Week in Review 
For the week 8/10/2009 - 8/14/2009
Brian Trumbore
President/Editor, StocksandNews.com

Wall Street

After a spectacular four-week run in global equity markets, most everyone paused for a breather. Chinese stocks, for example, had their worst week since February despite what most would agree was a flurry of good news; July industrial production up 10.8%, July retail sales up 15.2%, Goldman Sachs raising its GDP outlook for the rest of ’09 and 2010, and even though July exports were down 23%, this was better than expected. But there is some concern that perhaps Goldman is wrong and that if the government slams on the brakes with regards to lending, then the economy could go into a stall and thus earnings forecasts would go out the window. It’s also a common understanding that much of China’s spending on infrastructure, such as for more highways, isn’t the best use of state funds. At least there’s no inflation, with consumer prices off 1.8% vs. year ago figures, while producer prices are down 8.2%, but you don’t necessarily want these trends to continue. 

Elsewhere in Asia, Hong Kong’s GDP rose a solid 3.3% in the second quarter, breaking the back of its recession, while Singapore reaffirmed its own strong comeback but warned U.S. consumption must pick up to sustain any global recovery. For its part Japan’s exports rose in June over May. 

And then you had Germany and France exhibit positive growth in the second quarter, both up 0.3% when small decreases were forecast. [The rest of the continent, though, remained quite punk with the Eurozone as a whole down 0.1% and Russia’s GDP crashing 10.9% in Q2.] 

So what of the United States? Data was fairly light with July retail sales registering a disappointing 0.1% decline when a rise was expected, while on Friday, the Univ. of Michigan reading on consumer sentiment unexpectedly fell for August when a decent increase off July’s level was forecast. So the combination of low sentiment, which some might blame on the negative focus given the White House’s health care plans as much as on a still dour labor market, coupled with moribund retail sales isn’t exactly amber waves of grain and purple mountains majesties above the fruited planes. 

The Federal Reserve, in opting to keep interest rates in line, offered in its accompanying statement that the U.S. economy had stabilized but the Fed was still very cautious about the outlook owing to joblessness, home values, the consumer and the ongoing credit squeeze. 

There was some good news on the real estate front, however. Yes, foreclosures rose 7% in July over June with the usual suspects leading the way yet again – Nevada, California, Arizona and Florida – but luxury home builder Toll Brothers saw its first increase in signed contracts in four years and now has its lowest cancellation rate in the last three. Plus the National Association of Realtors noted that the median home price rose 4% in the second quarter over the first. 

On the health care front, the latest USA TODAY/Gallup poll has 34% saying demonstrations at their local town hall meetings have made them more sympathetic to the protesters’ views, 21% say they are less sympathetic. Independents by a 2-to-1 margin, 35%-16%, are more sympathetic. In a USA TODAY op-ed, House Republican leader John Boehner said, “No one condones the actions of those who disrupt public events. But those in Washington who dismiss the frustration of the American people and call it ‘manufactured’ do so at their own peril.” 

Daniel Henninger / Wall Street Journal 

“It’s early. A lot of Mr. Obama’s centrist admirers are no doubt willing to wait for their moderate man to emerge. I don’t think that will ever happen. 

“The moderates have nearly no presence in the administration, its agenda, or the congressional leadership. Maybe Larry Summers, on paper. The president likes to talk to moderates, but he doesn’t ask too many to work for him. The internal exile of Paul Volcker speaks volumes. Obama can’t keep the moderate-man conceit going indefinitely. 

“Barack Obama’s election-victory margin is a slim base built on hopes and dreams. His approval is in decline. The hopes and the approval are going to evaporate so long as the content of his policies continues to uncouple from the persona he put across as a candidate. Ironically, the same thing happened to Obama’s favorite punching bag, George W. Bush, who entered as a conservative standard-bearer and then declined as the personality of his presidency on domestic policy lost focus. A lot of the Bush base drifted away. It can happen here. 

