G20…the Street…and Europe
Wall Street finally reacted negatively to all the crosscurrents in the global markets these days as the G20 played out as expected, with a tame statement but the same disagreements among participants as before, though thanks to the fact South Korea deployed 60,000 security personnel, including 10,000 riot troops, it was peaceful. One must also believe China told North Korea that perhaps new No. 2, soon to be No. 1, Kim Jong Eun, needed to show his manhood in some other fashion than by disrupting the G20. So I was wrong in saying it would be a violent affair.
But otherwise, in the days leading up to the Seoul gathering, Brazil’s finance minister continued to rail about the Federal Reserve’s latest quantitative easing efforts and the dilution of the dollar that has seen a flood of money into Brazil’s currency, which is hurting exports, while Germany, China, Russia and Japan all put in their own two cents, echoing Brazil, more or less.
Britain defended the Fed, though, saying it was in everyone’s interest for U.S. domestic demand to rebound, while World Bank chief Robert Zoellick clarified that he really wasn’t advocating a return to the gold standard with a piece in the Financial Times, but said gold’s rise to $1400 reflected a lack of confidence and that a new monetary framework was required, which no one can really disagree with.
German Chancellor Angela Merkel called for a new attempt to complete the Doha round of trade liberalization in 2011, saying:
“The greatest danger that threatens us is protectionism, and we are still not taking enough steps to ensure genuinely free trade.”
Merkel was relatively tame compared to her finance minister, Wolfgang Schauble, who last week called Ben Bernanke “clueless” and this week said “The American growth model…is stuck in a deep crisis.” For example, “It doesn’t add up when the Americans accuse the Chinese of currency manipulation and then, with the help of their central bank’s printing presses, artificially lower the value of the dollar.”
So that was the backdrop for the G20. In the end, the nations issued a statement pledging to curb deficits and move towards more flexible exchange rates, while countries with widely used currencies need to “be vigilant against excess volatility.” And they agreed they need to come up with a new series of benchmarks that would help warn of pending crises, so in 6-12 months’ time they’ll establish them and, oh, by the way, it was good seeing everyone and have a safe trip home.
Yes, you could see by Wall Street’s reaction on Friday that not too many folks were really impressed by the G20 summit and, hey, there were other issues to be concerned with as well. Like Ireland and Cisco Systems’ earnings report.
On the issue of Ireland, I nailed this one last spring….and going back years before. And after my musings from last time you shouldn’t have been surprised to see headlines this past week in the likes of the New York Times, Wall Street Journal and Bloomberg such as the following:
All issues I’ve discussed at length the past five months in particular. The spread on Ireland’s 10-year paper over the 10-year German bund hit another new record, an unheard of 6.50% before rallying just a bit on Friday after some reassuring words from the European Union. Earlier, France joined Germany in calling for investors to share in the risk in sovereign debt should restructuring be needed, which spooked those already invested in Irish or Greek or Portuguese or Spain’s paper. There was much talk of default, until France and Germany said, oh, we’re not referring to existing investors, but any new bond issuance from the likes of Ireland needs to have some provision for sharing the costs should it come down to default. So Ireland’s and Greece’s bonds rallied a little as they exhaled.
Alas, the crisis is far from over, to say the least. Ireland and Greece et al are not seeing the revenues come in to meet their new realities and the budget cuts they’ve been proposing are hardly dong much to improve consumer sentiment.
You know how I talked of Ireland’s emigration problem last time? I saw a stat this week that 1 in 3 between the ages of 25 and 34 have lost their jobs since 2008. That’s staggering. No wonder the young people are leaving in droves.
But Ireland’s politicians continue to say default is not in the cards and it’s true the government can fund its debt obligations through the spring before it needs to come back into the market, but no one really expects the situation to improve here beforehand. And so foreign investors, for one, are selling their Irish and Greek and Spanish bonds at an increasing clip. [Foreign holdings of Greek paper, for example, were down 14% in the third quarter over the previous one.]
Overall in Europe, the 16-nation Eurozone saw combined GDP rise just 0.4% in the third quarter over the second, when growth came in up 1%, this as industrial production in the zone declined 0.9% in September. So the slowdown is firmly in place, with Germany’s third quarter GDP up 0.7% vs. the big rise of 2.3% in Q2, while France grew just 0.4%, Spain was unchanged, and Greece’s GDP for the third was down 1.1%. [Nothing on Ireland as yet.]
[In India, industrial production rose just 4.4% in September vs. an expectation of a 6.4% rise, another worrisome sign.]
Then there is China, which was another cause for angst by week’s end. Earlier, China reported a larger than expected trade surplus in October, which didn’t help its case much in front of the G20 on the currency issue, as exports rose 22.9% from a year ago (though less than expected) while imports increased 25.3%.
