Portugal

I spent two weeks in Portugal. I highly recommend it for a middle of the road tourist experience. Not touristy at all, but plenty to see and do. Not too expensive, good weather, nice beaches...

They say a picture tells a thousand words, so here is 9,000 words and change coming at you.





On out first day we went to the castle in Sintra just outside of Lisboa. This shot was taken from the moorish ruin that is nearby. The castle is a special one in that it is a strange blend of European and Middle Eastern styles.....
















These arches are a good example of the somewhat strange mix.


















Tile is very important in Portugal and the castle was no exception.













One day we took the local Sintra tram. Bit of a rough ride, but fun.




















When we were in Lisbon, I saw some of the same stonework as in Prague. You can't tell from the photo, but in real life, this stonework creates an optical illusion of depth.













We took this giant elevator up....




















And had a look over Lisbon.





















We also went to the walled city of Obidos which is built completely within a castle wall.


















And why would there be a castle wall if there wasn't a castle?








Sorry about any formatting problems. I'm not very good at this sort of thing. The good news is that I'm all out of vacation time so I will probably be staying put for a few months at least. Wait, did I say that was good news?

For the record

This is a very overdue post. When I returned from Moscow, Zarqawi was dead. It is amazing how much happens in a few days sometimes, or so little as the case may be. Anyone who reads this blog probably can guess what Zarqawi's death represents to me: another small, insignificant victory for the US forces. Yes, a bad man was killed. No, this will not have any measurable effect on the situation in Iraq.

Bombs are still going off. Iraqi's and Americans are dying in roughly the same numbers. Nothing has actually changed, and I think pehaps in another 10 or 15 years, maybe certain people will start to realize what Riverbend said about his death......

I've been listening to reactions- mostly from pro-war politicians and the naïveté they reveal is astounding. Maliki (the current Iraqi PM) was almost giddy as he made the news public (he had even gone the extra mile and shaved!). Do they really believe it will end the resistance against occupation? As long as foreign troops are in Iraq, resistance or 'insurgency' will continue- why is that SO difficult to understand? How is that concept a foreign one?


And yet, no one has even heard of Mullah Dadulla Akhund. Not yet anyway.

UPDATE: I forgot to include my favorite quote I heard from my good friend T. who said in reaction to the celebration on the right that Zarqawi's death would mean that "the craziness in Iraq would soon be ending". T. said sarcastically,

"Yea, hatred dies with one man."

An Apology

I apolgize to everyone for dropping off the face of the earth. I went on vacation to Portugal, again foolishly thinkiing that I would have at least limited internet access. I was so wrong.

Needless to say, the only thing I feel competent to comment on at this point is world cup soccer.

Both of the teams that I support were eliminated in the first round and in the same group. At least the US team got a tie with Italy who just knocked out Australia today with a penalty kick literaly in the last second of the game.

After all the rolling around the Italians did against the Czechs (don't get me wrong, the Czechs played horribly and deserved to lose), I wanted to see them go down. Obviously, I did not get my wish, but Italy looks weak going into the next round.

Ukraine has pesently defeated the Swiss in a shoot-out after extra-time yeilded a 0-0 tie. The star for Ukraine, Sevchenko (pronounced, "Shev-chen-ko") ominously missed the first shot, but his teamates more than made up for it as the next three converted assuring the win before the Swiss were even allowed their final kick.

Ukraine will now go on to play Italy in the quarter-finals. The Ukraine is the first team I have rooted for that has one anyting, the US, the Czech Republic, Paraguay, Equador, Austrailia, Mexico.... all eliminated. The Ukraine has restored my faith in the underdog, and I will root for them and Ghana for at least a couple more days.

And since I was in Portugal, I will root for them too, despite their appaling performance against Holland. Having said that, Holland deserves everything they get in world cup soccer, or any other national tournament. What we saw in this game was a classic battle between two teams who still consider themselves contenders, although neither really are. They both have historical claims on dominance that ring hollow today. As a result, you get the bloodbath of desperation that we saw last night. What was lost in all the carding and sending off was an shooting clinic by both teams but especially the Dutch. Perhaps only the Australians who lost in the last minute, or actually the last second, have a more heartbreaking story. The Dutch had so many missed opportunities. They will be left with "What if?"

