Stocks and News
Home | Week in Review Process | Terms of Use | About UsContact Us
   Articles Go Fund Me All-Species List Hot Spots Go Fund Me
Week in Review   |  Bar Chat    |  Hot Spots    |   Dr. Bortrum    |   Wall St. History
Week-in-Review
  Search Our Archives: 
 

 

Week in Review

https://www.gofundme.com/s3h2w8

AddThis Feed Button

   

10/06/2012

For the week 10/1-10/5

[Posted 12:00 AM ET]

Wait 24 Hours!!!

Peggy Noonan / Wall Street Journal, Thurs. p.m.

“The impact of the first debate is going to be bigger than we know. It’s going to affect thinking more than we know, and it’s going to start showing up in the polls, including in the battlegrounds, more dramatically than we guess.

“It wasn’t just Mitt Romney’s strong performance. It was President Obama’s amazingly weak one. He’s never been punctured before. But by debate’s end Wednesday night, if you opened the window this is what you could hear: Sssssss. The soft hiss of air departing from a balloon.”

Or maybe not…Friday’s jobs report for September revealed the unemployment rate fell to 7.8%, below the magic 8% figure and the lowest since Obama took office in January 2009. The unemployment rate had been above 8% since February ’09.

Immediately, many Romney supporters cried foul. The jobless rate was supposed to rise to 8.2%, not decline to 7.8%, according to economists, and former G.E. CEO Jack Welch received more than a bit of press with his Tweet:

“Unbelievable jobs numbers…these Chicago guys will do anything…can’t debate so change numbers.”

I won’t comment on the specifics of Welch’s remark, except to say that if the final employment number for October, released Nov. 2nd, four days before the election, is also below 8%, conspiracy theories will only grow (though by then some on the right say the damage will have already been done because of early voting). 

Here’s what we do know. The economy, according to the Bureau of Labor Statistics, created 114,000 jobs in September, right at economists’ consensus figure of 115,000.

The private sector created just 104,000, but the household survey showed an increase of 873,000 of which 582,000 were part-time positions. This particular number is highly volatile but was the highest single month since June 1983.

So once again…in this Twitterized world of ours that your editor truly can’t stand, my mantra since day one of this column being “wait 24 hours,” the picture changed drastically for both Republicans and Democrats from Wednesday evening to Friday morning. Euphoria turned into dismay for elephants. Donkeys who were baying on Wednesday could crow on Friday. For his part, President Obama immediately took the household survey and worked into his new stump speech that it was the best single month since Ronald Reagan was president.

Meanwhile, the truth is job growth remains putrid for this stage of an economic recovery and the percentage of those underemployed remains at 14.7%, unchanged from August.

Back to Jack Welch, while I no doubt have my own right-of-center tilt when it comes to my beliefs, as much as possible I believe in being fair, which is why on the bigger issues, such as in the look at the debate down below, I try to present both sides.

But I found Welch’s comment particularly amusing. I mean this is a guy who was notorious for beating earnings estimates every quarter by a penny, at a time when that was critical in terms of share performance. Every quarter. It’s all in my archives and if I ever get around to it will be part of my book. Of course G.E. was massaging the numbers to accomplish this…probably nothing illegal, but the company was master of the game…take a little revenue from the next quarter, or keep it off the books to add in the subsequent release…it’s what everyone did in the late 90s, early 2000s before all the accounting scandals began to hit.

But I want to digress from my normal lineup of importance, such as leading with Europe as I have 90% of the time the past few years, to talk about an item that still threatens to blow up the best plans of the White House as they campaign frantically these last four weeks….

The Middle East

WIR 9/22/12…on Syria

“There were major clashes between government and rebel forces on the border with Turkey this week and Turkey is getting dangerously close to reacting militarily.”

Within ten days I had nailed this one. But it’s about far more than Turkey and Syria. We are getting dangerously close to seeing the entire region around Syria implode and history will show it all goes back to the mishandling of the original uprising in Damascus.

The conflict in Syria has become a totally sectarian one as those rising up against President Bashar Assad are mostly Sunni Muslims, while Syria’s ruling elite, the Alawites, are an offshoot of Shiite Islam.

But now you have Shia Iran, and its Lebanese-based militia, Hizbullah, in Syria, both actual forces and weaponry, while hundreds of thousands of refugees are destabilizing neighboring Turkey, Jordan, Lebanon and Iraq.

In Tripoli, Lebanon, you have a classic example of how the conflict is rapidly spilling over. Dozens have been killed in the last few months in Lebanon’s second-largest city, with hundreds wounded in fighting between two main overcrowded neighborhoods. 100,000 live in a place called Bab al-Tabbaneh, where most residents back the Syrian uprising. Another 50,000 live in Jabal Mohsen and are predominantly Alawite, so backers of Bashar Assad. These two neighborhoods are essentially at war with each other. [Think Belfast at the height of The Troubles, only multiply it by 20-fold in terms of the potential explosiveness.]

Syria is trying to export its civil war to Tripoli, with armed groups in Jabal Mohsen connected to Hizbullah, to take attention away from Damascus and eventually destabilize all of Lebanon. Recall, I went to Lebanon in 2005 literally a few weeks after the last Syrian troops had been booted out.

But today, Hizbullah is formally part of the Lebanese government. Hizbullah wants to lend its support to Assad but most of its leaders don’t want the civil war crossing the border because of their leadership status. They’re trying to have it both ways, though, and as my friend Michael Young writes below, they can’t.

Jordan’s King Abdullah II has his own hands full, not just with refugees from Syria his government can’t handle, but now a resurgent Muslim Brotherhood, no doubt encouraged by its brethren in Egypt and their successful takeover. Abdullah was forced to dissolve parliament this week, a day before a major opposition rally, though I’ve yet to see a timetable for elections. 

Abdullah has always done an outstanding job (like his father before him) keeping the peace inside his country but now the Brotherhood is demanding Abdullah step up his reform efforts and we shouldn’t be the least bit surprised to wake up one morning to the news of something awful here.

And as I discuss further below, this week you saw protests in Iran over the plunging currency, largely because of the sanctions finally biting.

But on this last item, if the White House is thinking they can be smug, especially when it’s time for the last debate which will focus on foreign policy, Iran is yet another one that can go either way. It was in 2009, after all, that President Obama did not back the opposition in Iran as he should have and the protests were handily suppressed.

If the protests grow over the next few weeks, how will the White House react? It doesn’t want anything to do with foreign policy until after the election, but events in Iran, Syria, Turkey, Lebanon and Jordan could spin out of control beforehand, forcing their hand.

But back to Turkey. Since virtually the first day of the uprising that turned into a civil war in Syria, I have written President Obama should be working closely with Turkish Prime Minister Erdogan, a NATO ally, to establish the safe havens and/or no-fly zone that not only Erdogan wanted to see, but which also would have literally saved tens of thousands of lives. Instead, Obama ignored what has turned into a catastrophe of mammoth proportions and historians will heap scorn on his legacy when it comes to the Middle East.

This week, Syria fired some mortars across the border into Turkey and killed six Turkish civilians. Turkey then fired artillery deep into Syria, apparently at a military target, killing at least five. Turkey’s parliament authorized future retaliation though Ankara is saying its actions will be restrained as long as Syria doesn’t provoke it further. [There was another exchange between the two on Friday.] The UN Security Council condemned Syria. Syria apologized and its UN envoy Bashar Jaafari said his government was not seeking an escalation with Turkey, but wondered why the Security Council didn’t say anything about the horrific suicide attacks that hit Aleppo this week, killing about 50.

Aram Merguizian of the Center for Strategic and International Studies in Washington told the AP’s Karin Laub:

“There is not a single country bordering Syria that we can honestly say they are not facing a realistic threat to internal stability and national security.”

Sonar Cagaptay / Washington Post

“The close relationship that President Obama has built with Turkish Prime Minister Recep Tayyip Erdogan has provided the United States with a key Muslim ally in the Middle East. Washington and Ankara have worked closely to stabilize Iraq. Yet a storm awaits them in Syria….

“As the crisis in Syria has deepened, the White House has appeared willing to wait for the demise of Syrian President Bashar al-Assad. For Ankara, the crisis has become an emergency….

“The Obama administration is hesitant toward Syria for several reasons, including reticence to act before the November elections and war-weariness among Americans. Erdogan appears to view such concerns as cover for general indifference to Turkey’s Syria problem….

“Erdogan has a penchant for treating foreign leaders as friends – and losing his temper when he thinks his friends have not stood by him. The more Washington looks the other way on Syria, the more upset Erdogan is likely to get over what he sees as Obama’s unwillingness to support his policy….

“U.S. policy holds that a gradual soft landing could be possible in Syria. The hope is that the opposition groups will coalesce and take down the Assad regime, eliminating the need for hasty foreign intervention – an option that Washington fears could cause chaos.

“Ankara, however, wants an accelerated soft landing. Particularly with this week’s strikes, Turkey feels the heat of the crisis next door….

“The Syrian conflict’s sectarian nature is percolating into Turkey. More than 100,000 mostly Sunni Arab Syrians have taken refuge there, fleeing persecution by Assad and his Alawite militias. Alawite Arabs in southern Turkey resent the Sunni refugees, mirroring Syria’s Alawite-Sunni split. Angry Alawites in Turkey’s southern Hatay province oppose their country’s policy toward the Assad regime, and since the summer they have been holding regular pro-Damascus and anti-Ankara demonstrations. This is Ankara’s problem, and it might get ugly if Syria descends into full-blown sectarian warfare.”

Amir Taheri / New York Post

“Russia may…be involved in a wider plan to pressure Turkey, which has assumed an active role in helping change the geopolitical map of the Middle East.

“Moscow fears that losing Syria, its last remaining ally in the Arab World, could be a prelude for the overthrow of an even bigger ally in Iran. Emerging from Arab Spring turmoil, the new Middle East may have little room for Russia – yet Vladimir Putin has launched an aggressive campaign to regain zones of influence that Moscow has lost since the fall of the Soviet Union….

“Because Turkey is a NATO member, continued attacks from Syrian territory could strengthen those urging the alliance to take a more active role in helping overthrow the Assad regime….

“British sources tell me that much of the equivocation is due to ‘mixed signals’ from the Obama administration.

“It seems that President Obama is determined to stick to his policy of drifting with events. He refused to back the Arab Spring from the start, most dramatically by trying to prop up Hosni Mubarak in Egypt until the very end. On Libya, Obama was forced to support military action when it became clear that not doing so could provoke an open split with key NATO allies.

“Many in Ankara hope that Obama’s current ambiguous posture on Syria may be due to electoral calculations – that he’s wary of key supporters on the left who oppose military intervention even in support of pro-democracy movements.

“Russia and Iran appear determined to keep the pressure on Turkey, both through Syria and by encouraging further PKK [Ed. the Kurds] attacks from bases in Iran and Iraq. The question is how far they can go without provoking a major regional war that would inevitably suck NATO in.”

Editorial / Wall Street Journal

“One oft-heard argument against U.S. involvement in Syria’s 18-month-old civil war has been that intervention could provoke a wider regional conflict. President Obama has kept his distance, and one result seems to be…a wider regional conflict….

“Turkey has a significant military, but the country is not strong enough or politically assertive enough to topple Assad without U.S. help. The same goes for the Saudis and Gulf states. They are all waiting for U.S. leadership, but in this case the U.S. isn’t even willing to lead from behind. So the conflict spread anyway, raising the prospect that the U.S. will have to intervene, perhaps at a far higher cost.”

Michael Young / Daily Star

“As Hizbullah’s role in Syria becomes clearer, and as the party continues to contribute to the Assad regime’s viciousness, its vulnerabilities will increase. However, the notion that the Shiite community will turn against Hizbullah is wishful thinking. If anything, as sectarian hostility rises in Syria, therefore in Lebanon, Hizbullah will find it easier to impose Shiite unanimity behind the party’s choices, no matter how repugnant its behavior in Syria.

“But where Hizbullah will not escape blowback is in those aspects of its public image where, for years, it has put up facades of deception. The party has always asserted that it is on the side of the dispossessed and justice; it has systematically played down its image as a sectarian Shiite organization; and while it has always affirmed its loyalty to Iran and its supreme leader, the party has promoted an outlook that it has a wide margin of maneuver vis-à-vis Tehran.

“All three of these arguments are disproven by Hizbullah’s actions in Syria. There the party is, plainly, on the side of the dispossessors and injustice. Drawing Arab attention back to Israel is not going to alter this. Strategic necessity has torn away the party’s mask of virtue. This virtuousness had already been dented in Lebanon, after Hizbullah worked hard to return Syrian hegemony over the country following the assassination of Rafik Hariri – a crime in which four party members stand accused of having taken part. Nor was there much moral decency on show when Hizbullah and its allies militarily occupied western Beirut in May 2008, killing dozens of civilians….

“Few are fooled anymore. Gone are the days when Hizbullah and its leader, Sayyed Hasan Nasrallah, won popularity contests in Arab streets. Thanks to Syria, the Arab world has been cracked by the pulsations of sect. Hizbullah’s old partner Hamas has largely abandoned the Assads, as have the different branches of the Muslim Brotherhood, above all in Egypt. Long before Bashar Assad ordered his warplanes to bomb civilians, Syrians were already burning Iranian and Hizbullah flags, grasping that power politics, but also communal fear and solidarity (even if Shiites and Alawites remain considerably different), reinforced Shiite backing for the Alawites….

“There is an erroneous conviction among March 14 leaders [Ed. March 14 is the opposition coalition] that Hizbullah may be irreversibly crippled by the fall of the house of Assad. The party will lose a great deal, but it will also retain a great deal, not least its formidable arsenal. Hizbullah’s declining reputation is one thing, but its effectiveness is something else entirely. With or without Syria it will have the ability to wreak havoc in Lebanon and elsewhere. So, take heart that the party’s contradictions are being exposed, but don’t assume Hizbullah is on its last legs.”

And back to Iran…there have been widespread protests in the streets of Tehran as the currency, the rial, plunges and prices rise. The currency* fell 40% or more in one week and shop owners are closing as the people buy up dollars and other foreign currencies, making the situation worse. The government thus far has been powerless to stop the collapse.

*The rial was 10,000 to the $1 as recently as early 2011 and was at 37,000 against the dollar this week.

The people are also upset the government is spending countless $billions ($6 billion according to some) defending the Assad regime in Syria (paying Syrian government troops and providing weapons) when the money is better spent on the citizenry back home.

Yes, the UN and Western sanctions on Iran that came about because of its suspected nuclear weapons program are working and it would seem the central bank either doesn’t have the foreign exchange reserves it needs to prop up the currency or it can’t access funds frozen by the sanctions. But the Iranian regime won’t just crumble under pressure.

Jeffrey Goldberg / New York Post

“Could Obama simply be avoiding a messy foreign entanglement during his bid for re-election? If this were true, it would make him guilty of criminal negligence. Is he the sort of man who would deny innocent and endangered people help simply because greater engagement could complicate his re-election chances? I truly doubt it.

“Or perhaps Obama isn’t quite the brilliant foreign-policy strategist his campaign tells us he is. Of course, he has had his successes. I’m not sure you’re aware of this, but Osama bin Laden is dead.

“Yet Obama’s record in the Middle East suggests that missed opportunities are becoming a White House specialty.

“Syria is the most obvious example. Assad is a prime supporter of terrorism, and his regime represents Iran’s only meaningful Arab ally. Nothing would isolate Iran more than the removal of the Assad regime and its replacement by a government drawn from Syria’s Sunni majority. Ensuring that extremists don’t dominate the next Syrian government is another compelling reason to increase U.S. involvement.

“Yet all we have from Obama is passivity, which is a recurring theme in the administration’s approach to the Middle East.

“So is ‘aggressive hedging,’ a term used by the Brookings Institution’s Shadi Hamid to describe Obama’s strange reluctance to clearly choose sides in the uprisings of the Arab Spring.

“ ‘There’s a widespread perception in the region that Obama is a weak, somewhat feckless president,’ Hamid, who runs the Brookings Doha Center, told me.  ‘Bush may have been hated, but he was also feared, and what we’ve learned in the Middle East is that fear, sometimes at least, can be a good thing. Obama’s aggressive hedging has alienated both sides of the Arab divide. Autocrats, particularly in the Gulf, think Obama naively supports Arab revolutionaries, while Arab protesters and revolutionaries seem to think the opposite.’

“Leaders across the Middle East don’t take Obama’s threats seriously. Neither Israeli Prime Minister Benjamin Netanyahu nor the Arab leaders of the Gulf countries believe he’ll act militarily against Iran’s nuclear program in his second term.”

On to….

Europe

Euro finance ministers meet Oct. 8, while a key EU summit is to be held on Oct. 18-19 where the critical issue of a eurozone bank supervisor is to be addressed. German Chancellor Angela Merkel is also going to Athens on Tuesday and this will make news as massive protests are planned for her arrival. It's Germany, after all, who is viewed by Greeks in the worst possible light for making their lives miserable with all the conditions for bailout aid. Merkel wants Greece to stay in the EU, but she is there to discuss with Prime Minister Samaras how Greece can gain the German parliament’s ongoing support for further assistance; this while the troika (European Commission, European Central Bank and International Monetary Fund) remains in Greece to gauge the progress the country is making in fulfilling the terms of its bailout.

