0230 GMT October 31, 2008
Bail Out US-Style Banks that re getting infusions of the people's money are permitted to continue giving out dividends, and are not even required to lend the money, but are allowed it to add it to their reserves!
The rich get richer, and the common man can go to heck or where he will.
Bail Out Russia-Style The first two banks to get $50-billion, or a quarter of the Russian bank bailout, are owned by Russia's wealthiest persons.
The rich get richer, and the common man can go to heck or where he will.
Marx Wonder what the old boy would have made of all this Robbing Hood, stealing from the poor to give to the richest?
$3.5-Trillion And Counting After pumping in cash and guarantees of $3-trillion in order to restore liquidity to a market shot down by the collapse of mortgage-based securities, the Giant Minds of US Government finance have decided this is not working. So there is a new program in the works: $500-billion in guarantees to mortgage holders (many being the same banks who are feeding at public trough right now) so that mortgages for the needy can be restructured.
So now the banks, mutual funds and whatnots get a double dose of goodies to do one job.
Makes perfect sense: if you've drunk 750-ml of undiluted Russian 200-proof vodka in one sitting.
Meantime, what of those of us who pinched and scraped to keep paying our mortgages, for 13 years in the editor's case and many more years in the case of some readers? What if we are finding it hard to pay - ~60% of take-home in the editor's case? Sorry, we're out of luck.
That's the New American Way.
Something Beautiful and Inspiring, Really Far From Washington DC, America's Cesspool
This Hubble picture from NASA was taken after Hubble recovered from a month's blackout, caused by a malfunctioning router. The two galaxies, ~450-million light-years away, collided, with one passing through the other. The hot blues are new stars born of the collision. International Herald Tribune explains the center of the galaxy that was hit is the red region of the blue ring.
In February 2009, the last Shuttle mission to Hubble will refurbish and expand the telescope's capabilities, to allow it to operate to 2013, twenty-three years after its launch in 1990.
Hubble's successor is the James Webb Space Telescope, planned for a 2013 launch on the Europe Space Agency's Arianne rocket at Lagrange Point 2, 1.5-million kilometers from earth. Its mirror will be 6.5-meters vs Hubble's 2.4; among other capabilities, JWST will see up to 28 microns versus 2.5 for Hubble.
0230 GMT October 30, 2008
US General Pitch For More Afghanistan Troops In addition to the three combat brigades earlier requested, US military is asking for 10,000 supporting troops including an aviation brigade, 3 MP battalions, two engineer battalions, and other logistic/support troops. This adds to 20,000 troops, and we hear that there is a request for a fourth combat brigade.
After we finished bashing our head against the neighbors brick wall and felt much better, we were better prepared to face the existential question of why does American politics require US generals to consistently low-ball troops requirements, and forces them into a situation where they must negotiate dribs and drabs, always leaving them behind the curve.
The answer we have is that either the American public or the government or the military or all three are idiots unable to face hard facts.
The hard facts in this case - as they were in Iraq - is that unless you start a war right, you can spent forever and a day trying to get it right. The starting reason Iraq took five and a half years and not one was that 125,000 troops were sent instead of 250,000 which the generals required.
The US military has extraordinary achievements to its credit in Iraq, but that does not mean that we not recognize Iran's role in US success. Iran eventually figured out the more they opposed US, the longer US would stay. You can see the Iranians have their own, rather serious idiot problem: they could have avoided a big mess simply by cooperating with the US; US would have gone home long ago, leaving Iran a free hand. Anyway. Had the Iranians continued to oppose the US, America would be bogged down for years more in Iraq and could easily have even lost the war - again, because the committed forces were too small.
Its now becoming clear that the forces committed to Afghanistan were too small to prevent the Taliban comeback. We believe the US military has known this since 2006 - Americans on the ground are rarely idiots of any kind. But because there were no more troops available, the military had to do its best and the situation has deteriorated to the point that the Afghan war is in balance.
Now, 20,000 troops is not going to cut it. This is an ultra-lowball estimate driven 100% by politics and 0%. We can argue about how many troops are needed; in our opinion anything less than four additional divisions primarily to protect the border is guaranteed to fail. We're talking 100,000 more troops, perhaps 150,000 more.
Are the general going to get 100-150,000 more? No more than your Editor is going to win Miss Universe.
What the American military leadership has to do is stop being the waggy-tailed sniveling lap-dogs of the politicals. It has to stop saying: "Yes sir, three bags full, America all the way hoo-hah and dom-de-day" to the politicals. It needs to stand up and plainly tell the politicals the job cannot be done with less troops, and the politicals need either to leave Afghanistan, or the generals will resign en mass.
American military seems to think patriotism is sucking up to the politicals and saying "it will be done" when the mission cannot be done. This is the problem the US military leadership has had since 1950.
It may come as a huge surprise to American military leadership, but patriotism has to do with serving the United States of America, not the politicals. The "Duty" part of "Duty, Honor, Country" does not mean becoming yesmen to the politicals. The duty is to the country and to the soldiers under their command.
It is immoral for the generals not to tell the truth, and if the truth is not heard, not to resign.
But is this going to happen? It is not, because there is no honor among the military leaders. If nine of ten ranking generals threaten to hand in resignations, the tenth will go crawling on his belly to lick the President's boots and say: "Those other generals are cowards. Give me the job, I will win, regardless of how few resources you give me."
The other nine know this, and they don't want to resign for nothing, and be called cowards and incompetent in the bargain. They figure why should they ruin their careers, and some actually believe they can stop things from getting really bad for their men and country if they stay on.
We know that we are going to get a blast of letters saying: "Nine of ten top generals are honorable and honest? Wake up, its doubtful if even three of ten are." But we have to be polite its nine of ten.
So since no one is going to resign over Afghanistan, it's really a case of "there we go again" - serious rolling of the eyes. Once more into the breach, dear friends, once more setting ourselves up to make a mess. Groundhog Day, the movie, reprised.
0230 GMT October 29, 2008
Iraq we haven't been much concerned about Iraq because, as we've explained before, as far as we are concerned the US has won that war and needs to go home. Any plans to stay on for years to ensure Iraq does what the US wants are unrealistic, and we've also said that before.
The situation there right now is that contrary to what the US says, no consensus on letting US forces stay to 2011 exists within the country. A great many people want America to say "bye, its been real", not least Iran which - in case anyone needs to be reminded - has a great influence over Iraqi domestic politics. Indeed, Iran's influence in that aspect is greater than that of America's. Iraq enjoys control over all three Shia factions - Najaf, al Malaki, and al Sadr, and two of the three - Najaf and al Sadr want to sing "Red River Valley" on December 31, 2008. Al-Malki is torn between Iraq and the US: as a nationalist, he is ready to let the US stay, but only on his terms; that means a training and advisory role and nothing else. Contrawise, without American support his personal position may become untenable.
Moreover, US and al-Malaki can come to any agreement they want, but the Iraqi parliament has to ratify the agreement, and that is just not going to happen before December 31. Indeed, from the Iraqi viewpoint it makes no sense to agree to anything until the new US president settles in and the future contours of US policy become clear. This could take all of 2009; if the US remains in Iraq beyond December 31 without a hard-fast-sealed-delivered agreement, it will do illegally. That obviously is not a good thing whichever way you look at it.
This is the problem with winning a war: people expect you to go home. Japan and Germany, which the US takes as its examples, are completely inapropos because US totally defeated them and dictated unilateral terms. Later the two nations saw the virtue of having the US protect them against USSR and in Japan's case USSR/PRC. But for the Cold War, by about 1950 the Germans and likely the Japanese would have started agitating for US to quit.
The US was at war against Saddam, not against Iraq or its people. Saddam is gone, the Iraqis think they are able to carry on, on their own. That's all there is to it.
Euros In For Surprise If Obama Wins says International Herald Tribune. If you look at the world press, its pro-Obama fervor you'd think the world also gets to vote in the US elections. If that were the case, McCain would lose not 48-52 or something similar, he'd lose 2-98.
IHT points out that American global imperatives remain its imperatives regardless of who is the Prez. No US president is going to sit by and let the US slide into some kind of B Team status. Liberal or conservative, blue or red, white or black, man or woman, Martian-in-human-disguise or human, the US Prez is going to stand first, last, and only for America.
We've been trying to make the same point to our foreign friends, who seem to have no end of complaints about how the US doesn't understand them because Americans are so stupid, but who in their turn don't understand the first thing about the US because they are stupid enough to think if someone doesn't agree with them, that person is stupid.
By the way, the Euros are having a great time supporting Obama. So, its easy to be liberal when it isn't your country. So let's have the Germans, for example, step up to the plate and elect a half-Kenyan/half-white-German left liberal to run their country. The Editor freely admits that in many ways Euro societies are more humanistic and rational than America. But there is no need for them to think they are so superior in every respect. How many decades is it going to take before the Europeans get their own Obama?
Think for a moment: 88% of America is not black. That Obama has gotten where he has, win or lose shows that Americans really do take the matter of equality regardless of race seriously. So when the Brits elect a South Asian as prime minister, the Editor will accept their right to talk of racism in America. Until then, it will be a good idea for the Euros to think on who is really racist, them or Americans.
0230 GMT October 28, 2008
US Raid Against Syria Confirmed - not that we doubted the raid took place. US says an Al Qaeda facilitator who infiltrated fighters and money into Iraq is believed killed. US says it was careful to avoid harming civilians, and the women and children at the site were alive when the US soldiers left. So far in the international media, at least, Syria has shown a picture of just one woman apparently under treatment in a hospital bed. seems to us if women and children had indeed been killed, Syria would have provided a lot more photographs.
Reports say that two of the helicopters flew cover while two landed soldiers who conducted the attack on the house. We still suspect US captured a person/persons to take back to Iraq, and this gentleman may well be the so-called dead facilitator.
Meanwhile, Taliban claim they shot down a Chinook CH-47 in Afghanistan; US says all aboard were rescued and no one was killed.
UN Likely To Mount Offensive Against Congo Rebels A renegade Tutsi commander who has refused to cease-fire in the Congo has launched an offensive against Congo army forces in the northeast. He overran the big protected gorilla park; the rangers had to flee. This is very bad news because the gorillas here number 700, among the last of their species left in the world.
Next, his men overran a Congo army battalion HQ on the road to Goma and continue to advance.
Meanwhile, refugees angry at what they say is the UN's failure to protect them attacked the UN offices at Goma, one civilian is said to be dead.
UN says it cannot permit the rebels to advance further; this suggests a UN offensive is being prepared. UN has said it has held off attacking because refugees and fleeing Congo army soldiers could be harmed.
We tried very quickly to find out what the UN has in the area, and there seem to be an Indian mechanized battalion and an infantry battalion, plus Indian Air Force Hind gunships.
Their ability to quickly defeat the rebels is in no doubt. The problem is the UN is very thinly spread on the ground. To go after the rebels for a permanent solution to the problem will require at least two brigades, more likely three. It seems unlikely to us at this time India will send a division to the Congo; Pakistan is short of troops due to the NWFP insurgency and may not want to expand its international commitments; Bangladesh troops are well-trained but lightly armed and without battle experience, and they require significant logistics support, which no country may be ready to furnish.
This Is Why We Don't Usually Bother With Somalia News A couple of days ago the media reported that the Somali government and the Islamic rebels had agreed to a ceasefire. We were so skeptical this would materialize we did not bother reporting the story.
Sure enough, yesterday the main Islamic rebel group said it had no intent of ceasing fire, and that the government announcement concerned a small splinter group the government was using in an attempt to divide the rebels.
0230 GMT October 27, 2008
US/NATO Prepare To Negotiate with Taliban Some mornings one wonder why one bothers to get out of bed. Awaiting your editor was the Washington Post with this joyful news: US/NATO have decided the issue is not if to negotiate with the Taliban, but when. All agree that it will take time to set things up, more to reach agreements, but all are also agreed this is the only way to end the Afghan war.
What is about Americans? Are we manic-depressive as a people? Why are we either hitting individual people with 2000-lb bombs or talking about negotiated peace? Is there nothing in-between?
We said this just the other day: Negotiations with your enemy are a good thing. Negotiated peace is a good thing. Jaw-Jaw is better than War-War. But not where the Taliban is concerned. Should we have been talking to Pol Pot & Co. when they were killing millions of their country people? No. The only way to negotiate with them was at the point of a 203mm howitzer. Some people are guilty of such heinous crimes that the only way to deal with them is to kill them.
In Iraq, yes, negotiations were the best route, and if we blame American policy makers it is because they refused to negotiate with the Sunnis and gave a four-year life to an insurgency which should never have begun. But the Taliban are something else altogether.
Yes, the Afghan War as now being fought is unsustainable politically and in terms of available troops. The way to deal with this is not by negotiating with a bunch of psychotic goons, but by changing tactics to minimize the number of troops needed, the casualties, and perhaps even the cost. In words, to fight like you believe its going to take 20 years.
If the Americans cant figure out how to do this, why not ask our new allies, the Indians? The Indian Army has serious experience in fighting multi-decade insurgencies at low cost.
America, please think this over. The great majority of people are not evil. The Taliban, however, are evil by any definition. Do not negotiate with them; else you will learn why soon enough.
3-Way Crisis Building Up On The Horn of Africa? Djibouti has long had territorial differences with Eritrea , and intermittent clashes have been going on for years. But now Djibouti has told the UN unless Eritrea back down in the latest round of tensions, Djibouti will have to go to war to throw out Eritrean invaders. The UN has repeatedly called on both sides to withdraw forces from the border and to start negotiations.
Complicating matters is that Eritrea says Ethiopia is building roads through Djibouti border territory so it can mass artillery against Eritrean positions, a charge Ethiopia denies [BBC.]
Syria Says US Helicopter Attack Kills 8 Civilians The US says it is investigating. The interesting thing is the US is not denying the attack outright, and considering the point hit is 17-km from the Iraq border, we can forget about navigation/targeting error.
More curious: Syria says 8 US soldiers debarked from the helicopter and attacked a building under construction. This sounds like a mission to obtain live prisoners for interrogation: if US had reason to believe terrorists were using the house, a UAV or two would have been sent, no question of risking 4 helicopters, their crews, 8 men on the ground and probably others on board the helicopters just to blow up a house. For all the apparent flawless ease with which such missions are executed in Hollywood movies, this is a terribly risky type of operation which you mount only when you absolutely have to.
Later, rumors quote unnamed US sources as saying the house contained Al Qaeda operatives and the US decided to act unilaterally by sending in SF troops.
0230 GMT October 26, 2008
Rant (Not Terribly Profound) On The Price Of Oil
So the other day, oil looked ready to crash through $150/bbl on the way to its pit stop of $200/barrel before getting to its real high. Some were crying "market manipulation!" but the oil types - producers, traders and so on - were saying "that's the price the market has set, we must let the free market operate."
Don't know why the same people don't want the free market to operate with regard to the financial institutions and so on, but that's neither here nor there. No one claimed honesty is a virtue of the rich.
So now oil is at $65 and even with OPEC saying it will cut output by 2-million bbl/day, there appears to be no certainty the price won't slide to below $60.
So the oil lot are saying "demand recession".
So please explain, ye oil lot. World GDP will grow not at ~4% in 2009, but at something near 2%. Lets be pessimistic and say the growth will be zero. A 4% loss of demand drops the price by more than half? In which economic model?