No, the big issue was China’s release of its inflation data, with consumer prices up 4.4% for October (producer prices up 5.0%), the biggest increase in 25 months. So there are fears of further interest rate hikes, this on top of earlier ones, plus despite new reserve requirements on banks, bank lending has continued to soar, so expect even more restrictions to be levied on them. None of which is good for China’s growth prospects but the government has to nip inflation in the bud before civil unrest becomes an issue of a different kind. [It’s also disturbing that China seems overly concerned about repressing its dissidents as all manner of stuff has been happening on this front as well.] All of which led to a 5.2% decline in the Shanghai stock market on Friday. But at least Moody’s upgraded China’s debt, because, you see, China has a lot more cash to meet its obligations than, say, Ireland…or the U.S.
And what of the U.S. economy? Well, there wasn’t any big economic news except the weekly jobless claims figure was encouraging and the 4-week moving average is down to 446,000, the best since September 2008. The consumer continues to heal, paying down his debt, but this isn’t exactly great for retailers, though many seem optimistic Christmas could yet be OK. It sure as heck isn’t going to be with my family! But I did find a can of lentils I could wrap.
As for all-important Cisco Systems and its earnings report, Cisco is a great bellwether for a number of reasons, not the least of which is CEO John Chambers’ candor as he sheds light on the global economy through Cisco’s varied businesses. And this time the news could not have been worse. Cisco missed badly, particularly in its guidance for the current quarter, as the company talked of big cuts in government spending, not just in the U.S., but in Europe and Japan as well. State government orders, for example, were down a whopping 48% last quarter, so while retail and corporate spending is on an upswing, the key government component of Cisco’s is plunging.
Finally, a few other items. President Obama was dealt a big defeat in Seoul when he couldn’t wrap up a free-trade agreement with South Korea. The primary issue is autos. South Korea sells 10 times more of its vehicles in the United States than the U.S. sells in Korea and nothing was agreed upon to rectify the situation. It’s a pitiful performance on Obama’s part.
Commodity prices continue to spike, big time, though they finally backed off by week’s end. Part of this is growing demand, particularly in the developing world and an ever-increasing middle class, such as in China. But another part of it is pure speculation, particularly on items like sugar and coffee.
No doubt, the awful weather in countries like China, Russia and Pakistan and parts of the U.S. (such as earlier flooding in the Midwest) have reduced supplies of some products, but you cannot ignore the role of the speculators, not that there is much you can do about it. Hot markets draw hot money which moves prices higher still, etc. Were global growth to continue to soften after the generally solid recovery post-crisis, then commodity prices would fall, in some cases precipitously. Ergo, the inflation issue would be nipped in the bud. But I’ll comment further on this next week.
Lastly, I do want to say a word about the recommendations of the bi-partisan presidential deficit reduction panel. The panel recommended that the Social Security retirement age be raised to 68 by 2050, that there be a clampdown on medical malpractice suits, the deduction for mortgage interest be thrown out, deductions for capital gains and child care, among others, to also be tossed, gas taxes be increased 15 cents and income taxes reduced to three simple rates (8, 14 and 23 percent). In addition, defense spending would be slashed along with every other government agency and department, plus farm subsidies would be cut.
Those are the main items that I saw. I agree with every one of them. Kudos to the panel. Granted, the Democrats are raising holy hell, but I hope Republicans take the recommendations to heart which would give them even more of a legitimate platform for 2012.
Street Bytes
–The major indexes fell 2% across the board with the Dow Jones losing 2.2% to 11192, while the S&P 500 lost a like amount and Nasdaq declined 2.4% on the heels of the disappointing G20 meeting, China’s inflation report, and Cisco’s gloomy earnings.
Bonds took it on the chin, even as the Federal Reserve began buying Treasuries for QE2. Demand at recent debt auctions has been tepid, but we need another few weeks to see if a real trend has emerged.
–The Interior Department’s inspector general said the White House edited a drilling safety report “in a way that made it falsely appear that scientists and experts supported the administration’s six-month ban on new drilling.” [Dina Cappiello/AP]
“The inspector general says the editing changes resulted ‘in the implication that the moratorium recommendation had been peer reviewed.’ But it hadn’t been. The scientists were only asked to review net safety measures for offshore drilling.”
Of course the administration also said the oil had been all cleaned up when they really had no idea if that was the case. The president on down has lied consistently since the explosion and I’ve got all the evidence in this column to prove it.
Meanwhile, William Reilly, a former head of the EPA who is one of the co-chairmen of the National Oil Spill Commission, attacked the “culture of complacency” among those working on the Deepwater Horizon rig, which means BP, Transocean and Halliburton. Reilly said the companies made “one bad call after another” in the run-up to the disaster, and that “There appeared to be a rush to completion of the Macondo well and one has to ask where the drive came from that made people determine they couldn’t wait for sound cement or the right centralisers.” [The centralisers were to keep the steel well casing in place and BP only used six when its own modeling recommended 21.]
–Chevron announced it was acquiring Atlas Energy Inc., including a pipeline affiliate, for $4.3 billion in order to gain access to the natural gas-rich Marcellus Shale formation in Pennsylvania.
