Moon of Alabama Brecht quote
July 31, 2008

Billmon?

Is this THE Billmon?

But I was around, and following congressional politics rather closely (by which I mean professionally) when McCain first popped up on the political radar screen in 1986 during the so-called Keating Five scandal. In exchange for various regulatory favors, Keating, a wealthy and politically, um, generous, S&L executive, turned himself into the special friend of a bipartisan group of sleazebag Senators, with five in particular, including McCain, reaping most of the benefits. By modern standards (i.e. Jack Abramoff’s and Ted Steven’s standards) it was actually pretty tame stuff, but it was considered a big deal at the time)

Hmmm  ...

Go read: The Great White Hope

Thanks to furrythug and to Fran for linking this in comments.

Posted by b on July 31, 2008 at 04:20 PM | Permalink | Comments (105)

The German 'Gas Deal' with Iran

The Jerusalem Post is miffed about a German 'gas deal' with Iran.

A parliamentary state secretary in German Chancellor Angela Merkel's cabinet appears to have acted illegally in influencing the country's Export Control office (BAFA) to approve a €100 million-plus deal for liquefied natural gas with Iran.
...
Critics charge Germany with not stepping up the pressure to restrict trade to Iran, and affirm its historical responsibility to secure Israel's existence. Iran's genocidal policy toward Israel is testing, for many Israelis, Germany's commitment to the Jewish state.

Germany's 'historic responsibility to secure Israel's existence'? That's a new concept to this German dude but anyway.

Laura Rozen links to the JP and asks:

German gas deal with Iran illegal? One would think this would be a subject Senators and Congressmen and the pro Israel lobby might make a stink about. If sanctions fail, military action becomes more likely. But as one trade lawyer told me, "As usual for Germany, business takes precedence."

Baloney. It is the law that takes precedence.

The are no sanctions against Iran's oil and gas industry.

Neither the UN sanctions nor EU sanction against Iran are targeting exports or imports with the Iranian oil and gas industry. There is no international or national law relevant in Germany that forbids such exports. There is no legal base to deny any company the right to export equipment to Iran. That is 'free trade' in the best sense.

Here is what happened.

The German engineering company Steiner Group got into a contract with some Iranian company  to deliver three plants to liquefy natural gas. It is a big contract of €100 million, four times the normal annual turnover of Steiner. The plants will mostly be build in Germany, shipped to Iran and set up there by the Steiner-Group engineers. There are no possible nuclear or weapon proliferation issues with such plants.

A year ago the company requested a routine export clearance from the German Federal Office of Economics and Export Control. It expected no struggle, but the clearance was delayed and delayed again.

Finally the company contacted their local parliamentarian, Mr. Hartmut Schauerte. They were lucky as Schauerte is also a member of the administration. He is parliamentary state secretary in the Federal Ministry of Economics and Technology. The export control office is, as its own website says, "subordinated to the Federal Ministry of Economics and Technology  (BMWi)."

The BMWi ministry's org-chart (pdf) says Schauerte:

Represents the Minister in the political arena and provides the Minister with policymaking support, particularly on small and medium-sized enterprises and bureaucracy reduction; Federal Government Commissioner for Small and Medium-sized Enterprises

With a turnover of €25 million a year, Steiner-Group is a 'medium sized enterprise'. So Schauerte did what he is supposed to do. He woke up the bureaucrats in an office subordinated to the ministry he is helping to lead and told them to do their job.

The export control office had no legal base to deny the export clearance and in the end had to issue it.

Now the bureaucrats seem to be a bit pissed, lamenting about 'independence' towards the Jerusalem Post.  They are in fact not independent but subordinated to the ministry. Their job is to make timely decisions on a legal base. There is no legal base to deny the export clearance for liquefaction plants to Iran. When the bureaucrats did not do what they were supposed to do, the relevant secretary in the ministry intervened.

There was certainly nothing illegal in this.

The Merkel government could of course introduce a law that forbids such exports to Iran. But then the German parliamentarians would have to be asked to vote for higher unemployed and less export profits. They and their voters are not inclined to do or allow such only to appease Israeli paranoia.

Posted by b on July 31, 2008 at 02:13 PM | Permalink | Comments (15)

July 30, 2008

Good News From Turkey

The Constitutional Court in Turkey rejects the attempts to close down the ruling party:

Turkey's top court on Wednesday ruled against closing the governing AK Party for Islamist activities but decided to impose partial financial penalties on the party, chief judge Hasim Kilic said.

The threat of closing the AKP and of banning its top politicians, including the President and Prime Minister, from politics and elections was severe. This was coup attempt by legal means.

The consequences of an AKP ban would have been disastrous for Turkey and the Middle East:

  • The society in Turkey would have split further and the followers of the soft Islamic AKP would have radicalized.
  • The legal situation of the government under such a ban was totally unclear and could have led to a military coup.
  • Further steps on to EU affiliation would have been blocked.
  • Negotiations between Syria and Israel and between Iran and the U.S., facilitated by Turkey, would have stopped.

All  these dangers have now been averted. The financial penalty is unlikely to be a problem.

In 2002 the AKP government turned down U.S. requests for a 4th division attack on north Iraq through Turkey. That is one reason why neocons favored the closure of the AKP. They and Cheney would certainly have preferred a return of a hard right-wing, secular-militaristic government in Turkey.

For now the crisis is over. But the deep state in Turkey is a continuing danger and this was certainly not its last attempt to act against the will of the people.

Posted by b on July 30, 2008 at 12:41 PM | Permalink | Comments (4)

U.S. Troops in Iraq Will Be in a Legal Danger Zone

It seems that the Iraqi prime minister Maliki and Bush are about ready to sign a memorandum of understanding (MOU) on further U.S. troop stationing in Iraq. The MOU, as Badger reports it, says that half the U.S. troops will be gone by the end of 2009 and it includes a timetable for talks about a timetable for further troop reductions.

Some legal minds point out that without parliamentary backing such a MOU will have no legal power and might well be challenged in civil courts.

Without a sound legal framework, U.S. soldiers in Iraq might be personally liable, even in a U.S. court, for damage they create in Iraq. An officer ordering a raid could find himself getting sued for millions of dollars.

Under a new president the justice department is unlikely to cover up the issue with dubious legal opinions. One wonders how Sec. Def. Gates, the Pentagon lawyers and the U.S. troops in Iraq think about this.

Posted by b on July 30, 2008 at 11:16 AM | Permalink | Comments (16)

Collateral Damage - Damaged Collateral

Two days ago Merrill Lynch sold some of its toxic waste CDOs to Lone Star Funds. The original value of these C.D.O.s were $30.6 billion. Merrill sold them for $6.7 billion, 22% of their original value, but at the same time made a loan of $5 billion to Lone Star. The collateral for that loan are the CDOs now owned by Lone Star. As Roubini and others point out that if the value of the CDOs sinks further and ends up below $5 billion, Merrill Lynch will again have to bear losses.

Other banks, Citigroup, Deutsche Bank, UBS,  have used the same 'trick' of lending to the buyer of their toxic waste. The method has two purposes.

For one, the banks can obfuscate their risk position. Merrill Lynch is now officially free of further risk of write downs of that CDO bundle and has only the risk of a well covered loan to a well regarded Lone Star Fund.

Another purpose of this trick is to keep the market value for these CDOs artificially high. Bank accounting regulation demands that such papers be valued 'to market'. Other CDOs Merrill still holds would have to be written down further if the sold tranche would have gone for less than 22% of its face value. By making that loan, likely to quite preferable conditions for the buyer, Merrill propped up other CDOs book value.

This is not only important for Merrill Lynch. The NYT DealBook points out:

Still, Merrill’s price of 22 cents on the dollar was held up as the new measuring stick on Tuesday, as analysts whipped out predictions for Merrill’s peers. Several focused on Citigroup, a bank with large exposure to C.D.O.’s.

Following the deal, executives at Citigroup, JPMorgan Chase and Bank of America began reviewing the C.D.O.’s that their companies hold on their books. Those companies may have to lower their valuations, and take additional charges, if their assets are similar to those sold by Merrill.

Citibank owns CDOs it currently values at 61 cent on the nominal dollar. Those will have to be written down to 22 cents on the dollar. Ouch.

Or even further. The National Australia Bank wrote down its AAA rated U.S. real estate backed CDOs to 10% of their face value. If that is the real fair price of such 'assets,'  Merrill is set to book $2 billion additional losses on the CDOs it 'sold' to Lone Star.

But there is a much bigger bank that will be concerned with this. The Fed lent out over $400 billion in treasury bills to banks in trouble and it took CDOs and other junk paper as collateral. The value of that collateral has now significantly declined. The Fed will have to ask these banks to put up more papers as collateral or the tax payer will, one way or another, have to cover these losses. The collateral is damaged with the U.S. taxpayer being the collateral damage.

The Fed also owns (see point 2) Maiden Lane LLC, a holding company for Bear Stearns' toxic waste the Fed took over when Bear Stearns was 'rescued' by JPMorgan. As of June 30 the Fed estimated the 'fair value' of the Maiden Lane 'assets' at $29 billion. After the Merrill Lynch and NAB write downs that estimate is likely wrong.

Posted by b on July 30, 2008 at 09:31 AM | Permalink | Comments (8)

The Doha Failure is a Victory for the Sovereign

The failure of the Doha World Trade Organization talks is a victory for the people of all countries.

The past has seen a tendency of nations to give up their sovereignty to some unaccountable organizations or contractual agreement frameworks. The EU, IMF, NATO or the WTO are example for such. These organizations restrict the ability of future national governments to change basic national policies. With the rise of such constructs it did not matter anymore how people voted because basic elements of economic and security policies had been given away to some anonymous plutocracy and could only be changed by paying an ever increasing price.

The failure of the Doha talks may well be the long needed turnaround of this trend.

It does not matter who is to blame for these failures. The WaPo editors predictably blame China, the developing countries blame the U.S. and EU and their huge farm subsidies.

The developed countries insist on heavily subsidizing their own agriculture sectors. The $307 billion farm bill which passed the Senate in May is bigger than the GDP of most countries.

Afraid of mass imports of hugely subsidized goods from the U.S. and EU, developing countries insisted on their right to put tariffs on these and to protect their local long term food sources from economic ruin. The rich countries tried to deny that right to the poor even while they insisted on subsidizing their exports.

The real issue at stake here was the responsibility of a nation to provide for its people. That duty includes their security in a wide sense. Any nation is obliged to take care that it can feed its people from its own soil.

The failure of the Doha talks reaffirms this responsibility. The ability to adopt national policies on food production stays with the local people. Everyone who believes in real democracy should welcome this event. It is a win for the sovereigns of the world - its people.

Posted by b on July 30, 2008 at 02:54 AM | Permalink | Comments (26)

July 29, 2008

Liars and String-Pushers

Reuters does a nice Billmon like factbox of Merrill Lynch CEO Thain's quotes on ML's needs for fresh capital.

Thain consistently claimed that ML is well funded while raising billions over billions to make up for even more billions of losses.

Only twelve days ago ML announced its second quarter results. Thain then said:

"... right now we believe that we are in a very comfortable spot in terms of our capital."

Yesterday ML announced further losses of $5.7 billion and the need to raise capital by $8.5 billion by selling new stock.

He did not know that twelve days ago??? Barry Ritholz nearly calls this what it is - outright fraud.

Some people bought ML stock after the July 17th announcement. They should sue Thain out of his last sock.

There will be much more bad news coming from ML and other brokerages and banks. This credit bubble deflation is not over by half.

There is not much anyone can do about it. Last December I commented on calls by Roubini and others to lower Fed rates:

I regard this as pushing on a string with bad side effects.
...
I believe that any lowering of the central bank rates will push money not into the productive economy, but into some unproductive assets class, likely commodities, and induce another bubble there. The summary effect is increasing inflation in a recessive or stagnating economy.

Yesterday Krugman posted a chart at his blog that shows how right my analysis was. While the Fed lowered rates since December from over 4% to 2%, bond and mortgage rates actually went up. The Fed is pushing on a string. In the current situation rate cuts can not have the intended effects. But the bad side effects are also obvious. The average official inflation rate in 2007 was 2.85%. This years average is 4.23% so far and likely to increase further.

I closed the earlier piece remarking:

Only renewed trust between all economic entities, banks, manufacturers and consumers can repair the system. To regain this trust, the bad entities have to be shaken out. A real recession will do this. Any attempt to cushion it, by some half assed rescue schemes for faulty mortgages and bad investments, or by near zero-interest central bank money, will likely prolong the pain while at the same time inducing very unhealthy side effects, i.e. inflation.

