Our family was vacationing in Bermuda on the grass between our hotel room and the beach when my wife suggested we go under a tree to take a family picture. My daughter ran off in the other direction. And then a huge coconut fell from that tree landing about 20 feet away from my daughter. Just a reminder how everything can suddenly come to a complete stop.

My wife says I need to call our building engineering department to fix Mr. Potato Head. But I am good at replacing batteries. 

Our daughter Elizabeth doesn’t know the name of the president but she does know our doorman Gary. He gets us taxis and that makes him infinitely more important. She is quite smart; a week ago I told my wife to get an umbrella as we were going out to dinner and next thing I know Elizabeth brought out an umbrella from the closet and gave it to Karen. On our last trip to Bermuda, at the airport I was standing at the gate and suddenly noticed she was missing. She had gone to a different gate across the center walkway where there were plenty of seats and made herself comfortable as if we were idiots standing around waiting to board. On the plane, she ran ahead of us and took herself an exit row aisle. She says “Take off shoes” when we get close to the security check. She remembered the haircut she got 4 months ago; she is 2 years old and 3 months. By the way, we’re sending her to college next September.

I just read yesterday that the Chief of Police in Teheran was found at a brothel naked with 6 women and obviously removed from his post. I might add that as his last act he might have issued political asylum to Eliot Spitzer. 

I’m assuming you all know who he is by now. I know people who know him and they strongly disliked him. What I don’t understand is that if a guy like him was so wealthy, why couldn’t he just pay in cash – why was he secreting and juggling funds in official state bank accounts to hide this? I’m sure there is more to this story and that we will eventually hear of it.

About 2 weeks ago, I sold every stock I owned. I simply got tired of seeing bad news come out every day, noticed that most days the stock market was going down, and keep hearing that the news is worse than everyone has been led to think. When you read stories on the front page of the Financial Times of London that say “This kind of news could send the market down 500-1,000 points in a day,” that means Sell Baby! All of which made me feel no reason to stay in the market. It doesn’t help that Malaysia’s stock market value dropped 10% in a day (fortunately for me after I sold it).  Or that Bear Sterns, the #5 investment bank, lost 47% of its value in a day. (I think that Chase will buy it and that Morgan Stanley will buy Lehman Brothers, which also lost 15% of its value in a day this week.)  I think this is the right time to sit on money market cash and hold tight for awhile because it is an election year, the news is probably worse than it appears and the fed’s actions don’t seem to help – the economy has been screwed up so bad over these many years that fixing it is beyond the fed’s sprinkling of pixie dust or a $600 tax rebate from Congress to families making less than $75,000 a year (they’re in so deep that money ain’t gonna get spent in the economy). I think the folks in charge of America know this too. If I were a betting man, I’d sell short or buy foreign currency that rises against the dollar. But last time I bet against the dollar I lost, so I’m not a betting man. This time though the fundamentals dictate that the dollar is very weak.

Barak Obama is likely to be running against John McCain unless something drastic happens. I think that Hillary ran a poor campaign and was beaten fair and square; it has also been a problem that people just don’t like or believe her, things that really matter in a potential president. You can package dog food only so much but it is still dog food and if dogs don’t like eating it, it won’t sell. In order for Hillary to get the nomination, either the superdelegates would have to overturn the popular vote where it is clear that Obama got more delegates or Obama would have to yield, and I don’t see him doing that. If Hillary were at the top of the ticket, Blacks would stay home and feel that a Black can never get past the party machinery. If McCain runs, the evangelicals from the Right will stay home too. That leaves the whites in Pennsylvania and that would give the edge to McCain. I think that Hispanics would also tilt McCain over Clinton because they are not hostile to Republicans who are in favor of immigration and McCain is in favor of it. So the Democrats can’t win if the Blacks don’t accept their nominee. If I were McCain, I’d bring in Bloomberg as my VP rather than Mitch Romney. If the Democrats took Hillary, if I were McCain, I’d offer the VP to Obama because that would be a really sexy ticket. Republicans are not hostile to Obama but they sure hate Hillary. 

I’ve been monitoring the chatter about Obama’s priest; it is rather worrying that Obama has relied on this Reverend Wright for the past 20 years as a religious advisor and that this man has some really radical views about all sorts of things including America and it begins to make sense out of what Obama’s wife said about how she only recently became proud of being an American. There are other articles that explain a good amount of this away. If it turns out that Obama becomes president and had a secret agenda, there are going to be a lot of people very upset that the media chose to ignore or pass over that which it found inconvenient about the man.

I am not crazy about McCain at all and I have real disagreements about his agenda (ie: Iraq), but I will probably wind up voting for him. He has more experience and fewer question marks than Obama, he will not owe his office to the evangelicals and will be in a position to make the Republican party more mainstream, is more likely than Obama to deal with Iran, and he is likely to be only a one-term president, so that in 2-3 years we can find someone better to run this place if he turns out to be a dud.

