Harry Newton's In Search of The Perfect Investment
Newton's In Search Of The Perfect Investment. Technology Investor.
8:30 AM EST Monday, August 7, 2006: We are
entering a critical week. To wit:
1. The Fed meets to tomorrow to decide on interest rates. I believe it
will raise them, crimping the U.S. economy further.
2. BP has shut down half its oil production in Alaska, causing the price
of oil to spike to $76 in early Asian trading today. I believe oil is on its
way to $100. $4 a gallon is coming soon. Too soon.
3. The Israel-Hezbollah war has escalated. More dead. More rockets. The
Superpowers are trying to stop the war with U.N. resolutions. That won't work.
What's next? Pick a gruesome scenario: U.S. involvement?
the Fed's job is twofold:
1. Maintain the integrity of the currency. That means combat inflation.
2. Run the nation's banking system. Make sure there is sufficient liquidity
in the banking system to avoid runs on U.S. banks.
The Fed's job
is not to worry about how fast or slow the economy grows, or doesn't grow. It's
primary goal is maintain a reasonable level (i.e. very little) inflation.
To curb inflation, the Fed has raised interest rates at 17 consecutive
meetings (like the one tomorrow). Still, inflation is accelerating. Wages are
up 6.8% in the past year, the most in six years. Energy and food are
skyrocketing. The Fed has to raise rates. That will hurt the economy. That's
the Fed's objective -- slow the economy to restrain inflation and protect our
The Fed, BP's oil problems, the Israel-Hezbollah war and the housing slowdown
are not good for the economy. There is talk of a recession next year. I don't
believe that talk, though I do believe in a slowdown of the growth of
corporate earnings, which will hurt stockmarkets. Cash remains king, except
in rare "situations."
weather was eerily beautiful. Warm. No humidity. Blue skies. Perfect. All the
alternative energy plays I looked at are way overpriced. I'll keep looking.
geography of the Middle East: When you study
this map (courtesy Google Maps), you see three things:
1. How large Iran is. It's huge.
2. How two countries with significant U.S. troop presence border it. Those countries
are Iraq and Afghanistan. How would you feel if someone (Russia?) had taken
over Canada and Mexico?
3. How Iran could easily (if it wanted to) disrupt the world's flow of oil.
About 25% of the world's oil production passes through the Strait of
Hormuz, the Northern part of which is Iran.
last year when Iran suffered a huge earthquake with 100,000 or so dead? Syrian
planes flew in relief supplies. Apparently they flew back to Syria loaded with
missiles for Hezbollah.
Discussing, Traveling Amid and Defending the Inevitable War. This
is from Bernard-Henri Levy, the French writer and philosopher, writing in the
Sunday New York Times:
did not go to war because its borders had been violated. It did not send its
planes over southern Lebanon for the pleasure of punishing a country that permitted
Hezbollah to construct its state-within-a-state. It reacted with such vigor
because the Iranian President Ahmadinejads call for Israel to be wiped
off the map and his drive for a nuclear weapon came simultaneously with the
provocations of Hamas and Hezbollah. The conjunction, for the first time, of
a clearly annihilating will with the weapons to go with it created a new situation.
We should listen to the Israelis when they tell us they had no other choice
anymore. We should listen to Zivit Seri tell us, in front of a crushed building
whose concrete slabs are balancing on tips of twisted metal, that, for Israel,
it was five minutes to midnight.
up a sense of humor in all this madness.
This wonderful cartoon came from Investors Business
The Brink of Madness: A familiar place. This
came from the National Review, a conservative magazine (think Bill Buckley).
It's by Victor Davis Hanson, a senior fellow at the Hoover
I used to read about the 1930s the Italian invasion of Abyssinia, the
rise of fascism in Italy, Spain, and Germany, the appeasement in France and
Britain, the murderous duplicity of the Soviet Union, and the racist Japanese
murdering in China I never could quite figure out why, during those bleak
years, Western Europeans and those in the United States did not speak out and
condemn the growing madness, if only to defend the millennia-long promise of
Of course, the
trauma of the Great War was all too fresh, and the utopian hopes for the League
of Nations were not yet dashed. The Great Depression made the thought of rearmament
seem absurd. The connivances of Stalin with Hitler both satanic, yet
sometimes in alliance, sometimes not could confuse political judgments.
