Turkish Forum

Category: Authors

  • ETHICS GROUP ASKS FOR FEDERAL INVESTIGATION OF ARMENIAN ORGANIZATION

    ETHICS GROUP ASKS FOR FEDERAL INVESTIGATION OF ARMENIAN ORGANIZATION

    (update)

    Armenian-American group accused of lobbying violations

    McClatchy Newspapers as published on MiamiHerald.com, SacramentoBee.com, AnchorageDailyNews.com

    18 Feb 2009 // Michael Doyle // Fresno Bee – WASHINGTON – A high-profile ethics organization on Wednesday asked federal agencies to investigate the Armenian National Committee of America for alleged campaign finance and lobbying violations. [1]

    In a seven-page complaint, the Citizens for Responsibility and Ethics in Washington asserts the Armenian-American group failed to register either as a domestic lobbying group or as a foreign agent despite its political work and its close ties to an Armenian political party.

    The Armenian National Committee of America is one of the country’s most prominent ethnic organizations, and has worked closely with San Joaquin Valley lawmakers on Armenian genocide commemorative resolutions.

    “We’re not saying they should be out of business,” said Melanie Sloan, a former federal prosecutor who heads the private Citizens for Responsibility and Ethics in Washington. “We’re saying there are laws, and they should be following them.”

    Sloan attached 161 pages of exhibits in support of the allegations. [2]

    Armenian National Committee of America officials denounced the charges as unfounded.

    “We’ve taken a preliminary look at [the] allegations, and they are without merit and full of inaccuracies and misrepresentations,” ANCA Communications Director Elizabeth Chouldjian said.

    Chouldjian declined to undertake a point-by-point rebuttal of the complaint, but she said “the real story is why this is being brought up now.” She noted the complaint was filed about two months before the annual April 24 Armenian genocide commemoration; she did not elaborate on a potential motive for the complaint’s timing.

    The Armenian National Committee of America describes itself on its web site as “the largest and most influential Armenian American grassroots political organization.” It is active in regions with large Armenian-American populations, including New Jersey, Florida and California.

    Currently, Rep. George Radanovich, R-Mariposa, and other ANCA allies are rallying renewed support for an Armenian genocide resolution that collapsed last Congress. Under presidents of both parties, the Pentagon and State Department have opposed the resolution as an insult to Turkey, which denies that mass deaths between 1915 and 1923 amounted to a genocide.

    “Circumstantial evidence indicates that ANCA and its current or former executive directors … have lobbied Congress and the executive branch heavily with regard to perennial congressional Armenian genocide resolutions,” the complaint states.

    The complaint cites interviews and press releases, in which ANCA leaders tout their efforts to sway Sen. Bill Nelson, D-Fla., among others.

    The Armenian National Committee of America has not registered as a lobbyist with either the House or Senate. Failure to register can be a felony offense, though Sloan said potential problems are often resolved simply by registering after the fact.

    The Armenian Assembly of America, the nation’s other prominent Armenian-American organization, is registered and reported spending $182,000 on lobbying last year.

    “These are the rules, and everybody has to follow them,” Sloan said.

    The complaint asks the Internal Revenue Service to review potential tax violations and the Justice Department to open a criminal probe. The complaint also asks the House and Senate to open “companion inquiries” into the lobbying allegations.

    Citing press accounts, a U.S. embassy study and the research of Heather Gregg, a professor at the Naval Postgraduate School in Monterey, the complaint contends ANCA is “an arm” of the Armenian Revolutionary Federation. The latter is a political party that is part of Armenia’s ruling coalition.

    Agents of foreign political parties are required to register with the Justice Department. ANCA can endorse political candidates, as a group organized under section 501 (c)(4) of the federal tax code. The affiliated ANCA-Western Region, based in Glendale, cannot because it is a 501 (c)(3) organization. The complaint alleges the Western Region office nonetheless participated in the national organization’s candidate endorsements, in part by sharing a Web site.

    Sloan said the complaint arose from a tip received late last year.

    Sloan’s non-profit, six-year-old ethics group claims no partisan affiliation and has previously filed ethics complaints about both Democratic and Republican lawmakers. Its past targets have ranged from former Tracy area GOP congressman Richard Pombo to former Vice President Dick Cheney.