There is no official word on when the troika will decide if Greece is eligible for another 31 billion euro, but Samaras said this week if the country doesn’t get it, Greece will run out of money in November and there would be total anarchy. For its part, the IMF has already said it won’t disburse any further aid until it is convinced Greece’s debt is sustainable.

The Greek economy, by the way, is now projected to fall 6.5% in 2012 vs. an initial estimate of 4.8% from back in March, and it will shrink a sixth year in 2013, an estimated 3.8%. GDP is down 25% since 2009. How do you build a case for further aid then? You can’t. But Euro leaders are being pressured to hold it together.

As for Spain, Madrid continues to obstinately say all is well, their reforms (the fifth attempt at same since Mariano Rajoy became prime minister last year) will work, and they don’t need a bailout. But government debt is projected to rise to 85.3% of GDP this year and 90.5% in 2013 and the eurozone limit is supposed to be 60%, plus Spain’s central bank now estimates it will need to borrow $267 billion in ’13.

Madrid is playing a giant game of chicken with the ECB and Germany. For his part, ECB President Mario Draghi is telling the Germans that any bond buying the ECB does will be “accompanied by reforms from governments that address deep-rooted issues,” but Madrid won’t accept any conditions other than those they themselves lay out.

So Draghi played along this week at the ECB’s regular monthly policy meeting, saying, “Today we are ready with our OMT [Outright Monetary Transaction program]. We have a fully effective backstop mechanism in place, once all the prerequisites are in place as well.

“OMTs…have helped to alleviate such tensions [in financial markets] over the past few weeks, thereby reducing concerns about the materialization of destructive scenarios.”

Draghi added that Spain had made “remarkable progress” in reforming its labor market and banking sector, which is a crock. It’s why at a presentation on Friday, Spain’s Economy Minister Luis de Guindos was laughed at when he said Spain didn’t need a bailout. Heck, earlier in the week, the governor of the Central Bank of Spain said the proposed 2013 budget was too optimistic on its economic scenario for next year, and here the budget was just released ten days before.

And you know how I said last week that the stress test on Spain’s banks was a bunch of garbage and that the amount of funding for the nation’s banks to recapitalize them was way too low because there is no way on earth they are properly estimating their real estate exposure? A few days later, Moody’s Investors Service said the capital shortfall faced by Spain’s banks was as much as 105 billion euro, not the 53.7 billion shortfall the officials found after conducting the vaunted stress test. I rest my case.

Looking at the eurozone’s economic performance, the purchasing managers’ index for September for the 17 nations came in at 46.1 for September, up from 45.1 in August. The services index was also 46.1, though this was down from 47.2. The composite for both was obviously 46.1 and to give you an idea of how bad Spain is doing, their comp was 40.2.

Others of note…France’s manufacturing PMI was only 42.7, Germany’s 47.4, and non-euro Britani’s 48.4. For the eurozone it was the 14th consecutive month of contraction.

The eurozone unemployment rate remained at 11.4% for a third straight month, with Germany at 5.5%, France at 10.6% and Spain at 25.1%.

And Cyprus, which is in the euro-17, said it will seek a bailout of 11 billion to recapitalize its banks and pay the bills, its problems related to the Greek debt restructuring of last spring.

Finally, back to Greece, I’ve been writing of right-wing Golden Dawn and their growing support among the population. This week the New York Times ran an extensive piece by Liz Alderman on the topic.

“We have a major socioeconomic crisis in which several hundred thousand Greeks are losing ground,” said Nikos Demertzis, a professor of political sociology at the University of Athens. “And you have a rising number of immigrants in Greece, many illegal. This is creating a volcanic situation where all the classic parameters for the flourishing of a far-right force like Golden Dawn are present.”

Prime Minister Samaras talked about the immigration issue, with more than 1.5 million in a country of about 11 million, which “is creating extremism” that feeds the popularity of Golden Dawn, Samaras said. Outlawing the group, however, could backfire, he added.

Before I get back to the U.S., a few words on the global outlook outside Europe.

Kaushik Basu, the new chief economist at the World Bank, said the global economy “is not doing well. The difficult phase will live with us for a while.”

International Monetary Fund chief Christine Lagarde warned China and Japan that the shaky global economy can ill afford their territorial dispute that is already having a major impact on their economies (more on this below). “The current status of the economy and the global economy needs both Japan and China fully engaged,” she said.

The Asian Development Bank (ADB) cut its growth forecast for Asia, ex-Japan, to 6.1% this year, down from a July estimate of 6.6%, singling out slowing growth in China and India.

“The ongoing sovereign debt crisis in the euro area and the looming fiscal cliff in the U.S. pose major risks to the outlook.”

And the Economic Commission for Latin America and the Caribbean (ECLAC) forecast the whole area would slow to 3.2% in 2012, down from 4.3% last year and less than the 3.7% that ECLAC predicted in June. Brazil will grow only 1.6% this year. 

Also, the World Trade Organization reported that global trade is only expected to rise 2.5% in 2012, vs. 5% in 2011 and 14% in 2010. The average the past two decades is 6% per year.

So all the data is consistent with a slowdown around the world, including the 1.3% second quarter final GDP figure for the U.S.

Washington and Wall Street

This week, though, there was some decent economic data aside from the jobless rate. The September ISM reading on manufacturing came in at 51.5 when 49.8 was expected, while the September services reading was 55.1, also better than expected. Figures on August construction, down 0.6%, and factory orders, down 5.2%, were not good.

Looking ahead to the holiday shopping season, the National Retail Federation is projecting sales gains of 4.1% for November and December vs. a 5.8% gain last year. The International Council of Shopping Centers pegs 2012 at just 2.9%. The 10-year average gain is 3.5%, including a down 4.4% performance in 2008.

Fed Chairman Ben Bernanke said to the Economic Club of Indiana, “We expect the economy to continue to grow. Our concern is not really a recession. Our concern is that growth will continue but at a pace that’s insufficient to put people back to work….

“We expect that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economy strengthens.”

So once again, Bernanke gave you your marching orders to buy stocks and don’t worry about anything else that is going on in the world. Because even though he totally whiffed on the housing bubble, he’s good…real good.

Meanwhile, the Congressional Budget Office is projecting the 2012 deficit for the fiscal year ending in September will be $1.1 trillion, the fourth straight year of trillion dollar deficits under Barack Obama. [$1.4 trillion in 2009 and $1.3 trillion in each of the past two years.]

Good job, Mr. President. Amazing consistency! Plus, on the campaign trail and during the first debate, you talked of shaving $4 trillion from the deficit over the coming decade, but $1 trillion of that is savings already accomplished in a budget deal with Republicans and another $850 billion comes from winding down the wars in Iraq and Afghanistan. Plus a lot of your cuts only come into play once you’re long out of office, assuming a second term. Love it!

And on the issue of the fiscal cliff, should it come to pass, the nonpartisan Tax Policy Center said U.S. households face an average tax increase of $3,446 in 2013 if Congress and the White House don’t get their act together.

Street Bytes

--Stocks rallied, breaking a two-week losing streak, with the Dow Jones up 1.3% to 13610, while the S&P 500 rose 1.4% and Nasdaq tacked on 0.6%. Third-quarter earnings now become the focus, along with the presidential election campaign and Europe, while your editor and a handful of policy wonks will keep one eye on the Middle East.

--U.S. Treasury Yields

6-mo. 0.14% 2-yr. 0.26% 10-yr. 1.74% 30-yr. 2.97%

Treasuries fell, yields rose, on the stronger employment report. A better feeling in Europe over the handling of their debt crisis (though misguided) also led to some reallocation out of U.S. paper.

--Target announced it is joining rivals like Wal-Mart in not reporting monthly sales figures from here on. For its last report, Target said September same-store sales rose 2.1% vs. a year ago. Macy’s were up 2.5%, below expectations, ditto for Nordstrom and Kohl’s, the latter falling in the month vs. expectations of a 2% gain. Overall, sales were disappointing at the stores still reporting monthly, now representing just 13% of the overall U.S. retail market.

--The U.N. Food and Agriculture Organization reported that global food prices rose 1.4% in September, after being unchanged in July and August. Drought in the U.S., Russia and Europe pushed up corn and soybean prices to record highs, while dairy products rose 7%. Higher feed costs also helped drive meat prices up 2.1%.

But while the FAO is forecasting a fall in cereal production for 2012, it says indications for 2013’s wheat crop are encouraging.

--Oil at one point in the week was at a two-month low after the government reported U.S. crude production climbed to the highest level in more than 15 years, this as demand fell.

--Due to temporary refinery issues in the region, fuel prices in some parts of California soared at the end of the week, up to $5.69 a gallon in one area.

--U.S. coal exports rose 24% - hitting a record – in the first half of the year, according to the U.S. Energy Information Administration. While the U.S. takes advantage of abundant cheap natural gas, sales of U.S. coal to Europe are booming as utility providers there ditch more expensive nat gas for cheaper coal. Sales have slowed in the third-quarter but are still on track to exceed the record set in 1981.

--U.S. auto sales were 1.2 million vehicles in September, a 13% gain from the same month a year earlier, and for the year are on track for about 14.4 million.

General Motors’ sales rose 1.5% to 210,245 vehicles, its highest September since 2008. Ford’s were unchanged and Chrysler’s rose 11.5%.

Toyota’s sales were up 41.5% from a year earlier, Honda’s up 30.9% and Subaru’s up 32.2%. Nissan’s, however, were down 1.1%.

Hyundai’s were up 15.3% and Kia Motors’ up 35.1%.

--India’s stock market suffered a “flash crash” on Friday of 16% in mere minutes in the main “Nifty” index. The index recovered and 59 erroneous orders were cancelled. India’s National Stock Exchange blamed human error, not a computer algorithm, for the plunge.

--China’s official manufacturing PMI came in at 49.8 for September, up slightly over August but still contractionary, while the services PMI was 53.7, down from August’s 56.3.

--Last week I commented on the economic impact of the Japan-China dispute in the East China Sea and this week further proof of that rolled in. Bookings by Chinese to some popular Japanese tourist spots are down 70%, with the number of cancellations on Japan Airlines and All Nippon Airways up to 60,000 for travel between September and November.

And when it comes to car sales, Toyota’s in China fell by 50% in September over August.

But Toyota’s problems proved to be a boon for others, as VW’s Audi brand saw its sales rise 20% in September, while BMW’s surged 59%.

--Samsung Electronics is estimating record profits for the September quarter, led by strong sales for its Galaxy smartphone. The South Korean company is looking for operating profits of $7.3 billion, or double last year’s figure. But ongoing legal troubles with Apple cast a shadow over future performance.

--Workers at a large Foxconn plant in Zhengzhou, China, that manufactures Apple’s iPhone 5 went on strike, some 3,000 to 4,000, to protest their having to work through Golden Week (a vacation week in China) and for being subject to “overly strict” product-quality demands without adequate training, according to a press release issued by an advocacy group. No wonder Apple’s map app blows.

--Hewlett-Packard CEO Meg Whitman announced that the company’s turnaround may not bear fruit until 2015 or even 2016. Four of its five divisions saw operating profits fall by more than 20% the first nine months of the year, as at an analyst meeting HP said it expected to report 2012 full-year earnings far below expectations.

“The recent financial performance of HP has not been good,” Whitman said. “It’s going to take longer to right this ship than any of us would like.”

Said one analyst at ISI Group, Brian Marshall, “It’s brutal – it’s really, really negative. They’ve been very transparent [since Whitman took over about a year ago]. The problem with transparency is when they open up the full picture, it’s pretty ugly.”

HP is still the world’s leader in sales of PCs, printers and computer services, with revenue of $127 billion last year, but it is projecting revenues to decrease 11 to 13 percent next year when analysts were more or less expecting flat sales.

--Facebook announced it is up to 1 billion members – or one-seventh of the global population.

But since we know a ton of Facebook pages are fakes, I’m estimating 100 million are children under 10 months of age, while another 100 million are farm animals, who post their photos so that future generations of hogs, for example, can see what their mother looked like before she went to slaughter.

In the Western world, Facebook is generating up to $3.20 per user. In the developing world the average is about 44 cents. The countries contributing the most these days to user growth include Brazil, Mexico and India.

Separately, the Wall Street Journal had a piece on how “A growing number of top-ranked U.S. colleges say they are finding objectionable material online that hurts the chances of prospective freshmen….About a quarter of admissions officers at the nation’s top 500 colleges have used websites such as Facebook…to vet applicants, according to an annual Kaplan Test Prep survey. Of those, more than one-third say they have found something that has hurt a student’s chance of admission, up from 12% last year. ‘We have seen students that have been involved in bullying behavior or alcohol or drugs,’ said Martha Blevins Allman, dean of admissions at Wake Forest University.’” Hey, that’s my alma mater! Anyway, parents. The most important thing you can do for your child is to get into their skulls that Facebook can kill their chances of getting into the school of their choice, let alone hinder future job opportunities.

--Shares in social gaming company Zynga plunged 20% after it warned of disappointing third-quarter earnings and further cut full-year projections as revenues will fall short of expectations. Last December the company went public at $10. It closed Friday at $2.43.

--According to the Investment Company Institute, the percentage of American families who say they own stocks or stock funds slumped to 46% in 2011 from 53% in 2001.

--Related to the above, Morgan Stanley CEO James Gorman said in an interview with the Financial Times, “There’s way too much capacity and compensation is way too high. As a shareholder I’m sort of sympathetic to the shareholder view that the industry is still overpaid.”

Yup.

Morgan Stanley is cutting 4,000 jobs by the end of the year, but Gorman conceded there could be a new round of cost-cutting in 2013.

--Domestic airfares for the holiday season have risen about 3% over last year, according to Priceline.com.

--American Airlines continues to struggle, this time having to cancel scores of flights over loose seats. The air carrier, in bankruptcy, claims it’s a maintenance rather than labor issue. American is giving the rest of us in the country a bad name. May I suggest they change their name to Bolivian Air.

--The Hawaii Tourism Authority reports that for the first nine months of the year, tourists’ spending rose 20% from a year earlier to $9.59 billion. At this rate it would eclipse the full-year record set back in 2006. Japanese tourists are streaming in and with the tensions between Tokyo and Beijing, you would think this will only lead to more Japanese (and Chinese) choosing Hawaii over each other’s country.

One example of the tourism boom is the 1,636-room Sheraton Waikiki, where the occupancy rate is 95%. Good gawd…and you know that Sheraton is notorious for paper thin walls so what a nightmare…TVs turned up too loud, loud conversation, drunks…That’s it, I’m staying home.

--Under a new eight-year agreement with ESPN, Fox, and TBS, Major League Baseball will collect a combined $12.4 billion for television rights, or about twice the previous contract. Fox, for example, saw its per-season average go from $257 million to $495 million. ESPN’s from $350 million per to $700 million.

Americans love their ‘live’ sports.

--Want to really know how bad things are in Spain? The European PGA Tour’s Andalucia Masters, scheduled for Oct. 18-21 at Valderrama GC in Sotogrande, Spain, was canceled; the fourth Spanish event the tour was forced to cancel this year because of the collapsing economy there.

--A record 87,000 people left Ireland in the year to April, up from 80,600 a year earlier. Since the debt crisis hit in 2008, 182,900 Irish young people between 15 and 29 have fled. [Financial Times]

--Inflation Alert: My beer man upped the price on Coors Light 4%! But overall in America, after falling three straight years, beer sales rose 1.9% for the first eight months of 2012. It’s about an improving blue-collar job market it would seem. As a Wall Street Journal article pointed out, for example, sales are up 18% in North Dakota, where the unemployment rate is just 3% owing to the booming energy sector there.

--The U.S. birthrate declined 1% in 2011 over 2010, which was down 2% over 2009. I blame Bush.

Foreign Affairs

Israel: Prime Minister Netanyahu has apparently made a decision to hold elections on February 12, if not sooner. The Knesset returns from an extended recess on October 15 at which time a timetable will be established.

Meanwhile, Netanyahu and Defense Minister Ehud Barak have not spoken since Netanyahu condemned Barak for meeting U.S. officials behind his back. Barak is clearly plotting a return to the opposition rather than sitting in Netanyahu’s government. This obviously complicates things when it comes to Iran.

Afghanistan: President Hamid Karzai accused the United States of playing a “double game” by not going after insurgents’ backers in Pakistan and instead fighting a war against them in his country. Karzai is also upset the United States doesn’t sell him the weapons he says he needs and said he is turning to China, India and Russia for them.

At a typical Karzai press conference, where he is all over the board (and god knows what he says about America when he’s speaking his native tongue to locals), he did promise that he would step down from the presidency as scheduled in 2014. Karzai touched on the rocky relationship with the U.S. in a “60 Minutes” interview that aired last Sunday.

On Thursday he said, “NATO and Afghanistan should fight this war where terrorism stems from. But the United States is not ready to go and fight the terrorists there. This shows a double game. They say one thing and do something else.

“If this war is against insurgency, then it is an Afghan and internal issue, then why are you here? Let us take care of it.

“But if you are here to fight terrorism, then you should go where their safe havens are and where terrorism is financed and manufactured.”

