Mish headlines: Volvo Truck Orders Decline 99.63 percent; Auto Industry Faces Crash in US. Mish’s Volvobit is based on a Bloomberg commentary which ‘reports’:

Picture a highway gridlocked by 41,815 abandoned trucks — because Volvo’s order book got destroyed to the tune of 99.63 percent, with customers signing up for just 155 vehicles in the three-month period, the Gothenburg, Sweden-based company said last week.

I tend to check the numbers I post and the number of 41,815 less orders certainly is suspect.

First: The 155 number Volvo announced was just for sales in Europe, not worldwide as the Bloomberg commentary makes one believe. Volvo truck orders worldwide in Q3, which include Mack in the U.S., were 32,072.

Second: Here is what the Volvo CEO actually remarked on the 3rd quarter Europe order numbers:

In Europe, customers are continuing to adopt a wait-and-see attitude to the ordering of new vehicles and equipment. Moreover, they have increasingly opted to cancel already placed orders. For our part, we have made sure to diligently go through and cleanse out orders in order to secure the quality in our order books. The same number of orders that have been received in Europe during the quarter have been removed from the order books, which contributed to a virtual standstill in net order bookings.

Translation:

We fudged the order number in Europe over several of the last quarters but we have now decided to stop lying about these. Turns out we reported so many fake orders, that the total amount of fake orders we had to discard is just as big as all the real orders we got this quarter in Europe.

Here are the reported European order numbers for Volvo trucks picked from its various quarterly interim reports:

Cont. reading: Catastrophic Volvo Order Numbers Are Fake

Panic seems to set in over the situation in Afghanistan.

Two weeks ago people from Obama and McCain campaigns got a special briefing about Afghanistan:

Over two days, according to participants in the discussions, the experts laid bare Afghanistan’s most pressing issues. They sought to make clear that the next president needed to have a plan for Afghanistan before he took office on Jan. 20. Otherwise, they said, it could be too late.
…
The briefing on Afghanistan appears to have been the most extensive that Bush administration officials have provided on any issue to both presidential campaigns.
…
“The intent was to ensure that everyone understand that the situation is very fast-moving, and if the new administration spends three months trying to figure out what to do, it’s too late,” said one administration official who participated in the discussion.

Why couldn’t that wait two or three weeks? The possible decisions are anyway quite limited. There are three possible outcomes in Afghanistan.

1. The foreign troops retreat under fire.
2. The foreign troops negotiate a ceasefire with the major Taliban groups and retreat in orderly fashion.
3. An increase in force to train the Afghan army, hand the problem to them, retreat in orderly fashion while they cover your ass and then watch the Afghan army fail from the outside.

While some prepare for point two, the commander on the ground works on point three and asks for ever more troops:

Military planners now think they may need to send more than double the number of extra troops initially believed needed to help fight the war in Afghanistan.

The buildup in the increasingly violent campaign could amount to more than 20,000 troops rather than the originally planned 10,000, two senior defense officials said Wednesday on condition of anonymity because no new figures have been approved.
…
The Defense Department already has approved the deployment of about 4,000 people — one additional Marine combat battalion and one Army brigade to be sent by January.

…
The number of U.S. troops in Afghanistan has grown from fewer than 21,000 two years ago to more than 31,000 today.

With 150,000 U.S. troops in Iraq it is unlikely that the field commander’s request can be fulfilled. It is either Iraq or Afghanistan, not both of them. But even if troops could be moved within a few month, what would they be able to achieve except to anger more Afghan people. More troops with their long and thick logistic tail are certainly not the way to some solution in Afghanistan. The can only delay the necessary retreat.

There are only few journalists in Afghanistan and I assume we only get little news of what is really happening there. The doubling of the reinforcement request and the extraordinary briefing of the campaigns point to some real panic over the situation on the ground.

Petraeus said the flow of foreign fighters from Syria to Sunni insurgent groups including al Qaeda in Iraq has declined to 10-20 people a month from a height of 160.
Petraeus sees increasingly durable gains in Iraq , Reuters, Oct 7

The helicopter-borne attack into Syria was by far the boldest by American commandos in the five years since the United States invaded Iraq and began to condemn Syria’s role in stoking the Iraqi insurgency.

