Saving Face By Slaying Owls
Market Commentary
By Charles Payne, CEO & Principal Analyst
As any parent, the most majestic scenes for me were the births of my children, spectacles that could have only been orchestrated by God, and at one point it was the most empowering and humbling experience possible. Beyond that, I've witnessed other wonderful scenes brought to us on this planet that also serve as reminders of how grateful and how humble we should also remain. One scene for me occurred in North Dakota where I sat in a truck not far from a nuclear missile silo. The sun was falling, and the miles of skyscraper (tall sunflowers) served as the backdrop for this cool picture perfect evening. And there it was. a giant owl not in flight but gliding through the sky without flapping its wings.

The owl maneuvered with the grace of an Olympic ice-skater and defied gravity by moving higher and lower at will. The owl was on the prowl for an evening meal, and the intended target would never see or hear it coming. It was simply a blessing to sit there to watch, absorb, and appreciate that moment.

Natural Selection and the Free Markets

This brings me to the news the Obama administration is prepared to shoot and kill the barred owl in an effort to save the spotted owl. Keep in mind the spotted owl became a major cause of contention as efforts to save it from loggers eventually saw hundreds of logger jobs lost as millions of acres were set aside for their protection. Those special efforts haven't stopped the population of the spotted owl from plummeting more than 40% over the last 25 years. So, once again drastic measures must be taken.

In this case, Ken Salazar has given the green light to shoot and kill the larger cousin to the spotted owl. Environmentalists have taken to calling the barred owl, just 2 pounds in weight, a "bully" driving out their symbol of victory against mankind and capitalism.

Of course the spotted owl is a carnivore, and its prey includes flying squirrels, wood rats, and smaller birds. Maybe it's from my childhood and watching Rocky and Bullwinkle, but I have a soft spot for flying squirrels-where are their rights not to be eaten? But more seriously, this is really amazing that one species could be destroyed to stop what might simply be the process of natural selection. For those enlightened folks in the elitists halls of the White House who spend their day patting themselves on the back laughing at us simpletons, there is surely respect for the course of nature.

Obviously, it's not the case that the natural course of things should be allowed to happen in nature or business.

The administration admits an "ethical dilemma" but says they came to this decision from a science-based approach to forestry. It's one thing to kill sea lions to preserve salmon, which still doesn't sit well with me, or to kill coyotes and other predators to save livestock—a no-brainer. But, I think what we are seeing in the newest chapter in the saga of the spotted owl is a sense of outsized power to decide winners and losers in all facets of our lives. There are 162 species of owls in the world, and I would think they all had the same rights to evolve and survive without interference from mankind. Perhaps it's symbolism and the need to avoid embarrassment.

Back in the heat of the battle to save the spotted owl, (Northern variety) environmentalists hid huge spikes in into trees that not only ripped teeth out of chainsaws but exacted bloody damage to loggers working to pay bills and feed their own families. What would it say if, after all the verbal and psychical attacks, all the money and time and all of the finger wagging preaching from elites that never saw an owl and might eat one off a menu of a fancy Manhattan restaurant, the spotted variety still saw its demise?

Even as hardworking Americans were being put out of work, we were told new jobs for biologist would be created to conduct surveys. Of course the net job loss and true economic value of logging lumber that's used to build homes and create paper that carries words that change worlds and help to maintain order could never be covered by biologists and surveys. But as the sidebar shows, there is a lot of money being poured into this thing. What's really being protected with the killing of barred owls?

Not to belabor this point, but another story getting little press is another Ken Salazar scheme to wreak havoc in the name of saving a single species of animal. The administration wants to demolish three dams on the Klamath River in order to help Steelhead trout, Coho salmon and Chinook salmon. There are numerous dams along the river, and I'm not sure which would be blown away, but they are all so old you wonder why they need to go now in order to save these fish?

> Link River Dam 1921
> Fall Creek Dam 1903
> Keno Dam 1931
> Copco Dam 1917 and 1920
> JC Boyle Dam 1958
> Iron Gate Dam 1962

Destroying these dams would hurt homeowners, ranchers and small businesses, along with destroying sources of clean hydroelectricity and water for irrigation. Professor Paul R. Houser of George Mason University called the source of this decision "junk science," and even Bullwinkle is smart enough to know that's probably right.

