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  • POOR RICHARD’S REPORT

    POOR RICHARD’S REPORT

    Poor Richard’s Report                                                                        

     

                                                                                                    Over 300,000 readers

    My Mission: God has uniquely designed me to seek, write, and speak the truth as I see it. Preservation of one’s wealth while providing needful income is my primary goal in these unsettled times. I have been given the ability to evaluate, study, and interpret world and national events and their influence on the future of the financial markets. This gift allows me to meet the needs of individual and institution clients. 

    March 10, 2000 the stock market topped out.

    March 10, 2009 the stock market bottomed. 

    This does not mean it is going to run back up. The leaders of past bull markets do not lead the charge in new bull markets. This bear market has been the second worst in our history and probably the worst ever in other countries. It will be 5, 10, maybe 15 years before the averages make new highs- that is, if they do not change the components too much. Stocks bottom when the future looks the bleakest. So I believe we are near or at the bottom of a major cycle. It is a market of stocks not a stock market.

                 I have written that the market has bottomed, but the recovery is going to be long and painful for some. We have to institute new global regulations and retrain ourselves to be more frugal. We buy a home because we love it and want to live in it, not to turn a quick profit. We buy a stock because the company has a good product, provides a necessary function for the good of the community, and over a period of time will grow.

                Countries and consumers are tapped out. The ratio of household debt to Gross Domestic Product (GDP) rose from 66% in 1997 to 100% in 2007. We are not alone. In the United Kingdom it was an even bigger jump.

                In the US the overall debt reached 350% of GDP. Only 85% is private. This figure was 180% in 1980. The next bubble to burst will be credit cards and then, if we are unlucky, we will have a debt implosion. Individuals and corporations will do their best to reduce debt. They will be shut out from borrowing because of the massive borrowing the US Government will have to do. This will be true for many other countries also.

                Today there is a debate between Socialists and their foes that want less government intervention in their daily lives. I believe the truth lies in the middle. We can not be all things to all people. In the past we have borrowed on the future and it is now pay back time. We have to downsize our dreams and expectations or we could find ourselves in the same straight jacket that the Germans found themselves in 1930’s. The American spirit is that of a “can do will try for it” attitude. Today, while you are reading this letter, there is someone trying to figure out a cheaper source of energy. Until the discovery is achieved we will have a slow recovery. I believe that day will come from an area we least expect. Have faith.

                    With a slow recovery major corporations will wallow in the mud. Medium size companies that can move and change quickly and do not have a built in bureaucracy will become the new leaders. It has been my observation that the pinnacle of leadership lasts about 10 years. That leadership is attained because the new hires believe in the company. Later hires join because of the name and it’s safety. Competitors multiply and the growth rate slows down. As Andrew Carnegie was fond of saying “shirt sleeves to shirtsleeves in three generations” can apply to this corporate sequence.

                If you want to participate in this new bull market you must change your thinking. The averages mean nothing today. The market is made up of individual securities. You will want to know how your stock is doing. Not the market. Some stocks are going to drift lower because they are still over priced or because they have had a good run in the past and accounts are now overloaded with a past leader. These stocks should be sold. Taking a loss is really a good deal. First you limit your loss and you have given yourself liquidity. Liquidity means you have constant funds for your next purchase. The losses you accumulate can be used to reduce your taxes by $3,000 per year. This applies, as of 3/10/2009, before Obama changes the system. 

                Now lets say you have taken $25,000 in losses. Smile! You have just set yourself for the future. I am not referring to the next 8 years of  $3,000 worth of deductions. Let’s say two years from now that you have taken $20,000 gains in various trades and you face a monster tax bite. You can now use the remainder of your tax loss carried forward, which could be $19,000. Now your tax bite is only $1,000. This is why taking a loss is smart. More money has been lost by investors not doing a trade because of “taxes”.

                Now initially in this new market preferred stocks that have the 85% tax credit should do well, especially if it is selling below its call price. If they call it from you, you stand to make a gain. Corporate debt that is selling below par of strong companies will represent good value. Companies that hired a key person for the future while others have been downsizing is a big tip off.

                Gold is an investment for caution. The President’s strategy is to have a little inflation to support the housing market. Incidentally, the European Union and world leaders are debating over what should happen.  Some of the foreign politicians that carry a big stick are as follows: Wen Jiabao, 66, the Chinese prime minister who is under fire at home because he “put the brakes on too fast”. Angela Merkel, 54, the Chancellor of Germany who favors a “new global constitution” for financial markets. Nicolas Sarkozy, 54, President of France who regards himself as de facto leader of Europe given Gordon Brown’s domestic, political, and economic woes and Angela Merkel’s cumbersome coalition.  Gordon Brown, 58, UK prime minister who was the former Chancellor of the Exchequer and believes he is ideally equipped to tackle the crisis. He will host the Group of 20 summit of industrial and developing nations in London on April 2.

