Wall Street
It’s comical to watch President Obama after each jobs report step forward to trumpet what is truly pathetic private sector employment growth and this week was no exception as the U.S. lost 131,000 jobs in July, on top of a drastically revised downward revision for June, down 221,000. Yes, much of this was Census related, and, indeed, technically the economy has added workers at the private sector level for seven months now, but the 71,000 gain here for July was less than expected, while June’s figure of 31,000 was lowered from its initial estimate. At a bare minimum, the economy needs to add 150,000 a month just to stay even with population growth and folks entering the job market, while a normal rebound off a recession as severe as the one we’ve been through should see 300,000+ jobs each month.
As for the unemployment rate, unchanged at 9.5%, this is critical for the mid-term election and the White House has only two employment reports left, August and September, because October’s comes after the Nov. 2 vote. So 9% or higher is a lock and that is a huge psychological barrier to overcome for Democratic candidates looking to defend an administration that has failed miserably on this front.
As to the rest of the economic outlook, Federal Reserve Chairman Ben Bernanke was Mr. Doom and Gloom again this week, ahead of a critical Fed Open Market Committee meeting this coming Tuesday, as he said the U.S. has a “considerable way to go to achieve a full recovery in our economy,” strongly hinting we were slowing anew as many, such as moi, have said.
Specifically, Bernanke pointed to a popular topic with us realists, state and local government employment, saying in a speech to a group of same, “Over the past year, numerous state governments have laid off or furloughed employees, decreased capital spending, and reduced aid to local governments. Indeed, state and local payrolls have fallen by more than 200,000 jobs from their peak near the end of 2008.”
This was before Friday’s jobs report showed another 48,000 state and local workers were laid off. The Senate passed a $26 billion package to save some of these jobs, which the House is expected to approve shortly, but as I’ve been saying, while no one likes to see anyone get laid off, the country will be far better off in the long run if we begin to treat our local and state tax dollars with a little more respect instead of going on ill-conceived spending binges like we saw prior to the crash.
Another thing I get a kick out of on the jobs front is how every single CEO comes on CNBC and talks of hiring, which is a crock in many cases but who is going to go on television and say, “Yes, Maria, we had a good quarter, made a lot of money, but would you hire a lot of workers given the global uncertainty?” To this point, a survey of 6,200 companies conducted by KPMG International showed that 70% of U.S. manufacturing executives and 64% of service-sector execs expect revenue to rise the next 12 months, but, when asked about hiring, only 45% of manufacturing execs and 34% of the service variety think they will be doing some. [Joe Light / Wall Street Journal] This is perhaps the most honest description of the environment I’ve seen, but, again, you won’t get anyone to go on TV and say they aren’t hiring.
Then there’s the consumer. Spending is essentially flat. July chain store sales were up only 3% off last year’s dreadful pace, worse than expected, and the back-to-school sales picture doesn’t look too rosy. It doesn’t help on the spending front that personal bankruptcies suddenly spiked anew, up 9%, in June, and with increasing foreclosures on the housing front, none of this will translate to a surge in spending, to say the least.
Speaking of housing, and foreclosures, pending home sales for June were down when a gain was expected, and 20% of U.S. homeowners are underwater, or with negative equity, a full 14.7 million, with an estimated 4.1 million owning a home that is at a 50% discount to the mortgage, i.e., a home valued at $300,000 with a $600,000 loan. The pressures to just walk away are growing for many and that means more inventory thrown on the market (and decreasing values for those living around each home going vacant).
So there you have it…jobs and housing…housing and jobs…the two critical factors to the recovery, both still in dire shape. Housing prices are due to fall anew, though I would caution that when looking at the existing median home price (the only fair measurement), we could be headed just back to the spring lows of 2009.
Turning to another key topic these days, inflation, I can’t help but repeat a statement I made in the 1/2/10 WIR.
“More time has been wasted on this single topic over the past years than just about anything else.”
Inflation’s coming! Inflation’s coming! Oh the humanity!
For crying out loud, the Chicken Littles will be right one day, but if they then run around and say, I told you so! I told you so! trip ‘em for me.
If you want to partake in this debate, I’ve said ad nauseum you have to be intellectually honest. There are two things going on here. Just as in housing where you have to look at hard, national, figures such as the NAR’s median home price gauge (or now Case-Shiller), in terms of inflation, you can’t just strip out one set of numbers or another, unless you’re talking food and energy. We all have to state our case through the same dataset. If Ryan Howard of the Phillies wins a home run title with 42, just because he plays in a bandbox doesn’t mean that the guy who hit 39, but played at Citi Field (a far bigger park) is the real champ.
So right now, inflation, as measured by the consumer and producer price indexes, is dead in the water. From time to time, though, when you strip out volatile food and energy (in Japan they just strip out food), the inflation numbers can spike.
But for years we’ve had zero to little inflation using these gauges and in case you haven’t noticed, sports fans, this is what the all important bond market reacts to, as well as various gauges of economic activity, both here and abroad, and you see where bond yields have been headed this year, even as some continue to cry “Inflation is coming!”
Now…if you’re talking about rising commodity prices, or college costs, or state and local, or federal, tax rates rising, that’s a totally different story. These are but components of official inflation gauges, but, they have everything to do with consumer behavior. What ticks me off to no end is how so many don’t draw this distinction. I promise this is the last time I’ll bring it up (OK, next to last), except to conclude, of course, if commodity prices are rising, corporate margins will shrink if the company can’t pass on the costs (see Procter & Gamble and Unilever this week), or the consumer won’t spend as much if oil suddenly traded in the $90s and gasoline at the pump soared back over $3.00, or your local property taxes keep rising even as your wages are cut. All of this is critical to my own economic outlook. The little guy continues to get squeezed on all sides, but separate this from the official inflation picture.
And so it is that the likes of PIMCO’s Bill Gross and Mohammed El-Erian are among those sounding the alarm these days on deflation. Only a 25% chance of prices outright falling, according to PIMCO, but that is too big a number for comfort, and it’s but one reason why Gross on Friday said the Federal Reserve is unlikely to raise rates for “two to three years”. The two-year Treasury at week’s end is yielding a whopping 0.50%. There’s still simply too much debt sloshing around the globe, from government debt down to the individual level, and the deleveraging process is not going to end anytime soon…period. Don’t overanalyze it. There’s a reason why the savings rate in America has shot up to 6.4%, a necessary readjustment that at the same time means we aren’t spending as much, and companies aren’t hiring.
If PIMCO and others are right about the Fed, which as alluded to above will be supplying us with its latest thoughts on Tuesday, this also means that retirees in particular, who did all the right things in saving for this period, will continue to get zero for acting so responsibly, as in zero interest on their savings and money market accounts. It’s sad. It also sucks. Many will feel compelled to take risks they have no business taking in stretching for yield.
