the week 2/18/2008 - 2/22/2008
/ Los Angeles Times.Manchester, England.
Shirley Hale's husband dumped her for a younger woman and
moved to the Czech Republic, Hale didn't get mad. She got
a new house.
selling the family home in 2002, she bought a house in the
suburbs of this old industrial city in northern England and
took out a mortgage to fix it up. By last year, though, Hale
had fallen behind on the payments on her 'gorgeous little
place' and was looking at foreclosure - until a sales agent
for a mortgage 'rescue' company stopped in.
signed over her house for $50,000 less than what it was worth.
In return, she says, she was told she could live in it as
long as she wanted if she paid the company $600 a month. Six
months later, Hale learned her home had been sold and the
mortgage transferred to one of Britain's major subprime lenders.
Hale had 28 days to get out.
" 'I don't
even know who owns it now,' Hale, 72, said wistfully in an
interview in the tiny public-housing apartment she lives in
now. 'It's empty still.The garden shed has been stolen, all
my built-in kitchen has been smashed to pieces, the wallpaper's
been ripped off.They could have let me stay.'
subprime mortgage crisis has received attention worldwide,
and European officials have been quick to blame lax U.S. oversight
of lenders for the international credit crunch that has crippled
banks and sent shock waves through the financial markets.
But Europe has its own burgeoning mortgage meltdown - in Britain."
reminder, friends. From
"Week in Review," 4/2/05:
the bubble isn't just a U.S. story, it's global; whether we're
talking Britain, Spain, Australia, or China."
how years later some are still just getting this. I got a
kick out of a breathless CNBC reporter who came on this week
to cite a new research report from Tobias Levkovich of Citigroup
who was now talking of a global real estate bubble as a new
risk. No kidding, Sherlock.
indicator of the UK housing market, the average home price
is $466,000. Kim Murphy wrote of "modest three-bedroom tract
houses in the London suburbs going for $2.2 million at one
I've been beating a dead horse on this topic but it has been,
and continues to be, issue No. 1. The focus since August may
be on the credit crisis and mammoth writedowns in the financial
sector, but the Big Picture starts with the fact that the
chief asset of people in America, Britain, Spain, Australia,
China and everywhere in between has either peaked, and is
now crumbling, or is about to. Without the real estate bubble
you don't have the other crises, plain and simple. And when
your prime asset is increasingly underwater (10.3 percent
of all U.S. homeowners, today, according to Moody's Economy.com),
this is a growing number that will lead to severely reduced
sales. You thought they were punk last year? By one estimate
they were down another 16% in the first 15 days of February.
No wonder GMAC is closing more than half of its auto-financing
offices in the U.S. and Canada, cutting at least 1,000 jobs,
as auto delinquencies rise.
budgets are also taking an increasing hit as property and
sales tax revenues begin to dry up. In New Jersey, Governor
Corzine is looking to eliminate 3,000 to 4,000 positions.
Cuts in college aid can also be expected around the country,
on top of the normal reductions in services found during most
to real estate, while in Africa, President Bush made the following
statement. "I think the economy is down because we built too
many houses." That's not totally inaccurate, but coming from
the man who at every opportunity was touting home ownership,
while not having a clue as to the quality of the homebuyer,
makes some of us want to scream. There are those who say government
was powerless to stop the madness, but that's a bunch of bull.
Or rather that's what the bully pulpit is for, as I've argued
in the past.
Martin Feldstein, in an op-ed for the Wall Street Journal.
situation has the elements of a Catch-22: The credit flows
needed for economic expansion require confidence in the values
of existing financial assets, but market participants may
not have such confidence while the risk of recession hangs
is plenty of blame to go around for the current situation.
The Federal Reserve bears much of the responsibility, because
of its failure to provide the appropriate supervisory oversight
for the major money center banks. The Fed's banking examiners
have complete access to all of the financial transactions
of the banks that they supervise, and should have the technical
expertise to evaluate the risks that those banks are taking.
