Wall Street
I’m going to hold off a bit with my comments concerning the global economic outlook for a simple reason…next week is quarter end and I’ll examine not just where we are and where we’re headed, but also how I’m doing. Sneak preview…I think I’m doing pretty well. And I have to add that I am not covering the financial regulation bill that still needs to be approved by both the House and Senate before it goes for President Obama’s signature for the simple reason that I haven’t had an opportunity to look at this key piece of legislation as yet. It would appear for now, though, that banks are prohibited from making risky bets with their own funds, though they can still make limited bets in their own hedge funds and private-equity funds. And some banks may have to spin off their proprietary-trading desks. Derivatives trading is also limited, though not in the draconian fashion first envisioned. Everyone wants to know what the unintended consequences may be and these take time to hash out. One thing is for certain, however, and that is that Wall Street will figure out a way to remake itself, if need be, and compensation, not what’s best for the client, will drive the decision-making.
Moving along, as G-20 leaders meet in Toronto this weekend it’s the United States vs. Europe, with China hoping everyone else forgets it’s there.
The White House wants stimulative policies and job creation, desperately, before the mid-term election, while many in Europe have but one thought on their mind…cut spending and tackle their absurd entitlement system. The White House says we’ll worry about deficits later. The EU says if we don’t attack deficits now, our credibility is totally shot and no one will buy the bonds we need to continue to keep rolling over at reasonable rates.
Just look at what the new Cameron government in Britain is doing. Their austerity plan mandates that government departments slash spending a full 30%! The VAT tax is being increased. Capital gains taxes are going up. Welfare spending is being cut. Public sector pay for the higher levels is frozen for 2 years. But corporate taxes are being reduced. Except for this last item, hardly the kinds of moves that stimulate growth. Instead, it is hoped it’s short-term pain for long-term gain. Improving confidence in the financial system will eventually overcome job losses. These kinds of measures are being taken all over Europe.
But in the U.S., it’s enough if Congress can reduce added spending, not actually cut it. The administration is in a box, though. We weren’t supposed to see an official unemployment rate over 8%, remember? Today we’re at 9.7%…17% unofficially…with the Labor Department estimating that the long-term unemployed, out of work six months or longer, make up a sickening 46% of all jobless workers.
This week the Federal Reserve’s Open Market Committee offered that the “economic recovery is proceeding” and “the labor market is improving gradually,” but, “financial conditions have become less supportive of economic growth on balance, largely reflecting developments abroad.” Hardly a ringing endorsement for 3%+ growth well into the future, and sure enough the final revision of first quarter GDP dropped to 2.7%. Considering the depths of the recession, this recovery has been downright putrid, despite the $hundreds of billions spent on supposed stimulus.
As to future Fed rate moves, Bernanke and his merry governors (save for Thomas Hoenig, the lone dissenter these days) kept the same language they’ve been using since March 2009. Due to the labor issue, coupled with low inflation, expectations “are likely to warrant exceptionally low levels of the federal funds rate for an extended period.” Goldman Sachs’ economist Jan Hatzius (one of the best) doesn’t expect a Fed rate hike until 2012 because of the inflation outlook.
But if we know it’s still all about housing and jobs if we are to hope to see a robust, sustainable recovery, the news on the former took a decided turn for the worse this week. The May data on existing and new home sales was dreadful. Existing home sales were well below expectations and new home sales hit an all-time low, just 300,000, smashing a mark that goes back to when such records began to be kept, 1963. New home sales were down 32.7% from April, which marked the expiration of the first-time homebuyer tax credit. Overall, most expect home prices to decline over the course of 2010, even as mortgage rates hit an all-time low of their own… 4.69% on a 30-year fixed.
So you might be thinking well, hey, 4.69% at least means all manner of folk can refinance and that’s proven in the past to be an effective economic stimulus of its own.
Ah, but you can’t refinance if you’re underwater, so here we sit with these low rates and it’s like whoopty-damn-do. All-star analyst Meredith Whitney added that the primary reason she forecasts another leg down in housing is that the banks are getting more aggressive in foreclosing on delinquent borrowers. You’re also seeing how the government’s loan modification programs have largely been a failure, with a huge percentage of those whose mortgages are modified going right back into foreclosure 3-4 months later. So things just don’t look good at all.
Back to Europe, legendary investor George Soros had the following thoughts in a Financial Times op-ed on Germany and its need to lead.
“(The markets have not been reassured by Germany’s leadership, or lack thereof, thus far), because Germany dictated the terms of (the rescue package for Greece) and made them somewhat punitive. Moreover, investors correctly recognize that cutting deficits at a time of high unemployment will merely increase unemployment, making fiscal consolidation that much harder. Even if the budget targets could be met, it is difficult to see how these countries (Greece, Portugal, Spain…) could regain competitiveness and revive growth. In the absence of exchange rate depreciation, the adjustment process will depress wages and prices, raising the spectre of deflation.
“The policies currently being imposed on the eurozone directly contradict the lessons learnt from the Great Depression of the 1930s, and risk pushing Europe into a period of prolonged stagnation or worse. That, in turn, would generate discontent and social unrest. In a worst case scenario, the EU could be paralyzed or destroyed by the rise of xenophobic and nationalist extremism. [Ed. Recall this has been a long-term theme of mine.]
“If that were to happen, Germany would bear a major share of the responsibility. Germany cannot be blamed for wanting a strong currency and a balanced budget, but as the strongest and most creditworthy country, it is unwittingly imposing its deflationary policies on the rest of the eurozone. The German public is unlikely to recognize the harm German policies are doing to the rest of Europe because, the way the euro works, deflation will serve to make Germany more competitive on world markets, while pushing the weaker countries further into depression and increasing the burden of their debt.
“Germans should consider the following thought experiment: withdrawal from the euro. The restored Deutschemark would soar, the euro would plummet. The rest of Europe would become competitive and could grow its way out of its difficulties but Germany would find out how painful it can be to have an overvalued currency. Its trade balance would turn negative, and there would be widespread unemployment. Banks would suffer severe losses on exchange rates and require large injections of public funds. But the government would find it politically more acceptable to rescue German banks than Greece or Spain. And there would be other compensations; German pensioners could retire to Spain and live like kings, helping Spanish real estate to recover.
“Of course, this is purely hypothetical because, if Germany were to leave the euro, the political consequences would be unthinkable. But the thought experiment may be useful in preventing the unthinkable from actually happening.”
“This weekend’s G-20 meeting will likely fuel, not resolve, the heated debate triggered by a combination of exploding debt and deficits in industrial countries, and the recognition that many now face a future of muted growth and high unemployment.
