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  1. China-Russian Military Exercise: U.S. Targeted

When China and Russia recently conducted a joint military exercise in the Far East, it was widely considered to be a show of force against Taiwan. But some observers say the real target was - the United States.

The main thrust of the historic air-land-sea war games was on the Shandong Peninsula, opposite North and South Korea across the Yellow Sea and far from Taiwan.

Both China and Russia provide military supplies to North Korea, which borders the two countries.

"If a preemptive war by the U.S. would overthrow North Korea's nuclear-armed despotic regime, neither Russia nor China would want U.S. and/or Japanese troops posted in North Korea," the Asia America Initiative's newsletter reports.

The exercise was described in China's official press as "simulating aid to a third country that has broken down because of terrorist violence."

But China and Russia do not regard Taiwan as a "country." And the Chinese government has repeatedly described some American military actions - in the Balkans, for instance - as a form of state terrorism against a weaker nation.

The exercise deployed strategic bombers, jet fighters, submarines, naval infantry landing craft, paratroopers and 100 Chinese tanks.

The Russian military said the objective included seizing a beach in a "foreign country" in advance of a land offensive by China.

"The most likely scenario for such a real-world conflict would not be the island of Taiwan, but the Korean peninsula," according to the Asia America Initiative.

Toward the end of the exercise, the Russians planned to use long-range bombers to fire cruise missiles at naval targets.

The newsletter points out: "The last time anyone checked, Osama bin Laden did not have a conventional navy.

"Logically, this phase of the exercise could only be aimed at U.S., Japanese and South Korean naval forces."

Editor's Note:

• Get the CIA translation of China's military manual that predicted 9/11 -- Go Here Now.

2. Sheehan Protesters 'Professional'

Cindy "Peace Mom" Sheehan camped out near President Bush's Texas ranch to demand a meeting with the president - if you can call staying in an air-conditioned trailer "camping out."

One observer of the scene, who considers himself a conservative, visited Crawford "to understand what was actually happening."

Here's what he told NewsMax:

"I found a well-funded, well-orchestrated public relations campaign, run by media professionals complete with the highest quality electronic equipment.

"Most of the Sheehan protesters were either professional (paid staff of a public relations group or radical organizations), or were long-time protesters, some admitting to beginning vigils against the government as early as 1965."

When the talk turned to politics, "they all responded the same way: ‘It is America's fault.' No matter what the issue, each and every one of them had the same default: Bad things are America's fault.

"Cindy Sheehan spent most of her time huddled with VIPs in an air-conditioned trailer. When she ventured out it was for a scripted and often televised moment.

"During one conversation I had with her I tried to ask her a pointed question about how much time she would actually be on the bus tour to Washington. (I had discovered she would only be on the tour for two days, and would be away giving speeches during the rest of the trip … and I wondered if she was being paid for these speeches.)

"Her media person grabbed her arm and led her back to the trailer and away from me.

"But a few minutes later, she emerged from the trailer, smiling and performing for the cameras. Like the chicken at the local carnival that plays tic tac toe, she eagerly performs for any microphone."

3. Karl Rove's Crawford Trailer

Sheehan wasn't the only one "camped out" near Bush's Texas ranch during the president's vacation - his close political adviser Karl Rove was staying nearby in a trailer.

While Bush stayed at his ranch in Crawford, Rove and deputy chief of staff Joe Hagin took turns living in the trailer just down the driveway from Bush's main house.

The president took heat for his 5-week vacation away from Washington, but White House officials made the case "that technology made it possible for Bush to run the country from anywhere, even the so-called Western White House," MSNBC reported.

The ranch is equipped with secure phones and videoconferencing equipment.

Also, Bush had Rove and Hagin close at hand, and top officials including Vice President Dick Cheney, Secretary of Defense Donald Rumsfeld and Secretary of State Condoleezza Rice all came to the ranch for face-to-face meetings with the president during his "vacation."

"When you're president," said White House Press Secretary Scott McClellan, "you're president 24/7."

4. Barron's: 'Deep' Recession Coming

With the housing and consumer sectors overheating, Barron's suggests that a recession is looming in the not too distant future.

Still, the respected financial weekly says a savvy investor can still make out handsomely despite an economic downturn.

Their solution for riding out the next recession: Sector Investing.

In a recent feature entitled "Surviving the Recession," Barron's says sectors like "consumer and housing sectors are overheating, increasing the likelihood of a deep recession."

But just as these sectors will harm the economy, key sectors will soar.
 
The publication notes that even when the tech market bubble collapsed "some stock pickers made money even in 2000."

Again, the key to winning was understanding sector analysis and investing. MoneyNews and its print newsletter Financial Intelligence Report has warned that the housing bubble will burst, and that key sectors are the best way to navigate the coming storm.

"Distortions that have developed in the economy and the market over the past 50 years have created wide disparities in the performance of various industry sectors - and opportunities for investors to prosper as some actually rally," Kenneth Safian, head of Safian Investment Research, writes in Barron's.

As an example, Safian points to the "contrarians" who bought shares of homebuilders and health-maintenance organizations during the recession of 2000-01 - and have counted significant gains.

Much of the real estate, gambling, health care and consumer sectors, and small capitalization stocks, have become "richly valued" in recent years, but valuations are favorable in other sectors, primarily technology, Safian reports.

MoneyNews has just released our latest sector investing report detailing five new locked-in profit trends that we predict will be the big winners in the next six months. We're talking gains of 25% to 50% or more. Get a copy of this report now. 
 