Because these banks provide credit to the nonbank financial
institutions, the Fed can also indirectly examine what those
other institutions are doing.
bank examinations are supposed to assess the adequacy of each
bank's capital and the quality of its assets. The Fed declared
that the banks had adequate capital because it gave far too
little weight to their massive off balance-sheet positions
- the structured investment vehicles (SIVs), conduits and
credit line obligations - that the banks have now been forced
to bring onto their balance sheets. Examiners also overstated
the quality of banks' assets, failing to allow for the potential
bursting of the house price bubble.
of this for Fed supervision policy is clear. The way out of
the current crisis of confidence is not. We can only hope
that those who predict nothing worse than a temporary slowdown
though, the hits just keep on coming.to the balance sheets,
that is. How about Credit Suisse, for example. One week after
telling the world that its fourth quarter earnings would reflect
that it had avoided the worst of the subprime mess, CS shocked
the world with a $2.85 billion writedown as the result of
a few traders mispricing positions on the books. A UBS analyst
said that on top of the $150 billion already written off by
the financial sector to date, an additional $120 billion to
$200 billion was in the offing. Examples such as Credit Suisse's
mispricing are particularly worrisome because everyone knows
the practice is widespread. I at least give them some credit
for admitting it had to be divulged now rather than to try
and keep hoodwinking shareholders while awaiting a hoped for
recovery in asset values.
also a week where the likes of titan KKR had problems repaying
some short-term debt and a few hedge funds began to acknowledge
issues, and losses, of various shapes and sizes.
inflation. The consumer price index for January was up 0.4%
for a second consecutive month and has now risen 4.3% over
the past 12 months; 2.5% if you strip out food and energy,
though unfortunately you and I aren't able to on a day- to-day
the Federal Reserve acknowledges there are growing pricing
pressures, market participants are convinced the Fed is going
to keep slashing interest rates to buck up the economy, first,
and worry about fighting inflation later if need be. After
all, the Fed cut its growth forecast for 2008 to 1.3% to 2.0%,
this as the European Commission was cutting the forecast for
growth in its own region to 1.8% from 2.2%, as inflation in
the euro- zone is running at 2.6%. This isn't yet stagflation
as we had in the 1970s, but it wouldn't surprise a lot of
folks were we to develop a milder version in the intermediate
were about to suffer a down week until literally in the last
half hour on Friday equities staged a strong rally on the
heels of a CNBC report that one of the struggling bond insurers,
AMBAC, was going to receive a bailout. Earlier, stocks had
struggled on growing recession fears as a reading on Philadelphia
area manufacturing came in particularly weak. In the end the
Dow Jones and S&P 500 eked out fractional gains while Nasdaq
still declined 0.8%.
2.12% 2-yr. 2.02% 10-yr. 3.80% 30-yr. 4.58%
curve flattened just a bit this week, though intraday there
was quite a bit of volatility with the 10-year at one point
approaching 4.00% on the poor inflation data before recovering
at week's end. The Fed has been hoping that through their
rate cuts, yields would plummet across the board but they
have no control over the key mortgage rate, the 10-year, and
that has been rising; hardly a solution if you're seeking
to reinvigorate the housing industry. [Plus you have the issue
of more and more existing homeowners losing equity and thus
unable to refinance even if they wanted to.]
British government stepped in to nationalize mortgage lender
Northern Rock in a highly controversial move; the first such
step to nationalize a company or industry since the dreadful
1970s. Recall that last fall, Northern Rock suffered the first
bank run in the UK in over a century, forcing the government
to step in and guarantee deposits.
the Gordon Brown administration sought takeover offers, received
two, including one from Richard Branson's Virgin Group, only
to then reject the bids and opt to continue to subsidize Northern
Rock with $100 billion in loans, and the ongoing guarantees,
as the government instead hopes to revitalize it and then
return the bank to the private sector at a better price.
are shareholders left penniless, though, with thousands of
employees also facing layoffs, but this is a huge gamble and
UK taxpayers could easily have to foot the bills down the
road as the whole mess ends up being a referendum on Brown
and the Labor Party itself.
in China is running at a 7% clip, the highest in 11 years,
thanks in no small part to disruptions caused by the recent
severe winter weather and soaring food and fuel prices.