“In one corner stand the ‘growth now’ camp, arguing that expansion is a pre-requisite to service their debt sustainably. Without it tax receipts implode, investment is turned away, and meeting future debt payments is harder. This camp abhors Europe’s shift towards austerity, questions Tuesday’s tough UK budget, and urges countries like Germany to adopt expansionary policies….
“Against them stand the ‘austerity now’ camp. They point to worsening sovereign debt ratings, noting especially that (despite Europe’s rescue package) Greek and Spanish debt risk is back to worrisome levels. They are concerned a coming sell-off in equity and corporate bond markets will deter new investments and aggravate many country’s debt problems. For this camp America’s request that others postpone fiscal adjustments is irresponsible. Instead, they want budget cuts to lower risk premiums and stave off disruptive debt restructurings….
“The world is facing deep structural challenges yet its leaders are stuck in a short-term, cyclical mindset. Until they break out of it we will see little more than fruitless discussions, national policy flip-flops, and a troubling lack of global policy harmonization. Without action our future will be disappointing global growth and periodic sovereign debt crises. Let us hope this, if nothing else, is enough to bring the two camps together.”
And you know how I said above that China must hope it is largely ignored? Oh, it will be a main topic of discussion, its currency policy and all, but in surprising the markets by offering more flexibility, China was really just hoping to remove itself from debate in Toronto.
Of course China is going to do what’s in its own national interest, first and foremost, and a stronger yuan will boost domestic spending and begin to move their economy away from its heavy reliance on exports to a consumption-driven one. China just wants this to occur at its own pace and at a time of its choosing.
But since China’s announcement the currency band has certainly been narrow (it appreciated all of 0.5% this week) and the likes of Sen. Charles Schumer will continue to hammer away at the issue. Schumer, and his constituents, won’t care that the last thing China wants is volatility in its currency, which would only hurt exporters and drive away the long-term foreign investment it needs. It also has to concern itself with speculators, given that the government has signaled a one-way trade through its gradual revaluation plan.
A few other notes on China. Aside from the floods (discussed below), there has been continued labor strife, which won’t end for the foreseeable future, though as discussed before, rising wages are not an issue. This week the World Bank weighed in and said that in terms of manufacturers, they’ll simply raise productivity. China also began to remove some of its bigger stimulus programs, such as for the steel industry, where new capacity is banned until 2012.
And now a word on BP and the Deepwater Horizon disaster. This weekend, all eyes will be on the Yucatan Peninsula to see whether we have a hurricane in the Gulf on our hands by Monday morning that could represent another catastrophe in BP’s efforts to capture as much oil as possible before the relief well staunches the flow in August. Any storm of substance and the site could be abandoned for up to 14 days. And of course the oil currently sitting off the coast could be swept onshore. [On the other hand, that which is already on the beaches and in the marshes could be wiped away, which was a past experience in Corpus Christi.]
Of further import this week, however, was a federal judge’s decision to block the Obama administration’s six-month moratorium on deep-water drilling that is impacting 33 existing projects while not allowing new permits. Experts are advising the president that a continuation of the moratorium could lead to the best rigs and best people going elsewhere, while Judge Feldman (who is hopelessly tainted due to his own heavy personal investments in the oil & gas sector) noted in his opinion that “oil and gas production is quite simply elemental to gulf communities,” adding “Some of the plaintiffs’ contracts have been affected; the court is persuaded that it is only a matter of time before more business and jobs and livelihoods will be lost…The effect on employment, jobs, loss of domestic energy supplies caused by the moratorium as the plaintiffs (and other suppliers, and the rigs themselves) lose business, and the movement of the rigs to other sites around the world will clearly ripple throughout the economy in this region.”
Democratic Congressman Ed Markey, though, said the moratorium did not apply to the vast majority of rigs because they are already in production and that it made no sense to resume deep-water drilling before new safety measures are adopted.
One other note on the potential storm, and if not this one, another down the road…oil rose strongly at week’s end to near $80 ($79). The last thing the fragile global economy needs is an oil price shock.
Street Bytes
–Stocks fell hard on fears the recovery is petering out with the Dow Jones down 2.9% to 10143, the S&P 500 off 3.6% and Nasdaq down 3.7%. All three major averages are back into negative territory for the year.
–U.S. Treasury Yields
6-mo. 0.19% 2-yr. 0.65% 10-yr. 3.11% 30-yr. 4.06%
Treasury yields plummeted again with the 10-year nearing 3.00% at one point. This is hardly a good sign. There are legitimate questions regarding the strength of the economy and such a fall in rates could presage outright deflation.
–White House budget director Peter Orszag is leaving next month. Orszag helped steer the $797 billion economic stimulus bill as well as President Obama’s health-care reform law. Aside from being burned out, Orszag is marrying the hot Bianna Golodryga, an ABC News reporter, and so why the heck would he want to slave away, 18 hours a day, on budget matters when we are not only $trillions in hock, but he could be spending free time with her? Well?
–Funny that the G-20 should be in Toronto this weekend when Canada is the model economy of the moment. The Canadians not only did a terrific job steering through the financial crisis, but their recovery has been strong and about 75% of the jobs lost during the recession have already been recovered. The big reason is because while United States and European banks ran roughshod as they were deregulated going back to the 1990s, Canada’s financial institutions remained highly regulated.
Granted, as a result of economic stimulus that helped get it out of recession, the deficit is at a record high, but the IMF expects Canada to return to surplus as early as 2015.
A big reason for Canada’s elevation to the Best of the Worst is its concentration on cutting government spending, and then a weak currency and a booming U.S. did the rest. As Rob Gillies of the AP reported, what then Finance Minister (later Prime Minister) Paul Martin found was that 55% of the deficit reduction came from economic growth and 35% from spending cuts.
The problem, as Martin’s former budget chief Don Drummond told Gillies, is that the economic climate was so much better in the 1990s than today, adding:
“There’s a lot to learn from Canada but their (Europe, the U.S.) starting conditions are worse. Even though we were on the precipice of a crisis we weren’t in as bad a shape as many of them are.”
–Treasury Secretary Geithner said that banks had repaid about 75% of the bailout funds from TARP, adding that the odds had improved General Motors and Chrysler would repay their bailout money.
Among Spain’s labor reforms is one that would slash severance payouts from 45 days’ worth of salary per year worked to 25. 45 days?! 10 years was basically two years jerking around? Goodness gracious.
