comes to its ornery kid brother, North Korea.
Europe is a total basket case with the worst collection of political leaders of our time. How many times have I said a quick glance around the world reveals no Churchills? I think about this every week. Who will emerge, anywhere?
Barack Obama once thought he was the guy. I guess he still does, his ego always soaring to new heights even when the facts speak otherwise.
But unless you have your head in the sand, understand that both Obama and George W. Bush are going to be graded on two issues…not Iraq and Afghanistan…but North Korea and Iran.
I’ll admit to thinking that North Korea couldn’t possibly go to war…that they can’t be that stupid. But at the same time I’ve brought up countless times that no one knows who’s behind Lil’ Kim. Who is this son of his that is being groomed to take over? Who are the generals who are pulling the strings? I’d like to think there are a bunch of reformers, who recognize that if they gave up their weapons the country could receive $billions in aid to jumpstart their economy, which would then become the world’s low-cost producer. But what are really the chances of that? 20%?
More likely you have nothing but hard-line drug kingpins behind Kim Jong-il, drugs and ballistic missiles being that country’s only true stock in trade. For eight years George W. Bush could have done something here. He didn’t. And now 18 months into the Obama presidency it’s more of the same, only more dangerous.
Regarding Iran, I have never for a minute doubted the mullahs’ true intentions. They want the bomb and under the right circumstances, after creating a war between Israel and Hizbullah, Iran would not hesitate to annihilate Israel, even though it would also mean the end for millions of its own people. North Korea I question….but with Iran, what you see (and hear) is what you get.
So let the rest of today’s commentators talk about the global economic outlook, as I’m about to do myself, but this column has always been about separating the fundamentals from sentiment. What are the events, who are the players, that could crush the latter in a heartbeat?
And as Charles Krauthammer and others point out below, for its part the United States is abdicating leadership at the worst possible time.
Look at a map, as I do countless times a day, one staring me in the face. Play the game as I do. Where am I wrong? Where are America’s ideals winning out? Who can we count on as allies? Is our leadership doing its best to protect us?
It was a week where Europe for a time on Wednesday and Thursday appeared on the verge of collapsing, at least in terms of the idea of a unified currency. Oh, sure, as the euro traded down to $1.21 before a massive short squeeze propelled it back to $1.25, all manner of officials said not to worry, but how could you not do so when you had a German chancellor, Angela Merkel, running amok and unilaterally imposing her own financial regulations, such as a ban on certain short-selling, that meant for many market participants there wasn’t an easy way to hedge their bets. The rules of the game were being changed in mid-stream and the fact that Merkel was clearly trying to protect her own shaky financial institutions only made everyone else all the more nervous. Just how stable are the German (and you could add the French) banks? Just how big is their exposure to the likes of Greece, Spain and Portugal? What kinds of losses would they take if, heaven forbid, Greece defaulted? What will the losses be in any sovereign debt restructurings that take place? Losses equal less lending and a slowing economy.
Of course none of this kind of talk is good for Europe, and by extension the likes of the United States and China, to cite two obvious examples, both of which have massive exposures to Europe in terms of export business and potential hits to the bottom line. What does that mean for the large U.S. multi-nationals who have heretofore been handily beating expectations? What happens to these stocks, say an IBM, when in August, or sooner, they have to come out and reduce guidance? Have share prices already been beaten down enough to reflect the coming reductions in estimates? Which companies will have the guts to step forward first?
As Stephen Roach and Paul Volcker discuss below, in the end it’s about facing realities, the deleveraging that needs to take place around the world, even in China where some local governments and banks are scrambling to hide their debt issues before authorities from Beijing find out (that’s how they do things over there).
Angela Merkel said Europe faced “the biggest test in decades,” with the euro itself “in danger.” “If the euro fails, then Europe fails,” she added as she pleaded with parliament to approve its share of the $1 trillion bailout package, about 20% worth, which both houses of parliament did on Friday.
But it was the same Merkel who was also doing everything she could to fan the flames, thus infuriating France, among others, so what you have is a Europe racked by indecision, lack of coordination, and leaders who I guarantee will increasingly dredge up historic differences.
It’s also a Europe that, as in the case of Greece, will need to drastically cut spending, and that means an increasingly restive populous. France is but another example of the coming battles as it plans to increase the retirement age from the current minimum of 60, which represents a call to arms for the unions, who have scheduled a nationwide demonstration on May 27. [At least Greeks were quiet during their most recent national strike on Thursday.]
Stephen Roach, chairman of Morgan Stanley Asia / Financial Times
“The pace and severity of financial crises has taken an ominous turn for the worse. Over the past 30 years, a crisis has occurred, on average, every three years. Yet, now, only 18 months after the meltdown of late 2008, Europe’s sovereign debt crisis has hit with full force. With one crisis seemingly begetting another, and the fuse between crises now getting shorter and shorter, the world economy is on a very treacherous course.
“Each crisis has its poster child – from Thailand, to dot-com, to subprime. But they all have one thing in common – easy money. The ‘Greenspan put’ – the notion that central banks would be quick and aggressive in backstopping financial market disruptions – was the short-term anesthetic that repeatedly set the stage for the next crisis….
“Breaking this daisy chain won’t be easy. But a new approach is desperately needed. History gives us a guide as to how and where to find the answer. Think back to the late 1970s. At the time, there was a deep-rooted sense of despair and hopelessness over the seemingly intractable Great Inflation. Politicians and policy makers were convinced that the system was unwilling – or perhaps unable – to accept the pain of the cure. Sound familiar?
“Paul Volcker dispelled that notion – breaking the back of inflation by pushing the federal funds rate up to 19% in 1981. Just as monetary discipline was the answer nearly 30 years ago, I suspect it is the only way out today. For a world in the depths of crisis and despair, another ‘Volcker moment’ may well be at hand.
“No, I am not suggesting that central banks tighten monetary policy in the midst of a crisis. But it is high time to banish the moral hazard of macro policy – the false sense of security provided by open-ended fiscal and monetary accommodation as the world lurches from crisis to crisis….
“Central banks are imperfect institutions – and more so in recent years as they have abdicated their political independence. They were outstanding in waging the battle against inflation. They have failed in managing the post-inflation peace. The only hope for a crisis-prone world is a new battle plan.”
Speaking of Paul Volcker, in a speech at Stanford this week, Volcker said time is “growing short” for the United States to address its fiscal issues.