Meanwhile, two U.S. soldiers were killed last weekend in another green-on-blue, insider attack by an Afghan soldier, while three other soldiers were killed in a suicide blast.

Iraq: Dozens of hard-core militants, many with al-Qaeda ties, escaped in a prison break in Tikrit, Saddam Hussein’s hometown. 10 guards and two prisoners were killed in the ensuing firefight. It was an inside job as inmates broke into a prison storeroom and grabbed weapons there.

Venezuela: Huge weekend as Henrique Capriles Radonski faces off against Hugo Chavez in the country’s presidential election. At the previous election in 2006, Chavez trounced his opponent 63-37. Polls are very unreliable but most seem to think Chavez is up by about ten points, though one or two have Capriles slightly ahead. Chavez continues to maintain his popularity among the poor. He’s also warned that a Capriles victory would lead to a “profound destabilization” and possible “civil war.” The armed forces’ leading commander, however, said he would honor the election result.

Far more next week as we await the result, which could impact oil prices, among other things.

Georgia: President Mikhail Saakashvilil conceded on Tuesday that his party had lost Georgia’s parliamentary election and his opponent, billionaire businessman and philanthropist Bidzina Ivanishvili, had become prime minister, setting the stage for fireworks in Saakashvili’s final year in office. What was significant is this is the first time in Georgia’s post-Soviet history that the government changed hands peacefully through the ballot box rather than by through revolution. Saakashvili, as pro-West as any leader in the region and the man who brought democracy to Georgia, prevented violence in the streets after the vote, but the 56-year-old Ivanishvili immediately went on the attack, blasting the president’s reforms.

“I have always blamed Saakashvili for what has gone wrong in Georgia, and I can repeat that today: This man’s ideology has established a climate of lies, violence and torture.”

Neighboring Russia, as you can imagine, welcomed the defeat of Saakashvilli’s party; the two having fought a brief war in 2008. Saakashvili remains in office until his second term ends in October 2013.

For his part, Ivanishvili sought to downplay the assumption he would put Georgia back in the Russian orbit (he having made his fortune in that country) and said his first trip overseas would be to the United States, though no one really knows where the guy wants to take his country.

Saakashvili’s party was hurt in the last few weeks with the release of a prison video showing extreme abuse of prisoners by guards.

China: The Communist Party Congress is now set to begin Nov. 8 and it is assumed the issue of former Party maverick Bo Xilai will be disposed of beforehand. He faces the death penalty, though it would probably be suspended as in the case of his wife, recently convicted of murder. Party officials, though, face danger as Bo continues to have widespread support and some of the charges against him, such as for sexual misconduct (lots of mistresses) could be leveled against other leaders in power today. As one analyst in Beijing told the Los Angeles Times, “Airing all this dirty laundry is really risky for the party.  They are playing with fire.”

Bo was long seen as the chief rival to Xi Jinping, who is set to become the new president next month.

William Kirby, director of the Fairbank Center for Chinese Studies at Harvard University, observed:

“For the party, I think the Bo case shows so many things that are wrong with the political system – that it’s still to a large degree in the hands of founding families, that regional power matters enormously, that the military is the heart of this regime, that the judiciary and police are at the whim of the party, and that monetary corruption suffuses the system. The Bo case is like peeling back an onion, exposing fundamental flaws.” [Los Angeles Times]

Separately, last week I wrote of the Obama administration’s decision to block Chinese investment in wind farms on the grounds of national security. This week, Professor Zhou Dadi, vice-chairman of the National Energy Advisory Committee, said the move showed America’s “consistent hostility against China since the cold war. They believe all Chinese enterprises, no matter whether they are state-owned or private, are spy agencies. If the Ralls (Corp.) investment would impair U.S. national security, how come they allow other enterprises to build wind farms there?” [Zhou referring to operations in the same Oregon area owned by a Denmark company and a German outfit.] [South China Morning Post]

And it appears this week’s “60 Minutes” will have a segment none too pleasing to Beijing; specifically the topic of Chinese corporate espionage. Representative Mike Rogers, a Michigan Republican and the chairman of the House Intelligence Committee, goes after Chinese telecom company Huawei, which is building a large presence in the U.S., with Rogers urging companies considering purchases from Huawei to “find another vendor if you care about your intellectual property, if you care about your consumers’ privacy, and you care about the national security of the United States of America.”

On the issues in the East China and South China Seas, the rhetoric between Tokyo and Beijing remained white hot, while the Philippine government announced it was deploying 800 more marines to guard its interests in the disputed Spratlys islands, which China also claims, in the South China Sea. The Spratlys are additionally claimed in whole or in part by Vietnam, Brunei, Malaysia and Taiwan. Authorities in Manila, however, attempted to tamp down the vitriol.

Hong Kong: The city’s worst boating accident in decades claimed at least 38 lives when a commuter ferry collided with a boat of partygoers celebrating China’s National Day (part of the Golden Week holiday). I’ve been on ferries in Victoria Harbor a bunch of times and the waters are incredibly crowded. It’s amazing something like this doesn’t happen more often.

Random Musings

--New Jersey Republican Gov. Chris Christie, discussing Mitt Romney’s prospects in the first presidential debate last Sunday on CBS’ “Face the Nation.”

“He’s had a tough couple of weeks, let’s be honest….He’s going to come in Wednesday night, he’s going to lay out his vision for America…and this whole race is going to turn upside down come Thursday morning.”

Good call, Governor.

--First, some poll data before the debate.

Wall Street Journal/NBC News survey shows President Obama leading among likely voters, 49-46, down from a five-point lead in mid-September. The president’s overall job approval was 49%. 57% believe the economy is improving. Just 13%, the lowest number since Obama took office, think the economy will get worse.

Obama polls 71% of likely Hispanic voters in the WSJ/NBC survey vs. 21% for Romney. [Hispanics went for Obama in a CNN poll 70-26. But will they actually show up on Election Day, which is the fear of Democratic strategists.]

A CNN/ORC International poll of likely voters has Obama leading Romney 50-47. In this one, Obama has a 53-44 lead among females, while Romney leads 50-47 among men. Obama’s approval rating was 49%. Vice President Joe Biden had a favorable/unfavorable rating of 47-44, while for Paul Ryan the margin was 46-40.

A Politico/George Washington University Battleground poll of likely voters had Obama leading 49-47, though Romney led by 4 points among independents. Again, Obama’s approval rating was 49%. Obama led women in this one by 12 points.

In a Washington Post/ABC News survey, Obama again leads 49-47 among likely voters. But in swing states, the margin swells to 52-41. And, once again, Obama’s overall approval rating is 49%. 

--A Des Moines Register Iowa Poll shows Obama ahead in this swing state, 49-45.

--An NBC News/Marist College survey of swing states had Obama up by two points each in Nevada and North Carolina, while leading by seven in New Hampshire.

A Suffolk poll in Virginia had Obama leading Romney by two, while the Virginia Senate race between George Allen (R) and Tim Kaine (D) was tied.

--The New York Post identified 8 toss-up states in terms of U.S. Senate races: Connecticut, Indiana, Massachusetts, Montana, Nevada, North Dakota, Virginia, and Wisconsin. In all eight the margin is 5 points or less, with a 4-4 split. Were this to be the end result and there are no other surprises, Democrats would retain the Senate 52-48. But this survey of the races has Republican Linda McMahon in Connecticut and Scott Brown in Massachusetts trailing by less than two points so it’s 50-50 if you flip those two.

[Actually, a Quinnipiac Univ. poll has McMahon now ahead of her opponent by one, while the latest Boston Globe survey has Democratic challenger Elizabeth Warren leading Scott Brown 43-38, with a whopping 18% still undecided, 1% going for “others.” But Obama leads in Massachusetts by a 57-27 margin, which isn’t good for Brown, sports fans.]

Notice how Missouri is not listed among the toss-up states. Most seem to think that Republican candidate Todd Akin has way too much to overcome to defeat Dem. incumbent Sen. Claire McCaskill following Akin’s “legitimate rape” and his more recent use of the term “ladylike” to describe McCaskill’s campaign in 2012 vs. 2006. Should Akin go down and Republicans fall short of a majority, he will join the likes of Christine O’Donnell and Sharron Angle on a list of those who cost the elephants dearly.

So all the preceding was then. We’ll learn shortly the true impact of Romney’s strong debate performance and how much he moved the needle both nationally and more locally for other Republican candidates.

--OK, on to the debate. Opinion, from all sides, though little of it good for President Obama.

Karen Tumulty / Washington Post

“Mitt Romney finally found his voice Wednesday night.

“After many months of awkward moments and shifting campaign messages, he forcefully and confidently stood alongside President Obama and offered an alternative economic vision to what he called Obama’s ‘trickle-down government approach.’

“The two contenders seemed to swap roles Wednesday. Obama was the one who struggled for his footing, scowling on the split screens of millions of television viewers across the nation and often looking like a man who wished he were elsewhere….

“Romney pressed his case against Obama’s stewardship of a disappointingly weak recovery. He sought to sharpen his own proposals and to soften the perception among voters that he favors the interests of the wealthy over those who are struggling.

“ ‘The people who are having the hard time right now are middle-income Americans. Under the president’s policies, middle-income Americans have been buried,’ Romney said, echoing a damaging phrase that Vice President Biden used the day before to describe the status of average Americans over the past four years.

“Obama, meanwhile, did not make many of the arguments that he and his campaign have used most effectively against Romney. He did not recount the former governor’s career in private equity…or the secretly taped video in which the Republican nominee told wealthy donors that the 47 percent of Americans who do not pay federal income taxes are dependent on government and see themselves as victims.

“The president also left many of Romney’s claims unchallenged. Romney asserted eight times that Obama plans to cut $716 billion from Medicare without noting that the Republican vice presidential nominee, Rep. Paul Ryan (Wis.), shepherded a budget through the House that would do the same thing.”

Andrew Rosenthal / New York Times

“At the presidential debate tonight, Mitt Romney looked and sounded presidential, President Obama failed to step in and puncture that image.

“I won’t offer a detailed fact-check of the debate.  It would be too depressing…But Mr. Romney tossed out some whoppers, which Mr. Obama did not counter.

“Mr. Romney, for instance, said that under Mr. Obama’s health care program, the government would ‘sweep in’ and take over everyone’s medical care. That’s simply a lie, and Mr. Romney knows it, but Mr. Obama let it go unchallenged.

“This debate was perhaps most notable for what Mr. Obama left unsaid – for his many lost opportunities.

“When the president discussed his opponent’s tax plan, he sounded lost and detached. He should have put a direct and simple question to Mr. Romney: ‘Please name the deductions and exemptions you plan to eliminate in order to cut taxes without increasing the deficit. Just four or five would be nice.’…

“Instead of attacking Mr. Romney, Mr. Obama praised his leadership in Massachusetts. He made it clear that Romneycare is Obamacare. He said there was no difference between them on Social Security, taking that issue off the table for no discernible reason.

“I’m not so shocked. Mr. Obama has made his distaste for political jousting disappointingly clear over the last four years.”

Editorial / Washington Post

“If anyone hoped that Wednesday night’s debate between President Obama and Mitt Romney would shake the presidential candidates off their canned talking points, they would have ended the evening disappointed….

“(Both) candidates studiously maintained the evasions and omissions at the heart of their policies. The debate was wonky without being especially honest. Which particular deductions would Mr. Romney curtail to avoid, as he insisted he would, having the lower tax rates he proposes add trillions to the debt? He didn’t say, beyond maintaining, repeatedly, that he would not ‘under any circumstances raise the taxes on middle-income Americans.’ How would Mr. Obama ‘strengthen’ Social Security ‘over the long term,’ as he said must be done? He didn’t explain, other than to say only a ‘tweak’ is needed. Nor, on the more important issue of Medicare, did the president detail how, beyond promising to slow the growth of health care costs, he would control the rapidly growing federal program….

“Mr. Romney effectively indicted the president for the weak state of the economy four years after his election. ‘We know the path we’re taking is not working,’ he said. ‘It’s time for a new path.’ Mr. Obama said Mr. Romney was peddling the same tax-cut ‘sales pitch that was made in 2001 and 2003,’ adding, ‘Math, common sense and our history shows us that is not a recipe for job growth.’ But the two candidates were strikingly complicit in failing to confront the magnitude of the fiscal challenge the winner will face immediately. The overriding feature of the debate was a tacit conspiracy of avoidance.”

Daniel Henninger / Wall Street Journal

“Barring revelations by the Obama campaign that Mitt Romney has an identical twin, whoever that guy representing the GOP ticket was in Denver has just given the United States a real presidential election. At last.

“It would be asking too much for anyone to believe that the Romney campaign planned to spend two years saying very little about the substance of public policy as a ruse to anesthetize Barack Obama on debate night, but that is clearly what happened.

“Gov. Romney came to the debate prepared to press Mr. Obama in detail about the president’s record, to defend the substance of his own proposals and even draw sharp philosophical distinctions with Mr. Obama. We’re happy to tip a hat to his pre-debate sparring partner, Sen. Rob Portman of Ohio, but this level of competence and detail wasn’t acquired in the past 10 days.

“We may all wonder why he waited until now to liberate the real Mitt, but five weeks from election day that question is beside the point and behind us.

“This is the candidate, and he proved in Denver he deserves to be the candidate. At last.

“It is safe to say that no one expected or predicted that Barack Obama could be so pushed off his game or look so flustered in a contest of articulating ideas. What happened?

“Barack Obama showed the dangers and risks of presidential incumbency. For all the powers of the office, the U.S. presidency inevitably causes the person holding it to place outsized belief and faith in the correctness of his own policies and ideas. In a word, hubris. It has happened before.

“Barack Obama, perhaps the most self-confident person to occupy that office in our lifetime, was always skating along the edge of a cliff of self-destructive arrogance. No other president would have thought to berate the members of the Supreme Court as they sat in front of him during his State of the Union speech. The famous George Washington University speech in which he ridiculed his Republican partners in the deficit-negotiation talks, who had come to the speech expecting to hear a policy response, was another sign of potential danger.

“And finally there was the report a few weeks ago that Mr. Obama did not respect Gov. Romney and did not consider him competent to be president.

“This is a president, dismissive and condescending to any opposition, who went into that debate in Denver and essentially got his head handed to him by a better-prepared opponent….

“The president sounded like someone who had simply run out of ideas. His challenger was elaborating detail on his policies, and the president was the candidate living in the past….

“Mitt Romney may not have won the election in the first debate, but he established a new baseline. In 90 minutes in Denver, Mr. Romney finally aligned himself with the political zeitgeist of the electorate. They have wanted to know more about his plans. They wanted to know why he thinks their current president has failed and what he’d do differently. Now they do.”

George Will / Washington Post

“The presidential campaign, hitherto a plod through a torrent of words tedious beyond words, began to dance in Denver. There a masterfully prepared Mitt Romney completed a trifecta of tasks and unveiled an issue that, because it illustrates contemporary liberalism’s repellant essence, can constitute his campaign’s closing argument.

“Barack Obama, knight of the peevish countenance, illustrated William F. Buckley’s axiom that liberals who celebrate tolerance of other views always seem amazed that there are other views. Obama, who is not known as a martyr to the work ethic and who might use a teleprompter when ordering lunch, seemed uncomfortable with a format that allowed fluidity of discourse.

“His vanity – remember, he gave Queen Elizabeth an iPod whose menu included two of his speeches – perhaps blinds him to the need to prepare. And to the fact that it is not lese-majeste to require him to defend his campaign ads’ dubious assertions with explanations longer than the ads. And to the ample evidence, such as his futile advocacy for Democratic candidates and ObamaCare, that his supposed rhetorical gifts are figments of acolytes’ imaginations.

“Luck is not always the residue of design, and Romney was lucky that the first debate concerned the economy, a subject that to him is a hanging curveball and to Obama is a dancing knuckleball. The topic helped Romney accomplish three things.

“First, recent polls showing him losing were on the verge of becoming self-fulfilling prophesies by discouraging his supporters and inspiriting Obama’s. Romney, unleashing his inner wonk about economic matters, probably stabilized public opinion and prevented a rush to judgment as early voting accelerates.

“Second, Romney needed to be seen tutoring Obama on such elementary distinctions as that between reducing tax rates…and reducing revenues, revenues being a function of economic growth, which the rate reductions could stimulate.

“Third, Romney needed to rivet the attention of the electorate, in which self-identified conservatives outnumber self-identified liberals 2 to 1, on this choice: America can be the society it was when it had a spring in its step, a society in which markets…allocate opportunity. Or America can remain today’s depressed and anxious society of unprecedented stagnation in the fourth year of a faux recovery – a bleak society in which government incompetently allocates resources in pursuit of its perishable certitudes and on behalf of the politically connected….

“Before Denver, Obama’s campaign was a protracted exercise in excuse abuse, and the promise that he will stay on the statist course he doggedly defends despite evidence of its futility. After Denver, Romney’s campaign should advertise that promise.”

Editorial / USA TODAY

“Arguably the best thing that a president could do for the economy now is to resolve the uncertainty about the budget that is restraining growth. A plan that steers clear of the year-end ‘fiscal cliff’ of destabilizing tax hikes and spending cuts, while overhauling unaffordable benefit programs, would give employers and investors the confidence they need to put money at risk and create jobs.