In Ireland, one-third of mortgage holders are expected to be in negative equity by the end of the year, but some banks are planning ‘negative equity’ mortgages for homeowners whereby those who move take the negative equity portion of their current mortgage on to a new one. However, this means some homeowners could be throwing good money after bad if the market continues to slump. Of course it also means they are moving into negative equity all over again in a new location. This idea was tried in the UK, though I didn’t see how it’s panning out. [Britain’s housing market appears to have stabilized, which would help.] Meanwhile, one forecast has Ireland’s economy rebounding in 2011, after the steep drops of 2009 and 2010. Aer Lingus reported better traffic levels in April and May vs. last year. But Ireland’s jobless rate, now 13.8%, isn’t expected to drop below 13% in 2011.
Britain’s National Institute for Health and Clinical Excellence, a reputable agency, according to the Wall Street Journal, has recommended that the government push the food industry to reduce the salt and fat content of its products. About six million people in the U.K. have some form of cardiovascular disease. I totally agree with efforts to reduce salt. It’s absurd how much is in our foods. Let me salt the freakin’ food myself! [See, my blood pressure is rising due to salt. I’m not normally this angry.]
In Russia, Carlsberg, the no. 4 brewer, is forecasting that the Russian beer market will shrink between 10% and 13% this year. Noooo!!! Actually, the slide is due to a steep increase in excise taxes. Beer sales did recover in April over March, for those of you keeping track at home.
–Japan’s May exports rose 32%, but they were down 1.2% month on month. The government has nonetheless raised its growth estimate for the year.
–Apple is on a roll, to say the least. It sold its three millionth iPad this week, just 80 days after the product was introduced in the U.S. This news came as Apple took over 600,000 preorders for its iPhone 4. As for my adventures with my Palm Pre, it’s fully charged and becoming an expensive time piece. I do know how to use the camera, only I haven’t seen anything I want to take a picture of yet.
But wait, there’s more! It seems the iPhone 4 has a rather serious design flaw. Signal strength plummets when you hold it in your hand because the stainless steel band around the edges acts as the antenna! Kind of makes one yearn for the days of the tin can and string.
–Meanwhile, Barnes & Noble and Amazon reduced the prices of their e-readers, the Nook and Kindle. What were both previously $259 are now $199 and $189, respectively.
–But amidst the price-cutting in tech, which has been going on since my parents paid $65 for a Texas Instruments calculator for me back in the early 1970s, a device that did nothing more than the four functions, Acer, the world’s second-largest PC company, is raising the price of its products thanks to strong demand. JT Wang, Acer’s chairman, told shareholders, “Average selling price has slightly increased for the first time in five years…it’s a very rare event in our industry but consumers are still happy.” Speak for yourself, Wanger.
–Back in the day during Wall Street’s most recent bubble, Citigroup paid energy trader Andrew Hall a cool $100 million, a sum that helped ignite the pay debate for banks receiving government support. Hall left Citi to run his own hedge fund and I’m delighted to report he is sucking wind. As reported by the Journal, his commodities fund posted a decline of 10% last month and is down nearly 10% for the year through May.
–Here’s a story I’m assuming most of you don’t know about because I didn’t until this week. There is another serious ongoing oil spill, this one in the Red Sea, which has left sea turtles and sea birds covered in crude. But it took Egyptian government authorities days before they even acknowledged there was a spill. An environmental group said there was a cover-up of what is an offshore leak from an oil platform that had polluted 160 km of largely pristine coastline, including a major tourist destination, Hurghada, which is known for diving. [Sydney Morning Herald]
–Doctors are refusing more and more Medicare patients because of decreasing payment rates. Nationwide, 97% of doctors accept Medicare, but, for example, in New York, 1,100 doctors have left Medicare.
And in a story by Noam Levey of the Los Angeles Times, despite passage of health care reform, “the nation’s existing health system is continuing to fray, raising the prospect that the country could experience a crisis before the law establishes a new safety net in 2014.”
It’s about states cutting back due to huge deficits and in addition, federal assistance programs for the poor and those laid-off are expiring. Plus employers are cutting. Getting to 2014 and guaranteed access isn’t going to be easy.
–A Supreme Court ruling took away a favorite tool of federal prosecutors in corruption cases against both politicians and corporate chieftains, what is called the “intangible right of honest services.” The honest-services fraud law was used in the lobbying scandals involving Jack Abramoff and charges against former Louisiana congressman William Jefferson, as well as former Illinois governor Rod Blagojevich. But the Court ruled the provision was too vague and the decision could immediately impact the convictions of former Enron chief executive Jeffrey Skilling and newspaper magnate Conrad Black.
–The Asian carp has breached existing barriers and now directly threatens to invade Lake Michigan so environmentalists and lawmakers are ratcheting up the pressure on Illinois to block commercial waterways and deal with the issue or the carp, which can grow to 100 pounds, will decimate the $7 billion sport fishing industry in the Great Lakes. For 20 years, ever since escaping Mississippi catfish and retention ponds, the carp have been slowly voyaging up the Mississippi River. This could become a big issue shortly if it’s proved the carp have truly breached the barrier (and that this single fish wasn’t dumped from elsewhere). President Obama could issue an immediate order to seal off the Great Lakes but isn’t likely to do so. It’s up to Sasha. “Daddy, when are you going to close the freakin’ locks to keep the carp out of Lake Michigan?”
–Boeing Co. has halted test flights on the Dreamliner 787 after discovering another issue, the latest in a series that have delayed commercialization of the widebody plane for 2 ½ years. The new glitch involves the horizontal stabilizers, which is kind of important because you’d like an airplane to stay, err, horizontal…rather than vertical…know what I’m sayin’?
–British Airways has been in the midst of a serious labor dispute with its cabin crews that has resulted in a series of strikes. Now the airline said it would hire 1,250 attendants on wages about half what existing long-haul crew currently earn. A third wave of strikes is set for the peak of summer travel season. BA is struggling to stop a long string of losses.
–Sheldon Adelson, chairman of Las Vegas Sands, said Asians’ love of gambling is so strong that the equivalent of five Las Vegases in the region wouldn’t be enough to satisfy demand. Adelson made this statement from Singapore, site of his massive Marina Bay Sands project, which he expects to attract between 125,000 and 150,000 people a day. Hope they built enough toilets.
–A Picasso painting, “Portrait of Angel Fernandez de Soto (The Absinthe Drinker)” sold for $52 million at Christie’s, but a Claude Monet work (remember…Manet bad, Monet good), went unsold. As reported by Scott Reyburn of Bloomberg, “There were gasps as the Monet failed to sell, minutes after the Picasso was bought by a telephone bidder.” I don’t know if I’ve ever really ‘gasped.’
