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How Much is Too Much?

June 28, 2006

Dear Fellow Options Trader,

It's been said time and again that everybody has a price. And in my estimation, that price is usually quite affordable!

It seems we can't go through a week without either another assault charge against Naomi Campbell or another careless attack on our national defense by the media intelligentsia. The New York Times is having its feet held to the proverbial fire for publishing a seemingly "how to" course for enemies of the U.S. about how we tracked the flows of terrorist money through SWIFT, an acronym for the Society for Worldwide Interbank Financial Telecommunication, which links 7,800 financial institutions around the globe.

Some might say the terrorists already knew money flows were being tracked, but until our "friends" in the media decided to refuse a request from the White House to shut the story down, those who mean to do us harm didn't know exactly how SWIFT helped us track and catch them.

Apparently The New York Times was asked by the White House not to break the story due to national security issues, as was the Los Angeles Times, which also ran with it. The Wall Street Journal went public with its report about the financial surveillance as well, although it was reported on Fox News' Web site that it did not receive a similar request.

Now, I believe in freedom of the press as much as anyone, but my red flag is raised when our national security is at stake.

The CIA and Treasury Department have been using various methodologies since 9/11 to track the activities of suspected and confirmed terrorists, and the unveiling of these financial channels will not only encourage these "bad guys" to find slicker, more creative methods, but it will also create even greater hostility toward our country and thus make us more vulnerable to future attacks.

DOES OUR 'RIGHT TO KNOW' JEOPARDIZE OUR SAFETY?

I was in New York on Friday to do a live appearance on "Your World with Neil Cavuto" and tape Saturday's "Cavuto on Business" show -- just as the SWIFT program story was breaking. While I was in the green room getting ready for the show, I asked Steve Forbes, editor-in-chief of the magazine that bears his family name, whether his publication would disregard a request from the White House about going public with certain information, and he said absolutely not.

This didn't take place on camera, but was instead simply his honest response to the question of whether the media has a responsibility to Joe and Jane Public rather than to circulation numbers desperately in need of improvement!

Minutes later, on Fox News' "Forbes on Fox," Mr. Forbes borrowed a phrase from World War II, offering that "loose lips sink ships." Indeed, in that era, people and corporations (including major media outlets) recognized the fact that our enemies can find how to hurt us -- our citizens, our troops and our way of life -- when we offer up information and discuss how the U.S. protects its citizens.

It's my belief that the "loose lips" were meant to "sink" the current administration at the expense of making the rest of us less safe. Now that the terrorists know the blueprint for how SWIFT was used, the program has become virtually worthless. As I said to Neil Cavuto on-air, The New York Times would sell its soul for an uptick in circulation. And perhaps the same could be true of any other number of news outlets if they had access to the same intel.

We need to remember that terrorists are gathering the same information that you and I are seeing. And if not revealing exactly what our government is doing at all times can possibly save and protect thousands of lives, then I am in favor of letting the government go about its business in a time of war so that we are all able to continue to go about ours.

TRADE OF THE WEEK UPDATE

Traders at the Chicago Board of Trade are indicating a better-than-80% chance of a quarter-point interest rate hike at tomorrow's Federal Open Market Committee meeting. The floor traders have always been the most accurate predictors of the Fed moves, as the monetary policy can be read like a book from the activity on the floor.

That said, I'd like to keep a close eye on tomorrow's market activity before making a recommendation, particularly as Fed Chairman Ben Bernanke provides commentary on the state of the economy. Although a quarter-point rate hike is assured, speculation about a potential half-point hike is what's keeping traders around in front of the holiday weekend.

Good luck trading and remember -- pigs get fat, but hogs get slaughtered, so don't be a hog!


Jon "Dr. J." Najarian
Editor, ChangeWave Options Trader


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