Educate Yourself

Week in Review
For the week 2/27/2006 - 3/3/2006
Brian Trumbore
President/Editor, StocksandNews.com

"Time for a new supra-alliance consisting of the U.S., Britain, Japan, Australia and India. It's also time to speed up the debate on whether we want to see Japan rearm, including nuclear weapons. I don't think we do, yet, especially since India can counterbalance China, but it's contingent on how far we allow North Korea to get with its own nuke program."

I was pleased to see President Bush finalize an agreement on the nuclear front with India that will allow this budding nation to share in our civilian technology which in turn can help power its future growth. And while India is not a signatory to the Nuclear Nonproliferation Treaty, this at least opens up 14 of its reactors to international inspection; albeit not the ones deemed most useful for its nuclear weapons program.

French President Jacques Chirac hailed the agreement, citing India as "a responsible power," while the International Atomic Energy Agency's Mohamed ElBaradei praised it as well.

It has long been a time for new thinking with regards to the largest democracy in the world and as I was writing three years ago, now more than ever we need India as an ally and counterweight not just to China but also Muslim extremists throughout the region. No doubt, a big part of the agreement reached this week is a new military alliance which will be played down publicly but exists nonetheless. That is good.

Of course critics will have a field day, however, and many of the arguments raised against the nuclear pact will be good ones. I don't purport to be an expert on the minutiae and I'm sure there will need to be further haggling on the details.

You can also be sure, as I've written the past few months, that Iran in particular will talk about the double-standard at work here. "Why can't we have the same technology India is receiving? We just want a peaceful program and they already have nuclear weapons!" Sorry. We know what you're up to and your track record isn't the most pristine in world history.

Monday will see the release of the IAEA's long-awaited final report on Iran's nuclear program and we already know Mohamed ElBaradei will point to Iran's lack of cooperation in answering his inspectors' questions, along with detailing where Iran is expanding its program against the dictates of the world community.

Russia learned firsthand that all Iran ever wanted it for was to pick the Russians' brains and the bottom line is Iran keeps insisting on enriching some uranium on home soil and the UN Security Council can not let this stand. It's time for the international community to act. But look for Iran to attempt to continue stalling.

Here are the facts. Ten weeks after the Dec. 15 vote to elect a new parliament, we appear to be no closer to forming a government than we were on Dec. 16. There is growing opposition to the nomination of Prime Minister al-Jaafari among the Kurd, Sunni and secular parties and the Shia alliance doesn't have the votes to ram their choices down the others' throats.

Following the bombing of the Golden Mosque, well over 1,000 have been killed. Some estimates now exceed 1,500; a staggering figure. One senior UN official told BBC News that of the bodies he has seen lined up in the morgues, 75% showed signs of torture or execution.

An Iraqi defense official said the militias would be disbanded and weapons confiscated unless they are part of the security forces, but who is going to enforce that?

Then you have a Zogby poll of U.S. soldiers in Iraq. 72% of the troops say we should pull out within one year and, incredibly, 85% said the U.S. mission was mainly "to retaliate for Saddam's role in the 9/11 attacks." As John Zogby said, he found this "bewildering." I would call it deeply disturbing.

What I'm hearing from some fellow conservatives is also stupefying. For example, Ret. Lt. Col. Ralph Peters (whose enlightening thoughts on China I quote in my current "Hott Spotts" column) loses all perspective whenever he writes about Iraq. This week, in a series of columns for the New York Post from the field, he writes "Things are going far better than you've been told."

Mr. Peters, I know you love our military, as do I, and the terrific job they're doing on an individual basis, but don't treat the rest of us like a bunch of morons.

One conservative who has been as balanced as any throughout this post-9/11 era is George Will. Writing in the Washington Post this week he offered up the following:

"When late in the spring of 1940 people of southeastern England flocked across the Channel in their pleasure craft and fishing boats to evacuate soldiers trapped on Dunkirk beaches, euphoria swept Britain. So Prime Minister Winston Churchill sternly told the nation: 'We must be very careful not to assign to this deliverance the attributes of a victory. Wars are not won by evacuations.'