“If they get a big win on the health-care bill, none of this matters. Then the Obama persona of campaign 2008 can reemerge to relive the independents’ impossible dreams in 2012. But from the looks of the last two weeks, they’re not winning.” 

Dorothy Rabinowitz / Wall Street Journal 

“The president has a problem. For, despite a great election victory, Mr. Obama, it becomes ever clearer, knows little about Americans. He knows the crowds – he is at home with those. He is a stranger to the country’s heart and character. 

“He seems unable to grasp what runs counter to its nature. That Americans don’t take well, for instance, to bullying, especially of the moralizing kind, implicit in those speeches on health care for everybody. Neither do they wish to be taken where they don’t know they want to go and being told it’s good for them. 

“Who would have believed that this politician celebrated, above all, for his eloquence and capacity to connect with voters would end up as president proving so profoundly tone deaf? A great many people is the answer – the same who listened to those speeches of his during the campaign searching for their meaning. 

“It took this battle over health care to reveal the bloom coming off this rose, but that was coming. It began with the spectacle of the president, impelled to go abroad to apologize for his nation – repeatedly. It is not, in the end, the demonstrators in those town-hall meetings or the agitations of his political enemies that Mr. Obama should fear. It is the judgment of those Americans who have been sitting quietly in their homes, listening to him.” 

Yours truly is one of those described by Ms. Rabinowitz; sitting quietly in my home or office, listening, and not liking much of anything I hear our president say on the health care front as well as other topics. At least I gave him a shot. 

But then when it comes to health care, I’m mad at virtually everyone in this debate because I’m one of those getting totally screwed as I subsidize those who get their health care through their employers, as well as those without insurance, according to the studies. My monthly premium just went from $671 to $786! and I haven’t taken a sick day since 1981.   Haven’t had the flu… nothing….for 30 years. 

Oh, there are cheaper policies I could get but I wanted to use the doctors and the medical group I grew up with. Aside from a physical every two years, the only thing I’ve dinged the system for was my recent colonoscopy, which it appears my insurance paid about $1,600. Toss in $400 for the physical and blood work and I put in $8,000 (until the premium hike) for $2,000 in benefits.  Most years I’ve paid $5,000-$7,000 for $400 or less. 

So, yes, something has to be done about the health care system. But it's not sweeping Obamacare.  Let's see what happens when Congress returns in September having been educated by the people.  I suspect a totally new effort that will be a greatly watered down version of what's already on the table, but enough for the president to declare victory.

Street Bytes 

--Many are saying the market has run too far and that the fundamentals don’t warrant the move we’ve witnessed, but each time they want to take stocks down they seemingly bounce back, as in this past week where even though the major averages are entitled to a breather, a nice summer vacation of their own, the Dow Jones, S&P 500 and Nasdaq all registered just fractional losses, with Nasdaq’s 2009 gains still at 26% while the S&P has advanced 11%. 

Heck, I’d be ecstatic if we just sat at existing levels for three months, until mid-November, by which time we’ll have more clarity on earnings prospects for 2010 as well as the situation in Iran (I’m not giving up on this latter one’s potential to be a game-changer). I can then see a huge yearend rally the last six weeks or so.  

--U.S. Treasury Yields 

6-mo. 0.25% 2-yr. 1.05% 10-yr. 3.56% 30-yr. 4.40% 

In holding the line on interest rates at its Open Market Committee meeting, the Federal Reserve offered that inflation will remain subdued for some time to come. It also stated it will slowly shut down one of the key emergency plans to rescue the economy, the buying of Treasury securities to keep mortgage rates low. 

Thankfully, with all the debt that is piling up, $1.267 trillion for the first ten months of the fiscal year (2008’s $458 billion had been the all-time record on this front), the Treasury’s auctions to finance said obligations have gone pretty well. For how long no one knows for sure. 

--The FDIC shut down Montgomery, Ala.-based Colonial BancGroup on Friday. $22 billion of its assets being acquired by BB&T Corp., with the 346 branches reopening on Saturday as offices of same. But the FDIC will have to eat the other $3 billion in Colonial assets in what ends up being the sixth-largest bank failure in U.S. history. 

