We anticipate an intensifying political crisis in the United States. The Bush administration's inability to provide a coherent explanation for its decision to invade Iraq is now haunting the White House. A year after the end of major combat operations, the Bush team still seems incapable of clearly explaining its rationale for invading Iraq. As a result, the Democrats have put the administration on the defensive. This quarter will determine whether Bush can recover and take the offensive as well. We have said that the election is Bush's to lose -- and at this moment, he is doing what he can to lose it. This moment may pass, but the second quarter will give us the first indication of whether the president can regroup. We suspect he can, but we no longer are certain.
In the financial world I think that would be called a downgrade.