And one other point for those in the deflation camp. As I’ve said for years, don’t talk to me about inflation until we begin to see wages increase, which just isn’t happening. Steven Greenhouse of the New York Times had an excellent piece titled “More Workers Face Pay Cuts, Not Furloughs.”
At the Univ. of Hawaii, professors were forced to accept a 6.7% cut. Albuquerque trimmed employee pay 1.8% on average. “Sub-Zero, which makes refrigerators, freezers and ovens, warned its workers last month that it might close one or more factories in Wisconsin and lay off 500 employees unless they accepted a 20% cut in wages and benefits.”
Musicians at the Seattle Symphony have taken a 5% cut, employees at Newsday accepted 5% to 10% pay cuts. A major law firm cut salaries for first-year associates from $160,000 to $130,000.
Heck, it seems like the only people getting wage increases these days are workers in China.
But with all my talk on inflation/deflation, yes, you cannot ignore the short-term pop in food prices as a result of the extreme weather, particularly in key wheat producer Russia (more on this below). I also can’t help but note a little nugget concerning windpower in Germany. Because of the extensive high-pressure system that has stalled over much of Europe, a lack of wind virtually killed Germany’s wind network. Like down to 5% of normal volume. 5%!
And a few brief remarks on global economic activity. China’s official purchasing managers index for June came in at 51.2, still in expansion mode, but an unofficial gauge out of HSBC pegged it at 49.4, or a slight contraction. That said, the official government forecast on third quarter growth is 9.2%, while it was reported that tax receipts for the first six months were up a whopping 31% due to the substantial recovery from last year’s slowdown. At the same time, the government is still concerned about engineering a soft landing on the property front as it is requiring a new stress test for banks, examining the impact of a 50% to 60% plunge in prices in the hottest markets (which the government purposefully didn’t identify), an absurd worst case though the move itself should help some on the confidence front. But one area that is deservedly plunging is the steel sector, as in demand has cratered with the reduction in infrastructure projects as a result of tighter lending requirements.
In Euroland, manufacturing and service sector measurements were higher than expected, but retail sales in most places remain weak. Germany saw its industrial production for June fall, a major surprise, but factory orders rose.
Lastly, for those insisting the economic recovery in the United States is going to be robust, Goldman Sachs lowered its growth forecast for 2011 from 2.4% to 1.9%; hardly the kind of stuff that will lead corporate CEOs to go on a hiring binge.
On the BP front, the well has been plugged and cemented, though the company will proceed with the relief well to finalize matters. When the history of this disaster is written, the first line of the book should be, “It didn’t have to happen this way.”
Following my second trip to the region, Orange Beach, Alabama, next to Gulf Shores, I concluded that the Gulf of Mexico would be fine, though with all the dispersants scientists will find a dead spot or two. The fish will be plentiful, I said, though for the betterment of the gulf, fishing should be banned for a spell to at least allow the stocks to be rebuilt, which they were in need of doing so before the blowout, while allowing time to double- and triple-check the safety of the product. BP, in this scenario, would of course be responsible for continuing to compensate the fishermen for their losses.
I also concluded, though, that the beaches were contaminated, which they are, as I saw firsthand, though a hurricane ripping through would take care of that issue. I’m just guessing “60 Minutes” could take a look at this topic in one of their first programs of the new season. If you forgot what I’m referring to, oil washed up on the beaches and if it wasn’t immediately cleaned up, it was then buried with fresh sand with the next tide and the cycle could keep repeating itself, as it did in some locales. It’s just a fact. It doesn’t mean you close them. They look fine now, it’s just that underneath it’s a mini- Times Beach, Missouri (a famous 1976 dioxin spill).
And as much as I believe the gulf waters will be fine, you can’t help but question the government’s claim that only about 25% of the oil remains in the water. Maybe it’s only 10%, but maybe it’s 40%. After all the lies from both our own government, especially in those first few weeks, let alone BP, why even venture such a statement unless you’re taking bribes from BP officials, because the less they can claim is left, the less BP is on the hook for future claims.
Speaking of claims, if BP is found guilty of gross negligence, it could be responsible for $18 to $20 billion in civil penalties. If it isn’t, the oil giant will be sneaking out the back door quicker than you can say Thad Allen. As it is, it’s only natural that BP will try and keep from paying what’s fair to business owners in the region. Tony Kennon, the mayor of Orange Beach, told the Los Angeles Times that BP will have to come through on claims for many of his constituents to stay afloat.
“Summer’s gone, and there was nowhere near enough cash generated for our businesses to make it through the off-season. We’re going to do the best we possibly can with the remaining weeks, but our businesses won’t survive without BP’s help.”
As for the political angle to this debacle, forget the mid-term vote, I’m just wondering how President Obama and his team will be spinning it in 2012. They’ll of course claim the president displayed amazing leadership, and the campaign pictures will show him walking the beaches, Thad Allen in tow, looking concerned, yet the facts are Obama could not have done a worse job in those first critical weeks, as documented in these pages.
The bottom line is much of the oil that reached the coast never should have come close to doing so if a massive effort had been launched immediately to take care of it at the source. That’s a fact, and we can’t let the White House get away with anything but the truth. Obama blew it.
To be fair, though, where you can give him grudging credit is that thank god there was eventually a massive cleanup effort. It looked on television like a feeble effort, but I saw what these guys were doing and every little bit helped. That said, the BP commercials being played on our airwaves, that they are going to see the mission through to the end, “to make things right,” are sickening. This was a criminal act…and people at BP, and possibly Transocean, need to pay. But then, just as in the financial crisis, no one ever goes to jail for these kinds of crimes in our country, which is why they continue.
Finally, I can’t help but comment again on the Gulf Coast. It’s beautiful. But for the life of me by 10:00 a.m. in the summer months, it’s also stifling! The heat and humidity sucks the air out of you. I was watching NBC News early in the week and I kid you not, the heat index at Gulf Shores hit 125! Upon hearing this I quickly punched in Gulf Shores and at about 5:30 pm, local, it was 101 degrees with 86% humidity. Go ahead, look up what the heat index given those two numbers is. It’s actually greater than 125. To me the area is the perfect place for a nice, relaxing vacation, but in late September or early May.
Street Bytes
–Stocks rose again, with the Dow Jones up 1.8% to 10653, while the S&P 500 rose a like amount and Nasdaq gained 1.5%. Initially stocks gained on a better than expected ISM report on manufacturing for July, 55.2, but the rest of the data was weak at best, including June factory orders, down 1.2%. Earnings reports on the likes of Pfizer, Dow Chemical and P&G were mixed. Consumer products giant Unilever, as hinted at above, was symptomatic of the current environment when it said volumes rose 5.7% in the recent quarter, but prices fell 2%. For the big name players, competition is hampering the ability to raise prices.
