Thursday, April 23, 2009

Is Conservatism Consistent with Support of Bush's Enhanced Interrogation Techniques/NVS, EBAY, COP, Nestle, JNJ, EMC

Former Secretary of State Condoleezza Rice approved of the torture techniques including waterboarding, and she authorized the CIA to proceed.

She later told  world leaders that the U.S. had not engaged in torture. 

As you would expect, the editorial writers of the WSJ defend the Bush administration's use of torture, as do many of their subscribers and others who post comments online to the Journal's stories.    

The WSJ claims the torture memos show the lengths the Justice Department went to not cross the line into torture, and only the "liberal mob" is disturbed by any of these practices designed to keep American safe.  

This editorial may be the best statement of the Republican position. First, the Republicans claim waterboarding is not torture and then further assert that the "enhanced interrogation techniques" produced good information that saved lives. I do believe that there needs to be an independent evaluation on what information was gained as a result of the torture lauded by the WSJ in its editorial, rather than slavishly accepting as true mere hearsay assertions of plots foiled contained in one of the torture memos, which the WSJ editorial writers and others are inclined to do without nary a question even entering their consciousness about the truthfulness or reliability of such claims.   

There are several distinct questions.  Does the U.S. resort to torture in violation of international treaties and U.S. law, even though the FBI is securing good results with standard intelligent debriefing, which is the "conservative" GOP position? The FBI did remove itself from the interrogations, at the direction of its Director Robert Mueller, when the CIA was given the green light by Bush to engage in torture. 

A few real conservatives find that interesting. Did torture actually prevent or foil a 9/11 style attack on the West Coast, the so-called second wave of attacks, as Cheney claims, or is that an exaggeration?  There is significant differences in many of the accounts as to the importance of the intelligence gained through torture. This is a separate issue from whether the mere use of those techniques betrayed core American values. Mueller, the FBI's Director and a far more truthful person than Cheney in my view, has said no attacks were disrupted with the information gained by torture. (see quote in NYT article: & | 

As noted in the VanityFair article linked above, coercive interrogation techniques yielded a lot of "bullshit" that wasted the FBI's time.  The alleged conservatives at the WSJ and elsewhere could care less about what the Director of the FBI has to say on the issue, and there is no doubt whatsoever about that point.  

One of the most disturbing allegations comes from recently disclosed material.  So another question is whether there was an effort by the Bush administration to demand the use of torture, worldwide by the military and the CIA, to discover information linking Iraq to 9/11, both before and after the invasion, with pressure intensifying when it became apparent that no WMD was going to be found, a charge made yesterday by the Pulitzer Prize winning journalist Ron Suskind? video:

Were the techniques approved by Bush those used by the Chinese to secure false confessions from American soldiers during the Korean war, which is a contention in the Armed Services Committee report released yesterday? (see last paragraph in the Time story: TIME ABC News The New Yorker) The "conservative" editorial writers at the WSJ are not bothered by the U.S. using techniques developed by the Chinese to illicit false confessions by American soldiers during the Korean War or that the U.S. prosecuted Japanese for war crimes after World War II  for using the same techniques against American soldiers.

In fact, the republicans are not bothered by any of the interrogation techniques endorsed for the first time in American history by the Bush Administration and believe that they are consistent with traditional American values cherished by conservatives. I find these interrogation techniques to be torture beyond any doubt and are totally inconsistent with true conservative values. 

The new brand of conservatives that dominate and control the GOP are also not concerned about government intrusion into the private lives of its citizens and even encourage such invasions. True Conservatives, on the other hand, are circumspect by the power of the state being used to intrude into the privacy of its citizens. The GOP has changed dramatically in my adult life. It  is no longer the party of  Lincoln and Teddy Roosevelt.  If the Modern Day GOP was the party of fiscal conservatism and true conservative values, I would vote far more frequently for their candidates than I do now. I certainly look for non-reactionary alternatives to the Democrat party but find those hard to find. I did vote for Senator Alexander, the Republican incumbent, in the last election but I will never vote for Marsha Blackburn.    

Possibly, some may start to think about the conservative label that these individuals wish to attach to themselves. A fascist and a racist would consider themselves conservative, as would any believer in totalitarianism or the advancement of police state powers at the expense of individual liberty or privacy. All reactionaries who wish to roll back all or most of the progress made during the 20th Century to protect the health, safety and welfare of the public call themselves conservative. None of these people who masquerade as conservatives are True Conservatives.

I would not view the WSJ editorial writers to have a great deal in common with Conservatism, just some intersections here and there. A more appropriate label for them would be reactionary with a tinge of police state fellow travelers.

Maybe more than a tinge, more like a strong bias toward favoring police state practices. They do share a characteristic of the false conservatives, a desire to attach the label "liberal" to anyone who does not share their reactionary views. The use of the term liberal is the ultimate put down for the reactionary with totalitarian tendencies.  

