a place for news & views …

with a link to the elder OT

Isn’t it  funny how some ‘western’ politician still bluster about the signed ceasefire agreement over Georgia and Russian peacekeepers in Georgia. But they do this, of course, with a purpose. They want to change the accepted and signed ceasefire agreement.

To understand what is happening here, one has to go back to the phases that led to the ceasefire agreement. I will try to do so below and unfortunately it will be a bit longish.

So here is the short version:
The United States tries to change the signed ceasefire agreement over Georgia.

After Sarkozy negotiated with Russia and the ceasefire was agreed upon by both sides, the U.S. was very disappointed (and mad with Sarko).

Rice went to Paris and pressed Sarkozy to write a letter to Saakashvili that gives a very lopsided U.S./Georgia friendly interpretation of the ceasefire agreement. Legally that letter is completely without merit.

But now the U.S. wants this lopsided interpretation laid down only in a letter from Sarkozy to Saakashvili to became a legal part of the ceasefire agreement via a resolution at the UN Security Council.

It uses the ‘Sarkozy letter’ to make propaganda against legal troop movements and checkpoints the Russians are operating within Georgia. The media, of course, falls for it.

Russia of course will never agree to that outcome. It has no reason to do so and still most of the pressure points.

The situation on the ground:
The Russians have pulled their troops back into or near South Ossetia and Abkhasia along the peacekeeping lines that were agreed upon in the 1990s. They additionally keep lookout posts at Georgia’s main port Poti and in Senaki as well as near the major east-west road north of Gori.

Cont. reading: The Mysterious ‘Sarkozy Letter’

NYT says so.

The guy likes to hear himself talking. Not sure others like that too.

… or so it seems …

U.S.: 30 militants killed in west Afghanistan, AP, Aug 22, 2008
KABUL, Afghanistan – U.S.-led troops attacked a compound where Taliban leaders were meeting and killed 30 militants, American and Afghan military officials said Friday, but the Interior Ministry said a large number of civilians died. The U.S. said it would investigate.
…
The coalition said its troops called in airstrikes on the compound in the Shindand district of western Herat province Thursday
…
However, the Afghan Interior Ministry claimed U.S. coalition bombs
killed 76 civilians, including 19 women and 50 children under the age
of 15. The ministry called the bombing a "mistake."

… let's add 15 x 30 militants' killed  to that toll ….

US coalition: 30 militants die in Afghan battle, AP, Aug 21, 2008
KABUL, Afghanistan – U.S.-led coalition troops battled a group of militants in eastern Afghanistan, killing over 30 insurgents, while three NATO soldiers were killed in a roadside blast elsewhere, officials said Thursday.

The coalition troops used small arms and airstrikes during the raid in eastern Laghman province on Wednesday, killing more than 30 fighters, the coalition said. A cache of mortars and bomb-making material was also destroyed.

US and Afghan Troops Kill Dozens of Militants in Afghanistan, VOA News, Aug. 16
The U.S.-led coalition Saturday said more than 30 militants were killed in three days of fierce fighting in Zamto Valley, in southern Kandahar province. The coalition said its troops along with Afghan forces called in airstrikes during the clashes that began Wednesday and ended Friday.

Pakistan army targets militants in northwest, AP, Aug 8, 2008
KHAR, Pakistan—- At least 30 militants and seven Pakistani paramilitary troops have died in clashes near the Afghan border, where security forces pounded insurgent hideouts Friday with helicopter gunships and mortar fire, officials and residents said.

The offensive in the tribal region of Bajur came in the wake of a militant assault on an outpost manned by security forces Wednesday.

Cont. reading: Around the Hindu Kush, 30 is a Magic Number

How much taxpayer guaranteed loans did Toyota need to develop hybrid cars?

GM, Ford Seek $50 Billion in U.S. Loans, Doubling First Request

Aug. 22 (Bloomberg) — General Motors Corp., Ford Motor Co., Chrysler LLC and U.S. auto-parts makers are seeking $50 billion in government-backed loans, double their initial request, to develop and build more fuel-efficient vehicles.

The U.S. automakers and the suppliers want Congress to appropriate $3.75 billion needed to back $25 billion in U.S. loans approved in last year’s energy bill and add $25 billion in new loans over subsequent years, according to people familiar with the strategy. The industry is also seeking fewer restrictions on how the funding is used, the people said.