–U.S. Treasury Yields
6-mo. 0.18% 2-yr. 0.51% 10-yr. 2.82% 30-yr. 3.99%
The 2-year briefly fell below 0.50% for the first time ever.
–The Bank of England and European Central Banks both held the line on their own ultra-low rate policies, though ECB chief Trichet was a bit too enthusiastic about Europe’s economic “recovery.”
–In a shocker, after the market closed on Friday, Hewlett-Packard CEO Mark Hurd resigned following an investigation that found he had an inappropriate relationship with a female contractor. Hurd allegedly filed inaccurate expense reports designed to conceal the “close personal relationship” with the woman, while the company’s general counsel said Hurd “demonstrated a profound lack of judgment that seriously undermined his credibility and damaged his effectiveness in leading HP.”
No doubt more details will emerge shortly. The stock tanked in after-hours trading as the CFO, Cathie Lesjak, becomes the interim CEO.
–Christina Romer, chair of the Council of Economic Advisers, is joining Peter Orszag, former director of the Office of Management and Budget, in leaving the White House. Romer was a major proponent of the $787 billion stimulus package that has done virtually zero in creating jobs.
–Speaking of the stimulus, Newsweek had a telling piece on the clean-energy sector, which was guaranteed $billions for projects, but after an initial burst for construction, creates few actual jobs when the plants are finished.
For example, Solyndra received a $535 million loan and will have 1,000 employees in the end, or $535,000 per. Vogtle Electric received an $8.33 billion loan for 800 jobs, or a cost of $10,412,500 each! Brightsource Energy…$1.37 billion loan…86 jobs…$15.93 million each! U.S. Geothermal…$102.2 million loan…10 jobs!
–Fannie Mae is requesting an additional $1.5 billion in aid, which some see as a positive because it is far and away the lowest request yet since it was put under federal control in September 2008, though this still means that collectively, Fannie and sibling Freddie Mac, have required $146.4 billion to stay afloat.
But the two own or guarantee half of all U.S. mortgages and the foreclosure process, which slowed in the last quarter, is picking up again.
–July auto sales were mixed, though overall, sales of cars and light trucks were up 6.6% over June, but only 5.1% higher than July of ’09 as sales then were falling to a 30-year low. The annualized sales rate is at 11.98 million, still far from the peak of 16.9 million in 2005.
–In another sign the advertising market is bouncing back, however, General Motors is increasing ad spending this year by 3% to 5%, bringing it back to pre-bankruptcy levels, and it’s using high-profile events like the Super Bowl (as well as buying more ads for all NFL games). News Corp. and CBS reported strong ad gains across all segments as well, with CBS already selling out 80% of its fall TV inventory, vs. 65% last year at this time, and at higher prices. And you have the boost from the mid-term elections coming up.
–Greg Zuckerman of the Wall Street Journal had an interesting bit on IBM and its sale on Monday of $1.5 billion in three-year debt at just 1%, or only 0.3% more than the yield on government paper of similar maturity.
“Why is it such a big deal? IBM has an uncanny ability to sell bonds at a low coupon, just before rates climb. If history holds up, rates again will climb, pressuring bond prices.”
IBM’s track record is remarkable. 1979, 1989, 1993, 1995, 1996…each time it issued bonds near lows in the bond cycle. Its record isn’t perfect, but close enough to being so with many traders taking notice; though at the same time you would have thought they’d sell more longer-term debt given the historically low yields on that part of the curve.
–Research in Motion, maker of the BlackBerry, is facing off against the United Arab Emirates and Saudi Arabia, both of whom plan to block BlackBerry e-mail, messaging and Web browsing services, citing a potential security threat because encrypted data sent on the devices is moved abroad, where it can’t be monitored for illegal activity. The two claim terrorists can easily use the BlackBerry, but they are clearly just as concerned about human rights activists using them as well, among other things. The moves would prevent the devices from being used for these reasons as of October, and it appears the rule applies to foreign visitors as well. RIM is negotiating.
–With the sudden wheat crisis, India, the world’s second-biggest wheat grower, was expecting a bumper crop, but it had much of its stockpiled grain following last year’s drought stored under thin plastic sheets and now some is washing away, or rotting. As an economist told the Wall Street Journal, “It is gross mismanagement and negligence. If only you had handed over the grain to the private sector, not a grain would have been lost. But now, it is nobody’s grain.”
–Newsweek was reportedly sold for $1 to 91-year-old Sidney Harman, co-founder of Harman Kardon of stereo amplifiers and speakers fame (and husband of Congresswoman Jane Harman). Editor Jon Meacham is departing.
I hope the magazine survives…I hope they all do…the more sources for me the better. Like in the current issue I saw something I didn’t realize before.
For all the positives about Mexico’s economy, which has held up better than most in the Great Recession, one man, Carlos Slim Helu, and his empire of companies, comprises 42% of the country’s benchmark stock index, and, coupled with a few other powerful firms, the problem “is that such concentrations of wealth ultimately prove to be far more corrosive than constructive.”
“Monopolies are forcing Mexicans to pay a 40% premium for everyday goods and services, says President Felipe Calderon, whose draft legislation to increase competition is now stalled in the Senate.”
Gee, wonder why? Ya think it has something to do with campaign donations? Heck, in India, the 10 richest billionaires’ net worth amounts to a full 10% of the $1.2 trillion economy.
America had a problem like this, back in the days of Rockefeller and Morgan, and busting them up wasn’t easy, but in time the economy benefited tremendously from increased competition.
–UBS was ordered to pay $81 million in damages to a Maryland cellphone marketer, ten times the amount originally invested in auction-rate securities, because in early 2008, the company’s cash was frozen. Good. At the time the entire $330 billion market for the stuff was frozen when Wall Street pulled back from weekly and monthly auctions that had been used to reset interest rates. These investments were totally misrepresented by the Street, glorified money-market funds, they said, and clients would have easy access to their cash. That proved not to be the case.
–The cover story for the Aug. 2 issue of Barron’s concerned “The Final Frontier: Investors will miss a huge opportunity if they avoid vibrant and changing Africa. Fast growth on a continent of misconceptions.”
Spare me. Sure, you might find a hot stock or two, but spend your due diligence time either in the U.S. or in Asia.