--Energy: The Internal Energy Agency boosted its demand forecast for 2009 and 2010 ever so slightly, but warned talk of the global recession ending might be premature: 

“(Despite) the amelioration of some economic indicators in a few countries, the most that can be said is that the global economy may be stabilizing – but even if this is confirmed, it remains far from evident that growth will resume strongly before the end of the year. For example, a look at the latest industrial China and India is industrial production growth positive (and indeed quite strong in the former country). Elsewhere, by contrast, industrial production growth remains firmly in negative territory, even though the pace of decline has somewhat slowed, notably in Japan and Russia. More worryingly, industrial production has seemingly not reached bottom in the U.S.” 

[Regarding this last bit, the IEA was wrong; industrial production grew in July for the first time in nine months.] 

--William Schaffner, an influenza expert at the Vanderbilt University School of Medicine on H1N1. “The virus is still around and ready to explode.” John O. Brennan, the U.S. deputy national security advisor for counterterrorism and homeland security. “The strategy and the effort on the part of government is to make sure we…collaborate to minimize the impact.” Keep your fingers crossed. There are still no signs the virus has mutated into a more dangerous form. 

--Hedge-fund king John Paulson and his firm have been buying big chunks of financials such as Bank of America Corp. and Capital One; at least as of June 30 according to the latest filings. This is a significant vote of confidence considering that it was Paulson who profited to the tune of $17 billion by shorting financials and betting against subprime mortgages. 

--Attention Democrats in Congress. India’s government proposed reducing corporate tax rates to a record low while broadening the tax base. The biggest corporations will see their rate go from a max of 30 percent to 25 percent, 25 being the lowest rate ever for India. 

--I’ve always argued that the United States needs to play within the guidelines of the WTO and take its grievances to the organization when it feels it’s been wronged, and that the WTO more often than not will rule fairly. Such is the case this past week when China was told to open up its markets for media and movies after a U.S. complaint (filed back in 2007) was set in motion because of China’s excessive piracy of DVDs, CDs and books. At least it’s a start and ensures some market access for U.S. companies. But the ruling doesn’t affect China’s policy of cinema screening only 20 films a year – a restriction the movie industry says is deeply unfair given the amount of piracy going on. 

--And in the ongoing saga of China and the arrest of four Rio Tinto employees, Rio being the Aussie-Anglo mining giant, Beijing accused the company of spying over six years which cost Chinese steel makers $100 billion as they paid more than they otherwise would have. Rio employees allegedly bribed the steel companies to pay the higher prices. Rio said it wasn’t aware of any evidence to this effect. 

But, days later no formal charges had been levied against the four staff members and the government has stopped talking about the theft of state secrets, a significant move as now there is no guarantee the case will even go to trial. Both Australia and the U.S. have warned China that the issue “will have bearing on the international business climate and the willingness of individual businesses to invest in China,” as noted by a State Department spokesman. 

So related to the above two stories, as well as another decision this week on the part of the Chinese government not to insist on a malicious software program being incorporated into all PCs, the New York Times’ foreign correspondent Michael Wines had the following observations. 

“So far this week, the World Trade Organization has rebuffed China in an important case involving Chinese restrictions on imported books and movies. The Chinese government dropped explosive espionage charges against executives of a foreign mining giant, the Anglo-Australian Rio Tinto, after a global corporate outcry. And on Thursday, the government said it had backed off another contentious plan to install censorship software on all new computers sold here. 

“Throughout its long economic boom, China has usually managed to separate its aggressive push into the global business arena from domestic politics, which remained tightly controlled by the Communist Party. But events this week raise the question of just how long it will be before the two meet. 

“In each of those matters, politics and business collided, and business won.  Business does not always win, and when it does, as in these cases, the reasons are as often as not a matter of guesswork. But in at least some high-profile matters, China appears to be facing the reality that the outside business world can be freewheeling and defiant when its profits are threatened. And so China’s authoritarian system may also have to evolve in ways its top leaders may not readily endorse.” 