The Marcellus Shale includes New York, West Virginia and Ohio and is the largest known U.S. gas field. This past June, Exxon Mobil acquired shale-gas producer XTO Energy for $34.9 billion in a deal that has been criticized by many Exxon shareholders believing management way overpaid.
–Ah yes, I left PIMCO a long time ago, but every now and then I can’t help but think, ‘You idiot!’ I still have a lot of friends there and when I see that PIMCO once again kicked ass, taking in $56 billion in net assets in the third quarter, again more than any other money manager, I am happy for them. I had a great group to work with.
Of course if interest rates rise in a significant way, some of its funds will suffer from a net asset value standpoint, but then PIMCO has such a wide variety of products that one fund that may not be so popular today could be the number one seller tomorrow. If you’re a fixed income investor today, just make sure you understand the concept of duration.
–What two things have I said over the years that I don’t want to do? Fly on an A380 jumbo wiener, or take one of those cruises on a giant ship with 4,000 other folks.
So what we’ve seen the past week is the A380 come under serious question and Carnival Cruise Lines have a PR disaster with its Splendor ship with 3,299 passengers and a crew of 1,167 as a fire shut down the power and rendered it useless until it was rescued by Tugboat Mickey.
At least the disaster was a good advertisement for Spam and Pop-Tarts. Gotta admit I’m a sucker for cold Pop-Tarts, but I need to give Spam a try one of these days. I’m assuming it goes well with Pilsner Urquel.
Actually, the London Times recommended a Spam enchilada breakfast casserole for the passengers – “some Spam, onion, pepper and tomato in a tortilla can be rather nice when covered and baked with an eggy, creamy chili sauce.”
The Times also noted that “40-feet of rope, a wooden pole, a bed sheet and a few hundred empty tins of Spam should be enough to make a fairly workable raft, on which you can row for land or bob aimlessly around in the Pacific, Castaway-style.”
[Upon finally reaching land, one Splendor passenger said, “I want to eat some Mexican food. And I would like to take a warm shower.” Of course one can make this kind of statement when they know they’ll have a working toilet when needed afterwards.]
Back to the A380, Singapore Airlines said it was replacing Rolls-Royce engines on three of its planes after the Qantas Airways incident as a precautionary measure. Singapore Air operates 11 A380s, all with Rolls engines.
And then Boeing had to halt test flights of its 787 Dreamliner after a fire forced an emergency landing in Texas on Tuesday. Boeing called it the most serious incident yet since it began testing the long-delayed aircraft. Rolls-Royce makes the engines for the Dreamliner as well. [The A380 uses Trent 900 engines and the Dreamliner Trent 1000 engines, for those of you into this kind of thing.] Boeing shares tanked 10% on the week.
–There is nothing stupider than the International Energy Agency’s long-term projections on oil prices. Of course the IEA didn’t predict oil would soar to $150, nor retrace all the way back to $40, so when you see a prediction that the price of oil will rise to $110 in 2015, file it in the garbage.
What the IEA can do, however, is supply a respectable demand forecast and in the case of oil it’s still largely about China, which is why oil slipped on Friday on the prospects that the government there may have to rein in the economy a bit to halt the rise in consumer prices.
–Inflation Alert: Google, worried about staff fleeing to competitors, is giving a 10% raise to all of its 23,000 employees, plus a Christmas bonus of $1,000. It seems 10% of neighboring Facebook’s employees are Google veterans, according to the Wall Street Journal, with other Silicon Valley companies going after the Googleonians.
Note: While I’ve said I would not be concerned about inflation, broadly speaking, until wages began to rise, the above is not what I’m talking about…it’s largely a one-off that has zero to do with the overall economy.
Oh, and Google fired the employee responsible for the leak on the raise.
–General Motors’ car sales in China rose 19.6% in October, while Ford’s, coming off a lower base, rose 33%. China’s Geely Automobile Holdings reported its October sales rose 37% from the same month a year ago. In the first ten months the company has sold 315,000 vehicles. The issue is how long will it take Geely to become a factor here in the U.S.?
–New York Mayor Michael Bloomberg, in Hong Kong, defended China’s trade practices.
“It is very dangerous for us as a society – I’m speaking of America – to focus on blaming others, because what you do then is you don’t focus on your own practices.”
On the issue of the Obama administration’s decision to open an investigation into whether China violated WTO rules by subsidizing its exports of solar panels and other clean-energy products to the United States by restricting imports, Bloomberg said:
“Let me get this straight. There is a country on the other side of the world that is taking their taxpayers’ dollars and trying to sell, subsidize things so we can buy them cheaper and have better products, and we’re going to criticize that?”
Bloomberg noted the U.S. subsidizes “an enormous number of industries” itself.
Maybe Mayor Mike is launching a third party bid in China.
Separately, Rupert Murdoch told an Australian publication of a comment Bloomberg made about President Obama after playing golf with him over the summer. Murdoch said after the outing that Bloomberg “came back and said, ‘I never met in my life such an arrogant man.’”