–Forty wealthy families and individuals have joined Bill Gates and Warren Buffett in pledging to give at least half their wealth to charity. Among those committing are Michael Bloomberg, Pete Peterson, T. Boone Pickens, Ted Turner, Sandy Weill, and…why look at this…Larry Ellison! Evidently, Mr. Ellison was under immense pressure to join the crowd. You just know he hated this. I’m guessing he buys 42 super yachts on his death bed instead of forking his cash over.
–My portfolio: Well, in one week, Aug. 16, my little specialty chemical/biodiesel play in Fujian, China reports earnings. The company has already said it will also provide guidance for the rest of the year, which in attempting to read the tea leaves, I deem a positive. The stock will either remain dead money, or it will finally begin a sustained push upwards (subject to the whims of the overall Chinese economy, of course).
Foreign Affairs
“2010 is going to be about shattered expectations…It’s going to be about Iran, for sure, but also a heavy dose of Pakistan as it hurtles towards collapse, with unfathomable consequences.”
“(The) big issue, at least for the remainder of the year, is…keeping the peace in Lebanon…through which Iran, should it decide to do so, will act. It’s why I went there when I did in April. I’d be surprised if things were as I found them come December.”
Pakistan: You never truly know what will be the trigger for events but the historic flooding in this country, and the government’s utter failure to provide basic relief, could very easily be the trigger for a coup, with Taliban (and to a lesser extent al-Qaeda) sympathizers emerging as the new leadership team. For good reason, the situation in Pakistan got a bit lost in the other news of the week, including the catastrophic fires in Russia, but even the coverage of the Pakistan flooding missed the far bigger point. There you had the hopelessly corrupt President Zardari, ignoring the plight of his people while flitting about France and Britain, while over 14 million of his citizens were being displaced and at least 1,700 killed. Disease and food shortages are emerging as rapidly as the floodwaters engulf one acre after another (now over 1.4 million of crop land). Zardari was already on thin ice; I’d be shocked if the aftermath of the disaster doesn’t push him through it.
And who is taking advantage of the chaos? Chief rival, and extremist sympathizer, Nawaz Sharif, as well as a slew of Islamist charity organizations that had been banned because they were funnels through which the terrorists received financial support.
But as if this wasn’t bad enough, imagine that in Karachi, the main commercial hub, and port, a leading politician was assassinated, which touched off revenge attacks that killed at least 62. Dozens of shops were torched, businesses shut down.
These next two or three weeks are incredibly important. Can the military, the only ones capable of doing so, provide fresh water, at least, to the millions forced to leave their homes, and can massive disease, such as cholera, be prevented? If the government does indeed collapse the global markets would shudder. Who would have control of Pakistan’s nuclear weapons? The Taliban and al-Qaeda, at a minimum, would certainly be granted increased safe haven. Would the United States be forced to send in Special Forces to secure the weapons facilities? What then of neighbor India?
Trust me. I am not overdramatizing the situation here.
But a few housekeeping issues concerning Pakistan, and for the archives. Zardari said the U.S. and its allies are losing the war in Afghanistan because they are not winning local support, adding economic development aid has been minimal; this coming from a guy who by some reports pilfered $1 billion from his own government in the past. The White House vehemently disagreed with him.
And a study from the Bulletin of the Atomic Scientists concludes:
“India is estimated to have assembled 60-80 warheads and produced enough fissile material for (an additional) 60-105 nuclear warheads; Pakistan is estimated to have assembled 70-90 warheads and produced fissile material for as many as 90 warheads.”
India will not stand for Pakistan being in the lead in this regard, and it’s kind of ironic that while President Obama is seeking a world free of nukes, India, Pakistan and China (and to a lesser extent North Korea…and one must also assume Israel) are busily ramping up, with Iran looming on the horizon.
Israel / Lebanon: On Tuesday, on the disputed border between Israel and Lebanon, Israeli soldiers received permission from the United Nations (UNIFIL force overseeing the border) to prune some trees that were blocking Israel’s view. Permission was granted, though UNIFIL wanted Israel to wait a while, but the Israelis began their tree trimming anyway and before you knew it, a senior Israeli commander was killed by Lebanese army sniper fire, another commander was wounded (as Lebanon did not go after those pruning the trees), while Israeli retaliation resulted in the deaths of 3 Lebanese soldiers and one reporter, as well as 15 wounded. Later, a senior Lebanese army commander admitted to authorizing the shooting but said he did so because the Israeli army crossed the border. UNIFIL says there is no doubt the trees were on the Israeli side. Any rational reading of the development, which could have easily escalated into all-out war within hours, tells you that it was premeditated, as the Lebanese commander basically conceded. Just who in the Lebanese government could have authorized the move is unclear, though someone had to.
One thing is clear. Diplomats in the region deserve high praise, but the incident was a classic example of just what a tightrope the region wobbles on.
Lebanese Prime Minister Saad Hariri said Israel’s actions were a “violation of Lebanese sovereignty and demands…The United Nations and the international community [must] bear their responsibilities and pressure Israel to stop its aggression.”
Other Lebanese politicians piled on, in a rare show of unity. Druse leader Walid Jumblatt said:
“Theories of neutrality that certain domestic voices called for are useless and the logic behind demands to refrain from giving Israel any pretext to attack Lebanon fell after Israel’s provocations.”
“For years, many in the international community have remained silent when rockets have been fired at Israeli civilians, and when unprovoked attacks have been launched against our soldiers. Expressions of outrage have largely been reserved for Israel’s response to those attacks. Firing missiles on civilians is a war crime, and unprovoked attacks on soldiers are blatant acts of aggression.
“Israel expects the international community to condemn such attacks in the strongest possible terms. All those in the international community committed to peace should support Israel’s right to defend itself against those who attack the innocent and seek to destroy peace.”
To which I’d say to Mr. Netanyahu, stop your illegal overflights of Lebanon before one of your jets gets shot down!
For his part, Hizbullah leader Sheikh Nasrallah said he’ll provide proof Israel was behind the 2005 assassination of former Lebanese prime minister Rafik Hariri (Saad’s father), which is the ultimate crock, but Nasrallah continues to try and position himself ahead of any indictments handed down by the Special Tribunal for Lebanon, which may, as rumored, target members of Nasrallah’s party.
Ronen Bergman, senior military and political analyst for the Israeli daily Yedioth Ahronoth, in an op-ed for the Wall Street Journal.
“What of the Islamic Republic, striving to become the Middle East’s hegemon? According to intelligence reports obtained by the Israeli military and Mossad, Iran doesn’t want Hizbullah to start a major war against Israel at this time. Tehran prefers that the organization hold its forces in reserve in case they are needed by Iran to retaliate for an Israeli attack on its nuclear facilities. At the same time, however, Iran also has a clear interest in preserving Hizbullah as a central force in Lebanon. To the extent that Hizbullah’s political clout might be weakened by (any STL) indictments, Iran – like Syria and Hizbullah – might support a low-key conflagration as a diversion.
