Home Sweet Home – We had a nice holiday in North Carolina and my little girl continues to grow up fast; she looks very cool in sunglasses and she does a great job of taking my blood pressure and listening to my heart. Despite a ban on commercial TV and our best attempts to shield her from naughty words, we had a pretty big shock when she screamed OH S**T in the middle of a crowded airport when she got stuck in between two rows of chairs at a boarding gate. You never know where kids pick things up. For better or worse, I really believe that travel makes a difference and she goes through the photo album telling us the names of the places she saw and things she sees (ie: Chimney Rock North Carolina, rocking chair, airplane). Today she put on eyeliner, blush and lipstick and helped mom choose the colors. She tells us which park she wants to go to and why she likes it (swings, see-saw and slides), recites the menu of all the foods she likes to eat, plays the harmonica (not bad actually), points out G-Clefs in sheet music and tells us the names of letters and numbers and knows what letter some words start with. She tired out 10 year old kids on the playground last week and is rather fearless. I was wrong when I told you last month that we are sending her to college next month; she is going to the army. Jeremy smiles and laughs a lot when we dance the hokey pokey in front of him and loves being turned upside down and goes crazy when we feed him real food such as cheese blintzes, oatmeal and cheese grits instead of all that baby food. Thank God he’s a country boy, right?

You’d be surprised if you knew who else was reading Global Thoughts. Lots of people I don’t send e-mails to and that I’d never know about except that once in a while I find out about them. Let’s just say they are top-tier people all over the world.

A few Notes on our latest Trip to Western North Carolina, a beautiful area of the country to visit at this time of the year with the Blue Ridge mountains, forests and some very nice resorts  – Charlotte is a good airport to use as an alternate to Asheville which has more expensive and fewer choices; it is a 2 hour drive to Asheville. Grove Park Inn was an excellent resort and exceeded our expectations – good restaurants, nightly entertainment including a dueling piano bar and dancing in the lobby with an orchestra, beautiful country views, top notch spa, nice staff and interesting theme suites such as the Great Gatsby. Area attractions we visited included Chimney Rock (a beautiful scenic overlook seeing mountains, forests and lakes), Biltmore Estate including the Vanderbilt house, gardens and a petting zoo. A good Mediterranean-Italian style restaurant was Rezaz, an excellent bakery in nearby Hendersonville is called McFarlanes on Main Street (the cheese danish is exceptional), and a good babysitter is Patrice Tappe at 828.712.5774. This was a really good place for a holiday. We were originally to stay at the Biltmore but it would have been really boring with a family for 5 nights as it is more a place for older sophisticates to overnight and it takes you 15 minutes drive just to get off the massive estate property before you go anyplace while Grove Park is close to town.

OK, now onto current events.

Lebanon – I don’t want to insult Lebanon, but it was made pretty darn obvious this week that Iran and Syria are running that country and the Lebanese army is essentially a façade that answers to Hizbullah. Since this is so, it reiterates my point that until there is peace with Israel, Lebanon has no future. I spoke with a friend in Beirut last week and asked him if there weren’t troops around in the streets and he said no, and then a couple days later, they were out, shut down the airport and TV, and showed who was in charge. Lebanon’s only hope is that Israel gets involved and goes after Hizbullah. This is a major defeat as well for Saudi Arabia which has been shown to have backed the loser. They probably wouldn’t mind for Israel to do their dirty work. Problem is that this is not really Israel’s problem unless they decide that they want Hizbullah eliminated as a threat from the north and they go after Hizbullah with the understanding that they will make peace with Syria once the deed is done. Otherwise, they will just keep going in there every few years to knock Hizbullah down after Iran and Syria rebuild them.