The two highlighted sentences are contradictory. Why would one ask for ‘fewer restriction’ on how to use the subsidy when the declared aim of said subsidy is a quite restricted activity?

Oh, I see. The CEOs need a pay rise.

GM, Ford and Chrysler are bankrupt because:

• their car finance business was utterly irresponsible
• their product mix policy was shortsighted
• their top managers are dumb but greedy people

Would additional taxpayer dollars change anything of the above?

No. There is no reason to give them even a penny. Take care of the workers that will lose their jobs but stop bailing out shareholders and stupid CEOs.

Finally Russia is losing the war against Georgia!!! Investors are rushing out of the country!!! There might be a financial crisis in Russia!!! The power of the ‘global markets’ are fighting Russia!!! This will provide ‘an important check on Kremlin decision-making’!!!

So is the Financial Times telling its readers today. Under the headline Investors quit Russia after Georgia war it asserts:

Investors pulled their money out of Russia in the wake of the Georgia conflict at the fastest rate since the 1998 rouble crisis, new figures showed on Thursday.

Russian debt and equity markets have also suffered sharp falls since the conflict began on August 8, with yields on domestic rouble bonds increasing by up to 150 basis points in the last month.

Money is fleeing the country, the rouble crisis, sharp falls in the stock market, increasing yields … terrible indeed.

Now may we check the numbers please?

Let’s start with bond yields. I don’t have access to the Russian rouble bond index (the MICEX CBI), but was it really the war that began on August 8 that induced the yield increase up to 150bp in the last month?

Consider this Reuters piece written on August 7 when the war was only on Saakashili’s and his minders’ minds:

Cont. reading: The Financial Times Construes Propaganda

So there is some kind of agreement about U.S. troop reductions in Iraq:

BAGHDAD, Aug. 21 — U.S. and Iraqi negotiators have agreed to the withdrawal of all U.S. combat forces from the country by the end of 2011, and Iraqi officials said they are "very close" to resolving the remaining issues blocking a final accord that governs the future American military presence here.

Is there a clear definition for ‘combat forces’? I have yet to see one.

U.S. and Iraqi negotiators have now also agreed to a conditions-based withdrawal of U.S. combat troops by the end of 2011, a date further in the future than the Iraqis initially wanted. The deal would leave tens of thousands of U.S. troops inside Iraq in supporting roles, such as military trainers, for an unspecified time. According to the U.S. military, there are 144,000 U.S. troops in Iraq, most of whom are playing a combat role.

What are the ‘conditions’ in ‘condition based’? There is a big difference between ‘combat troops’ and troops in ‘playing a combat role’. (Is killing people now playing?) All troops within a military have ‘combat roles’. The last sentence is thereby meaningless propaganda.

Let me guess: There will be at least one full U.S. tank brigade and a two infantry brigades as ‘military trainers’ left in Iraq when all ‘troops with combat roles’ are declared to have gone.

Facing challenges from within his own majority Shiite group, as well as from minority Sunnis and Kurds, Maliki pledged that there would be no "secret deals" with the United States. He said the agreement would be put to a vote in Iraq’s fractious parliament.

Does anyone believe in a ‘pledge’ by Maliki?

I am a bit astonished about the parliament thingy. The signs were pointing to an agreement that would be made outside of the Iraqi parliament and Congress. Either Maliki thinks he can find a majority for this which I find unlikely, or this is his way to sabotage the deal. "Look I have tried, but the … party just would not go along …"

Originially there were two agreements: A Status of Force Agreement (SOFA) and a ‘strategic framework agreement’. The second one would:

broadly address issues not covered by the SOFA, including those outlined in a "declaration of principles" document signed by President Bush and Iraqi Prime Minister Nouri al-Maliki in November 2007. Among these issues: the U.S. role in defending Iraq from internal and external threats; its support of political reconciliation; and its efforts to confront terrorist groups.

Rice’s current trip seems to have covered only the SOFA.

But the ‘strategic framework’ is much more a restriction of Iraq’s sovereignty than the SOFA is? What is the status of negotiations on that one? Will the Iraqi parliament get a chance to vote on that too?