                Central bankers include the following: Jean-Claude Trichet, 66, President, European Central Bank who believes politicians and central bankers must do their utmost to shore up economic confidence. Zhou Xiaochuan, 61, Governor, Peoples Bank of China who has held that position since 2002 and is considered a principal supporter of faster market reforms. Fluent in English he can hold his own among economists. A sleeper is Mario Draghi, 61, Chairman, Financial Stability Forum and governor, Bank of Italy who is a US educated economist, former Goldman Sachs executive, and a respected transatlanticist.

                Regulators of note are: Adair Turner, 53 of the UK. Sheila Blair, 54 Chairman of the FDIC. Mary Shapiro, 53, Chairman of the SEC.

                Economists include: Robert Shiller of Yale. Montek Singh Ahuwalia, 65, Deputy Chairman, Indian Planning Commission. Robert Zoellick, 55, President, World Bank. Pascal Lamy, 61, who is Director General of the WTO. Paul Volcker, 81, Chairman, Economic Advisory Board. Fed Chairman in 1979-1987. He warned early and powerfully about subprime mortgages. Paul Krugman, Professor at Princeton University and columnist, NY Times. He has carved out a niche as the democrats’ liberal conscience. Then we have Leszek Balcerowicxz, 62, Professor of economics, Warsaw School of Economics.  

                Bankers to watch are: Lloyd Blankfein, 54, Goldman Sachs chief executive. Jamie Dimon, 52, Chairman of JP Morgan. Stephen Green, 60, Chairman of HSBC since 1962. He has voiced strong views about the need for reform of banking.  A lay preacher and author of a book about reconciling religion with free markets, he has criticized the industry’s excesses during the boom along with Peyton Patterson, Chairman, President, and Chief Financial Officer of NewAlliance Bank.  

                At the top of the list is President Barack Obama, 47, the revues on his economic rescue plan are mixed, but much detail is awaited.  In the meantime, the president is pressing ahead with radical domestic reform agenda encompassing healthcare, the environment, and education. As promised, it has a strong whiff of both audacity and hope. Then we have Ben Bernanke, 55, Chairman of the US Federal Reserve who is a scholar of the Great Depression. He has knowledge of measures that the central banks can use at times of great crisis and he has had ample opportunity to put his theories into effect, using an expanding range of tools too try to arrest the slide.”

                With this list of partial names one can see that this is a global problem; global problems need global answers. This will take time and patience. This is why I recommend the sales mentioned above and a hefty cash position. Sure, the market is trying to bottom, but the prudent way in the 21st century is to wade in step by step. One should also check in with a professional – like me.

     Cheerio !!!

    Richard C De Graff

    256 Ashford Road

    RER       Eastford Ct 06242     

    860-522-7171 Main Office  

    800-821-6665 Watts

    860-315-7413 Home/Office

    rdegraff@coburnfinancial.com

     

    This report has been prepared from original sources and data which we believe reliable but we make no representation to its accuracy or completeness. Coburn & Meredith Inc. its subsidiaries and or officers may from time to time acquire, hold, sell a position discussed in this publications, and we may act as principal for our own account or as agent for both the buyer and seller.

     

     

    This analysis is courtesy of the Financial Times and this assessment is by Lionel Barber, editor.  March 11,2009 page 7

  • Human Rights in Turkey: Old Wine in a New Bottle?

    Human Rights in Turkey: Old Wine in a New Bottle?

    Human Rights in Turkey: Old Wine in a New Bottle?

    Publication: Eurasia Daily Monitor Volume: 6 Issue: 47
    March 11, 2009
    By: Saban Kardas

    Turkish media coverage of the “U.S. State Department’s 2008 Country Reports on Human Rights Practices” highlights how human rights issues might fall victim to domestic political discussions and strategic calculations. As in previous years the 2008 report on Turkey, despite identifying the progress achieved by the Turkish government, also emphasized the areas in which serious problems remained. Among other issues, the report referred to the rise in documented cases of torture, unlawful killings by security forces, poor conditions in prisons, interference in judiciary independence, limitations on the freedom of expression, restrictions on non-Muslim groups, violence against women, child marriages, and corruption (www.state.gov, February 25).

    Turkey’s mainstream media outlets that are critical of the governing Justice and Development Party (AKP), especially those controlled by the Dogan Media Group (DMG), covered the report more extensively than in previous years. In particular, they highlighted parts of the report that condemned the government’s activities that allegedly contravened freedom of expression and created an environment of self-censorship for the media. Indeed, the report cited Prime Minister Recep Tayyip Erdogan’s lawsuits against journalists and cartoonists, his row with the DMG, and the fact that several large companies owning news agencies had instructed their journalists not to criticize the government for fear of losing business.