It is much better to watch World Cup Soccer on Czech TV than on Portuguese Television. The Portuguese show only Portuguese and Brazilian games on regular TV. You have to pay 22 Euros per month to see the rest. In the Czech Republic, all the games are on CT2, the second state run channel. Right now they are playing a jazz concert after the game, with no commercials. At halftime, there is very good commentary and about 3 commercials. One time, during a World Cup match at halftime, they played a short. concise documentary on Egyptian Hieroglyphics. I'm not making this up.

I think of this when I get letters pleading with me to help save PBS.

I'll be plugging in and plugging away soon.

Back from Moscow

I just got back from Moscow where foolishly I had expected to have at least some internet access. I did not, nor did I have any English language news or information of any kind, or a telephone, for four whole days. Suffice to say, I'm a little out of sorts and I feel it will take some time to get back on my feet. More from Moscow later, but here is an entry I wrote the first night in my hotel room, completely unedited.

Today was my first day spent in Moscow ever. The experience is enhanced by the fact that I never thought I would be able to come here. Much like my wife who says she never thought growing up that she would meet an American, much less go to America, my experience of being here in Moscow, on business no less, shatters the juvenile construct which defined my formative years. Russia has always been in my mind the forbidden land; it has always been the place that exists only in textbooks and in Reagan speeches. Never in my wildest dreams growing up did I think that I would have to come here on business, or for any other reason.

The Russian experience started before we even landed in Moscow. The first thing that was different was that before they even called for boarding, people lined up at the gate. This may have been an anomaly started by the first people who stood in line before the official boarding call. This in turn started a chain-reaction, which may or may not have been an exclusive feature of Russian travel. But I couldn’t help to wonder if 72 years of communism had some part in the willingness, rather desire to get in line as soon as possible. When the boarding call finally came, there were already at least 100 people in line to get on the plane.

There was some drama regarding carry-on baggage. Several people had to check their carry-on baggage, and there were some heated discussions regarding same. I began to worry that my carry-on baggage would be too much and I would end up being one of the arguing masses. In fact, I was unmolested, however, I couldn’t help but to wonder what was different about this flight that would justify such a different procedure. You see, I have traveled on Czech Airlines (the carrier for this flight) to Paris, to London, to Dublin, and to Amsterdam. Never before have I seen anyone be pressured about their handbag. This was different. Same airline, same check-in people, same airport, and yet we were being treated completely differently because of where we were going.

I boarded the plane without incident, and had an isle seat just behind first class: 4D. No one was in 4E to my great surprise. Most of the plane was full, but somehow I managed to get a free seat next to me. What was strange was that they kept repeating that this was a non-smoking flight throughout the flight. Usually you get the perfunctory warning and they leave it be, but on this flight they kept repeating it in three languages (English, Czech, and Russian) throughout the flight. My free seat deal ended towards the end of the flight as someone who needed medical attention was allocated my seat. She never actually sat there, but I had to move all the same. The broadcasted request that anyone who may be a doctor come to the front of the plane was also a first for me.

Finally we landed in Moscow and I headed for passport control. The lines were enormous. The only place I saw such big lines was in the United States, but in the United States everything was very well organized and moved quickly. In Moscow it was a good hour of standing before I got through. I felt especially sorry for the black guy in the next line. Knowing how openly racist they are here, I had picked him out and thought to myself, “I sure am glad I am not that guy right now.” Sure enough, when he got to the counter, there was a delay. He probably stood there for a good 15 minutes only to be told to wait aside while further information was gathered. This guy was obviously an American coming in from on the New York flight. He looked perfectly respectable, but I’m sure it was his skin color that held him back. I don’t actually know if he ever got through. I didn’t see him at baggage claim.

Once I finally got through, I found my bag stashed off in a corner. I went through customs and found my ride. On my way out I was approached by several taxi drivers, the last of which asked me if I wanted a taxi “a little later.” I told him I had someone waiting for me and he said, “are you sure?” I laughed and carried on looking for my ride which I managed to find. The drive through the center was incredible. Lanes don’t mean much apparently. I was an full hour of urban rally driving before we reached the hotel. At the hotel, I was asked to fill out a registration form. I had some idea what when where from filling out my landing card with the help of a friendly Czech man I met in line. Once the lady realized that I was filling out the registration card with Latin letters, she scoffed at me and crumpled up the form. Nonetheless I was granted a room.

Had I never lived in the Czech Republic the room might have been a bit shocking. I am sharing a bathroom. There are towels on the bed with a small bar of soap on top. The soap is not rapped in the traditional hotel paper. In fact, I can not determine if it is new or used. As bad as this room is, I’ve had worse.

