The retail sector shed 27,100 jobs in May. Analysts said the combination of rising gas prices and slowing home appreciation made consumers rein in spending. Manufacturing lost 14,000 jobs. US wage growth was again soft, with average hourly wages for May up just 0.1% from April (while the consumer price index swelled 0.6%).
Nasdaq Update (Item (10) above):
On June 12, 2006 the tech-heavy Nasdaq lost 44 more points and closed down another 2% at 2091. The Nasdaq has now (in just one month) lost more than 10% of its recent .local. high on May 08, 2006. Market-savvy analysts call a drop of 10% percent or more a full-fledged .correction., not just a momentary aberration. The Nasdaq is now 24% below where it stood on January 22, 2001, a level to which it has never come close since. Do readers think that this latest June 12 Nasdaq level does not affect/reflect the economic prospects for the tech-heavy EDA Industry?
Update July 6, 2006:
Over the last month or so, more information has become available that reinforces the geopolitical and economic commentary in the foregoing:
Good work if you can get it: Former Goldman Sachs CEO Henry Paulson filed to sell about $500 million worth of Goldman Sachs stock shortly after the US Senate voted to confirm his appointment as Bush's Treasury Secretary number three. Moreover, a generous government rule also makes Paulson exempt from paying taxes on any capital gains on the stock sale, eliminating a tax liability of up to about $200 million for Paulson.
In an ongoing crusade to control incessant inflation in the US, the Fed put in place its 17th consecutive quarter-point rate hike since June 2004, lifting the overnight interest rate to 5.25%.
In Q2 2006, the S&P 500 and the Nasdaq fell 1.9% and 7.2%, respectively. The Dow barely broke even. The Nasdaq is also down for 2006 six-months-year-to-date. The National Association of Purchasing Managers' Chicago group said its index of regional business activity slowed to 56.5% in June from 61.5% in May. Moreover, the prices-paid component of the index leapt to 89% from 76.9%, indicating sharply higher costs for manufacturers. Consumer spending slowed sharply in May as the continuing rise in gasoline prices left Americans with less to spend on other items. A barrel of light crude stood at a remarkably expensive $73.93 to end the quarter. Durable goods orders dropped 0.3% in May after a sharp 4.7% drop the month before, according to the Commerce Department, the first back-to-back declines in two years.
The Republican-dominated US Supreme Court today struck down the military tribunals set up the Bush administration to try the detainees being held in Guantanamo Bay. More than a narrow ruling, the decision is a reaffirmation that the law is what the US Constitution, the statute books and the Geneva Conventions say it is - not what the president wants it to be.
Federal prosecutors want Enron founder Kenneth Lay and former Chief Executive Jeffrey Skilling to fork over nearly $183 million in light of their convictions for perpetuating one of the biggest corporate frauds in US history. In a court filing, prosecutors asked US District Judge Sim Lake to order the newly-convicted felons to turn over that amount "in proceeds of the fraud conspiracy," which includes bonuses, Skilling's gains from stock sales, and Lay's use of loans from Enron to pay down much of his $100 million in personal debt in 2001. Lay, 64, and Skilling, 52, were convicted of defrauding investors and employees by repeatedly lying about Enron's financial strength in the months before the company plummeted into bankruptcy protection in December 2001.
Meanwhile, Richard Scrushy was handed felony convictions today in a state bribery scheme linked to his days as chief executive of HealthSouth Corporation. Acquitted last year of directing the HealthSouth fraud, Scrushy remains a defendant in major civil cases involving allegations of a $2.7 billion accounting scam at the rehabilitation chain he once ran.
A bevy of studies was released today that reveal the state of retirement across America as bleak in the best case and depressing in the worst case. For examples: more than 43% of Americans are not saving at all, and only a third of Americans are saving enough to maintain their standards of living in retirement; 28% of current workers and 12% of retirees are not confident about having enough money in retirement even to pay for their medical expenses; a vast majority of US employers are planning to curtail their retiree medical plans for current and future retirees in the next five years; regardless of their ages, genders, household incomes and education, 38% of surveyed Americans say they expect their retirement to be "financially difficult."
Things are not as bleak for most CEO's, such as Pfizer CEO Hank McKinnell for example. Since taking over Pfizer in 2001, he has been paid $79 million in salary and also paid pension benefits worth an estimated $83 million. Yet the drug giant's stock has fallen by more than 40%. "Corporate compensation in America is now offending a lot of people needlessly and it ought to be fixed," Berkshire Hathaway Vice Chairman Charles Munger said recently. "CEOs and boards should be a lot more sensitive to the current [economic] environment, and not have the wretched excesses of executive compensation hitting the headlines at the same time they are laying off 50,000 people."