    Attention to the report in the Turkish media has as much to do with its timing and the ongoing political discussions in the country as it does with the report’s intrinsic merits. The AKP government has been engaged in a fight with the DMG, which is unlikely to ease anytime soon (EDM, February 20). Against this background, the report’s criticism of certain practices provided much-needed ammunition to the DMG’s struggle against the government. The DMG used the report to make a case that the group’s own criticisms of government policies were not a result of parochial business interests but rather were objective assessments. Even liberal columnist Mustafa Akyol, a supporter of Erdogan, concluded that “the prime minister needs a moment of reflection and self-criticism. He needs to soften his rhetoric and rationalize his focus” (Hurriyet Daily News, March 5).

    In response, Erdogan maintained that the heavy dose of censure in the report was a result of “an international campaign” by certain circles. Without naming the DMG, he was implying that the media group was behind this campaign. “I will ask Hillary Clinton about the report,” Erdogan added, referring to his forthcoming meeting with Clinton on March 7 (Taraf, March 1).

    It is no surprise that Erdogan’s attitude came under attack. Sedat Ergin claimed that the report had been prepared a long time before the recent tax row, and Erdogan’s accusation of an “international campaign” by the DMG was simply nonsense (Milliyet, March 6). Likewise, Burak Bekdil noted that Erdogan had continuously preferred to ignore the DMG’s critical news coverage by claiming that the DMG’s critical viewpoint was in line with that of the opposition Republican People’s Party (CHP). Arguing that the correctness of the DMG’s stance was affirmed by the report, Bekdil maintained that the organization followed a neutral line. Bekdil then sought to ridicule Erdogan, saying, “Apparently, the CHP partisans have not only infiltrated the DMG but also crossed the Atlantic and successfully penetrated the U.S. State Department” (Hurriyet Daily News, March 4).

    During his private meeting with Clinton (EDM, March 9), Erdogan indeed raised this issue. According to Hurriyet, the flagship publication of the DMG, Clinton said that references to democracy, freedom of the press, and human rights reflected the high value Washington placed on these institutions; and she added that freedom of the press was an essential part of democracy (Hurriyet, March 7; Vatan, March 8).

    Other media outlets concluded, however, that Clinton had failed to challenge Erdogan on this issue forcefully. In an interview with CNNTurk, Clinton confirmed that she had discussed the report with Erdogan. Noting that such reports were prepared annually, Clinton said, “I fully understand…no politician ever likes the press criticizing them…overall…we think that Turkey has made tremendous progress in freedom of speech and freedom of religion and human rights, and we’re proud of that” (www.cnnturk.com, March 8). This tacit support for Erdogan was strongly criticized by The Washington Post, which wrote that Clinton had put economic and strategic interests before human rights advocacy and undermined the State Department’s efforts in this area (The Washington Post, March 10).

    Turkish Foreign Minister Ali Babacan, in an interview with NTV, attributed the publicity about the report to efforts by the DMG, without naming it, and noted that it was not a major item during the Erdogan-Clinton meeting. He went on to say that “The State Department too could make a mistake. This is not a report written by Clinton herself; it was written by lower-ranking officials, and there is no need to make a big fuss about it” (www.ntvmsnbc.com, March 8).

    The controversy over the coverage of the report shows how the commitment to human rights on the part of Turkish political actors remains tenuous. When it suits their agenda, they do not hesitate to benefit from coalitions they built with worldwide human rights and democracy advocacy networks to exert pressure on their opponents. When international criticism works against their interests, however, they denounce other groups’ resorting to similar tactics of using international leverage and label them as insignificant, or manipulated.

    https://jamestown.org/program/human-rights-in-turkey-old-wine-in-a-new-bottle/

  • Turkish-American “Strategic Partnership”: On the Way to Rejuvenation?

    Turkish-American “Strategic Partnership”: On the Way to Rejuvenation?

    Publication: Eurasia Daily Monitor Volume: 6 Issue: 45 March 9, 2009 01:42 PM Age: 3 hrs Category: Eurasia Daily Monitor, Foreign Policy, Turkey, Home Page, Featured By: Saban Kardas

    U.S. Secretary of State Hillary Clinton (left) greets Turkish Foreign Minister Ali Babacan (Photo: EPA)

    U.S. Secretary of State Hillary Clinton’s visit to Ankara on Saturday, the highest-level direct contact between the administration of President Barack Obama and the Turkish government so far, highlighted the value each side places on sustaining the Turkish-American partnership. In addition to her meetings with President Abdullah Gul and Prime Minister Recep Tayyip Erdogan, Clinton met with Foreign Minister Ali Babacan after which the two held a press briefing and made a joint statement about strengthening the bilateral relationship. Clinton also visited Ataturk’s mausoleum in Ankara and appeared on a popular show on the private NTV channel.