Bloomberg’s office responded, “As he has said many times, he believes all Americans should be rooting for the president to succeed.” [New York Times]
–Microsoft CEO Steve Ballmer sold 50 million shares worth about $1.3 billion recently. He still holds another 350 million. So if your bank won’t extend you credit, maybe drop Mr. Ballmer a line. Offer to be his lawn jockey or somethin’ in return.
—Call of Duty: Black Ops sold a record 5.6 million copies in North America and the U.K. on its first day, $360 million in sales, according to video game publisher Activision. I have never played a game like this in my life.
“A year ago, Long Island Judge Jeffrey Spinner concluded that a mortgage company’s paperwork in a foreclosure case was so flawed and its behavior in negotiations with the borrower so ‘repugnant’ that he erased the family’s $292,500 debt and gave the house back for free.
“The judgment in favor of the homeowner, Diane Yano-Horoski, which is being appealed, has alarmed the nation’s biggest lenders, who say it could establish a dramatic new legal precedent and roil the nation’s foreclosure system.
“It is not the only case that has big banks worried. Spinner and some of his colleagues in the New York City area estimate they are dismissing 20 to 50 percent of foreclosure cases on the basis of sloppy or fraudulent paperwork filed by lenders.”
Good! That was the basis of my rant a few weeks back. Fraud is fraud!
[But an appeals court could overturn the ruling. In other cases, the judges are demanding that the banks modify the loans when they are balking.]
–Fannie Mae and Freddie Mac “have spent more than $2 billion this year on foreclosed property expenses after acquiring tens of thousands of homes through foreclosures,” as reported by USA TODAY.
–In the ongoing situation involving former Hewlett-Packard CEO Mark Hurd and Jodie Fisher, the Journal uncovered a letter sent from Fisher’s attorney Gloria Allred to Hurd, which he forwarded to the H-P board, that claims Hurd told Fisher about a still-secret plan for H-P to buy Electronic Data Systems Corp. Hurd also accessed online a 1997 porn film that Fisher had a role in.
–Deflation Alert: Josh P. relayed the story of Red Lobster reducing some of its price points, taking the average dinner option from $19 to between $13 and $17, plus it’s introducing some spiffy new options such as parmesan-crusted tilapia, which is really sea robin…I’m assuming you know that. 94% of the fish you eat in restaurants is not really the fish listed. In fact it could be pork with fish sauce…just sayin’.
–The U.S. Postal Service said it lost a record $8.5 billion in the year ending 9/30 as revenues were down 1.5% over the previous year and mail volume fell 3.5%.
–Barry Diller’s IAC/InterActiveCorp. is laying off 130 engineers as he gives up his dream that Ask.com, the No. 4 search engine, could take on Google. Diller paid $1.85 billion for what was then known as Ask Jeeves back in 2005, and earlier this year IAC slashed the value of Ask.com in half in taking a $917 million write down. Ask.com’s market share never rose above 4%, compared to Google’s 64%. The search engine is going to be revamped into an online question-and-answer function at the site, which sounds like a real loser.
–Nevada was America’s fastest-growing state for 19 consecutive years until 2006. This year the population will drop an estimated 2.6%. The last time Nevada suffered a decline was 1920. When the two prime industries in a state are gaming and construction you have a problem, and of course Nevada has had the highest state foreclosure rate for 15 quarters in a row, currently running at five times the national average. Construction employment peaked at 148,800 in June 2006 and is now 60,000.
–Tourism to Lebanon in the first nine months of the year was up 17.8% over 2009. Better go in the next two weeks if you have the desire to do so…after that it will get very dicey.
–McDonald’s, the greatest company in the history of mankind (even better than the Roman Empire’s Circus Maximus Group LP), said comparable-store sales were up 6.5% in October from a year earlier as it continues to kick butt in a tough global environment.
–I’ve never been a big Conan O’Brien fan…I’ve also seldom stayed up to catch the lad, for starters, but I did watch him Monday and Tuesday and now that he’s on at 11:00, I may give it a shot now and then. His return on Monday was a huge success for TBS, 4.2 million viewers vs. Jay Leno’s 3.5 million and David Letterman’s 3.4 million (though the latter two start 30 minutes later). But…on Tuesday, Conan’s audience had already dropped to 2.8 million. I did think his opening video bit on Monday, explaining where he had been all this time, was very funny and it’s worth looking up.
–Back in the day, my favorite news magazine was U.S. News & World Report, but now even its monthly format is going the way of the dodo. The focus will instead be on the digital offerings.
–So Josh P. told me previously of how his Street-related firm hiked employees’ healthcare premiums by the same 19% as everyone else is these days, but then they learned this week the employee contribution for the vision plan is increasing from 30% to 50%. J.P. concluded, “Looks like its brail from here on out.”
Foreign Affairs
Iraq: There was some good news here this week, but before you gather your neighbors for a block party, understand that the tentative power-sharing agreement reached among the key parties in Iraq, 8 months after the March parliamentary election, is just that…very tentative.