--The U.S. and Switzerland finally settled a Justice Department lawsuit filed against UBS seeking the names of Americans suspected of tax evasion by having secret Swiss accounts. Though details are sketchy, UBS is expected to divulge thousands of the 52,000 suspect accounts. Many have already avoided prosecution by voluntarily disclosing their information to the IRS. One UBS banker has pleaded guilty to helping wealthy Americans evade taxes while another was indicted and declared a fugitive. 

--Mexico’s oil production may fall an additional 5% next year, which the finance minister says could lead to a tremendous fiscal shock. State revenues have declined about $23 billion thus far with oil accounting for 38% of the government’s budget last year. State-owned oil company Pemex projects it may pump less crude annually through 2012. 

--Owing to the fact key sugar producer Brazil is using an increasing amount of its homegrown product for ethanol, the price of raw sugar has hit its highest level since 1981.   A drastic fall-off in supply from India has also been a contributing factor. 

--GM said its new electric car, the Chevy Volt, should get 230 miles per gallon of gasoline in city traffic, or more than four times the current industry leader, the Toyota Prius. The Volt is powered by an electric motor and a battery pack with a current range of just 40 miles.    But after that, a small internal combustion engine kicks in to generate enough electricity to take you up to 300 miles, after which you better be near a charger or you’ll just sit there. Dead. Vultures circling. Of course the same thing would happen if you ran out of gas. But I digress. 

--Owing to success in the “cash-for-clunkers” program, Ford Motor Co. is boosting output by 26% in the second half to meet demand. The Ford Focus and Escape small SUV are among the top 10 sellers. 

--The major high-end resorts in Orange County, Calif., such as in Laguna Beach and Newport, are running at about 46% occupancy compared to 71% last summer. [Los Angeles Times] 

--InterContinental Hotels Group (operators for Holiday Inn and Crowne Plaza) reported a net loss of $56 million for the second quarter as revenues fell 27%, though it said trends had improved since the end of June. However, the business traveler is still staying away. It’s the leisure side that has seen a pick-up in InterContinental’s case. 

--Scandinavian airline SAS is cutting another 1,000 to 1,500 jobs; this on top of about 3,000 it shed earlier in the year. 

--JetBlue launched a rather unique promotion. For $599 you can fly as much as you want between September 8 and October 8. So for business travelers served by JetBlue’s route structure that’s pretty good potential savings. But you have to buy in by Aug. 21. So hurry. Operators are standing by.  

--CIT Group, one of the nation’s largest lenders to small and midsize businesses, has a lifeline of sorts with an agreement that gives the Federal Reserve greater oversight but also provides CIT with more time to come up with a business plan for the remainder of 2009 and 2010; one that details its capital requirements and how it plans on meeting them. CIT still hopes to avoid bankruptcy. 

--Deflation Alert: Consumer prices are down 5.9% for the year in Ireland, the largest such decline in the history of the country. But beer prices rose 12% in the past 12 months. 

--Frank DiPascali Jr., the right-hand man to Bernie Madoff, pleaded guilty Tuesday to fraud, conspiracy and other criminal charges, thus becoming the first of Madoff’s employees to confess to helping Bernie orchestrate his $65 billion Ponzi scheme. DiPascali is said to be cooperating with the government and will finger others complicit in the crime. 

[Separately, Sheryl Weinstein, CFO of Hadassah, a Jewish volunteer organization, writes in a soon to be published memoir, “Madoff’s Other Secret: Love, Money, Bernie, and Me,” that she had an affair with the guy…and that Ruth didn’t know. But my only comment is, who the heck would buy this book?] 

--I’m trying to track Atlantic City’s casino business, month-by-month, and for July the city’s 11 establishments were down again, off 12.7% from a year ago. Ten of the eleven are down substantially for all of 2009, with the Taj Mahal being off just 2.5%. 

--Due to California’s budget crisis, there will be no new textbooks for kindergarten through eighth grade until January 2016. Talk about pressure to keep them in serviceable condition! “You must wrap your books in steel and carbon fiber, children. Otherwise, your parents will be fined $4,200.” 