There are many open question here. Unfortunately, no report seems to answers those yet.

JIDDAH, Saudi Arabia (AP) — The U.S. energy secretary said Saturday that insufficient oil production, not financial speculation, was driving soaring crude prices.

[…]
"Market fundamentals show us that production has not kept pace with growing demand for oil, resulting in increasing prices and increasingly volatile prices," Bodman told reporters. "There is no evidence that we can find that speculators are driving futures prices" for oil.
Bodman: Insufficient oil production behind prices, USA Today, June 21, 2008

Of course there was no evidence available to prove speculation in the commodity markets. That was because the regulators simply never looked for evidence until pressure from some folks in Congress finally made them do something ‘unusual’:

The [Commodity Futures Trading Commission], which learned about the nature of Vitol’s activities only after making an unusual request for data from the firm, now reports that financial firms speculating for their clients or for themselves account for about 81 percent of the oil contracts on NYMEX, a far bigger share than had previously been stated by the agency. That figure may rise in coming weeks as the CFTC checks the status of other big traders.

[…]
Using swap dealers as middlemen, investment funds have poured into the commodity markets, raising their holdings to $260 billion this year from $13 billion in 2003. During that same period, the price of crude oil rose unabated every year.
[…]
"Business is lousy right now," Bowie said of Goldman Sachs. "Commodities and currencies are clearly the strongest business they have right now."

Originally only people connected to commodities, producers and consumers like farms and airlines plus a few middlemen, were allowed big  trades at the commodity exchanges. In 1991 a loophole was created for a Goldman Sachs subsidiary. A second loophole was opened in 2000 with the Commodity Futures Modernization Act of 2000. A main sponsor for that law was Enron. Since then private, unregulated commodity trading platforms have opened in London and in Dubai.

Unless all these markets get regulated down to the original task of commodity exchanges by an entity that really does its job, the daily global cost of oil and food will depend on the morning mood of a few Wall Street traders.

Bush said Russia’s invasion of Georgia and the threat to Georgia’s democratically elected government "is unacceptable in the 21st century"
Bush to Russia: Reverse ‘unacceptable’ course in Georgia, Aug. 11

"The days of overthrowing leaders by military means in Europe — those days are gone," Khalilzad said.
U.S.: Russia trying to topple Georgian government, Aug. 11

Sen. John McCain denounced the aggressive posture of Russia by claiming that: "in the 21st century nations don’t invade other nations."
McCain: "In The 21st Century Nations Don’t Invade Other Nations", Aug. 13

"Russia is a state that is unfortunately using the one tool that it has always used, […] and that’s its military power. That’s not the way to deal in the 21st century."
Secretary Condoleezza Rice – En Route to Brussels, Belgium, Aug. 18

Indeed, most of the world is bemused by western moralising on Georgia.  […] It shows how isolated is the western view on Georgia: that the world
should support the underdog, Georgia, against Russia. In reality, most
support Russia against the bullying west. The gap between the western
narrative and the rest of the world could not be greater.
[…]
The combined western population in North America, the European Union and Australasia is 700m, about 10 per cent of the world’s population. The remaining 90 per cent have gone from being objects of world history to subjects. The Financial Times headline of August 18 2008 proclaimed: “West in united front over Georgia”. It should have read: “Rest of the world faults west on Georgia”.
The west is strategically wrong on Georgia, Kishore Mahbubani, Aug. 20

The U.S. plans to reinforce its troops in Afghanistan:

The Pentagon will be sending 12,000 to 15,000 additional U.S. troops to Afghanistan, possibly as soon as the end of this year, with planning underway for a further force buildup in 2009.

Those are three brigades plus support units and maybe an extra brigade on top later on. Where will those troops come from? We don’t know yet, but there will likely be less forces in Iraq soon.

The outgoing ISAF Commander McNeill said 400,000 NATO/U.S. troops are needed in Afghanistan. Currently are some 60,000 to 70,000 are there. The new contingent will not make much of a difference.

But these additional forces in Afghanistan will be a much bigger logistic problem than they were in Iraq. Let us look at fuel consumption.