“For its part, Israel has little interest in a war in Lebanon. Its central concern remains the Iranian nuclear project. However, by promising to respond strongly to any provocation, it might find itself forced to act aggressively.
“What’s more, in the past two weeks, after a long period of relative calm, Hamas has repeatedly fired rockets at Israeli towns from the Gaza Strip and even from Sinai, which is Egyptian territory. Although there is no direct link between the incident on the Lebanese border and the rocket attacks in the south of the country, senior Israeli officials see them all as reflecting Iran’s desire to prevent direct talks between Israel and the Palestinian Authority. Such Iranian involvement may increase Israel’s resolve to respond to these attacks.
“Lebanon is a tinderbox. Whoever gave the command to the Lebanese snipers was playing with fire.”
Iran: As noted before, few dispute the increased sanctions by the United States, the EU, Canada and Australia are working, but it’s on a limited basis, while at the same time China refuses to go along and only increases its massive investments in Iran’s energy sector, as Beijing blatantly ignores the pleas of the United States to go along with the rest.
And this week Iran reported it has acquired four S-300 air defense systems, two from Belarus and two from unidentified others, even though Russia, which manufactures it, had declared it would not honor its 2007 contract to supply the S-300 to Tehran. The delivery can’t as yet be confirmed, but, if true, would be a blow to U.S. and/or Israeli efforts to strike Iran’s nuclear facilities.
Appearing on the Sunday news shows last weekend, though, Admiral Mike Mullen, chairman of the Joint Chiefs of Staff, said the U.S. had a plan to attack Iran, although he doesn’t believe it’s a good idea as yet, fearing the ripple effects in the region.
Iran continues to caution the United States against a strike. Foreign Minister Mottaki countered Mullen’s comments. “In case of an attack against Iran, their destiny will be worse than their pitiable destiny in Iraq and Afghanistan,” he told state media.
One other item…the U.S. missile shield designed to deter an Iranian strike on Southern Europe is on course to be activated as soon as early next year. A key component of President Obama’s revamped system from that proposed by President Bush is the use of Aegis-class destroyers and cruisers that will patrol the Mediterranean Sea. These ships will yet prove to be the backbone of our defenses as the administration looks to double their numbers with ballistic missile defenses to 38 by 2015 to deal with the nightmare scenario of Iran firing a salvo of missiles at Europe, particularly in response to a strike on their nuclear facilities.
Afghanistan: The United States death toll now exceeds 1,200, with 408 foreign troops killed in 2010 through July. General Petraeus issued new rules of engagement, as expected, but what is a surprise is they are supposedly very similar to his predecessor’s, Gen. McChrystal. In fact the accompanying document evidently talks of “redoubling…efforts to reduce the loss of civilian life to an absolute minimum,” which is a key to the counterinsurgency doctrine of Petraeus’. However, the rules also apparently give commanders in the field a little more leeway, but not as much as many had hoped for.
Meanwhile, the Dutch, who lost 24 troops, pulled their force of 1,950 as planned, thus beginning the exodus that will see virtually everyone exit by the end of 2011, except for the U.S. and Britain, or so it seems. Canada, for example, is removing its 2,800 next year, and Poland will pull its force of 2,500 shortly thereafter. The big question is what Germany and France, who face restive publics, will do.
And on the WikiLeaks front, Defense Secretary Robert Gates said there is not only legal culpability, which the Justice Department is handling, “But there’s also a moral culpability. And that’s where I think the verdict is ‘guilty’ on WikiLeaks. They have put this out without any regard whatsoever for the consequences.” Admiral Mullen said the leak is “unprecedented” in its scope and volume as the Pentagon scrambles to protect those Afghans who were identified in the publication of the secret war documents.
Support for the war in Afghanistan is eroding rapidly, just 36% in a USA TODAY/Gallup survey, down from 48% in February. Now, a record 43% also say it was a mistake to go to war there after 9/11. Personally, I support President Obama’s surge on this front, but I also feel the December date for a new review of the entire operation is critical. Americans need to start seeing measurable progress.
Iraq: It’s hard for the Obama administration to claim success in Iraq when, as the New York Times illustrated in excruciating detail this past Monday, the Iraqi government can’t provide the most basic of services. Most parts of Baghdad are receiving no more than five hours of power a day, some less, and now it’s obvious there won’t be a resolution to the power vacuum, post- the March 7 parliamentary election, until the fall at the earliest. For starters, Prime Minister Nouri al-Maliki wants to remain in that position, even though his coalition came in second to former prime minister Ayad Allawi’s bloc. They’ve been arguing for five months, while smaller political factions remain undecided as to who to support. And then you have the outsiders. Iran supports Maliki, while the Saudis, for one, support Allawi. But if you are a new member of parliament, which officially convened in June, you are receiving $10,000 a month, yet have met just twice. No speaker has been appointed either.
For his part, Allawi said the other day, “Right now, if you ask any Iraqi: What do you think of democracy? They will say it’s blood, stagnation, unemployment, refugees, cheating. If democracy does not succeed in Iraq and tyranny is replaced by another tyranny, there will be no legacy.”
By Aug. 31, though, the United States will have about 50,000 military personnel in Iraq, down from 144,000 in February of 2009.
“As part of his weird victory lap, (President Obama) rightfully praised the way ‘our troops adapted and adjusted’ to the insurgency in Iraq, then stressed that 90,000 service members have come home during his administration.
“He preened that we’ll meet his Aug. 31 deadline to transition ‘from combat to supporting and training Iraqi security forces’ and reaffirmed that we’ll remove the last of our troops in 2012. But the portion of (his speech to the disabled veterans) that focused on Iraq left out…Iraq.
“While that country has passed its military crisis, it’s now in political turmoil – from which our government has utterly disengaged. We won that war, but we still can lose the peace. Obama shunned the fact that, almost half a year after its last national election, Iraq doesn’t have a new government. Determined to abandon ‘Bush’s war,’ Obama’s been AWOL in Baghdad.
“His neglect may prove disastrous. And the saddest aspect is that the Iraqis wanted us to step in and act as referees, to press them to get past their political differences….
“(Iraq), not Afghanistan, lies at the heart of the Middle East, has a profound psychological grip on the Arab world, possesses a critical geo-strategic location – and, yes, has a lot of oil.
“Even a sloppy, kinda-sorta, not-downright-awful outcome in Iraq improves the Middle East enormously. But all this administration cares about is getting out. We’re in danger of throwing away seven years of sacrifices – many made by those disabled veterans to whom Obama pandered – because Obama won’t tell our diplomats to step up.”