"Or by curfews, such as the one that cooled the furies that engulfed Iraq after the bombing last week of a Shiite shrine. Wars are not won simply by facing facts, but facing them is a necessary prerequisite.

"Last week, in the latest iteration of a familiar speech (the enemy is 'brutal,' 'we're on the offensive,' 'freedom is on the march') that should be retired, the president said, 'This is a moment of choosing for the Iraqi people.' Meaning what? Who is to choose, and by what mechanism? Most Iraqis already 'chose' - meaning prefer - peace. But in 1917 there were only a few thousand Bolsheviks among 150 million Russians - and the Bolsheviks succeeded in hijacking the country for seven decades.

"After Iraqis voted in December for sectarian politics, an observer said Iraq had conducted not an election but a census. Now America's heroic ambassador, Zalmay Khalilzad, one of two indispensable men in Iraq [ed. the other being Ayatollah al- Sistani], has warned the Iraqi political class that unless the defense and interior ministries are nonsectarian, meaning not run as instruments of the Shiites, the United States will have to reconsider its support for Iraq's military and police. But that threat is not credible: U.S. strategy in Iraq by now involves little more than making the Iraqi military and police competent. As the president said last week: 'Our strategy in Iraq is that as the Iraqis stand up, we'll stand down.' ?

"Today, with all three components of the 'axis of evil' - Iraq, Iran and North Korea - more dangerous than they were when that phrase was coined in 2002, the country would welcome, and Iraq's political class needs to hear, as a glimpse into the abyss, presidential words as realistic as those Britain heard on June 4, 1940."

Well, I'm in a distinct minority on this one, having expressed my support last week. In a USA Today / CNN / Gallup survey, Americans are against the DPW deal by a 66-17 margin. A CBS News / New York Times poll had 70% against. Conservative commentator Pat Buchanan called the issue "a first-rate political disaster" for the president while Sen. John McCain, a supporter of DPW taking over selected operations at six terminals, said "UAE is freer than China."

Meanwhile, there was this story in the Jerusalem Post that DPW participates in the Arab boycott of goods from Israel and some in Congress jumped all over it.

But talk about much ado about nothing, yes, DPW may deny some goods but how many know this boycott goes back to 1951 and is circumvented on a regular basis, with many a 'wink wink'? In fact, Saudi Arabia dropped the primary boycott in order to join the World Trade Organization. Wouldn't want the facts to get in the way of a good story now, would we?

Last week I attempted to spell out that the main issue was not who has control of the ports, but just who is doing the packing on origination. I also noted that despite my own support for the deal, 9/11 Commission co-chair Thomas Kean was against it.

So this week Kean appeared on Chris Matthews' "Hardball" and echoed the exact point I was making. Each cargo container may make "10 or 11 stops" along the way before it reaches the U.S. There's your real concern, he concluded.

"At the end of the day, America's port security challenge is not about who is in charge of our waterfront. The real issue is that we are relying on commercial companies largely to police themselves. Both Congress and the White House should embrace a framework of 'trust but verify,' in President Ronald Reagan's phrase, based on real standards and real oversight. When it comes to the flow of goods around the planet, we need to know what's in the box."

Hassan M. Fattah and Eric Lipton had a piece in last Sunday's Times titled "Gaps in Security Stretch From Model Port to U.S." Following are just a few excerpts:

"The trouble is not focused at the end of the line - the port terminal at the American shore. It is spread up and down the supply chain at critical points across the globe, no matter what the United States government and partners like United Arab Emirates have so far tried?.

"The security efforts in Jebel Ali (Dubai) begin 24 hours before cargo headed to the United States is loaded onto a ship. Manifests detailing the contents of containers are submitted electronically to port authorities and customs. At a screening center in Virginia, federal officials try to identify containers that might present a risk by considering the origins of the cargo, its route, the sender and any changes in typical patterns.