“We better get started. Today’s’ concerns may soon become tomorrow’s existential crises,” noting that Europe demonstrates for us the hazards of “uncontrolled borrowing.”
“Little has happened to allay my concerns” raised five years ago that “dangerous and intractable” problems were rising in the U.S. “Intractable not just because of the combination of complicated issues, but because there seemed to be so little willingness or capacity to do much about it.”
Volcker added it will take “years” to restore economic balance in Europe following the current debt crisis. He also said:
“In the United States, we don’t seem to me to share the same sense of urgency” as countries such as Ireland. “The time we have is growing short” and “there are serious questions, most immediately about the sustainability of our commitment to growing entitlement programs.”
But spending is off the table at the federal level we’ve been learning.
This week the Federal Reserve released its latest estimates on the economy, including a 9.1%-9.5% unemployment rate the last three months of the year, with 2010 GDP coming in at 3.2%-3.7%. The forecast for core inflation has been revised down to 1.0%-1.5%. This week the figures on producer and consumer prices for April revealed that the core PPI, ex-food and energy, was up only 1.0% year over year, while core CPI is just 0.9% the past 12 months, the lowest level in 44 years. Folks, I know that college tuition, property taxes and medical expenses continue to rise but the bond market doesn’t act on “unofficial” data…only the official stuff. So stop beating your heads against the wall. When it comes to official inflation, the kind that moves markets, it’s nil, and until you see real wage growth, which is far down the road, this isn’t an issue in the U.S., let alone that we still have massive overcapacity in many industries.
Now if you’re talking about the impact of rising property taxes, tuition and medical costs on consumer spending and the overall economy, especially when one’s own wages aren’t rising, assuming you have a job in the first place, then that’s an animal of an entirely different sort. It’s why I am hardly optimistic on growth in the U.S. We saw further signs just this week in Wal-Mart’s earnings report that customer traffic at the largest retailer is off. Lowe’s lowered its guidance for the current quarter. [Home Depot, however, raised, slightly.]
There were two other items of note. The April number on leading economic indicators was down 0.1% when an increase was expected, and the weekly jobless claims figure was lousy, reflecting a rise to 471,000 when we’ve been running around 440,000, though for the good of the economy hopefully this increase was just a lot of “noise” and I’m the last one to make much of one weekly data point.
And then there’s Meredith Whitney, who has consistently said “there is no recovery on Main Street.” She’s been bang on. Further thoughts from her in a Journal op-ed:
“Just to maintain a steady level of unemployment, the private sector will have to create one million to two million jobs to offset government job losses [at the state and local level.]
“Herein lies the challenge: Small businesses, half of the private sector (and the most important part as far as jobs are concerned), have been heavily impacted by this credit crisis. Small businesses created 64% of new jobs over the past 15 years, but they have cut five million jobs since the onset of this credit crisis. Large businesses, by comparison, have shed three million jobs in the past two years.
“Small businesses continue to struggle to gain access to credit and cannot hire in this environment. Thus, the full weight of job creation falls upon large businesses. It would take large businesses rehiring 100% of the three million workers laid off over the past two years to make a substantial change in jobless numbers. Given the productivity gains enjoyed recently, it is improbable that anything near this will occur.
“Unless real focus is afforded to re-engaging small business in this country, we will have a tragic and dangerous unemployment level for an extended period of time.”
Ms. Whitney goes on to say that some of the provisions in the regulatory reform package, such as interest-rate caps, will only exacerbate the situation, because “If banks are not allowed to effectively price for risk, they will not take the risk.”
An index of Euro manufacturing and the service sector didn’t rise as much as expected for April, while business confidence in Germany, post-crisis, was down.
In the U.K., retail sales rose 0.3% in April over March, but inflation was up 3.7% last month, while the new coalition government reiterated it was committed to cutting corporate taxes.
In Asia, there were some extraordinary growth stories. Taiwan’s first quarter GDP rose 13.3% over a year earlier, the fastest pace in 30 years, and April exports to China rose 62%.
Japan’s GDP for Q1 rose 1.2% (4.9% annualized), the most in a decade, thus for the time being allaying double-dip fears there, while GDP in Singapore rose 15.5% from year earlier figures. Tourism is booming here owing to the new resorts and casinos.
Street Bytes
–Owing to the Euro mess and the ongoing crisis in confidence, exacerbated in no small part by the flash crash and doubts about the system, as well as growing concerns about global growth prospects vs. current forecasts, stocks took it on the chin as the major averages all fell at least 4%. At their closing lows on Thursday, the Dow Jones, S&P 500 and Nasdaq had also all reached ‘correction’ levels, declines of at least 10% from the recent highs.
And while the focus has been on rising gold (until stumbling this week), a broader measure of commodities, the RJ/CRB Index, was down 15% from its January high on Thursday as well.
–U.S. Treasury Yields
6-mo. 0.21% 2-yr. 0.76% 10-yr. 3.24% 30-yr. 4.10%
Rates on the long end continued to plunge over a flight to safety and the fact the U.S. is still more stable than the alternatives. For instance those who have been concerned China will be dumping their Treasury holdings can focus on other issues for the time being as the latest data from the Treasury Department shows that in March, China was a net buyer of U.S. paper for the first time in six months, with its holdings increasing to $895 billion. Japan, the second-largest holder, also increased its position to $784 billion.
–The Senate passed its version of financial reform regulation, 59-39, with four Republicans voting for and two Democrats against. The legislation bans deposit-taking banks from proprietary trading and establishes a consumer financial protection bureau to police the sale of credit products, as well as a formula for dealing with failing big banks. The Senate bill must now be reconciled with the House version that passed last year.
But there are some major issues to be hashed out in conference and the final legislation may yet be greatly different from what we understand today, particularly on the paramount issue of ‘too big to fail’ (though the president insists “there will be no more taxpayer-funded bailouts – period”) as well as the fate of credit swaps trading businesses and whether banks will be forced to spin them off.
Beyond this it’s not worth getting into further details until it’s clear what the conference committee ends up with, except that one issue some of us are most concerned with, new capital requirements on the bigger banks, is not part of the deal but could be for the new Financial Stability Oversight Council.
As to the Street’s fears that their profits will be slashed as a result of reform legislation, these guys are experts at reinventing themselves.