With people like the lying Mr. Thain and the string-pushing Bernanke in the lead, trust between all economic entities will not be regained anytime soon. As a result the global economic situation will become more disastrous than it needed to become.

Posted by b on July 29, 2008 at 09:54 AM | Permalink | Comments (4)

News of 2010

In 2010 there will be an important visit by the Pakistani Prime Minister to Washington. The Prime Minister will discuss Afghan-Pakistani security issues with the President and ask for military aid to buy more F-16s to counter India.

The same week, based on Pakistani intelligence sources, NBC News will announce that a recent U.S. airstirke in the Pakistani-Afghan border region killed a dangerous terrorist known as Abu Khabab al-Masri.

How do I know? Consider this item from January 2006.

ABC News has learned that Pakistani officials now believe that al Qaeda's master bomb maker and chemical weapons expert was one of the men killed in last week's U.S. missile attack in eastern Pakistan.

Midhat Mursi, 52, also known as Abu Khabab al-Masri, was identified by Pakistani authorities as one of four known major al Qaeda leaders present at an apparent terror summit in the village of Damadola early last Friday morning.
U.S. Strike Killed Al Qaeda Bomb Maker, Jan. 18, 2006

When the above news was distributed, Pakistan's then Prime Minister Shaukat Aziz was on his way to Washington DC to meet the President. That visit was in preparation of a deal to buy F-16s for the Pakistani air force. The deal was officially announced in June 2006.

Now lets flip to 2008.

One of al Qaeda's top chemical and biological weapons experts was killed in an air strike by a CIA pilotless drone in a remote Pakistani border region, senior Pakistani intelligence officials told CBS News Tuesday morning.

Intelligence officials investigating the Sunday night missile attack confirmed that Midhat Mursi al-Sayid Umar, also known as Abu Khabab al-Masri was one of six men killed and his remains had been positively identified.

"We now have a positive ID on the body. I can confirm to you that Al-Masri has been killed," a Pakistani intelligence official told CBS News on the condition of anonymity.
Officials: Al Qaeda's Mad Scientist Killed, Jul 28, 2008

Currently the Pakistani Prime Minister Yousaf Raza Gilani is visiting Washington and asking for more F-16s to fight India.

There is a good chance that the situation in 2010 will be similar to the one now. The Pakistani Prime Minister and the President will have changed by then, but the terror threat will be the same and the success of killing Abu Khabab al-Masri will be the same to. Pakistan will also need further F-16s to fight India.

Posted by b on July 29, 2008 at 08:03 AM | Permalink | Comments (8)

July 28, 2008

Suck. On. This.

Somehow SecState Rice got Friedman wrong.

Compare to Friedman at 2:25min.

Then again. She's black. Racism explains most of Friedman's vermin. Is she protesting that? I doubt it.

pic via FCL

Posted by b on July 28, 2008 at 04:18 PM | Permalink | Comments (3)

A Flower Story

This spring I bought a few packs of different seeds, mixed those up and put them into two huge pots on the balcony. Sun flowers and a kind of vetch did best and are fighting each others with the vetches entwining themselves around the sun flowers and actually strangle one of them.

 

More below the fold ...

I took this pic yesterday at 11am.


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This one yesterday at 7pm.


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This morning at 7:30am.


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Noon today at 11:30am. They really have this blinding glow.


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This afternoon at 3pm.


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Quite a short life. But check the bottom right on this one taken at 7:30 pm today.


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Next to those three that lived and died today a new one is preparing itself.

It will open up tomorrow in the first light of the day.

By noon it will be a full blossom.

Tomorrow afternoon it will die.

Posted by b on July 28, 2008 at 02:48 PM | Permalink | Comments (7)

Bashing China for High Oil Prices

After bashing 'speculators' for high oil prices the New York Times and the Washington Post have today found the real culprits: Fuel subsidizing developing countries, especially China.

The NYT headlines: Fuel Subsidies Overseas Take a Toll on U.S.

From Mexico to India to China, governments fearful of inflation and street protests are heavily subsidizing energy prices, particularly for diesel fuel. But the subsidies — estimated at $40 billion this year in China alone — are also removing much of the incentive to conserve fuel.

WaPo titles: China's Cars, Accelerating A Global Demand for Fuel

In the meantime, gas has been kept artificially cheap. Even after subsidies were partly lifted last month, a gallon of gas in China costs only $3.40, well below market prices.

How much of this is real?

Are $3.40 per gallon "well below market prices"? Via Wikipedia

According to http://www.gasbuddy.com, on June 9, 2008 gasoline prices in the United States were US$1.07/litre (US$4.06/US gallon).
...
According to national figures from the US Department of Energy, in March 2007 52% of the cost of gasoline went to pay for crude oil, 24% for refining, 15% to taxes, and 9% for distribution and marketing. By April 2008, these had changed to 72.7% for crude oil, 10% for refining, 11% to taxes, and 6% for distribution and marketing.

Subtract 11% from $4.06 and you get $3.61 per gallon as U.S. retail price without tax. Thereby China's gasoline prices are only 5.4% lower than prices in the U.S. Such a difference could well be explained by other issues than subsidies. The expression "well below market prices" is certainly not justified.

The alleged $40 billion subsidy the NYT is guestimating is also weird. In 2006 China consumed 7.3 million barrels per day. As that has since then increased let's calculate with 8 million b/d. That would be 2,920 million barrels per year or 90,520 million gallons per year. $40 billion of subsidizes are then $0.44 per consumed gallon. Add that to China gas price of 3.40/gallon and it will be at $3.83/gallon, i.e. higher than the U.S. price without taxes.

China has taken the decision to redistribute money it taxes from its people via a 11% subsidy to gas prices. That may not be smart policy but it amounts to as little as $0.085 per day and inhabitant. It has little to do with the general increase in oil prices.

The U.S. subsidizes food for its people with $9 billion per year. That are $0.082 per day and inhabitant. Will the WaPo and NYT now write big pieces on how farm subsidies in the U.S. are increasing world food prices?

Posted by b on July 28, 2008 at 11:45 AM | Permalink | Comments (9)

July 27, 2008

Bombing Clusters in India

The recent bombings in India are a bit curious. The tactic in these seems to be to release a dozens or more hand grenade size bombs disguised in lunch boxes within a short time frame in various public places in one city.

There were three such incidents this year. Yesterday  the city of Ahmedabad in the state of Gujarat was hit with such an attack that killed some 50 people. Last week Bangalore was the attack target and in May Jaipur, capital of Rajasthan, was hit.

All these cities/states are ruled by the right wing Hindu nationalist Bharatiya Janata Party.

Such attacks are quite easy to carry out with a very small team of only two or three people.

Now AP reports:

An obscure Islamic group claimed responsibility for a series of synchronized explosions that killed at least 45 people in western India, warning of "the terror of Death" in an e-mail sent to several television stations minutes before the blasts.
..
The e-mail's subject line said "Await 5 minutes for the revenge of Gujarat," an apparent reference to 2002 riots in the western state which left 1,000 people, mostly Muslims, dead. The historic city of Ahmadabad was the scene of much of the 2002 violence.

When those mob killings happened in 2002 and over thousand Muslims died the than ruling BJP, at least, looked away.

The BJP has a history of a using such attacks to rally its constituency. India just closed a nuclear deal with U.S. which the BJP considers as betrayal of national interest:

The Bharatiya Janata Party (BJP) will renegotiate the India-US civil nuclear deal if it came to power, opposition leader L K Advani said yesterday during the trust vote debate that will decide the fate of the Manmohan Singh government.
...
He stated that the India-US nuclear deal makes India a “subservient partner”.

There are general elections coming up in May 2009 and the BJP wants to win these.

There are several possible culprits for these terrorist attacks. They may be from a local group of Muslim taking revenge as the email claims. They may be instigated by he Pakistani secret service ISI again acting against U.S. interest. But these bombings may also be part of a 'strategy of tension' the BJP might like to rally its voters. The BJP has a quite selective record on fighting terrorism.

Like often in such cases we do not know who the bad folks are here but I hesitate to jump on the 'Islamic terror' wagon in a case like this. The fundamentalist Hindus do not have a record of being less violent than any jihadi.

Posted by b on July 27, 2008 at 03:03 PM | Permalink | Comments (10)

U.S. Ground Operation in Pakistan

There have been three attacks in the area of Damadola, a town in the Pakistani district of Bajaur next to Afghanistan's Kunar province. (Robert Lindsay provides a map and pictures of the area. Google has high res(!) satellite pictures of the Damadola area.)

So far all three had been described as missile attacks by U.S. predator drones. As it turns out now, one of these attacks was actually a U.S. special forces ground operations within Pakistan. Seal Team 6  killed 82 people, many of them pupils at a local school. The U.S. forces also abducted some of the people. What happened to them is unknown.

On January 13 2006 at least 18 people were killed when four Hellfire missiles hit houses in Damadola. The attack purportedly targeted Ayman al-Zawahiri, second-in-command of al-Qaeda after Osama bin Laden, who was thought to be in the village.

On October 30 2006 another attack was reported to have hit a madrassa a few miles east in Chenagai. Between 70 and 80 people are said to have been killed, and an eyewitness has stated that the madrassa school was filled with local students who had resumed studies after the Eid ul-Fitr holiday.

There were various official versions of that incident. Villagers reported to have seen U.S. drones and anonymous Pakistani military sources confirmed this. But officially the Pakistani army claimed to have attacked the madrassa and journalists were kept away from the place by Pakistani paramilitary forces. Analyzing a reprisal suicide attack on a Pakistani army base that followed in November 2006 the Indian analyst B. Raman recapitulated:

There has been considerable controversy regarding the origin of the air attack and the background of the students killed. The local villagers have been claiming that the attack was made by an American Predator aircraft, which flew into the area from Afghanistan. This has been played up by the Pakistani media.  ..  However, this version has been strengthened by a US TV channel, which has quoted unidentified Pakistani intelligence officials as saying that the attack was carried out by an American Predator aircraft because the Americans had information that Dr. Ayman al-Zawahiri, the No.2 to Osama bin Laden in Al Qaeda, was in the madrasa at that time. The Pakistani authorities have denied the presence of any high-level Al Qaeda personality in the madrasa when it was attacked.

The Pakistani authorities have claimed that it was they, who carried out the attack because they had received reliable intelligence that the madrasa was training suicide bombers for operations in Afghanistan. The Pakistani Army has released a list of persons killed showing all of them to be above 20 years of age. The religious parties have released their own lists of persons killed, showing them to be below 20 years of age. It is not possible to verify either list at present.

Another attack at Damadola by confirmed predator drones happened last year on May 14. It killed at least 12 people.

Today's LA Times refers to one of the above attacks in a story about the war of terror in Pakistan:

In 2006, one of the nation's most elite units, Seal Team 6, raided a suspected Al Qaeda compound at Damadola.

At CIA headquarters in Virginia, a roomful of people watched on video streamed from a Predator surveillance plane, officials said. They included high-ranking officials such as Albert M. Calland III, then the deputy director.

"They choppered in, rappelled down and went into the compound," said a former official familiar with the operation. "It was tactically very well executed."

Several mid-level operatives were detained, according to the official. The raid was separate from the January 2006 Predator strike in Damadola that missed Al Qaeda's No. 2, Ayman Zawahiri, the official said.

The only event reported in the media that would fit the LA Times description is the October 30 attack. If the LA Times sources are correct, U.S. ground troops attacked the madrassa, killed 82 sleeping students and teachers, abducted several, blew up the compound and had the Pakistani military covering their back.

One report at that time claimed that helicopters took part in that attack. As the attack started at 5:00 in the morning, i.e. in the dark, it is unlikely that Pakistani pilots were flying those helicopters.

Now the questions. What happened to those 'several mid-level operatives' that were 'detained'? Who tortured them when and where? Are they still alive?

Posted by b on July 27, 2008 at 10:47 AM | Permalink | Comments (2)

July 26, 2008

The Duopoly of Deceit

by Debs is dead
lifted from a comment

Tangerine's post details the favorite foreign policy ploy of the two party state. Even if Gore didn't use 911 as an excuse to invade Iraq , if one examines the way that the Clinton administration kept the screws on Iraq whilst repeating the Iraq has weapons of mass destruction lie ad nauseam, it is plain that even if the dems worry their supporters may not approve of unjustified increases in the empire's territory, they are quite prepared hold the line until their mates in the other mob are able to do it for them.

An objective examination of the dem behavior since WW2 - Korea (dem prez), attempted invasion of Cuba (dem prez), Vietnam escalation (dem prez), Dominica (dem prez), Kosovo (dem prez) and the ones I can't remember shows that the dems political organization is geared towards the empire's expansion.