    The joint declaration stated that the parties “reaffirmed the strong bonds of alliance, solidarity, and strategic partnership…as well as the commitment of both countries to the principles of peace, democracy, freedom, and prosperity enshrined in the Shared Vision and Structured Dialogue document agreed to in July 2006” (www.turkey.usembassy.gov, March 7).

    Clinton had a chance to discuss a wide range of issues with Turkish officials including the Middle East peace process, Iraq, Afghanistan, energy security, the global financial crisis, terrorism, developments in the Balkans and the Caucasus, Turkey’s EU membership process, and the Cyprus problem. The continuing discussions on using Turkish territory as a possible route for US troops leaving Iraq reportedly occupied the major part of Clinton’s agenda during her private discussions with Erdogan and other Turkish officials (ANKA, March 8). In response to a question about Turkey’s possible role in the U.S. withdrawal plans, Clinton noted that the process was still in its initial phases and Washington would maintain discussions with Turkey on the subject. Babacan repeated his earlier remarks on the issue, emphasizing that talks at the technical level were already underway and that Turkey had a constructive approach to the subject (Anatolian News Agency, March 7).

    Another major item discussed was Turkey’s contributions to resolving conflicts in the region. Clinton reiterated American appreciation of Turkey’s role with regard to the Palestine issue and the indirect talks between Syria and Israel. Both sides said that they would work together to achieve a comprehensive and sustainable peace in the region. Likewise, Clinton expressed her country’s support for the process of reconciliation between Turkey and Armenia that Ankara initiated. Clinton also noted that Washington found Gul’s visit to Iran this week important (Sabah, March 8). Although some Turkish sources speculated that Gul might have carried messages from Washington to Tehran (Hurriyet, March 9), this has yet to be confirmed officially.

    Overall, statements from both sides stress that the two parties had useful discussions and found mutual ground on issues of common concern, which might herald a new era in Turkish-American relations. Achieving consensus on strategic matters aside, a major roadblock in Turkish-American relations has been the public animosity toward the United States and how to reverse the anti-Americanism that became strongly engrained in the Turkish body politic during the Bush years. Cognizant of these challenges, the American side did its best to appeal to the Turkish people, as reflected in Clinton’s appearance on a TV show targeting female viewers (EDM, March; www.ntvmsnbc.com, March 7).

    Likewise, Clinton capitalized on Obama’s vision of change to emphasize that Turkish-American relations were entering a new phase. She announced that Obama would visit Turkey in a month. A White House official said that Obama’s trip “will be an important opportunity to visit a NATO ally and discuss shared challenges,” adding, “It will also provide an opportunity to continue the president’s dialogue with the Muslim world” (www.cnn.com, March 7). It is not yet known, however, whether the speech Obama had promised to deliver in a Muslim capital during his first 100 days in office will be given in Ankara or in the capital of another Muslim country. Given the positive feelings of the Turkish people toward Obama’s election as president (EDM, November 7), the visit might indeed help improve the deteriorating American image in Turkey.

    A similar move in public diplomacy concerns attempts to diversify bilateral relations on the societal level. The joint statement announced that a new program called “Young Turkey/Young America: A New Relationship for a New Age” would be launched. It would establish ties between emerging young leaders from both countries “to develop initiatives that will positively impact people’s lives and invest in future ties between the leadership of [the] two countries” (www.turkey.usembassy.gov, March 7).

    The Turkish side was apparently satisfied with the trip. Speaking on the private NTV channel, Babacan said, “Turkish-American relations have entered a new phase … Our foreign policy priorities are completely in line with each other. In the new phase, the focus is on consultation and cooperation.” Underlining Turkey’s willingness to work together with the United States as partners, Babacan added, “Clinton emphasized Turkey as a strategic partner. She accentuated this more powerfully than the previous administration, and the new administration is aware of Turkey’s importance.” Nonetheless, Babacan debunked the overly optimistic expectations that Clinton’s visit indicated that Obama might not use the word “genocide’ in his Armenian Memorial Day address in April, This possibility was not completely off the table, he said (www.ntvmsnbc.com, March 8).

    In the 1990s, under the Bill Clinton presidency, the Turkish-American relationship flourished in many areas and came to be called a strategic partnership. The Iraq War and ensuing developments turned “strategic partnership” into an oxymoron to describe Turkish-American relations. Despite efforts to save the relationship from further deterioration, disagreements between Ankara and Washington were difficult to bridge. The 2006 Shared Vision document, which the Babacan-Clinton joint statement referred to, for example, outlined a framework of close cooperation and structured dialogue to regulate bilateral relations. It was not put into practice, however, and relations hit a low point in 2007, when Washington criticized the Turkish government for its silence on anti-Americanism in the country and Ankara censured Washington’s inactivity toward PKK terrorism. This time, there appears to be a more solid basis for rejuvenating the partnership: strong references to the 2006 document after a long break are coupled with both sides’ carefully worded statements, which take each other’s sensitivities into account, and a determination to address problems through dialogue without playing blame games. With political will on both sides, it is not be wrong to assume that finally they may not only “talk the talk” but also “walk the walk.”

    https://jamestown.org/program/turkish-american-strategic-partnership-on-the-way-to-rejuvenation/

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  • A Race to the Bottom for Turkish Democracy

    A Race to the Bottom for Turkish Democracy

    Bickering Between Erdogan and Baykal: A Race to the Bottom for Turkish Democracy?