Cont. reading: Fuel for War in Afghanistan

There has been a mysterious raid in  Diyala province, Iraq. Special operation forces under direct command of Maliki and with U.S. support attacked the local government compound and later had a firefight with local police:

The Iraqi forces arrested Hussein al Zubaidi, provincial council member and head of the provincial security committee. A nearby raid conducted almost simultaneously by unidentified armed forces arrested the president of Diyala University.

While those arrested are Sunni and U.S. media are playing this as Sunni-Shia strife, Reidar Visser finds reason to believe that this is a inner Shia conflict between Maliki’s Dawa party and al-Hakim’s supreme council (ISCI).

There are also rumors of terminal illness of Grand Ayatollah Sistani. He is the power that had pressed Dawa and ISCI into the Unified Iraqi Alliance and held the Shia coalition together.

If that coalition indeed brakes Maliki could rule with a Dawa/Kurd minority alliance against a very split opposition. As long as he has (military) U.S. support and is capable of such black operations, it is unlikely that anyone can challenge him.

Divide et impera has been (at least temporarily) successful throughout history. Is that the U.S. strategy behind this?

… what would NATO do about it?

Scenario (map):

In late fall 2010 Russian NGOs instigate a reverse color revolution in the Ukraine and a Russia friendly ‘democratically elected’ government takes over. There are attacks on Russian ethnics in Estonia, Latvia and Lithuania. Some nasty pictures of these get played again and again in Russian and European media and lead to calls in Russia’s State Duma for protection of these minorities.

Russia calls for a UN security council resolution to stop the atrocities against ethnic Russians. While China supports Russia, the ‘western’ powers veto any resolution.

On invitation from the Ukraine, Russia moves air defense systems and
heavy artillery into the Ukraine. The Ukrainian and Russian governments put their
armies under ‘common’ (Russian) command.

Under domestic pressure Russia’s president sends a division of troops into each of the Baltic countries and the Russian navy to blockade their coasts. Estonia, and Latvia have 6,000 active troops each, Lithuania has some 18,000. After three days of unfair fights these local forces no longer exist.

There have been only relative few civilian casualties though. Russia declares it will respect the sovereign integrity of the three countries, but it will have to station peacekeeping forces there to prevent further atrocities. Fresh elections are announced for all three countries as their ‘criminal governments’ are under arrest.

‘Technical difficulties’ with pumping stations diminish Russian oil and gas supply to Europe by over 30%. The BTC pipeline gets sabotaged by PKK rebels in Turkey.

Meanwhile Serbia is again making loud noise about the Kosovo. Spain is in strife with its Basks who somehow have obtained RPG’s and other heavier weapons. In Turkey the PKK suddenly gained access to anti-air assets and is on offenive in several areas. Mujaheddin in Afghanistan got hold of anti-air missiles form China.

Within a week $200 billion worth of U.S. treasuries and agency papers get dumped by some obscure Cayman Island funds into the financial markets. The dollar tanks, interest rates and oil prices jump.

End of the scenario.

Estonia, Latvia and Lithuania are NATO countries. But what would NATO actually do if the above were to happen?

Cont. reading: If the Russians were really bad …

For Obama – Biden, Hagel, Sibelius, … ?

For McCain – Ridge, Romney, Elisabeth Cheney, … ?

My bet is Hagel and E. Cheney. But what do I know.

What is your bet?

There seems to be a major Taliban offensive going on in Afghanistan. This coincides with the Afghan Day of Independence which President Karzai is celebrating at an undisclosed location.

There was a suicide attack by car yesterday on the U.S. Camp Salerno in Khost city east of Kabul near the border to Pakistan. That attack killed mostly Afghan workers waiting for being searched to enter the camp. A wave of attacks on the camp followed after midnight. It was repelled.

Also east of Kabul, but in a different location, a French patrol came under fire:

Ten French soldiers have been killed in fighting with Taliban insurgents east of the Afghan capital, an Afghan military official said on Tuesday.

The soldiers, part of NATO’s International Security Assistance Force (ISAF), were engaged in a major battle with insurgents that began on Monday about 30 miles (50 km) east of the Kabul, he said.

There are no details yet. I wonder how the French will react to this. How (un)popular is that war in France? Please let us know in the comments about the reactions you see in the French media. 