–I hope some of you saw “60 Minutes” last Sunday. It had a riveting tale from a survivor of the Deepwater Horizon explosion and the evidence against BP. By week’s end the company said it was capturing 5,000 barrels a day of crude through that straw it inserted into the main leak, which was a stark admission that its first estimates of the amount spilled were grossly too small, seeing as this 5,000 that they are now capturing is but a fraction of what is still spewing. There are two smaller areas that continue to leak what BP says is 15% of the total, whatever that is. BP said it is now confident it will stop the leaks next week.
But the first heavy oil hit Louisiana’s fragile marshes the other day, a sickening scene. This isn’t a bunch of tar balls. It is the real deal.
And then you have the issue of the chemical dispersants being used, which I voiced concern over from the beginning. At first, the EPA approved BP’s use of something called Corexit, but it’s never been used in anywhere near the amounts it has been in this spill, and no one…no one…understands the long-term effects.
So on Wednesday, the EPA suddenly reversed course and said BP had to start using something less toxic, but BP said on Friday it couldn’t find a viable alternative. Understand that by one estimate BP has applied at least 600,000 gallons on the surface and 55,000 underwater.
BP also clearly withheld early video showing the true magnitude of the main leak, even though they evidently have as many as 14 cameras down there, while for its part, the Obama administration is getting slammed because as the New York Times reported, “since the Deepwater Horizon oil rig exploded, the government has failed to make public a single test result on water from the deep ocean.” The Times continued:
“Rick Steiner, a marine biologist and a veteran of the 1989 Exxon Valdez disaster, assailed NOAA (the National Oceanic and Atmospheric Administration)…declaring that it had been derelict in analyzing conditions beneath the sea.
“Mr. Steiner said the likelihood of extensive undersea plumes of oil droplets should have been anticipated from the moment the spill began, given that such an effect from deepwater blowouts had been predicted in the scientific literature for more than a decade, and confirmed in a test off the coast of Norway.
“ ‘A vast ecosystem is being exposed to contaminants right now, and nobody’s watching it,’ Mr. Steiner said. ‘That seems to me like a catastrophic failure on the part of NOAA.’”
Steiner’s issue of the 10 X 3 mile slick under the water that we’ve heard about (with who knows how many more like it) could be huge later because we’re entering hurricane season and NOAA warns that a storm in the Gulf could bring the oil up from the depths and wash it ashore. Yes, storms can also break up oil, but at the same time it spreads it over a greater area. In 1989, a storm with 70 mph winds made the Exxon Valdez spill worse. Other storms, though, have “scrubbed all the oil off,” as one expert told USA TODAY, referring to a spill in 1979 that impacted Padre Island, Texas.
— Last week I wrote, “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.”
On Monday, Meredith Whitney made news when she said in an interview on CNBC that investors “should avoid financials at all costs, particularly in the banking sector” because the Senate’s financial reform bill will end up restricting credit and hurt bank earnings. “Politicians have proven far worse than our worst expectations. It could be very bad for banks.”
Whitney added that “Some of these regulatory proposals are going to make it so difficult for everyone involved that you’ll see, I think, at least another $1.3 trillion (of credit) sucked out of the system.”
–Regulators investigating the May 6 “flash crash” continue to focus in on the role of high-speed, high-frequency traders, but the SEC and the Commodity Futures Trading Commission still have no definitive catalyst. SEC chairman Mary Schapiro did make these comments.
“In the past, professional liquidity providers with the best and fastest access to the markets were charged with affirmative and negative obligations to promote market quality.
“Many of the most active and sophisticated traders in today’s market structure are not subject to any obligations with respect to the nature of their trading.”
The SEC is working on a system of circuit breakers, including a halt in a stock’s trading if its price declines 10% over the preceding five minutes, but this involves coordinating all the different systems we have out there and it’s just not that easy to accomplish quickly.
–Noted money manager Jeremy Grantham had these comments on the financial industry as a whole.
“It has become a rogue industry. Today, the ethical standard is: don’t go to jail if you can possibly avoid it.”
Grantham wants market participants to direct more of their business to the “most ethical firms,” which he defined as brokers and banks that don’t exploit information gleaned from clients by trading for their own accounts. [Crain’s New York Business]
–Experts estimate the Greek government loses as much as $30 billion a year to tax dodgers. This week it made public a list of 57 Athens doctors who officials believe are guilty of a variety of offenses. As Suzanne Daley of the New York Times reported:
“Twelve of the doctors had reported a combined income of slightly more than $15 million from 2001 to 2008, yet they had deposited more than twice that much – about $39 million – in their bank accounts, the ministry said….
“Thirty-four of them claimed they earned less than $13,300, making them exempt from paying any tax. And tax inspectors said that one dentist in the area reported an income of just $375.”
–California’s median home price in April is up 15.4% from year ago levels, but unchanged from March. Foreclosures make up 38.1% of the resale market here, compared to the all-time high of 58.8% in February 2009. The figures for the critical six-county Southern California market in April were exactly the same…15.4% and unchanged.
But while the above is further proof that California has bottomed, I wrote last week that the New York metro area in which I live was the last to roll over, and thus is still in the midst of a crisis. So this week we learned that when it comes to New York City homeowners, in the first quarter foreclosures were up 16.3% from the same period a year ago.
–Tourism in New York City rose 11% in the first quarter vs. last year. Owing to the recession, in 2009, visitor spending plunged 13%. But now hotel occupancies are up 8.7% to 73.8%.
–I told you how I was astounded at the real estate boom in Beirut when I was there last month. This week it was announced that sales jumped 41% in the first quarter of the year vs. last. Sales to foreigners, read Gulf Arabs, rose 19%. Separately, the World Bank is forecasting growth of 6% this year in the Lebanese economy, compared to 4.4% in the Middle East overall.
–GM reported its first profit in three years, $865 million in the first quarter, and now plans on reopening 700 dealerships for its expected comeback. GM sold 17% more vehicles in the U.S. than it did for the first quarter of ’09. And a confident Chrysler announced it was bringing back 1,100 workers in Michigan.
–But Pfizer is slashing 6,000 jobs and shutting 8 plants worldwide; this on top of 20,000 job cuts as a result of the drugmaker’s merger with Wyeth. Two of the facilities to be phased out are in Ireland.