"If the computer system identifies a container as high risk, customs agents ask a customs team in Jebel Ali to request that local officials screen the shipment with the giant gamma-ray machines, which produce an image similar to that of scanners for carry-on bags at the airport. New movable scanners set atop trucks can also move around the port for speedier checks that, port officials say, are more accurate?.

"Auditors visiting some of the 42 ports participating in the Container Security Initiative have found a variety of problems.

"Containers identified as high risk sometimes were sent on to the United States before agents on the ground could find them, a 2005 report by the Government Accountability Office said, although it did not specify if the problem occurred in Dubai. Port officials in Dubai insist containers cannot be placed on a ship bound for the United States if they are not approved by customs agents?.

"The manifest information that the government gets is often incomplete or inaccurate. And customs officials may overlook dangerous cargo because currently they have no reliable way of ensuring that a container was not tampered with after it was stuffed or inspected?.

"?the biggest risk is not in the main ports where security agents keep watch but in small vessels that can easily sneak below radar and dock anywhere?.

"Mr. Flynn, the former Coast Guard official, said the best model he had seen was in Hong Kong. Every container in a pilot project there was scanned and checked for radiation before it was loaded onto a ship. The data on each container was then stored.

"The cost of such a system is well worth it, Mr. Flynn said. 'If we get this wrong, we shut down the global trade system. Knowing that, I have to wonder, why isn't this treated like an emergency?'"

The news on the economy was mixed, at best, as were the major equity averages. In the case of our three-legged stool - housing, the consumer, and capital spending - housing sales, both new and existing, for January were down while inventories were up; the latest reading on personal consumption was up big (more so once again than a sizable gain in personal income); and a survey by the Business Roundtable revealed that our nation's executives are increasingly likely to loosen the purse strings in terms of capital spending.

So using that broad-brush approach, two of three would appear to be up, with the other down.

But when you look more closely, many retailers disappointed in the month of February, as released this week (after a weather induced binge in January), consumer confidence is down and readings on manufacturing were mixed. Plus auto sales for February showed further declines for Ford and General Motors, while Japanese carmakers continue to see gains in both sales and market share. Additionally, the latest annual survey by Consumer Reports shows that when it comes to quality rankings, Japan takes top honors, hands down.

Back to real estate, in an interview for Business Week, Angelo Mozilo, CEO of mortgage lender Countrywide Financial, sees declines in home values of 5-10% in 2006, with the hotter areas falling 20-30% within 1-1 ? years. Economist Robert Shiller sees declines of as much as 40% in the more speculative regions, with both agreeing that if you bought recently in Miami, Ft. Lauderdale, Phoenix, Las Vegas and just about all of California, adjust your mindsets accordingly.

Last weekend, Federal Reserve Chairman Ben Bernanke said the U.S. economy has absorbed the oil shock (one can't argue with that), and that his Fed won't focus on asset price bubbles. Commenting on Bernanke's challenges, former Fed chairman Paul Volcker said, "How would you like to be responsible for an economy that's dependent upon $700 billion of foreign money every year?" in reference to the current $726 billion trade imbalance.

This week long-term interest rates rose to their highest levels in a year and the culprit was news from both Japan and the European Central Bank. Japan's consumer price index rose in January for the third straight month, giving credence to the Bank of Japan's belief that the deflation fight is over. [Prime Minister Koizumi disagrees.] The BOJ meets next week and the market believes it will signal a change in direction on money supply and eventually interest rates. That causes some consternation amidst bond traders and hedge funds taking advantage of Japan's low borrowing costs, though it should hardly be a surprise. Nor should the ECB's move to raise its short-term benchmark another ?-point, though in this instance many question why the ECB would continue to do so, as the bank has already stated, since the economy is still projected to grow at just a 2% clip this year with 2% inflation.