As if the overwhelming oil oligarchy is not enough: Water is "the first and last great commodity," said Phil Flynn, a senior analyst at Alaron Trading in Chicago. Water still doesn't have a publicly-traded market -- nothing similar to the oil futures which help dictate market prices. But with the US population headed for the 300 million mark later this year, and the world figure above 6.5 billion, "people theorize that the next great competition over supplies will be for fresh water," said Flynn, adding that the supply of drinkable water is becoming tighter and tighter. At some point, "it's going to be the oil market of the future," he said.
General Motors' largest shareholder is pressing the troubled American auto giant to speed up its turnaround effort by forming an alliance with two foreign car companies, Nissan and Renault, which would pay $3 billion for a 20% stake in GM. On its own, GM is in the midst of closing all or part of a dozen plants and cutting 30,000 jobs as part of its restructuring effort.
The Commerce Department said spending on construction projects fell 0.4% in May, marking the biggest decline since September 2004. The drop was unexpected; economists had forecast a 0.2% gain in construction spending. April outlays were also revised lower to a 0.2% drop from the 0.1% decrease previously estimated. Also, the Institute for Supply Management's June survey showed that the index fell to 53.8% in June from 54.4% in May.
Enron founder Ken Lay passed away today, while vacationing in Aspen. He was 64. Facing decades in prison, Lay had displayed no signs of ill health throughout his four-month fraud trial. Just before Enron became a scandal-tainted punchline, the company was the single largest contributor to President Bush, who nicknamed Lay "Kenny Boy." But White House press secretary Tony Snow said today that he hadn't discussed Lay's death with the president. "The president has described Ken Lay as an acquaintance", said Snow. Some legal experts said that Lay's death may render the government's criminal victory null. Regardless, his estate apparently remains the subject of civil lawsuits by the Securities and Exchange Commission and former investors and Enron employees, which could still proceed. Unless, of course, someone issues a posthumous pardon.
Dow Closes Down 76, Nasdaq Closes Down 37 -- Concerns over North Korea's nuclear ambitions and a new record for oil prices ($75.19 per barrel) sent stocks lower today and added to Wall Street's ongoing worries about the economy and interest rates. North Korea defied .stern warnings. from the US to launch seven missiles on July 4, including a long-range Taepodong-2. Since January 2001, this US administration has consistently refused to conduct 1:1 talks with North Korea. Gasoline futures also jumped 6 cents on July 5 to settle at $2.28 a gallon. With refiners fetching the equivalent of $95 a barrel or more for gasoline, "A refiner doesn't have to be disciplined in the buying of crude," explained Tom Kloza, an oil analyst at Oil Price Information Service in Wall, NJ.
July 7, 2006
US employers increased payrolls by a tepid 121,000 in June , providing ongoing evidence that companies are reluctant to bulk up their work forces in the face of high energy prices and slowing economic growth. The count of new US jobs added in June fell well short of economists' forecasts for an increase of around 175,000 new positions. "When you only have 121,000 jobs being added, that sounds pretty puny," said Ken Mayland, economist at ClearView Economics. "On the face of it, this is somewhat disappointing; the job picture is consistent with other barometers that suggest economic growth is slowing," he said.
Stocks plunged for a second straight session today as Wall Street battled a storm of negative factors - soaring oil prices, interest rate jitters and the slowing US economy. The Dow Jones industrial average dropped almost 167 points, bringing its two-day loss to 288 . The Nasdaq Composite finished the day at a nine-month low .
Escalating violence in the Middle East carried oil to near $77 a barrel , a new record high, following a fresh escalation in Middle East tensions. US gasoline prices are also setting new records. Bogged down in Iraq and having neglected the Middle East peace process for five and a half years, the current US administration appears powerless to help ameliorate the situation there. The same may be said of increasing belligerence by Iran and North Korea.
Surging oil prices pulled stocks sharply lower for a third straight session today, with bland corporate earnings and weak consumer data further dampening the economic outlook. The Dow Jones industrial average shed 396 points in the past three days . The Dow tumbled 107, or 1% today, to 10,739. The blue-chip index fell more than 121 points July 12 and lost almost 167 points July 13, and after today is just 21 points from turning negative for the entire year-to-date 2006 .
The Nasdaq composite index declined another 17 points today to 2,037, down 4.35% for the week, and now stands at a 14-month low .