The timing was startling, not least because American officials praised Syria in recent months for its efforts to halt traffic across the border.
U.S. says Iraqi militant killed in Syria raid, IHT, Oct. 28

Thousands of Syrians have taken to the streets of the capital Damascus to protest against a US raid which killed eight people near the border with Iraq.
…
Syria has demanded a formal apology for the raid and has threatened to cut off co-operation over border security if there is any repeat of the incident.
Syrians march in protest at US raid, Al Jazeera, Oct. 30

A private Syrian television station also reported that Damascus was reducing the number of troops on its border with Iraq in response to the "American aggression." The station, Dunia, showed footage of what appeared to be Syrian troops dismantling positions on the Iraqi border and leaving the area.
TV Station Reports Damascus Pulling Troops From Iraq Border In Response To "American Aggression", CBSnews, Oct 31

If confirmed, that is a smart move in my view. If the result of any effort to accommodate the U.S. is only to get bombed, why should Syria bother at all about who goes from Syria to Iraq?

The Baltic Dry Index measures cost for cargoes of raw materials by sea.  It was around 2,000 points in the beginning of 2006. It jumped to 12,000 in mid 2008. Since then it fell to 925. That is an unprecedented collapse of freight rates.

But its not only raw material transport which slumped. Yesterday I took this picture of a usually empty part of Hamburg harbor.

bigger, other perspective

These are five perfectly good feeder ships, normally used to distribute oversea containers coming from China to the Baltics and up to the UK, Sweden and Norway. Now they are moored to dolphins in the middle of the river.

I pass the place quite often and I never saw more than one ship laying there except during Christmas week. But I used to have a book with a harbor picture taken at the same place during the Great Depression. It showed some 15 out-of-work ships moored there.

These feeder ship are owned by small investors through private closed funds sold by local banks here. While Greece and Japan own the big bulker fleets, German private funds dominate the worldwide container ship market with ownership of some 3,000+ ships.

Having these out of work, will hit the income of a lot of normal folks around me.

Those ships are the first big locally visible sign of the downturn I noticed here.

What are signs in your area?

Samuel Wurzelbacher (aka. Joe The Plumber): "Obama’s presidency would mean the ‘death of Israel’.."

Raw Story via  Friday Lunch Club

If only …^*

^* the remark does not relate to the people living throughout Palestine, but to the zionist fiction of some democratic Jewish nation state with undefined borders, without a constitution and which is neither democratic nor Jewish.

Some ‘western’ military chiefs urged talks with Taliban to find a political solution to the conflicts in Afghanistan and Pakistan. Now everyone seems to have agreed to the plan:

The announcement that contacts would be sought with the Taliban came at the close of a two-day gathering of elders and prominent figures from Pakistan and Afghanistan.

"We agreed that contacts should be established with the opposition on both sides," said former Afghan foreign minister Abdullah Abdullah, who led his country’s delegation to the meeting in the Pakistani capital, Islamabad.

These plans have the support from the U.S. government. But now comes the big question. Who are the Taliban?

The recent talks the Afghan government held in Saudi Arabia were with former Taliban officials who are no longer involved in fighting and with Gulbuddin Hekmatyar, a longtime competitor of the original Taliban.

In Pakistan a group named Tehreek-e-Taleban led by Baitullah Mehsud is fighting against the Pakistani government in north-west Pakistan. (Some Pakistanis allege the group has Indian and U.S. support.)

In Afghanistan there are many groups, all labeled Taliban by the ‘western’ media, fighting against the foreigners and the government. Some of them have bases in Pakistan others do not.

U.S. drones have several times attacked Jalaluddin Haqqani’s houses in west Pakistan. His clan and organization fight on both sides of the Durand line and were on and off allies of the old Taliban. As a former mujaheddin Haqqani enjoyed U.S. support as an anti-Soviet fighter.

The Hezb-e-Islami Afghanistan (HIA) led by Gulbuddin Hekmatyar is anti-Taliban but famous for switching sides on a moments notice.

The original Taliban are said to be led by Mullah Omar and headquartered in Quetta in Pakistan’s south western Balochistan province. There are also several neo-Taliban groups solely based in Afghanistan.