Take your time about explaining this: we won't hold our breath because to normal people the answer is pretty obvious. The price shot up because of speculation, and as the signs of a global slowdown began emerging, oil price was kept up by people fleeing paper wealth for real wealth. So, in effect, the price drop is only very partly due to demand reduction. Its due mainly to the withdrawal of easy money now no longer available for speculation imposed on top of a previous wave of speculation.
Back to OPEC. Isn't it strange that OPEC is talking about reducing output to boost prices, i.e., refusing to let market price mechanisms work, and we're all quite cool with that, bar a few statements of indignation from US/UK?
Consider: the people that have been most affected by the catastrophic oil price increase have been the poor countries, about who neither OPEC nor the developed world spared a thought when their balance of payments went into crisis. So every commodity price is coming down: food, metals etc etc. Why is the world letting OPEC get away with cutting output?
Is oil less important than food? Given that you need energy, fertilizer, and transportation to grow/distribute food, oil is as important as food. So if tomorrow US, Canada, Brazil, Argentina, Russia etc formed a wheat cartel, and other countries formed a rice cartel, what would be the world reaction if as prices drop they decide to curtail output to keep prices 20-50% higher than today, on the justification used by OPEC, which feels a price between $70-$90 for oil is just right?
Think about that.
Here's another thought. There is a limit to how much OPEC can cut output. Some countries like Saudi, Russia, Brazil (not a member) have fat foreign currency reserves and can afford to wait out a 1, 2, even three year spell of lower prices. They can afford to cut. But other oil producers cannot. After a few months at most, they will have to resume production because they need the money; the betting is they are already getting ready to cheat on quotas. Once they resume production, if the global economy has not improved - and in a few months or even a year it will not - then the price could start spiraling downward. Personally we think there is no chance of going below $40/bbl because oil extraction costs money.
Nonetheless, production cuts may well not work. We at Orbat.com for one will not be weeping.
The London Times and Sex: Another Pointless Rant
Okay, so here is the London Times Online at it again. A major story about women who just can't say no to sex, and a side bar article on 10 things to know before buying a vibrator. On the front page. Your editor confesses he read the article on the girls who just caint say no, because frankly, he seems to meet only girls who caint say yes and this has been going on for a few decades. He'd hoped for tips on how to meet the Right Kind; unfortunately it seems to be - if you're a guy - that either you have it or you don't have it.
The Editor Does Not Have It. Or maybe he's reading the signals wrong: when the lady is doing the 100-meter sprint in high heels in Olympic time in the other direction, perhaps he should stop assuming she's saying No. Perhaps this is a very sophisticated way women have of saying "yes". Ditto when she unleashes her four Rottweilers who haven't been fed for four days along with her Attack Lap Poodle with a single command: "Get him!". [Clue: Fear the Lap Poodle. Rottweilers become your fast friends when you feed them that hefty drunk/passed out University of Maryland student lying in the middle of the sidewalk downtown. Lap Poodles can only be stopped by offering them a 10-gallon jug of Mad Dog 20-20.] [After the feared Lap Poodle has imbibed 10-gallons of the brew, it will get such serious gas it will either float away or, now in a mellow mood it will chew off only your left leg, your right arm, both your ears, and the lamppost and the street US Mail box.]
Maybe the lady needs to be chased. The Editor is perennially told that women love being chased, if only as a test to see how much you really care. But then there is this problem: how does one run the 100-meter sprint in 9 seconds at the Editor's age, and assuming he somehow manages, what's to say the lady won't make it a 3:25 1500 meters?
And if he manages that, who's going to update the blog, and who's going to get the Teddy Bears up from their day sleep (they sleep all day and party all night).
And as for buying vibrators, doesn't it take two to -um - vibrate? Or is one supposed to wear it around one's neck, suspended from one's key chain, to let women know that one is Down With That? (Us teachers tend to wear our keys around our necks attached to lanyards. No clue why, but its one way to make sure you never lose them. Oddly, adults tend to assume you're a coach, but little kids know immediately you're a teacher.)
More to the point is the existential question: would the Editor refuse to read London Times Online if it had no articles about sex? Would he read another newspaper if it had sex and the London Times had none? Obviously not. He reads (skims) as many papers he can in the short time he has to spare.
Even the Editor realizes the English are going through a phase where they are letting everything hang out (literally) on the matter of sex. But anyone who knows the English knows they are sex addicts to a man and to a woman and to a lampost. They say the average American male spends 18.235 hours of each 24 thinking about sex. The average American woman spends 18.235 seconds thinking about sex - every third Leap Year. But recent studies have shown the average Englishman and Englishwoman spend an average of 19.123 hours thinking abut sex - and that's three times every 24 hours.
But is the rest of the world enlightened by these English revelations? Are we any wiser? Are we any happier? Are we any richer? Are we, like Woody Allen, doubling the chances of a date on Saturday evening? The Editor at least doesn't think so.
So, a request to the London Times Online. Kindly keep sex between the covers (of your bed, not your newspaper) and give us the news instead.
[BTW, please don't ask how Englishwomen/men manage to think about sex 19.123 hours out of every 24 hours, three times over, making it 57.369 hours out of every 24 hours. The editor can explain, its all got to with correctly manipulating the 4th and 5th Dimensions - time-space - but you will be really, really sorry that you asked. The physics of time is like stories about sex: best left between the covers of musty, wrist-bruising heavy tomes and not permitted to emerge in polite company.]
0230 GMT October 25, 2008
Pakistan and the Taliban A big problem in assessing an American media article quoting experts or unnamed sources etc. is when you encounter information that is plain, simple wrong, is the media being stupid or is the media correctly quoting a stupid expert.
The only way to resolve the matter is to start making phone calls. Seeing as most of us have to work full-time, making phone calls inside business hours is difficult; leaving messages or emailing people seldom works. A not inconsiderable effort is required; at the end of the day you have to decide if that is the best use of your time; or if you're going to make calls, should you expend energy on something more productive.
[We just heard the term "at the end of the day", and so are using it to be perceived as fash. It's a pretty idiotic term because the "day" is 24 hours long and seamlessly blends into the next day. Unless something ends precisely at 235959 Hours, it has not ended at the end of the day. If by the term people mean "ultimately" then they should say "ultimately", but presumably that is not fash.]
So it is with a story we read in the WashPo arming tribal militias to fight Al Qaeda and the Taliban and how the some Americans are becoming convinced Pakistan is serious about tackling its insurgents. Did WashPo source's say that, or is that the WashPo's writers' interpretation of what was said to them?
To better understand our problem with stories like that, step back a while with us.
Al Qaeda is a completely foreign movement to Pakistan. That does not mean there are no Pakistani nationals working for AQ, but this is an outside group that settled first in Afghanistan and then began migrating to Pakistan when the Americans overran Afghanistan in 2001. For the Pakistan government to fight Al Qaeda makes perfect sense, even if Islamabad has not been particularly enthusiastic in the past about rooting out AQ, because it is a foreign movement.
But for Pakistan to fight the Taliban makes absolutely no sense because (1) The Taliban is a Pakistani creation; (2) it continues to be a vital tool in securing Pakistan's national security interests in the west.
Pakistan has not, and will not, fight the Taliban any more than the US will fight the Islamic Awakenings in Iraq, as these are American creations in support of American national security objectives.
Now, should the Awakenings turn against the US, obviously the US will fight them. But the Taliban has not turned against Pakistan because it is a Pakistani movement. It is a defacto irregular arm of the Pakistan military/intelligence services led by Pakistanis, supplied by Pakistanis, paid by Pakistanis, trained by Pakistanis and so on. A large percentage of the Taliban's fighters are Pakistani nationals.
So why should the Pakistanis cut off their sword arm for the west just because the US says it must? Pakistan will do that only if the US gives Pakistan everything it hopes to achieve by using the Taliban. That includes the removal of westernization and western influence in Afghanistan, sterilization of anything that smacks of Indian interest, the overthrown of the Karzai government, support of a Pakistan-Afghanistan military alliance, building of Pakistan air bases in Afghanistan for use in the event of war with India etc etc.
At this point, the Americans will undoubtedly say to us: "Are you mad? You want us to help Pakistan shaft us in the front, back and everyone else? Are you a Looney Tuner?"
And at that point we cluck sympathetically at the Americans and say that we completely understand the Americans' viewpoint, but why are they being Looney Tuners in insisting Pakistan commit hara kiri just because the US insists? If the US has to right to assure its national security by any means neccessary, so do the Pakistanis, no?
And if the Americans say "we don't care what the rights and wrongs are, we're the Big Dogs and the Little Dogs gotta get out of the way or we'll chew them up", we'll merely say: "You and whose crippled great-grandma?"
If the Americans want to clear Pakistan west of the Indus of insurgents, and occupy the buffer between Afghanistan and East Pakistan, all we will say is: "Orbat.com will support your campaign provided it is properly done, and not like your Iraq and Afghanistan campaigns which would make an ass with an IQ of 10 ashamed of itself."
So are we saying the Pakistani efforts against the Taliban all show and no substance? Of course we aren't saying that. There are renegade Taliban elements who don't listen as much as they should to Islamabad. They need to be offed. There also Taliban elements working with AQ against the interests of the Pakistan military/intelligence. They need also to be offed. There are Taliban who want to spread their rule to all Pakistan and then to northwest India. There are elements in the Pakistan military/intelligence who support this objective as long as it serves their purposes, but oppose it if the Taliban think of making the Pakistanis subordinate to their objectives etc etc.
What we are saying is: the
part of the Taliban that is firmly under Pakistan control - and that's
the bulk of the insurgents - is well and alive, growing stronger, and in
absolutely no danger from Pakistan.
So is it the WashPo that doesn't understand this or the people who
briefed the newspaper? If its just the newspaper, then no harm done. If
there are still significant elements in the US Government that cannot
accept the reality of Pakistan and the Taliban relationship, then we are
truly in big trouble.
0230 GMT October 24, 2008
West's Maritime Task Force En Route To Somalia Waters Seven frigates are to arrive in ~4 days. Four will operate in the Gulf of Aden where they will exercise with Gulf navies as well as perform anti-piracy patrols. Three will operate off Somalia's east coast.
French Navy has captured nine pirates and handed them over to the semi-autonomous government of Puntland region in Somalia.
Meanwhile the pirates holding the Ukraine arms freighter say again they will fight to the last if attacked, and the important thing to keep in mind is that the civilian crew will die. The pirates laughed when told the Ukraine company had collected $1-million of the $20-million ransom. That's not even a few nights in a good hotel, said the pirates. Really? Which hotel? And are they planning to star in a movie titled: "Dead Men Laughing?".
We beg to differ. The important thing is the pirates will die if they fight back. We'd advise the pirates to worry about themselves.
Al-Sadr's Militia Barely Controlling Itself says the Washington Post. It is under orders from the Grand Thug of Baghdad not to fight back, no matter what the provocation, and the other Grand Thug of Baghdad - sorry, Prime Minister al-Malaki - has been using the opportunity to knock the militia back. Wonder what happens when the Americans leave and al-Sadr doesn't have to worry about getting into a losing fight with them.
Editor Makes it To Billionaire Status Again Last Monday the unofficial exchange rate US$ to Z$ was 1 to 100,000,000. So with his carefully hoarded US$10, the editor is again a billionaire. Since inflation is said to be around ~20-trillion percent, he looks forward to again becoming a trillionaire.
Alan Greenspan "Distressed" that he has found a flaw in his pet theory that the market free of government regulation, regulates itself the best. This is the man who stuck to this absurd position for 18 years as Chairman of the Fed and who has cost ordinary people trillions of dollars in losses and he's "distressed"? His thinking has "evolved" over the last year?
So does Greenspan advocate that crime is best regulated by syndicates of criminals?
Hang him up high is what we say. Use a rope knot that will keep him twitching for a few hours. That should really distress him.
0230 GMT October 23, 2008
The Mouth Watering Aroma Of Stinking Fish Arises From Washington Did you know when the government decided to lend banks $250-billion to strengthen their capital base, you the taxpayer were also agreeing that the banks can use this money to buy other banks?
So juicy is this provision is that earlier, banks which were strenuously objecting to a forced government buy-in of their stock, are changing their mind and are willing to take this money.
The Government's rationale for this unilateral decision on its part - submitted neither to Congress nor to the public - is that anything that strengthens banks is good.
So what next? A blank checkbook that the banks can use whenever they want?
Did we mention that USG is now ALSO about to back certain market funds to the tune of $540-billion?
Taliban Says War Will Take 20-Years They are said to now realize they cannot win the war in months or even years and that it will take two more decades.
Intriguingly, the Taliban assessment comes at a point when the West is ringing alarm bells saying the war is being lost.
Anyway, the point is that if we're in for a 20-year war, it cannot be fought the same way the current war is being fought. West will have to pull out most troops, leaving only special forces and trainers, aiming to continually disrupt the enemy and to patiently train the Afghan forces. Expenditure will have to be reduced to perhaps maximum of $15-billion/year, and Allied dead to ~150/year maximum.
Problem as before remains the Afghan government. If it cannot be made corruption free and efficient, nothing is going to work.
Obama 10-Points Ahead Or Is It a Dead Heat One poll says Obama is 10% ahead of McCain, in which case its all over because the Fat Lady will never make it to the stage. Another poll says Obama is at 44% to McCain at 43%. Given the 3%+ margin of error, that is a dead heat. In that case its time for the Fat Lady to start choosing her dress.
We're wondering if there is going to be a "Bradley Effect". In 1982 Tom Bradley, an African American was winning in exit polls in race for California's governor. He lost, likely because whites lied to pollsters that they'd vote for him.
Nice article at http://en.wikipedia.org/wiki/Bradley_effect about the Bradley Effect.
0230 GMT October 23, 2008
Correction Yesterday we'd made mention of $55-Trillion or more in derivatives that may be understand. The source we quoted referred to credit-default swaps which are one type of derivatives. They are insurance against loan default, but had they been called "insurance" they would have come under regulation.
So right there you can see the big boys were playing fast and loose. again, Orbat.com has nothing against the big boys playing fast and loose - but the taxpayer shouldn't have to bail them out when their frauds fail. As for the argument they if the derivative boys and gals were allowed to fail they'd taken us common people with them, there's a very simple way of taking care of that.
Government should have simply auctioned to us ordinary folks hunting licenses each with the name of one person involved in derivatives. Us ordinary people would have made darn sure that the big boys and gals never again perpetrated any frauds. Nothing like slaughtering the guilty to encourage honesty among future generations of financial types.
Now, here's something truly sure to make you rejoice: derivatives of all kinds total $500-trillion+ or 250% world wealth. Are you starting to feel that while you may not understand most of the details, you have been played for a sucker by the money boys and gals? We at Orbat.com certainly do. The editor would love nothing better than to drop everything and get on this subject - he has a reputation for never letting go of a subject till there's an answer. But this is going to have to wait for 32 months: his every single day and hour is booked till June 2011.
So what kind of losses can we as taxpayers expect as this mess is unwound? No one has the least clue, but consider this. AIG was responsible for $450-billion of derivatives, say 1% of the world total. US Government has had to put ~$115-billion into recapitalizing AIG, say $1 for every $4 AIG owned in derivatives. Draw your own conclusions, folks.
Iran Nowhere Close To Developing N-Weapons: IAEA says Haaretz of Israel. IAEA says Iran does not have the fissile material for even one bomb.
Now, Orbat.com assessments happen to agree with the IAEA. So why are we not busy putting them out? Simple.
