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For the week 4/11-4/15
Wall Street and Washington
Last Friday, April 8, at 11:00 p.m. Eastern time, Congress and the White House reached agreement on a six-month stopgap budget for the remainder of fiscal 2011. It was a week that saw the introduction of Wisconsin Republican Congressman Paul Ryan’s deficit reduction plan.
Unfortunately, I was finishing up this column that night when the news hit on an end to the impasse but I had zero details. Nor as we learned did anyone in Congress have any two days later as leadership made the rounds of the Sunday morning talk shows.
Couple this with my motto of “wait 24 hours” and it was fruitless of me to comment much last time on the historic debate that has taken place this month, and which will carry forward until at least June and probably well beyond.
So I need to review the last two weeks and fill in some gaps for the record as we’ve all learned a few details, at least from the Republican side.
But first, you had to love the chutzpah of President Obama doing a victory lap on Sat., April 9, as a result of a government shutdown being averted. He went to the Lincoln Memorial.
“Hi everybody,” the president told stunned tourists. “I just wanted to say, real quick, that because Congress was able to settle its differences, that’s why this place is open today and everybody’s able to enjoy their visit.”
Ughh. There was more.
“And that’s the kind of future cooperation I hope we have going forward. Because this is what America is all about: Everybody from different places enjoying those things that bind us together. It is wonderful to spend time with you guys, I hope you have a great time.”
In fact, we would later learn of that supposed $38 billion reduction in federal spending for the remainder of fiscal 2011 that it actually saved only $352 million, according to the Congressional Budget Office. Some say it doesn’t even save that. In fact, when you figure in “emergency” spending on Iraq and Afghanistan, it actually spends $3 billion more! It seems that a large portion of the $38 billion was a result of money that was unlikely to be spent in any case. It was all just total B.S. Nonetheless, this past Thursday, the House voted 260-167 for the measure. The Senate followed, voting 81-19 in favor of the budget deal and the government and the troops are funded through September.
“But the continuing resolution also saves money on paper through phantom cuts. The whopper is declaring $6.2 billion in savings by not spending money left from the 2010 Census. Congress also cuts $4.9 billion from the Justice Department’s Crime Victims Fund, but much of that money was tucked away in a reserve fund that wouldn’t have been spent this year in any event….
“(This is) infuriating given the GOP leadership’s flogging of that $38 billion top-line figure.”
But this was a week that also saw the Republican House proceed to act immediately on Congressman Ryan’s deficit reduction plan for 2012 and beyond, a gutty move to put the White House back on the defensive after the president’s speech on Wednesday.
Republicans passed the budget blueprint on a virtual party line vote, 235 to 193, with no Democrats voting for it and four Republicans voting against. But while there is no chance of passage in the Democratic-controlled Senate, Republicans regained the policy advantage for the coming fight.
So since I didn’t go into any detail last time, let’s look at the Ryan effort.
Paul Ryan (assorted quotes from him of the past two weeks, various sources):
“Our budget, which we call The Path to Prosperity…cuts $6.2 trillion [the new number being talked about is $5.8 trillion] in spending from the president’s budget over the next 10 years, reduces the debt as a percentage of the economy, and puts the nation on a path to actually pay off our national debt. Our proposal brings federal spending to below 20% of gross domestic product (GDP), consistent with the postwar average, and reduces deficits by $4.4 trillion….
“This is America’s moment to advance a plan for prosperity…We can reform government so that people don’t have to reorient their lives for less. We can grow our economy, promote opportunity, and encourage upward mobility. This budget is the new House majority’s answer to history’s call. It is now up to all of us to keep America exceptional.”
Ryan’s proposal calls for a bipartisan solution on Social Security, which is indeed very doable (and frankly simple), but for Medicaid, the central government healthcare plan for low-income individuals, Ryan endorses spending in the form of block grants given to states based on population. The states then could develop their own plan for distributing the funds, rather than having to follow federal rules.
“There needs to be a safety net for people who cannot help themselves. There needs to be a safety net for people who are down on their luck” Ryan says. “But we don’t want to turn that safety net into a hammock that lulls people to lives of complacency and dependency…Our safety net is tearing apart at the seams.”
“Mr. Ryan’s budget rollout is an important political and policy moment because it is the most serious attempt to reform government in at least a generation. The plan offers what voters have been saying they want – a blueprint to address the roots of Washington’s fiscal disorder. It does so not by the usual posturing (‘paygo’) and symbolism (balanced budget amendment) but by going to the heart of the spending problem, especially on the vast and rapidly growing health-care entitlements of Medicaid and Medicare.”
“If Congress is serious about preserving economic prosperity and freedoms for the next generation, we must change course. Purveyors of conventional wisdom have long argued that structural reforms to Medicare and Medicaid are too risky politically. Yet, the greater risk is to toss away our country’s future by continuing down our present path. The time to start the conversation about reforming these entitlements is now.”
“(The) story of the past half century is that Americans found a way to extract money from future generations and leave them with the bill. What they have been enjoying is not prosperity but luxury. As Mr. Ryan sees, they face the serious and open question of whether they are morally capable, over the long term, of living within their means.”
On Wednesday, President Obama announced his proposal. He called for a mix of spending reductions and tax hikes that the White House claims would cut federal deficits by $4 trillion over the next 12 years without gutting Medicare and Medicaid. Of the Ryan plan, Obama said:
“These are the kind of cuts that tell us we can’t afford the America that I believe in and that I think you believe in. I believe it paints a vision of our future that’s deeply pessimistic.”
On Republican plans to cut taxes on the wealthy, while making the elderly pay more for their healthcare, Obama said:
“This is not a vision of the America I know. They want to give people like me a $200,000 tax cut that’s paid for by asking seniors to each pay $6,000 more in health costs? That’s not right, and it’s not going to happen as long as I’m president.
“The fact is, their vision is less about reducing the deficit than it is about changing the basic social compact in America.
“There’s nothing serious about a plan that claims to reduce the deficit by spending a trillion dollars on tax cuts for millionaires and billionaires.”
“We have to live within our means, reduce our deficit, and get back on a path that will allow us to pay down our debt. And we have to do it in a way that protects the recovery, and protects the investments we need to grow, create jobs, and win the future.”
“At a time when millions of our countrymen remain unemployed, the president again proposes tax increases on job creators,” calling Obama’s speech “class warfare.”
“Exploiting people’s emotions of fear, envy and anxiety is not hope, it’s not change, it’s partisanship. We don’t need partisanship. We don’t need demagoguery. We need solutions.”
“Any plan that starts with job-destroying tax hikes is a non-starter. Republicans are fighting for meaningful spending cuts and fighting against any tax increase on American small businesses.”