–Back to the salt issue, the Centers for Disease Control and Prevention says that most U.S. adults should eat less than a teaspoon of salt each day, but a government report says just 1 in 18 meet the goal. This is appalling!!! [Uh oh…my blood pressure is rising again.]
–Speaking of rising blood pressure…ripped from the pages of the New York Post (as reported by Mark DeCambre):
“Deutsche Bank’s co-head of equities Robert Karofsky took a leave of absence this week after being accused by one of his subordinates – who happens to be one of his closest friends – of having an affair with his wife, sources inside the bank tell The Post.” Great water cooler stuff, I think you’d agree.
–My portfolio: I dumped a lot of my smaller positions (some held years) and aside from raising a fair amount of cash, added to my natural gas holding. It’s a storm play, pure and simple, though I’m really targeting late-August / September, not this current threat. I have been buying in the money, Jan. 2011 calls primarily.
Foreign Affairs
Afghanistan: President Obama did the right thing in firing Gen. Stanley McChrystal following publication of the Rolling Stone article. In fact in hindsight, most conservative Republicans are in agreement. I was amazed that there was ever any thought otherwise. Conservative Eliot Cohen of Johns Hopkins, author of a terrific book, “Supreme Command: Soldiers, Statesmen, and Leadership in Wartime,” best summed it up in an op-ed for the Wall Street Journal.
“Gen. McChrystal’s just-published interview in Rolling Stone magazine is an appalling violation of norms of civilian-military relations. To read it is to wince, repeatedly – at the mockery of the vice president and the president’s special representative to Afghanistan and Pakistan, at the sniping directed toward the U.S. ambassador, at a member of his staff who, when asked whom the general was having dinner with in Paris said, ‘Some French minister. It’s so [expletive deleted] gay.’ The quotes from Gen. McChrystal’s underlings bespeak a staff so clueless, swaggering and out of control that a wholesale purge looks to be indicated.”
Cohen goes on to criticize the president’s running of the Afghan war, including the careless announcement at his West Point speech in December that he would begin a withdrawal in July 2011.
“But none of this excuses the substance or the tone of the words spoken by Gen. McChrystal and his staff. The poor judgment shown in political-military matters calls into question their broader competence to wage an acutely difficult war.
“There is, however, a more fundamental issue: military deference to civilian authority. It is intolerable for officers to publicly criticize or mock senior political figures, including the vice president or the ambassador (who is, after all, the president’s personal representative to a foreign government). It is intolerable for them to publicly ridicule allies. And quite apart from his own indiscretions, it is the job of a commanding general to set a tone that makes such behavior unacceptable on the part of his subordinates.”
After McChrystal’s dismissal, Adm. Mike Mullen, chairman of the Joint Chiefs of Staff said, “Honestly, when I first read it, I was nearly sick.”
Defense Secretary Robert Gates said that the statements attributed to McChrystal and his inner circle of aides “are unacceptable under our form of government and are inconsistent with the high standards expected of military leaders.”
Gates conceded that in his advice to Obama he had expressed concern over the impact a change in command would have on the war effort, even when we can all see the war is not going well.
But when Obama suggested the job be given to Gen. David Petraeus, Gates’ mind was eased.
“My primary concern over the past few days has been to minimize the impact of these developments on the conduct of the war in Afghanistan. The president’s decisions fully and satisfactorily address that concern.” Petraeus became “the best possible outcome to an awful situation.”
Some, such as columnist Michael Daly of the New York Daily News, argue that after McChrystal’s mishandling of the Pat Tillman case, he never should have had the job in the first place. It was McChrystal who endorsed a recommendation that Tillman receive a posthumous Silver Star for valor in the face of “devastating enemy fire.” As Daly notes, “He would later say he ‘didn’t review the citation well enough,’ describing it as ‘poorly written.’
“ ‘I didn’t catch that if you read it you could imply it was not friendly fire,’ McChrystal garbled under oath to Congress last year.”
I’ve read all the major opinion pieces on the whole McChrystal affair. It also needs to be noted that opinion is nearly unanimous that President Obama should fire Amb. Eikenberry, special envoy Holbrooke and National Security Adviser James Jones. Obama indeed pulled a rabbit out of a hat in getting Petraeus to agree to the job, but the president must finish cleaning house. Obama should also clarify what the deadline of July 2011 means.
“Counterinsurgency doctrine says that success turns on winning the ‘hearts and minds’ of the population, hence rules of engagement that reduce risks to the population but increase those of U.S. combatants. C.J. Chivers of the New York Times, reporting from Marja, Afghanistan, says ‘many firefights these days are strictly rifle and machine gun fights,’ which ‘has made engagement times noticeably longer, driving up the troops’ risks and amplifying a perception that Marja, fought with less fire support than what was available to American units in other hotly contested areas, is mired in blood.’
“The value of any particular counterinsurgency must be weighed against the risks implicit in the required tactics. The U.S. mission in Afghanistan involves trying to extend the power, over many people who fear it, of a corrupt government produced by a corrupted election….
“Ann Marlowe, a visiting fellow of the Hudson Institute who has been embedded with U.S. forces in Afghanistan six times, says there have been successes at the local and even provincial levels ‘but nothing that has lasted even a year.’ And the election fraud last August that secured Karzai another five-year term was symptomatic: His ‘government has become more egregiously corrupt and incompetent in the last three or four years.’ Last month Marlowe reported: ‘The Pentagon’s map of Afghanistan’s 80 most key districts shows only five ‘sympathetic’ to the Afghan government – and none supporting it.’ She suggests that Karzai might believe that President Obama’s announced intention to begin withdrawing U.S. troops next summer ‘is a bluff.’ Those Americans who say that Afghanistan is a test of America’s ‘staying power’ are saying that we must stay there because we are there….
“Obama has counted on his 2011 run-up to reelection being smoothed by three developments in 2010 – the health-care legislation becoming popular after enactment, job creation accelerating briskly and Afghanistan conditions improving significantly. The first two are not happening. He can decisively influence only the third, and only by adhering to his timetable for disentangling U.S. forces from this misadventure.”
“The American undertaking in Afghanistan is a fool’s errand, and McChrystal is breathtakingly foolish. Even so, he and it were badly matched. This, even though the errand is of the president’s careful devising and McChrystal was the president’s choice to replace the four-star general who had been commanding there.