It is one thing to do back of envelope calculations, talk to a few People in The Know, and form an estimate that is near 100% accurate. Its another thing to do the work that will convince skeptics and specialists. We have neither the time nor money to do proper analysis for publication. Nor is anyone interested in us making this case. People want an excuse to whack Iran, and they're using the N-thing as one excuse.
BTW: we're all for whacking Iran. No one at Orbat.com preaches Peace and Daisies. There are lots of perfectly good reasons to take out the current power structure. So we don't false excuses.
The big problem, at least in your editor's experience, is that when people generate propaganda they start forgetting that it is - well, propaganda. They start believing it, and then their actions get twisted and go wonky. We weren't thinking of Iraq 2003 as much as Ho Chi Minh in the 1950s. America had a great Death To The Commies propaganda machine going, and as far your editor is concerned, the Commies did need to die. But the propaganda submerged the sad reality that while Ho was communist, he was a nationalist first, and no tool of Moscow/Beijing. Indeed, he asked Eisenhower to help him in his revolutionary struggle against the French.
Anyone in the today generation every wonder why he asked America of all people? Isn't that like asking the Pope to officially sanction birth control, abortion, homosexuality, gay marriages and free sex?
Well, the odd thing is that revolutionaries around the world had what today would be considered a belief so off-the-wall that it would be Little-Men-In-White-Coats Time: they believed America was a revolutionary power. Third worlders oppressed by white colonizers particularly looked to America as a white country that was anti-colonial and pro-democracy and that also was the most powerful country in the world. They particularly looked to America for justice and freedom.
So what happened? How did we, who really once were the greatest revolutionary force to hit the world in modern history - say going back at least 2000 years - become such staunch reactionaries?
Well, of course you can trace it all back to World War II, but that doesn't really explain anything. If the editor lives long enough, he may get an answer to this study question which he has pinned to his "must solve this mystery before going 4-Paws-In-Air" board.
Are we saying in code that we think the way to deal with Islamic fundamentalism is to support Islamic revolutionism? Yes, and we must be about 999,999th among 1-million people who have suggested this, so we can't claim originality .
But what are the odds that we will support the radicals in places like Saudi, Afghanistan, Egypt, Jordan, Iran, Iraq, Pakistan, Indonesia and the Philippines, just to name some the bigger Islamic reactionary states?
About the same as the chances of our supporting Ho when he asked us for help.
0230 GMT October 21, 2008
Derivatives: $55 Trillion? Apparently, since no registry exists for derivatives, no one is sure how much paper there is out there. Washington Post says it could be around $55-trillion. That's the whole world's GDP for 2007.
A'int no government can guarantee that sum. So a keep an eye out folks: things have marginally improved, in that the stock market has gone above 9000, oil has gone below $70; one key measure of the interbank lending rate has fallen to half. But this by no means implies the financial crisis is over: its just starting.
Canada has no housing crash because you cannot deduct home mortgage interest, and anything less than a 20% down payment requires mortgage insurance.
Somali Pirates are for sure feeling the pressure. They paraded all hostages so that the blockading ships could see if the hostages were in good shape - they were; they have come down to $8-million in ransom; and they have said they will not blow up the ship/themselves if the ransom is not paid.
US Army's Armed Reconnaissance Helicopter Bites The Dust It stands cancelled after cost went up from $10-million per unit to $14-million, and delivery dates slipped by four years from 2009 to 2013. The army will start all over again; in the meantime its fleet of ~350 Kiowas will be upgraded at a cost of $800-million.
F-35 Environmental Impact Statement For Training Units At Eglin AFB says that 107 F-35s (USAF, USN, USMC) will make 240,000 take-offs, landing, and touch-and-goes annually. That compares to the 29,000 F-15C movements at present. Of course, the F-35 is a tri-service fighter, F-15 is flown only by USAF, but still [Ares Blog at www.aviationnow.com ]. US plans 2000 aircraft, foreign sales may reach 1500. US Navy will essentially standardize on F-35 as its sole fighter; likely the Marines will also end up that way. Currently their F-35B will replace only the Harrier AV-8, but since the only other US aircraft entering service is the F-22, its more than likely the USMC's F-18s will have to be replaced before a new generation fighter arrives. For the USAF, its F-35A will replace A-10 and F-16, so USAF will be standardized on two aircraft, F-22/F-35. This was the plan with the F-15/F-16, but for various reasons the A-10 has to be kept on.
Taiwan Billionaires Take Beating China Post reports Taiwan's billionaires are taking huge losses as the value of their companies' shares fall by as much as 50%. The ten leading billionaires appear to have lost something akin to $10-billion between them; with the the top two losing half of that sum.
ROK: China Post Says It Is In Much Better Shape Than 1997 Compared to eleven years ago, ROK's foreign exchange reserves are 12 times higher; corporate debt-to-equity ration has come down from 400% to100%.
Pakistan may have to take a $10-Billion loan from the IMF to boost foreign exchange reserves, which have fallen by 75%, and to avoid a debt default. Pakistan paid off its last IMF debt in 2004.
IMF loans usually create huge turmoil for the recipient nation because of the stringent position IMF takes against subsidies. Part of Pakistan's fiscal problem is government subsidies on POL have shot up as for political reasons, the government was refusing to pass on increases to consumers. Also, the internal security situation is spooking both foreign and domestic investors. And inflation has jumped to a 30-year high. [Bloomberg.]
0230 GMT October 20, 2008
Bailout: The Law Of Unintended Consequences Is Already In Play So the aim of the government Bailout's first phase was to restore liquidity to the mortgage market by taking over responsibility for toxic mortgages and giving banks more money that they could use for mortgage financing. One idea was idea was that with the government in the act, liquidity restored, etc. etc., 30-year mortgage rates would fall, increasing affordability, and thus helping revitalize the building sector and so on. This is a very simplified explanation, but stick with us. If we get too complicated we're not going to be helping anyone. If you are an expert, by all means write in with a detailed explanation.
But mortgage rates are going UP, not DOWN. This defies conventional free market wisdom. After all, if there is more of something, in this case money for mortgages, the price should go down.
So what's going on? LOUC. You see, earlier people/governments used to love Freddie Mac/Fannie Mae because it was taken as an article of faith that these mammoth undertakings had the backing of the government. Nowhere did it actually say so, but the government made clear to the world that in fact, if not by written contract, the feds stood behind the two, four-square.
Now why the government let Freddie/Fannie fail thus helping make a bad situation worse is a good question; we hope someone will answer it.
Nonetheless, what's happening now is that since the US Government is actually guaranteeing in writing so many other market instruments that people with capital are saying: "To heck with the Freds and the Fans, we can get better returns on these other instruments."
So instead of money flowing to the mortgage market, its going to other instruments, defeating the government's initial intent.
This is only the start of the LOUC in the Bailout and we are going to see many more fun things. Now, its being said that the global financial markets have gotten so complex no one, but no one, understands them in their entirety anymore and so you are going to get big, big, big LOUCs.
First, if that is so, then the Bailout is already a Ruptured Duck, which means we'll be heading for even more trouble instead of solving problems.
Second, if failure to see mortgage rates will go up and not down is deemed to be on account of too great a complexity, then heaven help us all. It shows that the people who run our lives are truly incompetent and all we can do is to get down on our knees and pray. That at is likely to produce better results than all the wise wo/men in the government/corporate/academic sectors.
Maybe we had really leave the financial crisis to Joe the Plumber to resolve. After all, he can't do worse than the existing lot.
Canada Is Not Hurting As Much And oddly, that's because they do their regulation in ways that work.
Reader Flymike has been repeatedly making the point that too much regulation is the cause. Reader Jonathan Coldfpring argues that all the dimensions of this crisis were known starting at least two years ago, but the Administration refused to act.
The Canada thing opens up a new line of thought. Which is, we'd better start thinking: if regulation works better, then we need to regulate properly. If it doesn't work better, then we'd better start deregulating right now. The system we have now may just turn out to be the worst of all worlds.
Deregulation The reason given for regulation is that left to itself, the capitalist system goes through huge up- and down-swings and these create chaos in the matter of GDP growth. What is required, it is said, is a system that smoothes out the highs and lows, so that we dampen both, and get a sustained growth.
So, if we stopped deregulation, people would start keeping their money in bullion or in cash, because there is no way, absolutely no way, no chance at all, that you and I as common citizens, nor matter how smart we are, can figure out what the people who borrow our money are doing with it, such as are they being fair to us or ripping us off.
The pro-reg crowd says that's bad, because we'll get lower growth.
The anti-reg crowd, and that includes Libertarians, say as long as regulations are thought up by people who think they are smarter than everyone else, and then subjected not to common sense but the irrational vagaries of the American political/legislative system, you are going to get a system so dysfunctional that actually, yes, we'd be better off without that so-called extra growth because in the long run its ephemeral growth.
We can't presume to speak for Mr. Coldspring, and we are sure he will correct us if we misrepresent him, but it seems to us that he will go with the "the politicos are going to mess it all up" and thus ultimately supports less regulation.
So: what do you think? Write and less us know. This is a matter of vital import to the GWOT. If we don't get things straightened out, the GWOT is dead. Just the government's action THIS year to date - we've still got 10 weeks to go - have added a trillion dollars to next year's deficit. The Republic cannot continue like this. When massive cuts have to be made in every area, and that is coming with dreadful certainty, defense will have to bear its share. That is not good for the GWOT.
Rejoice All Ye Infidels That's us, according to the Iranians and Hugo. Hugo Baby has to have an oil price of an incredible $97/bbl just to meet his import commitments, not to mention the billions he likes to give away to expand his overseas influence. Looks like he's going to be in serious trouble. Iran is relatively better off: it needs $58/bbl; but please note there has been such an explosion of spending that in 2000 it needed only $18/bbl.
Qatar is an odd little case: it could in theory actually pay buyers $8/bbl to take away its oil because it has steadily developed its massive gas resources, and the price of natural gas is holding up better the price.
No, Japan Will Not Bail US Out Japan is sitting on maybe ~$18-trillion worth of cold cash, counting its reserves, pension funds, and bank accounts. Some think - including a few Japanese - that now is the time the Japanese should start buying up America without repeating the mistakes of the 1980s when the Americans ripped them off so badly the Japanese ego has never recovered.
But this Japanese bailout is not going to happen for the reason the Japanese are absolutely risk-averse. They are an aging nation, and they absolutely do not want to take chances with their money. So, a few hundred billions of investment, of course. A few trillion? No way.
Your editor breathes a sign of relief. His Japanese is worse than his Chinese. He knows three words of Chinese and one of Japanese. In case you wonder, it's "Banzai!" thanks to the war comics that were so popular in his younger days. He knows seven words of German thanks to the comics: Achtung!; Gott in Himmel; Schwinehunde!; Kaput!; and Mein Fuherer!. As for French, according to the comics the only French words you need to know are: Mon Ami; Sacre Bleu!; and Mon Dieu! The rest of the time you speak French using accented English, such as: "Ah, my leetle Plum Pudding, shall wee go, as they say, for a leetle walk?" At the editor's age, you don't need to know much Hindi. Two words suffice: "Jai Hind!" - translated as "We Salute You, India!" This is used when a sexy lady walks by and the South Rises Again. At the editor's age the south is never going arise again, ever.
Who says comics are not educational?
0230 GMT October 19, 2008
4 of 5 Major Al-Qaeda Websites Knocked Out Someone has been destroying AQ's websites, and in a seriously permanent fashion. No one is claiming credit, says Washington Post. Some say that this is all fine, but destroying sites eliminates the ability to know what the other side is up to.
This is a point, but insofar as AQ uses its websites for recruitment, losing some slight insight into the organization is a small price to pay for blocking AQ's major propaganda channel.
The editor started reading a story on how AQ has taken to hiding messages in images on child pornography websites, but the whole thing is so sick he had to stop reading.
Pakistan Claims 60 Swat Militants Killed including by air action. Taliban sources say F-16s dropped 16 bombs on a training and camp area but no one was killed. Eyewitnesses say that some militants were indeed killed.
At the rate Pakistan claims it is killing militants, the whole nasty lot should now be cavorting in heaven. Moreover, what does it say about an enemy who, if your claims are right, you are slaughtering in large numbers but who refuses to give up, and indeed, who becomes even stronger?
People should be careful about making claims for propaganda purposes; propaganda is a two-edged sword.
India Dispatches Frigate To Gulf of Aden he help combat piracy. We have been waiting for this news a long time and are delighted India is stepping up to its responsibilities and not just blowing hot air about how great it is. Indians rank Global Number One when it comes to words, and Number 225 when it comes to action. This action should help actions correlate better with words.
About 15 Indian ships a month transit through the Gulf of Aden, and there is increasing fear about piracy. The frigate carries helicopters and marine commandos. More warships could be sent as neccessary.
After negotiations between UK and Somalia, the Royal Navy is to be given board, detain, and arrest powers against pirates. We don't quite understand the International Law of the Sea on this matter, but apparently a major legal block to the RN's proposed anti-piracy is now removed.
Somalia Usual heavy fighting underway in Mogadishu. Usual brunt borne by civilians.
Meanwhile, we see no news on the situation with the hijacked Ukraine arms freighter.
A Musing That Has Nothing To Do With The GWOT
Over 30 years ago visited an old school chum and his wife. The wife insisted on cornering the editor and insisted on telling him about her nervous breakdown. Finally he got her to stop by saying: "I have six nervous breakdowns before breakfast each day as a matter of policy, how can your one breakdown compare with mine?." The editor doesn't really have nervous breakdowns, but myriad are the things that can trigger his angst.
Today for no apparent reason he was deeply saddened by a CNN story about an Egyptian tycoon who is accused of having his Lebanese girlfriend killed at her apartment in Dubai. Of course, no one but the prosecution and the murderer knows what happened; but the fact is someone murdered this young woman. Any one who would kill someone so beautiful has committed a crime that is so beyond the pale that death by hanging - which is the penalty for a person found guilty - is far too little punishment. Every life is sacred to the Creator. But realistically, just as the destruction of a Michelangelo work of art is far more heinous than the destruction of a childhood painting by the editor, the murder of this young woman cannot be compared to just any murder.
http://www.cnn.com/2008/WORLD/meast/10/18/singer.slain.tamim.court/index.html?iref=mpstoryview There are several amateur-quality pictures of her at her personal website. http://suzantamim.jeeran.com/index.html.
The editor should explain that in South Asia/West Asia/Middle East, eyes are what define a woman's beauty. It was Mrs. Rikhye's eyes that led the editor to mess up his entire life and give up what too him were the most precious things he lived for. No ageism is implied here just because the pictures are of a young woman. The beauty of a person's eyes, man or woman, has nothing to do with age. It has to do with their inner being. Alas, as we grow older almost all of us tend to lose that inner purity. The editor remembers being told by a local - a Muslim - in Kashmir's Valley of Flowers, where Jesus is said to be buried that Jesus's most commanding feature was his eyes, and to look into them was to be changed forever. Of course, no one has any idea what Jesus looked like, and as far as the editor knows there is no historical reference to his eyes. But myths are more powerful than reality. And if you've spent time with holy persons, you will notice that without exception they have beautiful eyes.