But the above aside, I remain focused on geopolitics and as I've pointed out before I take what emanates from the Business Roundtable with a grain of salt because corporate CEOs are the most fickle when it comes to spending plans. A problem in a key hot spot may not stop the average American in their tracks, but it will have an impact in the boardroom. And there's also no doubt housing is going to start impacting some key data points. Not a disaster, but once we get through this upbeat first quarter the numbers will begin to turn decisively down.

--For the second straight week the Dow Jones registered a fractional loss, 0.4% to 11021, while the S&P 500 lost just two points, 0.2%, to 1287. Nasdaq, though, added 0.7% to the 2302 level.

Early in the week semiconductor stocks staged a sharp rally and Cisco Systems' move above $20 was significant from a technical standpoint for that once key barometer of the tech sector. But on Friday, Intel issued a revenue warning for the quarter and that put a bit of a damper on activity, though Intel's problems are Advanced Micro's gain as the latter continues to pick up market share at a seemingly accelerated clip.

The yield on the 10-year Treasury rose 11 basis points to its highest level since last spring amidst the aforementioned move by the ECB and the perception the Bank of Japan is preparing to act. Departing Federal Reserve Vice Chairman Roger Ferguson offered that economic growth is solid and core inflation "has remained moderate," giving some hope the Fed won't raise rates forever.

--In a survey for the Los Angeles Times and Bloomberg News, by a 60-37 margin people disapprove of the way President Bush is handling the economy. This has to drive the White House crazy, but it's all about globalization, the feeling that we are living beyond our means, both individually and in Washington, healthcare and perhaps just a general unease that there's another shoe to drop. Or maybe that last one is simply my own excuse for sleeping with one eye open.

--93 humans have died worldwide from bird flu since Dec. 2003, though as the H5N1 virus makes its way around the globe we still have zero evidence of a human to human transfer. Perhaps the most worrisome development of this past week was the death of a cat in Germany, the first mammal in Europe to succumb. And poverty-racked Niger joined neighbor Nigeria on the bird flu list and it's not as if these nations are prepared to cope with any widespread outbreak.

I've been saying watch out for the spring when the birds migrate back home (or to their vacation spots) and so we should expect some further distressing news in the second quarter, including the arrival of avian flu to the United States.

U.S. poultry farms are already being hit hard in terms of falling prices (including share prices for those that are publicly traded) before the flu even reaches here, and should H5N1 mutate to the human level, the travel industry will crash with word of the first quarantines and restrictions.

That said, investors should have time to plan accordingly, though the last thing I would be is bullish on airline stocks. Better to wait to see what the spring brings, and maybe miss further upside in that sector, than to get blindsided one morning that overnight some Asian country announced the first human to human transmission.

--And as the birds return in the spring, we already have our first mention of "the summer driving season" on the oil and gas front. But while inventories for all things gaseous and crude remain at or near record levels, the price of oil is still held hostage to geopolitical concerns; Nigeria, Iran and Saudi Arabia for starters. Regarding the Saudis, five suspected terrorists linked to the attempted bombing of the world's largest oil facility a week ago were killed in a shootout. Unfortunately the terrorists seem to mutate faster than bird flu has.

--BlackBerry users rejoiced late Friday as maker Research In Motion finally reached a settlement with NTP in its patent dispute. RIM then issued an earnings warning, but the stock soared nonetheless in after-hours trading as the uncertainty has been lifted.

--Russia's Economic Development and Trade Minister German Gref warned the nation's stock market could be on the verge of a crash. The RTS Index has doubled in the past year amidst record flows into Russian equities. Gref said the government was "very afraid of a so-called bubble forming." He joins a chorus of officials voicing similar concern. [Moscow Times]

[Tourism to Russia, incidentally, is falling off a cliff due to soaring prices, lack of Western-style hotel rooms, and a poor image. Most estimates put the decline at 20% over just the past year.]

--The U.S. and Colombia reached an agreement on a trade deal after 21 months of intense negotiations, a good thing; but now both the U.S. Congress and Colombia's legislature must approve it.

--Another auto parts maker filed for bankruptcy, 102-year-old Dana Corp., thanks to cutbacks at Ford and GM.