–The issue of state and local pensions continues to hit hard. The New York Post reported on the City’s FDNY bosses, for example, one of whom, retired chief of safety Allen Hay, took a lump sum of $177,917 for unused sick and vacation days on top of his annual pension that will exceed $100,000. Two other FDNY managers took a $174,560 payout. [New York Post]
Then you have Yonkers, New York, where more than 100 retired police officers and firefighters are collecting pensions greater than their pay when they were working. One guy retired at 44 with a base pay of $74,000. His pension is $101,333 a year! The man, now 47, said he did nothing wrong in adding lots of overtime to his base pay shortly before retiring. “I don’t understand how the working guy that held up their end of the bargain became the problem,” he said. [New York Times]
A Times study of pension data found that “3,700 retired public workers in New York are now getting pensions of more than $100,000 a year, exempt from state and local taxes.” The Times points out that official reports attempt to paint a better picture… “that the average state pension is a modest $18,000, or $38,000 for retired police officers and firefighters,” but it’s low because “it includes people who worked in government only part time, or just a few years, as well as surviving spouses getting partial benefits.” In line with the Yonkers story, “Thirteen New York City police officers recently retired at age 40 with pensions above $100,000 a year; nine did so in their 30s.”
And staying on this topic, U.S. News Publisher Mortimer Zuckerman had this to say concerning California.
“Investigative journalist Steve Malanga points out in the City Journal that California’s schoolteachers are the nation’s highest paid; its prison guards can make six-figure salaries; many state workers retire at 55 with pensions that are higher than the base pay they got most of their working lives. All this when California endures an unemployment rate steeper than the nation’s. It will get worse. There’s an exodus of firms that want to escape California’s high taxes, stifling regulations, and recurring budget crises. When Cisco’s CEO, John Chambers, says he will not build any more facilities in California, you know the state is in trouble….
“(When you look at the Service Employees International Union) no wonder it has become the nation’s fastest-growing union: It represents government and healthcare workers. Half of its 700,000 California members are government employees. More and more, it wins not on the picket line but at the negotiating table, where it backs up traditional strong-arming with political power. It spends vast amounts of money on initiatives that keep the government growing – and the gravy flowing….California can no longer rely on a strong economy to support this munificence….
“California is a horrible warning for the nation of how dreams can turn to dust….
“Today the citizenry is working in large part to serve the government. It is always hard to shrink government spending. It is particularly difficult when public sector unions have such a unique lever of pressure.
“We have to escape this cycle or it will crush us. One way is to take labor negotiations out of the hands of vulnerable legislators and assign them to independent commissions. They would have a better shot at achieving a fair balance between appropriate salary increases and the revenues and services of local municipalities. The electorate won’t swallow any more red ink.”
“California brokerage Thomas Weisel Partners Group Inc. stuffed $16 million in shaky securities into the accounts of three unsuspecting corporate customers so the brokerage could pay executive bonuses, according to a civil complaint by regulators….
“The customers were stuck with the securities when the market for the so-called auction-rate debt froze weeks later as the financial crisis was unfolding in early 2008, according to the complaint….
“The case ties together two issues arising from the global financial crisis: bonuses that securities-industry executives paid themselves despite the financial system’s near-meltdown and the treatment of customers stranded with auction-rate debt.”
–While Goldman Sachs’ trading desk turned a profit each day of the first quarter (as did the desks at three other large banks), a study by Bloomberg found that 7 of Goldman’s 9 “recommended top trades for 2010” have been money losers thus far.
–China has a serious workplace issue at giant Foxconn Technology Group (of Taiwan), which manufactures iPhones and iPads and is the largest contract maker of electronics. 8 workers have committed suicide this year. Imagine this. At the complex in Shenzhen there are 300,000 workers. 300,000! The government is looking into work conditions, which are harsh.
–Air France is under increasing scrutiny as a book, “The Hidden Face of Air France,” details what the author, Fabrice Amedeo, alleges are failures in management that have led to lax flight safety. With 1783 fatalities in its history, Air France is the second most deadly airline for passengers after Russia’s Aeroflot. It was last June that an Air France flight from Rio to Paris broke apart and plunged into the Atlantic, killing 228. While a cause has not officially been determined, investigators found that cockpit flight computers were receiving incorrect data such as on airspeed, which was critical as the craft neared a line of powerful storms.
[An Air India plane crashed Saturday in Mangalore, India, killing 160, with 8 survivors.]
–Atlantic City’s 11 casinos saw their gross operating profits decline by 25.2% in the first quarter vs. the same period in ’09.
–Long Island brokerage David Lerner Associates, big in this area for its advertising campaigns, has been charged by the Financial Industry Regulatory Authority with charging customers “excessive” markups on municipal bonds and high-grade mortgage-backed securities, including markups of up to 5.8% on more than 1,500 muni-bond transactions from 2005 to 2007 and up to 12.8% on some 1,800 high-grade mortgage securities.
–It was a few months ago that former Fed chair, and current Obama advisor, Paul Volcker, said that the only thing that the financial industry has produced of any real value in the past few decades was the ATM. The inventor of the automated teller machine, John Shepherd-Barron, died last Saturday. He was 84. Shepherd-Barron’s machine, installed at a Barclays bank in a London suburb in 1967, was the first to dispense cash.
Foreign Affairs
North / South Korea: This week, the South Korean government formally accused the North of torpedoing its naval vessel, the Cheonan; an act which killed 46 sailors. After the announcement, the White House issued a strong condemnation of the attack and said it would support Seoul in securing justice. In response, Pyongyang said it was prepared to go to war over the accusation. For North Korea, it’s the deadliest attack since the bombing of a South Korean airliner in 1987.
By week’s end, South Korea said it would respond prudently to the sinking, with President Lee Myung-bak saying, “It was a military provocation and violation of the UN Charter and the truce agreement. Since this case is very serious and has a grave importance, we cannot afford to have a slightest mistake and will be very prudent in all response measures we take.” Such a response is expected next week, though they undoubtedly will entail non-military sanctions.
North Korea responded, “From this time on, we will regard the situation as a phase of war and will be responding resolutely to all problems in North-South relations. If the South puppet group comes out with ‘response’ and ‘retaliation,’ we will respond strongly with ruthless punishment including the total shutdown of North-South ties, abrogation of the North-South agreement on non-aggression and abolition of all North-South cooperation projects.” [Reuters]
As for the United States, Secretary of State Hillary Clinton, in the region this weekend where she will take part in talks with China on a variety of economic and political issues, said the sinking “cannot go unanswered” and that the international community’s reaction must not be “business as usual.”
Meanwhile, China continues to voice support for North Korea, saying it would make its own assessment, which of course is absurd.