“The candidates didn’t even mention this fiscal cliff. Neither camp sees much merit in making specific proposals now that the other side would tee up for attack in TV ads and the remaining debates.

“So both candidates are running on unrealistic plans while hinting that they would pivot after the election to try to broker a bipartisan deal. If that is the case, it makes you wonder what the debates are all about.”

David Brooks / New York Times

“A sour fog settled over the Republican Party during the primary season. Several plausible candidates decided not to run for president, and the whole conversation ended up tainted by various political circus acts.

“The G.O.P. did its best to appear unattractive. It had trouble talking the language of compassion. It seemed to regard reasonable political compromise as an act of dishonor. It offered little for struggling Americans except that government would leave them alone.

“The Obama campaign took advantage…

“But, on Wednesday night, (Mitt) Romney finally emerged from the fog. He broke with the stereotypes of his party and, at long last, began the process of offering a more authentic version of himself.

“Far from being a lackey to the rich, Romney vowed that rich people will not see tax bills go down under a Romney administration…

“Far from being an individualistic, social Darwinist, Romney spoke comfortably about compassion and shared destinies….

“Far from wanting to eviscerate government and railing about government dependency, Romney talked about how to make government programs work better. ‘I’m not going to cut education funding,’ he vowed….

“Far from being a pitchfork-wielding populist who wants to raze Washington, Romney said he would work with the people he finds there….

“Far from being an unthinking deregulator, Romney declared, ‘Regulation is essential…I mean, you have to have regulations so that you can have an economy work.’….

“Yes, it’s true. Romney’s tax numbers don’t add up. Yes, there’s a lot of budgetary flimflam. No, Romney still doesn’t have an easy answer to wage stagnation (neither does Obama). But Romney’s debate performance signals the return of Governor Mitt. Democrats call it hypocrisy; I call it progress….

“I gave Obama better reviews than most pundits did Wednesday night, but his closing statement was as bad as any I’ve ever heard. If he can’t come up with a two-minute argument for why he should be president again, the former Mr. Audacity might still lose to the former Mr. Right Winger.”

Paul Krugman / New York Times

“ ‘No. 1,’ declared Mitt Romney in Wednesday’s debate, ‘pre-existing conditions are covered under my plan.’ No, they aren’t – as Mr. Romney’s own advisers have conceded in the past, and did again after the debate.

“Was Mr. Romney lying? Well, either that or he was making what amounts to a sick joke. Either way, his attempt to deceive voters on this issue was the biggest of many misleading and/or dishonest claims he made over the course of that hour and a half. Yes, President Obama did a notably bad job of responding. But I’ll leave the theater criticism to others and talk instead about the issue that should be at the heart of this election….

“First, Mr. Romney proposes repealing the Affordable Care Act, which means doing away with all the ways in which that law would help tens of millions of Americans who either have pre-existing conditions or can’t afford health insurance for other reasons. Second, Mr. Romney is proposing drastic cuts in Medicaid – basically to save money that he could use to cut taxes on the wealthy – which would deny essential health care to millions more Americans….

“Wait, it gets worse. The true number of victims from Mr. Romney’s health proposals would be much larger than either of these numbers, for a couple of reasons.

“One is that Medicaid doesn’t just provide health care to Americans too young for Medicare; it also pays for nursing care and other necessities for many older Americans.

“Also, many Americans have health insurance but live under the continual threat of losing it. ObamaCare would eliminate this threat, but Mr. Romney would bring it back and make it worse. Safety nets don’t just help people who actually fall, they make life more secure for everyone who might fall. But Mr. Romney would take that security away, not just on health care but across the board….

“One could wish that Mr. Obama had made this point effectively in the debate. He had every right to jump up and say, ‘There you go again’: Not only was Mr. Romney’s claim fundamentally dishonest, it has already been extensively debunked, and the Romney campaign itself has admitted that it’s false.

“For whatever reason, the president didn’t do that, on health care or on anything else. But, as I said, never mind the theater criticism. The fact is that Mr. Romney tried to mislead the public, and he shouldn’t be allowed to get away with it.”

Charles Krauthammer / Washington Post

“It was the biggest rout since Agincourt. If you insist, since the Carter-Reagan debate. With a remarkable display of confidence, knowledge and nerve, Mitt Romney won the first 2012 debate going away.

“Romney didn’t just demonstrate authoritative command of a myriad of domestic issues. He was nervy about it, taking the president on frontally, not just relentlessly attacking, but answering every charge leveled against him – with a three-point rebuttal….

“His success in doing this against a flummoxed Obama does more than rally the conservative base. It may affect waverers – disappointed 2008 Obama supporters waiting for a reason to jump. They watch Romney in this debate and ask: Is this the clueless, selfish, out-of-touch guy we’ve been hearing about from the ads and from the mainstream media?

“And then they see Obama – detached, meandering, unsure. Can this be the hip, cool, in-control guy his acolytes and the media have been telling us about?

“Obama was undone on Wednesday in part by his dismissive arrogance. You could see him thinking annoyedly: ‘Why do I have to be onstage with this clod, when I’ve gone toe-to-toe with Putin?’ (And lost every round, I’d say. But that’s not how Obama sees it.)

“Obama never even pulled out his best weapon, the 47 percent. Not once. That’s called sitting on a lead, lazily and smugly. I wager he mentions it in the next debate, more than once – and likely in his kickoff.

“On the other hand, Obama just isn’t that good. Not without a teleprompter. He’s not even that good at news conferences – a venue in which he’s still in charge, choosing among questioners and controlling the timing of his own answers.

“By the end of the debate, Obama looked small, uncertain. It was Romney who had the presidential look.”

Jennifer Rubin / Washington Post

“Romney seemed better versed in existing law and policies than did the president. At one point in rebutting Obama’s remarks on tax breaks for exporting jobs, he replied simply, ‘I’ve been in business 25 years; I have no idea what you’re talking about.’…

“Winner: Mitt Romney.

“Losers: President Obama, pundits who had already called the race for Obama and the Obama staffers who will have to explain to the president that he bombed.”

Editorial / New York Post

“President Obama had better hope that a kicked ass is covered under ObamaCare – as comedian Dennis Miller wryly observed.

“Because that’s precisely what the president got in last night’s debate, courtesy of Mitt Romney – and to the astonishment of all the media pundits.

“No, the Denver debate by itself won’t decide this election; Romney and Obama meet twice more and the vice presidential candidates hold one debate.

“But there was little doubt which of the two White House hopefuls looked more in control of what turned out to be a serious, substantive debate.

“Indeed, one word best describes Mitt Romney’s appearance last night: presidential….

“He made his case effectively and powerfully, time after time.

“Indeed, he did more than hold his own against Obama – he dominated this debate, from start to finish.”

--John Podhoretz / New York Post

“Slaughter. It was a slaughter.

“Mitt Romney put on the most commanding presidential debate performance of the insta-commentary era. One could literally watch, on Facebook and Twitter, hundreds of people on both sides of the political divide react in real time as the debate went on.

“Their reactions were identical, though their moods were not. As Romney dominated exchange after exchange with a surprisingly effective combination of pointed personal touches and remarkable factual preparation, conservatives and Republicans grew more and more jubilant while liberals and Democrats grew more and more alarmed….

“Meanwhile, the president was so off his game that he failed even to create an ‘aww’ moment at the very start, when he noted that last night was his 20th wedding anniversary.

“And he went downhill from there.”

Peggy Noonan / Wall Street Journal…back to her debate analysis.

“The next Obama-Romney debate will be different. The same Obama will not show up. He’s been embarrassed. He’ll bring his LeBron. He’ll be tough, competitive, and he’ll go at Mr. Romney professionally and personally: ‘We know you love cars, you’ve even got an elevator for them!’ This is where Sen. Rob Portman, in future debate prep, has to go. He has to play a newly energized and focused Chicago pol. But then he knows that.”

Noonan adds, “Watch out for Big Bird. Putting the merits and realities of overall PBS funding aside, Mr. Romney here gave a small gift to the incumbent. Democrats will merrily exploit it. Big Birds will start showing up outside Romney rallies, holding up signs saying ‘Don’t Kill Me!’ Think this through.”

Editorial / Wall Street Journal

“Election Day is only a month away, but for our money the presidential campaign really began in earnest Wednesday night in Denver at the first presidential debate. Mitt Romney met the challenge of appearing presidential, showed a superior command of fact and argument than the incumbent, and made a confident, optimistic case for change. These columns have often criticized the former Massachusetts Governor, but this was easily his finest performance as a candidate, and the best debate effort by a Republican nominee since Ronald Reagan in 1980….

“It’s going to be fascinating to see how this debate influences a race that the pundit class and most Democrats had all but declared to be over. The Romney campaign apparatus now has its own challenge to rise to the level of Wednesday’s performance by the candidate, in particular by improving its lackluster advertising that continues to traffic in general promises and platitudes….

“What worked for Mr. Romney on Wednesday was his confident demeanor and mastery of the policy detail, stitched together into a critique of the incumbent and clear explanation of the election stakes. Undecided voters saw a different challenger than they’ve been reading about, or seeing on TV, and the race is finally on.”

--The day after the debate, Mitt Romney apologized for his 47% remark, describing half the U.S. electorate as “victims.” It was “just completely wrong,” he told Fox News.

For his part, President Obama changed his tone at a rally in Denver.

“When I got on stage, I met this very spirited fellow who claimed to be Mitt Romney. But it couldn’t have been Mitt Romney because the real Mitt Romney has been running around the country for the last year promising $5 trillion in tax cuts that favor the wealthy. The fellow on stage last night said he didn’t know anything about that.”

Editorial / New York Post

“Team Obama, scrambling to regain solid footing after Wednesday’s debate debacle, has switched attack targets.

“Mitt Romney the extremist is out.

“Mitt Romney the liar is in.

“Chief campaign strategist David Axelrod complimented Romney’s ‘vigorous performance’ – but added that it was ‘one that was devoid of honesty.’

“Really. Axelrod talking ‘honesty.’….

“In fact, Obama & Co. need to think very hard before going down this road. That’s because, very frankly, honesty is not an Obama administration hallmark.

“Here’s just a random sample from a very long list:

“Team Obama portrayed last month’s murderous attack on the U.S. consulate in Benghazi as a spontaneous mob assault – despite knowing full well that it was a carefully planned al-Qaeda job.

“*Obama claims his plan would cut $4 trillion from the deficit. But he counts $800 billion in debt payments as spending cuts and spreads the plan out over 12 years – with most of the cuts back-loaded to when he is no longer president.”

--Earlier in the week, Vice President Joe Biden in Charlotte, talking about how Romney will raise taxes on the middle class, according to the Democrats. “This is deadly earnest, man. This is deadly earnest. How they can justify, how they can justify raising taxes on the middle class that has been buried the last four years? How in Lord’s name can they justify raising their taxes with these tax cuts?”

As the Wall Street Journal then opined:

“In our view, Mr. Biden deserves gratitude for having the courage to break the Obama campaign’s code of silence on the economy.”

--David Ignatius / Washington Post

“It’s embarrassing when President Obama’s risk-averse refusal to engage on foreign policy issues becomes so obvious that it’s a laugh line for the president of Iran.

“ ‘I do believe that some conversations and key issues must be talked about again once we come out of the other end of the political election atmosphere in the United States,’ President Mahmoud Ahmadinejad said cheekily in an interview last Sunday. I hate to say it, but on this matter the often-annoying Iranian leader is right.

“Less than six weeks before the election, the Obama campaign’s theme song might as well be the old country-music favorite ‘Make the World Go Away.’ This may be smart politics, but it’s not good governing: The way this campaign is going, the president will have a foreign affairs mandate for…nothing.

“The ‘come back after Nov. 6’ sign is most obvious with Iran. The other members of the ‘P5+1’ negotiating group understand that the United States doesn’t want serious bargaining until after the election, lest Obama have to consider compromises that might make him look weak. So the talks with Iran that began last May dither along in technical discussions.

“Ahmadinejad and some of his aides let slip during their visit to New York that they may be willing to offer a deal that would halt enrichment of uranium above 5 percent. Is this a good deal or not, in terms of U.S. and Israeli security? Sorry, come back later….

“I’m told that the talk in the Libyan underground is about a ‘global intifada,’ like what the new al-Qaeda leader Ayman al-Zawahiri has been preaching for the past five years. But ask U.S. officials about that subject and you get a ‘no comment.’

“To be blunt: The administration has a lot invested in the public impression that al-Qaeda was vanquished when Osama bin Laden was killed on May 2, 2011. Obama would lose some of that luster if the public examined whether al-Qaeda is adopting a new, Zawahiri-led strategy of interweaving its operations with the unrest sweeping the Arab world. But this discussion is needed, and a responsible president should lead it, even during a presidential campaign….

“The president hasn’t really made any bones about his wait-till-later approach. He put it frankly to Dmitry Medvedev, the president of Russia, back in March when he thought the microphone was off: ‘This is my last election. After my election, I have more flexibility.’

“This strategy of avoiding major foreign policy risks or decisions may help get Obama reelected. But he is robbing the country of a debate it needs to have – and denying himself the public understanding and support he will need to be an effective foreign policy president in a second term, if the ‘rope-a-dope’ campaign should prove successful.”

--The head of Russia’s Federal Security Service claimed that al-Qaeda is setting forest fires in Europe as part of its low-cost attack strategy.

“This method allows (al-Qaeda) to inflict significant economic and moral damage without serious preliminary preparations, technical equipment or significant expenses.” [Daily Telegraph]

--What a mess in New Jersey this week as a 16-year-old local high school girl showed the power of Twitter, but for the wrong reason. She faked her abduction. While her parents were out at her brother’s hockey game, the jerk tweeted “There is someone in my hour ecall 911.” [sic] Within hours, hundreds of thousands of Twitter users around the world were on the case, with the Clark Police Department receiving 6,000 calls in the immediate aftermath; most being false leads wasting time and money.

Police determined shortly after she had staged it all and had run away from home, like she’s done in the past. She was found unharmed after 46 hours. Of course now hundreds have posted messages calling the girl vicious names. What a great world we live in.

--I was going to write about the Wisconsin television news anchor who blasted a viewer who attacked her for being overweight, but I’m so sick of social media as it is. Jennifer Livingston of WKBT in La Crosse did say of the personal attack, “Do not let your self-worth be defined by bullies. Learn from my experience, that the cruel words of one are nothing compared to the shouts of many.”

--Note to those who use tanning beds. According to a British medical journal, at least 170,000 cases of skin cancer each year are linked to indoor tanning. True, there is also research that UV exposure, whether from a tanning bed or the sun, has many benefits. Just go for a jog instead.

--That was an extraordinary interview on “60 Minutes” last week with Arnold Schwarzenegger. I say extraordinary because he could not have come across worse, as in a truly awful person. Why he thought writing his new autobiography and dragging his family through the mud all over again was a good idea is beyond me. So he’s a “Dirtball of the Year” candidate.

--The Weather Channel has a plan to name “noteworthy” winter storms, an incredibly stupid idea. There’s a huge difference between snowstorms and hurricanes. As a rival forecaster told Bloomberg, “It has no scientific merit and it could be very confusing to the public.” TWC says that naming systems will help create public awareness.

--And here’s a “Sign of the Apocalypse.” From the Wall Street Journal:

“Pop Warner Little Scholars Inc., the nation’s largest youth-football organization, has suspended coaches of an elite California team amid an investigation into allegations that they paid 10- and 11-year-old players to intentionally injure opponents.”

The parent of a former player said the bounty program “started with coaches paying players $20 to $50 for hard-hitting tackles. It then evolved into a system in which players got similar rewards for hitting star players on the other team hard enough that they couldn’t play for the rest of a game, he said.” 

--ESPN The Magazine reports that President Obama is up to 104 rounds of golf during his almost four years. I haven’t gotten on him for this so I can’t now. Except the article says his rounds “last as long as six hours.” Six hours?! The longest weekend round on a crowded public course I can ever remember is 5 ½….a long one being 5. I’ve played a twosome, walking, in 2 hours and 20 minutes. And it’s not as if Obama has to wait on any tees.

So if you’re still undecided about who to vote for on Nov. 6, may I suggest you look at Obama’s  first debate performance, re-read David Ignatius’ piece on how the president has totally sacrificed foreign policy because of the campaign, and consider he is the world’s slowest golfer. The last item should automatically disqualify him.

--Speaking of golf, nice job by the U.S. Ryder Cup team last Sunday, eh? 

---

Pray for the men and women of our armed forces…and all the fallen.

God bless America.
---

Gold closed at $1780
Oil, $89.88

Returns for the week 10/1-10/5

Dow Jones +1.3% [13610]
S&P 500 +1.4% [1460]
S&P MidCap +0.7%
Russell 2000 +0.6%
Nasdaq +0.6% [3136]

Returns for the period 1/1/12-10/5/12

Dow Jones +11.4%
S&P 500 +16.2%
S&P MidCap +13.3%
Russell 2000 +13.8%
Nasdaq +20.4%

Bulls 46.8 [54.2 2 weeks ago]
Bears 
27.7 [Source: Investors Intelligence]

Don’t forget the StocksandNews iPad app…perfect with candy corn and a beer chaser.