“It may be said that McChrystal’s defect is only a deficit of political acumen. Only? Again, the mission in Afghanistan is much more political than military. Counterinsurgency, as defined by McChrystal’s successor, Gen. David Petraeus, and tepidly embraced by Barack Obama for a year or so, does not just involve nation-building, it is nation-building….
“The not quite seven months that have passed since the president announced his policy have been sobering military disappointments and daunting evidence of how intractable is the incompetence and how manifold is the corruption of the Kabul government. For as long as we persist in this Sisyphean agony, the president will depend on forthrightness from a military commander whose judgment he trusts. That could not be McChrystal; it is Petraeus. If McChrystal had been retained, he would have henceforth been chastened, abject, wary and reticent. It is unthinkable that he could still have been a valuable participant in future deliberations with the president and his principal national security advisers. The president demanded, and the Americans in harm’s way in Afghanistan deserve, better.
“It is difficult, and perhaps unwise, to suppress this thought: McChrystal’s disrespectful flippancies, and the chorus of equally disdainful comments from the unpleasant subordinates he has chosen to have around him, emanate from the toxic conditions that result when the military’s can-do culture collides with a cannot-be-done assignment. In this toxicity, Afghanistan is Vietnam redux….
“The shattering of McChyrstal is a messy blessing if the president seizes upon it as a reason for revisiting basic questions about whether Afghanistan matters so much and what is possible there and at what cost. It may be said that with the Afghan mission entering – or soon to enter; it is late and now may become more so – a crucial military phase in Kandahar, the cradle of the Taliban, McChrystal is indispensable. Any who may say that should heed the words of another general, one of the 20th century’s greatest leaders and realists. Charles de Gaulle said: The graveyards are full of indispensable men.”
So much disturbs me about the events of the past week. I am in a distinct minority in what I’m about to say but while it proved to be the height of irony, there was a reason why I used the Lincoln-McClellan analogy last week, before word of the Rolling Stone interview leaked out and suddenly everyone else was using it, but not for the way I intended it.
For the most part I am not a fan of the generals in the U.S. military. Any long-time reader will recall I was a minority of one in criticizing Gen. Tommy Franks during the early stages of the Iraq War and history is proving me right. There’s a reason why some of us also hearken back to the American Civil War because it is so rich in lessons, particularly on leadership. For every great general, on both sides, there were ten dreadful ones. Throughout history, for every Omar Bradley, there are a slew of bureaucratic hacks.
But I have been disturbed that for all the talk of how good McChrystal was in leading Petraeus’ surge strategy in Iraq, he wasn’t getting the job done in Afghanistan.
I am well aware of the serious issue involving the rules of engagement, and how they must change to better support our troops.
But the fact is, McChrystal was in charge when it came to taking Marja and Marja has not been a success, by his own admission!
And it was McChrystal who was in charge of the definitive battle for Kandahar and yet it’s been one delay after another in launching it. You cannot lay that all on Obama. That is what I was referring to in my McClellan analogy.
So no…from all my readings, I am a lone wolf (outside of George Will) who was not sold on Stanley McChrystal.
But here’s what else is bothering me. John Yoo, a law professor and former Bush Justice Department official, concluded an op-ed for the Journal thusly:
“Scholars have observed that the officer corps has become increasingly conservative in the last few decades, the result of self-selection and the end of the draft, Republican Party outreach, and the disappearance of the national security wing of the Democratic Party. Soldiers who have risked their lives for their nation on the fields of Afghanistan and Iraq do not like to hear elected politicians calling their wars unjust or devising the fastest way to withdraw.
“The nation, of course, is nowhere near a military coup. But it has witnessed the growing independence of the military from political control, accelerated by a Congress and media opposed to an unpopular president. His party’s political myopia has forced Mr. Obama to choose between battlefield progress and the constitutional authority of the commander in chief.”
It’s the idea the military is drifting apart from the civilian population that should be deeply disturbing to many of you. Some say this is a reason to reinstitute the draft.
I’ve kidded from time to time about coups…we all do…it’s a throwaway line. I vow never to joke about this again in this space. I apologize for my past use of the term.
President Obama did the right thing this week, but now he must finish the housecleaning and it’s time to stop the internal dissension. Line up or get the hell out. We live in different times. Those days of Lincoln having differing opinions on his staff were before our modern media age. It’s critical that our friends, and enemies, see a unified leadership. Only Obama can now decide whether to unleash the shackles on the military or pull out. Both choices are fraught with danger.
Lastly, Americans are incredibly fortunate that Robert Gates answered the call to stay in this administration. It seems a certainty he will be leaving at year end. Few expected him to stay beyond a transition year. He not only loves the troops, which he has proved in fighting for them unceasingly to receive the best equipment, but he is a voice of reason, and a heavyweight, in this otherwise featherweight administration.
[The NATO death toll in Afghanistan this month is 84 as I write…at least 50 of which are Americans.]
Iran: The mullahs announced they had produced, or were shortly to do so, 37 pounds of uranium enriched to 20%, the level needed for medical isotopes. [90% is the enrichment level for nuclear-weapons grade material, but the jump from 20% to 90% is relatively easy if given the right amount of centrifuges. At the same time, Iran has barred two U.N. nuclear inspectors with the International Atomic Energy Agency (IAEA) from entering the country following the imposition of a fourth round of sanctions by the Security Council. It was in late May that the IAEA issued a report stating that Iran was pushing ahead with higher-level enrichment while failing to answer questions as to the military dimension of their nuclear program.
But Russian President Dmitry Medvedev criticized the unilateral sanctions levied by the U.S. and EU since the U.N. resolution, saying Russia didn’t agree to separate sanctions. Defense Secretary Gates said U.S. intelligence showed Iran could be able to attack Europe with “scores” of missiles by 2020. Gates added that when it came to Moscow, it had a “schizophrenic” approach to Iran; it views Iran as a threat, yet pursues extensive commercial ties. The key to me is whether or not Russia backtracks on its promise not to deliver the S-300 sophisticated air-defense system to Iran that would greatly impede any attack on Iran’s nuclear facilities.
As an aside, I posted Sen. John McCain’s remarks on supporting Iran’s opposition movement on my “Hot Spots” link that you may want to peruse. His comments dovetail with mine over the years in this regard, but in the interest of fair and balanced reporting, Fareed Zakaria writes in the Washington Post:
“McCain reveals a startling ignorance about the Iranian regime when he argues, as in his speech, that it ‘spends its people’s precious resources not on roads, or schools, or hospitals, or jobs that benefit all Iranians – but on funding violent groups of foreign extremists who murder the innocent.’ While Tehran does fund militant groups, one of the keys to Ahmadinejad’s popularity has been his large-scale spending on social programs for the poor. The regime lays out far more money on those domestic programs than on anything abroad.”
