One of my favorite blogs, Business Monitor International's Risk Watchdog, had a post yesterday discussing the wider historical context of the Berlin Wall's fall. The discussion of the persistence of Communism and the comparison between 1979 and 1989 I personally found to be the most thought-provoking observations but the entire posting is worth reading, accessible here.

Observation 6: Communism did not entirely die.

China, Vietnam, North Korea, Cuba, and Laos all retain Communist leaderships, although in the former two countries the free market has largely prevailed. Many of the 'Communists' in Eastern Europe merely changed their names to 'social democrats' and returned to power, albeit in reconstructed form. Overall, the phenomenon of significant state interventionism in economies lives on long after 1989,

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Although investors appeared hesitant and positioned themselves ahead of corporate earnings reports, the Dow Jones industrial average inched closer to the 10,000-level before some afternoon weariness saw indexes sinking sharply.  At the end of the session that was characterized by slow trading, the Dow managed to notch up some gains to remain in contention for the 10,000 mark – a level it last breached nearly a fortnight after Lehman’s fateful collapse in September 2008. 

The Dow Jones industrial average, which rose as high as 9931.82 points in the morning, gained 20 points to close at 9885.80.  The broad S&P 500 index rose 4.70 points, or 0.44%, to close at 1,076.19 and the tech-heavy Nasdaq ended the day little changed.  Bond markets were closed for the Columbus Day holiday.  On the New York Stock Exchange, 16 stocks were higher in price for every 14 that fell.

Eight of the ten

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As the US strategic petroleum reserve (SPR) approaches capacity (721.5 million barrels filled out of a total possible 727 million, and will be filled by January 2010), the federal government will fade out of the oil-buying business. Some bearish traders believe that this factor can weigh in on prices, since most petroleum stocks in the United States are government-held rather than private. Bullish traders have also used the filling of the Chinese SPR as a reason that oil should go much higher.

The team at Casey’s Energy Opportunities believe that planned government buying or selling of crude oil for SPRs actually have very little impact in the overall market. However, an overall drawdown of worldwide inventory could put downward pressure on the price of oil. The various countries also have their particular reasons and influences in decisions to tap their reserves.

So which countries are executing preparedness plans to fill their strategic

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Gazprom will cut output in 2009 by 13.8%, the lowest in history, due to dwindling consumer demand domestically and in the former USSR.  The company has apparently said it is considering adding a third partner to the South Stream pipeline.  Bloomberg has an interview with the CEO of Statoil Hydro regarding hopes to join the Yamal project in northern Siberia.  Naftogaz Ukrainy apparently expects to see a recovery this year for the losses of 2008, maintaining that profit-making was prevented by currency exchange rates.  Vladimir Putin has said that although ultimately Russia plans to liberalize the gas market, a cautious approach is favorable.  According to Reuters, Russia will maintain Gazprom's export monopoly in the medium term.  A project to transport Russian gas from North Korea to South Korea has been halted due to inter-Korean tensions.  ...

A New Era in the Defense Industry: Lock And Load On Profits

by Tony Daltorio, Investment U Research

Over the past year, stocks of companies in the defense industry have taken a beating, down thirty percent… forty percent… or more.

Valuations have taken an even harder knock, with forward price-to-earnings dropping to just under nine times 2010 earnings… their lowest levels since the early 1990s, when the end of the Cold War led to the US cutting defense spending by more than half.

Today, investors fear a repeat performance, and let’s face it: The recon doesn’t look good.

Reports show that while the defense budget edges towards $600 billion a year, the supplemental budgets – which fund current operations – will actually decline sharply as the US winds down operations in Iraq and wages a more limited campaign in Afghanistan.

By 2010, total spending on research

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TODAY: US to modify or jettison missile defense plans? NATO chief to meet with Russian envoy; Lukaschenko sends out mixed messages.  South Ossetia denies book burning; think tank leader says Putin could be heading for Brehznev-style decades in power; Medvedev finds inspiration on blogosphere.The Wall Street Journal reports that the White House may abandon the Bush-era missile defense plans which have caused consternation in Russia.  AP sources quoted on the Washington Post suggest a compromise measure, tempered to Russian concerns.  RFE/RL has an entertaining list of the 'dissidents' President Medvedev might like to meet on his upcoming US trip.  NATO Secretary General Anders Fogh Rasmussen and Russian envoy to the alliance Dmitry Rogozin will hold an ...

TODAY:  Drug use nightmare for Russia; Medvedev calls for US support.  START talks to restart; tanks for Chavez.  Possible loan to Ukraine whilst relations remain chilly.  Black September anniversary; Scott Anderson interview.  Russia denies arms in Arctic Sea; infrastructure shortcomings scrutinized.  Russia is the world's biggest consumer of Afghan heroin, says President Medvedev, which 'is a threat to the country's national security' and 'a serious challenge to the health of the nation', which is already fighting demographic decline.  The President is calling on US troops to help curb the wave of drugs leaving the war-torn country.  Sergei Lavrov has said that isolating North Korea must be avoided and resumption of six party talks prioritized.  Lavrov has also objected to claims ...

I just spent an entertaining few minutes perusing the amateur photography gallery of President Dmitry Medvedev (the Moscow Times is running a story on this one).  So far I think Medvedev's photos are much better than Vladimir Putin's foray into oil painting, though it's hard to imagine one of the photographs nabbing a similar £750,000 auction price.What I am struck with though is this constant exaltation of both Putin and Medvedev as "the great man," which sometimes even reminds me of the kind of moves pulled by Kim Jung Il of North Korea (who once even spread the rumor that he was the best golfer in the world on the very first time he tried the game - five hole-in-ones).  The myth factories are pumping out stories in overtime, with Putin going to the bottom of ...

The U.N. International Atomic Energy Agency has filed a report suggesting that North Korea has failed to put a stop to its uranium enriching program and that Russia and China need to wholeheartedly back further sanctions.  According to Bloomberg, Japan apparently proposed to offer Gazprom $2 billion to help finance the building of a pipeline in exchange for 1 million tons of steel pipe.  PrimeGen Energy has announced it has signed a letter of intent to sell 75% of its working interest in its Timan-Pechora assets in Russia.  Lukoil anticipates that domestic oil production will get slower and perhaps even begin to decline, though Caspian and other foreign projects will see the company through the period of stagnation.  The company's vice president Leonid Fedun has defended competitors TNK-NP and Gazprom against the fines the Federal Anti-Monopoly ...

TODAY: New NATO chief asserts Russia needs to acknowledge sovereignty; nuclear chief fired; Uzbekistan wary of Kremlin's Kyrgyzstan plans.  Moscow-appointed judge in Yukos case to step down. Anniversary of Solzhenitsyn's death. The new head of NATO, Anders Fogh Rasmussen, has said that the alliance will attempt to pursue a 'strategic partnership' with Russia, whilst 'insisting on Russian compliance with her international obligations including respect of the sovereignty and integrity of her neighbors'.  The Commander of the strategic nuclear missile forces, Nikolai Solovtsov, has been fired after the repeated failures of the Baluva missile.  He will be replaced by General Andrei Shvaichenko.  Russia has renewed its backing for UN sanctions against North Korea, initiated to deter it ...