If someone could be bothered to check the history of amerika's territorial growth since independence I imagine you would find the same duopoly of deceit. One party aggressively expanding the territory while the other alleges to be a party of peace, only it never gives anything back the aggressors stole (initially from native amerikans, later from Mexico, later still anywhere in the world that amerika thought it wanted) and when something goes down which means that amerika must strike while the iron is hot to get the land and the less aggressive party is in power, that party does a policy reversal alienating it's base but nevertheless participating in the grab. I imagine that was the mechanism by which 100 plus treaties with the indigenous people were broken.

The political system is fatally flawed. I can't help but marvel at the self deception that leads peeps to think that the outrageous excesses of the bushco era are somehow different. That this hasn't happened before.

Most people know about the way that the indigenous people were tortured starved and dispossessed, do they think that is different but the constitution was upheld for everyone else since until bushco?

Cause the japanese interned in WW2 wouldn't agree neither would the Rosenbergs who were denied myriad constitutional protections when they were railroaded to execution. That's just a couple examples somehow the constitutional safeguards fall by the wayside whenever they are most needed. Not particularly an amerikan problem, this happens wherever there is an over concentration of power.

A big part of the problem is the system. The idea of having one person as the executive, all-powerful commander in chief, and head of state, rolled into one person overwhelms the ideals invested in the allegedly democratic way used to select this king type figure.

Amerikan society has been forced to accept a situation where people fight to get that position of absolute power and corrupt themselves and those around them with this process, to the point where virtually everyone in the political classes believes anything goes.

All the checks and balances are meaningless if one person, the prez, has the power to overrule those checks and balances. Legality is a side issue if the prez is powerful enough to get away with breaking the law. Right through amerika's history the prez has over ruled constitutional mechanisms and will continue to do so regardless of which portion of the political establishment the prez comes from.

---

b asks: Now how might such a system be changed?

Posted by b on July 26, 2008 at 06:46 AM | Permalink | Comments (55)

July 25, 2008

Hezbullah Vets Train NY Muslim Paramilitaries

This will certainly lead to some outrage. Or maybe not. It is all legal and why would anyone bother. Ask your favorite representative, senator or presidential candidate. They will assure you that these folks are harmless.

"We do not carry out demonstrations or political activity of any kind as we have no political agenda. Our agenda is to protect Muslims wherever and whenever necessary and by any means needed."

On Friday, the third session of the group's training camp will begin in the Catskills woodlands of upstate New York, on land belonging to a Muslim supporter of the organization. With tuition at $400, the group expects 15 participants and five instructors for the 10 days of training. Participation has doubled since the group began three years ago.
...
The group's MySpace page details the camp's regimen, which includes training in the Hezbullah's martial art, use of non-lethal weapons and identification of suspicious objects, but also sharpshooter and assault rifle training, infantry exercises and endurance marches. Explanatory literature lists a large number of weapons with which participants can expect to train.

"We believe all Muslim in the US must be legally armed and trained," Abu Yonat says, "and towards this goal we hold paramilitary training camps to train and equip Muslim American youth."
Hezbullah vets train NY Muslim paramilitaries

Posted by b on July 25, 2008 at 07:52 AM | Permalink | Comments (14)

July 24, 2008

Obama in Berlin

So why is this U.S. guy campaigning in my home country?

The Turkish prime minister was here in February. He rented a soccer stadium in a western German industrial city. There he gave a talk to some 70,000 of the 1.8 million Turks living here. That was fine with me.

But there are less than 100,000 U.S. people in my country and some candidate, not even a formal one yet, from across the pond makes a big show at one of the premier historic places in our capital? (Funny local detail: 'Siegessäule', victory column, where Obama holds the speech is also the name of the primier gay magazine in Berlin. The mayor of Berlin, Wowereit, is openly gay.)

How is this in our, German, interest?

That candidate by the way is the chairman of the Senate Foreign Relations Committee's Subcommittee on European Affairs. Since he got that job in January 2007 he held no policy hearing and never visited Europe. His real interests seem to be elsewhere.

What does he want from us?

Oh, I see, Afghanistan. He wants more of our boys and girls to protect (and get killed for) that TAPI pipeline, a major U.S. colonial project. TAPI will connect Turkmenian gas fields with consumers in Afghanistan, Pakistan and India. Hmm - couldn't we use that gas? I am quite sure Gazprom could deliver it at a my home for a decent price.

What could this guy possibly give us?

Maybe he can take those U.S. troops home who still take up valuable real estate here 63 years after the last war. Hey, why don't they go to Afghanistan and replace our troops there?

Update: - First impressions in the comments.

Posted by b on July 24, 2008 at 12:20 PM | Permalink | Comments (78)

July 23, 2008

An Interesting Business Model

NY gov. sees Wall Street bonus cuts, weak economy

ALBANY, N.Y., July 21 (Reuters) - Wall Street banks and brokerages may cut bonuses for their highly-paid workers by some 20 percent this year, New York Gov. David Paterson said on Monday, estimating that each 10 percent reduction in bonus pay costs the state $350 million in tax revenues.
...
New York's economy has long been dominated by financial companies. Last year, they paid $33.2 billion in bonuses, ...
...
Paterson said he was considering lobbying federal officials for aid to entities like Bear Stearns, Lehman Brothers and federally-sponsored organizations, referring to mortgage finance giants Fannie Mae and Freddie Mac.

Hmm.  Ok. That might really work. New York lobbies Washington to give some $350 billion to Lehman, Fannie and the other usual suspects. Then these firms can again pay some $35 billion in bonuses to their managers. Then New York can again tax some $3.5 billion out of those bonuses. Then Paterson can spend that money for lobbying Washington or whatever.

Interesting business model ... where do I sign up ... oh please no, not on the taxpayers side.

Posted by b on July 23, 2008 at 03:08 PM | Permalink | Comments (8)

The Decline of Foreign News Reporting

For some time now I had the impression that the number and quality of reports on foreign issues in the U.S. media decreased. A recent study by the Project for Excellence in Journalism confirms my subjective assessment:

[I]nternational news is rapidly losing ground at rates greater than any other topic area. Roughly two-thirds (64%) of newsroom executives said the space devoted to foreign news in their newspaper had dropped over the past three years. Nearly half (46%) say they have reduced the resources devoted to covering the topic–also the highest percentage recording a drop. Only 10% said they considered foreign coverage “very essential.”

With the U.S. involved in two official and several unofficial wars, an increasingly global economy and huge international problems like climate change one would think that the U.S. public needs more, not less information on foreign issues. But the only issues on which the papers increased  their reporting are local news.

The reasons are likely financially. Serious foreign reporting is a bit more expensive than covering the local football league. A lot of advertising has moved to the web. But there is also the increased expectation of profits.

As former editor of the LA Times John Carrol explains:

All three papers I've been editor of, particularly the Los Angeles Times and the Baltimore Sun, are achieving [a 20 percent] profit target. ... But they're achieving their profit targets only by cutting resources every year, getting rid of reporters, giving the readers fewer pages of news in the paper. You don't have to be a mathematician to know where that goes.
...
I think that newspapers could operate at a 10 percent average operating margin very, very robustly for the indefinite future. It would give them a better product, and it would give them money to invest in their future, which is a Web-based future.

Expectations of 20% profits in any long term business are overblown. But such expectations were the trend in the last decade heated by leveraged buy outs and other unhealthy greed schemes.

The economic bill for such behavior is currently presented. When the mess is over people may have a bit more frugal expectations and renewed interest in what is happening around the world.

Posted by b on July 23, 2008 at 09:42 AM | Permalink | Comments (15)

Human Rights Watch on Bombing Civilians

When a Palestinian goes on a rampage with a backhoe that must be bulldozing.

When the U.S. Air Force bombs civilians they really, really do it only when they are sure that they do not hit civilians. That is at least what the NYT is telling us in: Civilian Risks Curbing Strikes in Afghan War

In June alone, 646 bombs and missiles were used in Afghanistan, the second highest monthly total since the end of major combat operations in 2002.

Air Force lawyers vet all the airstrikes approved by the operational air commanders. Senior Pentagon officials said the more stringent rules of engagement now in effect for Afghanistan specified the acceptable levels of risk to civilians for a priority attack. They said these more stringent rules required a significantly lower risk of civilian casualties than was acceptable in Iraq.

I am sure the Iraqis are happy to hear so.

The piece is a sorry excuse for indiscriminate bombing: "We really care before we kill ..." The author does not even mention the 47 people on their way to a wedding killed by an air attack earlier this month. He instead includes this choice quote:

“In their deliberate targeting, the Air Force has all but eliminated civilian casualties in Afghanistan,” said Marc Garlasco, senior military analyst with Human Rights Watch. “They have very effective collateral damage mitigation procedures.”

Do they really Mr. Garlasco? Yesterday the news was this:

In Farah province, four Afghan police and five civilians were killed in an apparent mistaken airstrike by Nato forces early this morning.

Human Rights Watch is defending the U.S. Air Force's killer mentality. But that is of course one of their main tasks. Consider the experts HRW hires like the above quoted Marc Garlasco:

Before coming to HRW, Marc spent seven years in the Pentagon as a senior intelligence analyst covering Iraq. His last position there was chief of high-value targeting during the Iraq War in 2003. Marc was on the Operation Desert Fox (Iraq) Battle Damage Assessment team in 1998, led a Pentagon Battle Damage Assessment team to Kosovo in 1999, and recommended thousands of aimpoints on hundreds of targets during operations in Iraq and Serbia. He also participated in over 50 interrogations as a subject matter expert.

Now that is certainly the person one would ask for a critical view on bombing of civilians by the Above All maniacs ... he is one of them.

Posted by b on July 23, 2008 at 02:13 AM | Permalink | Comments (4)

Bulldozer

Bulldozer attack driver shot dead in Jerusalem writes Reuters:

A bulldozer driver went on a rampage in Jerusalem on Tuesday, hitting vehicles near a hotel where U.S. Democratic presidential candidate Barack Obama was due to stay later in the day, before he was shot dead.

Bulldozer? The pictures from Jerusalem show a small front-end loader or backhoe which may weigh some 2-3 tons.

A bulldozer is something like this.

It weighs about 50+ tons. The Israeli army has several of these up-armored Caterpillar D-9s. It uses them to flatten Palestinian homes in the illegally occupied territories and to kill people like Rachel Corrie.

The Israelis indeed bulldoze in the original meaning:

bulldose "a severe beating or lashing," lit. "a dose fit for a bull," a slang word referring to the beating of black voters (by either blacks or whites) in the 1876 U.S. presidential election. A bulldozer was a person who intimidates by violence until the meaning was extended to ground-clearing caterpillar tractor in 1930.

That is, when they do not shoot non-violent and bound Palestinians.

Posted by b on July 23, 2008 at 01:11 AM | Permalink | Comments (9)

July 22, 2008

Zimbabwe - Has Zanu-PF outwitted the IMF?

by Debs is dead
lifted from a comment

The announcement current Zimbabwe government headed by long serving president Robert Mugabe, which has met with both factions of the opposition Movement for Democratic Change including the faction led by Amerikan Enterprise Institute sock puppet Morgan Tsvangirai, appears to have wrong footed the media led hysterics who have been building to a crescendo screaming lies since Tsvangirai wimped out of the second round of elections.

The media running coverage of this meeting, brokered by South African President Mbeki, has been really unsure of what line to take.

An obvious sign of being unprepared is having no pre-prepped lines to use to denigrate the current Zimbabwe government with. This was the usual methodology; to pick on some side issue that plays to whitey's fear of Africans in control, then make it an issue by having a chorus of unanimous distortions throughout the western media. No one ever questions the veracity of a statement made by nearly every fishwrap on the news stand.

At the moment, favorite in the past-deadline English media is to discuss the meeting as if it hasn't yet occurred. This to give time for a consternation soaked huddle, called to get the 'sound bites' to be 'read off the same page'.

The big talking point of the Associated Press story carried in this (NZ time) morning's NZ Herald is unlikely to have traction as they say.  It goes: 

Mugabe, who has ruled Zimbabwe for all 28 years since independence and just last month declared election victory, appeared nervous at the ceremony. Head bent and looking beaten as he stood between two jubilant opposition leaders, Mugabe never once looked at Tsvangirai during the hour-long ceremony. Afterwards, he shook hands with everyone except his rival.

This piece of slanted ad hominem gossip won't have legs if a picture is really worth a thousand words. The par sits directly under a photo of Mugabe and Tsvangirai shaking hands at the meeting. The same image was in a vid run on BBC World. The BBC are completely dependent on others for footage since Zanu-PF tired of their one sided tirades against the president on the beeb. In the Herald story this obvious disconnect is explained thus:

"Asked about it at a news conference later, he posed for journalists, giving Tsvangirai a limp handshake."