“Did someone move the election to June 1? We ask because President Obama’s extraordinary response to Paul Ryan’s budget yesterday – with its blistering bipartisanship and multiple distortions – was the kind Presidents usually outsource to some junior lieutenant. Mr. Obama’s fundamentally political document would have been unusual even for a Vice President in the fervor of a campaign.
“The immediate political goal was to inoculate the White House from criticism that it is not serious about the fiscal crisis, after ignoring its own deficit commission last year and tossing off a $3.73 trillion budget in February that increased spending amid a record deficit of $1.65 trillion. Mr. Obama was chased by George Washington University yesterday because Mr. Ryan and the Republicans outflanked him on fiscal discipline and are now setting the national political agenda.
“Mr. Obama did not deign to propose an alternative to rival Mr. Ryan’s plan, even as he categorically rejected all its reform ideas, repeatedly vilifying them as essentially un-American….The President was not attempting to join the debate Mr. Ryan has started, but to close it off just as it begins and banish House GOP ideas to political Siberia.
“Mr. Obama then packaged his poison in the rhetoric of bipartisanship – which ‘starts,’ he said, ‘by being honest about what’s causing our deficit.’ The speech he chose to deliver was dishonest even by modern political standards….
“Mr. Obama ludicrously claimed that Mr. Ryan favors ‘a fundamentally different America than the one we’ve known throughout most of our history.’ Nothing is likelier to bring that future about than the President’s political indifference in the midst of a fiscal crisis.”
“His speech this week brought together all the strands of his flawed leadership. It was at moments clever, but merely clever, not up to the needs of the moment – and cleverness in a time of crisis comes as an affront. The speech seemed oblivious to recent history, as if the president had just discovered something no one knows about, a problem with spending, and has decided to alert us to the danger. He said other politicians attempt to cut by focusing on ‘waste and abuse,’ but he knows the real secret: The problem is entitlement spending. But addressing entitlements is all anyone serious has been talking about for years: it’s what the Ryan plan is all about!
“The speech was intellectually incoherent. An administration that spent two years saying, essentially, that high spending is good is suddenly insisting high spending is catastrophic. The president appealed for bipartisan efforts but his manner and approach leave his appeals sounding like diktats. His attempts to seem above the fray leave him seeming distanced and unwilling to risk anything.
“Most important, the speech signaled that the White House, after all this time, sees the question of spending as a partisan tool, a weapon to be deployed in an election, and not an actual crisis. This is disrespectful toward citizens who feel honest alarm.
“Because of these flaws, the speech will have no afterlife, and a major speech with no afterlife might as well not have been given.”
“President Obama spent 40 minutes yesterday treating the ambitious, far-reaching but completely unofficial long-term budget plan of an unknown Republican congressman as though it were the platform of his 2012 GOP rival for the presidency.
“Maybe Rep. Paul Ryan’s proposal to eliminate U.S. government debt in 10 years will be the centerpiece of the Republican campaign next year. Probably not, though. Yet the president clearly hopes it will, and he seized on it to draw a bright-line distinction between him and the Republican Party.
“Addressing the nation’s long-term debt was the nominal purpose of the speech. But in fact it was about painting the GOP as the party that hates autistic kids and the elderly.
“The Ryan plan, he said, will throw autistic children into the street, make it impossible for old people to go into nursing homes and cause potholes to go unfilled. ‘This is not the America I know,’ Obama said.
“The president is suggesting that he intends to frame his re-election bid as a battle between the kind and the cruel.
“But in setting it up as a fight of this sort, he is also signaling he is going to run with a message about the United States that is profoundly radical: What makes America great, Obama explicitly said, is the size of its government.
“The great threat of the Ryan plan, he says, is that it will reduce the size of government’s ‘commitments’ – i.e., the way it redistributes money by giving it to those it deems deserving and in need. And, by reducing it, the Ryan plan will bring American greatness to an end.
“ ‘We are a better country because of these commitments,’ he said. ‘I’ll go further: We would not be a great country without those commitments.’
“This idea – that America’s greatness is to be found in the ever-expanding size of its social safety net – may be the most radical thing Obama (or any president) has ever said.”
“(President) Obama’s deficit-reduction plan is now on the table and another contentious Washington debate is under way.
“The president’s speech was heavy with partisan rhetoric and light on fiscal specifics – and what details there were stood in stark contrast with a GOP plan put forward by Rep. Paul Ryan, the House Budget Committee chairman.
“Obama proposes tax hikes for ‘millionaires and billionaires,’ he says – though he’d also whack working families making as little as $250,000 a year.
“Ryan calls for wide-ranging tax reform – reducing rates and simplifying the system. And while his plan would end most deductions, it would also sharply lower tax brackets.
“ Obama seeks to cut Medicaid and Medicare costs via ‘greater efficiency’ and ‘new incentives’ and by ‘strengthening an independent commission’ that will ‘recommend the best ways to reduce unnecessary spending.’
“That’s pablum, of course, meant only to soothe fears as the president’s re-election campaign gets under way.”
Finally, economist Robert J. Samuelson / Washington Post
“We in America have created suicidal government; the threatened federal shutdown and stubborn budget deficits are but symptoms. By suicidal, I mean that government has promised more than it can realistically deliver and, as a result, repeatedly disappoints by providing less than people expect or jeopardizing what they already have. But government can’t easily correct its excesses, because Americans depend on it for so much that any effort to change the status arouses a firestorm of opposition that virtually ensures defeat. Government’s very expansion has brought it into disrepute, paralyzed politics and impeded it from acting in the national interest.
“Few Americans realize the extent of their dependency. The Census Bureau reports that in 2009 almost half (46.2%) of the 300 million Americans received at least one federal benefit: 46.5 million, Social Security; 42.6 million, Medicare; 42.4 million, Medicaid; 36.1 million, food stamps; 3.2 million, veterans’ benefits; 12.4 million, housing subsidies….
“ ‘Once politics was about only a few things; today, it is about nearly everything,’ writes the eminent political scientist James Q. Wilson…The concept of ‘vital national interest’ is stretched. We deploy government casually to satisfy any mass desire, correct any perceived social shortcoming or remedy any market deficiency. What has abetted this political sprawl, notes Wilson, is the rising influence of ‘action intellectuals’ – professors, pundits, ‘experts’ – who provide respectable rationales for various political agendas.
“The consequence is political overload: The system can no longer make choices, especially unpleasant choices, for the good of the nation as a whole. Public opinion is hopelessly muddled. Polls by the National Opinion Research Center at the University of Chicago consistently show Americans want more spending for education (74%), health care (60%), Social Security (57%) and, indeed, almost everything. By the same polls, between half and two-thirds of Americans regularly feel their taxes are too high; in 2010, a paltry 2% thought them too low. Big budget deficits follow logically; but of course, most Americans want those trimmed, too….
