Special Update #8 - Questions Remain About 911 & The Hijackers

INTRODUCTION

Think about how the media and news coverage have changed in the last 10 years or so. Today, when any major news story breaks, there is live coverage on all the cable news channels and often on the major TV networks. There are cameras, helicopters and on-site reporters almost instantly. Americans can watch dramatic and sometimes terrible events unfold as they actually happen, complete with coverage and "expert" analysis. A decade ago, we usually saw only "canned" footage on the nightly news.

While it wasn't the first such unfolding event to be covered live by the networks, I think it was the O.J. Simpson chase scene, with him in the white Bronco on the L.A. freeway, that signaled to the news networks that this type of coverage was to become the norm. Now, within minutes of the first network breaking a major story on TV, you can find live coverage of it on a half-dozen cable programs. As a result, the American people believe the media now more than ever.

It has long been known that the major television networks have a liberal bias to their content. Even the cable networks like CNN have had a liberal bias. The entrance of the FOX News network a few years ago was a welcome change, although their "fair and balanced" coverage is not always so fair and balanced, but generally is pretty good.

THE MEDIA IS ONLY PART OF THE PROBLEM

When it's O.J. Simpson speeding down an L.A. freeway, or when it's a Columbine school shooting, or some such events, the media is left to its own as to how to report the news and analysis of same. However, when it comes to events such as the 911 tragedy and the events that followed, the media is largely reliant on the GOVERNMENT to provide them with much of the information they pass on to us.

Our government has a long history of not being very forthright with the public, especially in times of war or crisis. This has been true during both Republican and Democrat administrations and congresses. There are numerous examples of incidents where the government purposely misled the public. I am not saying this has happened with 911 and the events since, but I am also not saying it hasn't. I just don't know at this point.

THINGS THAT STILL BOTHER ME

Many unanswered things still bother me about 911, but I will focus on only two for purposes of this Update.

First, as a former private pilot and airplane owner, I am still bothered by the assumption that these relatively untrained terrorists could have navigated these large jetliners off course, to NYC and DC, and managed to crash them into very specific targets. My friends who are airline pilots have the same questions.

Second, I am still bothered by how the government got us the names and photographs of the alleged hijackers so quickly after the 911 tragedy, when they say they had no prior knowledge of the attacks.

These two questions are intimately related as I will try to explain below.

WHO REALLY FLEW THOSE PLANES?

AMATEURS WITH LITTLE TRAINING?

Point #1: We are told that these terrorists got pilot training at private aviation centers in Florida. I have been through such training. I never advanced to flying jets, but the private pilot training for prop planes is very standardized. I am told the same is true for jet training. Yet flying private jets is substantially different from, and easier than, flying commercial airliners.

Which leads us to the question: Could these terrorists, with supposedly limited flight training, really have killed the pilots and crews, taken control of these very sophisticated airplanes (Boeing 757 & 767 - big planes), steered them off course, navigated them to very specific targets and crashed them into buildings, killing thousands of Americans?

I know several airline pilots. While they tell me that it is relatively easy to keep a commercial airliner "straight and level" once it is at cruise altitude and on auto-pilot, they also say that it is quite difficult and complicated to turn off the auto-pilot, change course, change altitude and fly one of these aircraft into a building, or into the ground, at high speed.

We are told that there were 5 hijackers on 3 of the hijacked airliners and 4 on the other one. We must assume that the hijackers killed all the pilots and flight attendants. I do NOT believe any US airline pilots would have flown their jets into a building, even under the threat of death. I believe they would have crashed the planes before injuring innocent people in buildings.

To have accomplished their terrorist missions as they did, I think we must assume that at least 2 of the hijackers were in the cockpit in the pilots' seats, with the pilots dead. Another must have been acting as flight engineer (maps) to tell the pilots how to get to NYC and DC. The other 1 or 2 were probably left to control the small number of passengers. You no doubt noticed that all 4 hijacked airliners had a very small load of passengers - by design, of course.

What I can tell you, after talking to airline pilots, is that if these terrorists had only the limited flight training we have been told, there is a very SLIM CHANCE they could have pulled off these 3 deadly acts - the Twin Towers and the Pentagon - plus the hijacked United flight that crashed in PA.

The pilots I've talked to tell me these hijackers must have been skilled jet pilots. Perhaps their flight training in private airplanes in the US was simply a "cover." There are several countries in which they could have been trained, but the most likely place they could have learned to fly commercial jets is Iraq. Thus, Iraq may have been involved in both the 911 attacks and the more recent anthrax outbreak.

HOW DID THE GOVERNMENT GET THE NAMES &

HOW DID THEY GET THE PHOTOS SO QUICKLY?

Point #2: The FBI released the names of the 19 hijackers on Sept. 14. They were immediately displayed on CNN and other news services. The government said the names were obtained from the passenger manifests (lists) of the 4 downed airliners. These manifests have not been released with the names of every single passenger and crew onboard. CNN posted the manifests on its website, but it withheld the names of the terrorists and certain passengers (at the request of the families). Other than airline employees who are not talking, no one else in the public has, to my knowledge, seen the complete passenger manifests.