    Publication: Eurasia Daily Monitor Volume: 6 Issue: 42

    March 4, 2009
    By: Saban Kardas

    The quality of political discussions in Turkey is hitting the bottom as local elections, slated for March 29, approach. Although candidates will be running for municipal posts, the aggressive campaigning by political parties has turned the election race into a national referendum on the governing Justice and Development Party (AKP)’s performance in power (EDM, December 3). The importance attached to the election results has, in turn, heightened the debate between not only the mayoral candidates but also party leaders, leading to an exchange of harsh verbal attacks. The latest row in this war of words was between Deniz Baykal, the leader of the main opposition Republican People’s Party (CHP), and Recep Tayyip Erdogan, the leader of the AKP and the current prime minister.

    Determined to win a decisive victory in the municipal elections, Erdogan’s AKP began the election marathon earlier than its rivals. Talking to large crowds at election rallies, Erdogan challenged the leaders of the opposition parties and accused them of being afraid to go to the people. In response, Baykal and Devlet Bahceli, the leader of the Nationalist Action Party, started to appear in election meetings organized by their parties. Bahceli rejected Erdogan’s charges and maintained that his party was always in harmony with the people. He claimed, moreover, that Erdogan was using the state’s resources, including planes and helicopters, to mobilize support for his own party’s candidates (Milliyet, March 2). Similar charges against the government are being made by other parties as well, as the AKP’s use of state resources puts opposition candidates at a disadvantage (Radikal, February 24; EDM, February 2).

    In the last week of February, the bickering between Erdogan and Baykal took a confrontational and nasty turn, with both leaders using very harsh words. Baykal maintained that the crowds Erdogan talked to were brought together by state resources, and he invited Erdogan to a TV debate so that they both could discuss everything openly. Erdogan declined the invitation and challenged Baykal to meet people on the ground (ANKA, February 22).

    Against this background, at an election rally on February 28, Baykal lambasted Erdogan’s indifference to criticism and maintained that by constantly bashing the opposition and the media in the election rallies, Erdogan avoided talking to the people about the real economic and social problems. Baykal also maintained that although his party had used a cooperative approach and proposed a package of suggestions about how to deal with the economic crisis in response to Erdogan’s earlier challenge, Erdogan ridiculed Baykal and simply responded to him by saying “mind your own business,” implying that Baykal would never come to power. Baykal went on to say that “this demeanor is maganda style. This is not the demeanor expected from a prime minister… We are used to seeing the elegance, kindness, and respect of past leaders. This kulhanbeyi style, this maganda style may look good on Erdogan [as a person], but it does not look good on [Erdogan as] the Prime Minister of the Turkish Republic.” In addition to his use of the words maganda (a pejorative term in Turkish to describe crass, rude and uncultured persons) and kulhanbeyi (rowdy), Baykal quoted a popular Turkish saying to disparage Erdogan: “You have become a prime minister, but you could not become a man (adam). You will hardly become a man, because you don’t know what you are talking about. You say one thing today, quite another thing tomorrow” (www.nethaber.com, February 28).

    Speaking at his own party’s rallies in other towns on Sunday, Erdogan said that although he knew very well how to respond to Baykal, his code of ethics and upbringing would not allow him to use such words in office. He said that he would remain a gentleman and seek redress in the courts. Maintaining a polemical tone, however, Erdogan says that after he quits politics, he might respond to Baykal with similar language. “My nation chooses a real man as its prime minister,” Erdogan added (Cihan Haber Ajansi, March 1; Aksam, March 2).

    On March 2 Erdogan’s attorneys filed defamation lawsuits against Baykal and Mustafa Ozyurek, the speaker and chief accountant of the CHP, who also used the word maganda during a press conference on February 27 to describe Erdogan’s conduct. The attorneys maintained that Ozyurek “aimed to attack Erdogan’s personal rights and [make] completely erroneous accusations of the most insulting nature” that could not be considered freedom of speech (Anadolu Ajansi, March 2; Today’s Zaman, March 3).

    Responding to these developments in an address to the CHP’s parliamentary group, Baykal defended his remarks and maintained that he had not insulted Erdogan personally in any way. Citing several instances in which Erdogan had insulted him and others, Baykal said that although Erdogan had sued him several times in the past for minor things, he himself had avoided resorting to the courts as a means of resolving their disputes. He noted that he had only criticized the prime minister’s behavior and words and would continue to do so as long as Erdogan acted in a this manner. Referring to Erdogan’s words that he would watch his deportment as long as he was prime minister, Baykal added that his reaction to Erdogan might have served a purpose after all by reminding the prime minister of his responsibilities in office (www.cnnturk.com, March 3).