  That complexity is just too hard to work.  Lies spread by western media rely on a superficial analysis by the consumer. 

Making peeps understand that shaking hands at a press conference but not in private is dangerous stuff, even if it could be nuanced correctly, in itself unlikely.

Readers forced to go beyond simple imagery may delve too far, as in: "Do you mean all the pix n vid of pols we are shown, are posed?"

But I am betting that the mention of two competing factions within the Movement for Democratic Change will be edited out of most stories and as for the Prime Minister of Kenya Raila Odinga, his comment in the Independent"

"Robert Mugabe is an embarrassment to the African continent," Odinga told BBC television. "He lost an election and refused to move on."

is not only beyond the bounds of normal hypocrisy it is dangerous ground.

Readers may remember, as Zanu_PF does, that Odinga, at the time a populist advocate of opposition to the neo-con attacks on the economic well being of the people of Kenya, won an election yet was forced to negotiate with the defeated government who wouldn't concede that defeat. This anti-democratic intransigence was backed by, maybe even instigated by, USuk, UN seppo suck asses and the greed heads

So Odinga settled for the role of Prime Minister, a largely powerless figure-head position whilst IMF and amerikan enterprise institute darling Mwai Kibaki kept his gig as president of Kenya.

Readers may get lost following the neo-con logic which goes like this. 

"When a humanist wins government in Africa we pay the thugs we had originally put in control, to beat the humanist supporters senseless. We call this tribalism. Then when the violence gets out of hand we force the newly elected government to accept well paid powerless positions.

This scam not only sabotages any prospect of change, it destroys the credibility of the anti-neo-cons and cripples the momentum for a change.

But when an anti neo-con is in power and wins an election, we instigate the same violence ("they are all tribalists in Africa" is a widely accepted meme), but refuse to accept the result of negotiations put together by any broker who isn't an IMF sock puppet. Even if that broker is the democratically elected leader of the nation in question's long time friend and neighbor.

For those of us who have looked at Kenya from all sides, this latest outburst confirms that Raila Odinga is competing with Mwai Kibaki for the position of most agreeable western lap-dog. A sad day for Kenyans indeed, yet what else can one expect, for decades this has been the stuff which elections are made of in the so called ' great democracies of the West'.

Incidentally the execrable Gordon Brown is prevailing upon the EU to bludgeon the Zimbabwean people with another round of economic sanctions, will this rapprochement between the political powers in Zimbabwe prevent that? I'm betting not if Gordon can help it. After all this has never been about the people of Zimbabwe, it has been about England's re-colonization of a former food source.

Zanu-PF will ensure as much as they can, that Zimbabwe isn't forced to relive the horrors of the 1990's when it's national institutions were put up for sale to the highest foreign bidder. That is inaccurate actually the national assets given away to carpet baggers with IMF connections.

Even the World Bank admitted in their warm and fuzzily titled paper

Structural Adjustment and Zimbabwe's Poor:

Zimbabwe's Economic and Structural Adjustment Program (ESAP) supported by the World Bank dismantled many of the controls confining the country's economy. . .
. . . 1/ the program did not reduce poverty and unemployment as its architects had hoped. Critical fiscal reforms made slow and uncertain progress, keeping budget deficits high. This created uncertainty and shortages of capital for private producers, which delayed investment in new capacity and job creation. By focusing on the formal urban sector, the program restricted its ability to reach the majority of Zimbabweans, who work predominantly in the informal sector and in rural areas.

The part of this paper that really gets my goat comes next:

Two basic lessons are that: (1) macroeconomic stabilization--particularly fiscal adjustment--is a prerequisite for sustainable growth in employment, output, and incomes, and (2) sound macroeconomic policies need to be accompanied by actions specifically designed to assist and protect people who do not directly benefit from formal sector growth.

Zimbabweans are starving and these World Bank technocrats are dispassionate to the point of sociopathy when they discuss the problems they have caused as if it were the result of a laboratory experiment, which of course it was.

New Zealand had gone through exactly the same 'reforms' a few years before Zimbabwe's mid '90s attempt, the voters there finally managed to rid themselves of the technocrats responsible out of the Tweedledee and Tweedledum parties.

Those appalling failures of humanity immediately picked up gigs with the IMF and World Bank so they could continue their 'experiments'.

NZ's once enviable community has been on a downward spiral of gaping income gaps and an ever growing 'underclass' (neo con talk for unwhite) ever since the experiments. The people of Zimbabwe have paid a high price for their successful rejection of neo-con subjugation but if they can trade free of sanctions, then they should recover quickly because unlike NZ, Zimbabwe hasn't sold the farm.

The vast bulk of Zimbabwe's resources still remain under Zimbabwean ownership.
So let us hope Zanu-PF have successfully pulled off their staunch rejection of the 'new imperialism'.

ps: Apologies for the remaining typos and mis-spellings but if I don't cut my losses I'll never finish.

Posted by b on July 22, 2008 at 03:06 PM | Permalink | Comments (32)

Fannie Freddie Bailout Cover

The Congressional Budget Office (CBO) wrote a letter on how much the proposed bailout for Fannie Mae, Freddie Mac and the Federal Home Loan Banks (FHLB) would cost. The letter is simply a measure to cover up the big money the taxpayers will have to pay for this.

The current plan put forward by SecTreas Paulson is to give the Treasury the financially unlimited authority to buy the bad stuff the companies hold and to socialize their losses. The CBO letter is the typical economic 'on one hand..., on the other hand...' answer one would expect. But it then uses some curious probablilities to in the end come up with only one number:

The Congressional Budget Office (CBO) estimates that there is a significant chance—probably better than 50 percent—that the proposed new Treasury authority would not be used before it expired at the end of December 2009. [...] Under that scenario, the temporary authority would not be used and thus would involve no budgetary cost.
[...]
In CBO’s view, however, that scenario is far from the only possible result. [...] Taking into account the probability of various possible outcomes, CBO estimates that the expected value of the federal budgetary cost from enacting this proposal would be $25 billion over fiscal years 2009 and 2010. That estimate accounts for both the possibility that federal funds would not have to be expended under the new authority and the possibility that the government would have to use that authority to provide assistance to the GSEs.

The $25 billion will be presented in the MSM as the total bailout cost for the mess. Indeed Bloomberg currently runs the headline Fannie, Freddie Rescue May Cost $25 Billion, CBO Says.

That headline is totally wrong. Those are not the costs. The $25 billion is some calculation of, for example, a 50% probability of zero loss, a 45% probability of $10 billion loss and a 5% probability of $300 billion loss for the taxpayer. The CBO notes that the possible upside from that 'bet' is zero.

One wonders how the CBO reached these or similar probabilities. Is the chance that no intervention is needed really 50%? Why then is Paulson proposing this at all? Is the chance of the big bang loss really only 5%? And why does the possible loss estimate stop in 2010? If the Treasury buys dubious assets from these companies could losses on these assets not occur later than 2010?

The attachment to the letter does not provide much answers to these questions. But it has some interesting numbers. The 'Fair value' of the three companies at the end of March was just $7 billion. Fair value is market value of all assets minus the market value of all debt. But the companies have liabilities and dubious assets in the trillions. They have

a book of business with a value of about $5.2 trillion. The riskiest loans, known as alt-A and subprime mortgages, accounted for about 15 percent of that portfolio.

Those are $780 billion of dubious Alt-A and subprime 'assets' that may have a real value of 80%, 60% or 40% of their nominal face value. That is the stuff the Treasury would likely buy for their nominal price. The difference to their real value would be payed by the taxpayers.

So while the top number of the CBO letter sounds like $25 billion and is headlining the MSM reports, the possible, and in my view likely, losses the U.S. taxpayer would have to carry under the Paulson plan, might well be in the hundreds of billions.

Are there better solutions than the Paulson plan? Yes, of course there are.

The Paulson plan has no possible upside for the taxpayer only downside risk. It also does not take any money away from the private shareholders of these bankrupt companies. Indeed the value of their shares would soar when the taxpayers take over the risk of these companies' bad assets. Instead the share holdings should be wiped out and the companies outright nationalized. The owners of Fannie and Freddy debt should also take a haircut. Fannie and Freddy debt always payed higher interest than treasury notes. If the U.S. government takes over these companies, their debt will be as secure as treasuries and should pay the same interest rate.

The CBO letter is just a cover so that Paulson, Schumer, Frank and their like screw the taxpayer with the losses of these companies while protecting their shareholders. That is free market capitalism in its purest form.

Posted by b on July 22, 2008 at 02:43 PM | Permalink | Comments (5)

July 21, 2008

Hunting for Bin Laden - Again

The Pentagon and the CIA are again focusing on catching Osama Bin Laden. I wonder why I have not read anything about that new effort in the mainstream news.

In a recent interview for the Real News Network Pepe Escobar and Pakistan/Afghanistan expert Barnett R. Rubin talk about the issue (5 minutes into the interview). Rubin blogs on Afghanistan at Informed Comment: Global Affairs.

When Escobar pushes the issue the well connected Rubin acknowledges that there is an intelligence and special operations 'surge' in an attempt to capture Bin Laden before the election. The intelligence agencies, as Rubin heard from them, are not very happy to be part of electoral campaign, but will the issue give a new try.

Earlier Rubin says he has heard that Bin Laden is suspected to be in the northern area on Pakistan's tribal regions and probably moving back and forth between the districts Nuristan on the Afghan side and Bajaur on the Pakistan side and maybe even further north.


South-West Asia and Central Asia, administrative map (pdf)

You will remember that recently 9 U.S. soldiers were killed in Wanat village in Kunar province slightly south of Nuristan when parts of their outpost were overrun. It was never explained why the outpost was positioned there at all. In Nuristan the U.S. also recently bombed and killed 47 people who were on their way to a wedding. Something undisclosed is going on there?

Catching Bin Laden, for real or pretended, would be a perfect October surprise.

But even if Bin Laden is where he is suspected to be, the physical terrain and 'human terrain' of that area is so complicate that I doubt that any 'surged' operation there will succeed. Consider the fascinating tribal relations, history (recommended) and languages in that area of Nuristan and Kunar (via Registan).

There are five feuding main tribes with various feuding sub tribes speaking a total 15 different language variants. There is also no infrastructure to talk of and a very mountainous area to cope with.

I regard the chances for the U.S. to capture Bin Laden there as quite low. Contrasting that the chances of 'collateral damage' of such a 'surge', i.e. accidental or intentional killing of civilians, is quite high.

Posted by b on July 21, 2008 at 02:30 PM | Permalink | Comments (26)

July 20, 2008

Faith and International Relations

Atheists or, more general, 'western' non-believers have difficulties to understand faithful people. The consequence is that we tend to analyze and interpret international relations in a sole 'western' secular framework. We assume that our framework is the 'right' one because our morals, values and judgments that make up that framework are the 'right' ones.

The neo-cons and liberal interventionists think we should and can remake other societies in our image. But people in faithful societies see themselves as made in the image of their god. That competitor is hard to beat.

Ryan J. Maher, a Jesuit who has been teaching theology for international affairs students in Qatar, points out:

During my two years in Qatar, I learned that many of my students approached discussions of faith and religion with an intensity and passion that differed in kind, not just in degree, from what I had grown accustomed to in the United States. Sure, there were those, Muslim and Christian alike, who were more interested in arguing than learning. But there were many more for whom religion was something more profound: the outward manifestation of an inner relationship with the divine.
...
The majority of people I know in higher education would argue that there is nothing wrong with religion for people who feel they need it. Their sentiments come down to something like this: "You have your religious convictions, I have mine. Let's acknowledge our differences and agree to disagree with one another within the confines of polite debate."
...
This template for discussing religion and faith is fundamentally flawed. It presumes that different groups of faithful people approach their religions in the same way football fans approach their favorite teams: .. For people of faith, religion isn't like that. A person of Muslim faith and a person of Christian faith engaged in honest conversation about religion are not like two fans pulling for their respective teams. They are more like two men in love with the same woman, each trying to express, safeguard and be faithful to his relationship with his beloved. Love brings with it complexities that football does not.

A Jesuit should probably use a better picture than two men in love with the same women, but I think the general idea here is correct.

People without faith have their subjective rational. For them it is difficult to 'get' the subjective rational of people with intense faith. Vice-versa probably applies. That is not an argument for or against following a religion. It is to point out that one needs to leave ones on subjective rational to understand the other. That is neither easy nor without fear. It also takes time.