And Dr. Bortrum posted a new column!

Have a great week. I appreciate your support.

Brian Trumbore

 



AddThis Feed Button

-10/06/2012-      
Web Epoch NJ Web Design  |  (c) Copyright 2016 StocksandNews.com, LLC.

Week in Review

10/06/2012

For the week 10/1-10/5

[Posted 12:00 AM ET]

Wait 24 Hours!!!

Peggy Noonan / Wall Street Journal, Thurs. p.m.

“The impact of the first debate is going to be bigger than we know. It’s going to affect thinking more than we know, and it’s going to start showing up in the polls, including in the battlegrounds, more dramatically than we guess.

“It wasn’t just Mitt Romney’s strong performance. It was President Obama’s amazingly weak one. He’s never been punctured before. But by debate’s end Wednesday night, if you opened the window this is what you could hear: Sssssss. The soft hiss of air departing from a balloon.”

Or maybe not…Friday’s jobs report for September revealed the unemployment rate fell to 7.8%, below the magic 8% figure and the lowest since Obama took office in January 2009. The unemployment rate had been above 8% since February ’09.

Immediately, many Romney supporters cried foul. The jobless rate was supposed to rise to 8.2%, not decline to 7.8%, according to economists, and former G.E. CEO Jack Welch received more than a bit of press with his Tweet:

“Unbelievable jobs numbers…these Chicago guys will do anything…can’t debate so change numbers.”

I won’t comment on the specifics of Welch’s remark, except to say that if the final employment number for October, released Nov. 2nd, four days before the election, is also below 8%, conspiracy theories will only grow (though by then some on the right say the damage will have already been done because of early voting). 

Here’s what we do know. The economy, according to the Bureau of Labor Statistics, created 114,000 jobs in September, right at economists’ consensus figure of 115,000.

The private sector created just 104,000, but the household survey showed an increase of 873,000 of which 582,000 were part-time positions. This particular number is highly volatile but was the highest single month since June 1983.

So once again…in this Twitterized world of ours that your editor truly can’t stand, my mantra since day one of this column being “wait 24 hours,” the picture changed drastically for both Republicans and Democrats from Wednesday evening to Friday morning. Euphoria turned into dismay for elephants. Donkeys who were baying on Wednesday could crow on Friday. For his part, President Obama immediately took the household survey and worked into his new stump speech that it was the best single month since Ronald Reagan was president.

Meanwhile, the truth is job growth remains putrid for this stage of an economic recovery and the percentage of those underemployed remains at 14.7%, unchanged from August.

Back to Jack Welch, while I no doubt have my own right-of-center tilt when it comes to my beliefs, as much as possible I believe in being fair, which is why on the bigger issues, such as in the look at the debate down below, I try to present both sides.

But I found Welch’s comment particularly amusing. I mean this is a guy who was notorious for beating earnings estimates every quarter by a penny, at a time when that was critical in terms of share performance. Every quarter. It’s all in my archives and if I ever get around to it will be part of my book. Of course G.E. was massaging the numbers to accomplish this…probably nothing illegal, but the company was master of the game…take a little revenue from the next quarter, or keep it off the books to add in the subsequent release…it’s what everyone did in the late 90s, early 2000s before all the accounting scandals began to hit.

But I want to digress from my normal lineup of importance, such as leading with Europe as I have 90% of the time the past few years, to talk about an item that still threatens to blow up the best plans of the White House as they campaign frantically these last four weeks….

The Middle East

WIR 9/22/12…on Syria

“There were major clashes between government and rebel forces on the border with Turkey this week and Turkey is getting dangerously close to reacting militarily.”

Within ten days I had nailed this one. But it’s about far more than Turkey and Syria. We are getting dangerously close to seeing the entire region around Syria implode and history will show it all goes back to the mishandling of the original uprising in Damascus.

The conflict in Syria has become a totally sectarian one as those rising up against President Bashar Assad are mostly Sunni Muslims, while Syria’s ruling elite, the Alawites, are an offshoot of Shiite Islam.

But now you have Shia Iran, and its Lebanese-based militia, Hizbullah, in Syria, both actual forces and weaponry, while hundreds of thousands of refugees are destabilizing neighboring Turkey, Jordan, Lebanon and Iraq.

In Tripoli, Lebanon, you have a classic example of how the conflict is rapidly spilling over. Dozens have been killed in the last few months in Lebanon’s second-largest city, with hundreds wounded in fighting between two main overcrowded neighborhoods. 100,000 live in a place called Bab al-Tabbaneh, where most residents back the Syrian uprising. Another 50,000 live in Jabal Mohsen and are predominantly Alawite, so backers of Bashar Assad. These two neighborhoods are essentially at war with each other. [Think Belfast at the height of The Troubles, only multiply it by 20-fold in terms of the potential explosiveness.]

Syria is trying to export its civil war to Tripoli, with armed groups in Jabal Mohsen connected to Hizbullah, to take attention away from Damascus and eventually destabilize all of Lebanon. Recall, I went to Lebanon in 2005 literally a few weeks after the last Syrian troops had been booted out.

But today, Hizbullah is formally part of the Lebanese government. Hizbullah wants to lend its support to Assad but most of its leaders don’t want the civil war crossing the border because of their leadership status. They’re trying to have it both ways, though, and as my friend Michael Young writes below, they can’t.

Jordan’s King Abdullah II has his own hands full, not just with refugees from Syria his government can’t handle, but now a resurgent Muslim Brotherhood, no doubt encouraged by its brethren in Egypt and their successful takeover. Abdullah was forced to dissolve parliament this week, a day before a major opposition rally, though I’ve yet to see a timetable for elections. 

Abdullah has always done an outstanding job (like his father before him) keeping the peace inside his country but now the Brotherhood is demanding Abdullah step up his reform efforts and we shouldn’t be the least bit surprised to wake up one morning to the news of something awful here.

And as I discuss further below, this week you saw protests in Iran over the plunging currency, largely because of the sanctions finally biting.

But on this last item, if the White House is thinking they can be smug, especially when it’s time for the last debate which will focus on foreign policy, Iran is yet another one that can go either way. It was in 2009, after all, that President Obama did not back the opposition in Iran as he should have and the protests were handily suppressed.

If the protests grow over the next few weeks, how will the White House react? It doesn’t want anything to do with foreign policy until after the election, but events in Iran, Syria, Turkey, Lebanon and Jordan could spin out of control beforehand, forcing their hand.

But back to Turkey. Since virtually the first day of the uprising that turned into a civil war in Syria, I have written President Obama should be working closely with Turkish Prime Minister Erdogan, a NATO ally, to establish the safe havens and/or no-fly zone that not only Erdogan wanted to see, but which also would have literally saved tens of thousands of lives. Instead, Obama ignored what has turned into a catastrophe of mammoth proportions and historians will heap scorn on his legacy when it comes to the Middle East.

This week, Syria fired some mortars across the border into Turkey and killed six Turkish civilians. Turkey then fired artillery deep into Syria, apparently at a military target, killing at least five. Turkey’s parliament authorized future retaliation though Ankara is saying its actions will be restrained as long as Syria doesn’t provoke it further. [There was another exchange between the two on Friday.] The UN Security Council condemned Syria. Syria apologized and its UN envoy Bashar Jaafari said his government was not seeking an escalation with Turkey, but wondered why the Security Council didn’t say anything about the horrific suicide attacks that hit Aleppo this week, killing about 50.

Aram Merguizian of the Center for Strategic and International Studies in Washington told the AP’s Karin Laub:

“There is not a single country bordering Syria that we can honestly say they are not facing a realistic threat to internal stability and national security.”

Sonar Cagaptay / Washington Post

“The close relationship that President Obama has built with Turkish Prime Minister Recep Tayyip Erdogan has provided the United States with a key Muslim ally in the Middle East. Washington and Ankara have worked closely to stabilize Iraq. Yet a storm awaits them in Syria….

“As the crisis in Syria has deepened, the White House has appeared willing to wait for the demise of Syrian President Bashar al-Assad. For Ankara, the crisis has become an emergency….

“The Obama administration is hesitant toward Syria for several reasons, including reticence to act before the November elections and war-weariness among Americans. Erdogan appears to view such concerns as cover for general indifference to Turkey’s Syria problem….

“Erdogan has a penchant for treating foreign leaders as friends – and losing his temper when he thinks his friends have not stood by him. The more Washington looks the other way on Syria, the more upset Erdogan is likely to get over what he sees as Obama’s unwillingness to support his policy….

“U.S. policy holds that a gradual soft landing could be possible in Syria. The hope is that the opposition groups will coalesce and take down the Assad regime, eliminating the need for hasty foreign intervention – an option that Washington fears could cause chaos.

“Ankara, however, wants an accelerated soft landing. Particularly with this week’s strikes, Turkey feels the heat of the crisis next door….

“The Syrian conflict’s sectarian nature is percolating into Turkey. More than 100,000 mostly Sunni Arab Syrians have taken refuge there, fleeing persecution by Assad and his Alawite militias. Alawite Arabs in southern Turkey resent the Sunni refugees, mirroring Syria’s Alawite-Sunni split. Angry Alawites in Turkey’s southern Hatay province oppose their country’s policy toward the Assad regime, and since the summer they have been holding regular pro-Damascus and anti-Ankara demonstrations. This is Ankara’s problem, and it might get ugly if Syria descends into full-blown sectarian warfare.”

Amir Taheri / New York Post

“Russia may…be involved in a wider plan to pressure Turkey, which has assumed an active role in helping change the geopolitical map of the Middle East.

“Moscow fears that losing Syria, its last remaining ally in the Arab World, could be a prelude for the overthrow of an even bigger ally in Iran. Emerging from Arab Spring turmoil, the new Middle East may have little room for Russia – yet Vladimir Putin has launched an aggressive campaign to regain zones of influence that Moscow has lost since the fall of the Soviet Union….

“Because Turkey is a NATO member, continued attacks from Syrian territory could strengthen those urging the alliance to take a more active role in helping overthrow the Assad regime….

“British sources tell me that much of the equivocation is due to ‘mixed signals’ from the Obama administration.

“It seems that President Obama is determined to stick to his policy of drifting with events. He refused to back the Arab Spring from the start, most dramatically by trying to prop up Hosni Mubarak in Egypt until the very end. On Libya, Obama was forced to support military action when it became clear that not doing so could provoke an open split with key NATO allies.

“Many in Ankara hope that Obama’s current ambiguous posture on Syria may be due to electoral calculations – that he’s wary of key supporters on the left who oppose military intervention even in support of pro-democracy movements.

“Russia and Iran appear determined to keep the pressure on Turkey, both through Syria and by encouraging further PKK [Ed. the Kurds] attacks from bases in Iran and Iraq. The question is how far they can go without provoking a major regional war that would inevitably suck NATO in.”

Editorial / Wall Street Journal

“One oft-heard argument against U.S. involvement in Syria’s 18-month-old civil war has been that intervention could provoke a wider regional conflict. President Obama has kept his distance, and one result seems to be…a wider regional conflict….

“Turkey has a significant military, but the country is not strong enough or politically assertive enough to topple Assad without U.S. help. The same goes for the Saudis and Gulf states. They are all waiting for U.S. leadership, but in this case the U.S. isn’t even willing to lead from behind. So the conflict spread anyway, raising the prospect that the U.S. will have to intervene, perhaps at a far higher cost.”

Michael Young / Daily Star

“As Hizbullah’s role in Syria becomes clearer, and as the party continues to contribute to the Assad regime’s viciousness, its vulnerabilities will increase. However, the notion that the Shiite community will turn against Hizbullah is wishful thinking. If anything, as sectarian hostility rises in Syria, therefore in Lebanon, Hizbullah will find it easier to impose Shiite unanimity behind the party’s choices, no matter how repugnant its behavior in Syria.

“But where Hizbullah will not escape blowback is in those aspects of its public image where, for years, it has put up facades of deception. The party has always asserted that it is on the side of the dispossessed and justice; it has systematically played down its image as a sectarian Shiite organization; and while it has always affirmed its loyalty to Iran and its supreme leader, the party has promoted an outlook that it has a wide margin of maneuver vis-à-vis Tehran.

“All three of these arguments are disproven by Hizbullah’s actions in Syria. There the party is, plainly, on the side of the dispossessors and injustice. Drawing Arab attention back to Israel is not going to alter this. Strategic necessity has torn away the party’s mask of virtue. This virtuousness had already been dented in Lebanon, after Hizbullah worked hard to return Syrian hegemony over the country following the assassination of Rafik Hariri – a crime in which four party members stand accused of having taken part. Nor was there much moral decency on show when Hizbullah and its allies militarily occupied western Beirut in May 2008, killing dozens of civilians….

“Few are fooled anymore. Gone are the days when Hizbullah and its leader, Sayyed Hasan Nasrallah, won popularity contests in Arab streets. Thanks to Syria, the Arab world has been cracked by the pulsations of sect. Hizbullah’s old partner Hamas has largely abandoned the Assads, as have the different branches of the Muslim Brotherhood, above all in Egypt. Long before Bashar Assad ordered his warplanes to bomb civilians, Syrians were already burning Iranian and Hizbullah flags, grasping that power politics, but also communal fear and solidarity (even if Shiites and Alawites remain considerably different), reinforced Shiite backing for the Alawites….

“There is an erroneous conviction among March 14 leaders [Ed. March 14 is the opposition coalition] that Hizbullah may be irreversibly crippled by the fall of the house of Assad. The party will lose a great deal, but it will also retain a great deal, not least its formidable arsenal. Hizbullah’s declining reputation is one thing, but its effectiveness is something else entirely. With or without Syria it will have the ability to wreak havoc in Lebanon and elsewhere. So, take heart that the party’s contradictions are being exposed, but don’t assume Hizbullah is on its last legs.”

And back to Iran…there have been widespread protests in the streets of Tehran as the currency, the rial, plunges and prices rise. The currency* fell 40% or more in one week and shop owners are closing as the people buy up dollars and other foreign currencies, making the situation worse. The government thus far has been powerless to stop the collapse.

*The rial was 10,000 to the $1 as recently as early 2011 and was at 37,000 against the dollar this week.

The people are also upset the government is spending countless $billions ($6 billion according to some) defending the Assad regime in Syria (paying Syrian government troops and providing weapons) when the money is better spent on the citizenry back home.

Yes, the UN and Western sanctions on Iran that came about because of its suspected nuclear weapons program are working and it would seem the central bank either doesn’t have the foreign exchange reserves it needs to prop up the currency or it can’t access funds frozen by the sanctions. But the Iranian regime won’t just crumble under pressure.

Jeffrey Goldberg / New York Post

“Could Obama simply be avoiding a messy foreign entanglement during his bid for re-election? If this were true, it would make him guilty of criminal negligence. Is he the sort of man who would deny innocent and endangered people help simply because greater engagement could complicate his re-election chances? I truly doubt it.

“Or perhaps Obama isn’t quite the brilliant foreign-policy strategist his campaign tells us he is. Of course, he has had his successes. I’m not sure you’re aware of this, but Osama bin Laden is dead.

“Yet Obama’s record in the Middle East suggests that missed opportunities are becoming a White House specialty.

“Syria is the most obvious example. Assad is a prime supporter of terrorism, and his regime represents Iran’s only meaningful Arab ally. Nothing would isolate Iran more than the removal of the Assad regime and its replacement by a government drawn from Syria’s Sunni majority. Ensuring that extremists don’t dominate the next Syrian government is another compelling reason to increase U.S. involvement.

“Yet all we have from Obama is passivity, which is a recurring theme in the administration’s approach to the Middle East.

“So is ‘aggressive hedging,’ a term used by the Brookings Institution’s Shadi Hamid to describe Obama’s strange reluctance to clearly choose sides in the uprisings of the Arab Spring.

“ ‘There’s a widespread perception in the region that Obama is a weak, somewhat feckless president,’ Hamid, who runs the Brookings Doha Center, told me.  ‘Bush may have been hated, but he was also feared, and what we’ve learned in the Middle East is that fear, sometimes at least, can be a good thing. Obama’s aggressive hedging has alienated both sides of the Arab divide. Autocrats, particularly in the Gulf, think Obama naively supports Arab revolutionaries, while Arab protesters and revolutionaries seem to think the opposite.’

“Leaders across the Middle East don’t take Obama’s threats seriously. Neither Israeli Prime Minister Benjamin Netanyahu nor the Arab leaders of the Gulf countries believe he’ll act militarily against Iran’s nuclear program in his second term.”

On to….

Europe

Euro finance ministers meet Oct. 8, while a key EU summit is to be held on Oct. 18-19 where the critical issue of a eurozone bank supervisor is to be addressed. German Chancellor Angela Merkel is also going to Athens on Tuesday and this will make news as massive protests are planned for her arrival. It's Germany, after all, who is viewed by Greeks in the worst possible light for making their lives miserable with all the conditions for bailout aid. Merkel wants Greece to stay in the EU, but she is there to discuss with Prime Minister Samaras how Greece can gain the German parliament’s ongoing support for further assistance; this while the troika (European Commission, European Central Bank and International Monetary Fund) remains in Greece to gauge the progress the country is making in fulfilling the terms of its bailout.