The agreement is to have Nouri al-Maliki remain as prime minister for a second term. Jalal Talabani, a leader of the Kurds, would remain as president, keeping the Kurds’ influence in place. Ayad Allawi’s Iraqiya alliance, composed mainly of the minority Sunnis but which received the most votes in the election, would then be in charge of the Speaker’s office. So that’s how the three key positions would be divided. Allawi himself, then, was to be put in charge of a new national security council, as well as be foreign minister. The national security council was to have the final say on foreign affairs, the role of the military, etc. So you’d have a system of checks and balances.
But the United States isn’t happy because Maliki, who has courted Iranian support at every turn, remains numero uno, and on Thursday, as the new speaker was selected in parliament, the Sunnis then walked out, including Allawi, because they say they cannot trust Maliki, with the key reason being the issue of de-Baathification and four Sunni lawmakers with ties to Saddam’s old regime who are being barred from assuming their positions. The Sunnis argue that any positions these four, and others of their ilk, have has nothing to do with the old politics.
Separately, you have the issue of Christians, who faced more deadly attacks this week, 14 bombs against Christian homes and interests on Tuesday and Wednesday alone. Needless to say, Christians continue to flee, either to Syria, Jordan or Egypt, or the safer Kurdish-held north.
Israel: Strange week in terms of the U.S.-Israeli relationship. Prime Minister Netanyahu was in the States giving a number of speeches and sitting down for interviews. In the main speech to a Jewish group in New Orleans, Netanyahu called the situation with Iran’s nuclear program more dangerous than ever because there are zero signs the mullahs are backing off their quest. The prime minister said the only hope for stopping Iran without force is for the United States and others “to convince Iran that it is prepared to take such action.”
“Containment will not work,” said Netanyahu. “It won’t work with a brazen regime that accuses America of bombing its own cities on 9/11, openly calls for Israel’s annihilation, and is the world’s leading sponsor of terrorism.”
What’s curious is the timing of the prime minister’s aggressive tact. Netanyahu summed up Iran this way:
“It denies the Holocaust. It sponsors terror. It confronts America in Afghanistan and Iraq. It dominates Lebanon and Gaza. It establishes beachheads in Arabia and in Africa. It even spreads its influence into this hemisphere, into South America.” [Ed. i.e., Hizbullah in Venezuela, as I’ve been noting for years.]
Netanyahu’s point being Iran is doing all this without the bomb. Imagine what it would do with it.
But then at the same time, the Israeli government announced it was advancing a plan for 1,300 homes in east Jerusalem, which brings the total of new homes in the area that are on the drawing board to 2,000, this after the end of the moratorium on settlement construction in September, which put an end to direct talks between the Israelis and Palestinians.
What seemed to startle Netanyahu was the tough U.S. response, as both Obama, from Indonesia, and Sec. of State Hillary Clinton condemned the move. Clinton said:
“This announcement was counterproductive to our efforts to resume negotiations between the parties. We have long urged both parties to avoid actions which could undermine trust, including in Jerusalem.”
The U.S. also said it was giving the Palestinians a massive injection of aid. Netanyahu replied, “Israel sees no connection between the peace process and planning and building policy in Jerusalem.” Plus, he says, the homes in contention are two years from being constructed.
It’s not a good time for the U.S. and Israel to be at odds, especially considering…
Lebanon: …which is a mess. The STL (Special Tribunal for Lebanon) looking into the 2005 assassination of Rafik Hariri appears to be getting closer and closer to issuing indictments and it is expected that members of Hizbullah are in the group to be charged. Hizbullah’s leader, Sheikh Nasrallah, said he will not allow members of his militia to be arrested and that “Any hand that (touches) any of them will be cut off.”
Then, President Michel Sleiman (also spelled Suleiman) adjourned a Cabinet meeting debating the issue of “false witnesses” because a vote on the topic could have threatened the government of Prime Minister Saad Hariri.
What the ‘false witness’ topic is about is what happens to those who may have supplied the STL with information on the killing of Rafik Hariri and 21 others? Hizbullah insists that those who “misled investigators” should be put on trial themselves and that the witnesses should not be protected. Secretary of State Clinton said the U.S. would challenge any attempts to hinder the tribunal’s work. To say Lebanon is a tinderbox is an understatement.
Iran: Back to the nuclear issue, this week President Ahmadinejad made it very clear Iran won’t discuss it in coming talks later this month. “We have repeatedly said our (nuclear) rights are not negotiable.” So why bother holding them? It’s why it’s getting down to crunch time for the U.S. in terms of ratcheting up the language as Netanyahu wants to see, but at the same time, you all know America is not in the mood for another conflict, to say the least, a position the Obama administration clearly adopted. Iran thus continues its four-corners offense, a brilliant stall game even if sanctions are biting in terms of their economy.
Afghanistan: It’s all about the December review at this point. But the issue of Canada’s involvement came up. They are supposed to pull their troops by end of next year but the White House is trying to get them to stay, even if in a non-combat, training role. Canada has lost more than 150 soldiers in the war thus far.