Crude oil futures reached an intraday record of $78.40 a barrel today as Israel intensified its attacks on Lebanon, further raising concerns about potential supply disruptions throughout the Middle East. Crude eventually settled at $77.03 a barrel, up 33 cents, another record close.
Retail sales fell in June, as did consumer confidence for July. Moreover, investors are increasingly concerned that the recent spate of corporate Q2 profit warnings is still another indication that the US economy is headed for a downturn .
Posting a loss for the third straight week, the tech-laden Nasdaq dropped 19 points to 2,020 today after plunging over 41 points on July 20. The 2,020 level was the lowest finish for the Nasdaq since May 17, 2005 , when it closed at 2,004.
Dell Computer Corporation stock tumbled $2.19 today, or 10%, to $19.91 after it said aggressive price cuts in the personal computer market would cause the company to miss forecasts. Dell has approximately 26,000 employees in the US these days; over the last three years, Dell has created nearly 40,000 offshore jobs.
The Dow Jones industrials ended the week up only 129 points, despite a one-day surge of 212 points on July 19 solely due to investor optimism that long string of Fed interest rate hikes may soon be nearing an end. Federal Reserve Chairman Ben Bernanke predicted that the US economic slowdown would help ease inflation pressures in coming months. Oh, great! Some observers felt the market was hearing everything positive Bernanke said on the 19th and ignoring his many caveats.
On July 20, Ford reported a second-quarter loss of $123 million, or 7 cents a share, down from a year-ago profit of $946 million, or 51 cents a share. In June, Ford's worldwide sales dropped 6.9% even as passenger car sales rose from a year ago. The truck side, which is key to profit, fell 14%, with the F-series pickups, the best-selling vehicle in the US, off nearly 10%. The month was even more difficult for Ford rival General Motors , which reported a 26% decline in June in US sales alone.
In the first actual charges to come out of the widening stock-options scandal , criminal and civil actions were filed July 20 against two former executives of San Jose CA Brocade Communications Systems for securities fraud. The two were charged with concealing millions of dollars in expenses, overstating the company's income and falsifying records of stock options grants. A third Brocade executive faces civil charges. The SEC and US Justice Department are now investigating at least 80 companies for backdating options and failing to properly account for them. The count was only 17 companies being investigated as recently as May 19, 2006.
The United Nations reported on July 18 that an average of more than 100 civilians per day were killed in Iraq during June 2006, registering the highest official monthly tally of violent deaths since the fall of Baghdad in 2003. Meanwhile, the new war among Israel, Lebanon and Hezbollah widened unchecked during the last 10 days. There could hardly have been a better moment for the annual meeting of the Group of 8 to prove its worth. Instead, it showed how pointless these \.leaders\. are. It did not take Bush's unwanted shoulder massage of Germany's Angela Merkel or his awkwardly open microphone to display the huge gap between the summit meeting and political reality. The entire G8 Meeting was a useless exercise.
Confirmation arrived today of the relentless slowdown in the US economy that we've been commenting on for months. The US Commerce Department officially reported that the nation's gross domestic product grew only 2.5% in the second quarter, less than half than in the first three months of 2006. Q2 growth in consumer spending halved, and Q2 residential investment suffered its steepest decline in six years . Meanwhile, the Commerce Department also reported that the core price index for personal consumer expenditures, which measures the price of consumer goods and services, excluding food and energy, surged at an annual rate of 2.9% in the second quarter, up 38% from the first quarter. Add in food and energy costs, and inflation is even worse. Perversely, the GNP news bolstered today's prices of stocks, as it raised investors' myopic hopes that the Federal Reserve will stop raising interest rates, never mind the declining GNP's enervating impacts on jobs and inflation. Along with the latest GDP report, the government also issued annual revisions today that showed the GNP was less than previously estimated for 2003, 2004 and 2005 . The main reason for the downgrade: business investment in computer equipment and software was less than previously reported.
Following on the heels of the reports in the original May Commentary regarding the oil industry's first quarter's results, Exxon Mobil , the world's largest publicly traded oil company, reported a 36% gain in second-quarter earnings this week, bolstered by outrageous oil and gas prices in the United States, China and India. Net income for the quarter rose to $10.36 billion , from $7.64 billion a year earlier. The only time Exxon's quarterly profit was higher was the fourth quarter of last year (after Katrina). Exxon revenue climbed only 12% in Q2 2006, to $99 billion, yet yielded a 36% increase in profits - hmmm . good business if you can get it! The $99 billion in revenue was second only to Exxon's third quarter of last year.