Added to the mix are various types of ‘foreigners’ which the ‘west’ all labels al-Qaeda. Some are Arab fighters who fought against the Soviets and later settled in Pashtun areas on both sides of the border. Others are fresh recruits from the Gulf, a few Uighurs from west China and some veterans from the Chechnyen wars.

So while talking with the Taliban is now the new rage, who will these talks actually be with?

As there is no leader of all these ‘Taliban’. There is no single person or group to talk with. There is also no real offer. The U.S. seems to be determined to stay in Afghanistan but the most important request from all the separate groups is a retreat of the foreign forces.

The U.S. may try to bribe this or that leader to temporarily switch sides. But I doubt that an Anbar province like full sized bribery will work in Afghanistan.

Some of the above are likely making more from the drug trade than the U.S. will be willing to offer. The Canadian military is paying local Afghans $300-500 a month to guard Canadian soldiers in their camps. The various Taliban are said to offer $300 a month to their fighters, while the Afghan army seeks recruits but pays only a slim $135. Imagine only what effects competitive incentives for turncoat ‘Taliban’ will have on the creation of a competent Afghan army.

The plans to now negotiate with the ‘terrorists’ are therefore likely to end nowhere unless the ‘west’ is willing to retreat.

The financial turbulence brings up all kind of strange stories like Citibank’s crazy business model. Here is another one.

As the recession settled in, car sales have tanked and car makers are in trouble. But this week Volkswagen shares exploded and for a few minutes Volkswagen was, on paper, the world’s most expensive company. This is the mother of all short squeezes.

What happened:

Cont. reading: Volkswagen Shorts Get Run Over

A screenshot of the current homepage of Citibank in Germany (Via EuroIntelligence).

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The bank offers consumer-credit up to €50,000 starting at 3.99% effective yearly interest rate. In the lower right corner, Citibank offers 5.15% interest on 12 month fixed deposits.

Citibank is borrowing at 5.15% and lending at 3.99%? That will certainly generate some great turnover, but why is that supposed to be a sane business model?

Because of income tax on interest it would likely not be profitable for me to borrow from Citibank and deposit the borrowed money with them. But how does this work from Citibank’s perspective?

What the f— was yesterdays special operation strike against Syria about?

A reader at Joshua Lanid’s blog reports:

I just spoke on the phone with a doctor in ABou Kamal- He confirmed that the attack happened around sunset. The 4 helicopters came from the East of the township, he saw them coming. The soldiers debarked and shot people who were working in a building under construction on the periphery of the township.

9 people were pronounced dead on arrival to the hospital- Two more are severely wounded and are being operated on right now [he does not expect them to survive]- He has not read the papers (there are none to read at this time of the night) nor listened to the news and there is no internet there….His report was completely spontaneous-

I was not able to get the details on the ages of the injured but he described them as poor simple people (Masakeen) from the town. If the matter were otherwise, he would have let me know.

There were no recent reports or accusation from the military against infiltration in Iraq from Syria. So what was the point?

Such an invasion of a foreign country must have been ordered from the highest level of the White House.

The only motive I can think of is that this is supposed to help McCain. Others suspect the same:

What better way to move the American people back to a neoconservative view than by provoking a Syrian/American conflict days before one of the most fateful elections in American history. Most Americans are fed up with foreign wars, unbelievable debt from those wars, and economic failure. Yet if we can provoke Syria into retaliating against the United States somehow, then we can terrify the American people enough right now before the elections. Then they will vote from fear, not from the perspective of pragmatism and realism, and certainly not from a position of vision and hope. It has happened before in history.

But Syria is very unlikely to retaliate. It did not retaliate when the Israelis bombed the box on the Euphrates a year ago. It did not retaliate when Israel in February killed Hezbollah leader Imad Mughniyeh with a car bomb in Damascus. Instead Syria continued with a policy of building better relation with its neighbors and even, for the first time in history, officially acknowledged the borders of Lebanon.

So if this was an attempt to stoke up an additional war, the lack of judgment is astonishing. Then again – the neo-cons have never shown good judgment at all.

The Real News Network is a fine new medium and Jay Paul is doing real good in building it up.

Here is his recent series of interviews with Howard Zinn.

In the first segment, Zinn says one should vote for Obama. But he makes a very important additional point.