“(The) options for responding are few, and mostly unsatisfactory. Neither (President) Lee nor any of South Korea’s allies want a war with Kim Jong-il’s crumbling dictatorship, which still possesses a formidable military arsenal and probably several nuclear bombs. Neither does the South want to shut down its last major economic link with the North – an industrial zone where South Korean companies employ some 40,000 North Korean workers….
“This is nevertheless a moment to insist on consequences for North Korea’s behavior – and to put China on the spot….If China wishes to shield the regime in Pyongyang after it has been caught committing an act of war, it should be obliged to do so in full view of its Asian neighbors, beginning with South Korea.”
Iran: On Monday night, Iran, Turkey and Brazil reached an agreement on a uranium exchange deal, designed to ensure Iran’s nuclear program is used solely for peaceful purposes. Immediately, the proposal was suspect.
For starters, Iran said “some” uranium would be shipped abroad (to Turkey) for enrichment, not a single batch as the West has been demanding. The uranium was to be enriched and stored in fuel rods, which is the form needed for Iran’s medical research reactor and the production of isotopes for cancer treatment. One problem. It’s my understanding Turkey can’t produce fuel rods, for starters, and Iran would be proceeding with the enrichment of other uranium in its stockpile, which the UN Security Council has ordered it countless times to stop.
The next day, though, the United States announced it had reached agreement with France, Britain, Russia, China and Germany, the P5 + 1 (five permanent members of the Security Council, plus Germany) on a new round of sanctions which would be the 4th.
But after Secretary of State Clinton said she had the support of China, the last holdout, China’s foreign ministry spokesman said it supported the deal put together with Brazil and Turkey and that it continued to favor “resolving the Iranian nuclear issue through dialogue and negotiations.”
The sanctions themselves, if ever approved (9 of 15 members in the Security Council are needed to pass it), are much weaker than hoped months ago. There is nothing on the energy front, only sanctions that would target nuclear investments abroad, Iran’s ballistic missiles, cargo inspections, proliferation-related financial transactions and the banking sector, including affiliations with the Revolutionary Guard, which has its hands in all facets of commerce.
But none of this is binding. We’re talking independent commissions would be established to monitor compliance. It’s a farce.
And of course now Brazil and Turkey, currently both non-permanent members of the Security Council, won’t vote for any sanctions, while earlier, Clinton stupidly said Brazilian President Lula’s mediation efforts would not succeed. Why didn’t she just keep her mouth shut?! The favorable press Clinton has been receiving recently is beyond absurd. She’s been a loose cannon, and, worse, not as educated on the facts as I’d expect her to be.
Also, the Brits are calling for separate sanctions against Iran because of Tehran’s extensive handing down of death sentences to opposition figures. This is just as important, if not more so, than any ineffective sanctions we may push through the UN. When is the United States, read Barack Obama, going to support the opposition? Well, you know the answer to this one by now. He’s giving negotiations a final shot.
Do you realize it’s now almost a year since President Ahmadinejad stole the presidential election? One year. Nothing. We abandoned the opposition, while Iran has been making advances on the nuclear and ballistic missile front, as well as continuing to fund and arm the likes of Hizbullah.
“What a fiasco. That’s the first world that comes to mind watching Mahmoud Ahmadinejad raise his arms yesterday with the leaders of Turkey and Brazil to celebrate a new atomic pact that instantly made irrelevant 16 months of President Obama’s ‘diplomacy.’ The deal is a political coup for Tehran and possibly delivers the coup de grace to the West’s half-hearted efforts to stop Iran from acquiring a nuclear bomb.
“Full credit for this debacle goes to the Obama administration and its hapless diplomatic strategy. Last October, nine months into this engagement with Tehran, the White House concocted a plan to transfer some of Iran’s uranium stock abroad for enrichment. If the West couldn’t stop Iran’s program, the thinking was that maybe this scheme would delay it. The Iranians played coy, then refused to accept the offer.
“But Mr. Obama doesn’t take no for an answer from rogue regimes, and so he kept the offer on the table. As the U.S. finally seemed ready to go to the UN Security Council for more sanctions, the Iranians chose yesterday to accept the deal on their own limited terms while enlisting the Brazilians and Turks as enablers and political shields. ‘Diplomacy emerged victorious today,’ declared Brazil’s President Lula da Silva, turning Mr. Obama’s own most important foreign-policy principle against him….
“So instead of the U.S. and Europe backing Iran into a corner this spring, Mr. Ahmadinejad has backed Mr. Obama into one….
“Only last week, diplomats at the UN’s International Atomic Energy Agency reported that Iran has increased the number of centrifuges it is using to enrich uranium. According to Western intelligence estimates, Iran continues to acquire key nuclear components, such as trigger mechanisms for bombs….The CIA recently reported that Iran tripled its stockpile of uranium last year and moved ‘toward self-sufficiency in the production of nuclear missiles.’….
“The deal will…make it nearly impossible to disrupt Iran’s nuclear program short of military action. The UN is certainly a dead end….
“Israel will have to seriously consider its military options. Such a confrontation is far more likely thanks to the diplomatic double-cross of Turkey’s Recep Erdogan and Brazil’s Lula, and especially to a U.S. president whose diplomacy has succeeded mainly in persuading the world’s rogues that he lacks the determination to stop their destructive ambitions.”
“That picture (of Ahmadinejad, Lula and Erdogan) – a defiant, triumphant take-that-Uncle-Sam – is a crushing verdict on the Obama foreign policy. It demonstrates how rising powers, traditional American allies, having watched this administration in action, have decided that there’s no cost in lining up with America’s enemies and no profit in lining up with a U.S. president given to apologies and appeasement.
“They’ve watched President Obama’s humiliating attempts to appease Iran, as every rejected overture is met with abjectly renewed U.S. negotiating offers. American acquiescence reached such a point that the president was late, hesitant and flaccid in expressing even rhetorical support for democracy demonstrators who were being brutally suppressed and whose call for regime change offered the potential for the most significant U.S. strategic advance in the region in 30 years.
“They’ve watched America acquiesce to Russia’s re-exerting sway over Eastern Europe, over Ukraine and over Georgia.
“They’ve watched our appeasement of Syria, Iran’s agent in the Arab Levant – sending our ambassador back to Syria even as it tightens its grip on Lebanon, supplies Hizbullah with Scuds and intensifies its role as the pivot of the Iran-Hizbullah-Hamas alliance. The price for this ostentatious flouting of the United States and its interests? Ever more eager U.S. ‘engagement.’….