My host came by to pick me up about 8 PM tonight. No less than 4 hookers approached us before we could get clear of the place. My host lied and told them that he didn’t in fact have a light. We went to the grocery store and bought food and vodka. We went back to his apartment, which is near the hotel, and he cooked a fantastic meal. Of course, we started the meal with the Russian style of drinking. You do a shot right at the beginning and eat right on top of it. By the time we finished the meal, the three of us had drank the better part of a liter of vodka. It is the best way to drink. You drink a lot, but you never feel completely drunk. It is a controlled drunk that lasts. Hell, I’m writing this for better or worse, and if I had drank that much vodka in any other way, I’m sure I would be so trashed that I couldn’t write anything.

The funniest thing was that once we drank a few shots, we were able to talk. My host doesn’t speak English, but I speak Czech, which is in the same Slavic family of languages. However, Czech and Russian are not so similar as to be interchangeable like Slovak and Czech, for example. The vodka got the communication flowing. Somehow we were able to understand each other. I learned a lot of Russian very quickly. It was quite a time.

When a person says the Russians know how to drink, it means something more that tolerance and bravado. They actually have a system that works. I’ve experienced this system in Prague with a Russian friend of mine, but tonight I experienced the real thing. Wow, I think the vodka is finally starting to catch up with me. Time for sleep.

Weekly Economic Report

Fed Chairman Bernenke all but plainly said that the short term lending rate would go to 5.25% citing inflation concerns. His "ramaining vigilant" quote will probably become one of his catch frases for raising rates. This had a devestating effect on the equity markets (DJIA down over 3%). The most worrisome day, ironically, was Thursday which ended in positive territory, but high volume and volatility pushed the Dow momentarily below 10,800. This represents a nearly 1,000 point drop in 29 days. This hard of a drop has not been seen in over 3 years. The main difference between now and then, was that then, the market was in a mode of stabilizing after some of the most volatile swings ever seen after the dot-com crash and 9/11.

Simply put, investors are diminishing their risk, which is why we also see gold spiking lower to nearly $600. This means they are pulling their money out. Investors are hoping that we have hit a bottom. Personally, I am surprised it went down this fast, so I expect to see a bounce next week. The downward action is looking quite shocking on the long term charts. A perfect funnel down. A bounce will probalby be followed by more downward action until this pattern of decline can be broken.

Three weeks ago I said that the USD/EUR rate would stay between $1.30 and $1.26 for some time. Well, for 3 weeks it has. Anyone range trading on this basic priciple over the last three weeks has made a fortune. This week we saw the perfect example of this as the high point was $1.2976 and the low point was $1.2597. The drop was mostly due to Bernanke's statement. When the pair hit this $1.26 level, on better than expected US trade deficit news, it immediately bounced up to $1.2680 and has now settled in for the weekend at $1.2639. I expect that $1.26 will hold but there is still a chance of that correction to $1.25 or lower.

HIgh volatility in all markets, with a sharp drop in equity markets and strong gains for the dollar: A typical reaction to hawkish comments from the Fed.

Look for a slower week next week. Or, rather, hope for one. I expect that equities will be more volatile than currencies in the comming week, with the Dow seeing a bounce off Thursday's bottom by weeks end, and the dollar consolidating around $1.2750.

Czech Elections

The Czech parliamentary elections were held Friday and Saturday.


June 4 (Bloomberg) -- Czech elections, marred by corruption charges and a threat to challenge the results, ended in stalemate as neither of the two main parties are able to gather a majority coalition, raising the prospect of new elections.

There is only one free-market party, the Civil Democrats (ODS), who garnered a small plurality (35.4%) but their policies are indealistic and outdated (still throwing around the idea of a flat tax). In Prague, many people held their noses and voted for ODS (they got over 48% in the capitol) citing "no other choice." The party, however, is a walking contradiction as they have been quite vocal against the EU. Vaclav Klaus, the President and figurehead of ODS has openly said that multi-culturalism won't work. EU ministers from ODS have publicly said that the question should not be which country will be next to join the EU, but rather which country will be the first to leave.

Free-market isolationists: walking contradiction.

But what are the other choices?