“Government is suicidal because it breeds expectations that cannot be met. All the partisan skirmishing over who gets credit for averting a shutdown misses the larger issue: whether we can restore government as an instrument of progress or whether it remains – as it is now – a threat.”
As reported in the Financial Times, this week “the IMF said the U.S. was the only advanced economy to be increasing its underlying budget deficit in 2011 at a time when the economy was growing fast enough to reduce borrowing….
“To meet the 2010 pledge by the Group of 20 countries for all advanced economies – except Japan – to halve their deficits by 2013, the U.S. would need to implement tougher austerity measures than in any two-year period since records began in 1960, the IMF said.”
A few weeks earlier, IMF deputy managing director John Lipsky warned that unless politicians devise a credible plan to rein in our debt, the markets will make continued borrowing infeasible, resulting in what Lipsky calls the “fiscal crisis” when the bond vigilantes exact tribute. That’s where it’s clear we’re headed. Some in Washington, such as Paul Ryan do get it. Others who are more interested in surviving another election cycle don’t.
It’s really sad. Like President Obama’s visit to the Lincoln Memorial, it’s also pathetic. And in so many ways we’ve become a truly pathetic nation.
Turning to Europe, the situation in Greece (see the future U.S.) has gone from bad to worse with the bond market voicing its displeasure that the country seems too far gone to avoid default. A board member at the European Central Bank, Lorenzo Bini Smaghi, said a Greek debt restructuring would be a “catastrophe” in that it would result in the bankruptcy of a large part of the country’s banking system.
“The Greek economy would be on its knees, with devastating effects on social cohesion and the maintenance of democracy in that country. It’s up to Greece to decide the way forward, given that it will suffer the worst consequences. Other countries must avoid pushing it towards a catastrophe.”
Greece, which had unemployment of 9% in mid-2009, is now headed to 15.5% this year. GDP is going to fall another 3%+ at this point.
But it’s the ECB, the IMF and Germany (which is really an independent third player in this whole crisis) that are pushing Greece, as well as Ireland and Portugal, over the cliff. Sorry to beat a dead horse but the entire euro-17, particularly these three, need growth and it’s tough to have growth when you are continuing to slash jobs and entitlements. Yes, both are warranted, but this is the box many members of the EU find themselves in, as does America. It’s a formula that is not about to work, but Mr. Smaghi hit on one of my main points for the past year when looking at Europe’s debt crisis. You ain’t seen nuthin’ yet when it comes to domestic turmoil and for some to say, well, who gives a rat’s ass about Greece, they don’t know their history. It can spread. Greece is in the Balkans, after all.
Meanwhile, Portugal has applied for an ECB bailout but its government is in chaos until the June 5 election and there’s no telling what the new government will do in terms of required austerity, seeing as the old government, just booted out, couldn’t get its plan through which led to the collapse of the Socialists. The ECB is demanding Portugal come up with a plan before it loans the nation (in conjunction with the IMF) somewhere in the neighborhood of $115 billion to $125 billion, and that the plan must be in place long before the election.
As for Ireland, it was downgraded another few notches by Moody’s, while Spain, which continues to say it will never need ECB assistance, had to admit that China had not, contrary to reports, invested $14 billion in its troubled savings banks.
The IMF called on all European banks to boost their capital levels (as I’ve said was a key issue all along) as some German banks are “vulnerable to further shocks.” Yup, already know this.
George Soros said that Europe’s refusal to allow members of the Euro-17 to restructure their debt has added to moral hazard in the financial system.
“Look at the situation in Europe…where authorities are insisting on no renegotiation or restructuring on outstanding debt because that could possibly provide a financial banking crisis. At the present we bail out, but in the future we will bail in. It has absolutely no credibility.”
Lastly, on another of my favorite topics, immigration in Europe, the New York Times had this headline on April 12.
It’s a massive issue, and I’ll have far more when I report to you from Paris in a few weeks.
Finally, just a note on Japan. It is still largely a mystery what is really going on at Fukushima Daiichi. One day the headlines read things are getting better, the next day you see something like “Japan Plant Emits More Radiation After Cooling Lapse,” which ran on Wednesday.
What we do know is the likes of Toyota are cutting back production not just in Japan and the United States, but also Europe due to the ongoing parts and power shortages. Toyota is warning of big issues at home owing to the sick power grid for the May to July period. A Bloomberg survey of 18 economists now has an average decline of 3% for GDP in the April – June time frame, though these same folks are saying the country will grow 1.9% in both the third and fourth quarters. I hope they’re right. I happen to disagree.
And in another development that isn’t likely to help matters, Prime Minister Naoto Kan, who was about to be booted prior to the March 11 triple disaster, only to see his job saved by the crisis, is being urged to resign by the largest opposition party.
--Stocks registered fractional losses in a second straight dull week with the Dow Jones off 0.3% to 12341, while the S&P 500 lost 0.5% and Nasdaq declined 0.6%. The IPO market supplied a little juice with two hot offerings, Zipcar and the world’s largest McDonald’s franchisee, Arcos Dorados Holdings of Latin America. But the few big players releasing first quarter earnings were nothing to write home about and offered little cause for optimism. We’ll get a fuller picture this coming week with far more releases.
--U.S. Treasury Yields
6-mo. 0.11% 2-yr. 0.69% 10-yr. 3.41% 30-yr. 4.47%
Treasuries rallied, partly a flight to safety with renewed turmoil in the European Union (though the euro itself maintained its strength) as well as March data on producer and consumer prices that wasn’t a disaster. The PPI rose 0.7%, up 0.3% ex-food and energy, and is up 5.8% year over year, 1.9% on core, while the CPI rose 0.5%, 0.1% on core, and is up 2.7% and 1.2% the last 12 months, respectively.
--China released some all-important data of its own. GDP for the first quarter rose a better than expected 9.7% over year ago levels, while consumer prices for March increased a hotter than forecast 5.4% so further fiscal tightening is in order, though experts are convinced China will be able to maneuver the inflation rate lower.
--Gasoline prices hit $3.81 for a gallon of regular nationwide and exceed $4.00 in some locales, such as Los Angeles and Chicago. For many the tipping point has been reached.
--In looking at the first quarter mutual fund return numbers, as noted in Barron’s (source: Lipper), I just want to highlight some 10-year returns thru 3/31/11.
Large-Cap Growth 2.47% annualized return
Large-Cap Value 3.57%
Small-Cap Growth 6.52%
Small-Cap Value 9.78%...wow!
S&P 500 Index Objective 2.77%
Science & Technology 2.65%
Precious Metals 25.38% (again, annualized)
Pacific Ex-Japan 14.17%
China Region 13.25%
Latin American 20.55%
Intermediate U.S. Govt. 4.51%
High Current Yield 6.92%
Money Market 1.77%....but the one-year return thru 3/31/11 is 0.03%. Or, if you used the rule of 72s to figure out how quickly your money would double, at 0.03% it would in a mere 2,400 years. I wonder how many World Series the Mets will win over that time? 3…maybe 4?