it is still surreal to reread the fantasies of Chamberlain, Daladier, and
Pope Pius, or the stump speeches by Charles Lindbergh (Their [the Jews]
greatest danger to this country lies in their large ownership and influence
in our motion pictures, our press, our radio, and our government) or
Father Coughlin (Many people are beginning to wonder whom they should
fear most the Roosevelt-Churchill combination or the Hitler-Mussolini
combination.) and baffling to consider that such men ever had
Not any longer.
generation too is on the brink of moral insanity. That has never been more
evident than in the last three weeks, as the West has proven utterly unable
to distinguish between an attacked democracy that seeks to strike back at
terrorist combatants, and terrorist aggressors who seek to kill civilians.
It is now nearly
five years since jihadists from the Arab world left a crater in Manhattan
and ignited the Pentagon. Apart from the frontline in Iraq, the United States
and NATO have troops battling the Islamic fascists in Afghanistan. European
police scramble daily to avoid another London or Madrid train bombing. The
French, Dutch, and Danish governments are worried that a sizable number of
Muslim immigrants inside their countries are not assimilating, and, more worrisome,
are starting to demand that their hosts alter their liberal values to accommodate
radical Islam. It is apparently not safe for Australians in Bali, and a Jew
alone in any Arab nation would have to be discreet and perhaps now
in France or Sweden as well. Canadians past opposition to the Iraq war,
and their empathy for the Palestinians, earned no reprieve, if we can believe
that Islamists were caught plotting to behead their prime minister. Russians
have been blown up by Muslim Chechnyans from Moscow to Beslan. India is routinely
attacked by Islamic terrorists. An elected Lebanese minister must keep in
mind that a Hezbollah or Syrian terrorist not an Israeli bomb
might kill him if he utters a wrong word. The only mystery here in the United
States is which target the jihadists want to destroy first: the Holland Tunnel
in New York or the Sears Tower in Chicago.
In nearly all
these cases there is a certain sameness: The Koran is quoted as the moral
authority of the perpetrators; terrorism is the preferred method of violence;
Jews are usually blamed; dozens of rambling complaints are aired, and killers
are often considered stateless, at least in the sense that the countries in
which they seek shelter or conduct business or find support do not accept
culpability for their actions.
Yet the present
Western apology to all this is often to deal piecemeal with these perceived
Muslim grievances: India, after all, is in Kashmir; Russia is in Chechnya;
America is in Iraq, Canada is in Afghanistan; Spain was in Iraq (or rather,
still is in Al Andalus); or Israel was in Gaza and Lebanon. Therefore we are
to believe that freedom fighters commit terror for political purposes
of liberation. At the most extreme, some think there is absolutely
no pattern to global terrorism, and the mere suggestion that there is constitutes
Here at home,
yet another Islamic fanatic conducts an act of al Qaedism in Seattle, and
the police worry immediately about the safety of the mosques from which such
hatred has in the past often emanated as if the problem of a Jew being
murdered at the Los Angeles airport or a Seattle civic center arises from
not protecting mosques, rather than protecting us from what sometimes goes
on in mosques.
But then the
world is awash with a vicious hatred that we have not seen in our generation:
the most lavish film in Turkish history, Valley of the Wolves,
depicts a Jewish-American harvesting organs at Abu Ghraib in order to sell
them; the Palestinian state press regularly denigrates the race and appearance
of the American Secretary of State; the U.N. secretary general calls a mistaken
Israeli strike on a U.N. post deliberate, without a word that
his own Blue Helmets have for years watched Hezbollah arm rockets in violation
of U.N. resolutions, and Hezbollahs terrorists routinely hide behind
U.N. peacekeepers to ensure impunity while launching missiles.
If you think
I exaggerate the bankruptcy of the West or only refer to the serial ravings
on the Middle East of Pat Buchanan or Jimmy Carter, consider some of the most
recent comments from Hezbollah chief Hassan Nasrallah about Israel: When
the people of this temporary country lose their confidence in their legendary
army, the end of this entity will begin [emphasis added]. Then compare
Nasrallahs remarks about the U.S: To President Bush, Prime Minister
Olmert and every other tyrannical aggressor. I want to invite you to do what
you want, practice your hostilities. By God, you will not succeed in erasing
our memory, our presence or eradicating our strong belief. Your masses will
soon waste away, and your days are numbered [emphasis added].
examine here at home reaction to Hezbollah which has butchered Americans
in Lebanon and Saudi Arabia from a prominent Democratic Congressman,
John Dingell: I dont take sides for or against Hezbollah.