Zakaria cites Iranian activist Akbar Ganji, who was jailed for six years in an Iranian prison for his writings against the government.
“ ‘Even entertaining the possibility of a military strike, especially when predicated on the nuclear issue,’ Ganji said, ‘is beneficial to the fundamentalists who rule Iran. As such, the idea itself is detrimental to the democratic movement in my country.’ The regime bends international issues to its favor and has become vocal about what Ganji calls the ‘gushing wound of Palestine… [which] worsens the infection of fundamentalism.’ He pointed out that Tehran continually reminds Iranians of America’s ‘double standards’ in opposing Iran’s nuclear program while staying silent about Israel’s arsenal of atomic weapons.
“Ironically, those hoping to liberate Iranians are the same people urging punitive sanctions and even military force against Iran. Do they think that when the bombs hit, those who wear green will be spared?”
Israel: Prime Minister Netanyahu called on Palestinian Authority President Abbas to start direct talks immediately, while Syrian President Bashar Assad and Jordanian King Abdullah II together blamed Israel for blocking peace efforts in the region. Israel has begun to ease its blockade of Gaza, but at the same time Netanyahu’s Likud Party unanimously approved a motion to continue settlement building in the occupied West Bank when the current freeze expires in September (the freeze having largely been a joke anyway).
And just a note on the right-wing defenders of Israel, such as an opinion piece written for the Wall Street Journal by Shelby Steele the other day. While Steele and the others argue that in no way can you equate Israel’s actions in the flotilla debacle with, say, Hamas’ rocket attacks, on which there should be little disagreement, just once I’d like to see the same essay note the settlements and Israel’s constant, illegal invasions of Lebanon’s airspace. Steele conveniently didn’t.
Iraq: Former Prime Minister Iyad Allawi fears for his life after being warned of assassination plots against him. Allawi nominally won the March 7 parliamentary elections but has seen two of his party members gunned down since. The government is making it exceedingly difficult for Allawi to travel and has not extended the courtesies granted senior government officials, which is disgraceful. For example, instead of using the same private airport in Baghdad he has used for seven years, he is forced to use the international airport where private security is not allowed. It would be as if our president denied Secret Service protection to the president-elect who defeated him in November.
As to the formation of a new Iraqi government, it is now 3 ½ months and there are zero signs we’ll all be invited to a celebration anytime soon. If anything, while the level of violence is falling (despite some recent high-profile attacks on the financial system that claimed about 50 lives), the delivery of essential services, such as power, has been abysmal and there are growing protests over this. Picture 110-degree daily heat and in some neighborhoods electricity for all of one hour.
In fact this was also a terrible week on the Kurdish front as the PKK terrorist group killed 9 Turkish soldiers on the border, while setting off a bomb in Istanbul that killed another 4 (both military and family members). Turkey responded with air strikes and raids inside Iraqi territory. Just as the U.S. does in targeting Taliban in Pakistan, the Turks are well in their rights to go after the Kurds in Iraq.
China: The floods ravaging the southern provinces have been catastrophic as tens of thousands try to prevent major dykes from breaking, some as long as 50 miles so imagine the water this would unleash. Over 200 have been killed but the damage estimates now top $6 billion, which is huge for here. I was offered reassurances my personal investment in Fujian province was OK, but that was before the rains shifted late in the week to put the two plants in the line of fire. In many areas over 40 inches have fallen resulting in the worst flooding in 50 years. [Which just continues a pattern of the last 2-3 years where we’ve seen catastrophic rains around the world.]
But on the good news front, China and Taiwan are going to be signing their major trade agreement on Wednesday; a spectacular accomplishment even as many in Taiwan are concerned their government has given too much up and jobs will be lost.
As for the missiles targeting Taiwan, an estimated 1,300 of them, China will not reduce the force until it sees what happens in Taiwan’s presidential election in 2012, in case the pro-independence DPP returns to power.
Meanwhile, Hong Kong’s legislature passed election reforms that could lead to universal suffrage in 2017 as promised by Beijing, though some democracy advocates say the new rules don’t go far enough. For example, 30 of 70 seats will still be chosen by special interest groups, long-dominated by pro-Beijing forces.
Australia: In a stunning development (at least in terms of the speed), Prime Minister Kevin Rudd was ousted in a Labor Party coup by Wales-born Julia Gillard, who thus became the nation’s first female prime minister. Gillard promised to hold new elections in the fall (probably October) and among her first acts was to reassure President Obama that Australia, which has about 1,500 soldiers in Afghanistan, will stick to its commitment there.
Rudd had been in office since 2007, with Gillard Deputy Prime Minister, but when Rudd issued a “back me or sack me” challenge to MPs, he quickly found out this was a dumb move and resigned without putting his leadership to a vote. Rudd’s support collapsed after he backed off a carbon-trading scheme and then announced a 40% tax on the mining industry, which is critical to the economy here. Rudd’s popularity tumbled to just 45% approval, but his disapproval soared from 13% to 49%.
South Korea: At ceremonies held in Seoul on Friday to mark the 60th anniversary of the start of the Korean War, President Lee paid tribute to veterans and called for peace on the peninsula, but also urged Pyongyang to stop its “reckless” behavior. It’s estimated the three-year war that began when North Korean tanks and troops swept into the South claimed four million lives. With tensions remaining high today, there is zero to celebrate.
Russia: The Kremlin had another natural gas tiff, this time with Belarus, as Russia began cutting flows of natural gas as it pressured Belarus to pay up…like $200 million worth for unpaid deliveries. Belarus then restricted the flow of Russian gas into Europe as it claimed Russia’s Gazprom owed it $260 million in unpaid transit fees. But after four days there was a meeting of the minds as some checks were exchanged (Gazprom admitted to paying $220 million) and the gas started flowing again.
Meanwhile, President Medvedev was in the States, checking out Silicon Valley before a series of White House meetings on Thursday. This gave President Obama an opportunity to crow, once again, that “When I came into office, the relationship between the United States and Russia had drifted – perhaps to its lowest point since the Cold War.”
Well there was good reason for that, Mr. President. Russia was acting like the Soviet Union of yore as it invaded our ally, Georgia, for crying out loud, while pressuring Ukraine at every turn.
But now everything is hunky-dory. Why Russia even wants increased foreign investment.
I believe that Dmitry Medvedev can be trusted, at a certain level. I believe Medvedev is as good as we could hope for at this stage in Russia’s history.