--According to a U.S. Senate report, Moody’s Investors Service and Standard & Poor’s adjusted the way they graded securities after being pressured by the likes of Goldman Sachs Group Inc. and UBS for their mortgage-backed securities product.
According to the report from Senators Carl Levin (D-Mich.) and Tom Coburn (R-OK) :
“The ratings agencies weakened their standards as each competed to provide the most favorable rating to win business and greater market share. The result was a race to the bottom.”
For both Moody’s and S&P, the gross revenue from rating the securities “quadrupled” between 2002 and 2006, with the symmetry between the two pretty amazing. For the former, $61 million to $260 million; for the latter, $64 million to $265 million.
“Investment bankers who complained about rating methodologies, criteria, or decisions were often able to obtain exceptions or other favorable treatment,” noted the Levin report.
Sen. Levin said, “We will be referring this matter to the justice department and to the SEC. In my judgment, Goldman clearly misled their clients and misled Congress.”
In one instance, Deutsche Bank’s top CDO trader referred to assets underlying the securities as “crap” and “pigs” at the same time Deutsche was selling them to clients. Prior to the crisis, the same trader sold the securities ‘short.’ [Goldman’s record is full of similar action.]
--Gretchen Morgenson and Louise Story / New York Times
“It is a question asked repeatedly across America: why, in the aftermath of a financial mess that generated hundreds of billions in losses, have no high-profile participants in the disaster been prosecuted?....
“This stands in stark contrast to the failure of many savings and loan institutions in the late 1980s. In the wake of that debacle, special government task forces referred 1,100 cases to prosecutors, resulting in more than 800 bank officials going to jail. Among the best known: Charles H. Keating Jr., of Lincoln Savings and Loan in Arizona, and David Paul, of Centrust Bank in Florida.”
William K. Black, a professor of law and the federal government’s director of litigation during the S&L crisis, told the Times:
“This is not some evil conspiracy of two guys sitting in a room saying we should let people create crony capitalism and steal with impunity. But…there were no criminal referrals from the regulators. No fraud working groups. No national task force. There has been no effective punishment of the elites here.”
Granted, the SEC extracted $550 million from Goldman Sachs, but as alluded to above in the Levin-Coburn report, there is far more the feds could have gone after.
However, when asked about this issue and how no Wall Street figures have gone to jail, Sen. Levin said, “There’s still time.”
--JPMorgan Chase reported a solid increase in first quarter earnings, but said bad mortgages and home equity loans cost the bank $1 billion, bringing total residential real estate losses since the financial crisis began to more than $20 billion, with high loss levels persisting. New mortgage lending has also stalled with mortgage originations falling 29% from the fourth quarter as JPM hires 2,000 to 3,000 employees to handle troubled mortgages and strengthen its internal controls. Overall, revenues fell 8%.
Competitor Bank of America missed its profit estimate badly as it too has major ongoing problems in its home loan business, losing $2.39 billion in it. BofA doesn’t expect this side of the operation to return to normal earnings until 2014 at the earliest.
--Iceland’s voters rejected a plan to repay the UK and Dutch governments following the island nation’s banking system collapse by a 59-41 margin. Iceland’s finance minister insisted 90% of UK and Netherlands’ claims will still be paid out as a result of savings bank Icesave’s demise in 2008. At the time, the British and Dutch governments had to make whole some 400,000 citizens and ever since, Iceland had been debating how to repay the money.
--China’s foreign-exchange reserves topped $3 trillion in March.
--China’s passenger-car sales grew 6.5% in March from a year earlier, below estimates as incentives ended and fuel prices rose. GM sold 233,014 vehicles in China in March, just up slightly from last year’s 230,048. Ford Motor sold 53,440 units last month, up 20% from year ago levels.
--Allied Irish Banks PLC (AIB), the bailed out financial institution, announced another 2,000 workers will lose their jobs, but the union representing the workers wants six weeks’ pay per year of service as severance (plus there is a statutory obligation to pay another two weeks per year). AIB is 93% owned by the Irish government but imagine how generous this package is. It’s outrageous.
--And this from the Irish Independent’s Charlie Weston:
“A quarter of a million people have nothing left to live on once they have paid mortgage and electricity bills, according to a new survey which reveals the true extent of the hardship imposed on households by the recession.”
“Another 210,000 people are so hard-up that their income does not even cover their essential bills for heat and the cost of the home….
“About three-quarters of a million people have on average just $100 left each month after paying essential bills….
“The research (also) found that a large number – 428,000 – feel there is no future for their family in this country.” [There are only about 4.4 million people in Ireland.]
--BP’s deal to complete a share swap with Russian oil giant Rosneft is in major jeopardy as three Russian billionaires, who own 50% of TNK-BP, BP’s existing Russian oil venture, are balking at the terms, making totally “unrealistic demands,” according to a BP spokesperson. At risk is the joint Arctic exploration deal that garnered so much attention back in January when the transaction was first announced.
--Not a great week for the airline industry, what with the incident at JFK airport when an Air France Airbus A380 jumbo wiener clipped a little Delta/Comair commuter plane, sending the latter spinning. Thankfully no one was hurt. The Comair plane may not have pulled up far enough on the taxiway. Because of the A380’s size, controllers might have had trouble seeing the smaller jet.
And then we learned that the number of air traffic controllers who have been taking naps while on the job is at least seven. The fellow at the FAA responsible for the controllers was relieved of his duties.
--Shares in Google tanked $48 (8.3%) following release of its first quarter numbers as costs continue to surge, part of an expansion plan set in motion 18 months ago.
“We are building multibillion-dollar businesses and now is the time to invest,” said the CFO. Co-founder Larry Page formally took over as CEO this month. Google now has over 26,300 employees.
--In the ongoing public vs. private debate, here in New Jersey, calls for budget reform have pushed a record number of public workers into retirement. Sounds good in theory, but cities have had to pay out huge sums for unused sick and vacation time, in many cases exceeding $200,000, for those retiring as well as those being laid off, as reported by the Star-Ledger the other day.
For example, the city of Newark paid out $6.1 million for 54 employees, or over $112,000 apiece.
--Cisco Systems Inc. is revamping its consumer businesses and closing its Flip video-camera unit, resulting in the loss of 550 jobs. CEO John Chambers said the company has shed the “accountability that has been a hallmark of our ability to execute consistently” for customers and investors. He vows to make further changes. The stock has been dead in the water for years now.
--Gretchen Morgenson / New York Times…on corporate pay and money manager Albert Meyer’s study of same.