Voting for Obama will only bring change if there is constant, huge pressure on him to really move towards real change. Such pressure will require a social movement and direct civil action to have some relevance.

Obama will only end the wars if some anti-war movement gets loud again. He will only raise taxes on the rich if there is public pressure to do so. He will only stop giving taxpayer money to the owners of the banks if there is civil action to pressure him to instead hand the available money to those in need.

When did Obama ever talked about the poor? He talked about the ‘middle class’. When did he talked about the poor?

Zinn sees the current situation comparable to the 1930s. Only direct action, labor strikes and civil disobedience moved FDR to implement the programs he implemented.

The good thing about this recession is that the indignation level of people may actually rise to a point to pressure Obama to really do something sensible. It still will need a lot of agitation and activism to counter the usual slump in activity after the election and to turn that indignation into pressure. Obama will do nothing significant, if he is not pressured from the street to do do so.

Think about that and what you probably could do after the election and prepare for now.

Zinn’s advice is not only to U.S. people. Obama has been hailed as the savior in European media. This to give him leverage to ask, for example, for more European troops for the senseless war in Afghanistan. Only an increase in action to counter such moves, real public pressure, will lead to a real change of course.

Any action will have to start soon after the election as it might decide about the selection of various ministers or secretaries. If you do not want Dennis Ross as sec-state, be ready to have an argument against him and voice it loud. If you do not want another former Goldman Sachs CEO as sec-treasury (Rubin) be ready to have an argument against him and voice it loud.

Be ready to take the streets over these issues. Be ready to ask other to also take to the streets and have an argument ready to convince them to do so.

While not driven by my recommendation to declare all Credit Default Swaps null and void the general idea seem to get a bit of traction.

At The Agonist Sean-Paul Kelly asks:

It seems to me that one of the most significant problems we face right now (and going into the future) is CDSs. What would happen if the Federal Government simply said: "they are all dead trades. if you sold protection you are off the hook, if you bought it, too bad"?

He points to a NYT piece which includes this:

Janet Tavakoli, a finance industry consultant who is president of Tavakoli Structured Finance, said the stock market’s gyrations are a result of a severe lack of confidence in the very officials who are charged with cleaning up the nation’s mess.
…
She also suggests that financial regulators impose a form of martial law, allowing them to rewrite derivatives contracts that bind counterparties to terms they may not even comprehend.

Chua Soon Hook who runs a profitable billion dollar fund for Asia Genesis Asset Management explained on Bloomberg TV how CDS are now used to raid leveraged companies and even  countries.

Hedge funds and banks load up with cheap credit insurance via CDS for debt of a company or country. They then short that companies stock. With that, the stock value of the company sinks, the default likelihood of that company increases and the value of the CDS bought goes up. This gives the fund money to buy more credit insurance which, as other market participants watch the increasing default spreads, will again increase the default risk of the company and the value of the bought insurance and the value of the short.

Credit insurance can be written, bought and sold in unlimited number. A company’s $1 billion total debt can be insured a 100 times and more. Even if the likelihood of a debt default increases only a tiny a bit, a big CDS position in a thinly traded market may double in value pretty fast. The leverage possible with these instruments makes the above a very profitable deal. Chua suggests to immediately make the writing of any new CDS worldwide illegal.

A scheme similar to the above now gets some interest from New York State and federal prosecutors:

Prosecutors are looking at whether traders manipulated the largely unregulated market for credit-default swaps to drive down the price of financial shares over the last year, people briefed on the investigation said.

In an unregulated over-the-counter market  there are no rules and manipulation will be very hard to prove.

It seems to me that a similar raid tactic is now used to profit from problems in some countries:

The cost of insuring Russian bonds against bankruptcy rocketed to extreme levels yesterday. Spreads on credit default swaps (CDS) reached 1,123, higher than Iceland’s debt before it sought a rescue from the International Monetary Fund.

Russia has over $500 billion in foreign reserves. The high CDS spread is by all means totally out of whack with reality. But with a rumor here and there, I am sure it can be driven up even more and some holders of some CDS will profit a lot from that.

Like Chua I believe that these CDS make the crisis we are in much worse and create a lot of unnecessary damage in the real economy. If a company has to pay higher interests because of CDS bets against it, jobs get lost.