230 GMT October 18, 2008
Today's update is really, really short as yours truly went berserk trying to pin down one single fact and used up three hours of time on the web. Us orbat researchers tend to be even more compulsive than researchers in general, and sorry to say, your editor is blindly compulsive. He's done his best to control this in recent years, but today the controls just did not work. His best (or worst performance) was a two-year odyssey to determine just how much fissile material Pakistan had accumulated in the early 1980s. He just could not let go of the subject. When he did find out, no one was interested because official policy in both India and the US was that Pakistan had the bomb, anyone saying it did not, immediately had to start outrunning the little men in white coats dispatched to capture her/him. Luckily the editor has long experience outrunning the little men.
Another Brilliant Statement of the Financial Crisis in two easy to understand sentences. This is from the current Business Week issue.
In the last ten years, US personal consumption grew by 7% while real incomes did not grow. US needs to save a minimum of 3% of personal income. Put the two facts together, and US will have to reduce personal consumption by 10% over the next ten years. This will likely cut ten-year growth to 1.5%/year vs the 2.6% attained.
Further, the 7% increase was financed by borrowing from overseas. The foreigners had money because America generously exported ~10-million manufacturing jobs and then borrowed money from China, East Asia so it could buy the goods that were now being produced overseas. Short of a default, that money has to be paid back, and it could be anywhere around $3-trillion. Payback can either be in cash or in stock: right now cash-rich people the world over are starting to buy into American companies in what is going to become a foreign invasion.
Now, isn't this interesting: one of the reasons American incomes stagnated is that with the manufacturing jobs gone, we were more and more forced to do low-paying service job. So we didn't have the money to afford the purchases from overseas; thus the borrowing.
In the process, the people who run the financial system and the companies made a killing; the rest of us got shafted.
If America is to return to financial health, it will have to start manufacturing again, it will have to become innovative again, it will have to increase its productivity again. It can no longer come up with clever manipulations of paper to generate wealth, and the manipulations in any case benefited only a few at the very top. No one, but no one will trust Americans again when it comes to financial matters, and that's another reason we'll have to start making things instead of boasting about how the information age has made manufacturing obsolete.
Our question which we have asked previously: does America anymore know how to make anything? If it wants to get back to the path of prosperity it had better start learning. Else you can look forward to us become Argentina. That country was a 1st world country in terms of per capita income till about the 1930s. Though it has recently saved itself from banana republic status, it remains a cautionary case. Economic growth is not a one-way-up process. There is nothing inevitable about a constant increase in the standard of living. If that were the case, the two wealthiest countries on the eve of the Industrial Revolution would now own the world.
FYI, those countries are China and India.
The Editor Saves Himself From An Almost Calamity Brought About By Love
First thing to understand is that while the editor's 1999 Chevvy Metro is in immaculate condition with just 61,000 miles, no maintenance missed, all repairs made with OEM parts etc, its insurance book value is less than $2000. Should another car smack into him or vice-versa, even at low speed, America being what it is, repairs can run to $4000. and if the airbag deploys, forget about it: you can pay $1500 just to get an airbag replaced.
Most people with a damaged 10-year old car would simply take the $2000 insurance check and use it for a down payment on a new car. The editor is not most people: he cannot afford to make monthly installments, and lacks the knowledge to keep a used car going at a reasonable price. So if he has an accident, that's it, he'll be riding a 50cc moped. In a region where "public transport" is a hysterical laughter inducing oxymoron, that can be quite a serious problem.
Second thing to understand is this particular road he uses on his way back from the gym: in the space of 60 meters, it runs a complete Z. The vertical part of the Z, about 40 meters, is three cars wide. This is in a quiet residential neighborhood, the street lights are few and dim, and parking is permitting on both sides. Thus you are effectively running in one lane. If any car is oncoming, you stop and let the other guy find his way around you. Sometimes he or you has to back up to make room.
Third thing: the editor's reflexes are Not What They Used To Be AND he is losing his night vision. He copes by not going anywhere outside three neighborhoods he has traversed for near 20 years and could drive blind if required.
OK, are we now clear on the structural set up of the situation? On to explaining what happened.
At the top of the vertical shaft of the Z is a STOP sign, and there is another at the bottom of the Z. Quite logical given the shape of the road and its narrowness. The editor turns from the top of the Z into the vertical shaft; he is going at 20 klicks/hour and slowing. At the bottom of the Z's vertical shaft, where is the other STOP sign, he sees to his left a parked car with its headlights on, behind a row of parked cars. There are also cars parked all the way on the other side of the road.
Wary that the driver of the car with headlights might be getting ready to pull out into the single lane that is available, the editor slows to 10/klicks an hour and carefully watches the headlights-on car, ready to slam on his brakes if that car moves.
Normally, one keeps shifting one's eyes all over a road, pausing only for fractions of a second. This time the editor's eye was caught for a full one-half-second by a SIGHT, and he does not immediately see the Danger: there is a black VW, all lights off, smack in the middle of the road in the sole travel lane! Okay, so maybe the editor's reflexes are not all that slow because he instantly does a complicated S maneuver and gets past the VW without hitting the car with the headlights on, and without running the STOP sign: the traffic on the bottom part of the Z is heavier as it is a local parkway, not a neighborhood street, so running the STOP sign in a panic is not a good idea.
OK, so what is the SIGHT that caught the editor's eye for half a second when he should have expended no more than 1/10th of a second before shifting eyes to dead ahead - in which case he'd have seen the dark VW well in time to brake.
If you know what happens to young people in love, you will not be surprised at what he saw. If you are not, you are likely to be completely baffled by the behavior of a person who stops their car in the middle lane, blocking all movement, and switches their lights off.
What we saw was a young couple standing, leaning, against the car with the headlights on, in a passionate but wholly innocent embrace that was so authentically posed no movie producer in Hollywood could ever reproduce it. Had the editor owned a camera and had he been able to take a photograph, he could easily have gotten $3000 for it because the young couple was very good looking and was dressed in summer attire (it was a warm night for October). Both were tall and slim, and both had excellently proportioned long legs. The young man had on shorts and a tight T-shirt, both of which displayed his buff figure to excellent effect; the young lady had on very short shorts, high heels, and a sleeveless open necked tight blouse, which displayed her figure in a way that could give Old People like your editor a heart attack - and be praising the Lord for the wonderful sight even as they are dying. She was against the car, the young man had his back to the road. We can't give any further details because some readers might misunderstand us and think the happenings were sordid, prurient and so on. Plus the editor has to let their happenings remain their secret: after all, he was an accidental and uninvited observer.
The point is there were not: they were completely spontaneous and devoid of the slightest hint of salaciousness. With the still heavily-leafed tall trees, the shadows, the classically American middle-class houses, a dog barking, an Indian Summer breeze and the dim street lights, the young couple made an archetypical Norman Rockwell painting of young love. The scene was breathtakingly, unmistakably America of a bygone age.
Even before he stopped at the STOP sign, perhaps 4 meters from the VW, the car with headlights on, and the young couple, the editor had figured it out. The young man - VW - had turned on to the vertical shaft of the Z from the bottom. His girlfriend resides in the house in front of which was her car, and she was in the car ready to pull out when the young man turned into the vertical shaft of the Z, came to a quick and instant halt, turned off his lights, leapt out of his car, pulled her from her car, and the next thing the couple are entwined.
This is True Love in every sense: passionate, spontaneous, uncontrollable and completely disregarding of the outside world. The editor was driving very slowly; but there are people who will barrel down the shaft at 35 klicks and had there been one such, there would have been a nasty collision with the VW plus a high chance of the couple getting getting hit by the driver as he tried to avoid the dark VW.
The editor was in a generally super-foul mood because it was night, he was returning to an empty house on a road behind which Mrs. R bought her house when she moved out, and even more so because the evening had been one of those ten perfect evenings weather/temperature/light wise you get every year.
But that one sight, which almost cost him his car, made him smile, and continue smiling for two more days. Young love: it restores your faith in the world.
BTW, someone is going to ask how come the editor saw all this in half of a second at night. The thing is, he may be ancient and decrepit and slow, but his power of observation is still sharp. Plus, as a visual thinker/processor of information, as is usual with this type, his eye takes a photograph which can be analyzed at leisure.
0230 GMT October 17, 2008
The Next Crisis: Credit Cards Okay, so we were going to save this for when the ordinary mainstream press got a hold of it, and it seems they have got a hold of it, possibly because of the Business Week article.
So the big credit card issuers have to be prepared to take losses of $100-billion in the next 5 quarters or so because of credit-card defaults. Now compared to the other nonsense that's going on, $100-bil is small French Fries. But credit-card default is not something banks can expect to get help on from anyone. A few big banks will be really out this money; its enough to whack profits for at least two years. And of course the $100-billion estimate is what is now estimated. It could well go up.
The Next Crisis After Credit Cards: Hedge Funds There are ~1000 hedge funds waiting to go under. No one has any idea of how much money will be lost, but it could be around $1-trillion. The big brokerages/Wall Street money houses went banky while leveraging one dollar 20 to 30 times; i.e., borrowing 20 to 30 dollars for every one in capital. Kind of makes one gasp, doesn't it?
Well, get this. Remember Long Term Capital Management, 1998, the people that started the exotic/toxic instruments mess? They were leveraged 200 to 300 times.
The Next Crisis after Credit Cards & Hedge Funds Commercial Real Estate. again, no one has the slightest clue as to how much money will go Houdini in this area.
US Government Agency Warned In 1996-99 Against Derivatives Like most other people we've been thinking regulation is at the bottom of this crisis. In one respect at least, however, its lack of regulation that's the culprit. We learn from the Washington Post that a small US Government agency warned in 1996-99 that derivatives were going to cause trouble.
You've guessed what happened: The Fed Chairman and the US Treasury secretary among others shot down the warnings. The head of the agency was apparently this scrappy woman who kept fighting, including testifying at over a dozen Congressional hearings. Everyone, but everyone important in Congress and the Administration also tried to get her to shut up. She wouldn't. So it was made clear it might be nice if she submitted her resignation, which she did, as an alternative to being fired.
Now, people: who was the Prez during those years? Hint: it wasn't Double U.
You gotta remember: money is money. The money class has one value: making more money with as little given to the taxman as possible, with as little government regulation as possible, and with maximum government bailouts when things go wrong. It doesn't matter if the money class is Democratic or Republican or Rasta or Hippie or Christian Right or whatever. It honestly is very short-sighted of us to pin any political ideology on the current mess. For every Democrat who points finger there is a Republican with equally impressive facts to counter-point, and for every Republican who points, there is a Democrat to refute.
This brings us to Governor Palin whatever you think of her, keep this in mind. Her and First Dude's assets are between $1-million and $2-million, half of which is one house. Together they earned $166,000 in 2007, and this includes untaxed allowances she gets as Governor. http://news.yahoo.com/s/ap/20081002/ap_on_el_pr/palins_finances and http://freeinternetpress.com/story.php?sid=18524 She gets paid $66,000 as Governor of Alaska. That is what your editor gets as a 12-year seniority teacher, of course with degrees coming out of his wazoo. First Dude is an oilfield worker. In earlier reports about First Dude the media kept mentioning his British Petroleum connection, so obviously we thought he's an executive. No way. He makes additional money doing things like commercial fishing and sports.
Assets of $1-$2-million are simply being "well-off" in America. Their income qualifies them to part of the upper 15% in annual earnings for American households. In my town we have a number of two-earner couples working for some combination of government and private organizations who earn as much as the Palins or even more. None can be called rich. My daughter-in-law's law school colleague began work with a $250,000 salary. Another colleague now earns $400,000 (they are all ~30 years old). mainly as network engineer. Compared to these ladies, the Palin's are badly off.
0230 GMT October 16, 2008
Puntland Gives Pirates A Black Eye Puntland (North Somalia autonomous region) rescued a hijacked cement ship held for ransom off its coast. The first attempt, on Monday, failed and one pirate and one security forces member were killed. Security forces tried again Wednesday; pirates ran out of ammunition and surrendered. This time no one was hurt - crew, pirates, or security personnel.
The NATO anti-piracy force off the Horn will total 7 frigates.
US Army Kill AQI 2 i/c In Mosul US reports it killed AQI's second-in-command October 5, 2008 during a raid in the northern city.
Iraq Wins on US Troops We'd warned readers Iraq would not accept America's Hashish Dreams of staying in Iraq for 10, 20, even 50 years. seeing as the Americans are all over Iraq in force, we don't quite understand why the US didn't see this and why Washington kept assuring everyone Iraq would agree to remain America's vassal, and that a deal would be worked out just fine.
Well, the deal has been worked right fine, but its the deal the Iraqis wanted, not the Americans. US troops are to withdraw from the cities in mid-2009, and leave entirely by 2011, except for those troops Iraq wants to remain behind. Meanwhile, US troops will be subject to Iraqi law.
So another major defeat for the Americans, but for once we're not feeling bad: even if it had to be the Iraqis that have rescues America from its own folly by kicking us out, in time we will come to see its the biggest favor they could have done us.
And please don't forget, we won the war. All US initial objectives have been met, and many of the latter objectives as well. Uncle will have to quit, but its for his own good. Thank you, Iraq.
And, if its any comfort, the Iraqis are not being stupid: they've said they'll continually review their needs and invite US troops to stay longer if needed, and ask for more troops if these are thought needed.
Next Crisis: Credit Cards says US's Business Week weekly. This one is coming well before anyone knows how much of a hole the banks have dug for themselves. For example, it now turns out that Wachovia Bank, which was taken over by Bank of America, has a whacking almost-$300-billion in bad loans. That's one bank, people. And don't think the credit card crash is the end of anything. Its only the beginning of the next crash - and there's a few more coming after that. We'll keep you posted, just in case you get overly optimistic about the chance for a US economy recovery.
Simple explanation for the trouble from the consumer end. Washington Post says US income per family remained stagnant for the last ten years, but American consumers increased their borrowing by $3-trillion dollars. So from the consumer end, we have to work off three trillion Monopoly Bucks before consumer income can start to grow again. Anyone who has gone into debt knows it takes a few minutes to pile up a big debt, and years to pay it back.
0230 GMT October 15, 2008
How Many Trillions, Did You Say? That's the problem: the Government is not saying and so far we haven't seen any estimates, but Uncle Sam has poured trillions of dollars into increasing liquidity for the banks. This is a nice bait and switch: while everyone's saucer-wide eyes are fixated on the $700-billion bail out, the Feds have been pumping money into the banks as if there is no tomorrow.
All you and I need to know about the result: it hasn't worked. Financial institutions are STILL not lending money. Only one financial writer of the many we regularly read has had the courage to say what needs to be said: every day Wall Street comes out with another demand for government action on the grounds "the government needs to restore confidence" etc. Steve Pearlstein of the Washington Post yesterday said, with some exasperation, that it was time for Wall Street to dance, and to stop demanding endless concessions. Wall Street also has a duty to the country, he said.
We've received a surprising number of letters with the same suggestion on how to "encourage" Wall Street to do its job: start taking bankers from their homes and offices, and start executing them publicly. One letter writer went even further than the usual "strip them and their families naked and throw them into the streets to scavenge along with the homeless". He suggested that while, after the first ten executions Wall Street people will start working, the Government should continue randomly executing one banker type a day.
Frankly, your editor is a bit taken aback. He thought he had a monopoly on the hang up on the lampposts themes. Readers may recall he wanted this done to Louisiana officials in the wake of Katrina, and then again with the DOD/Military/National Security/Intel people to ensure we don't get another Iraq anytime soon.