Israel-Olmert – I would bet that he continues in power on the premise that there is not a majority in parliament to go to new elections and that the evidence on him is not new stuff. Nobody really cares if he took party election money out of the election cycle a good number of years ago and I think they ought to pass a law that once you are elected prime minister, you should only be indicted/impeached for crimes done in office and the other stuff should wait till your term is over. It is wholly disruptive to have a country in hoc over a game of gotcha over this man’s actions from his prior history. Everybody who voted for him knew what they were getting. The country has much more important fish to fry right now and replacing him as prime minister is not going to help. Livni is clean but I’m afraid she would be indecisive in a crisis and I think she would be swallowed up by better political players in that system much as the new governor of New York has. Barak is great as defense minister but is not a consensus builder and will make people nervous as prime minister. Netanyahu is a man people want to be sure is kept away from that chair. I have previously stated that action against Hamas in Gaza is a matter of time and necessity and if it were my choice I would then turn the place over to Egypt who will ruthlessly keep the remnants of them subjugated better than the Israelis could. Syria is worth a peace deal if one is obtainable and the sacrifice of Lebanon is fine from Israel’s point of view and the most obvious result. I think that after Syria signs on with Israel, it will begin to moderate as it joins the Western world and that in time this will result in Lebanon gaining more freedom as Syria becomes less reliant on it for its economic lifeline as the economy as a whole in those countries improve. Freeing Barghouti is the key to peace with the Palestinians; Abbas cannot deliver the goods but is worthwhile keeping in place as long as nothing needs to happen. But making a deal with him and without Hamas is useless as Hamas could knock him out just as Hizbullah could knock out the facade of Siniora’s government in Lebanon in just a few hours. This can all go many different ways – to some extent you either deal with all of it or none of it.

US Elections -- Every day Clinton remains in the race is of use mainly to McCain, a person she likes better than Obama. People abroad I talk to mainly expect McCain to be the next president and I assume they are right. If McCain gets a youngish and charismatic running mate, he can match Obama’s appeal and reassure voters that there is an experienced man at the helm. I expect that countries such as Iran expect McCain and are moving to make their deals now. I don’t care for McCain but it is a no-brainer that I would vote for him over Obama. Obama hasn’t convinced me that he has any real idea of what he would do as president, I don’t really know what he thinks about the issues or that he has any real-world experience to be trusted in the job. 

US Economy – I started repurchasing stocks today after it is noted that the rest of the world is actively trying to boost the US Dollar and somewhat succeeding. The last month of economic statistics indicates that we are not going into some kind of serious recession and the Fed chairman acted uncharacteristically boldly and creatively in getting in front of the credit crunch after giving the initial impression that he would be slow to act. I noticed that had I not sold my stock, I would have made more money in the past 3 months than had I sold. But I’d rather have lost some profits than lots of my principal. The high price of oil is always a concern but it appears to me after further review that the price is supported by the market rather than the product of speculation and the price of food is probably a more serious problem overall. Americans are driving less and I am personally happy to see people get out of their cars but the demand that is pushing up prices is not from Americans in their cars. Cars are also more fuel-efficient; it cost me $14 to drive a full-size car 2 hours on a highway about 120 miles in North Carolina. That was about ¼ of a tank; I remember filling up the tank every 250 miles when I drove my parent’s Cadillac years ago. Overall, I think that if the value of the dollar goes up, the price of oil may begin to come down, and other economic matters may show improvement. There is definitely still downward pressure on home prices which are still expensive, but the main reason equities are holding steady is that US companies are selling abroad in a healthy manner due to the cheap US dollar, the US economy is de-industrialized and cares less about the price of oil than say China, and foreigners selling oil are taking their petrodollars and investing them into US companies and properties keeping our companies capitalized and Manhattan real estate expensive for me. 

I would still stay clear of India and China as investments (India is overvalued and China just doesn’t add up when you dig deep even though it looks exciting on the sheer masses of numbers and this is probably because the market there is rigged) but some performers appear to be Johnson & Johnson, Brazil (EWZ), Hewlett Packard, and finally USG (a homebuilder supplies company) might be a good speculative buy. It has begun to go up after going down very much. I don’t know that Citibank has hit rock bottom yet; Lehman Brothers has been recovering well, Lockheed Martin has done well with all our wars, and Exxon, Phillip Morris, Singapore and Australia have been all-around favorites. Microsoft is hard to let go of even though I don’t see high growth there and the company’s new chief got poor reviews for his job of managing the Yahoo approach.