--On Tuesday, if you went out for a smoke and were an investor in Google you may have been startled to find that your shares, which had run up to $397 after the open, were suddenly down to the $340 level in a matter of minutes. The culprit was a statement on a company Webcast that Google needed other avenues of revenue on top of search in order to generate substantial growth levels. Sounds like the truth to me, but coming from an outfit that offers zero in the way of guidance it was a call to 'sell' and ask questions later.

Well, the next few days Google reassured analysts it was still a significant growth story, despite increased competition, and the stock finished the week at $378. It was $381 four weeks earlier.

--According to a suit filed by shareholders, former Fannie Mae CEO Franklin Raines "dispensed grants exceeding $12 million from the Fannie Mae Foundation to groups such as the Brookings Institution and John F. Kennedy Center, discouraging directors tied to the organizations from challenging policies that led to $10.8 billion in accounting errors, the complaint alleged." [Bloomberg News]

The filing said, "In more than 78 board meetings, 48 audit committee meetings and 38 compensation committee meetings, defendants never raised any opposition to Raines, enabling and fostering the perpetuation of his schemes."

Raines and former CFO Timothy Howard walked away with $135 million in severance after their ouster in December 2004, according to the suit.

Well, long-time readers shouldn't be surprised at any of this. I'm sure when Mr. Raines attended a concert at the Kennedy Center, patrons whispered to each other, "Look, there's Franklin Raines. He's done so much for this place. What a great man." It makes me sick.

--In Atlanta, International Management Associates LLC is a hedge fund through which some current and former NFL players invested, as well as other wealthy sorts. The CEO a number of weeks ago claimed the $150 million fund was being hit by a massive wave of redemptions, so it suspended operations. But authorities have only tracked down $150,000 in assets as of a few days ago.

--In a piece for the New York Times, Alexei Barrionuevo and Kurt Eichenwald spelled out just how far Enron's Ken Lay has fallen. Once worth $400 million, it's now estimated he is down to $650,000, max. Other assets of his, including a trust fund, are tied up in court cases.

--Citigroup CEO Charles Prince's total compensation for 2005 was $23 million, which considering his title and the fact it's Wall Street is about what we've come to expect these days. But Chairman Sandy Weill, who is retiring in April, received $21 million, a totally outrageous sum for a man who does little these days, especially considering all the malfeasance that occurred under his watch over the years. Weill, 72, did say he told the board that he would require use of the corporate jet for just 10 years, not until death as had been his original agreement. Very magnanimous of him, I think you'd agree. Oh, and the SEC has expanded a long-running probe looking into Citi's activities in Argentina going back to 1997.

--The SEC has launched a serious investigation into short-selling, but it is being hijacked because of the prime example it appears to be holding up as evidence, Overstock.com and its wacky CEO Patrick Byrne. The case has also gained a lot of publicity as initially the SEC's enforcement division, without the knowledge of its new chairman, former Congressman Christopher Cox, subpoenaed three journalists, including CNBC's Jim Cramer.

The SEC wanted to investigate the ties between journalists and hedge funds and any possible collusion in launching 'bear raids' on a company's shares. But given the constitution's guarantee of a free press, the SEC thought otherwise and for now has withdrawn the subpoenas.

--CBS is suing Howard Stern for his promotion of Sirius Satellite Radio while still on his CBS Radio-affiliated show, a patently absurd suit. CBS claims it deserves much of Stern's gargantuan pay package, including stock in Sirius, for in essence being his negotiating vehicle.

Separately, I purchased my own XM Radio this week as I gear up for baseball. But I'm a little disappointed in the music selections.

--Some interesting tidbits regarding coal, courtesy of Trader George and my friends at Pritchard Capital Partners, as well as National Geographic. [And welcome to the firm, Chris E.]

Reserves: 1 trillion tons of coal are available, worldwide. The U.S. has 27%, Russia 17%, China 13%, India 10%, Australia 9%, So. Africa 5%, Others 19%.