Ever since I started these Special Updates in the days following the tragedy, I have repeatedly questioned how the government knew so quickly who the 19 suspected hijackers were. Again, the "official" story is, their names were taken right off the manifests provided by the airlines.

I have also questioned how the government got their pictures so fast? I am told that the government could have gotten their photos from passports or visas, but that would only explain those who were in the country legally. Or, I'm told, the government may have already had information on these men in the national security databases. While there is a lot of discussion about how the government got the photos, I will leave it to others for now.

More importantly, I do not understand why these supposedly sophisticated terrorists would have traveled under their real names. The easy explanation is that they had to travel under their real names so as to match their photo IDs. Possibly. But given the obvious sophistication of these terrorists, you would think they could have had fake IDs, with fake names, with photo IDs to match, and would not have had their real names on the passenger manifests.

There is a theory out there that the 19 men we saw in the photos were NOT the hijackers who crashed the 4 airliners. This theory assumes, as I have above, that these hijackers must have had serious commercial jet training to pull this off. Thus, the theory is that the real hijackers were highly trained "look-alikes" who were substituted for the 19 men we have all seen.

Of course, this theory raises many questions, the first of which is, could it even be true? I don't know. The second question is, if the men we've all seen in the photos were not the real hijackers, where are they today? Are they still in the US? Did they somehow slip out of the country on 911 or just after? And of course, if the 19 we've seen weren't the hijackers, then who were they?

CONCLUSIONS: WILL WE EVER KNOW?

I do not believe that the 19 terrorists we have seen on TV could have successfully crashed those Boeing 757/767 airplanes into the World Trade Center Twin Towers and the Pentagon IF they had only private pilot training. I believe the pilots among the terrorists must have had commercial flight training outside the US, most likely in Iraq. It took skill to do what they did.

If it wasn't the 19 men we have all seen in the photos, then who was it? And where are the 19 men in the photos? I don't know the answers. I wonder if we will ever know.

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BIPARTISAN UNITY IS ALL BUT DEAD!

While Democrats have rallied behind the President and the administration and their response to the terrorist attacks, the bipartisan unity began to unravel this week.

For starters, on Monday Senator Joseph Biden (D- Delaware) gave a speech to the Council On Foreign Relations in which he made some scathing comments about President Bush and the war in Afghanistan. Read for yourself:

"A long U.S. bombing campaign in Afghanistan plays into every stereotypical criticism of us [that] we're this high-tech bully that thinks from the air we can do whatever we want to do, and it builds the case for those who want to make the case against us that all we're doing is indiscriminately bombing innocents. . ."

Biden went on to say he doesn't know how long the "honeymoon or unquestioning period of unabashed support for the president's policy will continue." Biden was roundly criticized afterward. House Speak Dennis Hastert called Biden's remarks "completely irresponsible" and said:

"The last thing our country needs right now is Senator Joe Biden calling our armed forces a high-tech bully. The American people expect their representatives and senators to support these operations and to support our men and women in uniform. After losing close to 5,000 fellow citizens to terrorist attacks over the last month and a half, the American people want us to bring these terrorists to justice. They do not want comments that may bring comfort to our enemies."

After being roundly criticized by Hastert and others, including Senate Majority Leader Tom Daschle, Biden replied, "The speech speaks for itself."

If this weren't bad enough, there's more. Biden is the chairman of the Senate Foreign Relations Committee. It was reported that in a meeting at the White House last week, Biden proposed that President Bush appoint BILL CLINTON as a Special Envoy to the Middle East. The suggestion reportedly drew an incredulous response from Bush and others at the meeting. Thank goodness!

On Wednesday, the House of Representatives passed Bush's new $100 billion stimulus package which included a combination of new spending and tax cuts. The measure passed by a narrow margin of 216-214. The measure has not been voted on in the Senate where most Democrats want only apprx. $70 billion in stimulus.

Bush's plan was criticized by numerous Democrats because it includes new tax breaks for corporations and accelerates the individual tax cuts that were passed earlier this year. Some of the rhetoric was as hostile as any heard prior to 911.

The recent period of bipartisan unity is all but DEAD! Of course, this is no surprise.

RUMSFELD CONSIDERS "GLOBAL COMMAND" UNIT

Defense Secretary Donald Rumsfeld and his top advisors are seriously considering forming a "global command" force to fight terrorism around the world. Rather than repeat the details, you can read the story below in Special Articles. At the very least, this is more evidence that the war on terrorism will be a long one.

I have also included a link to Stratfor.com. You can read their latest analysis on the war and the future of the US military.

FORMER BOMB MAKER SAYS IRAQ IS

RESPONSIBLE FOR ANTHRAX ATTACKS

Dr. Khidhir Hamza was a top military scientist in Iraq during the early 90s. He headed up their nuclear weapons research program. He defected to the US in 1994. He says that Iraq is the only country, aside from the US and Russia, that has the technology to produce weapons-grade anthrax that can be delivered in the powder form we are seeing now in the US. He has no doubt that Saddam Hussein is directly responsible. Be sure to read the story below.