Combined, the top five oil companies , Exxon Mobil Corp., BP PLC, Chevron ConocoPhillips and Royal Dutch Shell PLC, "earned" $34.6 billion in the second quarter , also 36% more than the same period last year. Through the first half of 2006, the five companies have "earned" $62.8 billion, demonstrating the industry's current moneymaking prowess now that energy prices and profit margins appear likely to remain at heights that truly seemed far-fetched as the Clinton years ended.
Since oil prices have climbed even higher in July, peaking at $78.40 per barrel, Q3 2006 probably will be even more prosperous for the oil companies than Q2 . Remember all that talk in the Republican-laden Congress in recent times about a windfall profits tax? Ha-Ha. The US Senate held hearings with oil company executives last year without taking any action against the industry. While these executives repeatedly point out that "they don't set the price for crude oil", they nevertheless continue to accept larger and larger bonuses as their companies reap the benefits of the ballooning profits at the expense of hapless drivers everywhere. One more item for US voters to remember in November.
Well, Wall Street traders got their wish Friday when the US labor Department issued its payroll report for July. US job growth in July was again way below expectations . Employers added jobs in July at a miserably slow pace for the fourth consecutive month, providing the strongest evidence yet of the country's weakening economy. "I would be absolutely astonished if the Fed raised rates next week," said chief US economist for High Frequency Economics Ian Shepherdson hopefully. "The loss of momentum in the economy is all too evident." But investors nevertheless pushed stocks lower on Friday after all, unwilling to trust that the labor report was enough to keep the Federal Reserve from again raising interest rates.
Of course, stock market players' concerns pale in comparison to the ongoing dispair of millions of US workers lucklessly seeking jobs during the last five and a half years. And those who have jobs have seen their weak earnings growth continuously fall behind increasing inflation.
July's bad news continued. The unemployment rate , which usually moves in tenth-of-a-point increments, when it moves at all, jumped two-tenths in July, to 4.8%, the highest level in five months . Indeed, for the unemployed, finding another job is getting harder . The average number of weeks spent looking for a job grew by more than a week in July, to 17.3 weeks, the largest monthly jump since last August. At the same time, 1.3 million of the unemployed, or more than 18%, were out of work for 27 weeks or longer, an increase of 200,000 since June.
While the US economy deteriorates, while the federal deficit balloons, and while many parts of the world are in flames, the Republican-laden Congress again focuses on, you guessed it, repeal of the estate tax for the richest Americans !
For his part, Dick Cheney is inappropriately butting into Alaskan state politics, urging legislative leaders there to approve a controversial bill to allow three of the top five oil companies to build a new $20 billion natural gas pipeline. Of course, the oil companies are demanding billions in tax breaks , even though these same oil companies are swimming in profits (see the July 28 update above).
Amid all these troubles, George W. Bush left Washington today for another Texas vacation . You know - like the past vacations in Texas when he ignored the briefing that "Osama Bin Laden is determined to strike in the United States" (August 6, 2001), or like when he ignored Cindy Sheehan's protests about IRAQ, or like when he ignored the threat and subsequent devastation of KATRINA - that kind of Texas vacation. He'd better watch out this year; he may just miss the approaching end of the world, as many Christian "end-times believers" think the current Middle East wars are definite signs of the coming Armageddon.
As many predicted, the Federal Reserve on August 8 suspended its two-year crusade of raising interest rates, a policy shift based on the investment community's astonishing "hope" that a painful US economic slowdown will eventually subdue inflation. After 17 consecutive increases at every Fed meeting since mid- 2004, the central bank voted this week to hold its benchmark interest rate steady at 5.25%. In a rare display of uncertainty, the Fed committee was not unanimous in its decision. One reason is that today, inflation is still far from subdued. Core inflation is running about 2.9% higher than one year ago, the biggest year-over-year jump in 11 years (and core inflation excludes rising food & energy costs!).
Speaking of pain, Laurence H. Meyer, a former Fed governor and now an economic forecaster at Macroeconomic Advisers, predicted that it would take a truly significant economic slowdown to actually reduce inflation. For that to happen, he said, unemployment would have to rise for a sustained period. For example, to reduce inflation by one percentage point, the US unemployment rate would to rise by about two percentage points for a full year. Too bad for those laid off!