There is no official word on when the troika will decide if Greece is eligible for another 31 billion euro, but Samaras said this week if the country doesn’t get it, Greece will run out of money in November and there would be total anarchy. For its part, the IMF has already said it won’t disburse any further aid until it is convinced Greece’s debt is sustainable.

The Greek economy, by the way, is now projected to fall 6.5% in 2012 vs. an initial estimate of 4.8% from back in March, and it will shrink a sixth year in 2013, an estimated 3.8%. GDP is down 25% since 2009. How do you build a case for further aid then? You can’t. But Euro leaders are being pressured to hold it together.

As for Spain, Madrid continues to obstinately say all is well, their reforms (the fifth attempt at same since Mariano Rajoy became prime minister last year) will work, and they don’t need a bailout. But government debt is projected to rise to 85.3% of GDP this year and 90.5% in 2013 and the eurozone limit is supposed to be 60%, plus Spain’s central bank now estimates it will need to borrow $267 billion in ’13.

Madrid is playing a giant game of chicken with the ECB and Germany. For his part, ECB President Mario Draghi is telling the Germans that any bond buying the ECB does will be “accompanied by reforms from governments that address deep-rooted issues,” but Madrid won’t accept any conditions other than those they themselves lay out.

So Draghi played along this week at the ECB’s regular monthly policy meeting, saying, “Today we are ready with our OMT [Outright Monetary Transaction program]. We have a fully effective backstop mechanism in place, once all the prerequisites are in place as well.

“OMTs…have helped to alleviate such tensions [in financial markets] over the past few weeks, thereby reducing concerns about the materialization of destructive scenarios.”

Draghi added that Spain had made “remarkable progress” in reforming its labor market and banking sector, which is a crock. It’s why at a presentation on Friday, Spain’s Economy Minister Luis de Guindos was laughed at when he said Spain didn’t need a bailout. Heck, earlier in the week, the governor of the Central Bank of Spain said the proposed 2013 budget was too optimistic on its economic scenario for next year, and here the budget was just released ten days before.

And you know how I said last week that the stress test on Spain’s banks was a bunch of garbage and that the amount of funding for the nation’s banks to recapitalize them was way too low because there is no way on earth they are properly estimating their real estate exposure? A few days later, Moody’s Investors Service said the capital shortfall faced by Spain’s banks was as much as 105 billion euro, not the 53.7 billion shortfall the officials found after conducting the vaunted stress test. I rest my case.

Looking at the eurozone’s economic performance, the purchasing managers’ index for September for the 17 nations came in at 46.1 for September, up from 45.1 in August. The services index was also 46.1, though this was down from 47.2. The composite for both was obviously 46.1 and to give you an idea of how bad Spain is doing, their comp was 40.2.

Others of note…France’s manufacturing PMI was only 42.7, Germany’s 47.4, and non-euro Britani’s 48.4. For the eurozone it was the 14th consecutive month of contraction.

The eurozone unemployment rate remained at 11.4% for a third straight month, with Germany at 5.5%, France at 10.6% and Spain at 25.1%.

And Cyprus, which is in the euro-17, said it will seek a bailout of 11 billion to recapitalize its banks and pay the bills, its problems related to the Greek debt restructuring of last spring.

Finally, back to Greece, I’ve been writing of right-wing Golden Dawn and their growing support among the population. This week the New York Times ran an extensive piece by Liz Alderman on the topic.

“We have a major socioeconomic crisis in which several hundred thousand Greeks are losing ground,” said Nikos Demertzis, a professor of political sociology at the University of Athens. “And you have a rising number of immigrants in Greece, many illegal. This is creating a volcanic situation where all the classic parameters for the flourishing of a far-right force like Golden Dawn are present.”

Prime Minister Samaras talked about the immigration issue, with more than 1.5 million in a country of about 11 million, which “is creating extremism” that feeds the popularity of Golden Dawn, Samaras said. Outlawing the group, however, could backfire, he added.

Before I get back to the U.S., a few words on the global outlook outside Europe.

Kaushik Basu, the new chief economist at the World Bank, said the global economy “is not doing well. The difficult phase will live with us for a while.”

International Monetary Fund chief Christine Lagarde warned China and Japan that the shaky global economy can ill afford their territorial dispute that is already having a major impact on their economies (more on this below). “The current status of the economy and the global economy needs both Japan and China fully engaged,” she said.

The Asian Development Bank (ADB) cut its growth forecast for Asia, ex-Japan, to 6.1% this year, down from a July estimate of 6.6%, singling out slowing growth in China and India.

“The ongoing sovereign debt crisis in the euro area and the looming fiscal cliff in the U.S. pose major risks to the outlook.”

And the Economic Commission for Latin America and the Caribbean (ECLAC) forecast the whole area would slow to 3.2% in 2012, down from 4.3% last year and less than the 3.7% that ECLAC predicted in June. Brazil will grow only 1.6% this year. 

Also, the World Trade Organization reported that global trade is only expected to rise 2.5% in 2012, vs. 5% in 2011 and 14% in 2010. The average the past two decades is 6% per year.

So all the data is consistent with a slowdown around the world, including the 1.3% second quarter final GDP figure for the U.S.

Washington and Wall Street

This week, though, there was some decent economic data aside from the jobless rate. The September ISM reading on manufacturing came in at 51.5 when 49.8 was expected, while the September services reading was 55.1, also better than expected. Figures on August construction, down 0.6%, and factory orders, down 5.2%, were not good.

Looking ahead to the holiday shopping season, the National Retail Federation is projecting sales gains of 4.1% for November and December vs. a 5.8% gain last year. The International Council of Shopping Centers pegs 2012 at just 2.9%. The 10-year average gain is 3.5%, including a down 4.4% performance in 2008.

Fed Chairman Ben Bernanke said to the Economic Club of Indiana, “We expect the economy to continue to grow. Our concern is not really a recession. Our concern is that growth will continue but at a pace that’s insufficient to put people back to work….

“We expect that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economy strengthens.”

So once again, Bernanke gave you your marching orders to buy stocks and don’t worry about anything else that is going on in the world. Because even though he totally whiffed on the housing bubble, he’s good…real good.

Meanwhile, the Congressional Budget Office is projecting the 2012 deficit for the fiscal year ending in September will be $1.1 trillion, the fourth straight year of trillion dollar deficits under Barack Obama. [$1.4 trillion in 2009 and $1.3 trillion in each of the past two years.]

Good job, Mr. President. Amazing consistency! Plus, on the campaign trail and during the first debate, you talked of shaving $4 trillion from the deficit over the coming decade, but $1 trillion of that is savings already accomplished in a budget deal with Republicans and another $850 billion comes from winding down the wars in Iraq and Afghanistan. Plus a lot of your cuts only come into play once you’re long out of office, assuming a second term. Love it!

And on the issue of the fiscal cliff, should it come to pass, the nonpartisan Tax Policy Center said U.S. households face an average tax increase of $3,446 in 2013 if Congress and the White House don’t get their act together.

Street Bytes

--Stocks rallied, breaking a two-week losing streak, with the Dow Jones up 1.3% to 13610, while the S&P 500 rose 1.4% and Nasdaq tacked on 0.6%. Third-quarter earnings now become the focus, along with the presidential election campaign and Europe, while your editor and a handful of policy wonks will keep one eye on the Middle East.

--U.S. Treasury Yields

6-mo. 0.14% 2-yr. 0.26% 10-yr. 1.74% 30-yr. 2.97%

Treasuries fell, yields rose, on the stronger employment report. A better feeling in Europe over the handling of their debt crisis (though misguided) also led to some reallocation out of U.S. paper.

--Target announced it is joining rivals like Wal-Mart in not reporting monthly sales figures from here on. For its last report, Target said September same-store sales rose 2.1% vs. a year ago. Macy’s were up 2.5%, below expectations, ditto for Nordstrom and Kohl’s, the latter falling in the month vs. expectations of a 2% gain. Overall, sales were disappointing at the stores still reporting monthly, now representing just 13% of the overall U.S. retail market.

--The U.N. Food and Agriculture Organization reported that global food prices rose 1.4% in September, after being unchanged in July and August. Drought in the U.S., Russia and Europe pushed up corn and soybean prices to record highs, while dairy products rose 7%. Higher feed costs also helped drive meat prices up 2.1%.

But while the FAO is forecasting a fall in cereal production for 2012, it says indications for 2013’s wheat crop are encouraging.

--Oil at one point in the week was at a two-month low after the government reported U.S. crude production climbed to the highest level in more than 15 years, this as demand fell.

--Due to temporary refinery issues in the region, fuel prices in some parts of California soared at the end of the week, up to $5.69 a gallon in one area.

--U.S. coal exports rose 24% - hitting a record – in the first half of the year, according to the U.S. Energy Information Administration. While the U.S. takes advantage of abundant cheap natural gas, sales of U.S. coal to Europe are booming as utility providers there ditch more expensive nat gas for cheaper coal. Sales have slowed in the third-quarter but are still on track to exceed the record set in 1981.

--U.S. auto sales were 1.2 million vehicles in September, a 13% gain from the same month a year earlier, and for the year are on track for about 14.4 million.

General Motors’ sales rose 1.5% to 210,245 vehicles, its highest September since 2008. Ford’s were unchanged and Chrysler’s rose 11.5%.

Toyota’s sales were up 41.5% from a year earlier, Honda’s up 30.9% and Subaru’s up 32.2%. Nissan’s, however, were down 1.1%.

Hyundai’s were up 15.3% and Kia Motors’ up 35.1%.

--India’s stock market suffered a “flash crash” on Friday of 16% in mere minutes in the main “Nifty” index. The index recovered and 59 erroneous orders were cancelled. India’s National Stock Exchange blamed human error, not a computer algorithm, for the plunge.

--China’s official manufacturing PMI came in at 49.8 for September, up slightly over August but still contractionary, while the services PMI was 53.7, down from August’s 56.3.

--Last week I commented on the economic impact of the Japan-China dispute in the East China Sea and this week further proof of that rolled in. Bookings by Chinese to some popular Japanese tourist spots are down 70%, with the number of cancellations on Japan Airlines and All Nippon Airways up to 60,000 for travel between September and November.

And when it comes to car sales, Toyota’s in China fell by 50% in September over August.

But Toyota’s problems proved to be a boon for others, as VW’s Audi brand saw its sales rise 20% in September, while BMW’s surged 59%.

--Samsung Electronics is estimating record profits for the September quarter, led by strong sales for its Galaxy smartphone. The South Korean company is looking for operating profits of $7.3 billion, or double last year’s figure. But ongoing legal troubles with Apple cast a shadow over future performance.

--Workers at a large Foxconn plant in Zhengzhou, China, that manufactures Apple’s iPhone 5 went on strike, some 3,000 to 4,000, to protest their having to work through Golden Week (a vacation week in China) and for being subject to “overly strict” product-quality demands without adequate training, according to a press release issued by an advocacy group. No wonder Apple’s map app blows.

--Hewlett-Packard CEO Meg Whitman announced that the company’s turnaround may not bear fruit until 2015 or even 2016. Four of its five divisions saw operating profits fall by more than 20% the first nine months of the year, as at an analyst meeting HP said it expected to report 2012 full-year earnings far below expectations.

“The recent financial performance of HP has not been good,” Whitman said. “It’s going to take longer to right this ship than any of us would like.”

Said one analyst at ISI Group, Brian Marshall, “It’s brutal – it’s really, really negative. They’ve been very transparent [since Whitman took over about a year ago]. The problem with transparency is when they open up the full picture, it’s pretty ugly.”

HP is still the world’s leader in sales of PCs, printers and computer services, with revenue of $127 billion last year, but it is projecting revenues to decrease 11 to 13 percent next year when analysts were more or less expecting flat sales.

--Facebook announced it is up to 1 billion members – or one-seventh of the global population.

But since we know a ton of Facebook pages are fakes, I’m estimating 100 million are children under 10 months of age, while another 100 million are farm animals, who post their photos so that future generations of hogs, for example, can see what their mother looked like before she went to slaughter.

In the Western world, Facebook is generating up to $3.20 per user. In the developing world the average is about 44 cents. The countries contributing the most these days to user growth include Brazil, Mexico and India.

Separately, the Wall Street Journal had a piece on how “A growing number of top-ranked U.S. colleges say they are finding objectionable material online that hurts the chances of prospective freshmen….About a quarter of admissions officers at the nation’s top 500 colleges have used websites such as Facebook…to vet applicants, according to an annual Kaplan Test Prep survey. Of those, more than one-third say they have found something that has hurt a student’s chance of admission, up from 12% last year. ‘We have seen students that have been involved in bullying behavior or alcohol or drugs,’ said Martha Blevins Allman, dean of admissions at Wake Forest University.’” Hey, that’s my alma mater! Anyway, parents. The most important thing you can do for your child is to get into their skulls that Facebook can kill their chances of getting into the school of their choice, let alone hinder future job opportunities.

--Shares in social gaming company Zynga plunged 20% after it warned of disappointing third-quarter earnings and further cut full-year projections as revenues will fall short of expectations. Last December the company went public at $10. It closed Friday at $2.43.

--According to the Investment Company Institute, the percentage of American families who say they own stocks or stock funds slumped to 46% in 2011 from 53% in 2001.

--Related to the above, Morgan Stanley CEO James Gorman said in an interview with the Financial Times, “There’s way too much capacity and compensation is way too high. As a shareholder I’m sort of sympathetic to the shareholder view that the industry is still overpaid.”

Yup.

Morgan Stanley is cutting 4,000 jobs by the end of the year, but Gorman conceded there could be a new round of cost-cutting in 2013.

--Domestic airfares for the holiday season have risen about 3% over last year, according to Priceline.com.

--American Airlines continues to struggle, this time having to cancel scores of flights over loose seats. The air carrier, in bankruptcy, claims it’s a maintenance rather than labor issue. American is giving the rest of us in the country a bad name. May I suggest they change their name to Bolivian Air.

--The Hawaii Tourism Authority reports that for the first nine months of the year, tourists’ spending rose 20% from a year earlier to $9.59 billion. At this rate it would eclipse the full-year record set back in 2006. Japanese tourists are streaming in and with the tensions between Tokyo and Beijing, you would think this will only lead to more Japanese (and Chinese) choosing Hawaii over each other’s country.

One example of the tourism boom is the 1,636-room Sheraton Waikiki, where the occupancy rate is 95%. Good gawd…and you know that Sheraton is notorious for paper thin walls so what a nightmare…TVs turned up too loud, loud conversation, drunks…That’s it, I’m staying home.

--Under a new eight-year agreement with ESPN, Fox, and TBS, Major League Baseball will collect a combined $12.4 billion for television rights, or about twice the previous contract. Fox, for example, saw its per-season average go from $257 million to $495 million. ESPN’s from $350 million per to $700 million.

Americans love their ‘live’ sports.

--Want to really know how bad things are in Spain? The European PGA Tour’s Andalucia Masters, scheduled for Oct. 18-21 at Valderrama GC in Sotogrande, Spain, was canceled; the fourth Spanish event the tour was forced to cancel this year because of the collapsing economy there.

--A record 87,000 people left Ireland in the year to April, up from 80,600 a year earlier. Since the debt crisis hit in 2008, 182,900 Irish young people between 15 and 29 have fled. [Financial Times]

--Inflation Alert: My beer man upped the price on Coors Light 4%! But overall in America, after falling three straight years, beer sales rose 1.9% for the first eight months of 2012. It’s about an improving blue-collar job market it would seem. As a Wall Street Journal article pointed out, for example, sales are up 18% in North Dakota, where the unemployment rate is just 3% owing to the booming energy sector there.

--The U.S. birthrate declined 1% in 2011 over 2010, which was down 2% over 2009. I blame Bush.

Foreign Affairs

Israel: Prime Minister Netanyahu has apparently made a decision to hold elections on February 12, if not sooner. The Knesset returns from an extended recess on October 15 at which time a timetable will be established.

Meanwhile, Netanyahu and Defense Minister Ehud Barak have not spoken since Netanyahu condemned Barak for meeting U.S. officials behind his back. Barak is clearly plotting a return to the opposition rather than sitting in Netanyahu’s government. This obviously complicates things when it comes to Iran.

Afghanistan: President Hamid Karzai accused the United States of playing a “double game” by not going after insurgents’ backers in Pakistan and instead fighting a war against them in his country. Karzai is also upset the United States doesn’t sell him the weapons he says he needs and said he is turning to China, India and Russia for them.

At a typical Karzai press conference, where he is all over the board (and god knows what he says about America when he’s speaking his native tongue to locals), he did promise that he would step down from the presidency as scheduled in 2014. Karzai touched on the rocky relationship with the U.S. in a “60 Minutes” interview that aired last Sunday.

On Thursday he said, “NATO and Afghanistan should fight this war where terrorism stems from. But the United States is not ready to go and fight the terrorists there. This shows a double game. They say one thing and do something else.

“If this war is against insurgency, then it is an Afghan and internal issue, then why are you here? Let us take care of it.

“But if you are here to fight terrorism, then you should go where their safe havens are and where terrorism is financed and manufactured.”

Meanwhile, two U.S. soldiers were killed last weekend in another green-on-blue, insider attack by an Afghan soldier, while three other soldiers were killed in a suicide blast.