Pat Lang recently picked that theme up again with regards to the Middle East:

The local cultures in the Middle East and Islamic "worlds" are very strong.  They are likely to change at their own pace, influenced by the flood tides of information in the world today, but they will strongly resist change at anyone else's pace.

The belief that outsiders can "manage" that change is as destructive today as it has always been.

I think the argument is also right with regard to religions others than Islam. Do we understand deeply Buddhist Burma? Do we understand how faithful Hindi think?

I have argued the issue before in a piece about the Russian president Dmitry Medvedev.

Medvedev is now the leader of the Orthodox-Christian realm. He and the Russian voters and the Orthodox-Christian people elsewhere are aware of this. The "west" is not.

We are faithful that our believe in democratic states, universal justice and enlightenment is right. But to many those are relative things and there are alternatives to each. We may not like those and we have the right to disregard them within our communities. We have no right to press others communities into our frames. Doing so will lead to conflicts we might well lose.

Posted by b on July 20, 2008 at 01:36 PM | Permalink | Comments (118)

Eternal Exit Strategies

November 16, 2003 - Bush and Blair agree Iraq exit plan to end occupation

President George Bush and Tony Blair have agreed an exit strategy for pulling out of Iraq, officially ending the occupation next year while committing troops to the region until 2006.
...
British officials told The Observer that, although the occupation of Iraq would be over next year, it was likely that troops would need to stay, possibly until 2006. 'The whole process will take two to three years, as in Afghanistan,' said a senior Number 10 official closely involved in the Iraq negotiations.

---

May 5, 2004 - Blair sets target for Iraq exit strategy

Tony Blair set himself an 18-month target yesterday for pulling "substantial" numbers of British troops out of Iraq as he admitted that the crisis casts a "shadow" over support for his government.
...
For the first time, he outlined a timetable for a British "exit strategy". Within a year, he said, the Iraqis should have made enough progress to allow most British troops to go.

---

September 25, 2005 - Britain to pull troops from Iraq as Blair says 'don't force me out'

British troops will start a major withdrawal from Iraq next May under detailed plans on military disengagement to be published next month, The Observer can reveal.
...
The phased withdrawal strategy - the British side of which is expected to take at least 12 months to complete - would see UK troops hand over command responsibility for security to senior Iraqi officers, while remaining in support as a reserve force.

---

May 26, 2006 - Blair and Bush begin talks to work out exit strategy

Tony Blair and George Bush began crucial talks on strategy last night, after the installation of a new government in Baghdad. The talks were focused on the withdrawal of US and British troops from Iraq as quickly as possible.
...
London and Washington are desperately hoping the arrival of the new government under Prime Minister Nouri Maliki marks a turning point, where Iraqi troops will gradually take over full responsibility for security - if possible by the target date set out by Mr Maliki' the end of 2007.

---

February 21, 2007 - Blair Set To Announce Timetable For British Exit From Iraq

Prime Minister Blair will announce today a new timetable for the withdrawal of British troops from Iraq, with 1,500 to return home in several weeks, the BBC reported.

Mr. Blair will also tell the House of Commons during his regular weekly appearance that a total of about 3,000 British soldiers will have left southern Iraq by the end of 2007, if the security there is sufficient, the British Broadcasting Corp. said, quoting government officials who weren't further identified.
...
Treasury chief Gordon Brown, who is likely to succeed Mr. Blair by September, has said he hoped several thousand British soldiers would be withdrawn by December.

---

July 20, 2008 - Brown sets out plan for UK pull-out from Iraq

Gordon Brown yesterday held out the prospect of a substantial withdrawal of British troops from Iraq, possibly as early as next year, when he outlined a four-point road map paving the way for an end to Britain's involvement.
...
His declaration, which could lead to the bulk of British forces leaving Iraq by the time of the general election in 2010, came 24 hours after the White House announced that the US and the Iraqi authorities had agreed a 'general time horizon' for the 'further reduction of US combat forces in Iraq'.

---

Month 00, 2009

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Month 00, 2010

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Month 00, 2011

...

Posted by b on July 20, 2008 at 07:09 AM | Permalink | Comments (3)

July 19, 2008

OT 08-26

MoA lives off comments. Feed me now!

News & views ... open thread ...

Posted by b on July 19, 2008 at 01:59 PM | Permalink | Comments (106)

July 18, 2008

Anchoring

For some time now I feel the need for some new anchoring. It is diffuse and I am not sure what it is really about.


bigger

Please let me know your thoughts about it.

Posted by b on July 18, 2008 at 03:12 PM | Permalink | Comments (42)

Iran and Israel Have the U.S. Over a Barrel

Laura Rozen and her colleague suspect that the real reason why an attack on Iran was, for now, called off are the unstable U.S. economy and oil prices.

High oil prices threaten to push the U.S. from a credit crunch induced recession into a depression. The only way to avoid this is for the White House to take the war premium out of the oil price, hence negotiations with Iran.

Was this the result of economic 'sanctions' Iran put onto the U.S.? Yes.

On May 1st oil was at $110/bl. In April and May Iran rented some 10 huge crude carriers to store oil on them. The official argument was a lack of refining capacity for heavy Iranian oil. But the move not only took oil off the market, it also led to a scarcity of tanker capacity in world markets and thereby to a hefty increase in prices:

Rates for tankers have more than tripled since April 8, based on data from the Baltic Exchange and ship-fuel prices.

Some suspected back then (I did not) that this was a deliberate strategy by Iran and done with help from Venezuela.

On Friday July 3 oil had reached $145/bl. Then over the weekend the New Yorker published Hersh's piece about clandestine operations against Iran. It included strong voices including Sec. Def. Gates' against an open attack on Iran. Monday and Tuesday oil fell to $135/bl.

On Wednesday and Thursday Iran launched a bunch of missiles. It claimed that some of these were Shahab 3 missiles with a range of 2000 km. Experts disputed this. Iran also release a photoshopped still picture of the missile launch but at the same time also released not manipulated video. That made sure that an extended discussion led to a multiplication of the reporting about the issue. Filmmaker Errol Morris noted:

Take several steps back. Are we being tricked into thinking that Iran is a bigger threat than it is?

Oddly enough, the effect of all this publicity — including this essay — is to draw further attention to the missiles. If the casual reader passed over them quickly when they first appeared on the front pages of American newspapers, the missiles are now more than ever firmly embedded in the popular imagination.

On Thursday oil jumped up to $140/bl. On Friday June 11 it was back to $145/bl.

Since the 15th July announcement that Undersecretary of State William J. Burns will take part in negotiations with Iran crude oil prices fell from $145/bl to $130/bl.

Iran can deliberately increase the price of oil even when the U.S. tries to talk down the possibility of war. The U.S. economy is already in big trouble. With a little incident in the Strait of Hormuz Iran could take oil immediately back up to $150/bl. That would make a depression in the U.S. quite possible.

Iran indeed has the U.S. over a barrel.

Laura's colleague wonders "Everyone seems to have missed the obvious." That is certainly not the case. But as noted here before the U.S. press is suppressing the relation between the war on Iran Israel demands the U.S. to wage and oil price increases.

With this Israel also has the U.S. over the barrel. On June 7 oil prices jumped $11 because an Israeli minister talked about "unavoidable war." Today the NYT publishes on op-ed by the Israeli historian Benny Morris. He essentially argues that the risk of Iran having a nuclear bomb (which it neither has nor wants) justifies Israel to nuke Iran. He believes that it will happen "in the next four to seven months."

Such talk and Israeli provocations against Iran can shut down the U.S. economy for good.

Do the Israelis recognize this ability? If they do what goodie do/will they request from the U.S. to not use their deadly weapon against the U.S. economy?

Posted by b on July 18, 2008 at 12:01 PM | Permalink | Comments (65)

July 17, 2008

Enemy Buildings Attack U.S. Troops

The U.S. is finally fighting the real enemy in Afghanistan.

As the Air Force Print News service reports:

An F/A-18C dropped a GBU-12 onto an enemy building engaging coalition forces near Delaram.

Buildings shooting at coalition forces are easy to fight.

Obama will certainly have no problem obliterating all of them.

Posted by b on July 17, 2008 at 02:12 PM | Permalink | Comments (18)

The Follies of Attacking Pakistan

According to the Murdoch Times the U.S. is preparing to raid Afghan resistance bases in Pakistan:

Reports from the area said that hundreds of Nato troops were airlifted across the mountains from the village of Lowara Mandi, which has been an important base for cross-border attacks in Afghanistan. Heavy artillery and armoured vehicles were also being moved into position.

That move may suit the aggressive liberal interventionism of Obama, but it does not make any sense. At Pat Lang's site FB Ali has two pieces describing the current situation in Pakistan and the likely consequences of such a move.

If the US mounts sustained attacks on the tribal areas, this will be regarded by all Pakistanis as an attack on their country. The upsurge of anti-US feeling will be such that neither the government nor the military could thereafter afford to show any sign of cooperation with the US. That will seriously compound US problems in Afghanistan and the region.

The mood in Pakistan is already very bad. As a traveler just back from Pakistan reports:

[T]he annual GDP per capita is under $3,000. In spite of this, over the past few months, prices for seemingly everything except pirated DVDs have risen sharply. I paid the exact same for meat and vegetables in Karachi as I do in Washington, DC.
...
Usually, electricity would be out for an hour or two in some areas, at most once a day. This time, however, power goes out several times a day for anywhere between 5-12 hours, as part of nationwide power load sharing.

Additionally there is a severe water shortage and the coalition government is on the brink of falling apart. Today people stoned the Karachi stock exchange after shares plunged 30%.

The Pakistani government might indeed be tempted to turn that rage against away from itself and against the U.S.

Most 'western' media are currently propagating that the problems in Afghanistan would be solved if only Pakistan would fight the Taliban within its borders. That impression is certainly wrong. Most of the Taliban and other parts of the resistance do not even come from the Pakistani border area but are genuine Afghans. Except for a few cities the Taliban rule the whole south and east of Afghanistan and even some sectors in the west. The only stable areas are the north where the non-Pashtun warlords of the Northern Alliance are in charge and Herat in the west which is under benign Iranian control.

Fighting the Taliban in the Pakistani border areas would not change the general situation in favor of the 'western' forces and their puppets in Kabul. It would instead make the situation for the troops much worse.

Seventy percent of ISAF and U.S. supplies are landed in Karachi harbor and transported by private trucks through the Khyber pass into Afghanistan. Given the current mood in Pakistan, how long would that supply line stay open if the U.S. increases attacks on that country?

Posted by b on July 17, 2008 at 12:06 PM | Permalink | Comments (9)

Did the Wind Really Change over Iran

The U.S. will open a diplomatic interest section within the Swiss embassy in Tehran. That does not mean that peace will now break out. The U.S. has such an interest section in Havana since 1977 and it is still sees Cuba as an enemy.

That Undersecretary of State William J. Burns will sit in during one negotiation between Iran and the 5+1 group may not mean anything either. As Laura Rozen writes:

What remains uncertain at this point is whether the move represents what Bush administration officials publicly insist – a one-time offer by Washington to demonstrate its willingness to negotiate only if Iran should agree to halt its uranium enrichment activities, or the beginnings of a greater flexibility and willingness by the Bush administration in its twilight months to engage in a more sustained diplomatic process toward Tehran ...

Iran will not suspend enrichment and I do not believe yet that the Bush administration will accept that stand.

But here is one sign that this may be the start of a real negotiation attempt. The Israelis are getting nervous about it:

"There is a bad feeling in Israel and dissatisfaction with the U.S. move," Israel told senior Washington officials, according to a source in Jerusalem. "There can be no concession on the demand to end uranium enrichment as a precondition to negotiating with Iran," Israel added.

The Israel lobby in Washington will certainly want to have a say in this. I expect a renewed push in Congress for the Congressional Resolution 362 and some other serious interference by the hawks in both parties.

Posted by b on July 17, 2008 at 10:30 AM | Permalink | Comments (5)

July 16, 2008

Saudis Bribe Russia Against Iran? No.

Are the Saudis trying to buy of Russia? That is what Kommersant reported yesterday:

[In] February, Saud Al-Faisal, Minister of Foreign Affairs, paid a brief visit to Moscow to conduct negotiations with the then President Vladimir Putin. At that time the prince conveyed a personal message of King Abdullah, where Riyadh expressed its concerns over Iran’s growing impact in the Middle East. The authorities of the kingdom suggested that Moscow should scale down its cooperation with Teheran. In exchange, Saudi Arabia offered beneficial contracts.

Currently the well known Saudi weapon dealer Prince Bandar is in Moscow and is said to have specified the offer to pay Russia for distancing itself from Iran.