Billmon: Anatomy of A(nother) Fiasco

[I]t’s a pretty strange world where the sworn goal of US diplomacy is to put the country in a situation where it may have to go to war with another nuclear power (or back down ignominiously) to defend the sanctity of borders drawn by Josef Stalin and Nikita Krushchev. Leaving aside the raving hypocrisy (Kosovo, Iraq) it’s an alarming sign that the national security and foreign policy elites of this country – in both parties; and not just among the lunatic neocon fringe – are totally out of control.

…
If you caught Andrew Bacevich on Bill Moyer’s show the other night, you may have noticed that his biggest complaint was not that US foreign policy is misguided and destructive (although he clearly thinks it’s both) but that it is being conducted in a democratic vacuum — despite all the florid rhetoric about promoting democracy. We may still go through the motions of a republican form of government, Bacevich says, but the fabric has gotten pretty thin: or, in the case of our national revival of the Great Game in the Caucasus, damned near invisible.

How long before it tears completely?

The President of Pakistan former general Musharraf resigned:

“Whether I win or lose the impeachment, the nation will lose,” he said, adding that he was not prepared to put the office of the presidency through the impeachment process.

It is very likely that Musharraf would have lost the impeachment procedure.

Until now Musharraf had promised to fight for his job, But behind the scene there were negotiation about giving him immunity if he steps down. The PML-N party of Nawaz Sharif was against granting immunity while the PPP party of Bhutto husband Asif Ali Zardari preferred this. Zardari, also named Mr. Ten-Percent for the bribes he took during the rule of his now deceased wife Benazir Bhutto, relies himself on a shaky immunity granted for his former deeds.

The current deal was furthered by the Saudi intelligence chief Muqrin bin Abdul Aziz who arrived in Islamabad two days ago. Nawaz Sharif is a Saudi client who spend his time as an exile in Saudi Arabia. He hates Musharraf who as a army chief overthrew the government when Nawaz was Prime Minister. To push him towards granting immunity now, the Saudis threatend to take away the $5 billion per year oil subsidies for Pakistan. That would have worsened the already very bad economic situation in Pakistan.

It is not clear who will follow Musharraf as president. It is rumored that the former chief justice Iftikhar Mohammad Choudhry who was kicked out by Musharraf and for who’s reinstatement Nawaz Sharif was fighting will be offered the job. That would keep him away from a position where he could lift the immunity of Musharraf and Zardari.

While the immediate situation will be again unruly the longer term prospects for Pakistan are certainly better without Musharraf.

The Washington Post editorial page gives us another classic piece of hackitude.

In Five Ways to Wreck a Recovery Amity Shlaes explains how certain policies made, in her view, the Great Depression worse than it could have been:

[F]ive non-monetary missteps were important in making the Depression great, and the same missteps damaged the global economy as well. While many are thinking about the Depression, few seem concerned about replicating these Foolish Five today: ..

First one wonders why she writes the piece at all. Only last month she claimed that the U.S. is not in a recession at all. Then why is she now worried about a recovery? (As experts then pointed out, Shlaes used a wrong definition of recession to make that claim.)

But let us take a look at the "five non-monetary missteps" that as Shlaes says made the depression great.

She lists:

• protectionism, i.e. the Smoot-Hawley Tariff Act
• the investigation of the stock market crash by the Pecora commission and the creation of the SEC
• tax increases "during a downturn" like done by Hoover and FDR
• big government programs like the new deal
• some unspecified "inconsistencies" she attributes to the Roosevelt administration

If these non-monetary policies made the depression great or greater, than we should see some relation of their implementation to the Gross Domestic Product development that followed them.

Now take a look at this graph.

Cont. reading: Amity Shlaes Forges Historic Sequences

He has made the principle that the exercise of military power sets the bargaining table for international relations a consistent theme of his career ever since, and in his 2002 memoir he wrote that one of his lifelong convictions was “the imperative that American power never retreat in response to an inferior adversary’s provocation.”
NYT: Response to 9/11 Offers Outline of McCain Doctrine

So how would McCain, in the position of the President of the Russian Federation, have handled Saakashvili’s splendid little war.