“And in Latin America, they see (further) U.S. passivity as Venezuela’s Hugo Chavez organizes his anti-American ‘Bolivarian’ coalition while deepening military and commercial ties with Iran and Russia….
“This is not just an America in decline. This is an America in retreat – accepting, ratifying and declaring its decline, and inviting rising powers to fill the vacuum.”
“What Brazil and Turkey just did wasn’t intended to impede Tehran, but to make it harder for Western powers to impose sanctions. Both countries want Iran to run interference for them.
“Once Iran gets the bomb and takes the (slight) heat, Brazil and Turkey both intend to go nuclear.
“Brazil wants vanity nukes to cement its position as South America’s hegemon, a regional alternative to the U.S. Turkey’s slow-roll Islamist government dreams of a new Ottoman age – as it turns from the West to embrace the Muslim states it ruled a century ago. After easing Tehran’s path to the bomb, Ankara will claim that it needs its own nuclear capability to maintain regional stability….
“As Western states fantasize about a ‘nuclear-weapons-free world,’ their developing world darlings are scrambling like mad to develop nuclear arsenals. And we don’t get it.”
Meanwhile, Russia confirmed on Thursday that it was finally set to open a long-delayed nuclear reactor in Iran, the Bushehr plant, in August. Russian lawmakers also said that there is nothing in the proposed sanctions language that would preclude Moscow from delivering the S-300 anti-aircraft missile system to Iran. Said one, “We need to remember that Russia is a responsible seller of any of its products on external markets and we are not interested in the militarization of the Middle East.” Of course this week Russia announced a major arms sale to Syria, as well, because they are so highly responsible, you see.
“We are passing through a very difficult situation. Syria and Iran are meddling in Lebanese affairs, but at the end, we will try our best to solve this problem. There are 17 sects in Lebanon seeking to live together with love, peace and tranquility despite problems coming from the outside,” he said.
Well I wouldn’t go quite that far in terms of the peace and tranquility bit, seeing as Hizbullah is in the government, but the Patriarch’s point is well taken. It’s despicable, for example, how all of Lebanon’s leaders, including Prime Minister Saad Hariri, have been making pilgrimages to Damascus to grovel at the feet of Syrian President Bashir Assad, especially in the case of Saad Hariri. It was Assad, after all, who by all accounts had a hand (or at the very least, knowledge) of the assassination of Saad’s father. This is unfathomable to this Westerner, but classic Lebanon.
Rami Khouri / Daily Star:
“Ten years ago next week, the Israeli armed forces unilaterally withdrew from most of the territory that they had occupied in south Lebanon. The withdrawal did not lead to a peaceful border, but instead clarified that territory is only one aspect of a conflict with many dimensions. Ten years later, the south of Lebanon today is a region pregnant with tension, and perhaps the best microcosm we have of the nature of conflicts in the Middle East….
“This is perhaps the most militarized and politically confrontational border in the world, with armies from every concerned quarter. Israel and Hizbullah are the main antagonists, but also present in the immediate area or nearby are the Lebanese Army, United Nations peace-keeping troops from many countries, Syria’s armed forces further eastward, and, by proxy, interested state parties in the United States, Iran and Saudi Arabia.
“Nowhere else in the world is there such a dense concentration of armed units and political antagonists in a tense face-off that largely avoids routine clashes, but in the past four decades has erupted into active fighting and massive attacks on a regular basis.”
Mr. Khouri is relatively optimistic the peace will hold, at least in the short term. I say it won’t.
Afghanistan: A Taliban suicide car bomber hit a NATO convoy in Kabul, killing five American troops, one Canadian, and at least 12 others; the deadliest in the heavily-fortified capital since September.
And former UN envoy Peter Galbraith said the United States and its allies should consider sharply reducing troop levels here because it lacked a credible partner in President Hamid Karzai. It was last year that Galbraith, an American, was fired by the UN as number two in its Afghan mission because he accused Karzai’s forces of ballot-stuffing in the presidential elections. [His suspicions were later confirmed by a UN finding.]
Galbraith is warning of a “looming train wreck” in September’s elections for parliament.
“As bad as it is, the situation in Afghanistan is going to get immeasurably worse unless something is done to stop the parliamentary elections. What is a certain result of all this is increased chaos in Afghanistan, and what is a very possible result is civil war between the Pashtuns and the other groups.”
American troops would be in the middle of that civil war. [Agence France-Presse]
Iraq: A recount of the Baghdad vote from the parliamentary elections of March 7 revealed no changes, with Iyad Allawi holding his 2-seat margin but having little hope of forming a government. Allawi was also conspicuous by his absence at a Thursday gathering of politicians designed to foster reconciliation. Allawi said he had a meeting in Jordan with King Hussein. The formation of a new government is still months away. Why it’s time for summer vacation!
Pakistan: Former President Pervez Musharraf, who has been in living in London, said he plans to return to politics in Pakistan. “The question of whether I am running for president or prime minister will be seen later,” he told CNN. This could be interesting.
Thailand: At week’s end, order had been restored to the capital following a last spasm of violence between the military and the red shirts. Prime Minister Abhisit said the government would move quickly “to restore normalcy” following a week that left more than 50 dead. Abhisit, who is in way over his head but has nonetheless survived, vowed to continue to address political divisions.
One thing is clear. All sides of this conflict are at fault. The military, Abhisit and the red shirts; the latter for rejecting the prime minister’s offer to hold early elections. As I said last week, this whole deal was incredibly stupid, with everyone coming out a loser, and now it’s up to Abhisit to follow through with early elections, regardless, and for the military to let him hold them. But as of this writing, he has backed off on the offer for an early vote.
China: Taiwan’s President Ma Ying-jeou said the easing of tensions across the 100-mile wide Taiwan Strait makes it increasingly difficult for China to justify its targeting the island with 1,000 missiles. Ma, who is at the midway point of his four-year term, has repeatedly said that any political progress, on top of economic gains between the two, is contingent on the missiles being removed.
Mexico: President Felipe Calderon came to Washington for a state visit, a deserved gesture on the part of the Obama administration, but then Calderon denounced Arizona’s new immigration law as “discriminatory” and called on the U.S. to overhaul its immigration efforts. I like the man, but it was inappropriate to upbraid the U.S. in this fashion.