But Medvedev doesn’t run the show…Vladimir Putin does. Again, watch how Russia acts with regards to Iran in particular. The proof will be in the pudding.
Lastly, Reuters ran a story on mysterious Deputy Prime Minister Igor Sechin, who is said to be leader of the “siloviki” clan of nationalist, ex-military and security service officers “fighting to maintain a big state role in the Russian economy.” Sechin’s portfolio includes oversight of the energy and metals sectors, the world’s biggest. He is the third force I’ve been alluding to. Forbes magazine ranks him ahead of Medvedev in terms of power. I would just offer that we shouldn’t be surprised to wake up one morning to learn it’s Sechin, not Putin, in charge, and no one should be in the least bit surprised to also learn of a bullet or two to the head in the process. Sechin is not good people.
Colombia: Former defense minister Juan Manuel Santos handily won a runoff election to capture the presidency and replace U.S. ally Alvaro Uribe, who couldn’t run again after two terms. Santos has pledged to continue Uribe’s policies so he should be a good friend of Washington’s.
But will the Obama administration do anything in return? Despite Uribe’s success and pro-American stances, congressional Democrats have treated Colombia with disdain. As the Washington Post editorialized, in addition:
“The (White House), which has courted (Brazil’s) Lula and sought to improve relations with Venezuela and Cuba, has been cool to Colombia, recommending another 11% reduction in aid for next year and keeping the trade agreement (negotiated with the Bush administration) on ice….
“Ratification of the free-trade agreement would serve the administration’s stated goal of boosting U.S. exports while bolstering a nation that could be an anchor for democracy and political moderation in the region. It would also allow the administration and Congress to demonstrate that friends of the United States will be supported and not scorned in Washington.”
Jamaica: Drug baron Christopher “Dudus” Coke was extradited to the United States on Thursday after his capture earlier in the week by Jamaican authorities. The search for Dudus led to violence resulting in the deaths of 73 people and he had sought to be tried in a U.S. court rather than face prison in Jamaica.
Random Musings
–President Obama has had an amazingly busy stretch, what with BP, the McChrystal debacle, and the financial reform bill. But the news for Obama is not good when it comes to an NBC/Wall Street Journal survey as his overall job approval rating dropped to a new low for this poll, 45%, with 48% disapproving. Personal feelings towards him have also dropped with just 47% having a positive opinion. 50% disapprove of Obama’s handling of the oil spill (the survey was taken after he extracted the $20 billion pledge from BP and after his Oval Office address).
In addition, and most disconcertingly for Democrats looking to November, let alone all incumbents, 62% believe the country is headed in the wrong direction, with just 29% believing we are on the right track. Just who these 29% are I’ll never know. They can’t possibly be doing anything more with their lives than watching reality television and the Bonnie Hunt Show. How in God’s name can you possibly say the nation is headed in the right direction?! Do you think the humongous federal deficits aren’t an issue?
Lastly, as to who should control Congress, the NBC/Journal poll has 45% for the Republicans, 43% for the Democrats.
–A new Rasmussen survey shows that 57% feel Hillary Clinton is qualified to be president, with 34% believing she is not. What’s significant here is that only 51% believe President Obama is fit for the job, 44% saying he is not.
Ergo, Hillary is favored over Barack, which if you’re a Hillary supporter should only feed expectations that she will step down from her State Department gig in early 2011. She could then take a few months to assess the national situation and, if she decides to make a go of it, launch her bid for the White House at the Iowa State Fair that summer.
As for Sarah Palin, only 26% in the Rasmussen survey say she is qualified to be president, while 61% do not.
–On the issue of President Obama’s leisure activities last weekend, following criticism of BP CEO Tony Hayward’s participation in a yacht race back home (for which Hayward deserved to be excoriated), I draw a distinction between attending a Friday night baseball game and Obama’s Saturday golf outing. I see no problem with the former, and major problems with the latter.
Most Americans I think would agree that Friday night isn’t prime time for getting work done (unless you’re proofing WIR), but especially in a time of crisis, which is what we all agree is the situation in the Gulf, the president should be working straight through the weekend.
I also get a kick out of Obama’s claims to want to lead a normal life; family time for the kids, attending their sporting events. I’m sorry. I couldn’t care less about family time and his children. When you agree to run for president, and thus assume you can get elected, everything else is secondary.
This is the most important position in the world. Outside of dinner and a bedtime story, sorry, kids. You can write a book later about how you suffered from not having a father who was active in your lives.
But here’s what really bothers the hell out of me and I’m amazed no one else is upset about it.
Last winter I wrote of how I couldn’t believe both President Obama and Vice President Biden attended a college basketball game together. I said at the time this was incredibly reckless to have the two together like that. It’s one thing to have a joint appearance amid the secure confines of the White House, or on Capitol Hill; it’s quite another to be lollygagging around at a game, or as in the case of last Saturday, playing golf with the vice president.
What am I missing? What the heck is President Obama and his staff missing?! There’s a reason why during the State of the Union Address, for example, as secure as the Capitol is supposed to be, that a cabinet member is sequestered outside D.C. in a secure location so that there is some semblance of stability should a terror attack occur. So why recklessly put our top two leaders in a potential line of fire? The freakin’ Salahis got through. The criticis of Obama’s activities are missing a far bigger point.
–The Washington Post opined that a report titled “U.S. Computer Emergency Readiness Team [CERT] Makes Progress in Securing Cyberspace, but Challenges Remain,” paints “a disturbing picture of a national security disaster waiting to happen.”
CERT, established in 2003, is tasked with “analyzing and reducing cyber threats and vulnerabilities, disseminating cyber threat warning information, and coordinating cyber incident response activities.”
“The report released last week…reveals an institution that is floundering. CERT is understaffed, with no capacity to do anything other than process data for anomalies and react to breaches after the fact with fixes it has no authority to enforce. Among the report’s findings: Of the 98 positions authorized for the emergency readiness team, only 45 are filled, forcing it to rely on outside contractors to perform even basic functions such as updating operating procedures.
“After seven years, CERT still lacks a strategic plan, goals or any performance measures to assess its progress.”
–Faisal Shahzad, who attempted to detonate a car bomb in New York’s Times Square in May, pleaded guilty, saying he wished to “100 times over” until the U.S. pulls its troops from Afghanistan and Pakistan and stops unmanned drone strikes against terror suspects. He faces life in prison. He deserves a firing squad.
–The Moscow Times reported that a new metro station there has been named after famously gloomy writer Dostoevsky, which some say could lead to a surge in suicides.