SAUDIS POINT TO IRAQ

The Saudi Defense Minister broke silence on Wednesday and suggested that Iraq played a role in the 911 attacks in America. He also said that bin Laden and his associates have told the Saudis that al Qaeda was responsible for the terrorist attacks in America. See the story below.

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THE ECONOMY

The Index of Leading Economic Indicators (LEI) was released on Monday showing the worst drop (-.5%) in 5 years. Durable goods orders plunged 8.5% in September. Both were worse than expected. This is not good!

Most economists still maintain that the recession should be relatively short and not too severe. Most analysts still predict that the economy will be back to breakeven, or slightly positive, by the middle of next year.

The Bank Credit Analyst has been sending me daily e-mail updates since the 911 attacks. In these daily updates, they have slowly taken a more negative view of the economy, although they have not put any numbers on it. Here are their economic comments of Wednesday, just after the release of the Fed's latest "Beige Book" economic survey.

"This afternoon's Fed Beige Book on regional economic conditions confirmed that the economy has suffered a major jolt. The Beige Book highlighted that there has been some recovery from the short period of sharply reduced activity that occurred in the week after the terrorist attacks. However, retail sales have not returned to pre-September 11th levels. Layoffs and plant closings are widespread. Auto sales were one of the few bright spots, but zero financing rates may only temporarily boost sales. Another leg in the consumer retrenchment is underway which, along with the leading economic indicator, suggests that the recovery will be delayed until well into next year."

[The Beige Book is a periodic report issued by the Fed which includes the latest economic surveys from the various regional Federal Reserve banks.]

I will get my copy of BCA's November research publication next week. That's when I will know what they really expect. I will let you know. Until then, I don't want to venture a guess. All I can tell you now is, the news is not good.

THE MARKETS

The major stock markets have recovered back to near the levels of Sept. 10, and they have hovered there for the last week (down today so far). It is most impressive that the indexes have held up over the last week, despite the anthrax scare. As of Wednesday, the Dow is up 18% from the low on Sept. 21 when it fell below 8,000 briefly; the Nasdaq is up 23% from the low.

The bad news is, there is formidable resistance at the Sept. 10 levels and above. Meanwhile, the news out of corporate America continues to be dominated by reduced earnings, layoffs and cutbacks. Retailers are preparing for what most believe will be the worst holiday season in years.

Virtually everyone expects some kind of retest of the September lows. BCA is among this crowd. The question is, will the market go on to new lows? People are throwing out all kinds of numbers. The bears argue that the current P/E ratio is still far above the levels seen at any major market bottom in the last 40 years. While this is true, there is no rule that says the markets have to bottom at the same P/E ratio they did in 1960, or at any other major bottom since then.

Markets rarely do what the overwhelming consensus expects. Right now, the overwhelming consensus is that this rally is just about over, and the next move will be a retest of the lows. But what happens if we don't get a true retest? What if the US military catches or kills bin Laden? Will the markets rally on that news? Almost certainly! Perhaps strongly.

The truth is, no one knows what will happen next. I think the best place to be right now is with a professional money manager that trades the markets on a short-term basis. If you are interested, we can send you information.

As for bonds, most people believe long-term rates will continue to go down, as typically happens in a recession. As such, many investors are switching into bonds and fixed-income funds. My problem is, bond yields have been going lower for almost 2 years now. For me, it's awfully late to be jumping on this bandwagon.

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HILLARY BOOED OFF STAGE IN NYC

I'm sure you have all seen the video by now, at the big gala/concert in NYC, where the firefighters, police and emergency heroes BOOED Hillary off the stage. It was a PR disaster for Ms. Clinton. Even worse was a comment made afterward by one of her aides:

"This was clearly the wrong venue for Ms. Clinton; after all, these are the same people who listen to right-wing talk radio."

How disgusting! Of course, this quote was buried by the mainstream media. What else is new?

What you may not know is that Hillary has had a long history of disrespect for law enforcement, going all the way back to her days in Arkansas with the State Police there. Then when she and Bill first came to Washington, she treated the Secret Service like they were her personal servants. At one point, she tried to replace the Secret Service with FBI personnel. The Secret Service stood firm, and its Director reminded Hillary that the agents she resented were prepared to lose their lives to save hers.

You might remember the flap Hillary created in NYC last year when she referred to the 4 policemen who shot Amadou Diallo as "murderers." All four men were later acquitted, but the NYPD has never forgotten Hillary's words. Not surprisingly then, it was reported that when Hillary accompanied President Bush to "ground zero" last month, many of the firefighters and police refused to shake her hand.

Then last Sunday, she was traveling by motorcade to Westchester County Airport to board a private airplane. Her motorcade mistakenly went to the wrong airport entrance and tried to "run" the checkpoint. Fearing it might be a terrorist attack of some kind, the policeman clung to the vehicle, banging on the window, for over 100 yards before the driver finally stopped. The policeman was injured in the incident and had to be treated at a nearby hospital. Because it was Hillary, no charges were filed. The mainstream press never reported this incident either.

I predict that this latest embarrassment at the NYC concert for the firefighters, police and all was THE BEGINNING OF THE END of Hillary's political career.

Try as I might to ignore them, the Clintons just won't go away! See stories below.

All the best,