“Mr. Meyer’s favorite pay-and-performance comparison pits Statoil against ExxonMobil. Statoil, which is two-thirds owned by the Norwegian government, pays its top executives a small fraction of what ExxonMobil pays its leaders. But Statoil’s share price has outperformed Exxon’s since the Norwegian company went public in October 2001. Through March, its stock climbed 22.3% a year, on average, Mr. Meyer notes. During the same period, Exxon’s shares rose an average of 11.4% annually, while the S&P 500 returned 1.67%, annualized. [Ed. note: This is not for a 10-year period, per the above segment on mutual fund returns.]
“According to regulatory filings, Statoil paid Helge Lund, its chief executive, 11.5 million Norwegian krone in 2010 (roughly $1.8 million at the exchange rate last year). There are no stock options in the mix, but Mr. Lund was required to use part of his cash pay to buy shares in the company and to hold onto them for at least three years.
“By comparison, Rex W. Tillerson, the chief executive of ExxonMobil, received $21.7 million in salary, bonus and stock awards in 2009, the most recent pay figures available from the company. Mr. Tillerson’s pay is more than double the combined $8.3 million that Statoil paid its nine top executives in 2010….
“(Notes Albert Meyer) Middle-class America experienced a lost decade in their retirement accounts, whereas executives enjoyed record compensation packages through the subterfuge of stock option programs.
“There has been a massive wealth transfer from middle-class America’s retirement accounts to the bank accounts of the privileged few. The social consequences of this wealth transfer bear scrutiny.”
--Speaking of compensation, outgoing Aetna chairman Ron Williams received over $68 million in parting gifts, including $50 million in exercised stock options. Williams opted for this rather than go for what was behind the curtain where Carol Merrill was standing.
--We note the passing of longtime Wall Street strategist Joe Battipaglia, who died suddenly on Thursday. He was just 55. One thing about him, you knew where he stood, which was almost always in the bull camp.
--Online ad revenues rose 15% in 2010 to a record $26 billion.
--Google’s share of U.S. searches rose to 65.7% last month, while Microsoft’s Bing had 13.9% (up slightly) and Yahoo’s share was 15.7%, down from 16.1%.
--ABC is canceling the soaps All My Children and One Life to Live, both of which had been on for more than 40 years, and both of which I can’t say I ever watched a single episode, which doesn’t make me a bad person. Only General Hospital remains as the network’s lone daytime drama and I’m assuming the doctors and nurses there thoroughly scrub up before working on the patients.
--Thank god the insufferable Winklevoss twins were denied their bid in federal court for a new settlement in their claim Mark Zuckerberg stole their idea in creating Facebook. They already had a settlement with Zuckerberg for cash and stock valued at $65 million.
So we nominate Judge Alex Kozinski for “Man of the Week.” Said the judge in ruling against the jerks:
“The Winklevosses are not the first parties bested by a competitor who then seek to gain through litigation what they were unable to achieve in the marketplace.”
My portfolio: What a week for my China holding, but for the wrong reason. On Tuesday morning, a rogue trade (most likely a crazy stop/loss order with nothing below it…see ‘flash crash’) took the stock down to $0.30! Understand the company has 43 cents in cash.
Coincidentally, I was due to have dinner in New York with the CFO that evening, the third time in seven months, and I was beginning to doubt the dinner would come off. But I reached him on the phone, he didn’t know what was going on with the stock (they really do think much longer-term than we do), I asked ‘Are we still on?’ and he replied ‘Does it work for you?’
The point being I then went through all the issues (over delicious Korean food at Chom Chom, W. 56th) and gave him my own thoughts, wearing my former sales manager hat, and for those of you out there playing along at home, I’ve been writing that we are being hurt by the awful sentiment in Chinese small caps these days and some of the fraud stories in the press. But when it comes to the numbers in this case, I am as convinced as I’ll ever be that we are clean. I will not, however, stop doing my homework but if I hadn’t been over there, twice, to see the operation with my own eyes and meet the CEO face to face, over tea (you had to be there but it was classic), then of course I’d have my doubts.
I stated about six months ago that I’m now prepared to wait until 2013 for this stock to play out the way I think it will. I doubt I’ll have to wait that long, however.
Libya: It is beyond pathetic that after almost a month’s time, NATO has not been able to dislodge Moammar Gaddafi. I’m not exactly surprised, having written on Feb. 19 “the regime should succeed in beating down the protesters, but at a high cost.” So on Thursday, Gaddafi thumbed his nose at the West, traveling through the streets of Tripoli. NATO Secretary-General Anders Fogh Rasmussen called for more attack aircraft to hit tanks, artillery and rocket batteries. However, the likes of Turkey and Germany refused to answer the call as the alliance’s split deepened.
So on Friday, President Obama, French President Sarkozy, and British Prime Minister Cameron, issued a joint article in the London Times and other papers, saying Gaddafi must “go and go for good” before Libya can be rebuilt.
“It is unthinkable that someone who has tried to massacre his own people can play a part in their future government. The brave citizens of those towns that have held out against forces that have been mercilessly targeting them would face a fearful vengeance if the world accepted such an arrangement. It would be an unconscionable betrayal….
“So long as Gaddafi is in power, NATO and its coalition partners must maintain their operations so that civilians remain protected and the pressure on the regime builds…Britain, France and the United States will not rest until the UN Security Council resolutions have been implemented and the Libyan people can choose their own future.”
Earlier, French Foreign Minister Alain Juppe said NATO wasn’t doing enough to protect civilians in Libya, this after an African Union plan to halt the war was rejected by the rebels, who said it would keep Gaddafi in power.
“NATO’s internal debate over Libya has now broken into public view, with Britain and France publicly blaming other members for the slow pace of the bombing campaign. The Brits and French are right, but the real problem here is a military intervention with half-hearted U.S. involvement and incompatible goals. Moammar Gaddafi must be smiling at his luck….
“As the conflict drags on, Gaddafi is playing for a stalemate that leaves him in control of Tripoli and other coastal cities, buying time to fight another day….
“Whether the Obama administration and NATO like it or not, they have already taken sides in this conflict and need to see it through until Gaddafi is gone….
“France and Qatar have recognized the transitional council in Benghazi as the rightful rulers of Libya, but the U.S. is still the world’s most important voice. The U.S. reluctance to recognize the rebels sends a message that we are hedging our bets in the war….
“U.S. recognition would also open the way for other support to the rebels (such as tapping the $34 billion in Gaddafi holdings frozen in American financial institutions)….
“However reluctantly President Obama went along with this intervention, the U.S. and NATO are now committed….If the U.S., France and Britain can’t topple a tinhorn despot like Gaddafi who is loathed by most of his own people, the damage to Western credibility will be severe and long-lasting.”