Should your editor steal $1000, the minute he finishes his sentence - which may be as mild as community service - he will be deported from the US. Yes, people, us legal immigrants have no rights whatsoever no matter how small the offense. If his students steal $250 and happen to be over 16, there is a good chance they will do time in the Prince George's County Juvenile Detention facility.
Once in, their lives are basically over. To survive "Juvey" they have to seek gang protection. When they are released, no matter how dearly they may wish to go straight, their gang wants its pound of flesh, which usually ends up with the kid going to jail again - and again.
If my kids are over 17 and get caught with a few grams of crack cocaine, well, its goodbye to them. Given what is left of them after 10, 15, 20 years in a hard jail, the merciful thing would be to shoot them in the first place. That's what happens in places like Iran and Saudi - and we call them uncivilized.
So here we have a bunch of fatcats who have stolen trillions upon trillions from you, and all that happens is that worst they get fired with multi-ten-million dollar payoffs, and at best the government keeps them at the helm and begs them to take taxpayers money. You may know that the man majorly responsible for destroying the world's largest insurer, AIG, was hired back at $1-million a month to advise the company's new owners - you and me.
The other day two youngsters kidnapped a middle-aged lady at a shopping mall, made her withdraw money from her ATMs, forced her to take them shopping, and then took off in her car followed by the police hot-on-heels. The driver crashed the vehicle, killing him and the woman. The surviving kidnapper is charged with felony murder along with more offenses we can count. Felony murder is when you are responsible for the death of another during the commission of a crime.
Just about everyone the editor knows - including people of color - want this diseased mad dog put down. Sure, they grumble about cases where the accused happens to be white and gets away with relatively minor punishment. But they want this youngster get his just desserts.
Now lets see: in CNN alone I read the following. A South Asian man who loses his job, kills his wife, mother-in-law, his children, and himself. He leaves a note in which he says first he planned to kill only himself but felt it dishonorable to tale the easy way out while leaving his family to suffer even more than they were already suffer. A woman in her late 80s or 90s shoots herself when the sheriff comes to evict her from the house she has lived her life because she can no longer pay the mortgage. Surprisingly, she survives and the state takes immediate action to straighten out her mortgage. But not so lucky is a 53-year old woman who to avoid stressing out her husband and 24-year old boy does not tell them she has been unable to pay the mortgage for 42-months - the husband has had a serious run of bad luck over the years - and then shoots herself. This is while potential bidders for the foreclosed house are arriving. Her last instructions are for the husband to take her life-insurance and pay the arrears, something that may or may not happen depends on what her company has re. suicide rules.
For every one such case, there are a million where people in retirement or about to retire have seen the value of their pensions diminish, there are a hundred thousand whose homes have been foreclosed or are about to be - and BTW those who bought too much house to afford are by no means the majority. We could go on.
Now, what are the above cases if not felony murder? We cannot, of course, say with certainty that the above particular cases would have not happened had the current crisis not been on us. But folks, this thing is just starting. We haven't really started to feel the pain yet. For example, most people who lose their jobs have 6-months unemployment insurance.
In the Great Depression, the financial big cats paid the price: they too killed themselves, their families too were reduced to destitution. There was some fairness in the process.
There is no equity in the current process. Society breaks down if there is no justice. I do not keep an M-2 Browning HMG in my house, nor do I have it mined and booby-trapped every one yard; nor have I killed the boys that stole my car last year because I have signed on to a compact with society. and nor do I lay camouflaged steel decapitating wire to behead the teenagers who occasionally decide they have to cut across my yard. I restrain myself because I have signed on to a compact with society: society will do its best to protect me, in turn I give up the right to take justice into my own hands. And yes, I am very satisfied: the Takoma Park Police provide me with great service.
But society has a reciprocal responsibility to me: if it fails to look after me, it has broken the compact. Anarchy will result. So it is not an academic matter that we, the people, have been looted, robbed, and defrauded by the establishment, the very same people the government is now trying to protect using our money.
Your government has done everything possible to bail out the thieves and gangsters. They say its to help you and me, the common man. The truth is, Mr. George Bush, Hank Paulson, Senators McCain and Obama etc. think the common man is the one with assets of $10-million or more.
It doesn't matter be they Republican, be the Democrat, they are all part of the same corrupt process. And they need to pay, be they bankers, bureaucrats, politicians or whoever. No Justice, No Peace. Its as simple as that.
Your editor has been wondering why Americans are being so passive. Had this been back in India, he can assure you there would be blood in the street - spilt not by the beaten down poor, but by those who thanks to economic growth have something to lose.
The theory he favors has to do with America having a White Anglo Saxon Protestant value system - regardless of the ethnicity and color of Americans, we all operate on the WASP value system. Under this system, it doesn't matter what befalls you, it is your fault, always your fault, only your fault. If you lose your job, if you lose your house, if your pension is wiped out, its no one's fault but yours. So how can you go and shoot the people who put you here? You shoot yourself.
Folks, obviously personal responsibility must play a major part if society is to function - perhaps even the major part. But the time has come to differentiate between bad luck/bad decisions thanks to which we all suffer alike, the common person and the rich and those who rule us, and situations in which we are robbed and the robbers go on to bigger fortune while we pay the price. If I get robbed on the way home from the Metro station after following all reasonable precautions for one who lives in an urban area, yes, I will take the major share of the blame. But if someone breaks into my house and robs me, sorry, I will not hold myself at fault.
You may have noticed there is no mention of any losses the editor has suffered thanks to the current crisis. That's because he has ZERO savings of any kind, cash or other kind - unless you count his fortune in Zimbabwe dollars. True, his school system will not give us even cost-of-living increases for at least 3-4 years. This year his take home is down by 3% due to inflation (true inflation of 6%, but his mortgage, half of his take home, is not affected.) Okay, so like hundreds of millions of people he'll simply tighten his belt further, though like most Americans in the last 20 years he's been continually tightening the old belt. Mrs. R is well settled, so his is his eldest boy; his youngster will be settled soon, despite the bad economy. Its much easier to do without and to bear hardship if you are on your own. So he is not about to go and shoot anyone.
But even the editor has his limit. One concerns money carried on person. When he came to Washington, he was told to always carry a $20 bill in his wallet: if he was held up, he didn't want to get killed by an angry robber. Well, guess what? The editor NEVER carries more than a couple of dollars in his wallet and often nothing at all. You want to kill me because I have nothing to give you? Please go ahead: I will not suffer the humiliation of being robbed, particularly now I am old. Life purchased at any cost is worthless.
There is, of course, my house. If anyone comes to repossess it, I'm not going to shoot myself. I'll make sure as many people as possible I hold responsible will go down before I do. None of this stupid suicide-by-cop. People like myself may be old, but we have decades of planning and knowledge on causing mass mayhem if we need to.
So if you want to come get my house, please make sure you've made your will and your family is looked after, because you'll die before I will.
Ah yes: fighting to keep your house. What's more American than that?
0230 GMT October 14, 2008
A Brief Note To Presidente Ortega Respected Senor, you've been quoted by Reuters as saying that the current US financial crisis is punishment from God.
May I remind you that you, as a good ole Commie Godless Atheist should not be invoking God for any reason, or have you perhaps undergone a conversion in the last couple of decades?
Next, in case you haven't noticed, this is global crisis. So pray tell, what have the British, Germans, French, Italians, Japanese and so on, and the Icelanders done to deserve God's wrath?
Further, you've accurately noted that remittances to your country from the US will fall, and we may expect this will mean hardship for your people. So, do you mind telling us what sins you have committed that God is punishing your people?
Last: we hate to be the ones to break the news, but America is God's most fave country. True, as a loving parent he sometimes needs to smack the Americans, but this is only for their own good.
BTW: since you are speaking in God's name - a bit presumptuous, even for you - you might want to be reminded of one of God's basic precepts, which is, do not take His name in vain. Since you have found God, you can start your new life by obeying Him on that one.
UK NCO On Trial As Iran Spy Media reports that the corporal was translator to the British commander of NATO forces. After he was passed over for promotion, he believed he was victim of racial discrimination, contacted the Iranian military attaché in Kabul, and began his career as a spy. It didn't last long: he was arrested within a few months at the end of 2006 and is now on trial at the Old Bailey.
The NCO denies all charges.
First Two-Generation Astronauts Meet Richard Garriot day before yesterday became the sixth tourist launched into space by the Russians. His father was a 1973 crewmember on US Skylab. Today Richard will meet Sergey Volkov on the Space Station. Volkov's father was a cosmonaut on the USSR's Mir space station in 1991, and Sergey became the first second-generation astronaut in April this year when he was launched to the Space Station.
The editor hopes he can hang around long enough to see to see the first 3rd Gen astronaut.
0230 GMT October 15, 2008
How Many Trillions, Did You Say? That's the problem: the Government is not saying and so far we haven't seen any estimates, but Uncle Sam has poured trillions of dollars into increasing liquidity for the banks. This is a nice bait and switch: while everyone's saucer-wide eyes are fixated on the $700-billion bail out, the Feds have been pumping money into the banks as if there is no tomorrow.
All you and I need to know about the result: it hasn't worked. Financial institutions are STILL not lending money. Only one financial writer of the many we regularly read has had the courage to say what needs to be said: every day Wall Street comes out with another demand for government action on the grounds "the government needs to restore confidence" etc. Steve Pearlstein of the Washington Post yesterday said, with some exasperation, that it was time for Wall Street to dance, and to stop demanding endless concessions. Wall Street also has a duty to the country, he said.
We've received a surprising number of letters with the same suggestion on how to "encourage" Wall Street to do its job: start taking bankers from their homes and offices, and start executing them publicly. One letter writer went even further than the usual "strip them and their families naked and throw them into the streets to scavenge along with the homeless". He suggested that while, after the first ten executions Wall Street people will start working, the Government should continue randomly executing one banker type a day.
Frankly, your editor is a bit taken aback. He thought he had a monopoly on the hang up on the lampposts themes. Readers may recall he wanted this done to Louisiana officials in the wake of Katrina, and then again with the DOD/Military/National Security/Intel people to ensure we don't get another Iraq anytime soon.
Should your editor steal $1000, the minute he finishes his sentence - which may be as mild as community service - he will be deported from the US. Yes, people, us legal immigrants have no rights whatsoever no matter how small the offense. If his students steal $250 and happen to be over 16, there is a good chance they will do time in the Prince George's County Juvenile Detention facility.
Once in, their lives are basically over. To survive "Juvey" they have to seek gang protection. When they are released, no matter how dearly they may wish to go straight, their gang wants its pound of flesh, which usually ends up with the kid going to jail again - and again.
If my kids are over 17 and get caught with a few grams of crack cocaine, well, its goodbye to them. Given what is left of them after 10, 15, 20 years in a hard jail, the merciful thing would be to shoot them in the first place. That's what happens in places like Iran and Saudi - and we call them uncivilized.
So here we have a bunch of fatcats who have stolen trillions upon trillions from you, and all that happens is that worst they get fired with multi-ten-million dollar payoffs, and at best the government keeps them at the helm and begs them to take taxpayers money. You may know that the man majorly responsible for destroying the world's largest insurer, AIG, was hired back at $1-million a month to advise the company's new owners - you and me.
The other day two youngsters kidnapped a middle-aged lady at a shopping mall, made her withdraw money from her ATMs, forced her to take them shopping, and then took off in her car followed by the police hot-on-heels. The driver crashed the vehicle, killing him and the woman. The surviving kidnapper is charged with felony murder along with more offenses we can count. Felony murder is when you are responsible for the death of another during the commission of a crime.
Just about everyone the editor knows - including people of color - want this diseased mad dog put down. Sure, they grumble about cases where the accused happens to be white and gets away with relatively minor punishment. But they want this youngster get his just desserts.
Now lets see: in CNN alone I read the following. A South Asian man who loses his job, kills his wife, mother-in-law, his children, and himself. He leaves a note in which he says first he planned to kill only himself but felt it dishonorable to tale the easy way out while leaving his family to suffer even more than they were already suffer. A woman in her late 80s or 90s shoots herself when the sheriff comes to evict her from the house she has lived her life because she can no longer pay the mortgage. Surprisingly, she survives and the state takes immediate action to straighten out her mortgage. But not so lucky is a 53-year old woman who to avoid stressing out her husband and 24-year old boy does not tell them she has been unable to pay the mortgage for 42-months - the husband has had a serious run of bad luck over the years - and then shoots herself. This is while potential bidders for the foreclosed house are arriving. Her last instructions are for the husband to take her life-insurance and pay the arrears, something that may or may not happen depends on what her company has re. suicide rules.
For every one such case, there are a million where people in retirement or about to retire have seen the value of their pensions diminish, there are a hundred thousand whose homes have been foreclosed or are about to be - and BTW those who bought too much house to afford are by no means the majority. We could go on.
Now, what are the above cases if not felony murder? We cannot, of course, say with certainty that the above particular cases would have not happened had the current crisis not been on us. But folks, this thing is just starting. We haven't really started to feel the pain yet. For example, most people who lose their jobs have 6-months unemployment insurance.
In the Great Depression, the financial big cats paid the price: they too killed themselves, their families too were reduced to destitution. There was some fairness in the process.
There is no equity in the current process. Society breaks down if there is no justice. I do not keep an M-2 Browning HMG in my house, nor do I have it mined and booby-trapped every one yard; nor have I killed the boys that stole my car last year because I have signed on to a compact with society. and nor do I lay camouflaged steel decapitating wire to behead the teenagers who occasionally decide they have to cut across my yard. I restrain myself because I have signed on to a compact with society: society will do its best to protect me, in turn I give up the right to take justice into my own hands. And yes, I am very satisfied: the Takoma Park Police provide me with great service.
But society has a reciprocal responsibility to me: if it fails to look after me, it has broken the compact. Anarchy will result. So it is not an academic matter that we, the people, have been looted, robbed, and defrauded by the establishment, the very same people the government is now trying to protect using our money.
Your government has done everything possible to bail out the thieves and gangsters. They say its to help you and me, the common man. The truth is, Mr. George Bush, Hank Paulson, Senators McCain and Obama etc. think the common man is the one with assets of $10-million or more.
It doesn't matter be they Republican, be the Democrat, they are all part of the same corrupt process. And they need to pay, be they bankers, bureaucrats, politicians or whoever. No Justice, No Peace. Its as simple as that.
Your editor has been wondering why Americans are being so passive. Had this been back in India, he can assure you there would be blood in the street - spilt not by the beaten down poor, but by those who thanks to economic growth have something to lose.
The theory he favors has to do with America having a White Anglo Saxon Protestant value system - regardless of the ethnicity and color of Americans, we all operate on the WASP value system. Under this system, it doesn't matter what befalls you, it is your fault, always your fault, only your fault. If you lose your job, if you lose your house, if your pension is wiped out, its no one's fault but yours. So how can you go and shoot the people who put you here? You shoot yourself.
Folks, obviously personal responsibility must play a major part if society is to function - perhaps even the major part. But the time has come to differentiate between bad luck/bad decisions thanks to which we all suffer alike, the common person and the rich and those who rule us, and situations in which we are robbed and the robbers go on to bigger fortune while we pay the price. If I get robbed on the way home from the Metro station after following all reasonable precautions for one who lives in an urban area, yes, I will take the major share of the blame. But if someone breaks into my house and robs me, sorry, I will not hold myself at fault.