Global consumption: 5.440bn tons annually. China burns 1.5bn, Europe 1.117bn, U.S. 1.094bn, India 431mm, Russia 251mm

Projected use by 2025: China 3.2bn, U.S. 1.5bn, Europe 853mm, India 736mm, Russia 288mm, Others 1.6bn [net increase of 51%]

--My portfolio: Still recommending 80% cash / 20% equities, at least for the remainder of the quarter unless there is a significant move in share prices, either way, or something new on the geopolitical front. My own equity holdings remain concentrated in the carbon fiber play, which is doing quite well. Pilsner Urquell could be on tap this weekend as I watch Tiger and Phil battle it out at Doral.

Israel: Top Hamas officials were in Moscow on Friday and Hamas remained steadfast in its opposition to Israel, as political chief Khaled Mashaal, who hangs out in Damascus, said "There can be no peace if occupation continues." But whereas Russia initially received heat for inviting Hamas, in the end it further helped expose, and isolate, this vile group, and for its part Russia acted appropriately. President Putin, out of deference to the other members of the Quartet (Europe, U.S. and the UN) did not participate in the talks.

Earlier, Palestinian President Mahmoud Abbas said "I will not continue sitting in this place, against and in spite of my convictions." To Israeli officials, Abbas has long been irrelevant.

But the Europeans approved a $140 million aid package to the Palestinians, to be distributed by the UN, a move the United States didn't exactly discourage.

China / Taiwan: President Chen Shui-bian of Taiwan disbanded the politically symbolic unification council, but used the words "cease to function" rather than abolished. Set up in 1991, it was established to keep some sort of dialogue going between the two sides.

Beijing immediately went ballistic. Chinese President Hu Jintao said Taiwan's move was a "dangerous step on the road towards Taiwan independence." Premier Wen Jiabao declared, "This move (is) a serious blow to peace and stability in the Taiwan Strait." China's Taiwan Affairs Office said "Taiwan has become the most urgent task" facing the mainland.

President Chen, whose term expires in 2008, is hell-bent on declaring Taiwan's independence at some point and he wants Taiwan admitted to the UN under "Taiwan." But Chen doesn't have a majority in parliament and domestic opposition is mounting.

For its part, the Bush administration initially tried to massage Chen's move but by week's end a State Department spokesman said, "We expect the Taiwan authorities publicly to correct the record and unambiguously affirm that the announcement did not abolish the National Unification Council, did not change the status quo, and that the assurances remain in effect." Washington believes Chen overplayed his hand.

Recall that just last year China's National People's Congress had authorized force if Taiwan ever declared independence and the communists are playing the nationalism card in a big way.

Amnesty International issued a report saying purse snatchers in Guangdong province can face the death penalty, so if you plan on snatching anything there you may want to think twice.

And then there is the incident in Beijing I read about in the South China Morning Post.

An American woman was murdered in an exclusive Beijing compound favored by wealthy expatriates, but authorities are saying she died of a heart attack instead. Residents and workers at Le Leman Lake Villa all say Tina Tai was stabbed to death during a robbery, but the police wouldn't even let her husband and son into their home for two days after the body was found.

What is suspected is that a domestic worker overheard Tina and her husband discuss the fact she needed to withdraw $2,500 for a furniture delivery. And that's China today.

Russia: Equally disturbing are events in this nation. For example, Chechnya, where 29-year-old Ramzan Kadyrov has been named prime minister. Kadyrov's father was president in 2004 when he was assassinated and Russian President Vladimir Putin has taken a liking to the son. When Ramzan turns 30 in October it is expected he'll be named to his father's former position.

Aside from his age this is one scary looking dude and know this; he is currently head of a 1,000-man militia that has been linked to hundreds of kidnappings, torture and killings in Chechnya.