“The station, called Dostoevskaya, is decorated with grey and black mosaics that depict violent scenes from the writer’s novels.”
“One controversial mural reenacts the moment when the main character in ‘Crime and Punishment’ murders an elderly pawnbroker and her sister with an axe.
“Another shows a suicide-obsessed character in ‘The Demons’ holding a pistol to his temple.
“If that was not enough to darken the mood, a giant mosaic of a depressed-looking Dostoevsky, who also wrote ‘Notes from Underground,’ stares out at passengers.”
But I didn’t know this. An estimated 80 people commit suicide on the Moscow metro every year. I’d expect this to rise to 235,000 by 2011.
–As reported by Amina Khan of the Los Angeles Times:
“Chimpanzees are willing to attack and kill chimps from neighboring groups in an effort to expand their territory, according to scientists who have studied a primate colony in Uganda for 10 years.
“The chimp behavior could shed light on the evolutionary roots of human cooperation, the researchers said in a study in the journal Current Biology. Other experts said it could help explain the origins of human nature.”
The story goes on to describe the behavior, which is downright gross, including cannibalizing infants ripped from unfamiliar females who seek to enter the chimps’ domain, but I’m thinking this proves chimps were the first drug dealers.
–Speaking of poor behavior, let’s assume for a moment that the story breaking on former Vice President Al Gore this week has a kernel of truth to it, and perhaps a whole stalk. A masseuse who accused Gore of being a “sex poodle” is supposedly ready to come forward if she can sell her story for the right price. The New York Post said she is seeking $1 million, and “she intends to use the pants she wore on the night of the alleged incident – supposedly stained with Gore’s DNA and stored in a bank safety-deposit box – as evidence against Gore, who recently split with Tipper.”
This all goes back to October 2006 and a massage Gore ordered up at Portland’s Hotel Lucia. The woman eventually filed a police report this past January, but according to her lawyer, approached authorities in December 2006, only to then blow off police interviews. She is now accusing Gore of sexual “abuse,” alleging that he “began to demand that I go lower…It appeared that he was demanding sexual favors or sexual behaviors.” She further alleged, “He grabbed my right hand hard, shoved it down…..”
This is where I have to stop, this being a family column, but let’s just say the vice president allegedly used a “loud, angry-sounding tone.” [I’m assuming it was also condescending.]
At the time, though, Portland police dropped the investigation due to “insufficient evidence to support the allegations” and the woman declined to seek prosecution.
It’s also come to light, however, that Tipper “had previously complained about her husband’s trips to massage therapists and reportedly suspected he may have been involved with one,” as stated in the Post.
–The International Whaling Commission has been meeting on what to do with Japan’s controversial whale hunts and evidently there is no sign of compromise. Of course this is one of the world’s most corrupt bodies as figures have stepped forward to talk about how Japan, as always suspected, buys votes.
Commercial whaling has been banned since 1986, but Iceland and Norway have lodged official objections to that decision as they continue to hunt commercially, while Japan hides under its program of hunting for scientific research.
But a report released by American scientists has stirred up controversy of its own. Biologist Roger Payne of the Ocean Alliance, says that his researchers have found high levels of cadmium, aluminum, chromium, lead, silver, mercury and titanium in tissue samples taken from nearly 1,000 sperm whales over five years.
“These contaminants, I think, are threatening the human food supply,” Payne notes. “They certainly are threatening the whales and the other animals that live in the ocean.”
Disturbingly, researchers found mercury as high as 16 parts per million in the whales, vs. an average 1 part per million in shark and swordfish, two fish that health experts warn children and pregnant women to avoid.
“You could make a fairly tight argument to say that it is the single greatest health threat that has ever faced the human species. I suspect this will shorten lives, if it turns out that this is what’s going on.”
It was Payne, now 75, who back in 1968 discovered and recorded songs by humpback whales. His recent research spanned five years and 87,000 miles in collecting the samples. What a great job…and what a contribution he is making to humankind. [Arthur Max / AP]
–Comedian Jimmy Kimmel: “Rep. Joe Barton of Texas took it upon himself to apologize to BP CEO Tony Hayward for a political ‘shakedown.’ He later apologized for his apology and explained that he hadn’t seen the news in two months, and didn’t know that BP recently destroyed the ocean.”
[I’ll be reporting to you from Orange Beach, Alabama, in two weeks. I’ve never been there and aside from getting some stories, I’ll do my best to support the local economy and maybe make someone’s day. I also understand that as of this writing, it is a mess.]
–Astronomers have measured high-speed winds in the atmosphere of planet HD209458b (haven’t been there) which orbits a star in the constellation Pegasus, some 150 light-years away; so it’s a long, long ways, boys and girls. Anyway, the scientists estimate that the winds are in the neighborhood of 7,000 km/h, or 4,350 miles per hour, which would make it a CAT 87 by my back of the beer coaster calculation.
–Very cool findings under the streets of Rome this week as Vatican officials unveiled the first known icons of the apostles Peter and Paul, dating from the second half of the 4th century, using a new laser technique that allows restorers to burn off centuries of calcium deposits without damaging the colors of the paintings underneath. The discovery was made in the catacombs that extend for miles under Rome and archaeologists previously discovered what many believe to be the bone fragments of Paul, while this week it also appears they’ve identified the prison where Peter was held.
[Shout out to the Flanagan Family for their travel bits from Italy. I told the men to go to the catacombs. They loved it. The women didn’t. Which is probably why women avoided them 1600 years ago as well.]
–I do enjoy the World Cup, even if the vuvuzelas are here to stay for the duration. But people are such idiots, like those who insist the plastic horns are some kind of cultural icon.
For now, though, after a boring beginning, the games the past few days have been outstanding and while I’m rooting for the U.S. like everyone else here, one of the beauties of the World Cup is having a representative of your heritage in tournament play and so it is I end with…Go Slovakia!!!
Pray for the men and women of our armed forces, and all the fallen.
Gold closed at $1256
Oil, $78.86
Returns for the week 6/21-6/25
Dow Jones -2.9% [10143]
S&P 500 -3.6% [1076]
S&P MidCap -3.7%
Russell 2000 -3.3%
Nasdaq -3.7% [2223]
Returns for the period 1/1/10-6/25/10
Dow Jones -2.7%
S&P 500 -3.4%
S&P MidCap +2.6%
Russell 2000 +3.1%
Nasdaq -2.0%
Bulls 41.1
Bears 31.1 [Source: Chartcraft / Investors Intelligence]
Have a great week. I appreciate your support.
Brian Trumbore