[This morning there are reports that Gaddafi is using cluster bombs, banned by most of the world, and that NATO is running short of munitions.]
Egypt: The ruling military council cracked down on protesters in Tahir Square last weekend, killing two, the worst incident since the military started running the country. Civilian outrage has been spreading over the military’s failure to replace holdovers from the Mubarak regime, though this week Mubarak and his two sons were placed in detention for 15 days as a possible prelude to standing trial for abuse of power and corruption. Mubarak apparently suffered a heart attack while being questioned. Not sure if it was a Fred Sanfordesque fake act on Hosni’s part.
Mubarak didn’t help himself when last weekend he sent out an audio message on Al-Arabiya, complaining he was the victim of a smear campaign. He pledged his assistance in a probe of his family’s foreign assets, but then threatened the media with lawsuits for their portrayals of him. That was not the way to win back the hearts and minds.
Saudi Arabia: The White House is scrambling to win back King Abdullah, who is not happy with what the U.S. did to Mubarak by abandoning him and Abdullah is openly courting the Chinese and Russians. So the administration has had to send Defense Sec. Gates and then national security adviser Thomas Donilon within a week of each other.
The Saudis keep seeing trouble on all sides…from Bahrain, Yemen, Egypt and Iraq. Regarding Iraq, they view Prime Minister Nouri al-Maliki as nothing more than a tool of Iran, which is pretty much true, sports fans.
[Another nation bordering Saudi Arabia, Jordan, witnessed clashes on Friday between the radical Salafis, the Islamist sect I wrote of last time in regards to Egypt, and pro-monarchy supporters.]
Iran: Speaking of Tehran, the Obama administration said Iran is expanding its support for Shiite hardliners in Bahrain and Yemen, hoping to destabilize those regimes, while assisting the Syrian government.
Separately, Iran confirmed it was assembling components for uranium enrichment centrifuges at a facility west of Tehran that opposition groups maintain was a secret factory. Foreign Minister Salehi said “it is in no way a secret,” adding there are “plenty of factories in the country that manufacture equipment needed by the Bushehr power plant and the Atomic Energy Organization of Iran.”
Meanwhile, the Bushehr nuclear plant is slated to begin producing electricity within three months. As I’ve noted before, particularly in light of the events at Fukushima Daiichi, the likes of Kuwait and Saudi Arabia are more than a bit worried that Bushehr’s operations will not go smoothly and it’s a big accident waiting to happen. One thing is for sure, Iran is proceeding full steam with its nuclear program, despite hitches such as the Stuxnet computer worm that disabled a number of centrifuges at the main uranium enrichment facility at Natanz.
“The reports from Iran are particularly disturbing because its Islamic regime has been a short-term beneficiary of the revolution in Egypt and unrest in the Persian Gulf emirate of Bahrain. Deposed Egyptian strongman Hosni Mubarak was a determined enemy of Iran, and Bahrain’s crackdown on popular protests threatens to touch off the Shiite uprising, there and in eastern Saudi Arabia, that Iran has long wished for. As important, the region’s turmoil has pushed up oil prices, making it easier for Iran to endure the economic sanctions painstakingly orchestrated by the Obama administration….
“(The just announced) progress on centrifuges is significant because Iran until now has relied on slow and inefficient centrifuges, many of which appear to have been damaged by software sabotage. The more advanced machines could work at least six times faster. Iran has already enriched (enough uranium) for two nuclear bombs with further processing. The faster centrifuges mean that were Iran to embark on a ‘break out’ strategy – a race to complete a bomb – it could do so far more quickly, if it manages to install a significant number of the new machines.”
So now the nuclear work is gaining momentum while the world’s attention is focused elsewhere. Sanctions, while effective, have had little actual impact on the nuclear program and it’s time to support the opposition in Iran with more fervor, including the use of technology that can circumvent Iran’s Internet censorship.
[On a side note, Iran’s leadership is having one energy related problem and that is the rising protests over the price of natural gas, used extensively for home heating and cooking. The price has risen tenfold after the Ahmadinejad government cut off state subsidies in December.]
Israel: While the country’s attorney general decides whether to formally indict Foreign Minister Avigdor Lieberman on money-laundering charges (he has been ‘conditionally’ indicted…not that I really know what is going on here), I just wanted to mention a significant Israeli achievement, especially in light of increased tensions between Israel and Hamas, that being the deployment of the Iron Dome rocket/missile defense system. A week ago on Friday, Iron Dome, in development for years, intercepted a Grad rocket fired from Gaza toward Beersheba. Earlier, it had intercepted four rockets.
Pakistan: In a further sign of a deteriorating relationship, Pakistan has demanded the United States sharply reduce the number of CIA and Special Forces operatives in the country, and that it halt CIA drone strikes aimed at militants in northwest Pakistan, home to al-Qaeda and the Taliban. The New York Times estimated some 335 American personnel were being asked to leave. I saw another story where in light of the Raymond Davis fallout from his arrest, and subsequent release, the CIA had already withdrawn all of its personnel.
“That Islamabad is unable or unwilling to press Pakistan-based al Qaeda (including Osama bin Laden) and Taliban more is troubling, considering its own brewing internal-security problems and the billions in aid the U.S. has sent over the years….
“There are also concerns about continuing contact between Pakistan’s Inter-Services Intelligence (ISI) directorate and insurgent groups that have shed blood in Afghanistan….
“America is clearly – and rightly – nervous that Pakistan is involved in a dangerous, high stakes game that won’t bode well for our counterterror/counterinsurgency efforts in Afghanistan – or beyond….
“Islamabad may believe it can ride the Islamist-extremist tiger to its benefit in both Pakistan and Afghanistan – but that flesh-eater will assuredly turn on its former master.”
China: The crackdown against dissidents continues, including the arrest last weekend of up to 160 worshippers from an unapproved Christian church. After the group had been evicted from their usual place of worship, followers were told to meet at an open-air venue for Sunday morning services, police were tipped off and moved in.
As for the status of artist Ai Weiwei, an outspoken government critic who was arrested about two weeks ago, authorities have accused him of plagiarism, saying among other things that Ai stole an art professor’s idea, while others speaking on behalf of the government accuse him of tax evasion.
Russia: The rift between President Medvedev and Prime Minister Putin continues to grow, with Medvedev seizing the initiative on the investment climate in Russia and openly encroaching on Putin’s authority by replacing ministers who sit on the boards of directors of state-owned corporations. The battle lines are being drawn for the 2012 presidential election as it was assumed until now that Medvedev would step aside and hand the election to his mentor. Earlier, Medvedev blasted Putin’s comment that armed intervention in Libya was like the medieval crusades.
Medvedev has strongly hinted he could make an announcement soon on whether he is running while Putin is saying there is no hurry even with the election less than 12 months away.