    A WORD FROM CREW EXECUTIVE DIRECTOR MELANIE SLOAN
    “ Since 2003, CREW has closely monitored government ethics, bringing egregious conduct to light and holding public officials accountable for their misconduct. On our website you’ll find exhaustively investigated reports on corruption prepared by our research staff, high-impact lawsuits filed by our legal team, as well as the latest national ethics news. Thank you for your support. “
    Melanie Sloan, Executive Director
    WALLS ARE GETTING CLOSER AROUND THE ARMENIAN FALSIFIERS
    For decades, the Armenians lobbies lied, cheated, falsified, deceived, begged, screamed, demanded, and destroyed, without shame, remorse, or consequences. I don’t know about the first two, but it seems, the last item is finally being taken care of.
    I want to know, for instance, if, when, and how much financial help these Armenian front organizations provided to some vile politicians known for their passionate support of bogus Armenian genocide and how those monies helped shape American policy toward Armenian and Turkey. That would be a gross violation of US laws that say non-profit NGOs cannot engage in politics in a manner to influence policy or support candidates .
    Armenians falsifiers arrogantly and shamelessly made the bed; now they should lie in it!
    ***
    [1] Letter of complaint written by CREW about the Armenian non-profit ANCA to the Attorney General, IRS, the Secretary of the U.S. Senate, and the Clerk of the U.S. House of Representatives, all located in Washington DC (7 pages.)

    [2] Armenian associations, organizations, groups, and churches and their lobby activities are exposed here (161 pages.)

  • ETHICS GROUP ASKS FOR FEDERAL INVESTIGATION OF ARMENIAN ORGANIZATION

    ETHICS GROUP ASKS FOR FEDERAL INVESTIGATION OF ARMENIAN ORGANIZATION

    Armenian-American group accused of lobbying violations

    // 18 Feb 2009
    McClatchy Newspapers as published on MiamiHerald.com, SacramentoBee.com, AnchorageDailyNews.com

    18 Feb 2009 // Michael Doyle // Fresno Bee – WASHINGTON – A high-profile ethics organization on Wednesday asked federal agencies to investigate the Armenian National Committee of America for alleged campaign finance and lobbying violations.

    In a seven-page complaint, the Citizens for Responsibility and Ethics in Washington asserts the Armenian-American group failed to register either as a domestic lobbying group or as a foreign agent despite its political work and its close ties to an Armenian political party.

    The Armenian National Committee of America is one of the country’s most prominent ethnic organizations, and has worked closely with San Joaquin Valley lawmakers on Armenian genocide commemorative resolutions.

    “We’re not saying they should be out of business,” said Melanie Sloan, a former federal prosecutor who heads the private Citizens for Responsibility and Ethics in Washington. “We’re saying there are laws, and they should be following them.”

    Sloan attached 161 pages of exhibits in support of the allegations.

    Armenian National Committee of America officials denounced the charges as unfounded.

    “We’ve taken a preliminary look at [the] allegations, and they are without merit and full of inaccuracies and misrepresentations,” ANCA Communications Director Elizabeth Chouldjian said.

    Chouldjian declined to undertake a point-by-point rebuttal of the complaint, but she said “the real story is why this is being brought up now.” She noted the complaint was filed about two months before the annual April 24 Armenian genocide commemoration; she did not elaborate on a potential motive for the complaint’s timing.

    The Armenian National Committee of America describes itself on its web site as “the largest and most influential Armenian American grassroots political organization.” It is active in regions with large Armenian-American populations, including New Jersey, Florida and California.

    Currently, Rep. George Radanovich, R-Mariposa, and other ANCA allies are rallying renewed support for an Armenian genocide resolution that collapsed last Congress. Under presidents of both parties, the Pentagon and State Department have opposed the resolution as an insult to Turkey, which denies that mass deaths between 1915 and 1923 amounted to a genocide.

    “Circumstantial evidence indicates that ANCA and its current or former executive directors … have lobbied Congress and the executive branch heavily with regard to perennial congressional Armenian genocide resolutions,” the complaint states.

    The complaint cites interviews and press releases, in which ANCA leaders tout their efforts to sway Sen. Bill Nelson, D-Fla., among others.

    The Armenian National Committee of America has not registered as a lobbyist with either the House or Senate. Failure to register can be a felony offense, though Sloan said potential problems are often resolved simply by registering after the fact.

    The Armenian Assembly of America, the nation’s other prominent Armenian-American organization, is registered and reported spending $182,000 on lobbying last year.

    “These are the rules, and everybody has to follow them,” Sloan said.

    The complaint asks the Internal Revenue Service to review potential tax violations and the Justice Department to open a criminal probe. The complaint also asks the House and Senate to open “companion inquiries” into the lobbying allegations.

    Citing press accounts, a U.S. embassy study and the research of Heather Gregg, a professor at the Naval Postgraduate School in Monterey, the complaint contends ANCA is “an arm” of the Armenian Revolutionary Federation. The latter is a political party that is part of Armenia’s ruling coalition.