The markets that should reflect the real economy get out of whack because of unregulated instruments like CDS. The false sentiment they generated then influences the real economy. This is an example of Soros’ reflexivity.

So here again the steps to get rid of these:

At the same time:

• all financial exchanges and markets of the world close for a week
• CDS are declared null and void and new CDS creation is forbidden until new regulation is in place
• the publicly dealt financial entities have seven days to figure out and
  publicly restate the value of their liabilities and assets excluding
  all CDS
• a onetime windfall tax will be created that socializes overt advantages some entities will have from this
• the proceed of that tax shall be used to prop up the capital of the big
  losers in a program comparable to the Reconstruction Finance
  Corporation of 1932.

There is legal precedence (pdf) for such a big move.

The killing of the credit default swap markets, which only grew big over the last two years, will take a lot of insecurity out of the financial world, reintroduce confidence and bring lending back to normal levels. Even a threat to make CDS null and void, would be useful.

It still will need a while for people to get used to the thought that states could do such a thing. Please let me know if and when you see the idea mentioned elsewhere.

Tangerine says:

Thought this one might be relevant now.

It is colorful and lively.

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G8

photo, 2003

by Tangerine

Typepad still sucks.

Open thread …

Personally, I’m just waiting for the first right-wing wacko blogger to make the argument that even if Todd did lie, her story was "mythically" true because it represents the real life experience of so many delicate blossoms of young Caucasian womanhood.

Given the mental and emotional similarities between the "post-modern" left and the "pre-rational" right, I suspect it’s only a matter of time.
Billmon: The Conservative Tawana Brawley

Yesterday two former ‘bipartisan’ senators had an op-ed in the Washington Post calling on the new U.S. president to launch an outright attack on Iran after some sham negotiations:

[W]hile a diplomatic resolution is still possible, it can succeed only if we negotiate from a position of strength. This will require better coordination with our international partners and much stricter sanctions.
…
Both to increase our leverage over Iran and to prepare for a military strike, if one were required, the next president will need to begin building up military assets in the region from day one.

That op-ed is the based on a report (pdf) by an allegedly Bipartisan Policy Center.

Jonathan Schwarz summarizes the logic of the op-ed:

We’re Going To Attack You If You Try To Get The Power To Stop Us From Attacking You.

Now that would be correct if Iran would really try to get the power to stop the U.S. from attacking, i.e. to acquire nuclear bombs. But the IAEA and the U.S. intelligence community say Iran is not even trying. The correct summery of the op-ed’s logic is thereby:

We’re Going To Attack You If We Assume You Try To Get The Power To Stop Us From Attacking You

Glenn Greenwald shows how little real ‘bipartisanship’ the Bipartisan Policy Center really includes. Its report (pdf) is essentially an AIPAC product written by the American Enterprise Institute neocon Michael Rubin.

Helena Cobban points to the role of Dennis Ross, the zionist-neocon ex-Reagan, ex-Bush I, ex-Clinton hand. Ross is now Obama’s middle east adviser and a member of the ‘bipartisan’ group. 

Jim Lobe suspects Dennis Ross is trying to maneuver Obama into attacking Iran:

Cont. reading: Dennis Ross Prepares For War On Iran

Four days ago we mentioned the possibility of a U.S. default. Via naked capitalism we now learn that some folks in Taiwan take such talk seriously:

Regulators in Taiwan ordered insurers to limit their holdings of Freddie, Fannie, and Ginnie Mae paper. The stated reason was that they could not assess the credit risk and could not rely on published ratings. The explicit repudiation of rating agency ratings seems to be the first move of this type. and may be the beginning of a trend.

This statement either shows considerable ignorance or is an early warning of worries about the creditworthiness of the US government.
…
What calls this action into question, however, is that inclusion of Ginnie Mae on the list. Ginnies are full faith and credit obligations of the US government. If you are worried about the payment risk on Ginnies, then you are worried about the creditworthiness of the US government, period.