Latin America – Argentina is squandering its opportunity to reform and the new president looks same-old. Brazil is moving forward in a very strong way and is poised to be a regional power, particularly as it generates alternatives in the field of energy including ethanol and oil exploration.

Europe – France’s Sarkozy and UK’s Brown have a year to get it together or get tossed. 

Pakistan & Afghanistan – It’s rather decent how Musharraf has been sidelined without too much agony. Problem is I still don’t know who is in charge. The US has decided that it will do what it has to do in that country even if the government in charge falls as a result; they have probably come to the conclusion that the government cannot handle its Islamic insurgency. Afghanistan campaign will benefit from the new US commander but it is not a war that can be won – it is at best a situation to be managed.

Iraq – As Iran goes, so will Iraq. Even though Prime Minister Maliki is getting a better reputation for managing things in Iraq, it is evident that Iran is in the midst of negotiating with the US over Iraq and that it can still make lots of trouble there if it wants. This Al Sadr guy is a real wild card and it’s hard to see where his fortunes lie in the midst of Iran’s assessments of its interests. We will have to see if the US and Iran agree to anything. As far as Iran, I’m still waiting to see if they survive with their nuclear program in place by the end of this year. What I’m being told is that the Israelis are planning to act this year against Iran, presumably with American and Arab assent. I really don’t know what to make of it but the Israelis seem rather confident of their abilities and I have to recall that people in Israel and elsewhere say they won’t want to live there under the threat of Iranian nuclear blackmail.

Russia / Vietnam – When you take away the high price of oil, Russia is quite vulnerable and it is interesting that even in the realm of oil, high taxation has made oil exploration so frustrating that the country’s production has basically been capped. Either the new president changes things or a drop in the oil price will drastically change the face of Russia. Foreign investment is still undesirable – Vietnam looks a lot more interesting even if its stock market has corrected itself lately. 

Gulf – I agree that the fundamentals of the oil market are such that the price will remain high in the medium term but in another 10-15 years the leadership of this regional market will erode as alternatives are developed and other sources of energy are found. I assume that rulers of this region agree which is why so much investment is being made in the future beyond oil. Some of it is wasted – the Saudis and Kuwaitis are trying to buy off change without really dealing with it. But stuff is happening here – it is clearly becoming a source of prudent worldwide investment from its sovereign wealth funds and I am planning a visit to the region in early December solely to check out what’s going on and assess changes over the past 7-10 years. I was to go in June but the schedule was too tight to do justice to this region and I am still afraid of being caught in the middle of hostilities if the Israelis go after Gaza and/or Lebanon and it becomes a two-front war. On the list are Dubai and Abu Dhabi in the UAE, Qatar, Kuwait, Jeddah, Saudi Arabia, Cairo, and Amman. If possible, also Bahrain, Oman and Cyprus.

Ukraine – A Turkish friend of mine has moved there and says he likes the country. It is third world outside of Kiev but he says the system there works and that there are good opportunities from real estate to industrial. He is dealing with a gravel quarry. He is less bullish about Turkey than Ukraine these days.

Zimbabwe – South Africa’s leader Mbeki for whatever reason has made himself and country a pariah by sticking his neck out for Mugabe, a thug who will be history sooner or later. Very sad that a country that was taken over by a movement claiming social justice has had its leadership stoop so low. It will be interesting to see where he rides out his retirement.

Home sweet home for a few weeks and then it’s off to Italy, Switzerland, France and Israel for a few more weeks. Looking forward to staying in a nice castle in France and seeing some beautiful nature in Interlaken, Switzerland.

Hi-Fiving the Clown at the Circus

Being in over your head....

Cool in them sunnies, huh?

Along the manhattan skyline.

Mohonk Lodge, upstate New York

Grove Park Inn, Asheville, North Carolina

Would you believe this is a dog bakery in Asheville, North Carolina? Dogs are people too in this city.

At the petting zoo at the Biltmore Estate in North Carolina.

Chimney Rock, North Carolina. View from the top.

At the Biltmore Estate.

In the Biltmore gardens.

Have a Coke and a Smile!