    Agents of foreign political parties are required to register with the Justice Department. ANCA can endorse political candidates, as a group organized under section 501 (c)(4) of the federal tax code. The affiliated ANCA-Western Region, based in Glendale, cannot because it is a 501 (c)(3) organization. The complaint alleges the Western Region office nonetheless participated in the national organization’s candidate endorsements, in part by sharing a Web site.

    Sloan said the complaint arose from a tip received late last year.

    Sloan’s non-profit, six-year-old ethics group claims no partisan affiliation and has previously filed ethics complaints about both Democratic and Republican lawmakers. Its past targets have ranged from former Tracy area GOP congressman Richard Pombo to former Vice President Dick Cheney.

    A WORD FROM CREW EXECUTIVE DIRECTOR MELANIE SLOAN
    “ Since 2003, CREW has closely monitored government ethics, bringing egregious conduct to light and holding public officials accountable for their misconduct. On our website you’ll find exhaustively investigated reports on corruption prepared by our research staff, high-impact lawsuits filed by our legal team, as well as the latest national ethics news. Thank you for your support. “
    Melanie Sloan, Executive Director
    WALLS ARE GETTING CLOSER AROUND THE ARMENIAN FALSIFIERS
    For decades, the Armenians lobbies lied, cheated, falsified, deceived, begged, screamed, demanded, and destroyed, without shame, remorse, or consequences. I don’t know about the first two, but it seems, the last item is finally being taken care of.
    I want to know, for instance, if, when, and how much financial help these Armenian front organizations provided to some vile politicians known for their passionate support of bogus Armenian genocide and how those monies helped shape American policy toward Armenian and Turkey. That would be a gross violation of US laws that say non-profit NGOs cannot engage in politics in a manner to influence policy or support candidates .
    Armenians falsifiers arrogantly and shamelessly made the bed; now they should lie in it!

  • Turkish Government Under Fire

    Turkish Government Under Fire

    Turkish Government Under Fire for Delaying Response to the Global Financial Crisis

    Publication: Eurasia Daily Monitor Volume: 6 Issue: 32
    February 18, 2009
    By: Saban Kardas

    An announcement of recent economic indicators on Monday by the Turkish Statistical Institute (TUIK) has revealed that the number of unemployed people rose by 645,000 over the previous year, reaching 2.99 million in the period from September through November 2008. This represents an increase in the unemployment rate from 10.1 percent during the same period of 2007 to 12.3 percent in 2008. While the unemployment rate in rural areas was only 9.3 percent, it reached 14.2 percent in urban areas, and was 23.9 percent among the youth. The number of employed people reached 21,315,000, marking a 448,000 increase over the previous year. Of the entire pool of unemployed, around 72.6 percent were men, and about 59.4 percent did not have a high school diploma. Some 26.6 percent had been seeking employment for more than a year (Hurriyet Daily News, February 17, www.turksat.gov.tr).

    Rising unemployment, reaching the highest level since 2005, has brought attention to the Justice and Development Party’s (AKP) handling of the Turkish economy and whether it has taken the necessary precautions to weather the global financial crisis. Critics believe that unemployment figures are only one indication of how the government has failed to comprehend the depth of the crisis and formulate prompt responses. Indeed, earlier economic data released by the TUIK appear to lend support to the critics. At the end of last year TUIK announced that the economic growth rate had dropped to 0.5 percent in the third quarter of 2008 and would continue to decline in the last quarter (Sabah, December 16). Similarly, the country’s industrial production output declined in December by 17.6 percent on a year-to-year basis (Cihan Haber Ajansi, February 9). To make matters worse, the industrial capacity utilization rate dropped to 63.9 percent in January, marking its lowest level in the past 18 years (Radikal, February 11). Moreover, according to the Turkish Employment Organization (IS-KUR), the number of people looking for a job rose by 95 percent in January compared with the previous year, reaching 151,530 (Radikal, February 13).

    According to its critics, the government was slow to recognize that the global recession would inevitably result in the contraction of the Turkish industrial sector and result in unemployment. According to Mustafa Boydak, the head of Chamber of Industry in Kayseri, one of Turkey’s industrial centers in Anatolia, there were already signs of the crisis in the first half of 2008 and business circles had clearly explained the situation to the government, providing adequate warning. The lack of communication between Prime Minister Recep Tayyip Erdogan and economic managers, however, prevented a candid assessment of the crisis on the part of politicians, and Turkey fell behind other countries that have taken measures to assuage the economic calamity. Boydak cites three factors bedeviling the industrial sector: an inability to procure loans at reasonable conditions; difficulties with exports; and contraction of the domestic market (Referans, February 16; Hurriyet Daily News, February 17).

