Admiral Mullen To Stay

Admiral Michael Mullen will remain in his post of Chairman of the Joint Chiefs of Staff for at least the first year of the new presidency.The admiral will lead the effort to brief the incoming officials on global hotspots and the options for dealing with them.Admiral Mullen will utilize two charts.One of them shows historical challenges incoming presidents have faced,such as the Bay of Pigs invasion of 1961 and the 9-11 attacks.The other chart is classified and depicts current threats.The Joint Staff transition team supporting the admiral is headed by Marine Corps Brigadier General Kenneth F. McKenzie,Jr..Admiral Mullen sees presidential transitions as periods of alarming risk.He is doing his best to smooth out the international situation.Last week,he held talks with his Russian counterpart,General Nikolai Makarov.They discussed the future of NATO and missile defense in Europe in a businesslike way.

American Express Reports

American Express(AXP) has reported Q3 earnings of 0.74 a share,versus an estimate of 0.59.Its revenue was 7.16 billion dollars.The firm has set aside significant additions to its loan loss reserves.It aims to reduce operating costs and spending.The company had 1.4 billion in unpaid accounts,which was an increase of 51%.Cardmember spending is likely to remain soft through Q4.AXP is a holding of Omaha billionaire Warren Buffett's Berkshire Hathaway.

Raid Succeeds

U.S. troops carried out a successful raid on a building in Mosul in Northern Iraq on 5 October.The building is described as having been a major al-Qaida command and control center.Killed in the raid was Abu Qaswarah,the No.2 leader of al-Qaida in Iraq.Mr.Qaswarah,a native of Morocco,was in charge of al-Qaida in Northern Iraq,recruiting foreign fighters and directing them from Mosul,one of the few remaining al-Qaida strongholds in the country.A popular commander,he had been trained in Afghanistan.Four other militants died in the raid.

Genentech Reports

Genentech(DNA) reported earnings of 0.81 cents a share versus an estimate of 0.88.Revenue was 3.41 billion dollars versus an estimate of 3.36 billion.Its forecast for Q4 is 3.40-3.45 billion.Cowan and Company upgraded the stock from neutral to outperform.

Navy Professional Reading Program,Part III

The following titles are recommended:Eagle Against the Sun,by Ronald Spector;The Sherrif,by Colin S. Gray;The Crisis of Islam,by Bernard Lewis;On the Origins of War,by Donald Kagan;White-Jacket,by Herman Melville;The Pursuit of Victory,by Horatio Nelson.

GE Earnings

General Electric reported earnings in line with estimates.Earnings per share were 0.45,matching the estimate.Revenue was 47.2 billion dollars,versus an estimate of 47.342 billion.GE's infrastructure and NBC Universal earnings were up,while those of its consumer and industrial segment were down.CEO Jeff Immelt said that,while GE is not immune to the current environment,it is outperforming its peers.

Navy Watches Pirates

Six U.S. Navy warships have surrounded the Ukrainian freighter MV Faina,which has been commandeered by pirates off the coast of Somalia.Among the warships is the USS Howard(DDG83),an Arleigh Burke class destroyer.The warships have been sending helicopters to observe the pirates,who are holding 20 hostages,including Ukrainians,Latvians and Russians.Another hostage appears to have taken ill and died.There are 33 tanks,as well as other weapons and ammunition,aboard the freighter,which the Navy is concerned will aid militants in the region.The pirates are believed to be armed with automatic weapons,anti-tank weapons and grenades.They say that no one can tell them what to do,and that they are prepared to die if need be.There have been about 30 pirate attacks in the area this year.The Navy leads patrols along the 1880 mile Somali coast-or about 3025 kilometers.The Canadian navy also patrols off Somalia.Somalia has the longest coast in Africa,and is near key shipping lanes.A Russian frigate should arrive on scene within days.

Q3 Results

In Q3,the Dow Jones Industrial Average dropped 4.4%.The S and P 500 Index was down 9%,while the NASDAQ Composite Index slid 13.3%.

Honors

Two Navy SEALs have died in combat in Afghanistan.Senior Chief Petty Officer John Marcum of Flushing,Michigan and Petty Officer First Class Jason Freiwald of Utica,Michigan were killed in an engagement with heavily armed militants.CPO Marcum had received four Bronze Stars for heroic or meritorious service in combat,while PO Freiwald had received a Bronze Star and Joint Service Commendation Medal for his previous performance.The SEALs were part of Naval Special Warfare Development Group,Virginia Beach,Virginia.

Advisor's Counsel

Hugh Johnson of Johnson Illington Advisors says we are in a bear market and recession.You just don't make a lot of money in this environment.It's a preserve your capital environment.Wait until the market turns,then step in.It's better to buy them a little higher than to catch a falling knife.