2007 has not been a particularly memorable year, except perhaps if you are a Red Sox fan or the holder of a zero-down ARM.  The economy has managed a respectable showing in the face of a major melt-down in the sub-prime mortgage market, $100 dollar a barrel crude oil prices, and a precipitous decline in the dollar.  The American economy is a pretty miraculous thing.  It keeps on generating new jobs, in spite of market forces that would decimate most other economies in the world.

2006 will go down as a good year for business, the stock market, private equity firms, youTube, Bordeaux wine futures, Exxon-Mobil, and, improbably, the Saint Louis Cardinals. Faring not so well would be George W. Bush, the Amaranth Group of Hedge Funds, and the Boston Red Sox.

October 21st, 2005 was, of course, the 200th anniversary of the battle of Trafalgar. Trafalgar, you will remember, was where an English fleet led by Admiral Horatio Nelson demolished a larger French and Spanish force, thus dooming Napoleon's plan to cross the channel and invade England. The event was commemorated in grand style in England with a series of events, the highlight of which was a dinner on Nelson's flagship, HMS Victory, still on active service (in dry dock) in Plymouth.

T.S. Eliot once said "Humankind cannot bear very much reality". The year 2004 has tested all of us on the reality dimension.

The year 2003 started for Sally and me with a visit to South Africa for the hundredth anniversary celebration of the Rhodes Scholarship. It was a particularly memorable celebration because it highlighted a new collaboration of the Rhodes and Nelson Mandela Trusts to help build schools in South Africa. The week in Capetown ended with a lovely dinner at a wine estate with Mr. Mandela as guest of honor. He put aside his prepared text and spoke from the heart about his and his people's long journey to freedom. It was inspiring. Although in his mid-eighties and less steady on his feet, he has lost none of the grace, humanity, and determination that mark him as one of the twentieth century's great leaders. In retirement, Mandela still provides much of the moral force for a multi-racial society in South Africa. Many feel that his presence remains essential to the success of the modern South Africa.

Greetings, last year in this letter I was bullish on the prospects for 2002. Turns out I was mostly wrong.