    This case of bickering between Erdogan and Baykal is neither the first nor the last one. The history of Turkish political life is rich in similar episodes of political leaders engaging in a war of words against each other. This recent row, however, perhaps more than any previous one, amounts to a race to the bottom for Turkish democracy. The entire election campaign has been dominated by calls for duels, charges of corruption, and mutual accusations about the leaders’ demeanor—all overshadowing substantive public deliberation on political issues. It is, moreover, ironic that local election campaigns are being hijacked to such a great extent by national political considerations and populism. Regardless of which party wins the next elections, Turkish democracy might being the biggest looser.

    https://jamestown.org/program/bickering-between-erdogan-and-baykal-a-race-to-the-bottom-for-turkish-democracy/

  • George Mitchell Visits Ankara

    George Mitchell Visits Ankara

    Publication: Eurasia Daily Monitor Volume: 6 Issue: 40
    March 2, 2009
    By: Saban Kardas

    On February 25 and 26 George Mitchell, President Barack Obama’s special envoy to the Middle East, visited the Turkish capital of Ankara on his second tour of the region to discuss the future of peace initiatives in the area. Mitchell’s visit is to be followed up by Secretary of State Hillary Clinton’s trip to a Gaza donors’ conference in Egypt on March 2. Mitchell held meetings with Turkish officials, including President Abdullah Gul, Prime Minster Recep Tayyip Erdogan, and Foreign Minister Ali Babacan, and discussed Turkey’s contributions to the peace process, as well as bilateral issues between Turkey and the United States.

    Although Mitchell had been expected to go to Turkey during his first visit to the region, he was unable to do so, according to the American Embassy in Ankara, because of technical reasons and scheduling issues. Turkish sources critical of the governing Justice and Development Party’s (AKP) Middle East policies maintained that the postponement might have been a rebuke by Washington for Turkey’s pro-Hamas policies during the Gaza conflict and its aftermath, especially Erdogan’s confrontation with Israeli President Shimon Peres at Davos. Foreign Ministry officials denied those speculations, saying that the visit would take place in the future (Milliyet, January 31).

    The trip and the surrounding circumstances offer signs of a thawing of relations between Turkey and the United States. Statements from American diplomats with regard to Mitchell’s visit to Ankara emphasized Washington’s appreciation of Turkey’s prior diplomatic efforts. U.S. Ambassador to Turkey James Jeffrey told reporters that Turkey had played a key role in many crisis spots in the Middle East, including Iraq, Syria, Israel, and Lebanon. Jeffrey also emphasized that Washington supported these initiatives and was willing to seek coordination with Ankara (Anadolu Ajansi, February 25).

    Following his meetings in Ankara, Mitchell told reporters that Washington viewed Turkey as a key partner for Obama’s peace efforts in the Middle East. “As an important democratic nation with strong relations with Israel, [Turkey] has a unique role to play and can have significant influence on our efforts to promote a comprehensive peace in the Middle East…. It is important for us now to look forward and to work together to build a secure, prosperous future for all of the people of this region.” Mitchell also reaffirmed Washington’s support for Ankara’s efforts to achieve a comprehensive peace and two-state solution (Anadolu Ajansi, February 26; Today’s Zaman, February 27).

    Foreign Minister Babacan had a telephone conversation with Clinton ahead of the Gaza donors’ conference. They reportedly had a warm conversation, and Clinton expressed her support for Turkey’s leading role in the region. The two politicians will meet during the conference in Egypt; and Clinton may visit Ankara following the conference, but an exact date for the trip has yet to be confirmed (Hurriyet Daily News, February 26).

    The Turkish media’s coverage of recent developments appears to support the government’s arguments that the new administration in Washington may not be troubled by the recent course of Turkish diplomacy in the Middle East. Following Turkey’s harsh criticism of Israeli policies and its departure from transatlantic consensus on controversial issues, Western observers have been debating whether Turkey was “lost” to the West and, if so, who lost it. One line of criticism maintains that the AKP government’s growing orientation toward the Middle East and its independent foreign policy are a result of its roots in Islamist politics. Therefore they argue that through its pro-Hamas attitude, Turkey has lost its neutrality and can no longer play a mediating role in Israel’s problems with its neighbors.

    Other observers instead refer to the misguided U.S. policies during the Bush administration, which alienated Ankara along with many other allies, as the major reason for the occasional divergence of positions. Moreover, they point to a determination on the part of Ankara to pursue a more autonomous foreign policy that better reflects Turkish national interests. Regarding Turkey’s policy in the Arab-Israeli conflict, they maintain that Israel’s excessive use of force mobilized social groups across the political spectrum, and Ankara’s criticism of Israel cannot be reduced to the AKP’s parochial ideological orientation.