A Kremlin spokesperson denies the rumors:

"Any claims that military-technical cooperation between Russia and Saudi Arabia is in any way linked to Russian-Iranian dialogue are inappropriate and do not correspond to reality," said [Kremlin spokesman Dmitry] Peskov on Wednesday.

In this case I tend to believe the Kremlin spokesperson. The rumor might fit U.S. or Israeli intentions but it does not fit the real releations.

The weapon deal in preparation between the Saudis and Russia has a volume of some $2.3 billion over several years. That is less in financial volume than two days of oil production each for Saudi Arabia and for Russia. Such a modest bribe is certainly not big enough for Russia to give up on a strategic partnership with Iran. For comparison, the recent Saudi deal with Britain to buy Eurofighter planes is worth some $20 billion.

The Saudis will buy some weapons from Russia, T-90 tanks, BMP infantry carriers and helos, to have fun driving around and flying over their dunes. The helicopters may be useful for this or that ride of a prince to some foreign whorehouse but not for war. The Saudis don't fight their wars. They pay others to fight for them.

This small weapon deal is a simply a mild snub to the U.S. by the Saudis with the additional value of getting some access to Russian thinking. Russia has no reason to give up its good relations with Teheran. Iran is their direct land access route to the Gulf.  For several reasons such access might be very useful in the future.

The Saudis are more or less under U.S. control since Roosevelt signed a pact with King Ibn Saud 63 years ago. Unless the U.S. gives up fighting in Afghanistan, Iraq and Pakistan against those radical Salafi movements instead of going against their Saudi Wahabbi financies the Saudis are safe and the old pact will hold.

The Kremlin is certainly able to understand that.

Posted by b on July 16, 2008 at 02:54 PM | Permalink | Comments (6)

Mr. Contained

At this juncture, however, the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained
Testimony Chairman Ben S. Bernanke , March 28, 2007

---

Shares of Bank of America, which recently completed its acquisition of mortgage lender Countrywide Financial, lost 8.1 percent in trading yesterday. National City, an Ohio-based bank whose shares have taken a recent beating, was down 4.5 percent. U.S. Bancorp, Minnesota's biggest bank, said that its second-quarter earnings fell 18 percent and that its level of bad loans would continue to rise as more customers fell behind on payments. Its shares dropped as much as 12 percent before recovering to end the day slightly in the red.

The S&P banking index was down 5.4 percent yesterday and 14 percent since Friday.
Wachovia Faces Shallow Reserves but Says It Is Raising More Capital, July 16, 2008

---

It is encouraging that inflation expectations appear to be contained.
Testimony Chairman Ben S. Bernanke , March 28, 2007

---

The unexpectedly large increase in CPI was led by a 6.6% jump in energy prices and a 0.8% increase in food prices.
...
With prices rising so fast, inflation-adjusted or real weekly earnings fell 0.9% last month. Real earnings are down 2.4% in the past year, a vivid illustration of how the average worker is falling behind as prices rise and the weekly workweek contracts.
Consumer prices jump 1.1% in June, July 16, 2008

Posted by b on July 16, 2008 at 10:45 AM | Permalink | Comments (12)

A New NATO Campaign

BRUSSELS - (RBN) - In an effort to shore up support for its globalization project NATO has hired a  high-caliber manager to head its new marketing department.

As the New York Times reports today the job will go to Michael Stopford, an executive from the Coca-Cola Company. Mr. Stopford has spent two years guarding Coca-Cola’s image and will join NATO as deputy assistant secretary general for strategic communication services in August.

A trusted source in Brussels confided to RBN that Mr Stopford was selected after he impressed the NATO secretariat with a list of new slogans he exclusively developed for NATO. The source gave RBN access to the list.

As part of NATO's future global image campaign one of Mr. Stopford's slogans, printed below, will be selected and engraved in all NATO weapon delivery systems and ammunition.

  • NATO Revives and Sustains
  • When It's Hard To Get Started, Start With NATO
  • All Trails Lead To NATO
  • NATO Goes Along
  • Time Out For NATO
  • Good Food And NATO Just Naturally Go Together
  • NATO Follows Thirst Everywhere
  • For People On The Go
  • It's The Real Thing
  • I'd Like To Buy The World A NATO
  • NATO Adds Life
  • NATO Is It!
  • Can't Beat The Real Thing
  • Always NATO
  • All the world loves a NATO
  • Welcome to the NATO Side of Life
---
list

Posted by b on July 16, 2008 at 07:13 AM | Permalink | Comments (6)

July 15, 2008

Housing Bust Answers

Bellfong asks:

Off topic, but isn't the crackdown on poor lending practices just cover for defaults based on variable rate mortgages? I recall mortgage rates rising moderately, never going back to record lows even with the fed dropping its rate further in the last couple years. So, was the scam to get people who were happy to qualify for any loan at all into a variable rate mortgage, then take the properties from them down the road? Is this the real scam, with the income-not-verified practice just a cover? Obviously it all fell apart with recession, job losses, cost of living gone up and drying up of liquidity in the mortgage market pushing rates up, but it seems like there's more to tell, ..

Let me take that in parts:

  • isn't the crackdown on poor lending practices just cover for defaults based on variable rate mortgages?

No. The defaults will happen anyway. There is nothing left to cover. Yesterdays the Fed revived regulation that will discontinue some loans types. It is closing the barn door after the horse is out of sight. This is ass covering by a Fed that has not done its regulatory job for more than a decade.

  • I recall mortgage rates rising moderately, never going back to record lows even with the fed dropping its rate further in the last couple years.

Hmm - that is not really true if one looks at this chart. Mortgage rates pretty much followed the Fed's fund rate.

  • So, was the scam to get people who were happy to qualify for any loan at all into a variable rate mortgage, then take the properties from them down the road?

The people who sell the mortgages to the borrowers only care for the money they get when the mortgage is signed. They are not interested in anything else. What drove this bubble was greed at every level and the ability to obfuscate the risk and then push it to investors who lacked the ability or will to see it. I for one don't see any great conspiracy in that.

Greed is driving markets and unchecked greed leads to bad decision. That is the reason why sane societies decided to regulate markets centuries ago. The U.S. forgot the lesson last learned during the 1930s depression that free markets are indeed bad. Since Reagan the trend was to deregulate. We now see and feel the consequences.

  • Obviously it all fell apart with recession, job losses, cost of living gone up and drying up of liquidity in the mortgage market pushing rates up, but it seems like there's more to tell

The current recession is very much the consequence of the bursting of the housing bubble (and higher oil prices) rather than the the other way around. The housing bubble burst because the housing market ran out of customers and housing prices stopped to increase. The homeownership rate reached a historic high (graph) of 69% at the beginning of 2005 and went back down from there. All new houses built after that date added to inventory and depressed prices. Lending to 'dead' people and speculation obfuscated the situation for a while, but the bubble burst because it ran out of people who needed houses. (The 'natural' historic homeownership rate in the U.S. is some 63%.)

One should note that the expansion after the 2000 dot.com bubble burst was a small and artificial one. It was driven by too low fed rates that led to investment in unproductive real estate and by a classic Keynesian program of debt financed government spending in the unproductive homeland security and defense sectors. This leg of the recession will be very deep because the last 8 years were wasted. They were not used to invest in productive stuff like infrastructure, production equipment and research. I believe that economic historians will see the current recession as a continuation of the 2000 bust.

YY asks:

Can some enlightened soul explain to me how the so called sub-prime crisis isn't just the end of what is in fact a ponzi scheme. The part I'm suspecting is that when the CDO's are reconfigured to AAA and junk, wouldn't there have to be an ever increasing stream of "good" portions of mortgages to come in to offset the junk which may as well be discarded. And since the source is the same collection of dubious debts, wouldn't the volume need to increase exponentially to even keep the marketing going? Never mind what happens(ed) when the payments started coming due.

Yes, it was a ponzi like scheme.

The reconfiguring of Collateral Debt Obligations (bundles of mortgages) into well rated parts and badly or not rated parts was a critical point. When the originators of the CDOs couldn't come up with enough good AAA parts, they just declared the AA parts to be AAA. The rating agencies are only payed by the originator when they rate the originators stuff. If they would have denied these AAA ratings of essentially junk they would have lost business. So they took the bribes, agreed to the scheme and investors who trusted their ratings got scammed. The next years will see a lot of litigation against these agencies.

Posted by b on July 15, 2008 at 02:27 PM | Permalink | Comments (12)

July 14, 2008

The Obama Cover

This New Yorker cover graphic is summing up negative cliches on Obama. The same cartoon would fit on the Weekly Standard or National Review. Unlike others I am not surprised at all to find it where it is.

Why is the New Yorker seen as a 'liberal' magazine at all? The only readable stuff I ever find in it are the Hersh pieces. Even those are often dubious as Hersh seldom lets one in on his sources and their special interests in talking with him. He made his name with sound stories on My Lai, Abu Ghraib and recently with reporting on a new executive order for silent attacks on Iran. But all of these stories were reported elsewhere before he even got near to them. He added interesting details though.

Other than Hersh the New Yorker peddles warmongerers like George Packer and neo-liberal pseudo economist stuff by James Surowiecki. The rest is on U.S. scales middle of the road culture writing which is essentially rightwing nonsense when measured in international benchmarks.

So again: Why are 'progressives' astonished about such an attack cover by the New Yorker?

The primary task of media entities is to make profit for their owners. Tight races in elections and controversies create an atmosphere were people yearn for news and commentary and buy media products. Therefore the media owners interest is to create tight races and controversies. It sells the mags and with them lots of ads.

Posted by b on July 14, 2008 at 04:40 PM | Permalink | Comments (56)

Dubious Sudan ICC Indictment

The prosecutor at the International Criminal Court has asked a panel of judges to issue an arrest warrant for the Sudanese President Omar Hassan al-Bashir. Bashir is accused of 'criminal responsibility' for 'genocide.'

Alex de Waal and Julie Flint, who know a bit or two of that conflict, find this to be wrong. They believe that this move will have no positive effect on the conflict and that a backlash from it is likely to hit those who are already victims. In a recent Guardian op-ed de Waal and Flint explain:

The immediate dangers are easy to foresee. The very people the ICC seeks to defend - the survivors of the Darfur war - are the most vulnerable to whatever steps the regime takes in its fightback.

The UN peacekeeping force in Darfur is already almost at a standstill. A few more restrictions - or deaths - would paralyse it. Humanitarian aid that feeds two million displaced people is dependent on a UN airlift that can be choked off at any moment. Popular demonstrations of support for the ICC could be met with lethal force, prompting a response from the armed rebel supporters who control many of the displaced camps.

The writers do not mention the real issue here. There is oil under the sands of Darfur and the 'west' wants regime change in Khartoum or the alternative of splitting off Darfur from Sudan to have free access to its resources.

Unlike de Waal and Flint assume, there is no real interest at the ICC or within 'western' politics for the plight of the people in Darfur.

This is a resource conflict on two scales.

For the people on the ground the main issue is water. Lack of rain forced nomading pastoralist from their desertifying grounds towards settled farm land.

On the international level the main issue is oil. China has good relations with Sudan and is developing oil fields in the Sudanese south. It is now helping with seismic pre-exploration work in Darfur.

Bipartisan U.S. (and 'western') policy is to have control over hydrocarbon resources where- and whenever possible. As the regime in Sudan has not so friendly relation with the west it must be changed or, as an alternative, Darfur must be split off Sudan.

In its five years of operation the International Criminal Court has opened four investigations and issued twelve arrest warrants. All of those cases were in Africa. Is that by coincidence? Wars of aggression, suppression of opposition and human rights violations also happen on other continents. It is not the that Africa is somehow a special case. But it seems that the ICC has a special interest for that part of the world.

Why is that the case?

Posted by b on July 14, 2008 at 03:29 PM | Permalink | Comments (16)

Irrelevant

Irrelevant is what Bush seems to be now in international politics. This is certainly evident in the Middle East. The 'new middle east' Condi Rice announced is not happening the way she and her man envisioned it.

The tactic of isolation of any perceived enemy Bush used and also demanded U.S. allies to use has completely broken down.

Instead of isolation there are talks, many of those, and the U.S. simply gets ignored in these.

