slight correction re: Latvia’s currency crisis is a rerun of Argentina’s:
1) It’s not Roubini (though his org) commenting, rather Mary Stokes.
2) As commenters on that article point out (snipped from several of ’em):

Latvia entered the crisis with public sector debt of 12% of GDP versus 60% plus for Argentina, plus with much better capitalized Swedish parent banks; (…) nominal wages have come off 20% or so since end 2008. Correct me if I am wrong but that didn’t happen in Argentina?
Anonymous on 2009-06-11 04:49:06

Mr. Shriver, is your point that the US is destined to fail since its currency is pegged (the dollar is essentially pegged to the dollar), and its running the largest current account deficit in the world? Where is the monetary flexibility if you cant devalue versus the Chinese? Forget Latvia, let’s talk Washington D.C. You dont see the US congress come up with 3% of GDP worth of budgetary cuts over a weekend the way the Lats have just done..

I’m also struck by that articles entire focus on macro data, w/virtually no mention of Latvia’s nuts & bolts economy which, (and I’m no expert on Latvia but…) to best of little info I’ve picked up, is based largely on productive real products…. as opposed to recent US DOW gains based on smoke/mirrors financials which have not only produced nothing, rather relied solely on accounting gimmicks and recycled TARP $$.

Posted by: jdmckay | Jun 11 2009 14:24 utc | 4

Obama team appears bullish on arms exports: Boeing:

By Jim Wolf – Wed Jun 10, 6:05 pm ET
WASHINGTON (Reuters) – President Barack Obama’s administration appears even more disposed to permit exports of advanced U.S. arms than that of President George W. Bush, a senior Boeing Co executive said Wednesday.
“I think we see a more active discussion on those things,” Chris Raymond, vice president of business development for Boeing’s military arm, told a briefing ahead of next week’s Paris Air Show.
The Obama administration’s interest in building the military capabilities of potential coalition partners seems to be “more of a conscious thought and discussion right now than maybe it has been in the past,” Raymond said.
“So I think that all bodes well for our allies and the discussions that would take place on things they’d like to have — on releasability around some of those things,” he added.
Under Bush, the value of worldwide U.S. government-to-government arms agreements rose nearly 50 percent to $24.8 billion in 2007 — accounting for 41.5 percent of all such deals.
The top five buyers were Australia, Turkey, Egypt, the United Arab Emirates and Iraq, according to a report on October 23, 2008 by Richard Grimmett of the nonpartisan Congressional Research Service.
U.S. arms sales involve complex tradeoffs. Among issues weighed by the administration and Congress are regional stability calculations, U.S. business interests and keeping cutting-edge military knowhow from leaking to third parties.
Michele Flournoy, the new undersecretary of defense for policy, underscored the administration’s commitment to concerted action last month.
Washington could use targeted arms sales to help partners boost their capacity to deal with perceived threats such as Iran’s missile program, she said.
“When we look at the full range of security challenges that we face — terrorism, proliferation, economic security issues, climate change — there is not a single one that the United States alone can deal with effectively,” Flournoy said.
“You need coalitions and partners to deal with these challenges.”
GREAT TIME FOR FIGHTER BUSINESS
Boeing’s Integerated Defense Systems — the top U.S. exporter’s military business — expects to report revenue of $34 billion in 2009, up from about $32 billion in 2008, Raymond said.
This would remain about 50 percent of Boeing’s total revenue, with commercial aircraft making up the other half.
Bob Gower, manager of Boeing’s F/A-18 fighter program, said this was a “great time” to be in the fighter business.
There could be decisions this year on competitions in Brazil, Denmark and Greece in which the F/A-18E/F Super Hornet is vying against rival warplanes, he said.
Another Boeing fighter, a proposed F-15 “Silent Eagle” featuring special coatings to reduce its radar signature for export clients, is projected to be flying by next year, in time for a planned South Korean competition.
Everything about the new F-15 is “internationally focused,” Brad Jones, the program manager, told the briefing. Boeing has been in discussions with potential co-development partners, he said, but declined to name any of them.
The extent to which the aircraft’s radar cross-section may be reduced hinges on what the U.S. government is willing to release for export, Jones added.
“The question is really not how low can you go,” Jones said. “It’s really how low are you allowed to go.”
Boeing executives said they see opportunities for the planned new F-15 to compete for Middle East and Asia sales against Lockheed Martin Corp’s multinational F-35 Joint Strike Fighter, which is in the early stages of production.
(Reporting by Jim Wolf; editing by Ted Kerr)

Posted by: andrew | Jun 11 2009 14:44 utc | 6

@andrew – the Revolutionary Guard has already warned of a color revolution. It would suppress it.

Posted by: b | Jun 11 2009 14:57 utc | 8

@loyal #3,
It seems to me that the Iranian people wouldn’t feel such a need to fight fire with fire (i.e., by keeping an extremist such as Ahmadinejad in power) if Israel hadn’t put such a fire-breathing extremist such as Bibi in power.