    On February 15 major Turkish unions and vocational organizations organized a joint meeting in Istanbul to protest economic policies. In a rally entitled “We Will Not Pay the Price of the Crisis,” workers and public employees called on the government to introduce policies to address the rising unemployment immediately (Anadolu Ajansi, February 15).

    Following the announcement of official unemployment rates, the Turkish Confederation of Employers’ Unions (TISK) issued a statement calling on the government to take preventive measures. TISK claimed that among developing countries Turkey ranked near the top in terms of decline in industrial production and growth rate and in increasing unemployment. Based on the recently released figures, TISK believes that Turkey is one of the hardest hit countries by the economic crisis and that unless the government acts quickly to introduce a package to stimulate demand and solve financing problems, the situation might become even worse (Anadolu Ajansi, February 16).

    For its part, the AKP government does not seem to be alarmed by the recent economic figures. Speaking to the NTV news station, Industry and Trade Minister Zafer Caglayan said that the rise in unemployment had been anticipated and that if the government had not taken precautions in 2008, the numbers would have been even higher. Noting that the government expected the crisis to influence the Turkish economy for the next six to seven months, Caglayan assured the market that the government had a plan of action. Despite the repercussions of the crisis in the real sector, the financial sector was not as badly hit as in other countries, and this was to Turkey’s advantage. He especially rejected calls to introduce an “economic package” simply because other countries were doing so, and added that Turkey would deal with the crisis by taking its own unique conditions into account, echoing Erdogan’s oft-repeated argument that Turkey will handle the crisis according to its national interests. Caglayan also announced forthcoming measures to stimulate the automotive and textile industries (www.ntvmsnbc.com.tr, February 16).

    Indeed, the government has already forwarded the first concrete package to the Turkish parliament. After approval by the Planning and Budgetary Commission, the parliament began debating the package on February 17. The main goal of the package, which includes short- and mid-term measures to address the economic crisis, is to stimulate employment (ANKA, February 17).

    The government is also under pressure for delaying the conclusion of a loan with the International Monetary Fund (IMF), and critics believe that this is mainly because of short-term political considerations in anticipation of forthcoming local elections. The government, on the other hand, argues that the IMF conditions would have limited Turkey’s flexibility in dealing with the crisis, perhaps even exacerbating the problems in unemployment and growth (www.ntvmsnbc.com.tr, February 16). In the meantime, Turkey and the IMF have taken a break from negotiations to clarify their positions on the remaining points of disagreement (EDM, January 29). Despite the Turkish side’s assertion that there has been progress in negotiations, it is still unclear when an agreement might be reached (www.cnnturk.com, February 17).

    Although the AKP government believes that it is doing everything to manage the global crisis on the basis of Turkey’s national interests, the market has grown increasingly anxious about the government’s delay in implementing efficient measures. It is hoped that the economic stimulus package and a deal with the IMF, should there be one, will not be too little, too late.

    https://jamestown.org/program/turkish-government-under-fire-for-delaying-response-to-the-global-financial-crisis/

  • Turkey and Russia Developing a New Economic and Strategic Partnership

    Turkey and Russia Developing a New Economic and Strategic Partnership

    Turkey and Russia Developing a New Economic and Strategic Partnership

    Publication: Eurasia Daily Monitor Volume: 6 Issue: 31
    February 17, 2009
    By: Saban Kardas

    Turkish president Abdullah Gul paid a four-day visit to the Russian Federation from February 12 to 15, marking the flourishing multidimensional relations between the two countries. Gul met with Russian president Dmitry Medvedev, Prime Minister Vladimir Putin, and other officials and also traveled to Kazan, the capital of Tatarstan, where he discussed joint investments. Gul was accompanied by Kursad Tuzmen, the state minister responsible for foreign trade, and Minister of Energy Hilmi Guler, as well as a large delegation of Turkish businessmen. Foreign Minister Ali Babacan joined the delegation for part of the trip.

    The Russian side elevated Gul’s trip from the previously announced status of an “official visit” to a “state visit,” the highest level of state protocol, indicating the value Moscow attaches to Turkey. Gul and Medvedev signed a joint declaration announcing their commitment to deepening mutual friendship and multi-dimensional cooperation. The declaration mirrors a previous “Joint Declaration on the Intensification of Friendship and Multidimensional Partnership,” signed during a landmark visit by then-President Putin in 2004 (Today’s Zaman, February 14).

    Indeed, Turkish-Russian economic ties have flourished over the past decade, with trade volume reaching $32 billion in 2008, making Russia Turkey’s number one partner. Given this background, bilateral economic ties were quite naturally a major item on Gul’s agenda and both leaders expressed their satisfaction with the growing commerce between their countries.