  • With the help of Qatar the Lebanese formed a government in which Hizbullah and its allies have a veto. Bush has tried for nearly two years to prevent this.
  • Syrian President Bashar Assad got a warm welcome in France and there is no longer talk of sanctions against Syria.
  • Egypt helped to negotiate a truce between Hamas and Israel in the Gaza strip.
  • Germany is facilitating negotiations between Hizbullah and Israel.
  • Turkey mediates talks between Israel and Syria.
  • In Iraq the long term status of force agreement Bush demanded will not happen. Instead the Iraqis have increased  their demands and want the green zone walls gone by the end of the year and U.S. troops to leave their cities.
  • In Pakistan Bush's man Musharraf is powerless and likely to get impeached.
  • In Afghanistan president Karzai has spoken out against U.S. attacks on Iran from Afghan soil.
  • Kuwait, with several thousand U.S. troops on its ground, openly criticizes Bush's policy towards Iran.

The next few month in the oval office will be lonely. Let us hope that a bored and irrelevant Bush does not come up with any mischievous ideas. 

Posted by b on July 14, 2008 at 12:52 PM | Permalink | Comments (8)

July 13, 2008

Reading Maps of Incidents in Afghanistan

In what seems to have been a raid against a small U.S. outpost in Afghanistan at least nine U.S. soldiers were killed today:

Militants fired machine guns, rocket-propelled grenades and mortars from homes and a mosque in the village of Wanat in the northeastern province of Kunar, a mountainous region that borders Pakistan, NATO's International Security Assistance Force said in a statement.

Such an incident is unusual. The Taliban now try to avoid big fights as they usually lose in frontal assaults against U.S. fire power. This year they used IED attacks, suicide bombings or PR operations like the attack on the parade in Kabul and the prisoner escape in Kandahar. I don't remember any recent big number assault towards a U.S. outpost. Something is really odd here.

I checked the maps and remembered to have looked at a nearby place recently because of another incident:

A US air strike killed 47 civilians, including 39 women and children, as they were travelling to a wedding in Afghanistan, an official inquiry found today. The bride was among the dead.
...
Fighter aircraft attacked a group of militants near the village of Kacu in the eastern Nuristan province, but one missile went off course and hit the wedding party, said the provincial police chief spokesman, Ghafor Khan.

Different towns and provinces, but Kunar is next to Nuristan.

Hmm.

Kacu is at 34° 1' 12N, 70° 30' 23E and Watan is at 35° 3' 8N,  70° 54' 26E. The distance between these, as the crow flies, is some 77 miles.

The earth bound travel distance between these places is about 120 miles but not really difficult. From Kacu north through the plain of Nangahar to Jalalabad, then north-east along the green river valley and after some 30 miles at Kerala north-west along a smaller river to Watan.


(note: the yellow line is the border to Pakistan)

Under Afghan circumstances that maybe a day or two of driving and riding.

Was the bride killed in the incident in Kacu related to people in Watan or did folks from Kacu travel north to take revenge?

Posted by b on July 13, 2008 at 03:24 PM | Permalink | Comments (12)

Freddie and Fannie - "Who could have known ..."

Freddie Mac and Fannie Mae, the over-leveraged government sponsored mortgage finance companies, are swimming belly up and will have to be rescued by the taxpayers in one form or another.

"Who could have know ... ?"

Searching through the Moon of Alabama archives I found an exchange I had with anna missed back in November 2004 (typos corrected).

anna missed asked:

So I wonder what happens to all those (Bush) new and old homeowners if the interest rate is jacked up in some significant way to move the Fed debt down. With the housing market, in some measure, carrying both production, financing, and labor through the Bush economy, could rising interest rates create enough of a disruption to precipitate a major deflation in the real estate market? And what happens when people are faced with negative equity, and how does that effect their ability to secure future credit? And how could an import based, retail, and services economy survive such an evaporation of credit?

Should real estate held close to current value be dumped?

My response back then:

Some 50% of the mortgages in the last months were adjustable rates (ARMs). Their rate will increase immediately when treasury rates go up. People will have to default and quite a bunch of houses will be available on the market, subduing prices. With prices going lower more peoples mortgage will exceed their home equity. This could become a chain reaction with a very significant drop in house prices and lots of bankruptcies.

This may have effects in the banking sector (expect Freddie and Fannie to somehow go belly up).

If you want to stay in your house for the rest of your life and if you can pay your fixed rate mortgage rates without problems stay put. If you plan to move in two years or if you are not sure you can pay your future mortgage rates you may better look into renting a place for a few years and buy a house again when they become cheap.

But when will houses become cheap again? Should one buy now?

No. Knife catching is hazardous. The IMF did a study some years ago looking at twenty housing market busts in 14 countries since 1970. House price deflation from peak to trough was usually around 28% and took 4 years. It is likely that the house price deflation in the current bust will be bigger and take longer. I do expect a 40% price decline in average. It will take 5 to 6 years until the markets stabilize.

That the decline will take so long has political consequences. There is nothing anyone can do to prevent it or shorten it. The presidential election in 2012 will be about the declining economy just as the current one. The incumbent in 2012 is therefore likely to lose.

Posted by b on July 13, 2008 at 12:08 PM | Permalink | Comments (8)

July 11, 2008

Climate Change Conflicts

BenIAM in comments points to a report on Post-Conflict Environmental Assessment in Sudan by the United Nations Environment Programme. Chapter 4 (pdf), recommendable also for its pictures, says:

The scale of historical climate change as recorded in Northern Darfur is almost unprecedented: the reduction in rainfall has turned millions of hectares of already marginal semi-desert grazing land into desert. The impact of climate change is considered to be directly related to the conflict in the region, as desertification has added significantly to the stress on the livelihoods of pastoralist societies, forcing them to move south to find pasture.

That seems to be the central point of what the conflict in Darfur and neighboring Chad is about. Millions of people are moving away from land that turned to desert and conflict naturally arises when they 'invade' other people's land. Economic shocks caused by a lack of a rainfall are the major cause (pdf) of civil wars in sub- Saharan Africa.

The world has seen large scale population movements before. The Migration Period or Völkerwanderung in 300 to 700 A.D. in Europe was likely also the result of climate change. Desertification in western Asia and a cold period in northern Europe compelled people to move. Some equestrian pastoral people, 'Barbarians' or Huns were the Janjaweed of their times. They moved west and people living there were pushed further west themselves invading other people's land.

Governments can not do much about such conflicts and pressure. One reason the roman empire finally broke down were these mass migrations. If people get hungry because their lands are overpopulated and/or desertify, they will move.

I therefore find it a bit callous when the 'west' cries about 'genocide' in Darfur and wants to charge Sudan's president in front of the International Criminal Court. Omar Hassan al-Bashir may not be a good man but there is little he or anybody can do about migrating populations in a country with little infrastructure when one part of the people has no other chance of survival than to press into the land of another part of the people.

The 'intentional community' and so called peacekeepers are helpless in such situations too. There are no clearly identifiable sides in such conflicts. There are no good versus evil people in this only needs.

Yesterday seven peacekeepers in Darfur were killed when a gang of some 200 raided their convoy. Nobody is even sure who the attackers were or why the attack happened. Indeed peacekeepers can make the situation worse not because they fight but simply because of their additional catastrophic impact on scarce local resources and infrastructure. David Axe reports from eastern Chad were peacekeepers are supposed to protect camps with refugees from Darfur:

Arid eastern Chad has always suffered water shortages. In 2004, a quarter-million Darfuri refugees settled in the region, placing further strain on local water sources. Intensive labor by a wide range of aid groups -- drilling new wells, building dams to catch rainwater, opening up channels to feed rain into underground reservoirs -- has alleviated but not eliminated the problem.

Now EUFOR is deploying thousands of soldiers and tonnes of equipment, all requiring tens of thousands of liters of water per day -- and water shortages have become a water crisis.

EUFOR flies in bottled water from Europe for its peacekeeping troops in Chad but this only creates different problems:

The water these French convoys bring in does not come from Chadian sources -- it is shipped in from foreign sources, so in one sense it’s harmless to parched eastern towns. But the trucks must travel on roads never intended for such heavy use in order to deliver the water.

These roads are especially fragile where they cross the country’s thousands of dry river beds, or wadis. During Chad’s long rainy season, from roughly June to October, the Chadian government sets up roadblocks to prevent vehicles from crossing the wadis and damaging the roads. Those that absolutely must cross pay a fee.

But French army Staff Sergeant Alexandre Barbet, whose job it is to escort the convoys, says the French drive right on through without paying. "What are they going to do?" he asks rhetorically. EUFOR considers the fees bribes.

With such a behavior the 'peacekeepers' will soon be in violent conflict with the local people.

Are there solutions to mitigate the impacts of climate change?

There seem to be three thing we could do:

  • Limit the effects of industrial living on global warming. I have little hope for that to happen at a scale that would have real effect.
  • Find peaceful ways to settle people impacted like in Darfur in other lands. Refugee camps that get set up and protected are only short term solutions creating more problems. The people in such camps will never be able to go back where they came from. They also can not live in these forever. Eventually they have to settle somewhere where they can make a living. Where?
  • Find technical solutions to prevent flooding of coast lands and desertification of inner lands. Can big projects like Lybi's Great Man-Made River be an example? Could huge desalination plants at Sudan's cost, probably powered by nuclear energy, create sweet water that could be piped into Darfur? Would that solve problems or create more?

Peacekeepers and ICC indictments are not solutions to the problems mass-migration caused by climate change and desertification creates. Humanity needs to come up with better ideas.

Posted by b on July 11, 2008 at 12:54 PM | Permalink | Comments (19)

July 10, 2008

Obama The Fraud

October 24, 2007:

"To be clear: Barack will support a filibuster of any bill that includes retroactive immunity for telecommunications companies."
link

That was then. Now:

The Senators then voted for "cloture" on the underlying FISA bill -- the procedure that allows the Senate to overcome any filibusters -- and it passed by a vote of 72-26. Obama voted along with all Republicans for cloture.
link

It is now obvious that the guy is a fraud.

The democratic primaries were looking quite enthusiastic with a record number of voters and plenty of small donations. Obama is doing his very best to change that for the general election. To what end I do not know.

Does he really believe to pick up more voters on the right than he is losing on the left? If so, I think he is wrong.

Prediction: Voter participation in the general election will be at a record low.

Posted by b on July 10, 2008 at 12:06 AM | Permalink | Comments (144)

July 09, 2008

The Economy: Who Can We Blame?

Who is to fault for the economic trouble we are in. Are it politicians, economists or structural issues both are unable to influence?

Joseph E. Stiglitz, a former Chief Economist of the World Bank, sees the problems as the effects of a false theory. A theory which is more a political than economic one. In a recommendable piece in an Egyptian(!) paper headlined The end of neo-liberalism? he asserts:

[T]he losers are clear: countries that pursued neo-liberal policies not only lost the growth sweepstakes; when they did grow, the benefits accrued disproportionately to those at the top.
...
Neo-liberal market fundamentalism was always a political doctrine serving certain interests. It was never supported by economic theory. Nor, it should now be clear, is it supported by historical experience. Learning  this lesson may be the silver lining in the cloud now hanging over the global economy.

In  today's Guardian Simon Jenkins, himself a opinion journalist but also a trained economist with a neo-liberal bent blames economists:

When muck hits fan, economists always blame politicians. They would have some justice if they did not take credit when things go right. I was always uncomfortable at the overselling of economics as a science, when it is rather a branch of psychology, a study of the peculiarities of human nature.
...
Economic management is and always will be about politics, about the clash of needs and demands resolved through the constitutional process.

A third opinion comes in a report by The Australian about a recent Carnegie Council workshop in New York. While it is about the U.S., the central economic position of the U.S. in the world may justify some generalization:

The energy, financial and political woes that grip the US signal a decisive shift in world power, mocking the liberal delusion that Barack Obama or John McCain can return American prestige and power to its pre-Bush year 2000 nirvana. There is no such nirvana. There is instead a new reality: the greatest transfer of income in human history, away from energy importers such as the US to energy exporters; the rise of a new breed of wealthy autocracies that cripple US hopes of dominating the global system; and demands on the US to make fresh compromises in a world where power is rapidly being diversified.
...
For the US there is no easy solution to the structural forces driving oil, energy and financial markets. Yet much of the political debate remains in denial of these forces.

Again, who is to blame: Economic theory? Politics? Structural international issues like resources outside of the influence of economists and politicians?

The trained economist in me answers: "On one hand ..., but on the other hand ...". A politician or opinion maker like Jenkins will favor the say whatever underpins his more conservative or progressive ideological standpoint and blame the opposition.

But who do you think is really to blame? The voters? Idiology?