"On May 17, 1896, Muscovites began to gather on Khodynskoye Pole, where a lavish program of entertainment was planned to celebrate the coronation of Emperor Nicholas II. By 5 a.m. on May 18, several hundred thousand people were milling around the pavilions, and police were unable to maintain order. In the ensuing crush, nearly 1,400 died and 1,300 more were seriously injured. The emperor saw no reason to call off the festivities, however. That evening, as scheduled, he attended a ball.

"On Feb. 23, 2006, the Basmanny market collapsed. All day long, the main television stations fed us programming devoted to Defenders of the Fatherland Day. Meanwhile, people were buried alive under the ruins of the market, calling desperately for help. Rescue workers slowly pulled them out. A fire broke out and was extinguished. Those trapped in the ruins who escaped the blaze froze to death. At least 66 people died.

"No one thought to call off the celebration of Defenders of the Fatherland Day, however. Why not? As Mayor Yuri Luzhkov noted, there were two Muscovites among the dead. The rest of the people in the market at 5:40 a.m., when it collapsed, were foreign traders, mostly Azeris. Why cancel the gala televised concerts on account of the death of a few dozen people whom the defenders of the fatherland hassle every day outside railway stations?"

Belarus: On March 19, the people of this Russian ally go to the polls to re-elect dictator Alexander Lukashenko. As leading opposition leader Alexander Milinkevich says, Lukashenko is destined to receive 75%...a nice figure that shows both support and a free vote, at least that's what they'll sell the West.

So on Thursday, another presidential candidate, Alexander Kozulin, was beaten and detained after he tried to enter a conference chaired by the president. Three of Kozulin's aides were also beaten, while overall, 60 dissidents were rounded up across the capital of Minsk. U.S. National Security Adviser Stephen Hadley blasted Belarus' actions. "We would like [the vote] to be free and fair, and a prerequisite of free and fair elections is that you don't beat up opposition candidates or opposition supporters and throw them in jail."

Earlier in the week, authorities in Belarus claimed Milinkevich was planning a coup following announcement of the election results.

It has long been rumored that Lukashenko will allow his pitiful nation to be swallowed up by Russia as Putin attempts to recreate the old Soviet Empire, the two being best buddies.

But what's equally significant is that it was Lukashenko, with Putin's blessing, who moved up the election so that it would fall before Ukraine's critical parliamentary vote on March 26, the following week; the feeling being that if Belarus held its election after Ukraine, as originally scheduled, it could help stir up opposition forces aligned against Lukashenko.

Your intrepid reporter is going to be in Kiev the week between these two votes to get a better sense of the political climate.

Lebanon: The next ten days could be critical as the various political parties and tribes hold a "national dialogue" in an attempt to address all the issues this country faces. Rafik Hariri's son, Saad, met for seven hours the other day with Hizbullah leader Nasrallah. Better they talk than not, I guess. Beirut is in a total lockdown.

For starters, the leaders must address the presidency of Syrian lackey Emile Lahoud, as well as how to disarm Hizbullah.

Philippines: President Gloria Arroyo lifted the state of emergency following the arrest of at least 16 involved in a coup plot.

Serbia and Montenegro: The embarrassing inability of the government here to turn over Gen. Ratko Mladic is going to cost the Serbs dearly. The European Union has said if Mladic is not turned over to The Hague soon to face war crimes charges, Serbia and Montenegro's bid for EU membership is history. So the Serbian defense minister said they'd pick him up well before the end of the year, while the EU said, "Try March."

Ireland: What a bizarre, and depressing, scene in Dublin last weekend as a few hundred members of an IRA splinter group came down from the North to confront some Protestants who were planning a rare parade in Dublin to honor those who had died during The Troubles. The parade, in the predominantly Catholic Republic of Ireland, was bound to inflame passions but the IRA went nuts before it even got started, rioting in Dublin's most popular shopping district. Sinn Fein, the political arm of the IRA, disavowed any connection to the violence and for once I believe them.

Dow Jones -0.4% [11021]
S&P 500 -0.2% [1287]
S&P MidCap -0.1%
Russell 2000 +0.3%
Nasdaq +0.7% [2302]

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