subprime crisis reached into Australia & New Zealand Banking
Group, in what CEO Michael Smith said was a "bloodbath" in
debt markets due to derivatives linked in this case to insurer
have seen our money market yields drop 0.6% in the past two
months. We're being penalized for doing the right thing, by
8-1 vote, the Supreme Court ruled that makers of medical devices
like implantable defibrillators are immune from liability
for personal injuries as long as the FDA approved the device
beforehand. Thousands of existing lawsuits against the manufacturers
could now be dismissed. Writing for the majority in Riegel
v. Medtronic, Justice Antonin Scalia said that allowing state
juries to impose liabilities on the maker of an approved device
"disrupts the federal scheme," 'under which the FDA has the
responsibility for evaluating the risks and benefits of a
new device and assuring that it is safe and effective for
its intended use.' [Linda Greenhouse / New York Times]
Generale confirmed a record fourth-quarter loss of $4.9 billion
due in no small part to the $7 billion trading scandal. But
regarding the rogue trader Jerome Kerviel, it's increasingly
clear that others, at the least, should have known of the
fraud, though a report commissioned by SocGen said the opposite;
that he acted alone.
chairman Bill Gates said there was "nothing new" in the Yahoo
takeover process. "We've reinforced that we consider (the
original $31 price) a very fair offer." Microsoft is threatening
to launch a proxy fight.
Microsoft said it was opening levels of the company's software,
making it easier to create new products that run or link to
Microsoft's designs. Many, such as the European Commission,
which has had a long-running battle with Microsoft and its
perceived monopolistic practices, are less than impressed.
10-K (annual report) reiterated it is "taking steps to reduce
accidental clicks." Click-fraud.
a kick out of GE's regulatory filing that it has found more
accounting errors in various divisions in terms of how revenues
are recognized. The SEC has been investigating the behemoth's
accounting since 2005. Of course during the bull run ending
in 2000, GE was notorious for managing to 'beat' earnings
expectations by a penny every single quarter. The last few
years they have generally been meeting analyst estimates.
Basically, it's all a joke.
Image Corp. filed for bankruptcy protection and will shed
half of its 184 stores as it seeks a loan to stay in business
and restructure. It's largely a matter of "tired" stores and
the fact that in a recession type environment, we don't need
the gadgets Sharper Image peddles.
York developer Harry Macklowe, attempting to stave off bankruptcy,
has received at least three bids of $3 billion or more for
the iconic General Motors building in New York, which would
be a record for a single edifice in the U.S. Of course this
is totally absurd. As Jennifer Forsyth noted in the Wall Street
Journal, "the rents from the building barely pay the mortgage
and many of the tenants have long-term leases far below current
rates. Yet, the sales price jumps every time it changes hands.
'Nobody ever made money owning the General Motors Building;
they only made money selling it,' says Lawrence Russo, president
of a real-estate investment advisory firm."
Regarding the cause of the British Airways Boeing 777 crash
at Heathrow Jan. 17, a mechanical defect has been ruled out,
as were ice and birds. No one evidently has a clue what the
real cause was, which is equally unsettling.
lake, China's fifth largest and one of the most polluted,
is employing 50,000 silver carp with, get this, another 1.55
million to be added shortly, in an effort to gobble up toxic
blue algae. But when the carp mature, fishermen are then allowed
to catch and sell them.
my take on this. If you see "Farm-raised carp from China"
at your local supermarket, take a pass.
U.S. Dept. of Agriculture ordered the largest beef recall
in U.S. history, four times the size of the previous record,
as a result of an animal-abuse investigation into Chino, California-based
Westland/Hallmark Meat Co. Undercover video from the Humane
Society showed crippled and sick animals ("downer cows") being
shoved with forklifts and sprayed with water in an effort
to get them to walk into the slaughterhouse. Otherwise, the
meat isn't supposed to find its way into the food chain. Westmark
is a leading provider of beef to school lunch programs but
there was no evidence consumers have gotten sick from the
product. The film itself was disgusting.
Watch: Charles Schwab cut its online trading commission to
$8.95 from $9.95. Thanks, Chuck.
giant Reed Elsevier is paying a staggering $4 billion for
personal data provider ChoicePoint. Anglo-Dutch Reed is attracted
by the prospects of selling ChoicePoint's 19 billion pieces
of data to insurers, employers, and financial institutions.