On the other hand, Calderon was right in calling on the U.S. to stop the flow of assault weapons. I’d also state the obvious. Stop doing drugs, people!
Random Musings
–President Obama fired National Intelligence Director Dennis Blair for incompetence. Blair was harshly criticized in a Senate report this week for multiple failings, including his mishandling of the failed Christmas Day attack, when the Senate Intelligence Committee found that the National Counterterrorism Center was in a position to connect intelligence that could have prevented it.
–It was Bloody Tuesday for incumbents and the establishment as Pennsylvania Sen. Arlen Specter was defeated in a Democratic primary, losing to two-term Congressman Joe Sestak, while Tea Party favorite Rand Paul bested an establishment Republican choice in Kentucky who had the support of Senate Minority Leader Mitch McConnell. Paul picked up 59%. So while they are from opposite ends of the spectrum, both Sestak and Paul won with anti-establishment themes.
But Rand Paul immediately got in hot water when he declined to say that he would have voted as a senator for the landmark 1964 Civil Right Act. In an interview with MSNBC, Paul said, “I’m opposed to any form of governmental racism or discrimination or segregation,” but he added the question of imposing standards on private businesses was “still a valid discussion.” Mitch McConnell was forced to declare his own support for the civil-rights law, calling it a “monumental achievement” for the country.
Rand Paul then backtracked in a clear sign of not being ready for prime time. What’s disturbing, though, is that he kept saying the same thing before he was pulled aside, confusing freedom of speech (and tolerating racists) and simple human rights. I say he’s like his father. One not living in the real world, witness Congressman Paul’s idiotic remarks on issues like Iran.
As for the impact on President Obama and the Democrats, Tuesday’s balloting was a further sign of deep trouble, particularly when looking at Specter’s defeat. Obama ignored him in the end, not wanting to be tied to another embarrassing loss, a la New Jersey, Virginia and Massachusetts since last November.
–A new AP-GfK survey has President Obama’s approval rating remaining at 49%, as low as it’s been in this poll since he became president. Congressional Democrats have a 37% approval rating, though Republicans score but 31%.
–Connecticut Democratic Attorney General Richard Blumenthal, who is the reason why incumbent Senator Chris Dodd was forced into retirement by the White House, said he took “full responsibility” for multiple comments over the years that he had served in Vietnam when he had, instead, received multiple deferments, worked in the Nixon White House, and then joined the Marine Corps Reserve.
“On a few occasions I have misspoken about my service, and I regret that and I take full responsibility, but I will not allow anyone to take a few misplaced words and impugn my record of service to our country.”
I watched this a-hole during his little press conference, and it’s amazing how he thought he’d get away with this, but still won’t admit he outright lied. Heck, lots of people have lied about their service record when it comes to Vietnam. We’ve seen guys fake being Medal of Honor winners. Guys have purchased medals of all kinds and then appear in parades for the adulation.
But this dirtball, Blumenthal, wants to be a U.S. senator. In 2008, he told an audience in Connecticut:
“I served during the Vietnam era. I remember the taunts, the insults, sometimes even physical abuse.”
Blumenthal called the New York Times report that blew the story wide open, an “outrageous distortion” of his record. But what should upset Connecticut voters just as much is that this is a guy who even lied about being captain of the swim team at Harvard…when he wasn’t on the team to begin with!
“(Richard Blumenthal) booked himself a lectern at a Veterans of Foreign Wars hall in West Hartford, Conn. – hoping to explain away having lied about being a veteran of a foreign war.
“Faced with the facts, he finally ‘fessed up – sort of….
“For one thing, taking ‘full responsibility’ would have involved not trying to camouflage the facts by booking that VFW hall.
“All of this matters because Blumenthal is seeking to replace another unprincipled pol, Chris Dodd, in the U.S. Senate….
“Blumenthal’s principal debt of honor, however, is not payable to the people of Connecticut. Not at all.
“Rather, it is due to the nearly 15,000 United States Marines whose names are chiseled into that granite wall hard by the National Mall down in Washington.
“It is their sacrifice that Blumenthal sought to appropriate, and taking ‘full responsibility’ would begin with an apology to them – delivered alone, in the dead of night, no cameras allowed.
“But it would take an honorable man to make such an act of contrition – and an honorable man wouldn’t have told such a base lie to begin with.”
“Bill Clinton not only dodged the draft but lied to do it, and still we elected him president over a World War II combat flier – though Clinton never lied about having been in Vietnam. George W. Bush spent his war flying fighters over Texas and still defeated Al Gore, who had served in Vietnam. Then Bush beat John Kerry, a wounded and be-medaled Vietnam veteran. Dick Cheney’s military record – he got five academic deferments – didn’t seem to hurt his political career, and he was bold enough to say to a Washington Post reporter: ‘I had other priorities in the ‘60s than military service.’
“Of course none of them lied about having been in Vietnam – a catastrophically stupid thing to do, a fact that is easily checked. What would propel Blumenthal to do such a thing?
“As a Marine (and Vietnam veteran of no distinction whatsoever), I’ve run into men who told me they’d been in the Marines, too. Always happy to meet a fellow Marine, I’d ask what unit they served in.
“ ‘Oh, I was in…the 173rd…’ Except there is no 173rd in the Marine Corps. I’ve felt embarrassed for them and wondered how empty their lives were that they’d tell such a lie….
“The fact is that regardless of whether a war was moral, justified, won or meaningful, having served in one – particularly in combat – confers prestige. Harvard and Yale and social connections are nice, but at 3 o’clock in the morning you find yourself outranked by high school dropouts whose names are on the wall of the Vietnam Memorial. Not in the eyes of the world, but in your own eyes.
“What a withering state it must be for some men, that they’ll shame themselves far worse than they were shamed before, by telling a lie.”
“Being a liar doesn’t necessarily disqualify Blumenthal from Senate service. A growing number of elected officials at the state or national level have lied about any number of things – from extramarital affairs to criminal behavior.
“Some have gotten away with it for quite a while. But no one can get away with lying about military service. Government record keeping on that is exact.
“My World War II official service record, which I keep posted on the wall next to my study desk, lists these details.
“Date I left for service in Europe and the date I returned.
“Date I left for service in the Pacific and the date I returned.
“Additionally, my Bronze Star medal citation, which I keep posted next to my service record, lists the starting and stopping dates of my combat service in Europe.
“Our government may have sloppy records on many things. But the service records of our military is not among them.
“Anyone who distorts his or her military record is not fit for public service.