Russia: As noted above, the wild fires have crushed the agriculture sector here as President Medvedev declared a state of emergency in seven key areas around Moscow. Moscow itself was blanketed in smoke so thick, it was getting into the subway system. Some reports do have firefighters belatedly making progress, though environmentalists blame the crisis on the enactment in 2007 of what is called the Forest Code, a law signed by then-President Putin.
“ ‘Formerly, each forest had a man who would discover fires at an early stage,’ Alexei Yaroshenko, a forestry expert at Greenpeace Russia, told the Moscow Times.
“But under the new system, the number of personnel employed in fieldwork has been cut by 75%, while 12,000 new bureaucrats were hired to do related office work, he said.
“In addition, it may take a week to move firefighting equipment from one location to another, while it only took a day before the 2007 law went into force, he said.
“ ‘There is no central body to oversee the transfer of equipment because it was broken into several structures,’ he said.”
For his part, Medvedev dismissed two senior military officials for not preventing one of the fires from blowing through a base in the Moscow region and threatened to show “no sympathy” toward any other government official found liable in connection with the fires. In terms of the aviation supply base, Medvedev said at a Security Council meeting it was “criminal negligence” that allowed the base to be destroyed and, get this, the base’s commander and other senior officials were nowhere to be found as the fire approached. 13 warehouses with equipment and as many as 200 planes were destroyed.
In another part of the region, explosives and radioactive materials had to be taken away from a major nuclear research facility. The head of Russia’s nuclear agency assured us all that there was no risk of a nuclear disaster. Not sure I trust the man, Sergei Kiriyenko, seeing as how Russia once covered up a nuclear accident in the Urals for what, oh, about 50 years.
As for the air pollution, the country’s chief lung doctor said it was so bad, he compared it to smoking two packs of cigarettes within three or four hours. Muscovites were told to “put aside all hard work.”
Meanwhile, in the U.S. Senate, Republicans are blocking ratification of the New Strategic Arms Reduction Treaty (New START) with Russia until after the summer recess because the administration won’t guarantee enough future spending to maintain the U.S. nuclear arsenal, which places the debate into the fall campaign, exactly what the White House didn’t want. The treaty is modest in scope, and should be approved; however, I agree that it’s also all about maintaining the remaining nuclear force at top level. [2/3s, not just 60 votes, are needed for passage and Richard Lugar is thus far the only Republican senator firmly on board.]
And back to Vladimir Putin, it should be zero surprise that talk of him running for president again is back on the front burner, no pun intended, as he jets around the country while Medvedev stays largely in the Kremlin. State media is lavish with its praise of Putin and only sheds him in the best light, like showing Putin promising to rebuild villages destroyed by the fires, women kissing Vladimir, he kissing them back, Vladimir blasting the governors for not being better prepared; a real take-charge, man of the people story. You also may have seen the pictures of him recently, riding his Harley to an international motorcycle show, wearing black boots, black pants and shirt, a black belt with a silver buckle and dark shades. As a Kremlin expert told the Los Angeles Times, “Putin loves to employ his favorite Benito Mussolini-the-father-of-the-nation image, wearing all black and looking tough.”
And then I’m reading an editorial from a publication, Vedomosti, and I didn’t realize President Medvedev recently gave the Federal Security Service, the FSB (successor to KGB) new powers that allow for 15-day sentences for people who “obstruct the work” of an FSB agent. Gee, that’s kind of broad, don’t you think? But as the editorial points out, “this is only the tip of the iceberg. Now, the government’s other security and law enforcement agencies are saying, ‘You gave the FSB more powers, what about us?’”
“After the law regulating the minimum blood-alcohol level among drivers was annulled, police have become even more active arresting drivers on drunk-driving charges. Considering that the alcohol testers the police carry give positive results even if the only thing a driver had consumed was a bottle of Kvas (non-alcoholic beer-like drink), it is easy to imagine what a boon this has been for the traffic police in terms of collecting bribes.”
“During the oil-boom years, Russians signed off on an unofficial ‘social contract’ with the government: in exchange for a higher standard of living, Russians were willing to tolerate the government gaining more control and limiting their civil rights. But now, the latest increase in government interference in people’s lives is occurring at a time when the incomes of Russians have dropped sharply. Russians are far less tolerant now of the government chipping away their rights, and their growing discontent could easily spill into the streets.
“Afraid of an increase in protests, the government, instead of relaxing its control over the people, is doing the opposite. The new FSB law is a vivid example. It is clear that one of the main motives in pushing for the power to give ‘warnings’ to people who are ‘about to commit a crime’ was to intimidate leaders of protest movements and convince them that it would be in their best interest to confine their complaints to the kitchen. The FSB law is just one more example of how little the country has progressed from the Brezhnev years.”
By the way, 1,229 people drowned in Russia in July (lakes, rivers and ponds), but this was 15 fewer than in June. Normally, 75% of the drowning deaths are the result of a little too much to drink.
China: The People’s Liberation Army Daily had an editorial this week in which it proclaimed in part: “Currently, the international trend is experiencing deep and complicated changes, and competition has become fiercer regarding the international order, national strengths and geopolitics.”
So, “Modernization is the core of the construction of the PLA, and it should be guided by national core interests. [The PLA] should strengthen preparation for warfare and focus on boosting the core capacity of fighting regional battles against the background of information technology.”
Well this isn’t exactly great news, as China and the United States stake out positions on the South China and East China Seas, and then it was reported that the U.S. will sell Taiwan two decommissioned warships, though the sale isn’t likely to be approved until later this year or early next.
Meanwhile, Taipei asked Beijing to consider removing the nearly 2,000 missiles targeting the island, with China saying it would agree to talks on military security “at a proper time,” but not now.
North Korea: Hundreds of South Korean soldiers were forced to scour the border area for land mines after one man was killed by a blast, apparently a mine in a box that was washed into the South by heavy rain; this while the United States said Pyongyang hadn’t demonstrated it was committed to returning to the six-party talks aimed at halting the North’s nuclear weapons program. For its part, the South held massive maritime drills as the North labeled it all another serious provocation.
Australia: Suddenly, the snap election here is but two weeks away, and Prime Minister Julia Gillard finds herself in a dead heat when she thought the vote was certain victory after she took over in a party coup from Kevin Ruud. While Gillard is still preferred over Opposition Leader Tony Abbott, her Labor Party is even with the coalition, and now former Prime Minister John Howard has entered the campaign on the side of his protégé, Abbott, as he blasts away at Gillard.