K. and I exchanged some notes on a topic I brought up a few
weeks ago, the Internet disruptions in the Middle East and
South Asia caused by the severing of up to five key cables
that cross the Mediterranean, the cause of which has yet to
be determined. Was it terrorism? India's Economic Times noted
"It provided a grim prospect of the Net being hostage to terrorist
attacks." In reality cables could be severed by earthquakes,
submarines, or monster fish..OK, maybe not this last one.
expert told the Christian Science Monitor that "Cable cuts
happen on average once every three days" and are nothing more
than an inconvenience, with fishing boats being the most common
the bigger issue, though, is the lack of redundancy. Regardless,
fundamental networks, including electronic banking, are at
increasing risk and maintenance of the networks is largely
in private hands so it would be easy to infiltrate them if
you wanted to wreak havoc.say as part of a wider-scale operation.
[This last bit is simply my own personal conclusion.]
Stewart Living Omnimedia acquired the rights to Emeril Lagasse's
franchise of cookbooks, television shows and kitchen products
for $45 million in cash and $5 million in stock at closing.
The company didn't acquire Emeril's 11 restaurants. Good for
Emeril. You can't help but love the guy.
inflation rate is now more than 100,000 percent, "gaining
34,367 percentage points on the December rate of 66,213 percent,"
according to the government. At least 80 percent of the people
here live below the poverty line.
I communicated with the CFO of the biodiesel company in China
last weekend following a negative piece in Barron's on one
of their auditors, but the company opted not to take my advice
and issue some kind of statement. Frankly, I'm a better troubleshooter
than they are. Fourth-quarter earnings and the annual report
are due out shortly, however, and they've assured me they
will address it at that time. I see no reason to do anything
with my holdings.
when I said I owned solar-power giant Suntech at one point,
buying at $31 and selling at $47, only to then see it run
up to $90? Shares in the company hit $35 this week on an earnings
miss, though the growth rate is still spectacular. My remaining
solar play pre-announced that it would not only exceed expectations
for its fourth-quarter, but that the outlook for 2008 remained
strong as well, yet the market still took this one out back
and shot it. All hyper-growth industries go through these
phases but understand, solar is here to stay. You must, however,
go with the leaders, or in the case of my existing holding,
companies that have a technological advantage.
I have been all over this one for well over a year, including.
said this is a flashpoint worth keeping your eye on.not because
it would be a market-moving event, but rather it would sap
resources from the war in Afghanistan. That is the import
I have yet to see anyone mention."
will remain a big issue and could yet explode depending on
how far Russia wants to support its client Serbia."
parliament declared independence last Sunday and among those
immediately recognizing the fledgling nation were the U.S.,
UK, France and Germany. Others, such as Slovakia, Spain and
Cyprus have yet to do so due to fears that separatist movements
in their own countries could flare up as a result of Kosovo's
Russia, it is not necessarily a done deal that they will take
advantage of the renewed chaos to then actively support not
just Serbia, but separatist movements in Abkhazia and South
Ossetia, both of which broke off from Georgia in the 1990s.
The leaders of these two immediately said they would seek
their own independence, but Russian officials were less than
welcoming of the statements.
has long felt there was no need to change the UN protectorate
status going back to 1999 and the end of the Yugoslav wars
that claimed 10,000 lives in Kosovo alone. The Western powers
and the UN felt otherwise; that it was only fair to protect
the two million ethnic-Albanians in the province who had been
systematically persecuted, and worse, while Russia and Serbia
argue that by granting Kosovo its independence, 120,000 Serbs
living there will become the new victims.
Thursday, during a mass rally in Belgrade, Serbian Prime Minister
Kostunica fanned the flames by proclaiming "As long as we
live, Kosovo is Serbia" and a few hundred drunken thugs took
it upon themselves to attack the U.S. embassy while Serbian
police were nowhere to be seen, a total outrage.
keeping with my own predictions over the past year, I expect
the violence to be mitigated thanks to the existing presence
of 16,000 NATO troops on the ground, with more police and
advisors on the way. This means, however, that, yes, it will
be sapping strength from Afghanistan; a fact I still don't
hear anybody talking about. That's why we need to focus on
Kosovo in keeping our eye on the real Big Picture. You undoubtedly
saw that over 130 were killed in two suicide attacks in Afghanistan
on consecutive days last week; the first of which killed 100
and represented the single deadliest attack since the invasion.