Belarus: A remote-controlled bomb killed 12 in a crowded metro station in Minsk on Monday. Suspects were arrested but an exact motive wasn’t known though President Lukashenko, the autocratic leader since 1994, said it was an attempt to destabilize the country.
France: A law banning face coverings went into effect this week, France becoming the first country in the world to prohibit the veils anywhere in public. At least one arrest was made the first day. Violators are subject to about a $200 fine.
As for next year’s presidential election, Nicolas Sarkozy’s approval rating has plummeted to 29%, a new low, while probable Socialist candidate, Dominique Strauss-Kahn, saw his positives rise to 45%.
Ivory Coast: Strongman Laurent Gbagbo was finally dislodged from his bunker and Alassane Quattara, the internationally recognized president hailed “the dawn of a new era of hope,” while also launching legal proceedings against Gbagbo, who had refused to accept the verdict of the voter’s in last November’s presidential election. At least 800 died in violence following the vote, with an estimated 100,000 fleeing the country. French forces played a key role in the final days of the conflict.
Nigeria: Key elections have begun and will take place over the next few weekends. More on this next time as predicted violence could threaten oil exports from this key supplier to the U.S.
Mexico: 16 police officers were arrested for allegedly providing cover to drug-cartel gangs involved in the deaths of at least 126 recently discovered in a series of mass graves in the northeastern part of the country. And for the first time, the U.S. government warned its employees and citizens could become targets of the violence in three Mexican states. Among the cities singled out for caution is Monterrey, a key business hub where companies like Whirlpool and General Electric have their regional bases. Monterrey is also where Major League Baseball had in the past held some regular season contests as part of the effort to spread the popularity of the sport. You won’t see that happening again for the rest of my lifetime (hopefully about 25 years, mused your editor at the keyboard).
--Defense Secretary Robert Gates, soon to be former secretary, warned President Obama that any further defense cuts beyond what Gates has already achieved would threaten both force structure and military capability. I agree that the defense budget has to be on the table with everything else, and I believe as President Eisenhower did that one of the threats to our country is the military-industrial complex.
“In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.”
As I’ve written countless times before, this isn’t about the grunts, it’s about the bloated leadership structure (which Gates has been trying to reform) and all these generals retiring and then heading straight into the defense industry or to become lobbyists for it. Neither is good. In no way do these individuals then look out for the best interests of America at that point. It’s about winning contracts and then seeing the costs skyrocket.
Overall, these days the issues are overwhelming…both in terms of security and the budget.
“Whoever takes the reins at the Pentagon (following Gates’ departure) will face a formidable array of challenges, including a defense budget that is almost certain to decline, perhaps substantially, in the coming years as Washington tries to come to grips with the country’s rapidly weakening fiscal standing.
“Moreover, while military budget cuts are characteristic of periods following the end of a war, such as Korea and Vietnam, or when the threats to the nation’s security diminish substantially, as occurred at the Cold War’s end, the opposite is occurring now.
“Consider that while U.S. forces are drawing down in Iraq and should begin withdrawing from Afghanistan in the not-too-distant future, it is far from clear they will leave a less threatening situation behind than what exists today. While the Obama administration has opened a third front in Libya, there are broader risks in the Mideast as a number of states make the volatile transition from authoritarianism to proto-democracies.
“If that were the next defense secretary’s only problems, they would be formidable enough. However, there are other storm clouds visible on the security horizon.”
And so Mr. Krepinevich goes on to discuss China’s rapid buildup, and the risk posed by Iran going nuclear, and if Iran goes nuclear, with a nuclear Israel already in the region, what would Turkey do? And will Pakistan extend its nuclear umbrella to some of the Gulf States, let alone its own instability.
“Before the next secretary of defense calls in his green eyeshade staff, as he undoubtedly must and will, he should first have some sense of how – or if – the U.S. military can meet the challenges outlined above, and the implications for the defense program.
“Absent such an effort, there is a high risk that false economies will be realized while our military remains organized, trained and equipped to meet the familiar, comfortable challenges our rivals are abandoning in favor of those described above.
“As Sir Francis Bacon observed, ‘He who will not apply new remedies must expect new evils.’”
Meanwhile, on a totally different item, for the first time in its history, the U.S. Navy fired a laser ray gun mounted on a warship, “zapping – and setting fire to – an empty motorboat as it bobbed in the Pacific Ocean.”
Built by Northrop Grumman Corp., the laser system could be used to zap incoming missiles, enemy drones or possibly shoot down ballistic missiles one day.
The laser beam in the test was “baseball-sized” and the distance was in miles, so we were told. [Sydney Morning Herald]
“In the scheme of things, saving the 38 billion bucks that Congress seems poised to agree upon is not a big deal. A big deal is saving a trillion bucks. And we could do that by preventing disease instead of treating it….
“A sane diet alone would save us hundreds of billions of dollars and maybe more.
“This isn’t just me talking. In a recent issue of the magazine Circulation, the American Heart Association editorial board stated flatly that costs in the U.S. from cardiovascular disease – the leading cause of death here and in much of the rest of the world – will triple by 2030, to more than $800 billion annually. Throw in about $276 billion of what they call ‘real indirect costs,’ like productivity, and you have over a trillion….
“The many numbers all point in the same direction. Look at heart disease: The INTERHEART study of 30,000 men and women in 52 countries showed that at least 90 percent of heart disease is lifestyle related; a European study of more than 23,000 Germans showed that people with healthier lifestyles had an 81 percent lower risk….
“Corny as it is to say so, if we can put a man on the moon we can create an environment in which an apple is a better and more accessible choice than a Pop-Tart. Some other billions of dollars must go to public health. Again: we built sewage systems; we built water supplies; we showed that we could get people to eat anything we marketed. Now all we have to do is build a food distribution system that favors real food, and market that.
“Experts without vested interests in the status quo come to much the same conclusion: Only a massive public health effort can save both our health and our budget.”
So you have to come up with incentives for the food companies to produce more healthful foods.
“The best way to combat diet-related diseases is to change what we eat. And if our thinking is along the lines of diet improved = deficit recued, so much the better. If a better diet were to result only in a 10 percent decrease in heart disease (way lower than experts believe possible), that’s $100 billion project savings per year by 2030.
“This isn’t just fiscal responsibility, but social responsibility as well. And the alternative is not only fiscal catastrophe but millions of premature deaths.”
--A large-scale antiterrorism drill last week met its goal of preventing any mock radiological ‘dirty bombs’ from being smuggled into New York City, according to Newsday.
“Law enforcement agencies from New York, New Jersey and Connecticut took part in the exercise, which involved using radiation sensors to probe for cesium sources being smuggled by mock terrorists. They discovered roughly 153 radiation sources that were supposed to be found, along with 35 unofficial findings, the majority from individuals who had recently received radioactive medical treatments….