    Cooperation in energy is the major area of mutual economic activity. Turkey’s gas and oil imports from Russia account for most of the trade volume. Russian press reports indicate that the two sides are interested in improving cooperation in energy transportation lines carrying Russian gas to European markets through Turkey (www.cnnturk.com, February 14).

    Moreover, Russia is playing a major part in Turkey’s attempts to diversify its energy sources. Cooperation in nuclear energy is particularly important in light of Turkey’s plans to introduce nuclear power. A Russian-led consortium won the tender for the construction of Turkey’s first nuclear plant; but since the price the consortium offered for electricity was above world prices, the future of the project, which is awaiting parliamentary approval, remains unclear (EDM, January 26). Prior to Gul’s visit to Moscow, the Russian consortium submitted a revised offer, reducing the price by 30 percent (www.ntvmsnbc.com.tr, February 14). If this revision is found legal under the tender rules, the positive mood during Gul’s trip may indicate the Turkish government is ready to finally give the go-ahead for the project.

    The Russian market also plays a major role for Turkish overseas investments and exports. Russia is one of the main customers for Turkish construction firms and a major destination for Turkish exports. Similarly, millions of Russian tourists bring significant revenues to Turkey every year.

    Nonetheless, a huge trade imbalance in Russia’s favor due to Turkey’s heavy dependence on Russian gas and oil continues to be a major concern for the Turkish side. Despite commitments to fix the trade imbalance made during Putin’s 2004 visit, the gap is still there. It remains to be seen whether this trip will produce concrete results on that count, but so far the only news is that the two sides may start to use the Turkish lira and the Russian ruble in foreign trade, which might increase Turkish exports to Russia (Hurriyet, February 15).

    Other economic issues causing problems in Turkish-Russian commercial relations were also addressed. Ankara is particularly disturbed by difficulties encountered by Turkish goods at the Russian border. In response to Gul’s request for help on that issue, Medvedev reiterated the Russian position that strict inspection rules on trucks were being applied to all countries and Turkey was not specifically discriminated against. Nonetheless, he suggested the establishment of a joint technical delegation to examine the issue (Anadolu Ajansi, February 13). The parties had already agreed in September to simplify customs procedures and the new delegation might contribute to those efforts.

    A large part of Gul’s visit concerned the development of political ties between the two countries. Both leaders repeated the position that, as the two major powers in the area, cooperation between Russia and Turkey was essential to regional peace and stability. Noting he had held fruitful and sincere contacts with his Russian counterparts, Gul said “Russia and Turkey are neighboring countries that are developing their relations on the basis of mutual confidence. I hope this visit will in turn give a new character to our relations” (Hurriyet Daily News, February 13).

    For their part, the Russians praised Turkey’s diplomatic initiatives in the region. Medvedev particularly emphasized his satisfaction with Turkey’s actions during the Russian-Georgian war last summer and Turkey’s subsequent proposal for the establishment of a Caucasus Stability and Cooperation Platform (CSCP). Medvedev said the August crisis had demonstrated not only the need for coordination among regional countries to address local challenges, but also their ability to deal with such problems on their own without the involvement of outside powers (www.cnnturk.com, February 13).

    Medvedev was clearly referring to the exclusion of the United States from attempts to solve regional problems. Indeed, the ease with which Turkey went ahead with the CSCP, bypassing Washington and not seeking transatlantic consensus on Russia, prompted international and Turkish observers to question Turkey’s place in the West (EDM, September 2). Since then, attention has been focused on Turkey’s determination to follow an independent foreign policy.

    Economic dependence on Russia, however, reduces Ankara’s autonomy and options with regard to Russia in diplomatic affairs. During the Russia-Georgia war, this asymmetric dependence forced Turkey to follow an acquiescent policy toward Moscow. Prime Minister Recep Tayyip Erdogan acknowledged that dependence on Russia had tied Turkey’s hands (EDM, August 27; Milliyet, September 2).