From a political standpoint in the U.S., the Democrats would
be foolish not to admit successes in Iraq, but then pivot
to Afghanistan with credibility.
In a somewhat surprising, yet positive, move on Friday, Shia
cleric Moqtada al-Sadr ordered a renewal of the ceasefire
his Mahdi Army militia has been observing the past six months;
a major reason why there has been such a significant drop
in violence amidst the surge of Gen. David Petraeus. Petraeus
is due to address Congress in April and Sadr's apparent move
can lend credence to the general's plans to withdraw more
item. On Friday, Turkey launched a ground offensive to root
out Kurdish rebels, as is their right at this point, and reportedly
killed 24. It's clear that military cooperation between Ankara
and Washington is once again on a strong footing after the
relationship suffered at the beginning of the Iraq war.
President Ahmadinejad renewed his despicable threats to destroy
Israel as the world community does nothing in response. Hizbullah,
meanwhile, issued its own warnings in the aftermath of the
assassination of Imad Mugniyeh, who it is now known was killed
by a headrest bomb.
noted with interest the opinions of two who are calling for
something that I long have, dialogue with Tehran.
in the Wall Street Journal, Christopher Hitchens said we should
use the pretext of Iran's exposure to catastrophic earthquakes,
such as 2003's Bam quake, where "American search-and-rescue
teams performed prodigies of valor and skill and became so
popular locally that the news of their achievements had to
be hushed up by the regime's less-than- perfect censorship."
"Consider, then the 'public diplomacy' impact of a serious
public offer to Iran, made through international media and
from the podium of the United Nations. The U.S. could propose
the following: a commitment to help Iran protect its centers
of population and its key installations against an earthquake.
Along with the provision of expertise and advice would come
a request for inspections of key facilities, especially those
which might, if ruptured, pose a Chernobyl-type threat to
stroke, this would make a strong appeal on a matter of urgent
material interest, to the general Iranian public. It would
point a contrast between our priorities and those of the regime.
And it would position us, before the fact, for something not
unlike the well-improvised post-tsunami operation mounted
by the U.S. Navy in Indonesia."
Marc Gerecht of the American Enterprise Institute, in an op-ed
for the New York Times.
too long, the United States has failed to wage a war of ideas
with the Iranian regime over the proposal that scares them
the most: the reopening of the American Embassy. Washington
has the biggest bully pulpit in the world, and we are faced
with a clerical foe that constantly rails against the intrusion
of American values into the bloodstream of Iranian society.
There are profound social, cultural and political differences
among Iran's ruling elites, let alone between that class and
ordinary Iranians. Some of these differences could conceivably
have a major effect on the progress of Iran's nuclear-weapons
program. And the way to make these differences increasingly
acute is to apply American soft and hard power.
Khamenei needs to be put off balance, as he was in 1997 when
Mr. Khatami unexpectedly tapped into a huge groundswell of
popular discontent and became president. What we need now
is a psychological repeat of 1997: a shock to the clerical
system that again opens Iran to serious debate.
dealing with the mullahs, it is always wise to follow the
lead of one of Iran's most audacious clerical dissidents,
former Interior Minister Abdallah Nuri. In 1999, he mocked
the regime for its organic fear of the United States. Is the
revolution's Islam so weak, he said, that it cannot sustain
the restoration of relations with the United States?
be riveting in Tehran - and millions of Iranians would watch
on satellite TV - if Secretary of State Condoleezza Rice challenged
the regime in this way: Islam is a great faith; the United
States has relations with all Muslim nations except the Islamic
Republic; we have diplomatic relations with Hugo Chavez and
American diplomats in Havana. Why does the Islamic Republic
fear us so? Is the regime so fragile? President Khatami repeatedly
said that he wanted a 'dialogue of civilizations.' The United
States should finally say, 'O.K., let's start.'
Bush administration were to use this sort of diplomatic jujitsu
on the ruling clerics, it could convulse their world. No,
this is absolutely no guarantee that Tehran will stop, or
even suspend, uranium enrichment. But a new approach would
certainly put the United States on offense and Iran on defense.