Posted by b on July 9, 2008 at 02:19 PM | Permalink | Comments (25)

Reasons Behind Maliki's Timetable Request

There are three possible interpretations of Maliki's insistence for a timetable for withdrawal of some U.S. troops from Iraq. These are based on how one sees Maliki's position:

He is :

  1. a puppet of the U.S. government
  2. a puppet of the Iranian government
  3. a self nationalistic politician vowing the electorate of Iraq for the upcoming elections

If Maliki gets his orders from the U.S. than the whole timeline issue is a U.S. election ploy. McCain and Bush will accept, reluctantly, the 'Iraqi wish' for a timetable. Obama will have lost his most important argument that he is the only one who will end the occupation in Iraq.

If this interpretation is correct the timetable than will be worded in a way that will allow for many troops to stay into the far future and on U.S. conditions.

This is indeed what seems to be going on:

Ali al-Adeeb, a Shiite lawmaker and a prominent official in the prime minister's party, told The Associated Press that Iraq was linking the timetable proposal to the ongoing handover of various provinces to Iraqi control.

The Iraqi proposal stipulates that, once Iraqi forces have resumed security responsibility in all 18 of Iraq's provinces, U.S.-led forces would then withdraw from all cities in the country.

After that, the country's security situation would be reviewed every six months, for three to five years, to decide when U.S.-led troops would pull out entirely, al-Adeeb said.

So far, the United States has handed control of nine of 18 provinces to Iraqi officials. <
...
The proposal, as outlined by al-Adeeb, is phrased in a way that would allow Iraqi officials to tell the Iraqi public that it includes a specific timetable and dates for a U.S. withdrawal.

However, it also would provide the United States some flexibility on timing because the dates of the provincial handovers are not set.

The second interpretation would be consistent with Maliki's recent trip to Iran after which he insisted on some issues that are against U.S. interest. He for example demanded to throw the anti-Iranian MEK-cult out of Iraq. The 3,000 or so cult members are currently under U.S. supervision and used for clandestine terror acts in Iran. Maliki also vehemently insisted on no U.S. attacks on Iran from Iraqi soil.

A sign that there might be a real conflict between Maliki and the U.S. came as a threat issued by the White House yesterday:

White House spokesman Tony Fratto said specific withdrawal dates are not part of the talks. He added: "We have great confidence that the political leadership in Iraq would not take an action that would destabilize the country.

Fratto directly threatens to revive the Salvadorian option, i.e. to reignite a civil war in Iraq.

The third interpretation is based on Maliki's internal political position. While he has had some recent successes in lowering the level of conflict in Iraq he also has only little support in the parliament. A major part of his own Dawa party has split away from him. The timetable for a U.S. retreat is a main demand of the Sadr movement and by picking up on this demand Maliki may try to position himself and his party for the provincial elections as a more secular alternative to as-Sadr. Pat Lang sees such general nationalistic issues as a major force in Maliki's move.

In reality the three motives above are not inherently incompatible with each other. The Republicans have some interest to move away from McCain's 'hundred years in Iraq' and free some troops for Afghanistan, Iran might want to lower the profile of U.S. troops in Iraq to replace their influence and Maliki might want to present himself as a nationalist not under U.S. control.

We will only be able to judge what motives are really behind this when the results of the negotiations will be announced. If the timetable is very flexible, allows the U.S. to influence it on the go and includes a big residual force, point one is more likely. If the timetable is very strict and allows for no residual force, the Iran point would be the case. A strict timetable with a big residual U.S. force in long term remote bases would fit the Maliki angle as it would give him continued backing against militias as well as make the electorate happy.

Posted by b on July 9, 2008 at 01:14 PM | Permalink | Comments (27)

July 08, 2008

OT 08-25

News & views ...

and a link to the antecessor ...

Posted by b on July 8, 2008 at 12:27 PM | Permalink | Comments (92)

Unruly Puppets

'The direction we are taking is to have a memorandum of understanding either for the departure of the forces or to have a timetable for their withdrawal,' a statement from Maliki's office quoted him as telling Arab ambassadors to the United Arab Emirates.
Iraq demands troop withdrawal timetable in U.S. defence pact talks

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"It is important to understand that these are not talks on a hard date for a withdrawal," [White House spokesman Scott Stanzel] said.

"As Ambassador (Ryan) Crocker has said, we are looking at conditions, and not calendars -- and both sides are in agreement on this point," [he] said.
...
Asked about Maliki's comments, Pentagon spokesman Bryan Whitman told reporters: "With respect to timetables I would say the same thing I would say as respects to the security situation -- it is dependent on conditions on the ground."
White House says no 'hard date' for withdrawal in Iraq talks

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BAGHDAD - Iraq's national security adviser said Tuesday his country will not accept any security deal with the United States unless it contains specific dates for the withdrawal of U.S.-led forces.
Iraq insists on withdrawal timetable

The big question now: What can and will Cheney do to again get things in Baghdad under control?

Posted by b on July 8, 2008 at 11:43 AM | Permalink | Comments (5)

A New New Deal

Freddie Mac and Fannie Mae stocks took a dive yesterday. Both are now down 60% from the beginning of this year. These are congressional chartered companies that buy up mortgage loans and finance these through issuing bonds. These bonds have the implicit backing of the United States but it is unclear if this would hold when they default.

Many of the mortgages Freddie and Fanny bought over the last years are of dubious value and it is likely that the companies will lose a lot of money. Both will need fresh capital but I find it hard to see how anyone sane would invest in these. The U.S. taxpayer will have to jump in.

The last days made it clear to anyone that there will be no recovery this year and likely not even next year. The housing market will correct further down and take the country deeper into recession and possibly into a depression.

The whole problem is the result of false economic policies that started with Reagonomics and continued through Democratic and Republican presidencies.

Where is the political answer to this?

Schumer's housing bill will rescue some of the banks that finance his campaigns but it also puts even more burden on Freddie and Fanny. The rebate checks were used at the gas stations and did not ignite more economic activity. There were already calls for a second round of such checks.

Instead of financing further consumption any future program should put money were it really could induce more economic activities: creating new infrastructure especially for public transit, repairing bridges, changing suburbs into something that resembles towns and the like.

The program will have to be big. It will be a difficult fight to finance it as tax revenues will tank and liabilities  increase further through the wars that will continue to go on.

As the situation will get much worse over the next months, both presidential campaigns will have to present some new programs. McCain's current economic program of lowering taxes for the rich and corporations while claiming to balance the budget is just laughable. Obama's current program is much too small and consumption orientated.

The U.S. has structural problems that need structural answers, not some simple tweaking of economic screws here and there.

This chart (stolen from Krugman) shows the share of the richest 10 percent of the American population in total income. We are back in the gilded age and a new New Deal will be needed.

Could a possibly coming depression trigger the political will to introduce one?

Posted by b on July 8, 2008 at 09:58 AM | Permalink | Comments (9)

July 07, 2008

Iran War Drumbeat and the British Press

Like on Iraq the British press is used to transport the 'threat' of Iran to the English speaking public. This weekend the Telegraph as well as the Times have again excelled at this.

MI6 asset Con Coughlin peddles some scary secret Iranian companies working on parts for even more scary P-2 centrifuges and writes:

The companies, based on the outskirts of Tehran, are working on constructing components for the advanced P2 gas centrifuge, which can enrich uranium to weapons grade two to three times faster than conventional P1 centrifuges.
...
“If Iran’s nuclear intentions were peaceful there would be no need for it to   undertake this work in secret,” said an official familiar with the intelligence reports.

These 'secret' second generation centrifuges are the ones on display at the Iranian president's website and are producing low-enriched Uranium under the watchful eyes of the IAEA in Natanz.

The Sunday Times joins Coughlin with a renewed scare well known to anyone who watched the propaganda buildup for the war on Iraq: ‘Germ warfare’ fear over African monkeys taken to Iran

Hundreds of endangered monkeys are being taken from the African bush and sent to a “secretive” laboratory in Iran for scientific experiments.
...
Manji said scientists at the Razi Vaccine and Serum Research Institute in Iran had bought 215 vervet monkeys from him this year but he had become suspicious about their true motive, although he was still trading with them. They had “spent a lot of money” on getting the monkeys, even sending over scientists to check on each consignment.

“Iran is very secretive,” said Manji, who has been exporting monkeys for 22 years. “They said it [the monkeys] was for ‘our country’, for vaccine. [They said] ‘We don’t buy vaccine from anywhere; we prepare our own vaccine’.

There are a number of issues here. The Razi institute is certainly not 'secretive'. It even publishes its research in English.

The Times says:

The Razi institute, which was established in 1925, does legitimate research but does not publicly list on its website the use of primates in any of its current projects. Other animals being used for experiments, such as guinea pigs and mice, are mentioned.

The only category on that website that lists animals at all is labeled Products on the Market: Laboratory Animals. The Rezi folks do not have vervet monkeys to sell. They list animals they breed and can sell. They buy these apes because they do not have them. They don't list them for sale because the don't have any for sale.

According to the Times, the Iranian lab bought 215 of these apes when the total sales was in the multiple thousands. According to Primate-Freedom and Primate Info Net the U.S. uses about 45,000 of a world total of 80,000 primates for research.

The apes sold to Iran are considered as being of "least concern" of extinction by the Wisconsin University Primate Info Net and are regarded as a pest in some African countries. They are quite valuable for research because:

Specifically, vervets are important in studying high blood pressure and AIDS. They are one of the few species of nonhuman primates that naturally develops high blood pressure and simian immunodeficiency virus (SIV), the ancestor of human immunodeficiency virus (HIV), is widespread throughout wild populations (Chakrabarti 2002; Ervin & Palmour 2003).

The Telegraph story is just a rewarmed stuff peddled three years ago by the anti-Iranian MEK cult, and the Times story is without any fact that points to anything else than normal pharmaceutical research in and by Iran.

Both these stories are part of a drumbeat. The U.S. press is somewhat cautious about such stories after the Judy Miller Iraq disaster. But these tales do creep into the public mind anyway with the help of the MI6 and these UK press organs.

Is that the purpose of their existence?

Posted by b on July 7, 2008 at 04:32 PM | Permalink | Comments (13)

A Memorandum of Understanding?

Maliki and Bush have a big problem. The Iraqi parliament will obviously not agree to the status of force agreement the U.S. is pressing for. But Maliki now thinks he has found an alternative.

Iraq has proposed a short-term memorandum of understanding with the United States rather than trying to hammer through a formal agreement on the presence of U.S. forces, the country's prime minister said Monday.
...
Al-Maliki has promised in the past to submit a formal agreement with the U.S. to parliament for approval. But the government indicated Monday it may not do so with the memorandum.

"It is up to the Cabinet whether to approve it or sign on it, without going back to the parliament," Iraqi government spokesman Ali al-Dabbagh told the AP.
Iraq's al-Maliki wants short-term US agreement

The big issue here is legality. A memorandum of understanding can be a legally binding treaty. But for that they will have to fulfill certain conditions. In this case one of these conditions might well be agreement by the Iraqi parliament.

The Iraqi constitution says in article 58:

A law shall regulate the ratification of international treaties and agreements by a two-thirds majority of the members of the Council of Representatives.

Lawyers in the state and defense department will have serious caveats about an MOU that is not ratified in Iraq. Without a legally binding treaty immunity of all U.S. personal in Iraq would be at risk.

Iraq may also have to pay a hefty price as an memorandum of understanding will not be a binding protection against lawsuits towards Iraqi money in New York fed accounts.

The UN mandate, which today legally covers the occupation, will run out at the end of this year. To renew it seems to be the only legal alternative to a status of force agreement. It is dubious that the Security Council would agree to again prolong the mandate. The U.S. would certainly have to pay a heavy political price to arrange for the votes.

Posted by b on July 7, 2008 at 12:00 PM | Permalink | Comments (3)

July 06, 2008

Red versus Blue

Thanks to anna missed for pointing to this Media Matters report on a brutal case of photo manipulation by Fox News.

With the rise of digital pictures one finds more and more of such manipulation though usually more subtle and in advertising or glamor mag covers. For some hilarious examples take walk through the archives of the Photoshop Disaster blog.

In some reporting on the current presidential elections a much simpler but effective manipulation is used.

The banner in the screenshot below is from the Jerusalem Post coverage of the U.S. election.

The red channel value of the Obama part of the montage is about 30% too low. No professional photographer has such a badly adjusted camera. The manipulation makes Obama's skin look blue, cold and pale. The McCain part seems to have a slightly lifted red channel value which lets him appear warm.

It is the red versus blue fight played out in rgb spaces and hue curves.

The JPost manipulation is obvious because it is overdone. A 10% red reduction in the Obama part would have been less obvious and still been quite effective. Because such color manipulation is very easy and has a unconscious effect we can be sure that it will be used in many anti-Obama campaigns.

Posted by b on July 6, 2008 at 01:34 PM | Permalink | Comments (3)

 
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