--In announcing that the Bridgestone Corporation is extending its sponsorship of the W.G.C.-Bridgestone Invitational for four years, as well The Greenbrier becoming a new sponsor to replace Buick, PGA Tour Commissioner Tim Finchem commented, “To have these two announcements coming this week and to see companies now thinking ahead instead of thinking backwards is very positive.” 

--McDonald’s global same-store sales for July rose 4.3%, a solid performance (up 2.6% in the U.S.), due in no small part to its new coffee lineup.  

--Thanks to Meryl Streep’s performance as Julia Child in ‘Julie & Julia,’ the late chef’s ‘Mastering the Art of French Cooking,’ a classic published 50 years ago, is back at the top of best-seller lists, topping both Amazon and Barnes & Noble. Pretty incredible. 

--I had a personal interest in Typhoon Morakot, the storm that killed hundreds on Taiwan before crashing into eastern China, with some parts of Taiwan receiving an unfathomable 80-120 inches of rain. My China investment’s headquarters and new plant took a direct hit but with no apparent damage to either facility, though with pain for the employees. I was on pins and needles all last weekend trying to get the news and watching radar clips. Thankfully (and selfishly) all seems to be on schedule for opening the new plant in October, though I am planning on holding this stock for another two years if need be. 

Foreign Affairs 

Afghanistan: As I go to post, there's word of a horrific car bombing outside NATO headquarters in Kabul that has killed at least 4 and wounded scores.  This is a significant event ahead of the elections.

Secretary of Defense Robert Gates, refuting the claims of incoming British Chief of Staff (head of the army) Sir David Richards that Afghanistan is a decades-long proposition: 

“You have to differentiate between institution-building and economic development on the one hand and defeating the Taliban and al-Qaeda on the other. The latter can be accomplished in a few years. The larger part of it – economic development and institution building – probably is a decades-long enterprise.” 

U.S. Commander Gen. Stanley McChrystal conceded that “We’ve got to stop (the Taliban’s) momentum” and that the group is “very aggressive right now.” 

This week more British soldiers were killed, bringing that nation’s tally to 199. 

But for the immediate future it’s about Afghanistan’s presidential vote, Aug. 20, and trying to secure enough of the nation so that a legitimate election can take place.  Saturday's bombing makes the task all the more difficult.

Iran: There were more show trials, including of Iranian workers at the British and French embassies, with the British in particular being “outraged.” A senior leader of the Revolutionary Guard said reformist leaders such as Mousavi and Khatami “must face justice.” But while squashing dissent is working, many senior clerics continue to speak out, particularly when it comes to conditions in the detention centers. 3 protesters died in custody at one facility and the head of it was sacked. 

Iraq: The level of violence the past few weeks has been disturbing as some of the bombings bear the hallmarks of al-Qaeda in Iraq, as well as Sunni insurgents, and it calls into question the ability of Iraqi security forces to contain the carnage, especially as the U.S. presence winds down. Some Iraqi leaders say it’s not about the ability of the Iraqi military but rather al-Qaeda changing its strategy. 

On a different issue, after 25 years of conflict between Turkey and Kurdish separatists, Turkish Prime Minister Erdogan has agreed to meet with the Kurdistan Workers Party’s (PKK) leader, Ahmet Turk; a highly significant gesture. 

Israel/Lebanon: President Shimon Peres: 

“We wish to see Lebanon again as the Switzerland of the Middle East – Switzerland, and not Iran….The situation in Lebanon has changed. We have not changed. We never were and never will be enemies of Lebanon. There was not in the past nor is there now any reason for Lebanon to be Israel’s enemy or for Israel to be Lebanon’s enemy. We wish the Lebanese people success in rebuilding their country and hope that an alliance of peace and good neighborly relations will emerge between us. 