You may have noticed there is no mention of any losses the editor has suffered thanks to the current crisis. That's because he has ZERO savings of any kind, cash or other kind - unless you count his fortune in Zimbabwe dollars. True, his school system will not give us even cost-of-living increases for at least 3-4 years. This year his take home is down by 3% due to inflation (true inflation of 6%, but his mortgage, half of his take home, is not affected.) Okay, so like hundreds of millions of people he'll simply tighten his belt further, though like most Americans in the last 20 years he's been continually tightening the old belt. Mrs. R is well settled, so his is his eldest boy; his youngster will be settled soon, despite the bad economy. Its much easier to do without and to bear hardship if you are on your own. So he is not about to go and shoot anyone.
But even the editor has his limit. One concerns money carried on person. When he came to Washington, he was told to always carry a $20 bill in his wallet: if he was held up, he didn't want to get killed by an angry robber. Well, guess what? The editor NEVER carries more than a couple of dollars in his wallet and often nothing at all. You want to kill me because I have nothing to give you? Please go ahead: I will not suffer the humiliation of being robbed, particularly now I am old. Life purchased at any cost is worthless.
There is, of course, my house. If anyone comes to repossess it, I'm not going to shoot myself. I'll make sure as many people as possible I hold responsible will go down before I do. None of this stupid suicide-by-cop. People like myself may be old, but we have decades of planning and knowledge on causing mass mayhem if we need to.
So if you want to come get my house, please make sure you've made your will and your family is looked after, because you'll die before I will.
Ah yes: fighting to keep your house. What's more American than that?
0230 GMT October 13, 2008
Russia Demonstrates Long range Missile Readiness On Saturday a missile boat launched a Sierva R-29RM SLBM, but please note this a liquid-propellant weapon, and as such decades behind the more stable solid-propellant types. Nonetheless, the missile has 10 warheads. It equips 6-7 Delta IV SSBNs that have been retained/reactivated to form the core of a reasonably modern Russian SLBM capability will the old/new Bulava missile is put back in development.
On Sunday a SS-21 Topol, 21 years old, was launched. And following that SSBNs on the Sea of Okhostk and the Barents Sea Russian each launched one SLBM.
Four launches over two days succeeds in demonstrating to the world that the Russians still have a viable long-range missile capability and that they are determined to modernize their deterrent.
http://russianforces.org/missiles/ has a nice listing of Russian's strategic weapons. We learn that only two missile armies with perhaps 300 ICBMs are to remain. Of 14 SSBNs, two are being deactivated, two are awaiting overhaul, one is in overhaul, and one new boat is not yet equipped. Total missiles will be about 180. Last, approximately 80 long-range bombers with cruise missiles are available, but 64 of these are obsolete Tu-95 Bears and only 16 Tu-160 Blackjack's are modern.
Still, ~700 or so missiles, most with multiple warheads, is an impressive deterrent, far bigger than UK/France/China combined field.
Dictator Mugabe Already Breaks Power Sharing Agreement with the opposition by allocating all key ministries, including defense and police, to his party. True the agreement was an informal one, even had it been engraved in platinum, it would have have made no difference to the Old Crocodile. Its clear that the pessimists were right when they said Mugabe would not give up power as long as he is alive. Indeed, the opposition had better watch out because Mugabe can start repression all over again.
Further adventures
of the Zimbabwe Dollar
We were right not to panic and sell our Zim Dollars when, at the
end of August 2008, the government cut 10 zeroes from its money,
reducing us from trillionaire status to poverty- the unofficial rate
being US$1 - Z$100-billion. As of October 12 the unofficial rate is back
to US$1=Z$4-million, so we are now worth Z$40-million. The unofficial
inflation rate for October is 2-trillion-percent, so with any kind of
luck we should be trillionaires again very soon. It takes nerves of
steel to play the currency game, let us be frank. Not everyone has the
required elan. Of course, not everyone has just US$10 to their name,
either.
0230 GMT October 12, 2008
Pirates Threaten To Blow Up Arms Ship
themselves included, if the ransom is not paid. We wonder if they
realize this lets the US at least off the hook. If they commit suicide,
taking the crew and cargo with them, then the US cannot be blamed AND
the cargo is destroyed. After all, the US is known not to pay ransoms,
so there is no question of faulting the US if the pirates stage a nice
boom-boom.
Of course, its unlikely they will. Saying "We'll
kill the hostages unless you play" is a pressure tactic. Saying "we'll
also kill ourselves if you don't play" is no tactic and only a measure
of desperation.
If the Russian heave to over the horizon and want
to stage a hostage rescue, the US is also off the hook. If the rescue
works, all glory to Russia and the cargo - which is all the US is
interested in, is out of the hands of Islamists. If things go wrong, the
US is in no way involved.
The nice thing about this blockade as far as US is
concerned, is the US has do nothing at all. It has surrounded the
freighter, and says it will not let the cargo be unloaded, and said not
another word. The onus is entirely on the pirates.
A Row Over Pakistan's Help To The Taliban
Because officially Pakistan is an ally in the GWOT, both US and UK
have been very circumspect in publicizing Pakistan's help to the
Taliban. The latter is, of course, a Pakistani organization, created,
armed, trained, and guided by the Pakistan Army.
Three Pakistan army "volunteer" brigades including
armor and artillery spearheaded the Taliban to victory in the 1990s, and
10,000 Pakistani troops were trapped in Afghanistan when the US overran
the country in 2001. As part of its deal with the US, Pakistan was
allowed to airlift the men and their officers out of Afghanistan.
You might think that in 2001, with the US forcing
Pakistan into an alliance at gunpoint, the Pakistanis would have been in
no position to bargain. But President Musharraf managed to convince the
Americans that if the officers/men were not allowed to escape, his
generals would overthrow him. Would the US rather deal with a new leader
who was ready to fight the Americans despite knowing he would lose, or
with kind, friendly, pro-America Papa Mushy?
In retrospect, letting the Pakistanis go and
allying with Pakistan may not have been the best course, but then,
everyone is wiser after the event. And certainly Orbat.com understands
the compulsions that led the US to make a deal.
Subsequently, the US has known all along that
Pakistan has continued to nurture the Taliban. Till recently, however,
the US thought the better course was to persuade Pakistan to break off
its support.
Lately, of course, US/UK have become increasingly
aggressive toward Pakistan re. the Taliban. The cat was never in the
bag, so what's happening now is not really a case of letting the cat out
of the bag. and in any case, while earlier US/NATO was able to
"persuade" Kabul to keep quiet and publicly go along with the fiction
that Pakistan was an ally, various things have happened that have turned
Kabul against the UK - as also against the US, by the way, and Kabul has
recently been freely talking to anyone and everyone willing to listen
that the Pakistanis are being duplicitious.
Now, because of the peculiar self-censorship the
US media in particular plays to, most of the Afghan quarrel with US/UK
has not made the US press. But lately the British press has gotten on
the story, and one result is this Times London article
http://www.timesonline.co.uk/tol/news/world/asia/article4926401.ece
The article pulls no punches and says a Taliban
leader killed last year by UK special forces in Helmand was found to be
a Pakistan Army officer. Now a British officer embedded with a training
team has talked, saying that Pakistanis often attacked Afghan frontier
posts, and that during battle last year the Pakistan military flew
repeated helicopter missions to resupply a Taliban base. also, the
Pakistanis used Chinese artillery to fire on NATO forces during
operations in Eastern Afghanistan.
To the Indians this new brouhaha is quite yawn
inducing. The Indians have been giving US/NATO details of Pakistan's
support of the Taliban, but first, the official policy was not to make a
fuss to keep Pakistan's "cooperation", and second, US/NATO can hardly go
around touting proof brought in by the Indians. The Pakistanis
routinely attack Indian frontier positions including serious
artillery battles to cover the ingress/egress of Kashmiri "freedom
fighters." There have been times where the volume of firing as the
Pakistanis cover the infiltrators, and as the Indians go counterbattery
against the Pakistani guns, and then the Pakistanis go counterbattery
against Indian guns, is so serious that if you happened on the scene
you'd think you were in the middle of a major battle. Sometimes there
are artillery duels simultaneously across hundreds
of kilometers of frontier, though usually the big bang-ups take place
sector by sector.
Why India just passively sits there, year after
year, while its territory is under open attack is a great mystery to the
Editor - and he studied Indian military tactics and strategy while
living in India for 20 years. But you may as well ask why the Indians
have done nothing over the last ten years as the Chinese have steadily
infiltrated Indian territory to actually build what may by now be
hundreds of kilometers of roads inside India.
Be that is it may, Pakistan is learning the US is
not India, because the US is carrying the war into Pakistan. While you
do hear about the UAV operations because the Pakistanis inevitably make
a hue and a cry, you don't hear about the scores of US/UK special forces
infiltrations into Pakistan that are taking place, or about the
Pakistani irregulars the US has recruited to fight alongside.
Where this all ends, we certainly cannot say. We
can say these US pinpricks do not deter Pakistan. The sole solution is
to carrying the war, full scale, into the NWFP and Baluchistan. Right
now the US lacks the resources to do anything of the sort, so a
stalemate prevails, with both the US/UK and Pakistan getting in sneak
punches to the other fellow's face whenever possible.
Is this a strange way for allies to treat each
other? Well, yes and no. This is the real world out there, and its a lot
more complicated than the Washington strategists, academics,
politicians, media etc. understand.
0230 GMT October 11, 2008
The editor's colleagues at work have become concerned that he's walking around in a coma. The explanation of his pathetic state is that the news nowadays is so hideously boring it would put a rock into a coma.
Afghanistan Strategy Review A friend called to say that whereas we've been saying an Afghanistan strategy review is imminent, the review has already taken place. We should have been clearer: yes, the review has taken place but the required tough decisions have not been decided for two reasons. One, the US has run out out of all good options on Afghanistan. Two, policy makers correctly want to leave the big decisions to the next president.
The review says the CI is failing, the Taliban is getting stronger, the Karzai government cannot get its act together, Pakistan's tribal belt is a hotbed of insurgents and Pakistan itself is coming under severe pressure and the government cannot combat the insurgents, corruption cannot be contained, opium production is creating havoc and so on and so on.
In other words" "The war is lost but we're hanging on because we can't figure out what else to do." But nary a policy decision is in sight.
All that's happened is that NATO has finally agreed with the US that the drug kingpins have to be taken down, and the US has agreed with NATO that any interdiction cannot be permitted to hurt the small farmers who have been driven to plant opium because the government gives them no other option for survival.
Meanwhile, Secretary Gates - who has an astonishing ability to cut through lies and false/garbled arguments and a clarity that ensures he doesn't come up with stupid ideas like Rummy and Company - is reduced to repeating that tired, off-tune song about NATO must contribute more troops. We understand that for political/diplomatic reasons he can't speak the truth: NATO is not going to contribute anything except bad smells that require one to stand upwind of that worthy organization. Only the US can send more troops, and with the budget disaster that's already happened and is coming up, even the US may go wobbly.
The Secretary has pragmatically decided that talking to the enemy is always a good idea, but we'd be surprised if he expects potential future talks to go anywhere.
He has, nonetheless, come up with one excellent idea: he is telling the west: "you don't want to fight, fine; but send money for those willing to do the job." Its quite possible he will shame the West into contributing more money, reducing the burden on the US. But: the west is also facing the same budgetary problems as the US.
Iran Bogarting That Joint Again and we, for one, are getting quite resentful. Now the Iranian higher command is pontificating that the economic crisis is America's just dessert for its sins committed against Iran. Iran, says the high command, is insulated against the global economic crisis and is in great shape.
Hello, Earth to Iran: you're the country that needs oil to stay above an incredible $95/barrel. Have you noticed the price has fallen to $77 and the betting is it will go down to $60 or even below? This means you are about to become bankrupt. Not a good thing since high command is going into a election next year. We hear that housing construction in Teheran is grinding to a halt. That's just a harbinger. And let's not talk about the inflation that you've unleashed by throwing all the money you've made these past months into populist projects to buy votes. And need we mention the people's revolt that is threatening? Shop keepers refused to pay a new sales tax and so emphatically that the government has had to drop the idea.
Instead of gloating about the US economy - which is actually in pretty good shape - start worrying about your own.
Another person who needs $95/barrel is Hugo. It's said the Saudis can live with $55; we think the real figure is lower.
Brazil Oil Brazil has made yet another potential giant oil strike. These discoveries are coming so fast we've frankly lost track, but are under the impression that in the last 3-4 years the country has hit a potential 10-billion barrels of new oil and that is just the beginning. Its interesting to speculate what will happen when the US starts drilling in coastal and offshore waters. Some years ago, it didn't matter if there was oil deep offshore because the recovery technology didn't exist. Now people blithely drill down to 1-mile below sea level and so these new discoveries are being made.
Over 20 years we were told in very hush hush fashion that initial Soviet seismographic surveys conducted for India showed the North Arabian Sea was one series of oil/gas reservoirs from one end to the other. Wonder what's happening that end.
Of course, if oil falls to below $60, a lot of the new discoveries will not be highly profitable. But (a) people can simply wait till prices go up; and (b) as extraction technology improves, recovery costs fall. We've heard it said that there's quite a lot of hydrocarbon fields that can be developed profitably even at $40/bbl.
Oil/gas is a frustrating area to study because information is held very closely and what is given out is usually the most pessimistic available.
India Reliance Industries, India's largest private company - and probably by now its largest company, period - says it has started production from one of its blocks in the Bay of Bengal. It is drilling down to 8000-feet. In two years output of oil/gas is expected to be 550,000/bbl oil equivalent a day, saving India ~$15-billion in foreign exchange annually at $80/bbl. This will boost offset considerably any GDP growth slowdown.
0230 GMT October 10, 2008
Oil Prices May Collapse to $50/bbl and perhaps even $40/bbl according to some analysts. Perhaps the lower figure is as extreme as that touted by people who were saying the price would go to $200/bbl, but oil is definitely headed downward for two reasons. One, as the world enters recession, prices drop in any event. Two, since so much of the price was because of speculation and because of respectable pension/mutual funds wanting more profit than they were getting from staid but safe investments, and because speculation etc. depends heavily on borrowed money, since the latter is not to be had for love or anything else, a big price drop is inevitable.
Normally we'd be highly alarmed at prices dropping below $80/bbl because that would destroy the alternate energy sources that are being built up. In this case perhaps there is not that much concern for alarm. The world now understands it has to use less and less oil and rely more on clean and green. US government subsidies for solar has been extended by six years as part of the $700-billion package; and that should give sufficient time to bring down generating costs to the point no major subsidies are required. Wind tax credit has been extended only one year, and this is worrying, because the US for one has immense wind resources. But wind does appear to be on its way to subsidy-free operation: so much capacity is under construction or planned that wind operators are running into shortages of turbines and other equipment.
The drop in price has a highly beneficial result: Iran, Venezuela, Russia will be badly hit, and the lower oil prices will greatly help the developing world, which has been the real sufferer of the oil producers' avarice.
Will not OPEC reduce production to pull up the price? The problem is cartels work best when the demand is high. And right now the oil producers are committed to enormous budgets based on the assumption prices were going to keep rising. They must pump as much oil as is needed to meet their budgetary requirements. Countries like Venezuela and Russia particularly depend on high oil prices; Saudi Arabia has large monetary reserves and could possibly cut back. But that will be insufficient to make up for other countries who need money at any cost, including Angola and Nigeria.