    The AKP government too has been seeking to present its policies in the Middle East as driven by the country’s national interests and reflective of a broader consensus in society. The declared American approval of Turkey’s role in the Middle East seemingly supports the AKP’s previous arguments about the correctness of its stance. It still remains unclear, however, how far Washington will go along with Turkey’s leadership role in the region.

    A major driving theme of the Turkish government’s policy during the Israeli offensive in Gaza was its argument that Hamas should be part of any attempt to find a solution to the conflict in the Middle East. Erdogan repeatedly stressed that he would be a major advocate of the Palestinians in international forums (EDM, January 5). During Mitchell’s discussions in Ankara, he was again told by Erdogan that exclusion of Hamas from U.S. initiatives would not be realistic. Erdogan noted that since Hamas came to power, Turkey had encouraged it to follow more peaceful policies and claimed that Hamas had made some progress in that regard. Erdogan asked the United States to approach all parties from an equal distance and respect Hamas as an elected government (Cihan Haber Ajansi, February 26).

    By sending signals that it is ready to coordinate with Turkey’s diplomatic initiatives, Obama’s foreign policy team is showing that it is prepared to cooperate with regional allies and will take their interests into account. Whether it will also take their opinions into account, however, is quite another issue. The extent to which Washington is willing to negotiate with Hamas as a shareholder in the Middle East peace process and reconstruction of Gaza may also provide a real test of how far it appreciates Ankara’s new foreign policy orientation.

    https://jamestown.org/program/george-mitchell-visits-ankara-ahead-of-gaza-reconstruction-summit-mends-fences-with-turkey/

  • Poor Richard’s Report

    Poor Richard’s Report

    Poor Richard’s Report

    Over 300,000 readers
    My Mission: God has uniquely designed me to seek, write, and speak the truth as I see it. Preservation of one’s wealth while providing needful income is my primary goal in these unsettled times. I have given the ability to evaluate study, and interpret world and national events and their influence on future of the financial markets. This gift allows me to meet the needs of individual and institution clients. .

    LET’S HAVE FUN !!!
    Recall Congress !!!!