Indeed, if the Fed cracks down harder on inflation, it risks throwing the US economy into an actual recession, not just a slowdown, which would leave workers whose wages have hardly kept up with price increases in still worse shape. And with energy prices up sharply, many workers, whose pay increases have lagged far behind productivity gains, already have far less disposable income for other purposes.
And, as the Labor Department also reported on August 8, productivity already slowed to an annual rate of increase of 1.1% in the April-June 2006 quarter. Productivity is the key factor determining living standards. Strong growth in worker productivity, which occurred often during the last five years, should allow businesses to pay their workers more (although businesses seldom did so in the last five years; most of the benefit went to corporate profits) without raising the prices of business products (which they have been doing, especially recently, causing inflation).
Meanwhile, on August 10 Wall Street withstood the news of a terror plot targeting commercial airlines. But European markets tumbled as British authorities said 24 people were arrested in a widespread plan to destroy numerous international flights, and reacting, the US raised its terror alert to the highest levels ever for air travelers.
While airline stocks fell on August 10, overall US stock averages nonetheless went up that day! Wall Street also benefited from lower crude prices, which fell on the belief that reduced travel in the coming months might curtail demand for fuels. A barrel of light crude settled at $74 on August 10, down $2.35.
Of course, that was just a day after the oil company BP announced that a corrosion problem was forcing a shutdown of its pipelines serving Alaska's Prudhoe Bay. Oil prices immediately shot up, with oil temporarily gaining more than $2 a barrel, to nearly $77, and gasoline rising five cents a gallon in some cities. Why BP was so negligent in its inspection protocol is not yet revealed. Not surprisingly, Republicans were quick to use BP's travails as yet another reason to whip up hysteria to drill more in the US. But of course, everyone but the right wing knows that even all-out drilling everywhere in the US and off our coasts would never dent America's oil appetite. The US has only 3% of global oil reserves, yet we consume 25% of the world's oil. Only alternatives to fossil fuel will save us.
But maybe most Americans don't, in fact, know facts. A large number of Americans remain apathetic or just plain ignorant about geopolitical issues, and these sad-for-democracy conditions do not seem to be getting better. As recent as late July 2006, a Harris Poll reported that 50% of Americans now seem to believe that Iraq had weapons of mass destruction after all when the US preemptively invaded over 1200 days ago, up from 36% who thought so in February 2005. Meanwhile, 64% still believe that Saddam had strong links with Al Qaeda. Part of the reason, of course, is the current administration's incessant propaganda. In many cases, facts are either labeled "junk" science or simply lied about: stem cells, global warming, tax cuts, income inequality, Iraq, etc.
Alas, there was some good news this past week. The defeat of Senator Joe Lieberman at the hands of Connecticut businessman Ned Lamont should send a message that voters are at long last angry and frustrated over the US presence in Iraq. Lamont said he ran against Lieberman because he was offended by Lieberman's continuously cheerful (and inaccurate) descriptions of what was happening in Iraq and Lieberman's sanctimonious denunciations of Democrats who have criticized the administration's handling of the Iraq war.
And other good news: the unlikely duo of Tony Blair and Arnold Schwarzenegger this week agreed to collaborate on cleaner-burning technologies and to explore an emissions-reduction program to attack global warming that would combine mandatory controls on greenhouse gases with market incentives. For his part, Blair claimed he was not really defying his good friend George Bush. The "governator" was more forceful, saying that the Bush administration and Republican Congress have shown no leadership on the issue (gee, there just might be an election coming up in CA). The Blair/Schwarzenegger agreement again dramatizes how badly the current administration in Washington lags both Britain and California with Bush's lame program of "voluntary pollution reductions".
And finally some good news regarding Israel, Lebanon and Hezbolla: late in the week, the United Nations Security Council finally produced a formula to end the fighting in Lebanon. Of course, while the diplomats dithered, hundreds of Lebanese and Israelis died, one-third of Lebanon's population was uprooted, and new layers of anger and fear were sown on both sides of the border. (Remarkably, after Bush initially gave Israel the green light to keep attacking, and later supplied additional smart bombs to the Israeli air force, Bush didn't even speak on the phone to the Israeli prime minister till August 11, more than a month after hostilities began).