    This dependence apparently did not bother Turkey very much. Following Gul’s visit, some have even described Turkish-Russian relations as a “strategic partnership,” a label traditionally used for Turkish-American relations. It remains to be seen how long Ankara can maintain a balancing act between the two major powers when controversial issues such as Russian plans for building a missile shield come onto the agenda.

    https://jamestown.org/program/turkey-and-russia-developing-a-new-economic-and-strategic-partnership/

  • 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 continuing to provide needed income is my primary goal for these unsettled times. I have been given the desire to study and observe global money progressions and trends for the last 50 years. I evaluate possible future trends in order to provide positive concepts for you to form your own conclusions. The main purpose of this letter is to warn you of possible financial sinkholes.
    Good Bye Stocks – Hello Bonds

    We are leaving the golden era of free enterprise due to unmitigated greed and chicanery. We can easily adjust if we accept the true meaning of what awaits us. If we fight to retain our old dreams and fantasies we will see ourselves being spoon fed by fat socialist bureaucrats for the “common good”.
    In this letter I will present some facts for your perusal and then you can make up your own mind in regards to your financial decisions. Those willing to change their offensive strategy can become winners in life’s never ending battles.
    The result of these recent price disturbances (all the bubbles bursting) is the falling value of the property that has been borrowed against. The value of the property’s income also falls. We have come from extreme over indebtedness and now find ourselves in a hole – we should stop digging.
    This is a hard lesson that our grandparents learned in the 1930’s, but sadly has been forgotten as satanic greed took over our souls. We now find ourselves caught between a recession and a depression. I call it a MESSYSESSION.
    All the corporations whose bubbles have burst must work down their inventories; since many are in the financial sector this will take time. Individuals must use their earnings to pay down debts to save their homes instead of spending money on frivolous purchases. The Rule of 72 has the deck stacked against them, unless the Usury Law is resumed. The lack of the Usury Law is quicksand for our economic recovery.
    The working down of inventories alone can be deflationary, however, the Federal Reserve has been pumping money into our supply pipeline at super speed. When an entity goes bankrupt, those debts do not go back into circulation, they go to money heaven. This is why the Fed has to keep the supply pool full and why this action should keep us out of a depression.
    Having to pay down all this debt slows down our economy and hurts our suppliers worldwide. This is why we have a world wide Messysession.
    Corporations that have borrowed from the Government will have a hard time maintaining their common stock dividends because their first priority is bond interest. Their second priority is preferred dividends. What is left over will then be distributed to common stock holders or used for debt reduction. Debt reduction means job security.
    Sooner or later the US Government will have to go on a massive borrowing campaign. This could weaken the dollar and send interest rates soaring along with the price of Gold – for a while.
    Some recessions are “V” shaped, which means stocks fall down hard and come back up quickly. Stocks tumble, but recover because there are people looking across the valley. If the recovery is like an elongated “U” or “L” one needs binoculars to see across the valley to a recovery. This could cause price to earnings ratios to shrivel, since analyst’s earnings estimates will be suspect at best. The economy can take a year or two to recover based upon how responsible Congress is. It will be years before our economy fully recovers from all the bubble bursting. What we need is a cheap new energy invention.
    The only period, since 1872, where stocks substantially outperformed bonds on a prolonged basis was the 1950s to 1960s. This was a golden era for stocks and it has taken many abuses to wind down.
    These are some of the many issues that President Obama faces on the home front. Now we shall look at some of his international problems.
    Europe is changing. It used to be that France and Germany were the major players, with Great Britain looking on. The United States has encouraged the expansion of the European Community to diminish the power of the two largest countries. Poland is emerging as an economic power and if Turkey is admitted, as they should be, they will bring new found political clout for the first time since the demise of the Ottoman Empire 90 years ago. Their inclusion could bring stabilization to the chaotic Middle East situation. Turkey has freedom of religion, a vigorous economy (17th largest), and a solid government. Their influence is growing. They also have a strategic location to insure peace long term.
    Then, there is Russia, who can throw all kinds of money around, but when it comes to signing on the dotted line – they cannot be trusted. Turning off gas supplies in mid-winter and canceling major contracts with world-renowned companies are actions that are hard to forget. Obama has pledged to focus US military power on the war in Afghanistan. The bulk of supplies must come from the north. Russia does not want a ballistic missile defense system in central Europe. It wants a halt to NATO expansion and reduced American influence in the Caucus and central Asia. They also want a broad renegotiation on non-trivial treaties that are terrible for Russia in 2009. (Anyone want to be President?)