On Wednesday Roubini gave a talk at a London hedge fund show (video 45 min, report.) He is getting gloomier again. The major points:

• the worst is still ahead of us
• we are again on the border of a systemic financial meltdown
• 2/3 of global GDP (countries) is in recession
• IMF may soon be out of money (see remark below)
• a panic is the stock market is possible
• expect stock market closures for several days
• politicians are out of possible policy responses
• we will have 2 years of recession
• followed by Japan like stagnation
• the crisis has geopolitical and social-political consequences (Roubini explicitly mentions China’s possible demand of Taiwan)

The IMF has $100 to $250 billion it can lend to countries in need. This is now too little. As the NYT reports today, there are talks of ‘western officials’ to somehow enable the IMF to lend up to $1 trillion to emerging market countries (Brazil, South Africa, Turkey.) The piece does not say where that money would come from.

The Fed has now acknowledge a loss of $2.6 billion on the $29 billion of loans it took over in the Bear Stearns bailout. Those losses will grow. AIG got a $123 billion loan line from the Fed in its bailout. $90.3 billion of these have now been used by AIG to pay off bad bets on Credit Default Swaps. AIG will need more money.

As Roubini says politicians are running out of policy options. The only policy response that I can think of would make a real difference is to declare all credit default swaps null and void.

A finance professional from Shanghai was on Bloomberg TV yesterday and came close to that: Chua Says New Credit-Default Swaps Should Be Banned. He believes that CDS are now used to manipulate (short) some currencies and stock markets and threaten to bankrupt whole countries making the situation even worse than it already is. He may well be right.

With concern of U.S. solvency now being official, some CDS issuers and speculators may think about this and try a trick or two against the U.S.  If Soros could break the Bank of England, could some savvy rich folks from Asia or the Gulf try a similar trick on a different country?

The Taiwanese regulators seem to think so.

While the election race is on it is important to keep up on how the wingnuts see it. You’ll have to live with them no matter what’s the outcome.

Washington Times did an interview with the now again maverick John McCain:

Sen. John McCain on Wednesday blasted President Bush for building a mountain of debt for future generations, failing to pay for expanding Medicare and abusing executive powers, leveling his strongest criticism to date of an administration whose unpopularity may be dragging the Republican Party to the brink of a massive electoral defeat.

"We just let things get completely out of hand," he said of his own party’s rule in the past eight years.

In an interview with The Washington Times, Mr. McCain lashed out at a litany of Bush policies and issues that he said he would have handled differently as president, days after a poll showed that he began making up ground on Sen. Barack Obama since he emphatically sought to distance himself from Mr. Bush in the final debate.

The return of the maverick in the public mind?

That highlighted poll reference may be caused by the IBD/Tipp poll, a seemingly conservative view prefered by freepers because(?) it doesn’t go into electoral votes, the only measurement that counts in the end. But that ‘poll’ caught this:

The Republican is making headway with middle- and working- class voters, and has surged 10 points in two days among those earning between $30,000 and $75,000.

Huh?

What would have cause that? Palin’s wardrobe bill that was, in 60 days, twice the yearly income of the top income families asked in that poll? That is somewhat implausible to me.

But then. Who knows?

Democracy does not mean that people vote their interest.

Now that is what I’d call a prime target:

Last week, after months of Pakistani delays, about 30 U.S. military trainers were permitted to set up operations north of the [Federally Administered Tribal Areas], a U.S. official said. The trainers will provide counterinsurgency instruction to Pakistani army soldiers, who in turn will train members of the Frontier Corps, the government’s paramilitary force in the FATA.
Pakistan Will Give Arms to Tribal Militias

Those 30 ‘trainers’ better watch their back.

Pakistan will provide arms to some parts of the tribes in FATA, who will then fight other local powers called ‘Taliban’.  Guess where those arms will end up when, as usual, this or that group changes its allegiance.

The policies in and around Pakistan are again full of inconsistencies. During the last weeks the U.S. has some 12 times used drone-missiles to bomb targets in FATA. Today, it killed nine people in such an attack.

Only yesterday after two weeks of negotiation the two houses of parliament unanimously adopted a resolution calling for "an urgent review of the national security strategy and revisiting the methodology of combating terrorism in order to restore peace and stability through an independent foreign policy."

The resolution also said:

The challenge of militancy and extremism must be met through developing a consensus and dialogue with all genuine stakeholders.

…
That Pakistan’s sovereignty and territorial integrity shall be safeguarded. The nation stand united against any incursions and invasions of the homeland, and calls upon the government to deal with it effectively.