On August 17, the Congressional Budget Office said that unanticipated tax receipts so far this year will likely allow the 2006 federal deficit to come in at ... hold on ... "only $260 billion". But the deficit will begin to rise again next year and will continue to balloon further unless Bush's string of past tax cuts for the wealthy is allowed to expire on schedule. Otherwise, even the most optimistic assumptions, including no more major disasters and reductions of US forces in Iraq and Afghanistan -- reveal a stream of red ink that would create still another $2.5 trillion of debt (above the current debt of $8 trillion) over the next 10 years and average at least $254 billion a year, according to budget office calculations. (Recall that when Bush first took office in 2001, the US was running yearly fiscal surpluses). Indeed, budget office figures showed that the administration's spending is increasing by 7.7% this year alone, easily outstripping US economic growth. In fact, even in the best case, the federal budget will likely hang around 20% of the country's gross domestic product through the bitter end of the Bush presidency, up from 18.5% of GDP when Bush first came to office. Some conservative!
Also on August 17, a federal judge ruled the Bush eavesdropping agenda to be both illegal and unconstitutional. She wrote that Bush has violated the 1978 Foreign Intelligence Surveillance Act (FISA) when he told the NSA to spy without a warrant on international phone calls. She offered a cutting condemnation of Bush's attempt to place himself beyond the reach of Congress, judges or the Constitution. "There are no hereditary kings in America and no powers not created by the Constitution," wrote Judge Anna Diggs Taylor of the United States District Court in Detroit. She noted that the 1978 FISA law was passed to disallow this type of abuse of power and provided ample flexibility for collecting intelligence. Instead of simply abiding by the 1978 law after this ruling , Bush's lawyers are now trying to have the suit thrown out on national security grounds. In this case, the administration told Judge Taylor that merely arguing its case would expose secret information. The Judge said this argument was "disingenuous and without merit." No sooner had her ruling been issued, than Bush's crowd in Congress began calling for new laws to defeat the Judge's objections. Republicans pointed out that Judge Taylor was appointed by Jimmy Carter. (Judge Taylor's decision was a sequel to the Supreme Court's decision in June 2006 in Hamdan v. Rumsfeld that struck down the administration's plans to try detainees held in Guantanamo Bay, Cuba, for war crimes). The Republicans' ridiculous efforts to undermine the August 17 eavesdropping ruling will unquestionably proceed, but for now, one solitary judge has done what the US Congress has studiously avoided doing.
And also on August 17 , another federal judge ordered strict new limitations on tobacco after finding that cigarette makers engaged in a decades-old conspiracy to deceive the public about the dangers of smoking . The deception, Judge Gladys Kessler of Federal District Court for the District of Columbia said, resulted in "an immeasurable amount of human suffering." Judge Kessler ordered the companies to stop labeling cigarettes as "low tar" or "light" or "natural" or with other "deceptive brand descriptors which implicitly or explicitly convey to the smoker and potential smoker that they are less hazardous to health than full-flavor cigarettes." The judge said she regretted not being able to punish the companies further . Cigarette makers, the judge said, profit from "selling a highly addictive product which causes diseases that lead to a staggering number of deaths per year, an immeasurable amount of human suffering and economic loss and a profound burden our national health care system."
More bad news for workers . On August 18 Boeing said it must begin shutting down production of its C-17 cargo plane, because the US Congress has not funded new purchases. The decision may ultimately affect 5,500 Boeing employees in Arizona, California, Georgia and Missouri who are directly tied to the C-17 program. But the result will first hit the 25,000 employees of the nearly 700 companies in 42 states that supply parts and systems for the plane, Boeing said. "The C-17 is one of the Defense Department's most successful acquisition programs ever," said Ron Marcotte, vice president and general manager of Boeing Global Mobility Systems. "But we can't continue carrying the program without additional orders from the US Government."
Even though the UN Truce in Lebanon is less than a week old , helicopter-borne Israeli commandos landed near the Hezbollah stronghold of Baalbek over the August 19-20 weekend and engaged in a lengthy firefight in what the Lebanese prime minister, Fouad Siniora, called a " flagrant violation" of the cease-fire . The United Nations issued a statement that Secretary General Kofi Annan also considered the raid a violation and was "deeply concerned." The Israelis said "the aim of the operation was to disrupt terrorist activities against Israel and to prevent arms from being transported to Hezbollah from Iran and Syria." Moreover, Israel still intends to try to kill the Hezbollah leader, Sheik Hassan Nasrallah, according to an anonymous senior Israeli commander.
And the last news item for August 18: In each poll released since the Brits foiled the alleged Trans-Atlantic terror plot - CBS, Gallup, Newsweek, Pew, Zogby - Bush's approval rating remains mired in the 30's . Apparently the incessant terror fear mongering doesn't work anymore, no doubt due to the fact that the administration has squandered billions of dollars and thousands of lives on IRAQ while neglecting critical security enhancements within the US.