Iraq: Dozens of hard-core militants, many with al-Qaeda ties, escaped in a prison break in Tikrit, Saddam Hussein’s hometown. 10 guards and two prisoners were killed in the ensuing firefight. It was an inside job as inmates broke into a prison storeroom and grabbed weapons there.

Venezuela: Huge weekend as Henrique Capriles Radonski faces off against Hugo Chavez in the country’s presidential election. At the previous election in 2006, Chavez trounced his opponent 63-37. Polls are very unreliable but most seem to think Chavez is up by about ten points, though one or two have Capriles slightly ahead. Chavez continues to maintain his popularity among the poor. He’s also warned that a Capriles victory would lead to a “profound destabilization” and possible “civil war.” The armed forces’ leading commander, however, said he would honor the election result.

Far more next week as we await the result, which could impact oil prices, among other things.

Georgia: President Mikhail Saakashvilil conceded on Tuesday that his party had lost Georgia’s parliamentary election and his opponent, billionaire businessman and philanthropist Bidzina Ivanishvili, had become prime minister, setting the stage for fireworks in Saakashvili’s final year in office. What was significant is this is the first time in Georgia’s post-Soviet history that the government changed hands peacefully through the ballot box rather than by through revolution. Saakashvili, as pro-West as any leader in the region and the man who brought democracy to Georgia, prevented violence in the streets after the vote, but the 56-year-old Ivanishvili immediately went on the attack, blasting the president’s reforms.

“I have always blamed Saakashvili for what has gone wrong in Georgia, and I can repeat that today: This man’s ideology has established a climate of lies, violence and torture.”

Neighboring Russia, as you can imagine, welcomed the defeat of Saakashvilli’s party; the two having fought a brief war in 2008. Saakashvili remains in office until his second term ends in October 2013.

For his part, Ivanishvili sought to downplay the assumption he would put Georgia back in the Russian orbit (he having made his fortune in that country) and said his first trip overseas would be to the United States, though no one really knows where the guy wants to take his country.

Saakashvili’s party was hurt in the last few weeks with the release of a prison video showing extreme abuse of prisoners by guards.

China: The Communist Party Congress is now set to begin Nov. 8 and it is assumed the issue of former Party maverick Bo Xilai will be disposed of beforehand. He faces the death penalty, though it would probably be suspended as in the case of his wife, recently convicted of murder. Party officials, though, face danger as Bo continues to have widespread support and some of the charges against him, such as for sexual misconduct (lots of mistresses) could be leveled against other leaders in power today. As one analyst in Beijing told the Los Angeles Times, “Airing all this dirty laundry is really risky for the party.  They are playing with fire.”

Bo was long seen as the chief rival to Xi Jinping, who is set to become the new president next month.

William Kirby, director of the Fairbank Center for Chinese Studies at Harvard University, observed:

“For the party, I think the Bo case shows so many things that are wrong with the political system – that it’s still to a large degree in the hands of founding families, that regional power matters enormously, that the military is the heart of this regime, that the judiciary and police are at the whim of the party, and that monetary corruption suffuses the system. The Bo case is like peeling back an onion, exposing fundamental flaws.” [Los Angeles Times]

Separately, last week I wrote of the Obama administration’s decision to block Chinese investment in wind farms on the grounds of national security. This week, Professor Zhou Dadi, vice-chairman of the National Energy Advisory Committee, said the move showed America’s “consistent hostility against China since the cold war. They believe all Chinese enterprises, no matter whether they are state-owned or private, are spy agencies. If the Ralls (Corp.) investment would impair U.S. national security, how come they allow other enterprises to build wind farms there?” [Zhou referring to operations in the same Oregon area owned by a Denmark company and a German outfit.] [South China Morning Post]

And it appears this week’s “60 Minutes” will have a segment none too pleasing to Beijing; specifically the topic of Chinese corporate espionage. Representative Mike Rogers, a Michigan Republican and the chairman of the House Intelligence Committee, goes after Chinese telecom company Huawei, which is building a large presence in the U.S., with Rogers urging companies considering purchases from Huawei to “find another vendor if you care about your intellectual property, if you care about your consumers’ privacy, and you care about the national security of the United States of America.”

On the issues in the East China and South China Seas, the rhetoric between Tokyo and Beijing remained white hot, while the Philippine government announced it was deploying 800 more marines to guard its interests in the disputed Spratlys islands, which China also claims, in the South China Sea. The Spratlys are additionally claimed in whole or in part by Vietnam, Brunei, Malaysia and Taiwan. Authorities in Manila, however, attempted to tamp down the vitriol.

Hong Kong: The city’s worst boating accident in decades claimed at least 38 lives when a commuter ferry collided with a boat of partygoers celebrating China’s National Day (part of the Golden Week holiday). I’ve been on ferries in Victoria Harbor a bunch of times and the waters are incredibly crowded. It’s amazing something like this doesn’t happen more often.

Random Musings

--New Jersey Republican Gov. Chris Christie, discussing Mitt Romney’s prospects in the first presidential debate last Sunday on CBS’ “Face the Nation.”

“He’s had a tough couple of weeks, let’s be honest….He’s going to come in Wednesday night, he’s going to lay out his vision for America…and this whole race is going to turn upside down come Thursday morning.”

Good call, Governor.

--First, some poll data before the debate.

Wall Street Journal/NBC News survey shows President Obama leading among likely voters, 49-46, down from a five-point lead in mid-September. The president’s overall job approval was 49%. 57% believe the economy is improving. Just 13%, the lowest number since Obama took office, think the economy will get worse.

Obama polls 71% of likely Hispanic voters in the WSJ/NBC survey vs. 21% for Romney. [Hispanics went for Obama in a CNN poll 70-26. But will they actually show up on Election Day, which is the fear of Democratic strategists.]

A CNN/ORC International poll of likely voters has Obama leading Romney 50-47. In this one, Obama has a 53-44 lead among females, while Romney leads 50-47 among men. Obama’s approval rating was 49%. Vice President Joe Biden had a favorable/unfavorable rating of 47-44, while for Paul Ryan the margin was 46-40.

A Politico/George Washington University Battleground poll of likely voters had Obama leading 49-47, though Romney led by 4 points among independents. Again, Obama’s approval rating was 49%. Obama led women in this one by 12 points.

In a Washington Post/ABC News survey, Obama again leads 49-47 among likely voters. But in swing states, the margin swells to 52-41. And, once again, Obama’s overall approval rating is 49%. 

--A Des Moines Register Iowa Poll shows Obama ahead in this swing state, 49-45.

--An NBC News/Marist College survey of swing states had Obama up by two points each in Nevada and North Carolina, while leading by seven in New Hampshire.

A Suffolk poll in Virginia had Obama leading Romney by two, while the Virginia Senate race between George Allen (R) and Tim Kaine (D) was tied.

--The New York Post identified 8 toss-up states in terms of U.S. Senate races: Connecticut, Indiana, Massachusetts, Montana, Nevada, North Dakota, Virginia, and Wisconsin. In all eight the margin is 5 points or less, with a 4-4 split. Were this to be the end result and there are no other surprises, Democrats would retain the Senate 52-48. But this survey of the races has Republican Linda McMahon in Connecticut and Scott Brown in Massachusetts trailing by less than two points so it’s 50-50 if you flip those two.

[Actually, a Quinnipiac Univ. poll has McMahon now ahead of her opponent by one, while the latest Boston Globe survey has Democratic challenger Elizabeth Warren leading Scott Brown 43-38, with a whopping 18% still undecided, 1% going for “others.” But Obama leads in Massachusetts by a 57-27 margin, which isn’t good for Brown, sports fans.]

Notice how Missouri is not listed among the toss-up states. Most seem to think that Republican candidate Todd Akin has way too much to overcome to defeat Dem. incumbent Sen. Claire McCaskill following Akin’s “legitimate rape” and his more recent use of the term “ladylike” to describe McCaskill’s campaign in 2012 vs. 2006. Should Akin go down and Republicans fall short of a majority, he will join the likes of Christine O’Donnell and Sharron Angle on a list of those who cost the elephants dearly.

So all the preceding was then. We’ll learn shortly the true impact of Romney’s strong debate performance and how much he moved the needle both nationally and more locally for other Republican candidates.

--OK, on to the debate. Opinion, from all sides, though little of it good for President Obama.

Karen Tumulty / Washington Post

“Mitt Romney finally found his voice Wednesday night.

“After many months of awkward moments and shifting campaign messages, he forcefully and confidently stood alongside President Obama and offered an alternative economic vision to what he called Obama’s ‘trickle-down government approach.’

“The two contenders seemed to swap roles Wednesday. Obama was the one who struggled for his footing, scowling on the split screens of millions of television viewers across the nation and often looking like a man who wished he were elsewhere….

“Romney pressed his case against Obama’s stewardship of a disappointingly weak recovery. He sought to sharpen his own proposals and to soften the perception among voters that he favors the interests of the wealthy over those who are struggling.

“ ‘The people who are having the hard time right now are middle-income Americans. Under the president’s policies, middle-income Americans have been buried,’ Romney said, echoing a damaging phrase that Vice President Biden used the day before to describe the status of average Americans over the past four years.

“Obama, meanwhile, did not make many of the arguments that he and his campaign have used most effectively against Romney. He did not recount the former governor’s career in private equity…or the secretly taped video in which the Republican nominee told wealthy donors that the 47 percent of Americans who do not pay federal income taxes are dependent on government and see themselves as victims.

“The president also left many of Romney’s claims unchallenged. Romney asserted eight times that Obama plans to cut $716 billion from Medicare without noting that the Republican vice presidential nominee, Rep. Paul Ryan (Wis.), shepherded a budget through the House that would do the same thing.”

Andrew Rosenthal / New York Times

“At the presidential debate tonight, Mitt Romney looked and sounded presidential, President Obama failed to step in and puncture that image.

“I won’t offer a detailed fact-check of the debate.  It would be too depressing…But Mr. Romney tossed out some whoppers, which Mr. Obama did not counter.

“Mr. Romney, for instance, said that under Mr. Obama’s health care program, the government would ‘sweep in’ and take over everyone’s medical care. That’s simply a lie, and Mr. Romney knows it, but Mr. Obama let it go unchallenged.

“This debate was perhaps most notable for what Mr. Obama left unsaid – for his many lost opportunities.

“When the president discussed his opponent’s tax plan, he sounded lost and detached. He should have put a direct and simple question to Mr. Romney: ‘Please name the deductions and exemptions you plan to eliminate in order to cut taxes without increasing the deficit. Just four or five would be nice.’…

“Instead of attacking Mr. Romney, Mr. Obama praised his leadership in Massachusetts. He made it clear that Romneycare is Obamacare. He said there was no difference between them on Social Security, taking that issue off the table for no discernible reason.

“I’m not so shocked. Mr. Obama has made his distaste for political jousting disappointingly clear over the last four years.”

Editorial / Washington Post

“If anyone hoped that Wednesday night’s debate between President Obama and Mitt Romney would shake the presidential candidates off their canned talking points, they would have ended the evening disappointed….

“(Both) candidates studiously maintained the evasions and omissions at the heart of their policies. The debate was wonky without being especially honest. Which particular deductions would Mr. Romney curtail to avoid, as he insisted he would, having the lower tax rates he proposes add trillions to the debt? He didn’t say, beyond maintaining, repeatedly, that he would not ‘under any circumstances raise the taxes on middle-income Americans.’ How would Mr. Obama ‘strengthen’ Social Security ‘over the long term,’ as he said must be done? He didn’t explain, other than to say only a ‘tweak’ is needed. Nor, on the more important issue of Medicare, did the president detail how, beyond promising to slow the growth of health care costs, he would control the rapidly growing federal program….

“Mr. Romney effectively indicted the president for the weak state of the economy four years after his election. ‘We know the path we’re taking is not working,’ he said. ‘It’s time for a new path.’ Mr. Obama said Mr. Romney was peddling the same tax-cut ‘sales pitch that was made in 2001 and 2003,’ adding, ‘Math, common sense and our history shows us that is not a recipe for job growth.’ But the two candidates were strikingly complicit in failing to confront the magnitude of the fiscal challenge the winner will face immediately. The overriding feature of the debate was a tacit conspiracy of avoidance.”

Daniel Henninger / Wall Street Journal

“Barring revelations by the Obama campaign that Mitt Romney has an identical twin, whoever that guy representing the GOP ticket was in Denver has just given the United States a real presidential election. At last.

“It would be asking too much for anyone to believe that the Romney campaign planned to spend two years saying very little about the substance of public policy as a ruse to anesthetize Barack Obama on debate night, but that is clearly what happened.

“Gov. Romney came to the debate prepared to press Mr. Obama in detail about the president’s record, to defend the substance of his own proposals and even draw sharp philosophical distinctions with Mr. Obama. We’re happy to tip a hat to his pre-debate sparring partner, Sen. Rob Portman of Ohio, but this level of competence and detail wasn’t acquired in the past 10 days.

“We may all wonder why he waited until now to liberate the real Mitt, but five weeks from election day that question is beside the point and behind us.

“This is the candidate, and he proved in Denver he deserves to be the candidate. At last.

“It is safe to say that no one expected or predicted that Barack Obama could be so pushed off his game or look so flustered in a contest of articulating ideas. What happened?

“Barack Obama showed the dangers and risks of presidential incumbency. For all the powers of the office, the U.S. presidency inevitably causes the person holding it to place outsized belief and faith in the correctness of his own policies and ideas. In a word, hubris. It has happened before.

“Barack Obama, perhaps the most self-confident person to occupy that office in our lifetime, was always skating along the edge of a cliff of self-destructive arrogance. No other president would have thought to berate the members of the Supreme Court as they sat in front of him during his State of the Union speech. The famous George Washington University speech in which he ridiculed his Republican partners in the deficit-negotiation talks, who had come to the speech expecting to hear a policy response, was another sign of potential danger.

“And finally there was the report a few weeks ago that Mr. Obama did not respect Gov. Romney and did not consider him competent to be president.

“This is a president, dismissive and condescending to any opposition, who went into that debate in Denver and essentially got his head handed to him by a better-prepared opponent….

“The president sounded like someone who had simply run out of ideas. His challenger was elaborating detail on his policies, and the president was the candidate living in the past….

“Mitt Romney may not have won the election in the first debate, but he established a new baseline. In 90 minutes in Denver, Mr. Romney finally aligned himself with the political zeitgeist of the electorate. They have wanted to know more about his plans. They wanted to know why he thinks their current president has failed and what he’d do differently. Now they do.”

George Will / Washington Post

“The presidential campaign, hitherto a plod through a torrent of words tedious beyond words, began to dance in Denver. There a masterfully prepared Mitt Romney completed a trifecta of tasks and unveiled an issue that, because it illustrates contemporary liberalism’s repellant essence, can constitute his campaign’s closing argument.

“Barack Obama, knight of the peevish countenance, illustrated William F. Buckley’s axiom that liberals who celebrate tolerance of other views always seem amazed that there are other views. Obama, who is not known as a martyr to the work ethic and who might use a teleprompter when ordering lunch, seemed uncomfortable with a format that allowed fluidity of discourse.

“His vanity – remember, he gave Queen Elizabeth an iPod whose menu included two of his speeches – perhaps blinds him to the need to prepare. And to the fact that it is not lese-majeste to require him to defend his campaign ads’ dubious assertions with explanations longer than the ads. And to the ample evidence, such as his futile advocacy for Democratic candidates and ObamaCare, that his supposed rhetorical gifts are figments of acolytes’ imaginations.

“Luck is not always the residue of design, and Romney was lucky that the first debate concerned the economy, a subject that to him is a hanging curveball and to Obama is a dancing knuckleball. The topic helped Romney accomplish three things.

“First, recent polls showing him losing were on the verge of becoming self-fulfilling prophesies by discouraging his supporters and inspiriting Obama’s. Romney, unleashing his inner wonk about economic matters, probably stabilized public opinion and prevented a rush to judgment as early voting accelerates.

“Second, Romney needed to be seen tutoring Obama on such elementary distinctions as that between reducing tax rates…and reducing revenues, revenues being a function of economic growth, which the rate reductions could stimulate.

“Third, Romney needed to rivet the attention of the electorate, in which self-identified conservatives outnumber self-identified liberals 2 to 1, on this choice: America can be the society it was when it had a spring in its step, a society in which markets…allocate opportunity. Or America can remain today’s depressed and anxious society of unprecedented stagnation in the fourth year of a faux recovery – a bleak society in which government incompetently allocates resources in pursuit of its perishable certitudes and on behalf of the politically connected….

“Before Denver, Obama’s campaign was a protracted exercise in excuse abuse, and the promise that he will stay on the statist course he doggedly defends despite evidence of its futility. After Denver, Romney’s campaign should advertise that promise.”

Editorial / USA TODAY

“Arguably the best thing that a president could do for the economy now is to resolve the uncertainty about the budget that is restraining growth. A plan that steers clear of the year-end ‘fiscal cliff’ of destabilizing tax hikes and spending cuts, while overhauling unaffordable benefit programs, would give employers and investors the confidence they need to put money at risk and create jobs.