And isnt that the point, after all: the amoral Westerner cannot exercise
moral judgment because he no longer has any?
An Arab rights
group, between denunciations of Israel and America, is suing its alma mater
the United States for not evacuating Arab-Americans quickly enough from Lebanon,
despite government warnings of the dangers of going there, and the explicit
tactics of Hezbollah, in the manner of Saddam Hussein, of using civilians
as human shields in the war it started against Israel.
on behalf of Hezbollah inside the United States does anyone remember
our 241 Marines slaughtered by these cowardly terrorists? routinely
carry placards with the Star of David juxtaposed with Swastikas, as voices
praise terrorist killers. Few Arab-American groups these past few days have
publicly explained that the sort of violence, tyranny, and lawlessness of
the Middle East that drove them to the shores of a compassionate and successful
America is best epitomized by the primordial creed of Hezbollah.
There is no
need to mention Europe, an entire continent now returning to the cowardice
of the 1930s. Its cartoonists are terrified of offending Muslim sensibilities,
so they now portray the Jews as Nazis, secure that no offended Israeli terrorist
might chop off their heads. The French foreign minister meets with the Iranians
to show solidarity with the terrorists who promise to wipe Israel off the
map (In the region there is of course a country such as Iran
a great country, a great people and a great civilization which is respected
and which plays a stabilizing role in the region) and manages
to outdo Chamberlain at Munich. One wonders only whether the prime catalyst
for such French debasement is worry over oil, terrorists, nukes, unassimilated
Arab minorities at home, or the old Gallic Jew-hatred.
It is now a
cliché to rant about the spread of postmodernism, cultural relativism,
utopian pacifism, and moral equivalence among the affluent and leisured societies
of the West. But we are seeing the insidious wages of such pernicious theories
as they filter down from our media, universities, and government and
never more so than in the general publics nonchalance since Hezbollah
These past few
days the inability of millions of Westerners, both here and in Europe, to
condemn fascist terrorists who start wars, spread racial hatred, and despise
Western democracies is the real story, not the quarter-ton Israeli
bombs that inadvertently hit civilians in Lebanon who live among rocket launchers
that send missiles into Israeli cities and suburbs.
Israel should have hit more quickly, harder, and on the ground; yes, it has
run an inept public relations campaign; yes, to these criticisms and more.
But what is lost sight of is the central moral issue of our times: a humane
democracy mired in an asymmetrical war is trying to protect itself against
terrorists from the 7th century, while under the scrutiny of a corrupt world
that needs oil, is largely anti-Semitic and deathly afraid of Islamic terrorists,
and finds psychic enjoyment in seeing successful Western societies under duress.
In short, if
we wish to learn what was going on in Europe in 1938, just look around.
English Teachers Die Young
year, English teachers from across the country can submit their collections
of actual similes and metaphors found in high school essays. Here are some of
last year's winners.
+ Her face was
a perfect oval, like a circle that had its two sides gently compressed by a
+ His thoughts
tumbled in his head, making and breaking alliances, like underpants in a dryer
without Cling Free.
+ She grew on
him like she was a colony of E.Coli, and he was room-temperature Canadian beef.
+ She had a deep,
throaty, genuine laugh, like that sound a dog makes just before it throws up.
+ Her vocabulary
was as bad as, like, whatever.
+ The revelation
that his marriage of 30 years had disintegrated because of his wife's infidelity
came as a rude shock, like a surcharge at a formerly surcharge-free ATM machine.
+ Shots rang out,
as shots are wont to do.
+ The young fighter
had a hungry look, the kind you get from not eating for a while.
+ He was deeply
in love. When she spoke, he thought he heard bells, as if she were a garbage
truck backing up .
column is about my personal search for the perfect investment. I don't give
investment advice. For that you have to be registered with regulatory authorities,
which I am not. I am a reporter and an investor. I make my daily column -- Monday
through Friday -- freely available for three reasons: Writing is good for sorting
things out in my brain. Second, the column is research for a book I'm writing
called "In Search of the Perfect Investment." Third, I encourage
my readers to send me their ideas, concerns and experiences. That way we can
all learn together. My email address is .
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