Posted by: Cynthia | Jun 11 2009 21:52 utc | 10

b@7
Ahhh… I read only Stokes piece, not FT link. I did read it this morning, and indeed Roubini does make “Agentina crisis” comparison. I also read you Latvia links… thanks.
I’ll say this: I’ve subscribed to RGB for some years now, and Roubini has been Oracle of reality since at least ’05… well earned rep. I’ve also come to conclusion through this period of world econ meltdown, that nobody has got it all right. From everything I’ve seen, meaningful econ recovery is well down the road, particularly in US. Reasons as I see it are primarily 2 fold:
a) core causes which precipitated this “event” have not been addressed at all, primarily calling to account the fraudsters who caused this mess. If anything, they’ve been refinanced on taxpayer’s dime with little done to prevent another bubble. And DOW rise recently, AFAIC, is just that… a bubble.
b) meaningful econ activity here (US)… defining it (eg: meaningful), laying foundation to achieve it, and channeling resources to that process… just hasn’t happened. By meaningful I mean, generally, what’s most needed: energy, homegrown expertise in cutting edge sciences required to address pressing needs… hasn’t happened.
So w/that in mind, from what I see, Roubini’s recent (+/- last 6 weeks) predictions for recovery late ’09/early ’10… personally I think he’s wrong.
As I said, I read your Latvia links. I didn’t see much in either detailing what I mentioned prior, eg: nuts & bolts of their economy… what they do. I also did some poking around since yesterday morning based on comments I quoted from Stoke’s article on differences between Argentina even and current Latvian actions and, it seems to me, commenters were correct.
Roubini says in your FT link:

depreciate the currency, euroise after depreciation, restructure private foreign currency liabilities without a formal “default”, and augment the IMF plan to limit the financial fallout. It is a risky strategy but – as in Buenos Aires nine years ago – when plan A does not work it is time to move to plan B sooner rather than later.

W/out defining nuts & bolts of Latvia economy as I mentioned, what strikes me about above FT quote is huge magnitude of difference in econ/currency environment world wide now, as opposed to time of Argentinian event. Particularly, real/meaningful tech development was exploding almost exponentially, infiltrating & transforming economic processes in virtually every sector. Advances were occurring at breakneck speed, w/huge promise for all kinds of stuff which, as it turns out, was (IMO) only nominally realized.
Additionally, at that time strength of $USD was near unquestioned, China was not yet emerged, EURO was in it’s infancy and an experiment viewed w/skepticism elsewhere… everything was different.
We now have future of $USD in doubt. China has fully emerged, and it’s influence could tip scales worldwide depending on their choice of actions. Currencies around the globe are in trouble, and US has no resources left to carry their water. In short, looks very much to me as though much of western world caught in a time warp w/mindset believing “prosperity” of late ’90s >> smoke & mirror DOW rise through +/- 06 is current reality.
I don’t think it is.
As I mentioned (and has been well documented all over good WEB econ blogs), recent DOW upswing all financials & oil, real econ activity on US shores unchanged (financials as % of GDP way too high, no recovery $$ arrived for “green” energy nor commitment generated for infrastructure to support it), etc. etc.
So coming back to Latvia, as I said I’m not really up to speed on exactly what their nuts & bolts are made of. But actions they’ve taken to trim costs in big way never happened in Argentina. More explicitly, Argentina mess was initiated by forceful IMF dictates codifying hugely oppressive conglomerate international corp. profit taking guaranteed by their government, at expense of their own poplulation’s development (much like Bolivia in last few years and their resistance to same). Argentina’s economic “miracle” was a bubble waiting to happen, sold to public as fundamental wealth building when it wasn’t (much like mortgage CDS scam)…
As you said, Latvia’s econ built on private enterprise and, from little I know (but some), legitimately so. This is the stuff, IMO, the world needs and is the definition of sound morally based “free market” (as opposed to what we’ve been sold her through Bush years). Most certainly this was the case in Romania/Bulgaria w/their burgeoning, high quality & homegrown tech sectors.
The transformation in all this realigning world economies which IMO needs to happen is a recognition of doing work that matters with currency value following those achievements (or lack thereof), respectively. Rather now, as has happened leading up to current mess, it is the currency wagging the production with said currencies being manipulated in all kinds of ways to create illusions of wealth they represent. It’s bass-ackwards, leaving Wall street again poised to determine winners/losers for same reasons they sold CDS fraud, etc etc.
From what I’ve seen of Roubini lately, I’ve been of mind for several months now that his reliability on the econ future may beginning to run it’s course. Just my “finger in the wind” sense of things, hope I’m wrong.
Ok, just my $.02 USD (and falling fast)… and as usual thanks for provocative posts and meaningful insights.

Posted by: jdmckay | Jun 12 2009 13:29 utc | 12