Existing home sales declined 3% in March but the median sales price rose from February.

Johnson & Johnson increased its dividend by 3 cents a quarter.  This represents a 6.5% increase. This makes me more inclined to re-establish a position in JNJ and LB really wants to dump IR over the strenuous objections of RB.  

Ebay, a position that I took just to be contrary to Eric Savitz at Barron's, reported earnings  of 28 cents on a GAAP basis and 39 cents non-GAAP, with GAAP operating margin falling to 20.9% from 25.2%.  Yahoo! Finance  Dynamic Asset Allocation Trumping Trading Rules/Oops Forgot about 55 million/Earnings Yields for Recent Stock PurchasesThis was above the consensus estimate of 33 cents excluding items, the so-called non-GAAP number.  Ebay's marketplace business suffered a 18% year-over-year decline in revenues. Pay Pal increased revenue 11% and Skype had 21% year-over-year growth in revenue. PayPal now represents about 32% of Ebay's revenues. Overall, however, sales fell 8% from a year ago and earnings also declined. The company estimates 2nd quarter non-GAAP earnings to be in the range of $.34 to $.36.  

The I.M.F. predicted the global economy will decline 1.3% in 2009, which would be the first global decline in over 6 decades.  The I.M.F. predicted a decline of 2.8% in the U.S. for 2009 and zero growth in 2010.  If  market participants become convinced that this 2010 prediction for the U.S. is reasonable, then the market will most likely fall in the months to come. I suspect that the I.M.F. prediction for 2010 is too pessimistic. 

Nestle, a position in my portfolio, missed forecasts for its sales, but reaffirmed its growth target for 2009. Article - WSJ.comMarketWatch Excluding the impact of currency exchanges, organic sales rose 3.8%. The strength of the Swiss Franc, however, had a negative impact of 5.2% on this number. Nestle is currently selling at about 12 times 2010 estimated earnings. I am okay with this report under the current circumstances.

Apple (AAPL) had a good report with net income hitting 1.2 billion or $1.33 a share, well ahead of the consensus forecast of $1.09.

I was very impressed with Apple's performance in recessionary conditions. 

UPS had an awful report, with net income falling 56% from a year ago. Its results fell below the consensus estimates both for earnings and revenues. I do not own it.  

EMC, which is owned, reported earnings of 16 cents excluding items on 3.15 billion in revenue versus 22 cents in the year ago quarter. Analysts expected just 12 cents on adjusted basis on more revenue.   What was really disappointing in the results was the 12% fall in license revenue at EMC's 86% owned subsidiary VMware (VMW) and VMW's guidance for the 2nd quarter. 

ConocoPhillips, a newly added position, released a report which was better than the consensus estimate but not encouraging for this new stockholder.  Earnings were 56 cents a share compared to $2.62 a year ago.  The forecast was for just 44 cents, so the bar was set pretty low.

Novartis (NVS), another recently added position, reported better than expected results. Operating profit fell 6% to 2.35 billion from a year ago but was above consensus estimates of 2.19 billion.  

Pharmaceutical sales were up 12% in local currencies but only 3% after currency conversion. This Swiss company reports earnings in U.S. dollars and about 67% of its sales are outside the U.S.  So when those sales are converted back to the dollar when the dollar has gained strength against those foreign currencies, those revenues and earnings become lower after being translated back into dollars. Unlike many other foreign companies that report earnings in their local currencies, Novartis is hurt by the strong dollar and would be helped, as I understand this somewhat complicated matter, by a weaker dollar.  I am operating under the belief now that the U.S. dollar may hold its strength for the remainder of this year, due to being less bad than other major currencies, but will start to falter next year, an opinion subject to change based on new information. Asset Allocation Problems: foreign currencies, stocks and bonds

It has been reported in several publications that Democrat Congressman Jane Harman was allegedly caught on a wiretap talking to a suspected Israeli agent saying she would lobby the Bush administration to reduce spying charges against two members of the American Israeli Public Affairs Committee in exchange for that Israeli lobby helping Ms. Harman become the chairwoman of the House Intelligence Committee. Harman denied the report.  It was also reported that former Bush Attorney General Gonzales halted the investigation of Harman because Bush needed Harman's support on W's warrantless wiretap programs. Washington Post InvestigationsCQ Politics  CQ Politics

A good discussion of the warrantless wiretap program can be found at NSA warrantless surveillance controversy - Wikipedia, the free encyclopedia

The Supreme Court recently decided 5 to 4 in Arizona v. Gant that the state does not have the right to search a car without a warrant when the driver has been pulled over for a traffic offense and is safely in custody in the back of the police car.

Why would a conservative support the warrantless search of a home or a car? Alito and Roberts had no problems with it in the Gant case, but oddly Scalia & Thomas joined the majority which resulted in the 5 to 4 decision.   

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