Yemen: Al-Qaeda leader Anwar al-Awlaki renewed his call for jihad against Americans, while his father’s lawyers back in the States argue the U.S. can’t target an American citizen for death. You can only shake your head on this.
Meanwhile, a French newspaper ran a story on an incident from two years ago that has just come to light. Al-Qaeda is so desperate, it was attempting to stitch bombs into dogs that would then detonate in their carrier containers once placed on planes. But the bombs were so poorly designed, all they did was kill the dogs as the material poisoned them.
India: I got a kick out of President Obama’s attempts to reframe his long-delayed trip to India as one in which he was looking for jobs for the American people instead of the military nature it was originally intended to be. Obama called the new relationship “the defining partnership of the 21st century.” Should this come to pass, that would indeed be good for Planet Earth, but I imagine China will have something to say about this, for good or bad.
But while Obama wanted to talk jobs, after his shellacking on Nov. 2, to prove he got the message of the voters, India has only one concern, terrorism, as Prime Minister Manmoham Singh said India can’t engage in talks with Pakistan, as the U.S. wants, as long as its enemy’s “terror machine is as active as it’s ever been.”
Obama did back India’s bid for a permanent seat on the UN Security Council, which India deserves, while halfway around the world, the U.K. was backing Brazil’s bid. Both should get seats.
Russia: The West was in an uproar over the latest reporter being almost bludgeoned to death, Oleg Kashin. [He’s supposed to survive severe injuries.] There’s a reason why I facetiously said last week that I wished I had been in attendance for Mikhail Khodorkovsky’s trial, but that I would have been beaten walking back to my hotel. Human rights groups assert there have been 19 unsolved murders of journalists since 2000 and that investigations into such attacks lead nowhere. Nonetheless, once again President Dmitry Medvedev said “the criminals must be found and punished.”
Kashin was unique in that he worked for a mainstream, not opposition, newspaper and he was covering an ugly fight I wrote of awhile back, that being the construction of a highway through a protected woodland.
Kashin’s father said the attack on his son is “a potent challenge to the authorities. They must find them…the scumbags. By doing this a 10-minute walk from the Kremlin, they are not just throwing down a challenge to the media. They are throwing down a challenge to everyone.”
“Few Russians believe that (the beatings of reporters are) due to the fecklessness of police and prosecutors. Rather, it arrives from the fact that most or all of the crimes are sponsored by senior government officials or people close to them. The highway near Moscow, for example, is being financed by a crony of Prime Minister Vladimir Putin, Mr. Medvedev’s de facto superior. Mr. Kashin’s reporting about the road was attacked on the Web site of a Kremlin-sponsored youth movement, which declared that ‘Journalist-traitors need to be punished!’
“Mr. Medvedev has been saying for the last year that Russia badly needs to attract Western investment to modernize its economy. That’s why he has repeatedly proclaimed an end to what he once called ‘legal nihilism’ – and why he promises action following attacks on civic activists and journalists. Neither the Obama administration nor any other Western government has held the Russian president accountable for his failures to deliver. That’s probably one reason the crimes continue.”
And on the issue of Khodorkovsky and his partner Lebedev, the Post editorialized that the U.S. Senate passed a resolution saying the two “are prisoners who have been denied basic due process rights under international law for political reasons.”
“(But) what of Barack Obama? Previous U.S. presidents, after all, have turned Russian dissidents into personal causes. Jimmy Carter and Ronald Reagan championed Sakharov; Reagan even declared Andrei Sakharov day.
“Obama, who has spent the past two years assiduously courting Putin and Medvedev, has spoken publicly about Khodorkovsky just once, in response to an interviewer’s question last year. He said that he found the new charges ‘odd’ but that ‘I do not know the intimate details’ and ‘I think it is improper for outsiders to interfere in the legal processes of Russia.’
“In his glass cage, Khodorkovsky concluded by saying that ‘everyone understands’ that his case ‘will become part of Russian history. All the names will remain in history – of the prosecutors and judges – as they remained in history after the notorious Soviet trials.’ That’s also true of Obama: His record on Khodorkovsky will become part of his history. So far, it’s a weak chapter.”
Myanmar/Burma: Following its sham election, the country’s first in 20 years with the military-backed party winning a rigged vote (turnout was also miserable), all eyes are on Nobel laureate and dissident Aung San Suu Kyi, who has spent 15 of the past 21 years in detention but is due to be freed as her latest house arrest term expires on Saturday.
Random Musings
–In the first AP-GfK poll after the election, 46% view Sarah Palin favorably, 49% unfavorably, and only 5% don’t know enough to form an opinion, which is an amazingly low figure. For instance, Mike Huckabee is viewed favorably by 49%, with a 27% unfavorable rating, meaning 24% have no opinion.
But I am absolutely astounded by the following. “Among adults who identify themselves as Republicans or GOP-leaning independents, 79% view Palin favorably, 17% unfavorably.” So this means Palin could win the nomination…then what?
Well, if it was Palin vs. Obama today, when it comes to independents, 43% have a favorable view of Palin with 61% having a positive one of Obama.