Judge For Yourself: Does A 3% Decline In Auto Sales Imply An "Outright Collapse"? To us that looks like a mild decline. To J.D. Power, the auto industry research firm, that puts the US into the midst of a global "outright collapse". In 2008, US sales were 13.6 million units; in 2009, JD Power estimates 13.2-million.
Right here you can see part of the problem with the current financial crisis: people are losing their intelligence faster than the editor goes through chocolate bars. If people are going to run around screaming "the sky is falling" when all that is happening is some well-needed correction to years of "irrational exuberance" and speculation, then they've forgotten about business cycles and capitalism.
Meanwhile, GM's market capitalization has sunk to $2.5-billion, the lowest since 1929 according to Reuters. We don't know if the lowest level is in terms of real money - 1929 being ~ $1 to today's Funny Money $11, or in terms of Funny Money. Since the media assumes we are all as stupid as they are, they avoid any figures that threaten to give their dainty brows a furrow.
The US Government has, as far as we can understand, agreed to $25-billion in guarantees for the auto industry, likely a first down payment on what the industry says it needs. Here the government is clearly paying for the complete incompetence of the US private auto sector. Had the auto companies continued their 1990s recovery into the 2000s, they would have been healthy as marathon runners and well positioned to survive - perhaps even to grow by takeovers of weaker companies. But the auto industry insisted we all wanted SUVs and has done belch-all about building the fuel-efficient and green vehicles the public really wants.
0230 GMT October 9, 2008
Somalia Pirate Deal Near? So says the International Herald Tribune. The pirates will get $8-million, and assurances they will not be blown out of the water or arrested by the US Navy. Other sources say that while the outlines of a deal are in place, many details remain to be worked out.
We think its unlikely the US has agreed to any immunity for the pirates. We'd suggest that the pirates get the best Washington DC lawyers to review any agreement that says the US will not go after the pirates. There is no nation more devious with legal language than the US .
A Most Enlightening Call-In On CBS Radio CBS asked people to call in and tell what they absolutely would not cut despite the economic crisis. (a) Lady says she will absolutely not stop spending $3/day on Starbucks. (b) Another lady says she will never cut cable TV because she has to watch "her" Redskins - the Washington DC football team. That's about $600/year. (c) Gentleman says he will absolutely not stop buying cars: he has only 13 and is planning his forteenth.
US 24th Air Force Activated This is the USAF's "Cyber Air Force". It has three wings and one group. Time was that that would have been an understrength Air Division. The fewer the aircraft and resources, the more HQs. In Vietnam, for example, 2nd air Division out of Tansonnhut, Saigon, at peak had 12 wings and several groups totaling 1000 aircraft. In 1966 it was redesignated 7th Air Force, so this is an extreme example, but it suffices to make the point. (Thanks, Wikipedia, for the walk down memory lane - you save users a lot of time; we'd have had to look up our notes in several places to retrieve that inf9ormation.)
0230 GMT October 8, 2008
Its Official: Iranian Need To Stop Smoking The Good Stuff Or Get New Spectacles Fars, an official Iran news agency, reported that a US "Falcon fighter" entered Iran airspace at low altitude to evade detection and was forced down by the Iranians. Interrogation of the five US military officers and three civilians showed there was no malignant intent; the plane had merely strayed, and it was allowed to proceed on its way.
So: Actually this incident happened on September 30, the plane was a Dassault Falcon business jet, and the people aboard were Hungarians.
While Fars did correct itself quoting other Iranian and Mideast media sources, may we remind the Iranians of correct smoker etiquette? "Don't Bogart that joint, my friend, pass it on to me." Any prohibited substance that can turn a Falcon bizjet into an 8-seat F-16 flying US military officials around has to be the Good Stuff. Share and share alike, is what we say.
Goodbye, GWOT We mentioned that in view of the financial crisis, which is likely to take ten years to full work off, US defense budgets will be cut. We received further confirmation yesterday, alas we cant identify our sources, except to say they work at Langley and are responsible for keeping the senior officers in nice toilet paper. We are told that the Charmain brand in apple green and with aloe vera is the current rage.
No one has yet identified the areas that will be cut, obviously, because this reversal of fortune re. budgets has come on us suddenly, but the betting is that one area that will take a cut is the US Army's Future Combat System, parts of which the US Army is unhappy about anyway.
Eventually, of course, total US defense expenditure (we include homeland security) will have to be cut to less than 4% of GDP as opposed to the ~6%+ it now runs, including intelligence. That's going to mean goodbye to GWOT.
One nice thing about Neutron Bomb Mr. George Bush is that it is destroying all sides with strict impartiality. The Neutron Bomb has essentially wiped out the Republican party, but it has also given the Democrats toxic radiation poisoning which will kill them slowly and painfully.
Currently it looks increasingly likely Senator Obama will win the election. Yes the polls are not to be trusted; yes, we'll find if color is really not a factor only after people cast ballots, as opposed to talking to pollsters etc. etc.
But look at it this way: there is no way the $700-billion bailout will start taking effect till after the election, and even the added money the Fed/Treasury are pumping into the economy - we think its closing in on $2-trillion now, including $900-billion in new authority - may well prove insufficient. One thing you can be 100% sure is that the government will pump in as many trillions as needed: there is not going to be a depression, and the government can print all the money it wants.
The pain for the common person is only now starting. So the Dems, assuming they win, will inherit the Mother of all Money Messes, and certainly in four years they will be unable to turn nothing around. Among other unpleasant things, they will have to drastically raise taxes unless the US dollar is to become another Zimbabwe dollar, because not just does this new paper money have to be repaid, the excesses of the last ten years have to be wound down. And we know how the American people react to higher taxes.
In 2012, we can be sure, people will be turning their wrath on the Dems just as they are now on the Reps, and then the Dems will take the same beating and loss of credibility as the Reps are now taking.
So its not just Senator John who will cry: "Et Tu Georgius?" but Senator Barak as well.
0230 GMT October 7, 2008
Less Than Meets The Eye in the CNN story that in Saudi-brokered talks between the Afghan government and the Taliban, the latter have said they are all for peaceful negotiations and that they have broken with Al Qaeda.
We can't help saying that if the Taliban had broken with Al Qaeda when in September 2001 the US Government asked them to hand over Osama, a lot of subsequent grief might have been avoided.
Anyhows. We believe there is less than meets the eye to this news. Please note it has taken two years for the Afghans and Taliban to even talk. It is likely to take years more to come to a real agreement, and the chances that it will stick are slim.
We are unsure if the CNN story represents real progress or is just the Saudis sitting on the heads of both parties to force some agreement. Why should the Saudis care? For one thing they don't want Iran's influence to spread - perhaps they might have thought about that before going gung-ho to overthrow Saddam? There are increasing ties between Iran and the Taliban. Another reason is the Saudis want to appear mature, statesmanlike partners of the US, and show the Americans they are not plain bloodsuckers, but eager to help their great ally, the US.
Pardon us while we barf. The only time that the US can trust the Saudis is when the House of Saud goes into the trash bin of history.
So, what leverage does Saudi bring to the table. The sole leverage that comes to mind, providing rouge Saudis are not supporting the Taliban with cash, is Big Bribes. These sometimes work, and sometimes people just take your money and walk away on one pretext or the other, usually that the other side has shown no true faith in a peace agreement.
Not that the US Government listen to us, but were we asked for our opinion we'd say (a) it will be foolish for the US to let up its efforts to destroy the Taliban just because talks may be in prospect. US has to keep squeezing till a secure peace is a done deal, and maybe not even then. We are happy to say in this case the US Government has taken our advice - even before we gave it, isn't that remarkable? (b) How can you negotiate with a movement that is about the closest thing to the Devil's work we have on earth?
This is not new stuff; we'd forgotten to include in earlier posts: for want of time we're including two stories in the update; both remain entirely relevant.
0230 GMT October 6, 2008
Afghanistan Is Lost: British Ambassador We'd have mentioned this story earlier except for the financial crisis. Apparently British Ambassador to Kabul is a man not to mince words or be politically correct - the Brits in any case a lot less ideological than Americans, and so state reality much more clearly and without evasions. He said the war is lost, largely because the government is completely ineffective and corrupt. Taliban is increasing control by leaps and bounds. Only hope is a dictator for at least five years who will bludgeon the 800 tribes/sub-tribes into submission. Americans are idiots (he did not actually use that word but its pretty clear that's what he means) and basically have no clue how to fight a CI in Afghanistan; they are making things worse; more troops will only accelerate eventual defeat.
So, as you may imagine, big uproar back home, not because he called it as he sees it, but because that's not the official line to the Americans and the ambassador's thoughts are impolitic.
Personally, orbat.com feels the Americans are not the Delicate Daisies the British seem to assume. They can take criticism, and certainly at the theatre level the Americans are perfectly aware of what the Brits think. Right now the Americans are not in a crusading mood: even their own analyses paint a very dark picture; people at all levels are getting a bit antsy about the 7 years that have passed since US invaded; and when the bailout/additional liquidity bill come due, as it will starting next year, people are going to start rethinking if America should be aggressively overseas in a high cost mode.
President Bush neatly and sight unseen converted 9/11 to a Global War on Terror with no discussion outside his circle; no authority from Congress; no oversight; and no heed in printing more dollars to fight the crusade. Largely he succeeded because Americans are so patriotic you have only to wrap yourself in the flag and they will follow, regardless of what doubts they may harbor. This is an overreaction to Second Indochina, and the same generation that said "Heck no! We wont go!" is trying to assuage their guilt in turning against the soldiers who were doing the fighting as much as they turned against the government. They want absolution now that they can sense The Big sleep is approaching But President is out in a few more months and there is a lot of rethinking already underway.
Gotta Love Those Brits Washington Post yesterday had a great story about two British intelligence operations in North Ireland during the CI operations there.
The British knew the leader of the IRA's political wing, Gerry Adams, loved to have his conferences in new cars and on the move. So for years every new car going into Northern Ireland was bugged, and the British knew almost exactly what was happening at the political level.
The Belfast bombings were getting out of hand, so British intelligence along with the Northern Ireland police and the SAS Regiment put together a most ingenious plan. They set up a laundry - yes, a laundry - in a strategic district. It was a real laundry, but some of the personnel were British agents. Then tickets color coded street-by-street were sent out as invitations. When the clothes arrived, they were indeed washed, dried, ironed, but one step was not to be found in your Laundry Operations Manual: before going to the regular laundry line, the clothes went through a machine - disguised as a laundry machine where the clothes were subjected to analysis for traces of explosive powder etc.
Having found which streets the bombers lived on, special promotions were sent out to the neighborhoods, along the lines of "Do One, Get One Free". This time the promotions were not just color coded, they were numbered. So: specific target fixes were obtained. This being the British and not the joyously carefree Yanks, the information of who lived where was checked from multiple sources and records. One day: wham! and the networks were rolled up.
Doesn't get better than this.
But before our American readers start feeling dejected, please be assured the US is using a bunch of very high tech tools that boggle the imagination to track and kill AQ in Iraq. The war in Northern Ireland is over, so the British can talk about their achievements. The war in Iraq and the GWOT in general is still on, so the Americans can not talk and probably will not be able to talk for at least 30 more years.
0230 GMT October 5, 2008
US Blockade Of Somali Pirates US has six ships on station to prevent the hijacked Ukraine ship from unloading its weapons. It is unclear to us what types the ships are: as far as we can tell there are three destroyers and a cruiser.
An international force to combat piracy in the Horn of Africa region is under formation; several European countries and some Asian nations like Malaysia will participate. Nonetheless, the pirates cannot be defeated unless their shore bases are attacked, and so far we see no sign land attacks are planned. It's worth noting that the US Navy's first overseas operations were intended to protect American merchant shipping off the Barbary Coast, which includes modern day Libya and Algeria. The US Navy took on the pirates not just at sea, but also on land.
Meanwhile, we are completely baffled as to why Somalia has recognized the government of South Ossetia. The Somalis have expressed their appreciation for the Russian help to combat the pirates now en route, but does the dispatch of one frigate, which will coordinate with perhaps 15-20 warships from other countries, require a recognition of South Ossetia? Somalia is now the fourth to accord recognition, the first three being Russian, Venezuela, and Nicaragua.
US Hands Off Sunni Militias To Baghdad; Kills Senior AQI Leader The Iraq Government is now responsible for the Sunni Awakening militias created by the Americans. Everyone is holding their breath, waiting to see if the government honors its promise to continue paying the militias and to recruit a certain percentage into the Iraq security forces.
The Iraqis understand quite well than abandoning the militias will mean another several ten thousand Sunni fighters against the regime, but there is a more-than-even chance that local politics will take precedence over logic and the government will not be able to forget/forgive the brutal suppression of the Shias by the minority Sunnis during Saddam's 30-year rule.
Meanwhile, US says it has killed the AQI emir of Baghdad, the senior AQI commander in the capital. He is said to be responsible for the resurgence of recent violence against the Shias and also for attacks on US troops.
Indian Special Forces To Expand to 14 battalions from the present eight. The news is not knew; the Israelis are supposed to be providing equipment and expertise to six battalions raised specifically to fight in Kashmir. Rumor has it that the army wants even more.
Now, even at 20 battalions, Indian SF will represent less than 5% of Indian infantry battalions. Nonetheless, we are uneasy at even the expansion from 8 battalions. We recall what Field Marshal Slim said of SF in the India/Burma theatre: he believed they drained the best officers and NCOs from the regular infantry, leaders who would be better employed in regular battalions. He also believed that opportunities to use SF for special missions were few and far between, so either you used them as regular infantry, or you tied up enormous resources for insufficient return.
We do not see why the Parachute Regiment, which now has just 3-4 battalions left after the conversions to SF, cannot fulfill most SF roles.
Meanwhile, we hear rumors that Pakistan will raise, or has under raising, a third SF brigade. Please note that our south Asia expert, Mandeep Singh Bajwa refuses to confirm a second brigade, leave alone a third. His criteria for orbats are very stringent, and match those that the Directorate of Military Intelligence uses.
0230 GMT October 4, 2008
Dresden February 1945 That between 100,000 and 135,000 civilians died in the firebombing of Dresden is so much an article of faith that we were surprised to read that a German study of the records show only 25,000 killed. But what surprised us even more is that this figure has been around for at least 15 years, if not more. So why has it taken so long to hit the mainstream press?
An estimated 3-500,000 German civilians are thought to have died in the Combined Bomber Offensive conducted by RAF Bomber Command and USAAF 8th Air Force.
Among the doleful figures of the Offensive is that 160,000 Allied airmen also died, about evenly divided between the RAF and USAAF. That figure represents an incredible 44% of US combat dead in the Atlantic/Europe theatres.
Bailout Bill Becomes Law and already warnings are being posted that it will not prevent a recession, only make a depression unlikely. Good luck, US economy.
Teachers, Salaries, Vacations, Tenure and Pay For Performance
This has nothing to do with GWOT or strategic/military affairs, but the editor, as a teacher, is often taken aback by statements such as: "Okay, so you don't get paid much, but you get 10 weeks vacation each year." Yes we teachers do, but it is unpaid vacation. Generally, teachers work ~190 days/year, and that's what they get paid for. I get 21 paychecks a year, not 26.
If you have ever taught, or even sat in on a classroom, you will not be surprised to learn that at least 40% of American teachers quit before completing five years. We are told in UK it is 40% quit within two years.
The editor is always amused when people like Ms. Melinda Gates and her husband Bill express outrage that teachers insist on tenure, and how this protects incompetent teachers, and how teacher pay/job security should be predicated on the achievement of students.