That Pakistan’s territory shall not be used for any kind of attacks on other countries and all foreign fighters, if found shall be expelled from our soil.

That dialogue must now be the highest priority, as a principal instrument of conflict management and resolution. Dialogue will be encouraged with all those elements willing to abide by the Constitution of Pakistan and rule of law.

Somehow that resolution does not fit with arming tribal forces and U.S. missile attacks on Pakistani ground.

But the Pakistani president Zardari, now as despised as the General Musharraf was before him, does not care about what the parliament or the people think.

That could for now be excused as Pakistan is only weeks away from defaulting on its debt. All ‘friends’ of Pakistan have so far declined to lend money. Zardari is on his way to Saudi Arabia to ask again while his prime minister is in China to again beg for help. The humiliating walk to the IMF seems inevitable. But even before the economic crisis Zardari has never shown any distance to the politics proescribed from the U.S.

The continued U.S. attacks on FATA may well incite even more tribal people against the Pakistani government. One suspects they are planed with the aim  to keep them busy against the Pakistani state so they will leave the occupation forces in Afghanistan alone.

That would be a miscalculation. By now most Taliban action in Afghanistan seem to be indigenous and the line of supply for these forces in south and west Afghanistan is coming from the south through Quetta, not from the eastern FATA.

With severe economic problems like daily electricity blackouts getting worse and coming additional IMF strictures one can easily imagine that Pakistan will soon be again in a struggle against a U.S. influenced ruler who acts against the interest of his people and the expressed will of the parliament.

China Hand asks if military rule will come back to Pakistan within the next year. I find that more likely by each day.

NATO sent a small flotilla to the coast of Somalia. Additionally there are ships from Russia, Britain, India and the U.S. in the area. Supposedly they are looking for pirates along the 1,880 miles of Somali coastline.

But nobody knows what these ships can really allowed to do. What distinguishes a pirate boat from fishermen?  What could be done when some fishermen are observed capturing a cargo ship. Are Somalis boarding an international ship which is illegally fishing in Somali waters pirates or  informal coast guards?

"We don’t know," say’s NATO:

U.S. Admiral Mark Fitzgerald said while he was aware of where the pirates were operating, there was little he could do militarily to stop them and that guidelines on how to take them on — including whether to shoot — were still in the works.

"You know, I don’t think we’ve gotten the rules of engagement yet from NATO," Fitzgerald told reporters on Monday during a briefing on U.S. naval operations in Europe and Africa.

Those rules of engagement will likely be very restricted.

The German frigates who are part of the NATO flotilla are, for example, not allowed to engage pirates at all. The German constitution sees pirates as a police problem, i.e. a state coast guard issue, not a federal military task.

Other countries have similar restrictions:

[The Danish] captured 10 people, but after holding them for six days aboard a Danish ship, the suspects were set free and put ashore in Somalia because the legal conditions surrounding their detention were unclear.

Denmark’s Defence Ministry said Danish law did not allow for prosecution of the men before a Danish court. The ministry said it had explored the possibility of handing them over to other countries but that was also not feasible.

There is now a UN resolution which allows some measures against pirates in Somali waters, but this is unlikely to change national caveats.

Unless the world accepts and negotiates with a Somali government that the Somalis
themselves recognize as legitimate, there is little anyone can do about
the problem.

Despite all the media notice piracy around Somalia gets, it is by far not the most dangerous area. The International Maritime Bureau lists the coasts of Nigeria, Indonesia and Tanzania as comparatively more dangerous waters. 

For now crewmen on board of cargo ships ready to hose down lots of water on anyone trying to board their ship seem to be the best defense against piracy. The IMO’s advice to captains:

Water hoses compel the attackers to fight against the jet of water that may also swamp their boats and damage their engines and electrical systems. Water pressures of 80lb per square inch and above have repulsed boarding parties. Special fittings for training hoses may be considered to provide protection for the operators. A number of spare fire hoses could be rigged and tied down to be pressurized at short notice if a potential attack is detected.

That is certainly cheaper and likely more effective than the current toothless cannon-boat policies.

Barfly vbo pointed to this amazing video in a recent comment.

On the left John Howard, then Prime Minister of Australia. On the right Stephen Harper, now Prime Minister of Canada, and leader of the Conservative Party of Canada.

Who wrote their speech?