South Dakota Republican Senator John Thune has his work cut out for him if he is to run for president. 70% of prospective voters have no opinion, i.e., have no clue who he is. Ah, ladies, that would soon change because Mr. Thune is a hunk, so women who know him say, and this hunk factor can carry him a long way once the primaries get started.
“Despite its considerable gains in the midterm elections, the GOP has a problem looming in the margins named Sarah Palin.
“She who can rouse the base like none other is now She to Whom Respect Must Be Paid. Like it or not.
“Many with the so-called party establishment don’t quite know what to do about Palin. She’s adored by Tea Partyers, to whom she conveniently attached herself as soon as she sensed a shift in the air. A rogue like Palin isn’t going to let a rogue movement fill a stadium – or a desert – without her.
“She also had some luck with her gambles on midterm endorsements, at least in the House….Palin’s Mama Grizzly shtick, which followed her pit bull-with-lipstick shtick, apparently was effective. She had a less-stellar record in the Senate, with only six of her 11 anointed ones winning.
“Thus, Republican Rep. Spencer Bachus of Alabama recently had the audacity to assert what heretofore had been relegated to whispers behind closed doors: ‘Sarah Palin cost us control of the Senate.’’
Of course now Bachus is trying to pull back from his statement, out of fear.
“Watching Palin drop foreign policy and economic nuggets into the twitterverse confirms that the real agenda for Palin is President Palin, and therein lies fresh terror for Republicans. She’s too powerful to ignore, and too (fill-in-the-blank) to take seriously.
“She is – in a word yet again whispered rather than uttered – ‘Dangerous.’
“Not only would Palin the presidential candidate drive away other Republican candidates, but she would most certainly lose a national election. Thus, the GOP finds itself in a pickle: How to shed itself of this attractive nuisance?
“The answer, alas, is the stuff of all complicated relationships: Can’t live with her, can’t live without her.”
–Former President George W. Bush sold 220,000 copies of his memoir the first day. I watched the Matt Lauer interview and let’s just say that while I voted for the man twice, when my own book comes out (granted, it’s likely to sell 8 copies the first day as I run around to local book stores to buy up the few copies they have), I can tell you now he will not be treated well, and seeing as the book will be about the period 1999-2009, it’s about him, in essence.
–California Republican Rep. Dana Rohrabacher (Orange County) posted on his Twitter account that George W. Bush is “not a class act,” responding to conservative Mark R. Matthews who called Bush a “class act” for not criticizing President Obama. Rohrabacher also says Bush “destroyed” the GOP.
–But what’s this? According to the New York Daily News’ Thomas Defrank, a longtime scribe of all things Washington, George W. Bush has told friends, as one put it, that “McCain ran a lousy campaign with an unqualified running mate and destroyed any chance of winning by picking Palin.”
–As to the mysterious condensation trail in the sky just off the California coast, I have to respect the opinion of experts such as John Pike, who said the object in the video moved too slowly to be a missile and had to be an airplane contrail. But Global Security Newswire says there is a very remote possibility it was a secret test of a foreign-made missile using an obscure U.S. Navy facility at San Nicolas Island. “On at least one occasion in the past, the Defense Department has used San Nicolas – an uninhabited land mass in California’s Channel Islands – for engineering evaluations of foreign missiles that the U.S. military seeks to better understand,” the missiles having been procured through clandestine intelligence or military efforts. For example, it’s become public that several years ago the Pentagon acquired some Scuds which it then tested.
–Sign of the Apocalypse: Prosecutors in New York arrested 17 people, charged with the theft of $42 million of Holocaust compensation funds provided by the German government. The charge is that the 17 (and it could end up being far more) fooled a non-profit group that distributes the funds into making 5,500 false payments. Six of those charged work for the group – the Conference on Jewish Material Claims Against Germany. The chairman of the group itself was “outraged” as he was the one who detected the matter and contacted the FBI. The defendants face up to 20 years in prison. I’d give them all life without parole. When the hell are we going to wake up and understand we have to start using high-profile cases to set an example?! Medicare fraud, for instance, should be life without parole at a certain monetary threshold.
–USA TODAY had a great piece on music producer Quincy Jones. What a life he’s had, especially given the incredibly rough start to it, like getting an ice-pick planted in his head. Jones keeps lobbying President Obama to appoint a U.S. minister of culture, primarily to promote music education, and while I’m sure some on the right would rail against such a position, we need something like this. As Jones (who’s 77 but still going strong, ergo, he’d be the perfect person to get things started) insists, music is culture’s essential art.
“It’s the only one that engages the left and right brain simultaneously, the emotion and intellect. It’s the voice of God.
“I tell my kids and I tell protégés, always have humility when you create and grace when you succeed, because it’s not about you. You are a terminal for a higher power. As soon as you accept that, you can do it forever.”
Heck, those two paragraphs are far more inspiring than anything our president has been preaching recently. Let’s slide Jones into the presidency and move Obama to Chairman of the President’s Council on Physical Fitness…or move Michelle to that position and give Obama a position at the Smithsonian.