“The Lebanese border is still threatening. The Second Lebanon War created a new reality. Israeli deterrence has been restored, but Hizbullah on the other hand brought calamity on Lebanon and its people. We saw that in its subservience to Iran, Hizbullah is destroying Lebanon. There is nowhere in the world where an organization as bizarre as Hizbullah exists. It’s entire ideology is war and destruction. Hizbullah established a state within a state, an army within an army; an organization thirsty for blood in a land yearning for peace. It is not Israel which is a danger to Lebanon. The land of the cedars is cursed by Hizbullah.” [Jerusalem Post] 

To which I’d say to Mr. Peres and all Israeli leaders, give back Shebaa Farms and you take away Hizbullah’s reason for existence. Period. The land is Lebanon’s. Return it. [For new readers I first raised this topic years ago.] 

Then there’s the Palestinian issue. Fatah is in turmoil as former prime minister Ahmed Qurei said the elections for the faction’s Central Committee last week were more fraudulent than Iran’s and pointed out that three of the candidates who gained seats used to work closely with Israel, with Qurei asking, “Was it by coincidence that these men won?”  In addition, every member of Fatah’s Higher Committee in the Gaza Strip submitted their resignations over what they saw as “massive fraud.” President Mahmoud Abbas denies his group is heading towards a major split. 

But with Abbas floundering worse than ever, there is growing sentiment in Israel to release jailed Fatah leader Marwan Barghouti, who is probably the most popular Palestinian on the street. Barghouti is serving five life sentences for the murders of four Israelis during the second Intifada, but he is seen as a relatively moderate force. In 2006 he was involved in what was called “the Palestinian prisoners’ document,” which called for the establishment of a Palestinian state within the pre-1967 borders as well as for the “right of return” for Palestinian refugees. Israel should let him go with strict conditions, though his fellow Palestinians may feel compelled to take him out if they thought Barghouti had already cut a deal with Israel. 

[On Friday, Hamas got into a battle in Gaza with a fringe element that was seeking a strict Islamic enclave and at least 16 were killed.] 

Russia: President Medvedev weighed in on Ukraine’s upcoming presidential election, slated for January 2010, as he called for a new leader to break with the “anti-Russian” policies of incumbent President Yushchenko. Medvedev blasted Yushchenko for arming Georgia and for putting gas supplies to Europe at risk while departing “from the principles of friendship and partnership with Russia.” Seeing as Yushchenko has an approval rating of minus-3 (or thereabouts), Medvedev’s move wasn’t necessary. He will get his wish come next year…a pliant partner as head of state in Kiev. 

Meanwhile, Russian Prime Minister Putin went to Abkhazia on Wednesday for his first visit to the breakaway Georgian republic since Moscow recognized it as an independent state last year. Putin said Russia will be boosting its security presence there. For his part, Medvedev took after Georgian President Saakashvili and called for an international arms embargo against Georgia, adding, “severe retribution would come to those who issued the criminal order to attack South Ossetia.” 

Later, the tag team of Medvedev and Putin, trying to put down rumors they deeply dislike each other, were seen watching a football game together at a Sochi bar, Sochi being the site of the 2014 Winter Olympics, which is going to be an interesting geopolitical event on a number of levels, one being the fact Sochi is very close to Abkhazia. 

And on the human rights front, the head of a Russian non-governmental organization and her husband were shot to death in Chechnya, a day after being abducted, in yet another killing of campaigners in the Caucasus. 

Lastly, there is the mystery of the 4,000-ton Arctic Sea, a Russian cargo ship that was hijacked and then disappeared, possibly in connection with a Russian commercial dispute. The ship has a 15-member Russian crew and is supposedly carrying $1.8 million in timber destined for Algeria. But it was last spotted off the western coast of France and north of Spain*. Just a day after departing from Finland, the ship was boarded by 10 armed and masked men identifying themselves as Swedish police officers, though Swedish police have denied any connection. A company official denies the vessel is carrying a “secret cargo” from the drug-trafficking hub of Kaliningrad. But all are in agreement a 4,000-ton ship such as this doesn’t just disappear. 

*Late Friday there were unconfirmed reports the ship was off the Cape Verde islands, which if true isn’t exactly the fastest way to Algeria. 