“If Connecticut Democratic Party leaders give Blumenthal their Senate nomination this weekend, it will be a slap in the face to all military veterans and all in the service. It would also be a sad sequel to Sen. Dodd.”
Following the revelations, Blumenthal’s lead against probable Republican challenger Linda McMahon shrunk from 13 points to 3. Blumenthal cannot be allowed to get away with his actions, though on Friday, state Democrats did select him as their nominee.
–The National Climatic Data Center and NASA released a report showing that through April, 2010 is the warmest year ever recorded. The Earth’s combined land and ocean average surface temperature was 56 degrees, which is 1.24 degrees above the 20th-century average. El Nino, a periodic warming of the Pacific Ocean, is partly to blame. Both agencies use data going back to 1880. NASA has already said 2010 would be the warmest year on record.
But in the U.S., Florida has had its coldest year ever, while Maine, New Hampshire and Vermont are having their warmest. For Planet Earth, April was the warmest it’s ever been.
–Ice is melting so fast in Greenland that the island is rising…1 inch per year! The pace could accelerate to two inches by 2025! Why if I live another 25 years or so, that means Greenland could be about 35 inches higher! I don’t know if I can cope with this.
However, if we had a mini-ice age during the same period, the ice would press the land back down. Yet another reason to sleep with one eye open.
–Meanwhile, the National Academy of Sciences issued an 869-page report reasserting man’s role in altering the climate, which dovetails with previous UN findings, including the Intergovernmental Panel on Climate Change that contained several highly-publicized errors.
But the academy conceded there are real issues in forecasting long-term changes. The new report, for example, says sea levels will rise 6.5 feet by 2100, which is more than the UN report predicted.
–Craig Venter, the U.S. genomics pioneer, said scientists at his laboratories had created living organisms out of chemicals…the world’s first “synthetic cells.” Said the ethics professor at Oxford University, “Venter is creaking open the most profound door in humanity’s history, potentially peeking into its destiny. This is a step towards…creation of living beings with capacities and natures that could never have naturally evolved.”
The synthetic bacteria created thus far has no immediate application but Venter plans on moving quickly to more targets, such as designing algae that could help produce hydrocarbon fuels. His company, Synthetic Genomics, has already signed a $600 million agreement with Exxon Mobil towards this end. [Financial Times]
–So it turns out Tareq and Michaele Salahi tried to crash Wednesday’s state dinner for Mexican President Calderon after all. According to ABC News, “As their stretch limo ran a red light and seemed to be trying to turn into a restricted area near the White House, agents were able to stop the vehicle with (them) inside.” Please just throw these jerks in jail.
–The Salahis could share a cell with Adam Wheeler, the 23-year-old who scammed Harvard out of $45,000 in scholarships and other financial aid. Wheeler, a transfer student in 2007, allegedly fabricated a life story that including claims he had gone to MIT and Bowdoin, submitting bogus letters of recommendation from the latter, even though that school had kicked him out in ’07 for “academic dishonesty.”
Once at Harvard, he won a research grant worth $14,000 based on allegedly plagiarized writing.
But as the New York Post reported, “It wasn’t until September when one Harvard prof finally grew suspicious after noticing that Wheeler’s Fulbright and Rhodes scholarship applications claimed straight A’s at Harvard and were chock full of ‘numerous books he co-authored, lectures he had given and courses he had taught.’”
–According to a study created by the Gallup organization, after age 50, daily stress and worry take a dive and happiness increases.
“Stress is ‘constantly dropping, but the curve gets much steeper after age 50,’ said co-author Arthur Stone. At age 50, 42% cite ‘a lot’ of stress, compared with 35% at 58, 29% at 62 and 20% by 70.” [USA TODAY]
I would just add that if you’re a New York Mets fan, stress totally overwhelms the body, making it difficult to cope and deal with life on any level.
–But here’s some good news, as reported by Ron Winslow / Wall Street Journal:
“A new study from the Harvard School of Public Health suggests that the heart risk long associated with red meat comes mostly from processed varieties such as bacon, sausage, hot dogs and cold cuts – and not from steak, hamburgers and other non-processed buts.
“The finding is surprising because both types of red meat are high in saturated fat, a substance believed to be partly responsible for the increased risk of heart disease. But the new study raises the possibility that when it comes to meat, at least, the real bad actor may be salt. Processed meats generally have about four times the amount of salt than unprocessed meats.”
Well that’s terrific news, especially since I just discovered that the highly-acclaimed Five Guys hamburger chain (the burger of choice of none other than golfer Phil Mickelson) has a location about five minutes from my place.
Then again, maybe the study was put together by Adam Wheeler.
–Indiana Rep. Mark Souder, an eight-term Republican evangelical Christian and leading champion of family values (cough cough), announced he would resign from Congress after admitting an extramarital affair with a staffer. Yet another dirtball, though seeing as he is a most unattractive sort, I’m wondering what the staffer, who’s kind of cute, saw in this guy.
As for Souder’s Democratic opponent in November, Tom Hayhurst, he said in a statement that his thoughts and prayers were with Souder and his family.
–I posted JPMorgan Chase CEO Jamie Dimon’s commencement address at Syracuse on my “Wall Street History” link for you new college graduates out there. One piece of advice I loved of his was “read everything.”
–Lastly, I’m heading to New Orleans for a quick trip on Monday, spending Tuesday at the World War II Museum, and then on Wednesday I’ll see what I can glean from a trip to the Gulf coast.
Pray for the men and women of our armed forces, and all the fallen. I subscribe to Army Times and read the obituaries from Iraq and Afghanistan. One in particular caught my eye this week; Army Spc. Eric Finniginam, 26, from my island of Yap in Micronesia. He died of wounds sustained in Afghanistan. I know the people there are extremely proud of his service.
Gold closed at $1176
Oil, $70.04…lowest weekly close since 12/11/09
Returns for the week 5/17-5/21
Dow Jones -4.0% [10193]
S&P 500 -4.2% [1087]
S&P MidCap -5.0%
Russell 2000 -6.4%
Nasdaq -5.0% [2229]
Returns for the period 1/1/10-5/21/10
Dow Jones -2.3%
S&P 500 -2.5%
S^&P MidCap +3.2%
Russell 2000 +3.8%
Nasdaq -1.8%
Bulls 43.8
Bears 24.7 (unch.) [Source: Chartcraft / Investors Intelligence]
Brian Trumbore