    The stock market gave its first internal sell signal sometime in 1998 when the Lowery Reports selling pressure line crossed above the buying pressure line. This meant the sellers were in control. Since Price to earnings ratio’s were at an all time high and about 24 years since the start of the last major bear market my internal clock set off all kinds of alarms. The external sell signal came on March 10, 2000 when the Clinton Administration went after Microsoft as a red herring to forget Al Gore’s problem of money laundering with the Chinese in his bid for the presidency. Microsoft’s did not contribute to either party so they were a prime candidate. That act was the pin that burst to dot.com bubble and the real start of the major bear market that we are in today. This is when I started selling all big cap stocks for the next 6 years.
    I have now been in this business one way or another for over 50 years. During that time I have read, heard and experienced many challenges. My noggin is a mishmash of facts, figures and clouded forms that only take shape when the right message enters my pea pod brain.
    I have been try to write this letter for a week now, but the write words escaped me because inside I knew I was wrong even though I hated to admit it. That is why I am keeping the title of this letter that you see above.
    The fact is that we are in serious trouble. I spend more time than most reading about the Federal Reserve. I have written in the past that the Chairman and his board can do anything they want to protect or improve our economy.
    Dr Bernanke has a habit of foreshadowing possible future events. One should always take note of his speeches. His most famous one was when he spoke about combating a possible deflating economy. He said that he would fly over the country in a helicopter dropping dollar bills. The press mocking him gave him the nickname “Helicopter Ben”.
    The first clue we were I trouble was when the Congress passed the rebates early in 2008 without much of a debate. Our representatives had been fighting, clawing, spitting and chewing each other to tiny bits. Now they were pals? Then came TARF and BARF for the banks, we had to bail out the big guys. With type of news the dollar should sink and gold go to 2000.
    So President Obama wanted a bailout bill real fast, 800 pages of pork and long term goodies that will cost us about $100 trillion dollars before we are through. I personally felt an outrage that our leaders did even to bother to read it. Seven democratic Congressmen voted against it and 3 Republican Senators voted for it.
    Then I saw a picture of Tim Geithner, our new Secretary of the Treasury. He was being groomed to be the next Chairman of the Federal Reserve. While others got squashed for not paying their taxes , he slid through that political barrier. Why I asked myself. Maybe because we are really in deep trouble and our politicians are scared? They know something we don’t? THEN HIS PICTURES CAME BACK TO HAUNT ME. He never smiles. He has sharp eyes like a falcon seem the pierce the air. The grey squirrels on the ground know the feeling when they spot the silhouette coming at them. His eyes are of fear, incomprehensive astonishment of how bad are system is. As a former President of the all powerful Federal Reserve Bank of NY and the only permanent member of the FOMC (Federal Open Market Committee) as Vice Chairman, his ivory tower office could not see the little bits and pieces crumbling around him. His full blown ideas of how to save our banking system deflated along with our economy. We are in a world wide debt crisis. European banks were leverage more than ours. Each bubble bursting is deflationary because all those excess inventories have to be worked off. The credit cards are the next one- Senator Dodd where are you with an new Usury law? Supported by Lobbyist (Bribers)?
    So in the Panic of 1907 when JP Morgan was the unquestioned leader and closed several banks and merged several others with out a peep from Washington or in New York City, today we face the same from DR Ben. This time we are finding out a little bit at a time. Chinese water torture. That is why President Obama has been bad mouthing the economy instead of trying to prop it up. Is he preparing us for something even worse?
    We won’t have a depression because Dr Bernanke did his doctorate on the great depression and how to avoid making the same mistake. Believe me, every central banker his worth had read it and underlined it. But we all have to change our habits and thinking. Stocks are dead meat. They are a source of cash. Need money? Sell some stock. Debt instruments are now the game. Corporate bonds have first call on a company’s assets. Then preferred stockholders come next. If anything is left over the common stock holders get the crumbs off the table. By the way – there all kinds of studies being promoted that T Bills have outperformed the market over a 20 year period, timing your stock purchase in very important.
    Now my friend; do not despair. Losses in stocks can be carried forward (so far at the printing) so that gains can be offset by losses
    Let me show you. Corporations that are solvent and viable will want to demonstrate this by reducing their debt. They can buy some back in the open market, or they can call the entire debt issue in and retire it. This is an excellent option in a deflationary economy. For us as investors finding those bonds or preferred’s selling below the call price could put us in what Obama calls the rich class. I mean if you are going over $250,000 you might as well go big time.
    Now is the time for all our politicians to back up the President. When the President presents his list of programs to be canned because they are outdated and pure pork and do not really contribute to the economy the Congress must back him up. Those that refuse to cut wasteful projects must be recalled. There might have been better ways, but this the one he chose. Failure to back him could send us down even faster. Consider this war-an economic war. Those who balk are traitors. They are traitors in a time of need. During the next two years if it obvious that some programs are not working then they should be stopped. If they refuse to admit failure then we can boot them all out in two years and rescind these acts. Being a registered Republican, these are not easy words to write, but we are at a defining moment in our history and I feel we must show unity or else we won’t be able to sell any bonds to finance these expenditures.
    By the way, this economy stinks world wide. The consumer is tapped out and if we don’t watch it as a country we will be too. We could be running into a debt brick wall a few years from now. I sure hope not. Cash is King!
    Today I would not own any money market funds except U S Government funds. There are too many funds and you don’t know where the next bankruptcy will come from. There has already been one fund that “broke a dollar”, but that was quickly made up. Cold hard cash is good, because later on you will be able to pick up tasty bargains at tremendous discounts
    I would also look at preferred stocks. They have second call on a corporation’s assets right after the bond holders. You have to be choosy. I prefer AMERCO Pfd A which is the holding company for U-Haul Trailer Company. It is listed on the NYSE and trades just under 20. The yield is just over 10% and 85% is tax free and they quarterly. You have an added protection in that they have a covenant for dividend in arrears. They must make up any dividends in arrears before they can resume regular payments. Here is the kicker. The call price is $25, if you paid 20 or under you stand to make over 30% gain. This is important because I believe any corporations will go all out to reduce their debt burdens. This will instill consumer confidence and support the common stock.
    So those of you who feel beaten down in a mutual fund here is a long term solution to your problem.
    It is important that you look around your own area and check out local companies. As an individual living in the community corporate officers like to brag at parties etc and just by common sense deduction and no inside information you might yourself a solid winner.
    ` Remember – never give up – there is a light at the end of the tunnel – it may be a pen light from here , but the close we get the brighter it shine. They economy will rebound, but the growth will be more subdued and the price to earnings ratio’s will keep contracting until this market is completely over sold and undervalued.
    These are formidable times which require much discussion. My last letter I tried to cover too much at one time so I will write more often , and try to limit my topic.
    Cheerio !!!

    Richard C De Graff
    256 Ashford Road
    RER Eastford Ct 06242
    860-522-7171 Main Office
    800-821-6665 Watts
    860-315-7413 Home/Office
    rdegraff@coburnfinancial.com

    This report has been prepared from original sources and data which we believe reliable but we make no representation to its accuracy or completeness. Coburn & Meredith Inc. its subsidiaries and or officers may from time to time acquire, hold, sell a position discussed in this publications, and we may act as principal for our own account or as agent for both the buyer and seller.