Russia seems to be a weird place – a friend of mine from Moscow who I’ve known for 15 years with the same contact information has seemingly fallen off the face of the earth. Phones and e-mails all suddenly gone. I hope he hasn’t been shot, jailed or fled.

Can you say SWF (Sovereign Wealth Fund)? David Rubinstein, head of the Carlyle Group, says the Abu Dhabi Investment Fund will replace Wall Street and the City (London) as the most important source of investment capital. I noticed that the NY Stock Exchange passed some new decrees undoing some of the regulatory items that dissuaded foreign companies from listing there. As I have said repeatedly, the US has been making many mistakes in driving down our country’s competitiveness – poor immigration policies, over-regulating Wall Street, and running an economy that promoted irresponsible consumption including everything from oil, credit lines and housing mortgages.  

Turning to the Middle East, Israel is in an interesting position. It feels that it can take on Iran to goad them into attacking it giving it just cause to attack it in return and it is letting Syria know that if attacks are staged on it from Lebanon, the Syrians will get the retaliation this time as they should have in 2006. Kuwait has let it be known that it would rather Israel attack Iran than the US. In a way, the Saudis and Israelis are pushing in Lebanon – the Saudis are kicking Syria and arming Hizbullah’s enemies in Lebanon, while the Israelis are making it clear they are getting ready to strike Hizbullah and will hit Syria if they don’t make nice or get out of the way. The talk about Gaza may be a precursor to clearing the decks for an attack on Hizbullah so that they don’t have to fight on two fronts at once. The more you hear about the murder of the Hizbullah commander last month, the less you hear the Arabs saying that the Israelis did it. There is a sense that someone in Syria gave the Israelis the information needed to do it. There is a lot of infighting going on over there within Assad’s clan and there are people with motives to have gotten rid of this guy. Anyway, Barak is not interested in any ceasefires with Hamas and is on the offensive and I expect it will be his choosing when he wants to invade and clean Gaza up and what comes after that. Abbas has no real say in Palestine and the Israelis think he is basically a loser. Barak thinks he is a goner and frankly it matters more what he thinks than anyone else. Barak dissed the Palestinian prime minister and the American consulate in what was supposed to be a three-way meeting and it was rather clear he didn’t show up because he thought it was a waste of time to deal with them. A guy like Abbas who this past week tells an Arab newspaper that he opposes resistance for now because they can’t do it but that later he might be in favor of it is the kind of guy who the Israelis have no reason to talk to because what is the point of making a deal with a guy who says openly that what’s for now is for now. We had all that talk from Arafat 5-10 years ago and nobody felt it was useful to deal with him; why deal with a guy who talks the same way and cannot deliver anything anyway? Olmert is a great partner to have in a talking shop when nobody is really serious – Olmert can’t deliver either because the Israelis don’t want him either, and there is always the Shas faction or somebody else to veto anything he might agree to that would actually be important. Condi Rice is well intentioned but she’s got poor cards to deal with and a weak boss who is a lame duck. So I think we should all get used to the idea that nothing is really going to happen in this arena under the present circumstances except another fight to reshuffle the deck and see if it gets better with the next president, a new Israeli prime minister and a new head of Palestine – Barghouti is my choice because it requires a real Mother-Fu#** to represent this dysfunctional nation comprising 2 states bordering Israel.
 
A bit of theoretical discussion about terrorism. Two interesting articles I read this month:

What Makes A Terrorist: Economics and the Root of Terrorism by Alan Krueger, Princeton University  Press, reviewed in the Jerusalem Report 2/18/08. Says that people from upper economic and intelligence classes are terrorists and that there is little terrorism from world’s poorest 50 countries and that 88% of terrorist attacks occur in the country of origin of the terrorist rather than the wealthier states. States most prone to terrorism are the intermediate range of political freedom – there is some freedom but still government repression to the extent that people don’t feel that participation in the political system will bring them any benefit. In Israel, the authors found that the only real effect on morale based on polls of 22,000 people would be to drive some votes 1.35% toward right wing parties before an election and more terrorism happens under left-wing governments, meaning the goal of terrorists tends to be to kill a peace process. Best solution to terrorism is not economic or educational aid but rather increasing political freedom in a country. Building civil society – creating avenues for well-educated young people to pursue political causes within a country. Another study I read last year in the Financial Times correlates terrorism to the greatest number of young people in a country and says it is often as simple as that. 

Notes from Economist dated 9 Feb 2008: 3 factors in suicide bombings according to Robert Pape of the University of Chicago: community under occupation, occupier is a democratic society that can be swayed, and a sectarian difference between the perpetrator’s community and the target. Middle class values such as discretion and politeness are needed to maintain cover. Religion is not so much a factor; very few in the madrasas in Pakistan and Indonesia are violent. Sympathy among the community is important; they want to be seen by their peers as heroes.