Now we begin to see the consequences of the recent election. The Homeland Security Act, another Patriot Act in sheep’s clothing, is being pushed for passage by the Republicans. In its present form the Homeland Security Act represents the greatest threat ever to US citizens’ personal privacy. I do not say that lightly.
For years, the US and its allies have, via a system code-named Echelon, monitored a substantial body of the world’s international and foreign electronic communications. This revelation was part of what initially prompted my move to encrypt the email I send. I continue to advocate email encryption as a standard practice. Your personal electronic communications should be private like your letters sent in the US mail.
But the Homeland Security Act dwarfs these privacy concerns. As detailed by NY Times columnist William Safire in “You Are a Suspect,” the Homeland Security Act does the following:
Every purchase you make with a credit card, every magazine subscription you buy and medical prescription you fill, every Web site you visit and e-mail you send or receive, every academic grade you receive, every bank deposit you make, every trip you book and every event you attend — all these transactions and communications will go into what the Defense Department describes as “a virtual, centralized grand database.”
To this computerized dossier on your private life from commercial sources, add every piece of information that government has about you — passport application, driver’s license and bridge toll records, judicial and divorce records, complaints from nosy neighbors to the F.B.I., your lifetime paper trail plus the latest hidden camera surveillance — and you have the supersnoop’s dream: a “Total Information Awareness” about every U.S. citizen.
Welcome to 1984. The time to protest to your congressional representive is now.
It looks like my bet on Aquila (ILA-NYSE) isn’t going to pan out in the short-term. Today they suspended their dividend and announced another quarterly loss (mostly attributted to their exit of the energy trading business). There’s an old investment joke about how “if you liked Company X at $30 a share, you’ll love it at $3” and while sometimes that’s true, I don’t think so here.
Without the dividend, Aquila becomes a long-term turnaround play. I think it has merit when studied in that light, but it’s not something I’d recommend to new investors. If, like me, you’ve already ponied up the cash for shares, I say ride it out and in the 3- to 5-year time frame when I think things will be more than fine. Indeed, I expect a resumption of dividend within 36 months. But Aquila isn’t exactly turning on a dime in altering their business direction, and it’s going to get a little worse before it gets better.
I expect a bad 4th quarter 2002 result and mediocre earnings for 2003. So far as bad news in the next quarter, well, Aquila’s admitted as much in statements and regulatory filings. Getting out of the trading business has proved expensive. This economy isn’t helping matters either, what with the over supply of energy on the market. If the company survives 2003—and their going under has always been at least a remote possibility—they should be well-positioned for stable growth and earnings in 2004 and beyond. That assumes a lot—maybe too much—but unless you have a need of a loss for tax purposes, I continue to advocate a buy-and-hold approach. I still think there’s an upside for the patient.