    We must come up with a way to renew confidence for the consumer. First and foremost is the renewal of our Usury laws that were dropped because disintermediation was wrecking the banking system in the 1970s. Creating lasting jobs will not happen by just building roads. These programs must be done so that they promote or improve future growth. It is difficult to do this on a national level because there are too many fingers in the pie. Programs done on a state level are easier to control. It is more realistic to meet regional needs.
    Lowering corporate taxes when a corporation moves into intercity areas would mean better roads, and businesses to support them. Raising taxes invites tax avoidance schemes that only benefit the issuer. It also removes money from the private sector. Today, pricing power has evaporated.
    There must be global reorganization of the securities laws, most importantly the Uptick rule. Countries that do not participate should be banned from trading within the member countries. Today hedge funds and institutions have spent millions of dollars on sophisticated trading programs. This makes for an uneven playing field and has driven the small investor to the sidelines, as witnessed by declining volume on the exchanges. The large institutional investor becomes the ultimate bag-holder at the bottom of markets when they have no one to sell to.
    If a country’s Gross Domestic Product (GDP) is declining that means the average on corporate earnings will be declining also. This means fewer companies will be showing an increase in earnings and therefore there will be fewer securities that have an investment grade value. Since there are already too many mutual funds and they all cannot buy the same stocks, that game is over. I would sell your mutual funds while you can if you are over 55 years old. If they get too many orders for liquidation they have the option of delivering stock of the same value to you. That is an easy way to get rid of their losers. If you are under 55 and own a balanced fund where the income can be reinvested on a periodic basis you are in the catbird seat. Lower prices will mean more shares and 10 to 15 years from now when the market recovers you could be a wealthy person. Other low income on non paying funds should be sold. It could be 20 to 25 years just to breakeven and that is only if it is a survivor.
    First quarter earnings are going to be a disaster. I suspect this is when many will throw in the towel and give up.
    Gold should be considered a hedge – possible short term.
    Here are some moneymaking ideas. A successful portfolio can be 20% equities 50% fixed income and 30% cash.
    By equities I mean income-producing securities yielding over 5%. There are a few out there that are “stupid” cheap versus dirt-cheap. Then there are preferred stocks, many of which are 85% tax-free. Many are selling below their call price. This means if a company wants to improve its balance sheet, they can do that by calling your preferred from you by paying the call price. If they fail to pay a preferred dividend it becomes cumulative. To resume payments they must make up the back dividends first. One that falls into this category is: AMERCO Pfd A (NYSE) 20 (2-6-09) pays $2.125 which yields 9.41%. gives you a tax free yield of 8%. If they call the stock at $25 you will have a $5 gain which amounts to a 25% gain. You won’t be able to have this return with common stocks over the next several years.
    Tax free bonds were good when income tax rates were 55%-92%. The low tax rates today are beaten by preferred stock’s rates, such as the one I mentioned above. You have a ready market and real value. What you see is what you get. There was an issue on Long Island that defaulted in the depression. A default like that today would wreck havoc in the entire sector. For safety reasons, please avoid tax-free bonds.
    Since the US has to borrow around a trillion dollars or more, Government bonds could be an instant loss. For now, I would avoid these also. That leaves us with corporate bonds. Many corporate bonds have a better balance sheet than the United States. Buying bonds in the five year range is the safest place to be. As the bond gets closer to maturity the price fluctuations are at a minimum and easily salable. You are better off buying an individual bond than a fund. The fund will charge a yearly management fee as well as anything else they can get away with. Also, some funds simply dump bonds into a portfolio and walk away. There was a case where a fund dumped their holdings of an issue right at the very bottom, only to have the bonds called a few months later. Please remember that corporate bond holders have first lien on a corporation’s asset.
    I suspect that in a few months you will see a stampede out of many mutual funds and a proliferation of all types of bond funds trying to cash in on the new trend. Keep it simple- buy your own.
    I know I have thrown many ideas your way in this letter and I apologize, but I feel the times warrant such thinking. I will be available, free of charge, to anyone who would want to discuss any of these ideas at the addresses below.
    CHEERIO!!!!
    Richard C De Graff 2/10/2009
    256 Ashford Road
    RER Eastford Ct 06242
    860-522-7171 Main Office
    800-821-6665 Watts
    860-315-7413 Home/Office
    rdegraff@coburnfinancial.com