Pakistan: Following the death of Taliban leader Beitullah Mehsud, there was a shootout between contenders to replace him and, according to reports, one was killed. The overall leader remains Mullah Omar. 

But here’s a highly encouraging sign. According to a Pew Global Attitudes survey, a full 70% of Pakistanis now oppose the Taliban. In 2008, only 33% viewed them unfavorably. Alas, the United States is still opposed by 64%. 

North Korea: Former Secretary of State Henry Kissinger blasted Bill Clinton’s mercy mission to Pyongyang in an op-ed for the Washington Post, saying it only encouraged further blackmail and the taking of Americans around the world by terrorists and the likes of North Korea. Kissinger wants the Obama administration to stay focused on dealing with the North only through the six-party process in place. 

Separately, Indian authorities detained a North Korean vessel and searched it for radioactive materiel, the first time a ship has been seized and boarded under the new UN Security Council sanctions regime. The ship anchored without authorization in the Andaman and Nicobar Islands (think tsunami) and it turns out the vessel was carrying more than 16,000 tons of sugar bound for the Middle East, but the mystery isn’t solved because there was zero reason for it to be in Indian waters and act the way it did. [For you map mavens out there, it should have traveled due west once exiting the Strait of Malacca.] 

China: From Defense News… “China, which is still far behind the United States in UAV (unmanned aerial vehicle) capabilities, appears to be busy copying U.S. designs and conducting espionage to secure unmanned technologies.” 

India: According to results from NASA’s gravity satellites that measure groundwater depletion (through a formula involving the Earth’s gravitational pull I can’t begin to fathom), parts of India are on track for severe water shortages. Not good, considering India uses an increasing amount of water for agriculture. Of course you have the same issue from Israel and the Middle East, to Australia, and the American West. 

Burma: A court ordered pro-democracy leader Aung San Suu Kyi to serve an additional 18 months of house arrest for her role in protecting an American who swam to her lakeside home uninvited. The American, John Yettaw, hardly a hero in this fiasco, was sentenced to seven years in prison. This is just my opinion, but it was incredibly reckless of Yettaw to put Suu Kyi in such a terrible spot. No one else seems to comment on this aspect. 

Nor does anyone discuss (for obvious reasons) what to me would be one of the greatest rescue missions of all time; a commando raid to bring the Nobel Peace Prize winner to freedom. Or perhaps I’m dreaming. 

In the meantime the international community reacts with anger but does nothing, though U.S. Senator Jim Webb (Va.) is over there, a first in dealing with the junta. 

Indonesia: Talk about “waiting 24 hours,” last weekend it was reported that Southeast Asia’s most wanted terrorist, Noordin Mohammad Top, a man responsible for the recent Jakarta hotel bombings, as well as the 2005 Bali attacks, was killed in a shootout. Days later, though, the government admitted he was not the victim, rather an accomplice was. So Noordin is still out there, planning other attacks. One of those killed in the raid, though, was himself planning an assault on President Yudhoyono’s residence. 

Colombia / Venezuela: Colombian President Uribe has invited U.S. forces to increase their aid in his nation’s drug war, including upping the presence of U.S. troops and advisers from 300 to 1,400. So Venezuelan President Chavez got all bent out of shape and broke off diplomatic relations, warning the move threatens all-out war and then accusing Colombian soldiers of crossing the border. One question for Hugo. What are you doing with all those Iranians in your country, as well as Hizbullah? 
--- 

Pray for the men and women of our armed forces, and all the fallen. 
God bless America.

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Gold closed at $948
Oil, $67.46

Returns for the week 8/10-8/14

Dow Jones -0.5% [9321]
S&P 500 -0.6% [1004]
S&P MidCap -1.4%
Russell 2000 -1.5%
Nasdaq -0.7% [1985]

Returns for the period 1/1/09-8/14/09

Dow Jones +6.2%
S&P 500 +11.2%
S&P MidCap +20.0%
Russell 2000 +12.9%
Nasdaq +25.9%

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