He would like to ask Mr. Bill Gates: lets suppose you had to run Microsoft the way you want schools to run. So lets see how you like this, Big Boy: you do not get to choose your workers, you have to "hire" any and all as are assigned to you. You can do absolutely nothing if your "workers" refuse to show for work, or sleep on the job, or plain refuse to do the job.
You can do absolutely nothing about special needs children who you are supposed to teach along with the rest of the class unless they have very severe needs. Even one disruptive student in a class of 30 can wreck the class.
You can do nothing about that student: refer her to the administrator too many times, and your administrator will say: "I cannot run your classroom. If you cannot control your students, you need to rethink teaching as a career."
You can offer neither incentives to your students or punish them in any way. If the school decides to punish them, usually by suspension, they are delighted to stay home.
And lets see the Gates' each teach 197 kids Geometry in six sections, where 90% of the kids cannot divide 36 by 2 without a calculator, and 90% cannot solve a one variable equation. Lets see them handle kids who have no study skills, no retention, and no confidence. BTW, did I mention 50% or more cannot read, and typically my students are 10th and 11th graders?
Lets see them handle kids who have given up years ago, and when asked to work either act out or stare apathetically at the wall. Lets see them try and give remedial instruction to the kids as well as teach a lengthy and complicated lesson each day, and falling behind means they will be written up.
If Mr. and Mrs. Gates came to teach at my school under a "pay-for-performance" scheme, given as they have absolutely zero control over any of the factors that make their "workers" what they are, I can guarantee you at the end of a year they will be paying the school system, not getting any money.
So, sir and madam. I admire your business acumen and your financial success. You're one of the best in your field. But just as I would never presume to tell you how to run your business, given I have never been in the corporate world, don't tell me how I should be compensated for teacher, given you have never taught.
If teachers did not have tenure, and were subject to the whims and fancies of the administration, and were punished for failing to bring kids to standard when the teachers have zero control over the factors that shape the kids and their learning, I can assure you 80% of teachers would wash out in two years.
You may be surprised to know that when teachers are asked why they quit, almost no one cites pay as the issue. Number one issue is discipline, and number two issues is discipline plus the administration.
And BTW, my school is not an unusually "tough" school. Given the income level of the parents and given their values, my school is quite typical of a school located in the suburbs but with inner city type kids.
Oh yes, did I mention I have exactly ONE white student of my 197? I've counted maybe 7 white students in a school of 1800 students.
0230 GMT October 3, 2008
More On The Bailout One problem with the way the editor writes, as we've said before, is that he doesn't refer to his previous posts, and puts very complex arguments in compressed form. Unless you read what he's saying very closely, you can get the whole thing wrong. Editor has frequently been accused of saying one thing whereas the item being referred to says the exact opposite. So we thought it time to return to the bailout question, and add new information that has come up.
Mark-To-Market and Risk Ratios The youngster dropped in for a while last Monday and enlightened us on two technical aspects of the mess. First, the risk derivatives carry was wrongly assessed at 5% default; the actual default has been 7%. Since Wall Street was pushing amazingly complicated new financial instruments, its hardly surprising that the risk was incorrectly figured; there is evidence that the assumptions fed to the risk model were not as mathematically rigorous as they should have been.
Second, mark-to-market. The Government has an accounting rule that says the value of certain securities financial institutions carry must be entered at the present market value, not at future value. There are all sort of good reasons for this rule. One is that it forces valuation of assets at an easily calculated price that anyone can understand. Who can tell what assets will be worth in the future, and can we let companies put any value they arbitrarily choose? Obviously we cannot, because this will reduce transparency, and the push worldwide is for greater transparency. We can talk about that another time.
But in this case, the Mark-To-Market thinggy has caused a collapse of mortgage-backed securities to lows completely unjustified by market conditions. Assume the Penny Lane Bank owns ten 1-million dollar homes on Penny Lane and that it has no other business. All houses carry a $500,000 mortgage. The mortgage holder specifies that the mortgage cannot be more than 1:1, and these houses meet that condition.
Now assume due to some problem, one family has to sell. $600,000 is the best price the family gets. Now ALL houses have to be revalued at $600,000.
Major problemo, dudes and dudettes. Since the mortgage cannot be more than 1:1, all nine remaining houses are now underwater. The mortgage to equity ratio is now 5:1. To rebalance, all nine remaining houses each have to come up with an additional $400,000 cash. Assume this does not happen, the other nine go into default even if all nine have been paying their monthly installments on time.
Because the housing market is overbuilt, these ten houses find no immediate buyer. But given three years to work off the housing overhang, these houses can be sold at the original price
Problem Major Number 2. Penny Lane Bank has borrowed $4-million and put up $1-million to get the $5-million in mortgages it funded for the houses. The lenders of the $4-million panic and figure Penny Lane cannot wait three years for prices to recover. They demand that Penny Lane put in $1-million additional capital. But all that Penny Lane had by way of cash/marketable securities was $1-million. The houses are now worth a lot less than originally. The houses were the collateral Penny Lane put up to get $4-million in loans from 58th Banccorp of Podunk, Ohio. Penny Lane cannot come up with another $1-million. But 58th Banccorp borrowed $3-million of the $4-million it lent to Penny Lane. 58th's lenders, HubbaBubbaHoo of Wall Street start squeezing 58th. well, Penny Lane cannot satisfy 58th, and 58th cannot satisfy HBH, and now HBH cannot satisfy its share holders, who push its shares down from $100 to $2.
So ladies and gentlemen: how do you spell C-R-A-S-H? HBH looks to the government for a bailout, government says no, and HBH declares bankruptcy, pulling down 58th and Penny Lane with it.
Ironically, but for the Mark-To-Market rule, Penny Lane could have waited to sell the houses at a better price, then it would not be in trouble, and 58th wouldnt be in trouble, and HBH wouldn't be in trouble and neither would Wall Street.
So a very little crisis which could have been resolved in time becomes a major blowup. Multiply by 1000 times, and you have your entire financial system going under for no logical reason at all!
Government Regulations As The Culprit Reader Mike has sent us several emails saying that not just have government regulations created the present mess, the amount of money the government takes from citizens and then misallocates is now well over 60% of the GDP, and this is destroying growth. His calculation for Maryland might be: 35% federal tax, ~7% Medicare/Social security; 8% state tax, 5% sales tax, 1% city tax, and the balance taken up in complying with onerous regulations at every stage. Reader Mike argues that the Constitution prohibits the government from taking away citizens' money to bail out other citizens unless those taxed agree. And the citizens have neither been asked if they agree to $700-billion being taken, nor given a chance to object.
This Is Not The Time To Recriminate At the risk of simplifying Reader Jonathan Coldspring's complex argument to us via e-mail, since the world financial markets run on confidence, and global confidence is crashing, regardless of the rights-and-wrong - which can be sorted out later - the $700-billion bailout is needed to inject liquidity into the credit markets. Right now those who have money to lend are not lending. The entire global financial system runs on credit, and the system will crash, pushing us into a massive depression. If the bailout is okayed, Government will give money to HBH, which now has the ability to wait on 58th without asking 58th to raise more capital, and so on to Penny Lane. Confidence will be restored.
And because a lot of the crashing assets owned by the financial system have a value much above the crashed value, the Government is likely to recover most of its money, if not all, and may indeed make a nice profit for the citizens.
Reader Coolspring believes the problem is so acute that no trickle-up program such as putting people to work, extending employment benefits, refinancing individual markets etc - such as we suggested the other day - can succeed.
But What Happened To the $1-trillion Plus the Government has already injected into the capital markets, say the Naysayers. What about the several rate cuts which have shifted money from the thrifty saver to the profligate borrower? What assurance exists that after this $700-billion plus $1-trillion even more money has to be injected? If Wall Street is to be saved, on what grounds do we refuse the Big Three Auto makers the $50-billion they want to cover their failure to become profitable? What about the at least $25-billion the airlines say they need? And so on.
There Is No Way Out Of Massive Suffering say the structuralists. America has for years been living beyond its means, using money borrowed from suckers abroad. America has given up making anything of real value. Obviously this is a generalization because some manufacturing sectors - steel as an example, are doing very well after decades of slimming down and increasing productivity. But the generalization is true because tens of million of American jobs have been exported overseas. The people who now make things for us were supposed to buy $1 in goods from us for every $1 they sold in goods to us. It did not work that way for many reasons, and more and more America will be owned by foreigners, the American standard of living has fallen, not risen - the minimum wage-earners at Wal-Mart cannot afford to buy even the goods the company imports from China.
The structualists say that huge cuts in government spending coupled with tax increases are the only way America can bring its credit overhang into balance. This will mean ten years of no growth, maybe even negative growth, a steep fall in living standards and so on. We cannot maintain our artificially high standard of living anymore. The bail-out will not work because the overhang runs to trillions of dollars. Best not to throw that money at a losing situation, but use it as part of our overall strategy to reduce consumption and increase production.
There Is No Crisis says another school of thought. Sure the economy/financial system is in a downward phase. But isn't that the way capitalism works? We are supposed to save during up periods to maintain ourselves during lean periods. Our parents/grandparents learned this the hard way during the Depression. It is not the government's role to think its can smooth out business cycles the magnitude of which we face. If it is the government's role, then lets stop talking about loans and guarantees. Nationalize failing financial/industrial institutions to the extent money is available. That way when things improve, the taxpayers will get their money back plus more.
As for the "Government cant run things the way private sector can". Well, that's plain hooey, isn't it? If that is true, then the Government cannot be trusted to run bailouts either. And most emphatically it is not the Government's business to bail out private enterprise that messed up.
So This Is a Rushed Summary of how we got into this mess, why the bailout is needed or not needed, and why it will succeed are not succeed. Naturally we have covered only a few points.
Please be welcome to write in with your thoughts. One request and requirement: please do not pick a narrow topic and say this is wrong and this is right. Think of the whole system and how your ideas/thoughts might help to revive the economy. It is this lack of global thinking that is in great part responsible for getting us into this and many other messes.
0230 GMT October 2, 2008
Update On Hijacked Arms Freighter The pirates say they are in direct contact with the ships owners, and are confident the incident will have a happy ending, with the pirates getting $20-million and releasing the ship.
Call us pessimists, but we don't see a happy ending for the pirates. First, where do they get the idea than the Ukraine company can pay $20-million as ransom? Neither the ship, nor the cargo, nor the crew put together are worth $20-millon to a second world company. If the company pays ransom, it will be from its own pocket. If it lets the matter continue as it is now, it (a) gets the ship back free of charge because the international force successfully regains the ship; or (b) it gets the insurance money if the ship is damaged or sunk in a rescue effort.
With at least six warships including at least three US, surrounding the ship, why should the Ukraine company make any concessions to the pirates? This ship is going precisely nowhere.
So supposing the ransom is paid, do the pirates think the international maritime force is simply going to let the pirates go home? No, sir. The force is there to combat piracy, and you combat piracy by (a) sinking pirate boats or vessels; (b) capturing the pirates and sending them to trial. Piracy being a most serious offense, the pirate are NOT going to get six months time and a year's probation. They will be squeezed mercilessly by the military before they are turned over to a civil authority, because people need all possible details about the pirates and their organizations.
The Joker in the pack approaches That is the Russian frigate, and Russian sources say it carries both special forces and marines. With the Russian captain dead of hypertension (a heart attack?), Moscow still has two citizens on board the ship and some of the Ukrainians may also be Russian citizens. The Russians have announced they are in no way obliged to work with the international force. That's a polite way of saying the Russians will go after the pirates themselves. And people, with the Russians thirsting for some good press and determined to show the world they count for something, what are the odds they will NOT launch a dramatic rescue, even if it means some the crew are killed?
If we were the pirates, we'd be busy negotiating the terms of our surrender, writing sad farewell letters to our families, and warning the home base that this time there could be an attack on their base itself. Puntland is an autonomous region of Somalia; it has said it cannot fight the pirates much as it may want to; and getting permission from Somalia Government to stage a land action is no problem because the Somali people are suffering the most from the pirates.
New findings on AIDS BBC reports that scientists believe they have identified the source of the AIDS epidemic. It came about because the Europeans began building cities in Africa, specifically Leopoldville, now Kinshasa, in the Congo. Sometime between 1884 and 1924 the virus jumped from monkeys to humans. The scientists say 19 of the 10 virus strains come from the area around former Leopoldville.
We mention this because of the disappointment that will be suffered by those who believe AIDS is a specially-developed US virus intended to wipe out the African-American population, or the Third World, or whatever. We doubt anyone was developing viral weapons a hundred years ago. African Americans "knew their place" in America and were no threat to the whites. US had minimal involvement in the Third World; in any case, why would the white man bring medicine, schools, infrastructure to the Third world if all he wanted was to wipe out the population? And, of course, the Third World was not perceived as any kind of threat to anyone except itself a hundred years ago.
BTW, at one time the Russians were touting the theory that US/NATO had developed AIDS as a weapon of war to use against the Warsaw Pact. Seeing as how long an infection takes to progress to the illness, we can't imagine anyone using the virus as a weapon of anything.
Israel To Become First Non-Consortium F-35 Customer Israel wants 75 of the fighters under a $15-billion program - $200-million per fighter. That of course is the lifecycle cost and may include armament.
0230 GMT October 1, 2008
Shootout On Hijacked Ship? BBC says it received information from a maritime monitoring group that a shootout took place among the pirates holding the Ukraine ammunition/tank cargo, leaving three shot, with no details.
Lies, all lies, the pirates say: we are solidly united.
Well, maybe not. Two clans are involved in the hijack, and there may be a disagreement, with one saying compromise and lets get out with our lives, and the other saying "ransom or else."
We say with full awareness the US in recent years has been highly sophisticated in putting out rumors based on plausible fact and real fact. This tactic seriously frays nerves in these hostage situations. Once the hijackers start looking very closely at each other, the game is on its way to being up.
So it doesn't matter if no shootout took place: doubts have been sown, and both facts are going to watch each other closely.
Pakistan Counter Insurgency Mandeep Singh Bajwa writes the Pakistan Army has committed five divisions to the NWFP insurgency. People may disagree with us, but In Our Humble Opinion, most of those divisions are there for show, to impress the Americans and the world.
And please belay all the trash about "the Pakistan Army doesn't have the capability to fight CI", which the US is buying into. The Pakistan Army is perfectly capable of fighting CI, it just doesn't want to, for reasons legitimate and illegitimate. Legitimate: having see the country breakup once, in 1971, the Pakistan Army doesn't want it to break up again. A second breakup will spell Finish for Pakistan. Legitimate: force is not always the answer, surely the Americans know this by now, having won Iraq with a clever mixture of bribes, social services, infrastructure building, provision of local security, and tuning former insurgents into allies. What may seem illegitimate to US but is legitimate for Pakistan Army: the Taliban is its creation to further Pakistan foreign policy. Pakistan does not want Karzai government to succeed because it believes - correctly - it will encircled by India.
If you think the Pakistan Army cannot do CI, just study the March-May 1971 phase of the East Pakistan insurgency, which in terms of numbers of people opposing the government likely is an all-time record. Within two months the insurgency was dead; which is why India had to start getting involved. Please also study the 1971-76 Baluch insurgency. And right now Pakistan Army is holding down Baluchistan, which two years ago was on its way to blowing up again, with one toe of one foot.