Focus on Defense:USS George H.W. Bush

If anyone has a question about the ingenuity of American workers,they should see this ship,said Virginia Governor Tim Kaine,who was recently appointed Chairman of the Democratic National Committee,at the commissioning of the aircraft carrier USS George H.W. Bush(CVN 77) in Norfolk,Virginia on Saturday.Defense Secretary Robert Gates,who will be staying on in the Obama administration,added there is no one more deserving than President George H.W. Bush,who was the 41st president,to have an aircraft carrier named for him.Mr.Bush was the last of the World War II generation to serve as commander in chief.The carrier,which will be homeported in Norfolk and serve in the Atlantic Fleet,is a symbol of American strength and credibility,Mr.Gates observed.The ship is manned by more than 5500 sailors and Marines,who have been working on her for three years now,along with shipyard workers from Northrop Grumman Shipbuilding.

Shop Talk

A special greeting to Delaware,where I advertised this week.You are the domicile of many corporations,a business center for the region and the nation.Delaware is a logical place for a business publication to reach out.The motorists of the Washington metropolitan area are not reaching out to the Inauguration.They are bitterly critical of the extensive security measures being imposed,such as closing the major bridges from Virginia into the District of Columbia to private cars.These are the same voters who largely supported Mr.Obama in November.They chose this charismatic figure,a man who can draw millions from both home and abroad;now they regret the consequences.His entire presidency may be a special challenge for security agents and motorists wherever he travels.Not that it won't be worth it-that remains to be seen.

AmEx To Receive Funds

American Express will be receiving federal loans and other backing now that it is a commercial bank.The U.S. Treasury will inject 3.37 billion dollars from the Troubled Asset Recovery Program into the company,in exchange for warrants and preferred stock.As well,AmEx has gotten backing for 5.5 billion in corporate bonds from the Federal Deposit Insurance Corporation.It can also borrow at 0.5% from the Federal Reserve's discount window.The financial crisis has hurt AmEx's ability to raise money in the capital markets,and drove it to become a bank holding company along with Goldman Sachs,Morgan Stanley and other financial firms.

Property Owners May Suffer

Property owners in Maryland may find a higher property tax bill in their mailboxes this July.A property tax credit that was formerly granted automatically,the Homestead Tax Credit,must now be applied for.Unless owners submit a form either by mail or online,they will no longer receive the credit.Many people,of course,could either forget to apply for the credit,put it off,or fail to realize that they are now required to do so.Human nature could bolster the coffers of Maryland and its counties and municipalities.

Final Results for 2008

The Dow Jones Industrial Average fell 33.84% for 2008,its only gainers being Wal-Mart and McDonald's.The S and P 500 Index dropped 38.49 for the year,while the NASDAQ Composite Index plunged a record 40.54%.The Toronto benchmark was off 35.03% for 2008.In North America,Mexico's stock market fared best,with a drop of just 24.23%.Of the 20 most widely held stocks in the U.S. markets,Johnson and Johnson lost the least,with a decline of 10.3%.

Buyers Report Free Fall

U.S. Manufacturers reported a sharp drop in activity for December,according to the Institute for Supply Management's Purchasing Managers Index.The index registered 32.4-down from November's reading of 36.2.A Thomson Reuters survey of economists had predicted a reading of 35.5,and a number below 50 indicates the sector is contracting.Also in the ISM survey,it was noted that new orders fell to an historic low,eclipsing the previous record from 1948,while prices paid slumped below the former record,set in 1949.The December manufacturing result is the lowest since June 1980.At that point,the economy was almost through a recession that lasted six months.Over the past 28 years,the ISM manufacturing index has seldom dipped below 45.The Institute for Supply Management,a buyers' trade group based in Tempe,Arizona,surveys hundreds of firms for its monthly reports,which are considered major events on the economic calendar.

Shop Talk

I have readers in Sunnyvale and Mountain View,California.Southern Cal won its third straight Rose Bowl yesterday,to the chagrin of Penn State fans.The markets back East are still being cheerful,but the volume is light,so we cannot be quite sure about this.There is a consensus that the markets will recover in the second half of 2009,yet enough caution in the wind to give us pause.Everyone has been wrong before,and we are in the worst financial crisis in more than a generation,so a prolonged downturn would seem more than reasonable.It is also more than reasonable,then,to keep the portfolio defensive for the foreseeable future.Yes,you could miss some of the upswing,but once it occurs,there will be plenty of it to get in on.Have a safe drive home,if you aren't there already.