“ ‘At no point during exercise play were the ‘terrorists’ successful in bringing a radiological device into New York City from the surrounding region,’ according to a police statement.”
No word on whether in the course of the drill, authorities were able to discover any pitching help for my New York Mets.
--William Kristol, editor of The Weekly Standard, jokingly posted an item last weekend following the joint appearance of Republican Sen. Marco Rubio (Fla.) and Republican Congressman Paul Ryan on Fox News Sunday that the two would make for an attractive ticket in 2012 and Kristol, I think, was a little taken aback by the groundswell of support he received for his idea. But there is also a fatalism about the state of American politics which I would imagine 80% or more of the citizenry believe is the state we find ourselves in today.
And for crying out loud, seriously, for non-Tea Partiers (who have the likes of Michele Bachmann as a favorite), the rest of us elephants have…Mitt Romney? Tim Pawlenty? Rick Santorum? Mitch Daniels seems to be rapidly fading from the conversation.
But I’ll say this about Cong. Bachmann. I’ve seen her in a lot of network interviews lately and she’s getting better. I’ll leave it at that, except to say increasingly it seems as if it’s “Sarah Who?”
As for Donald Trump, he told the Wall Street Journal that if he runs for president, and doesn’t get the Republican nomination, he’d then run as an independent. [Trump actually leads in the latest poll among Republican primary voters.]
And finally, it appears Oprah Winfrey won’t endorse the president this go ‘round as she’s more concerned about not offending any viewers for her new Oprah Winfrey Network.
--Switching gears a bit, Paul Bedard of U.S. News & World Report had this item.
“The Asian brown marmorated stink bug that has swept into 33 states and the District of Columbia, destroying peaches and apples along the way, has a new target: wine grapes. Researchers tasked to track the bug and find a way to kill it now say that wineries in Virginia and out west in Oregon, Washington, and parts of California are under attack.”
Uh oh. I had no idea. Virginia Cong. Frank Wolf said, “Some vineyards and some growers have been wiped out in the last year.”
The issue with peaches and apples is that the stink bug will insert its tongue into the fruit and suck, but while it looks bad, it won’t affect the flavor in the rest of the fruit.
“But with grapes,” writes Bedard, “the bugs stick to the clumps of fruit during the picking season and can end up in wine presses. Wolf says that just 10 stink bugs crushed into one ton of grapes can ruin the wine.”
Other crops such as corn, tomatoes and soybeans are also now under attack. The stink bug has only been around a little over ten years so there hasn’t been enough time to find the right pesticide or natural foe, though the EPA is considering allowing fruit growers to use dinotefuran, a powerful poison. Incredibly, a tiny wasp, “the size of a comma in this sentence, is the stink bug’s natural predator in Asia.” But experts don’t want to introduce it here until they are sure they aren’t making things just as bad in another manner, or worse.
--50 years ago, April 12, 1961, 27-year-old Russian cosmonaut Yuri Gagarin became the first human to break earth’s atmosphere in an extraordinary feat for the Soviets.
But I was reading a piece in the Los Angeles Times on Voyager I (or simply Voyager) which has been in space for more than 30 years and according to the godfather of the mission, 75-year-old space physicist Ed Stone, in another four or five years, Voyager will be the first to enter ‘deep space.’
“What are we going to find?” Stone mused to the Times’ Kurt Streeter. “Right now, I don’t think anybody knows.”
Voyager continues to send back information that more than boggles the mind. My brain is far too small for this. It and sibling Voyager II were both launched in 1977.
The two craft captured the world’s imagination because of the “audacity of the goal: to make drive-by visits to the planets and then go beyond – way, way beyond. And there was Carl Sagan, the charismatic space physicist and storyteller who spoke of the mission in mythical terms.
“It was Sagan’s idea to affix each Voyager with what became a hallmark: a gold-plated record showing Earth’s position among the stars that could also play songs and greetings. Sagan speculated the probes would be found by intelligent life, and the discs read, heard and understood.
“Stone liked the idea – not because he believed the Voyagers would ever be found, but because having the ability to send spacecraft into deep space and adorn them with a sampling of earthly culture said something profound about how far humankind had come and where it was headed. ‘It was a wonderful notion,’ Stone says.”
So in 1979, Voyager passed Jupiter and its moon, Io, discovering active volcanoes, which no scientist had predicted, thinking active volcanoes were only on Earth.
1980, Saturn. 1986, Uranus. 1989, Neptune (with winds kicking up to 1,400 mph…tough to hit a pitching wedge into that kind of zephyr…and a moon, Triton, “speckled with geysers spewing nitrogen.”)
“The acoustic shadows of the Civil War remind us that the more it recedes, the more important it becomes. Its lessons are as fresh today as they were for those young men who were simply trying to survive its daily horrors.
“And horrors there were: 620,000 Americans, more than 2 percent of our population, died of gunshot and disease, starvation and massacre in places like Shiloh and Antietam and Cold Harbor, Fort Pillow and Fort Wagner and Palmito Ranch, Andersonville and Chickamauga and Ford’s Theater.
“Yet in the years immediately after the South’s surrender at Appomattox we conspired to cloak the Civil War in bloodless, gallant myth, obscuring its causes and its great ennobling outcome – the survival of the union and the freeing of four million Americans and their descendants from bondage. We struggled, in our addiction to the idea of American exceptionalism, to rewrite our history to emphasize the gallantry of the war’s top-down heroes, while ignoring the equally important bottom-up stories of privates and slaves. We changed the irredeemable, as the historian David Blight argues, into positive, inspiring stories.
“The result has been to blur the reality that slavery was at the heart of the matter, ignore the baser realities of the brutal fighting, romanticize our own home-grown terrorist organization, the Ku Klux Klan, and distort the consequences of the Civil War that still intrude on our national life….
“Maybe Walt Whitman, the poet and sometimes journalist who had worked as a nurse in the appalling Union hospitals, understood and saw it best. ‘Future years,’ he said, ‘will never know the seething hell, the black internal background of the countless minor scenes and interiors…of the Secession War, and it is best they should not.
“ ‘The real war,’ Whitman admonished us, ‘will never get in the books.’ We are, nonetheless, obligated to try.”
Pray for the men and women of our armed forces, and all the fallen.
God bless America.
Gold closed at $1486…another new high
Returns for the week 4/11-4/15
Dow Jones -0.3% 
S&P 500 -0.6% 
S&P MidCap -0.5%
Russell 2000 -0.7%
Nasdaq -0.6% 
Returns for the period 1/1/11-4/15/11
Dow Jones +6.6%
S&P 500 +4.9%
S&P MidCap +8.3%
Russell 2000 +6.5%
Bears 16.3 [Source: Chartcraft / Investors Intelligence]
Have a great week. I appreciate your support.