The ruling Social Democrats have an archaic policy platform, and by all accounts are severely corrupt. They give lip-service to helping the working class, and then institute a minimum income tax. The prime minister conducts himself in televised debates like a college softmore at best. To his credit, most of the other leaders conduct themselves similarly. As an example of hypocricy, one day he condemns corruption in soccer, the next he announces plans to build a new soccer stadium. The policies they are enacting are bad for business, and don't really help the people. Their motto of "garanutee and prosperity" rings rather hollow. Their election posters were defaced widely, the most common changed their slogan "We work for you," to "We work for us."

The Comminists are the third largest party here and they got almost 13% of the vote. In some of the industrail areas in the east they are still the most popular party. The Communists are, well, communists. ODS usually says things at the debates like, "The Communists had their chance and we all know how that worked out." Pretty tough to argue with that.

The two fringe parties (The Christian Democrats and the Greens) received about 7% and 6% respectively. As small as they are, their seats in the parliament will be highly coveted in coalition building efforts. But the bad blood from this election will make it very difficult for any ruling coalition to be formed.

The Czech Republic is looking more and more like Western Europe all the time.

Weekly Economic Report

Market

The Dow finished slightly higher at the end of this shortened trading week. High volatility persisted in spite of low volume. The market droped over 180 points on Tuesday but recovered those losses by Thursday. Trading was flat today with the Dow closing down about 12 points. The longer the Dow can tread water around 11,200, the better. The downward treadline is still very steep and keeping people nervous. The Economist has picture of a bear hiding behind a tree on the cover. The caption is, "Which Way is Wall Street?" I imagine it will consilated here between 11,000 and 11,300 for a while before the next move down.

Data

Initial unemployment claims were higher than expected this week. Inflation looks to be under control, as today's hourly earnings report came it at 0.1% when 0.3% was expected. This fueled suspicion that the Fed will now pause its rate hike cycle. The market didn't get much of a boost from that however. The shocker came at the end of the week with new non-farm payrolls coming in at 75K when 180K was expected. There was also a spike in temporary labor, up 229K in May. Unemployment came in at 4.6% after 4.7% was expected. But the non-farm payroll number sent a shock into the currency market, cutting the dollar down 1% in 1 minute....

Dollar/Euro

I said a couple of weeks ago to expect the EUR/USD to stay between $1.26 and $1.30. Last week I mentioned that $1.27 was providing good support. That continued, and the range has tightened to $1.27 and $1.29. A range traders paradise, bouncing between the two. The last time it bounced off of $1.2720 this morning, it lingered right at $1.28 all day until the non-farm payroll number came in and it hit $1.29 in one minute and met stiff resistance, backing off to $1.2875. Now it has broken the $1.29 barrier and the Euro is currently trading at $1.2920. I still think that a correction down to about $1.25 will come, but short term, we could see further dollar weakness.



The market is volatile and nervous. The bears are in the midst, but they haven't made the big move yet. Bernenke speaks twice next week, the first time on Monday before the senate panel. Hawkish comments from him could lead to a recovery for the dollar and more problems for Wall Street in anticipation for further rate hikes. I didn't get the final number, but the 10 year note dove under 5%. If it closes under 5% it would be the first time the overnight rate and the 10 year were thus inverted.

Oil spiked 3% today to close over $72 a barrel on news of a kidnapping on a Nigerian oil rig, and doubts about a resolution to the Iranian issue.

Jittery all the way around. Real signs of weakening in the high end real estate market are adding to a general uncertainty about the future. We are in a place where volatility can take hold and do real damage. That is not to say it is for certain. So far, for the last week anyway, what seems to be inevitable has been delayed. The volatility has canceled itself out. Lucky so far.

The next month or two are crucial.

Iraqi Probe into Haditha Killings

Maybe I am reading too much into this, but it seems like the Iraqi prime minister is trying to strut his stuff a little. Here is a strong statement from the article by al-Maliki...

"We cannot forgive violations of the dignity of the Iraqi people"

Fair enough. Who can argue with that logic?

Also, yesterday's declaration of a state of emergency in Basra, again by al-Maliki, has me feeling like the guy is really stepping up to be a leader. I have to say, he seems to be doing a pretty good job under the circumstances. The pressure is on to show the world he is serious and he seems to be up to the challenge.

However, declarations are easy, but real results are hard to come by. Just ask President Bush.

We will see if Basra can be quelled, and if the Iraqis are capable of conducting a serious investigation. If these two things can be accomplished, al-Maliki is on his way to being a legitimate ruler.




al-Maliki