Somalia: U.S. officials arrested 14 people from Minnesota, Alabama and California on charges they were providing money, personnel and services to the Somali militant group al-Shabab. Earlier, a Chicago man was charged with attempting to support al-Qaeda and al-Shabab. As noted in past reviews, the hub of the Somali network is St. Paul, Minnesota. Attorney General Eric Holder said:
“The indictments unsealed today shed further light on a deadly pipeline that has routed funding and fighters to the al-Shabab terror organization from cities across the United States….
“As demonstrated by the charges unsealed today, we are seeing an increasing number of individuals – including U.S. citizens – who have become captivated by extremists ideology and have taken steps to carry out terrorist objectives, either at home or abroad.”
Officials believe up to 50 U.S. citizens are currently fighting with al-Shabab in Somalia.
Al-Qaeda: The AP reported through an FBI counterterrorism source, Brian LeBlanc, that the man who took over for 9/11 mastermind Khalid Sheikh Mohammed as chief of global operations is Adnan Shukrijumah, 35, who lived in the U.S. for more than 15 years and has been a wanted man since 2003. Earlier this year he was named as a conspirator in the plot to bomb New York’s subway system in 2009. Shukrijumah’s mother lives in Miramar, Fla., and she said she has not had contact with him for several years. “He is not an evil person,” she added. “He never had a problem with the United States.” Lock the mother up while we’re at it.
Mexico: The government has revised the death toll in the drug war to 28,000 since 2006, a huge jump from the previous estimate of 24,800, while police and soldiers have seized 84,000 weapons and 35,000 vehicles, as well as $400 million in cash…so why isn’t it winning? The Calderon administration claims it is.
Venezuela: Not for nothing but the war of words between the United States and Venezuela is escalating. Whereas in the past, Washington ignored the buffoon from Caracas, this week, Larry Palmer, the U.S. nominee to be ambassador to Venezuela, referred to “clear ties” between members of the government and Colombian guerrillas. Then Palmer ripped the competence of the Venezuelan army. As in this guy must not want to be ambassador because Venezuela might not let him in. In his nomination hearing, Palmer said he wasn’t concerned Caracas would cut off the oil flow to the U.S.
Haiti: Hip-hop star Wyclef Jean declared he would run for president in his native country, though he faces all manner of hurdles, including questions as to whether or not he has lived in the country the past five years, as well as ongoing issues concerning his charity and possible tax evasion. Jean would be running against his uncle, Raymond Joseph, who resigned his post as Haiti’s ambassador to the United States.
Random Musings
–In the above mentioned USA TODAY/Gallup poll, President Obama’s overall job approval rating came in at 41%, a new low for the survey.
–By only a 63-37 margin, Elena Kagan won approval for the Supreme Court, thus becoming the fourth female justice in U.S. history, but at least for now the ideological balance will remain 5-4 in favor of the conservatives on most lightning rod issues. Last year, Sonia Sotomayor was confirmed by a 68-31 vote.
–A U.S. federal judge overturned California’s voter-approved ban on same-sex marriage, Proposition 8, passed in 2008 by a 52-48 margin, finding it unconstitutional to discriminate against same-sex couples and now it seems certain the case will reach the U.S. Supreme Court. Gov. Arnold Schwarzenegger welcomed the judgment, which does not immediately allow California same-sex couples to marry.
–Marc A. Thiessen / American Enterprise Institute, in an op-ed for the Washington Post:
“Let’s be clear: WikiLeaks is not a news organization; it is a criminal enterprise. Its reason for existence is to obtain classified national security information and disseminate it as widely as possible – including to the United States’ enemies. These actions are likely a violation of the Espionage Act, and they arguably constitute material support for terrorism. The Web site must be shut down and prevented from releasing more documents – and its leadership brought to justice. WikiLeaks’ founder, Julian Assange, proudly claims to have exposed more classified information than all the rest of the world press combined. He recently told the New Yorker he understands that innocent people may be hurt by his disclosures (‘collateral damage’ he called them) and that WikiLeaks might get ‘blood on our hands.’”
News organizations have concluded over 100 Afghan informants have been identified, and at least one U.S. intelligence operative. And now WikiLeaks is preparing to do more damage. Assange needs to be put out of business, and as Thiessen points out, the United States has every right to go after him on foreign soil, though international cooperation is preferred.
“WikiLeaks represents a clear and present danger to the national security of the United States. If left unmolested, Assange will become even bolder and inspire others to imitate his example. His group is at this moment preparing to release tens of thousands of documents that will put the lives of our troops and our allies at risk. Will President Obama stop WikiLeaks from doing so – or sit back and do nothing?”
–California Congresswoman Maxine Waters plans to fight ethics charges in a House trial, just as fellow Democrat Charles Rangel seems destined to do. In Waters’ case, it’s about her efforts, as a member of the committee overseeing banking, to see that OneUnited Bank, a minority-owned institution, received $12 million in bailout funds. The problem is, her husband, Sidney Williams, had owned stock in the bank and served on its board. Waters claims she fully disclosed her husband’s ties to the bank, but my reading of the deal is it was belatedly so and OneUnited was far from a model institution.
The bigger picture, though, is that the Democrats are scrambling, or perhaps better put, bumbling, as House Speaker Nancy Pelosi was reduced last weekend to saying, “When I came in, we said we’ll drain the swamp. And we did.” Only this all seems like the Three Gorges Dam’s flood-enhanced runoff.
–In a Fairleigh Dickinson/Public Media survey, 42% of New Jersey residents say the state is on the right track, up 7% since May, while the percentage of pessimists is down an equal 7 points. Republican Gov. Chris Christie receives a 47% approval rating, with 36% disapproving. In a highly Democratic state, this gives you a good sense of why Christie is already being thought of in terms of 2012 and beyond.
–The latest Reuters-Ipsos poll finds Senate Majority Leader Harry Reid with a 48-44 lead over Republican Sharron Angle (among those likely to vote), in what is the most fascinating senate race of the year.
–I like this comment of Carlyle Group founder David Rubenstein, in an interview with Charlie Rose, on the aforementioned idea that the wealthiest Americans should give at least 50 percent of their net worth to a philanthropy when they die.
“Bill Gates did call me, and I agreed I would participate. Philanthropy is one of the great American inventions. When I turned 54, I read that a white male will, on average, die in 27 [more] years. So I realized I lived two-thirds of my life. What do most people say on their deathbed? They don’t say, I wish I’d made more money. What they say is, I wish I’d spent more time with my family and done more for society or my community. So I’m now 60 years old. And I’m doing what I call sprinting to the finish. I’m very concerned that if I slow down and retire, my immune system will relax, and all of a sudden the germs will come in and I’ll die at 61. I want to accomplish much more than I did in my previous 60 years because I now have the resources, the access, to do things I couldn’t do before. I’m actually more heavily scheduled than I was before, and I love what I’m doing. If I got paid nothing, I’d probably still be doing it.”