We would, at least, have the unquestioned moral and political
high ground. And from there, it would be a lot easier for
the next administration, if it must, to stop militarily the
mullahs' quest for the bomb."
it's always been about Diplomacy 101. Put Iran on the record.
I have advocated two steps the last two years. End-run Ahmadinejad
and talk to Rafsanjani (which neither Hitchens nor Gerecht
discuss) and, second, President Bush should accept Tehran
University's invitation from last year (which I assume still
stands) to address the students. Again, of course Ahmadinejad
would forbid this, but what would have been accomplished?
It would put his regime on the record, obtain the further
backing of the West, and galvanize the students.
engagement, such as that suggested above, it is a certainty
in the eyes of your editor that Israel will have to launch
a preemptive strike on Iran's suspected weapons facilities
by year end. Iran is ripe for revolution, but I'm afraid we
have missed our opportunity.
The late Benazir Bhutto's Pakistan People's Party (PPP) finished
first in the parliamentary voting as her husband, Ali Zardari,
takes control, while former prime minister Nawaz Sharif's
PML-N captured second with President Musharraf's party a distant
third. But as Zardari and Sharif, once bitter enemies, formed
a coalition, they still don't have the two-thirds needed in
parliament to oust or impeach Musharraf. At least not now.
Other smaller parties may yet cross over to support the majority.
has thus far vowed not to resign, but one has to wonder just
how long he can hang on. At least for now he is saying he
"wants to avoid confrontation" and will gradually "ease himself
out" of politics "in a peaceful and civil manner."
is apparent, however, and that is the reinstatement of Pakistan's
chief justice Chaudhry, whom Musharraf had fired last year,
thus precipitating the crisis. And a player who deserves a
lot of credit for the relatively peaceful election (considering
it was Pakistan) is Army Chief of Staff Gen. Kayani, who acted
responsibly throughout and gained the plaudits of U.S. Senator
Joe Biden, a witness to the vote.
to Zardari and Sharif, amidst all the glowing talk of an emerging
democracy in Pakistan, remember that these two (along with
Bhutto) were absolutely awful when they were previously in
Bernard Cole, an expert on China's Navy.
may not be the right word, but I do think that China wants
to be the hegemon of East Asia. By that I mean that Beijing
aspires to be in a position where it can effectively - through
economic and diplomatic pressure, for the most part - direct
the course of events in the region that affect Chinese interests.
This will certainly impact U.S. allies and interests, but
it is the course of action we should expect China to take."
Minnick of Defense News adds:
say that China is reusing the strategy that it used over 20
years to marginalize Taiwan in the region and on the world
stage: financial incentives, gifts of aid and arms, and outright
John Tkacik of the Heritage Foundation:
Washington.is allowing a laser-focused Beijing to shape the
strategic agenda in the Pacific," Tkacik said, adding that
America's democratic friends and allies in the Asia-Pacific
"watch with great anxiety America's new willingness to accept
China's new preeminence in the region."
On a different
issue, the recent breaking up of an alleged spy ring by the
U.S. Justice Department, Taiwanese authorities are concerned
China now has access "to the crypto/keying material/ algorithms
that could allow Beijing to penetrate Taiwan and U.S. networks."
[Wendell Minnick / Defense News]
you have the incredibly successful satellite shootdown by
the U.S. Navy. Congratulations, guys!
China accused the United States of hypocrisy in criticizing
other nations' space ambitions while rejecting a proposed
space treaty and firing a missile to destroy one of its own.