Let’s look at the first issue I highlighted: "military power sets the bargaining table"

With that conviction, McCain certainly would not have refrained from bombing the runway of the Tbilisi’s international airport. He would not have let happen the Georgian army’s hasty retreat from Gori to Tbilisi without creating another highway of death. He would not have allowed the U.S. to fly in those 2,000 Georgian reinforcement troops while the fighting was still going on. Those are indeed the things that ‘set the bargain table’ and that now seem to bit a troublesome for the Russian’s.

Imagine how none of the stream of international ‘guests’ that propped up Saak in the media over the last days could have reached Tbilisi. Imagine that his Georgian army would have been destroyed down to the very last tank on the road to Tbilisi. Imagine pictures of Georgian soldiers sitting for days on some U.S. air base in Iraq while the infrastructure of their homeland gets dismantled.

McCain as Russian president would have made sure that all those things would have happened to further the Russian position at the bargaining table.

I have seen comments that the Russian’s have ‘Ledeenized’ Georgia. Those comments referred to something McCain’s fellow neocon Michael Ledeen once said:

"every now and again the United States has to pick up a crappy little country and throw it against a wall just to prove we are serious."

The Russians certainly did not do that to Georgia. The military doctrine that encapsulates "throw it against a wall" is "shock and awe". But Tbilisi still has electricity, the hospitals are intact, the TV stations are broadcasting and its international telecommunications lines are still working. Shock and awe, or ‘Ledeenizing’, would have eliminated those comforts. But that did not happen to Georgia.

With McCain as Russian president it would have happened.

The second thing I highlighted are these "provocations" of an "inferior adversary". The biggest recent one I can think of was the big July maneuver in Georgia with the participation of over 1,000 U.S. troops. If McCain would have ruled in the Kremlin, that would have been enough provocation to get rid of Saakashvili as soon as those U.S. maneuver troops left.  There were many earlier provocations where Saak loudmouthed against Russia, had his people mortar and snipe Ossetians and the Russian peacekeepers and gave other reasons to get slapped hard like he should have been for his asking for NATO membership.

The Russians have been relatively quiet about all those provocations. With McCain ruling over the Russian Federation they would have answered with force simply because anything else could have been seen as "retreat".

With McCain in the lead, instead of first Putin and then Medvedev, Russia would by now probably be in a better global political situation. Short term, bullying works …

But for simple Georgians, the situation would be much worse. No electricity, no water, no food, many, many dead civilians … simply think Baghdad or even Fallujah.

It is good that McCain is not ruling Russia.

Should Moscow not scale back its actions, then the potential for escalation cannot be discounted. As a White House official explained to us: “This is a very appealing issue for Americans. We don’t like big nations bullying small ones.”

Swoop – Georgia: Checks on Pax Americana or a New Beginning?

Bullying?

"When I use a word," Humpty Dumpty said in rather a scornful tone, "it means just what I choose it to mean-neither more nor less."

"The question is," said Alice, "whether you can make words mean so many different things."

"The question is," said Humpty Dumpty, "which is to be master — that’s all."

Lewis Carroll – Through The Looking Glass

Much of the ring road — we call it the ring road — that links key provincial capitals to Kabul, is pretty well complete. And that’s important, because, first of all, road building brings jobs to young men who might be recruited to the Taliban. But roads enable people to get commerce to centers of trade. In other words, roads promote enterprise. Enterprise provides hope. Hope is what defeats this ideology of darkness.
President Bush Discusses Progress in Afghanistan, Global War on Terror , Feb 15, 2007

Yes, these roads bring jobs. For young Chinese men.

Anyway. It seems like "this ideology of darkness" recently has some astonishing successes:

Between 100 to 150 US troops have withdrawn from a strategically important district of the the Afghan province of Ghazni, officials say.

They say that soldiers retreated from the district of Nawa after repeated attacks by Taleban insurgents.

It is not only the soldiers who fled adjusted the front:

"All police and government staffs have evacuated from the Nawah district this morning due to lackness of essential supplies," the official said, "Taliban militants took the district center without using a bullet."

The district, marked green, is of special interest because it is right next to the (blue) Afghan ring road part that connects Kandahar and Kabul (Bagram), the two biggest foreign bases, and eventually to Pakistan.

complete map
Note: the red roads are ‘projects’. They do not (yet) exist in a meaningful way.

Cont. reading: The Road War in Afghanistan