“The candidates didn’t even mention this fiscal cliff. Neither camp sees much merit in making specific proposals now that the other side would tee up for attack in TV ads and the remaining debates.

“So both candidates are running on unrealistic plans while hinting that they would pivot after the election to try to broker a bipartisan deal. If that is the case, it makes you wonder what the debates are all about.”

David Brooks / New York Times

“A sour fog settled over the Republican Party during the primary season. Several plausible candidates decided not to run for president, and the whole conversation ended up tainted by various political circus acts.

“The G.O.P. did its best to appear unattractive. It had trouble talking the language of compassion. It seemed to regard reasonable political compromise as an act of dishonor. It offered little for struggling Americans except that government would leave them alone.

“The Obama campaign took advantage…

“But, on Wednesday night, (Mitt) Romney finally emerged from the fog. He broke with the stereotypes of his party and, at long last, began the process of offering a more authentic version of himself.

“Far from being a lackey to the rich, Romney vowed that rich people will not see tax bills go down under a Romney administration…

“Far from being an individualistic, social Darwinist, Romney spoke comfortably about compassion and shared destinies….

“Far from wanting to eviscerate government and railing about government dependency, Romney talked about how to make government programs work better. ‘I’m not going to cut education funding,’ he vowed….

“Far from being a pitchfork-wielding populist who wants to raze Washington, Romney said he would work with the people he finds there….

“Far from being an unthinking deregulator, Romney declared, ‘Regulation is essential…I mean, you have to have regulations so that you can have an economy work.’….

“Yes, it’s true. Romney’s tax numbers don’t add up. Yes, there’s a lot of budgetary flimflam. No, Romney still doesn’t have an easy answer to wage stagnation (neither does Obama). But Romney’s debate performance signals the return of Governor Mitt. Democrats call it hypocrisy; I call it progress….

“I gave Obama better reviews than most pundits did Wednesday night, but his closing statement was as bad as any I’ve ever heard. If he can’t come up with a two-minute argument for why he should be president again, the former Mr. Audacity might still lose to the former Mr. Right Winger.”

Paul Krugman / New York Times

“ ‘No. 1,’ declared Mitt Romney in Wednesday’s debate, ‘pre-existing conditions are covered under my plan.’ No, they aren’t – as Mr. Romney’s own advisers have conceded in the past, and did again after the debate.

“Was Mr. Romney lying? Well, either that or he was making what amounts to a sick joke. Either way, his attempt to deceive voters on this issue was the biggest of many misleading and/or dishonest claims he made over the course of that hour and a half. Yes, President Obama did a notably bad job of responding. But I’ll leave the theater criticism to others and talk instead about the issue that should be at the heart of this election….

“First, Mr. Romney proposes repealing the Affordable Care Act, which means doing away with all the ways in which that law would help tens of millions of Americans who either have pre-existing conditions or can’t afford health insurance for other reasons. Second, Mr. Romney is proposing drastic cuts in Medicaid – basically to save money that he could use to cut taxes on the wealthy – which would deny essential health care to millions more Americans….

“Wait, it gets worse. The true number of victims from Mr. Romney’s health proposals would be much larger than either of these numbers, for a couple of reasons.

“One is that Medicaid doesn’t just provide health care to Americans too young for Medicare; it also pays for nursing care and other necessities for many older Americans.

“Also, many Americans have health insurance but live under the continual threat of losing it. ObamaCare would eliminate this threat, but Mr. Romney would bring it back and make it worse. Safety nets don’t just help people who actually fall, they make life more secure for everyone who might fall. But Mr. Romney would take that security away, not just on health care but across the board….

“One could wish that Mr. Obama had made this point effectively in the debate. He had every right to jump up and say, ‘There you go again’: Not only was Mr. Romney’s claim fundamentally dishonest, it has already been extensively debunked, and the Romney campaign itself has admitted that it’s false.

“For whatever reason, the president didn’t do that, on health care or on anything else. But, as I said, never mind the theater criticism. The fact is that Mr. Romney tried to mislead the public, and he shouldn’t be allowed to get away with it.”

Charles Krauthammer / Washington Post

“It was the biggest rout since Agincourt. If you insist, since the Carter-Reagan debate. With a remarkable display of confidence, knowledge and nerve, Mitt Romney won the first 2012 debate going away.

“Romney didn’t just demonstrate authoritative command of a myriad of domestic issues. He was nervy about it, taking the president on frontally, not just relentlessly attacking, but answering every charge leveled against him – with a three-point rebuttal….

“His success in doing this against a flummoxed Obama does more than rally the conservative base. It may affect waverers – disappointed 2008 Obama supporters waiting for a reason to jump. They watch Romney in this debate and ask: Is this the clueless, selfish, out-of-touch guy we’ve been hearing about from the ads and from the mainstream media?

“And then they see Obama – detached, meandering, unsure. Can this be the hip, cool, in-control guy his acolytes and the media have been telling us about?

“Obama was undone on Wednesday in part by his dismissive arrogance. You could see him thinking annoyedly: ‘Why do I have to be onstage with this clod, when I’ve gone toe-to-toe with Putin?’ (And lost every round, I’d say. But that’s not how Obama sees it.)

“Obama never even pulled out his best weapon, the 47 percent. Not once. That’s called sitting on a lead, lazily and smugly. I wager he mentions it in the next debate, more than once – and likely in his kickoff.

“On the other hand, Obama just isn’t that good. Not without a teleprompter. He’s not even that good at news conferences – a venue in which he’s still in charge, choosing among questioners and controlling the timing of his own answers.

“By the end of the debate, Obama looked small, uncertain. It was Romney who had the presidential look.”

Jennifer Rubin / Washington Post

“Romney seemed better versed in existing law and policies than did the president. At one point in rebutting Obama’s remarks on tax breaks for exporting jobs, he replied simply, ‘I’ve been in business 25 years; I have no idea what you’re talking about.’…

“Winner: Mitt Romney.

“Losers: President Obama, pundits who had already called the race for Obama and the Obama staffers who will have to explain to the president that he bombed.”

Editorial / New York Post

“President Obama had better hope that a kicked ass is covered under ObamaCare – as comedian Dennis Miller wryly observed.

“Because that’s precisely what the president got in last night’s debate, courtesy of Mitt Romney – and to the astonishment of all the media pundits.

“No, the Denver debate by itself won’t decide this election; Romney and Obama meet twice more and the vice presidential candidates hold one debate.

“But there was little doubt which of the two White House hopefuls looked more in control of what turned out to be a serious, substantive debate.

“Indeed, one word best describes Mitt Romney’s appearance last night: presidential….

“He made his case effectively and powerfully, time after time.

“Indeed, he did more than hold his own against Obama – he dominated this debate, from start to finish.”

--John Podhoretz / New York Post

“Slaughter. It was a slaughter.

“Mitt Romney put on the most commanding presidential debate performance of the insta-commentary era. One could literally watch, on Facebook and Twitter, hundreds of people on both sides of the political divide react in real time as the debate went on.

“Their reactions were identical, though their moods were not. As Romney dominated exchange after exchange with a surprisingly effective combination of pointed personal touches and remarkable factual preparation, conservatives and Republicans grew more and more jubilant while liberals and Democrats grew more and more alarmed….

“Meanwhile, the president was so off his game that he failed even to create an ‘aww’ moment at the very start, when he noted that last night was his 20th wedding anniversary.

“And he went downhill from there.”

Peggy Noonan / Wall Street Journal…back to her debate analysis.

“The next Obama-Romney debate will be different. The same Obama will not show up. He’s been embarrassed. He’ll bring his LeBron. He’ll be tough, competitive, and he’ll go at Mr. Romney professionally and personally: ‘We know you love cars, you’ve even got an elevator for them!’ This is where Sen. Rob Portman, in future debate prep, has to go. He has to play a newly energized and focused Chicago pol. But then he knows that.”

Noonan adds, “Watch out for Big Bird. Putting the merits and realities of overall PBS funding aside, Mr. Romney here gave a small gift to the incumbent. Democrats will merrily exploit it. Big Birds will start showing up outside Romney rallies, holding up signs saying ‘Don’t Kill Me!’ Think this through.”

Editorial / Wall Street Journal

“Election Day is only a month away, but for our money the presidential campaign really began in earnest Wednesday night in Denver at the first presidential debate. Mitt Romney met the challenge of appearing presidential, showed a superior command of fact and argument than the incumbent, and made a confident, optimistic case for change. These columns have often criticized the former Massachusetts Governor, but this was easily his finest performance as a candidate, and the best debate effort by a Republican nominee since Ronald Reagan in 1980….

“It’s going to be fascinating to see how this debate influences a race that the pundit class and most Democrats had all but declared to be over. The Romney campaign apparatus now has its own challenge to rise to the level of Wednesday’s performance by the candidate, in particular by improving its lackluster advertising that continues to traffic in general promises and platitudes….

“What worked for Mr. Romney on Wednesday was his confident demeanor and mastery of the policy detail, stitched together into a critique of the incumbent and clear explanation of the election stakes. Undecided voters saw a different challenger than they’ve been reading about, or seeing on TV, and the race is finally on.”

--The day after the debate, Mitt Romney apologized for his 47% remark, describing half the U.S. electorate as “victims.” It was “just completely wrong,” he told Fox News.

For his part, President Obama changed his tone at a rally in Denver.

“When I got on stage, I met this very spirited fellow who claimed to be Mitt Romney. But it couldn’t have been Mitt Romney because the real Mitt Romney has been running around the country for the last year promising $5 trillion in tax cuts that favor the wealthy. The fellow on stage last night said he didn’t know anything about that.”

Editorial / New York Post

“Team Obama, scrambling to regain solid footing after Wednesday’s debate debacle, has switched attack targets.

“Mitt Romney the extremist is out.

“Mitt Romney the liar is in.

“Chief campaign strategist David Axelrod complimented Romney’s ‘vigorous performance’ – but added that it was ‘one that was devoid of honesty.’

“Really. Axelrod talking ‘honesty.’….

“In fact, Obama & Co. need to think very hard before going down this road. That’s because, very frankly, honesty is not an Obama administration hallmark.

“Here’s just a random sample from a very long list:

“Team Obama portrayed last month’s murderous attack on the U.S. consulate in Benghazi as a spontaneous mob assault – despite knowing full well that it was a carefully planned al-Qaeda job.

“*Obama claims his plan would cut $4 trillion from the deficit. But he counts $800 billion in debt payments as spending cuts and spreads the plan out over 12 years – with most of the cuts back-loaded to when he is no longer president.”

--Earlier in the week, Vice President Joe Biden in Charlotte, talking about how Romney will raise taxes on the middle class, according to the Democrats. “This is deadly earnest, man. This is deadly earnest. How they can justify, how they can justify raising taxes on the middle class that has been buried the last four years? How in Lord’s name can they justify raising their taxes with these tax cuts?”

As the Wall Street Journal then opined:

“In our view, Mr. Biden deserves gratitude for having the courage to break the Obama campaign’s code of silence on the economy.”

--David Ignatius / Washington Post

“It’s embarrassing when President Obama’s risk-averse refusal to engage on foreign policy issues becomes so obvious that it’s a laugh line for the president of Iran.

“ ‘I do believe that some conversations and key issues must be talked about again once we come out of the other end of the political election atmosphere in the United States,’ President Mahmoud Ahmadinejad said cheekily in an interview last Sunday. I hate to say it, but on this matter the often-annoying Iranian leader is right.

“Less than six weeks before the election, the Obama campaign’s theme song might as well be the old country-music favorite ‘Make the World Go Away.’ This may be smart politics, but it’s not good governing: The way this campaign is going, the president will have a foreign affairs mandate for…nothing.

“The ‘come back after Nov. 6’ sign is most obvious with Iran. The other members of the ‘P5+1’ negotiating group understand that the United States doesn’t want serious bargaining until after the election, lest Obama have to consider compromises that might make him look weak. So the talks with Iran that began last May dither along in technical discussions.

“Ahmadinejad and some of his aides let slip during their visit to New York that they may be willing to offer a deal that would halt enrichment of uranium above 5 percent. Is this a good deal or not, in terms of U.S. and Israeli security? Sorry, come back later….

“I’m told that the talk in the Libyan underground is about a ‘global intifada,’ like what the new al-Qaeda leader Ayman al-Zawahiri has been preaching for the past five years. But ask U.S. officials about that subject and you get a ‘no comment.’

“To be blunt: The administration has a lot invested in the public impression that al-Qaeda was vanquished when Osama bin Laden was killed on May 2, 2011. Obama would lose some of that luster if the public examined whether al-Qaeda is adopting a new, Zawahiri-led strategy of interweaving its operations with the unrest sweeping the Arab world. But this discussion is needed, and a responsible president should lead it, even during a presidential campaign….

“The president hasn’t really made any bones about his wait-till-later approach. He put it frankly to Dmitry Medvedev, the president of Russia, back in March when he thought the microphone was off: ‘This is my last election. After my election, I have more flexibility.’

“This strategy of avoiding major foreign policy risks or decisions may help get Obama reelected. But he is robbing the country of a debate it needs to have – and denying himself the public understanding and support he will need to be an effective foreign policy president in a second term, if the ‘rope-a-dope’ campaign should prove successful.”

--The head of Russia’s Federal Security Service claimed that al-Qaeda is setting forest fires in Europe as part of its low-cost attack strategy.

“This method allows (al-Qaeda) to inflict significant economic and moral damage without serious preliminary preparations, technical equipment or significant expenses.” [Daily Telegraph]

--What a mess in New Jersey this week as a 16-year-old local high school girl showed the power of Twitter, but for the wrong reason. She faked her abduction. While her parents were out at her brother’s hockey game, the jerk tweeted “There is someone in my hour ecall 911.” [sic] Within hours, hundreds of thousands of Twitter users around the world were on the case, with the Clark Police Department receiving 6,000 calls in the immediate aftermath; most being false leads wasting time and money.

Police determined shortly after she had staged it all and had run away from home, like she’s done in the past. She was found unharmed after 46 hours. Of course now hundreds have posted messages calling the girl vicious names. What a great world we live in.

--I was going to write about the Wisconsin television news anchor who blasted a viewer who attacked her for being overweight, but I’m so sick of social media as it is. Jennifer Livingston of WKBT in La Crosse did say of the personal attack, “Do not let your self-worth be defined by bullies. Learn from my experience, that the cruel words of one are nothing compared to the shouts of many.”

--Note to those who use tanning beds. According to a British medical journal, at least 170,000 cases of skin cancer each year are linked to indoor tanning. True, there is also research that UV exposure, whether from a tanning bed or the sun, has many benefits. Just go for a jog instead.

--That was an extraordinary interview on “60 Minutes” last week with Arnold Schwarzenegger. I say extraordinary because he could not have come across worse, as in a truly awful person. Why he thought writing his new autobiography and dragging his family through the mud all over again was a good idea is beyond me. So he’s a “Dirtball of the Year” candidate.

--The Weather Channel has a plan to name “noteworthy” winter storms, an incredibly stupid idea. There’s a huge difference between snowstorms and hurricanes. As a rival forecaster told Bloomberg, “It has no scientific merit and it could be very confusing to the public.” TWC says that naming systems will help create public awareness.

--And here’s a “Sign of the Apocalypse.” From the Wall Street Journal:

“Pop Warner Little Scholars Inc., the nation’s largest youth-football organization, has suspended coaches of an elite California team amid an investigation into allegations that they paid 10- and 11-year-old players to intentionally injure opponents.”

The parent of a former player said the bounty program “started with coaches paying players $20 to $50 for hard-hitting tackles. It then evolved into a system in which players got similar rewards for hitting star players on the other team hard enough that they couldn’t play for the rest of a game, he said.” 

--ESPN The Magazine reports that President Obama is up to 104 rounds of golf during his almost four years. I haven’t gotten on him for this so I can’t now. Except the article says his rounds “last as long as six hours.” Six hours?! The longest weekend round on a crowded public course I can ever remember is 5 ½….a long one being 5. I’ve played a twosome, walking, in 2 hours and 20 minutes. And it’s not as if Obama has to wait on any tees.

So if you’re still undecided about who to vote for on Nov. 6, may I suggest you look at Obama’s  first debate performance, re-read David Ignatius’ piece on how the president has totally sacrificed foreign policy because of the campaign, and consider he is the world’s slowest golfer. The last item should automatically disqualify him.

--Speaking of golf, nice job by the U.S. Ryder Cup team last Sunday, eh? 

---

Pray for the men and women of our armed forces…and all the fallen.

God bless America.
---

Gold closed at $1780
Oil, $89.88

Returns for the week 10/1-10/5

Dow Jones +1.3% [13610]
S&P 500 +1.4% [1460]
S&P MidCap +0.7%
Russell 2000 +0.6%
Nasdaq +0.6% [3136]

Returns for the period 1/1/12-10/5/12

Dow Jones +11.4%
S&P 500 +16.2%
S&P MidCap +13.3%
Russell 2000 +13.8%
Nasdaq +20.4%

Bulls 46.8 [54.2 2 weeks ago]
Bears 
27.7 [Source: Investors Intelligence]

Don’t forget the StocksandNews iPad app…perfect with candy corn and a beer chaser.

And Dr. Bortrum posted a new column!

Have a great week. I appreciate your support.

Brian Trumbore