States will not easily abandon its military advantage based
on space technology, and it is striving to expand and fully
exploit this advantage." [South China Morning Post]
talk about a bunch of garbage, I can't put it any better than
an editorial in the Wall Street Journal did, prior to the
as today, the U.S. Navy will aim a ship-based SM-3 missile
at a decaying satellite that is falling to Earth. The missile's
make, the general location of the launch vehicle and the target
are all known - because the U.S. government has publicly stated
these facts. Still, the Chinese and Russian governments are
raising a fuss.
this operation with what happened a year ago January, when
Beijing surprised the world by shooting down one of its weather
satellites in a test of its antisatellite capabilities. Not
only was the test unannounced, but it took China days to concede
that it had happened. Because the satellite was destroyed
at an altitude of approximately 850 kilometers, it left countless
hazardous particles drifting in orbit that could harm future
The presidential election is just a week away, March 2, but
in a scary reminder of where this nation might be headed,
Moscow has seen six fatal attacks on dark-skinned people in
just the past week, all in separate incidents. Last year,
42 of 1,101 killings were said to be racially motivated.
the election, some are saying that Dmitry Medvedev can't receive
more than 71 percent of the vote because anything above this
would be an embarrassment to Putin, who was very proud he
garnered that figure in the 2004 election. No doubt Medvedev
will receive 80 percent, if the vote is tallied accurately,
so if we instead see 69 or 70, you know it was manipulated.
Korea: Not for nothing, but zero is going on here in terms
of negotiations to completely end the country's nuclear program
per previous agreements. It's now basically March and Pyongyang
was to have provided a full declaration of all its activities
by the end of 2007. Kim Jong-il continues to play us for chumps.
There is little to say about President Bush's trip to Tanzania,
Benin, Ghana, Liberia and Rwanda except to note that he deserves
credit for his malaria and AIDS initiatives and the pictures
from the trip were nothing but positive in terms of America's
the continent remains awash in conflict, whether it's Kenya,
Somalia, Sudan/Darfur, Congo or Zimbabwe. Regarding the latter,
there is a big election coming up March 29 and, finally, it
would appear President Mugabe could meet his end. Remember
the name Simba Makoni, a finance expert who had previously
been in Mugabe's cabinet and has now broken ranks. He gets
high marks from all.
Kenya, there was talk of a settlement between the two leading
factions and the creation of a prime minister post that would
go to the opposition, but we've learned to 'wait 24 hours'
here. There was also a disturbing story that some of Kenya's
top distance runners have been funding and organizing tribal
gangs involved in the worst violence in the Rift Valley; the
region that produces most of the nation's elite athletes.
Two have already died in the violence.
You've undoubtedly noticed I tend to list the countries for
this section of WIR in terms of their priority for the week,
so my ranking of Cuba down this far tells you everything about
my opinion of the announcement Fidel Castro was formally stepping
81, is turning power over to brother Raul, 76, who it is expected
will be anointed successor at a meeting of the national assembly
on Sunday. Will Raul take the path of a reformer? Possibly.
It can't get much worse here. But my reading of the situation
says to follow No. 2, 56-year-old Carlos Laga, who is a known
the U.S. embargo, which in terms of farm products was dismantled
back in 2000, it should of course be totally shelved, following
a face-to-face between President Bush and either Raul or Carlos.
Now ask me if that will happen this year? Of course not. It's
an election year and the exile community in south Florida
(and Union City, N.J.) calls the tune. Otherwise, in all honesty
this issue bores the hell out of me because for the better
part of 50 years the United States has blown it. Ask yourself
just one question. By our policy of refusing to engage, in
what way did we better the lives of the Cuban people? Class
I read two separate articles on Tijuana. The first said tourism
was down 90% due to the widespread drug violence. According
to a story in the L.A. Times, only 150 tourists show up each
day now. That was Sunday. Then on Wednesday I read the following
hitmen have killed a popular Mexican singer along with his
manager and assistant (in Tijuana).The body of Jesus Rey David
Alfaro, known as 'The Little Rooster,' was one of six that
turned up tortured, murdered and pinned with threatening messages
for Mexico's army."
out Little Rooster had ties to a rival drug cartel. I think
I'll pass on a roadtrip to Tijuana over the coming year.
the men and women of our armed forces.
Oil, $98.81...closed above $100 Tues./Wed.
for the week 2/18-2/22
Dow Jones +0.3% 
S&P 500 +0.2% 
S&P MidCap +0.7%
Russell 2000 -0.9%
Nasdaq -0.8% 
for the period 1/1/08-2/22/08
S&P 500 -7.8%
S&P MidCap -6.7%
Russell 2000 -9.2%
Bears 33.7 [Source: Chartcraft / Investors Intelligence]
great week. I appreciate your support.
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