–I couldn’t agree more with those trashing first lady Michelle Obama for her trip to Spain with 9-year-old Sasha (and some of her friends), including that of the New York Daily News’ Andrea Tantaros who called Michelle a “modern day Marie Antoinette.” This trip, more so than any of her reported 8 vacations this summer, by the end of August, is the worst in terms of where the two are staying, one of the world’s top resorts, but more importantly, the costs borne by taxpayers for the immense entourage the first lady travels with. Heck, when they landed, I saw a report where the caravan was some 30 cars long…and that’s what we take care of, folks.
This woman just doesn’t get it. When Hillary took Chelsea, and Laura Bush took the daughters on big trips to Africa, at least some official business was also being conducted, and these were admittedly much different times in terms of the respective economies.
And as I noted a few weeks ago, I’m sick of how the Obamas have taken this whole ‘we want our kids to have a normal life’ spiel. I know this is impertinent to say, but at this point, I couldn’t give a damn about these girls. When the president first came in, it was sweet that he tried to be home for dinner every night, read them bedtime stories and such, but now look at all these kids have been doing. Michelle and Barack are truly tone deaf. Then again, Barack at times does act like the Man who would be King.
–And then there is Caroline Giuliani, Rudy’s daughter. This amazing brat, a 20-year-old Harvard student, shoplifted $150 worth of makeup from Sephora when she had $320 in her wallet! As the Daily News’ Joanna Molloy writes:
“Your estranged father, former Mayor Rudy Giuliani, is worth up to $60 million, and your mother, Donna Hanover, got $6.7 million in their messy divorce….
“Another question: Do they give blowouts at the 19th Precinct? Because you looked stunning when you left there with your distraught mother Wednesday, with perfect waves, cropped cranberry cardigan, designer shades perched LiLo-like atop your head. That was in stark contrast to your arrest ensemble: sneakers, pants, and a big ol’ baggie NYU t-shirt. Your college, Harvard, must have appreciated that…
“Top New York child psychiatrist Dr. Clarice Kestenbaum says shoplifting among children of wealth and privilege ‘often has nothing to do with the value of the item,’ but is an attempt to hurt a parent.
“Dr. Gregory Jantz, the author of ‘Gotta Have It,’ said you could be hurt and angry at your father, ‘but [you] still want his attention. This is a way of getting back at him.’
“For a guy who wanted New Yorkers to pay big bucks for throwing their gum in the street, it sure is.
–But wait…there’s more…in terms of kids with a famous parent. Bristol Palin called off her engagement to Levi Johnston for a second time, after a story emerged that Levi may have fathered a child with a pregnant ex-girlfriend. And so we throw Bristol’s name in the December file for “Idiot of the Year” consideration.
–How hot has it been? In Washington, D.C., there have been 45 days of at least 90 degrees vs. only 22 all of last year (couldn’t tell if Friday was No. 46, Washingtonians). And in New Orleans, or rather just outside at Louis Armstrong International Airport, the highest minimum daily temperature ever was recorded on Tuesday when the mercury didn’t fall below 84 degrees.
Here in the New York City area, July ended up being the second-hottest month on record, losing out to the record by an 81.5 to 81.3 average temperature margin in Central Park.
–You can have Twitter. For a second time, rumors swept the network that Bill Cosby was dead, forcing Cos to say, “To the people behind this foolishness, I’m not sure you see how upsetting this is. Again, I’m (rebutting) rumors about my demise.”
–Like the Fox News employee on Greta Van Susteren’s program who was responsible for using a picture of Shirley Sherrod to illustrate a segment on Maxine Waters. Van Susteren issued an effusive apology.
“The biggest political change in my lifetime is that Americans no longer assume that their children will have it better than they did. This is a huge break with the past, with assumptions and traditions that shaped us….
“Parents now fear something has stopped. They think they lived through the great abundance, a time of historic growth in wealth and material employment….But they look around, follow the political stories and debates, and deep down they think their children will live in a more limited country, that jobs won’t be made at a great enough pace, that taxes – too many people in the cart, not enough pulling it – will dishearten them, that the effects of 30 years of a low, sad culture will leave the country messed up. And then there is the world: nuts with nukes, etc.
“Optimists think that if we manage to turn a few things around, their kids may have it…almost as good….
“But do our political leaders have any sense of what people are feeling deep down? They don’t act as if they do. I think their detachment from how normal people think is more dangerous and disturbing than it has been in the past….
“(I’ve) never seen the gap wider than it is now. I think it is a chasm. In Washington they don’t seem to be looking around and thinking, Hmmm, this nation is in trouble, it needs help. They’re thinking something else. I’m not sure they understand the American Dream itself needs a boost, needs encouragement and protection. They don’t seem to know or have a sense of the mood of the country. [Ed. Ms. Noonan goes on to use the example of the immigration debate.]….
“When the adults of a great nation feel long-term pessimism, it only makes matters worse when those in authority take actions that reveal their detachment from the concerns – even from the essential nature – of their fellow citizens. And it makes those citizens feel powerless.
“Inner pessimism and powerlessness: That is a dangerous combination.”
–But to end on a light note, I loved this bit from Stephen F. Hayes in The Weekly Standard.
“Not long ago, I took my three-year-old son to the doctor. I was reading to him in the waiting room when an old man and his wife sat on the couch directly opposite ours – the only seats that weren’t occupied on that busy morning. The man introduced himself, and we began chatting. As we spoke, I noticed Conner staring curiously at his wife, who was wearing a patch over her left eye.
“I continued my conversation and Conner continued glaring at the woman. Finally, after what must have been two full minutes of examination, he spoke up.
“I’m rarely without words, but I was not going to tell her that my son thought she was a pirate. So I said nothing.
“Conner, however, heard her question and filled the awkward silence by loudly repeating his question.
“His hearing was apparently only a little better. ‘He wants to know if you’re a parrot.’”
Pray for the men and women of our armed forces, and all the fallen.
Gold closed at $1205
Oil, $80.70
Returns for the week 8/2-8/6
Dow Jones +1.8% [10653]
S&P 500 +1.8% [1121]
S&P MidCap +1.5%
Russell 2000 -0.0%
Nasdaq +1.5% [2288]
Returns for the period 1/1/10-8/6/10
Dow Jones +2.2%
S&P 500 +0.6%
S&P MidCap +6.2%
Russell 2000 +4.0%
Nasdaq +0.8%
Bulls 38.9
Bears 33.3 [Source: Chartcraft / Investors Intelligence]
Have a great week. I appreciate your support.
*Dr. Bortrum has a new column.
Brian Trumbore