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  • Ankara Monitors French Plans

    Ankara Monitors French Plans

    Ankara Carefully Monitors French Plans to Rejoin NATO’s Military Command

    Publication: Eurasia Daily Monitor Volume: 6 Issue: 26
    February 9, 2009
    By: Saban Kardas

    Determined to bring Paris into NATO’s military command after four decades of opting out, French President Nicholas Sarkozy is expected to announce France’s return to NATO’s military structures by April, when a NATO summit will mark the 60th anniversary of the Western alliance. Recent reports indicate that Paris secured U.S. support for the transfer of two senior command positions to the French. Nonetheless, discussions on the timing and modalities of France’s rejoining the alliance’s military structures will increase in the following weeks. Speaking at the annual Munich Security Conference, Sarkozy said that while pursuing this goal, he would not do anything that might jeopardize his country’s independence (www.euobserver.com, February 5; Reuters, February 6).

    Recent discussions on France’s return to NATO’s military structures have highlighted the intricate links between Turkish-French relations on the one hand and their implications for Turkey’s relationships with NATO and the European Union, on the other. Turkey is a full member of NATO and is negotiating accession terms for EU membership. Turkey’s EU membership process has been stalled recently, and Ankara puts a large portion of the blame on obstacles created by EU-members France and Greek Cyprus. In particular, Ankara is irked by the French and Cypriot objections to the EU’s efforts to open new negotiation chapters with Turkey (EDM, January 20).

    Turkey’s problematic relations with the EU may have negative repercussions for NATO-EU security cooperation. Paris has been pushing for strengthening the EU’s military capabilities without undermining NATO’s role in European security. For France, a greater European role in security and defense affairs would complement NATO’s collective security responsibilities. Despite the EU’s progress toward acquiring autonomous military capabilities, however, it still depends on NATO assets to carry out military missions.

    Turkey supports greater European autonomy in principle, but Ankara is troubled by its exclusion from the decision-making mechanisms of the European Security and Defense Policy (ESDP), the EU’s security arm. Being the largest non-EU contributor to the ESDP, Turkey demands greater participation of non-EU NATO allies in the European defense initiatives. Ankara supports NATO’s primacy in managing European security and objects to the development of EU-only capabilities that might undermine NATO.

    In an effort to retaliate for the Greek Cypriots’ objections to Turkish-EU cooperation, Turkey uses its position in NATO to prevent Greek Cypriot participation in EU operations utilizing NATO assets. Ankara maintains that since Cyprus does not have a security agreement with the alliance, it cannot have access to sensitive information. Sources argue that this situation “makes it difficult to work out detailed tactical arrangements between NATO and the EU. It is a potential burden on operation settings” (Hurriyet Daily News, February 2).

    Since decisions in NATO are taken unanimously, it has been suggested from time to time that Ankara could also use its position in NATO as leverage to remove obstacles in Turkish-EU negotiations, but Turkey has refrained from resorting to that option. Although Turkish diplomats carefully avoid giving the impression that Turkey might veto France’s reintegration when this issue comes on the agenda, some Turkish experts and academics call on the government to consider this option to counteract French policies against Turkish interests. Following the 2008 NATO summit, where Sarkozy announced his plans for reintegrating France into NATO’s military structures, a Turkish academic labeled a veto as a “low-risk” card and argued that “Ankara must ensure that Paris understands that rejoining France to the military wing of NATO will be possible only if France meets some of the Turkish demands. Negotiations on this issue must begin” (www.asam.org.tr, May 2).

    Given Turkey’s recent frustration with French policies, it has been speculated that Turkey might threaten a veto in NATO to bargain for a lifting of French obstacles in Turkish-EU negotiations. Some see this occasion as a new litmus test for Turkish diplomacy, because, following the Davos incident, the government is under pressure to play hard ball to protect its national interests. Opposition parties expect the government to use the veto trump effectively (Milliyet, February 7).

    Noting the eagerness of Paris to rejoin NATO, analysts argue that Prime Minister Recep Tayyip Erdogan will be caught in a dilemma as the April summit approaches. If Erdogan lets France have its way after having presented so many obstacles to Turkey, he might lose popularity at home. If Turkey uses its veto power as a bargaining chip, it might well backfire, because at a time when there is consensus on bringing France back into the organization, this move might isolate Turkey from its allies (Milliyet, February 6; www.cnnturk.com, February 6).

    The feasibility of a veto hinges, however, on whether a formal vote is needed for a French return. French diplomats and alliance officials believe that a unanimous decision is not required (Turkish Daily News, July 24; Reuters, February 6). Indeed, France is already active within NATO, and French troops serve in continuing NATO operations. A French return would largely concern French representation in the command structure.

    Before departing for the Munich Conference, Turkish Foreign Minister Ali Babacan told reporters that Turkey was still evaluating a French return to NATO. Babacan noted that Turkey would await clarification of whether a unanimous vote was necessary. Describing the situation of France as a unique case, Babacan added “the matter is more political than legal… The key concern here is for NATO to continue operating as a strong international organization. But, we will see how the French decision will be implemented… Here, the modalities of French participation are important, and we expect the French to present their modalities in the coming days” (ANKA, February 6).

    Though maintaining Turkey’s policy of ambiguity, Babacan avoided confrontational language. He gave indications that Turkey would prioritize alliance interests and go along with its NATO allies.

    Nonetheless, even if a unanimous decision might not be required, political bargaining would be needed for the distribution of command posts. Given the high premium NATO attaches to political consensus among its members, France and the United States will have to work hard to bring Turkey on board.

    https://jamestown.org/program/ankara-carefully-monitors-french-plans-to-rejoin-natos-military-command/