–It drives me absolutely nuts when men like George W. Bush and Barack Obama talk of how “hard” the presidency is. Excuse my language, but no s—, Sherlock! And then Obama says the following to Steve Kroft on “60 Minutes.”
“(You) know, when you’re campaigning, I think you’re liberated to say things without thinking about, ‘Okay, how am I gonna actually practically implement this.’”
So, sports fans, that campaign of his, as we’ve all painfully learned, was total B.S.
“Over the past two years, I’ve polled tens of thousands of Americans. Their top complaint about politicians is that they fail to ‘say what they mean and mean what they say.’ Their top complaint about government is that it lacks ‘accountability.’ Their top complaint about Washington is that ‘government has grown too big, too inefficient, and too out of control to do even the bare minimum things it is supposed to.’
“These concerns explain why Hurricane Katrina ended President George W. Bush’s presidency three years before his term expired. They explain why the gulf oil spill disaster crystallized voters’ concerns that Obama is in over his head. And they explain why the stimulus – after all those billions in debt, unemployment is still near 10 percent – has been deemed a failure.
“Americans’ agenda is simple. In broad terms, they want the government to spur job growth, but not by subsidizing more government jobs with taxpayer dollars. They want Washington to balance the budget and reverse the growing influence of government on daily life. They want the government to encourage success, allow failure, punish those who break the law – and then get out of the way. And above all, they want politicians to follow through on their promises, even if that means tempering those promises in the first place.”
When it comes to Republicans now, the people say they’ll swallow big budget cuts. It’s time to follow through, or as Luntz says, “Republicans cannot be timid.”
–Sign of the Apocalypse, part deux: Former New York Republican Gov. George Pataki is considering running for president. Pataki was a dreadful governor for 12 years. He would be dreadful for America.
–Maybe I shouldn’t have, but I found the statistic that 1,100 college students each year commit suicide staggering.
–I would like to thank the jury that sentenced Steven Hayes to death in Connecticut for its incredible courage. As the husband of the victims (his wife and two daughters) said:
“Vengeance belongs to the Lord. This is about justice. We need to have some rules in a civilized society.”
–Washington Post conservative columnist Charles Krauthammer was right to opine on Friday that the stink caused by the cost of President Obama’s trip to India was a bit overblown and misses the big picture that Obama sent the right message to India. My only complaint would be that it took the president over 18 months to get there.
–So you know how I made the predictions a few weeks ago that, one, the international space station will have a depressing issue next year and, second, that we’d receive a signal from outer space in 2012? Last weekend’s Washington Post had a story that started out, “The scientific search for extraterrestrial intelligence went global this weekend as observatories in 13 nations on five continents trained their telescopes on several promising star systems.
“While they don’t expect their one-day joint effort will find the kind of intentionally produced signal from afar that enthusiasts have been seeking for decades, participants say the undertaking illustrates just how far the search for extraterrestrial intelligence, or SETI, has come….
“Suddenly, the prospects for finding planets that might have complex life and environments to support it appear to have brightened. Scientists well in the future may still conclude Earth is the only planet that harbors life, but discoveries in the last few years seem to increase the odds that we are not alone after all.”
Recently, Microsoft co-founder Paul Allen gave the SETI enterprise $30 million to build a large array of radio telescopes in the mountains of northern California.
Said one expert, “Who knows what kind of life we’ll ultimately find out there? It won’t be like our life because it will have evolved in response to different kinds of forces. But there’s no doubt about it – the underlying chemistry will be the same and that means it will be basically an extension of what we have here.”
–I forgot to mention last time how I spent 4 nights in Honolulu on either end of my recent trip and met some of the coolest kids from our Navy. As I passed out a ton of business cards, I hope some of them are reading. I guaranteed them it would make them look smarter in front of their COs. But boy, these kids are hands down the best of America.
–Lastly, why am I in Spokane? Actually, I just got back from the Boise State-Idaho football game in Moscow, Idaho, Friday night. It’s a boring tale for this column why I decided to attend the contest, which proved to be a 52-14 blowout for the No.4-ranked Broncos (I left at 31-0), and I had to stay in Spokane because there is a real lack of hotel rooms around the Moscow/Pullman area. With this trip my traveling is done through January. At least that is what my body clock is screaming. No mas!
Pray for the men and women of our armed forces, and all the fallen.
Gold closed at $1365
Oil, $84.88
Returns for the week 11/8-11/12
Dow Jones -2.2% [11192]
S&P 500 -2.2% [1199]
S&P MidCap -2.0%
Russell 2000 -2.3%
Nasdaq -2.4%
Returns for the period 1/1/10-11/12/10
Dow Jones +7.3%
S&P 500 +7.5%
S&P MidCap +16.1%
Russell 2000 +15.0%
Nasdaq +11.0%
Bulls 48.4
Bears 23.1 [Source: Chartcraft / Investors Intelligence]
Have a great week. I appreciate your support.
Brian Trumbore
