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Monday, November 12, 2007


More Journal Musings

Regular readers of this blog know of the influence of the WSJ on my thinking and that I don't throw the paper out without thoroughly perusing it first (even though that means I still have some fairly old newspapers lying around). I certainly spend around two hours with most editions. So this post will catch me up on various articles and columns that I have torn out recently for the purpose of quoting here, hopefully for the benefit of musings readers who either don't have the patience to spend quite so much time with the WSJ or somehow manage to make it through life without it.

First a quote I found amusing from the September 26 edition on U.S. Homebuilder Horrors. Actually this is something the Journal reprinted from a fellow blogger, breakingviews.com. "The (housing) sector is on course to meet D.R. Horton Chief Executive Donald Tomnitz's prediction that 2007 was 'going to suck, all 12 months of the calendar year.'" Hey, this is a family blog! Seriously, great call, Donald, and what do you think it's going to be like in 2008? Please, tell us what you really think this time.

Then, on the ever popular topic of global warming and human culpability, November 1 brought us an op ed from skeptic John R. Christy of the University of Alabama's Earth System Science Center, who was one of the IPCC panelists who shared the Nobel with Al Gore. Unlike Mr. Gore, Mr. Christy looks at the data as a scientist, not as a politician nor as an anti-development academic. As a result, he interprets the data a little differently, and draws more measured conclusions about the lengths we should go to combat the warming climate. For example: "The recent CNN report 'Planet in Peril'...spent considerable time discussing shrinking Arctic sea ice cover. CNN did NOT note that winter sea ice around Antarctica last month set a record maximum (yes, maximum) for coverage since aerial measurements started."

And, "There has been a drought (in the U.S. Southwest), but it would be a stretch to link this drought to carbon dioxide. If you look at the 1,000 year climate record for the western U.S. you will see not five-year but 50 year long droughts. The 12th and 13th centuries were particularly dry. The inconvenient truth is that the last century has been fairly benign in the American West. A return to the region's long term "normal" climate would present huge challenges for urban planners."

And finally, "My experience as a missionary teacher in Africa opened my eyes to this simple fact: Without access to energy, life is brutal and short. The uncertain impacts of global warming far in the future must be weighed against disasters at our doorsteps today...a cost benefit analysis of health issues by leading economists calculated that spending on health issues such as micronutrients for children, HIV/AIDS and water purification has benefits 50 to 200 times those of attempting to marginally limit "global warming."
In a recent post, I estimated that Mrs. Clinton was a 60% favorite to win the Presidency, a calculation that stemmed from my assumption that the Democratic nomination was a lock for her. Though this calculus may have disconcerted readers and others, I still think she is the favorite, though her campaign has been tarnished of late by a couple of mediocre debate performances, and the portrayal of her (by her husband) as a "victim" of the increasingly desperate attacks on her positions by her primary opponents.

I have to admit to laughing out loud at the Journal Editorial page reaction to her debate performance. "The junior Senator from NY seems increasingly to have adopted her husband's political methods, minus the savoir-faire. The result is that it's impossible to know what she believes about anything."

"On Iran's nuclear ambitions, moderator Brian Williams asked...the candidates 'What would make it crystal clear in your mind that the U.S. should attack Iran?' Senator Clinton's answer was, in sum, 'I think that what we're trying to do here is put pressure on the Bush Administration.' She added, 'we've got to rein him in.' (meaning Bush, not Ahmadinejad). Pressed by Mr. Williams, she clarified, "We're not in my view, rushing to war. We should not be doing that. But we shouldn't be doing nothing.'"


"The question of experience came up repeatedly, and Mrs. Clinton wasn't shy about citing her time as First Lady as a main qualification to be President. When Tim Russert asked 'In order to give the American people an opportunity to make a judgement about your experience, would you allow the National Archives to release the documents about your communications with the President, the advice you gave, because President Clinton has asked the National Archives not to do anything until 2012. Mrs. Clinton's initial response was to blame the Archives, but when Mr. Russert asked about lifting her husband's ban, she replied 'That's not my decision to make.' Apparently we are supposed to believe that the former President would refuse his wife's request to release those records if she asked. Even gentle Mr. Obama couldn't bite his tongue about that one, comparing the episode to the "secretive" Bush Administration."

Also hilarious were her responses on the Spitzer driver's licensing plan for illegal aliens: "It makes a lot of sense" to give licenses to illegals. "Mr. Spitzer is trying to fill the vacuum left by the failure of this Administration to bring about comprehensive immigration reform...I just want to add, I did not say it should be done, but I certainly recognize why Governor Spitzer is trying to do it...Do I think this is the best thing for the Governor to do? No." On Social Security, "I do not advocate and do not support" raising Social Security taxes. But she would still consider it."

You get the idea. I won't be voting for her, but I must admit to a certain nostalgia for the innocent hi jinx of the Clinton years. And we can spend some more effort trying to define the word "is."

And in her weekend column, the fabulous Peggy Noonan, in contrasting Mrs. Clinton's character with that of the Iron Lady, Mrs. Thatcher, told the following anecdote:

"The story as I was told it is that in the early years of her prime ministership, Margaret Thatcher held a meeting with her aides and staff, all of whom were dominated by her, even awed. When it was over she invited her cabinet chiefs to join her at dinner in a nearby restaurant. They went, arrayed themselves around the table, jockeyed for her attention. A young waiter came and asked if they'd like to hear the specials. Mrs. Thatcher said, "I will have beef."
Yes, said the waiter. "And the vegetables?"
"They will have beef too."

More from Ms. Noonan's column next time.


Back on the road again, this time to Orlando, home of theme parks, golf, sun and this year, the best trade show in our industry.
The market continues to stink, and to be buffeted by hedge funds that cause enormous price swings in individual stocks as they change their bets and move from one sector to another. That can be very disconcerting for individual investors, but it also provides opportunity for nimble investors looking for attractive entry and exit points. Last Wednesday, I bought 200 shares of Bank of Granite (GRAN), a beaten down regional bank for 11.42. Today, I exited my position in Andrew Corp.,selling all 1700 shares for 14.75, close enough to the expected takeover price of 15, especially since there have been doubts expressed about whether this deal will close. The shares were purchased in 8 different transactions from 2004-2006 at prices ranging from 8.73 to 14.42. Also today, I bought 1100 more shares of FSII at 1.90. So far, this average down has been a complete failure. They can't all be gems.

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