"A critical disparity now exists between the consumer and technology sectors," Safian writes.

While consumer spending has escalated since the early 1990s, capital expenditures for technology products declined, and the tech industry suffered a depression from 2000 to 2002.

"But it now looks to be one of the most favorable sectors. It has been consolidating for several years, a process likely to continue, and the market seems ready for the introduction of new software and hardware to replace older products," according to the report in Barron's.

What's more, with traditional growth stocks underperforming, growth-stock managers will have to buy the large tech issues. Individual tech stocks he favors include Texas Instruments (TXN), Nokia (NOK), Qualcomm (QCOM), Microsoft (MSFT), Raytheon (RTN) and Motorola (MOT).

In Washington, the "official" outlook for the economy is favorable, so a consumer-led recession would come as a surprise to policymakers. Most of them "are in denial," according to Safian, "and those who aren't in denial are frustrated by their inability to move legislation through Congress."

Recently MoneyNews' Financial Intelligence Report has made recommendations that are up over 50 percent on an annualized basis. Find out how to protect your investments and profit from the coming recession - Go Here Now.

5. Report: Corruption Spurs Israel's Expulsion of Jews

Rampant corruption in the Israeli government is behind the expulsion of Jews from occupied territory, a scathing new report charges.

Middle East analyst Rachel Neuwirth, reacting to a finding by Business Data Israel that named Israel's government as the second "most corrupt" among developed nations (after Italy), called the Israeli government "a cesspool of corruption and treason."

And she told the Jewish Voice and Opinion that corruption may explain "Israel's inanely self-destructive decision to expel the Jewish population of Gaza and part of Samaria, and to withdraw Israel's military outposts from these areas, which are essential for Israel's defense."

The Israeli Knesset Controls Committee recently revealed that Eival Giladi, Prime Minister Ariel Sharon's appointee to administer the disengagement plan, is paid by Palestinian interests to help develop enterprises - including resorts, housing and casinos - that are planned to replace the evicted Jewish communities.

Giladi is also managing director of the British-owned Portland Trust, which has plans to raise $500 million to build 150,000 housing units for Arabs on land seized from Jewish farmers in Gaza.

Ozrad Lev, a former high-ranking Israeli intelligence officer, told the committee that Giladi's appointment represents "a built-in conflict of interest."

But Giladi is only "the tip of the iceberg of people who stand to reap personal benefit from the disengagement," said David Bedein, bureau chief of the Israel Resource News Agency.

Another is an old Army friend of Sharon, Cyril Kern, who is now a wealthy British businessman. He made headlines in Israel for lending Sharon money to pay a fine for illegally soliciting campaign contributions.

Accepting loans from a foreign national is illegal for public officials in Israel, but Sharon was never charged with a crime.

Kern is now an investor in a corporation formed to develop a gambling casino on the site of a Jewish settlement in Gaza, the Jewish Voice and Opinion reports.

Another close friend of Sharon, Austrian financier Martin Schlaf, has exclusive rights to operate other casinos in territories administered by the Palestinian Authority.

Neuwirth says that Dov Weisglass, Sharon's personal attorney, and Deputy Prime Minister Shimon Peres may have financial interests in the expulsion as well.

"Sharon appears to be personally and financially beholden to a circle of financial backers and campaign contributors who stand to make a killing from the Gaza disengagement," said Neuwirth.

Responding to the corruption charges, an editorial in the Jerusalem Post called for "a complete revision of who gets to govern and how."

Neuwirth added: "The apparent reality is that Israel's government is a cesspool of corruption and treason. Its prime minister appears willing to place his people in mortal peril by destroying their national security, unity and morale, for no better purpose than to confer financial benefits on his financial backers and political hangers-on."

6. Gays Accuse McCain of Betrayal

A gay rights group has characterized John McCain's support of a gay marriage ban as a move to the right to bolster his chances of gaining the GOP presidential nomination in 2008.

The Senator from Arizona recently announced that he is backing an initiative that would change the state's constitution to ban gay marriages and deny government benefits to unmarried couples.

"By also banning government benefits to unmarried couples, it is a de facto ban on civil unions as well," according to the conservative Web site redstate.org.

"McCain's position thus goes beyond the Republican platform and puts him solidly in the camp of Christian conservative activists."

That move is seen as a betrayal by the gay rights publication The Advocate, which calls McCain a "notoriously pro-gay Republican" who is now supporting an "antigay amendment."

McCain's so-called "pro-gay" stance could be based on his opposition to a federal constitutional amendment banning same-sex marriage. But that position stems from his belief that the issue should be dealt with on the state rather than federal level.

The Arizona Human Rights Fund is fighting the Arizona initiative, which could be on the ballot in November.

Steve May, co-chairman of the group, said McCain is doing what he has to do politically in preparation for an expected run for the White House.

McCain's "endorsement of issues that many Arizonans consider extreme is understandable in light of the fact that he is also running for the nomination in places like South Carolina and Louisiana," May told The Advocate.

He said the amendment "doesn't fit with Arizona's live-and-let-live traditions."

Meanwhile McCain has been receiving some rough treatment in his own state over his proposed immigration reform bill.

The senator was booed by some at a recent town-hall style meeting when discussing the bill, which would allow undocumented immigrants to stay in the country if they pay a fine and participate in a guest-worker program.

Editor's Note:

• Dick Morris Reveals McCain's Must Win Strategy Go Here Now.