It would be a serious dilemma if the spotted owl ate Chinook salmon. This isn't lightweight stuff as it points to an attitude that is very dangerous. I'm willing to live with and deal with obstacles created by God not by those created by a single human being with his own idea for who wins and who loses based not on fitness but fancy.

The Market

I wondered about the market and its ability to rally after the LTRO came in so much lower than expected. And while stocks finally stumbled, the kind of sell-off I was worried about occurred in the precious metals market where gold and silver took massive hits. Interestingly, it wasn't the less than hoped for LTRO but comments from Ben Bernanke that seem to have taken the biggest toll on stocks and precious metals. The Fed Chairman is in that odd pickle of trying to take a victory lap and still keep open the option of further money-printing. Some of the worries include:

State and local government worker layoffs (too many economic promises to workers)
Housing market (prices are still falling and foreclosures will surge this year)
Gasoline prices (biggest component of oil spike from weak dollar and money printing)

He has called the recovery uneven and modest, which is as close to honest as we might get from the Fed. Oddly, the market's initial interpretation is that the Fed isn't going to print more cash. So, we have to wonder if it's possible for the stocks to rally on "uneven and modest" economic growth if Fed action is off the table. This is a serious catch-22. The good news early this morning was a better than expected PMI reading in China. Speaking of catch-22's, so many people are rooting for China to stumble and yet we need them to keep growing so they can buy our treasuries and become a larger market for our finished goods.

Because our government must spend more and more money, creating this welfare utopia, we can't call China out for currency manipulation, and the more powerful they become, the more we swallow our tongues. The only revenge would be seeing their locomotive economy fly off the rails. But we pray it doesn't happen ... yet. In the meantime China's role in the revival of our car companies is under-reported, but auto sales could make or break today's session. In the absence of a jobs report this week, the street will dissect today's monthly auto sales and other data for hints at February job growth.

Comments

When are you running for President? I think the country would be well served with your sensibilities. Thank you for being the voice of reason. Jan Morris on 3/1/2012 10:38:26 AM

We moved from Greenwich, CT to Klamath County. Quite an eye opening experience. The federal gov. has destroyed the economy, which has led to drug abuse, etc. The lake had 29 mills on it not that many years ago. Today there is one. This state has 2 democratic senators who have no rural experience. There is essentially no representation for the people or businesses in this area so everyone dumps on them. Why would anyone remove dams that provide power. They're more concerned about the sucker fish. It's mind boggling. Thanks for your commentary today. Anne on 3/1/2012 12:49:18 PM

Charles, Iappreciate the opportunity to comment. I read your comments daily and several have spurred me to action in my own right. Thank you for all you do in keeping me aware. God bless you and yours. Shirley Martin on 3/1/2012 3:23:36 PM

It's all icons and dogma. My dad, a gentle, intelligent soul, used to disparage the left for never coming up with a new thought. He'd hear some rant and say, "That's the same rant they were spouting in the '30s." It's not the owl, it's the owl as icon - it's no longer an owl, it's a liberal symbol. What right do they have to take over the owl's identity? Patricia Flynn on 3/1/2012 3:41:33 PM

Charles, I have lived on the Klamath River most of my life. My ancestors have lived here forever, so I am aware of the issues. In the beginning of the last century the miners dredged the upper Klamath by building wing dams. The wing dam was built about half the way across the river and that's how the huge dredge was moved. My grandfather was a miner and he said the salmon runs were not affected. The problem now is commercial over fishing (fish factory ships). Also the lower Klamath Indian Tribes have gill nets across the river and are taking way more fish than reported. During the salmon run a person can go to that area and buy a pickup load of gill netted salmon. It's going to cost about twenty bucks a fish but it can be done. The spotted owl put me out of business, but that is a different story. Sincerely, Larry C. Brown Larry C Brown on 3/1/2012 6:24:17 PM

The spotted owl has mated with another owl and is surviving as a new species. The harassing of the Klamath Basin people is about taking out farmers, it started with the man-made water put in to attract farmers. This is a lower populated area that can't fight back. Valerie Bonner on 3/2/2012 4:35:57 PM

 

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