Asian Markets Plummet Tuesday

Tuesday, September 16, 2008

From the AP:

Japan’s benchmark Nikkei 225 index was down 5.3 percent to 11,560.66 in mid-afternoon trading, while Hong Kong’s blue-chip Hang Seng Index shed 5.7 percent. Both markets — Asia’s two biggest — had been closed for holidays on Monday, when news first broke about the dramatic events on Wall Street.

Across the region, markets were all deep in the red. South Korea’s Kospi was down 5.4 percent, Taiwan’s benchmark was off 4.7 percent and China’s Shanghai index was down 3.2 percent.

I have warned, repeatedly, on this page about the impending global economic meltdown. If it has finally begun, we’ve just got to sit tight and get the bad blood out of the system. There is simply no way to avoid this, and stopgap measures really only prolong the pain. The problem underlying the whole mess is massive, poorly secured (if secured at all) debt. The financial industry is swimming in it.

But, in a sense, we are all at fault. America, and more generally, Americans, is up to its eyeballs in debt. We simply cannot afford to borrow more money to prop up public companies. Bear Stearn was a failed stopgap. Fannie and Freddie were really too big to fail. But now Treasury and the Fed have drawn the line. After all, with a $400 billion current budget deficit, $10 trillion in debt (not too mention the potential liabilities of Fan and Fred, which they are keeping off the books), and the money we are hemorrhaging in the strategic and financial disaster that is Iraq, we cannot shoulder an additional burden.

This has been building for a while, and it’s not going to be pretty, but we will recover. It’s just going to take a long, long while.

Try not to panic.

And, please, for the love of God and all that is holy, don’t dare but McCain/Palin (!) in charge of cleaning up this mess. An American default is possible. A Great(er) Depression is possible. Intellect counts.

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McCain: Palin Top Energy Expert in America

Thursday, September 11, 2008

Along with that doozy, he cites this expertise and Alaska’s proximity to Russia as her national security credentials. All while wearing a creepy, shit-eating grin.

Sorry, for whatever reason, WordPress won’t let me embed it. I’ll figure it out and post it later. In the meantime, find the video here.

Can you say overconfident? Watching this video, you know McCain is going down.

(H/T Jonation Martin, Politico)


Will Politics Destroy Our Military Victory in Iraq?

Friday, August 22, 2008

Of course. This is not even a question. We have won the war in Iraq. In recognition of this fact, the U.S. and the Iraqi government have agreed in principle to a time frame that gets all American troops out of the country by 2011 (basically, adopting Barack Obama’s plan). Our soldiers should be welcomed home as the heroes they are.

But what happens between now and then, and after that point, will determine if our victory holds. You can be assured that it will not. And this is the reason why W., McCain, and the rest of the neocons have made the biggest strategic mistake in our country’s history. They have won a war militarily that cannot be successfully resolved to our benefit. The Shiite-led Iraqi government is in bed with the Iranians. Already, they are going after the leaders of the Sunni Awakening movement that has been the largest part of the success of Petraeus’s strategy. By doing so, they will foment more chaos, more war, and drive the Sunni to terrorism, while bringing the Shia closer to Iran.

We must guard against the political mistakes of the Iraqi government and the American neocons. Our troops must not stand in the way of this civil war. We cannot afford the lives or the treasure. The battle now must be between the Iraqis. The “aspirational goal” of removing all troops by 2011, must come to pass. Get our troops out. They have done their job.

We have won the war, but we will lose the peace. This outcome, which we should all hope and pray will not happen, will be entirely the fault of the worst president in the history of our country, George W. Bush, and his neocon enablers, McCain now foremost among them.

Don’t let these men hold our troops hostage to the internal politics of Iraq. Bring our troops home and let the Iraqis fight the rest out for themselves.


Inflation Up 5.6% in the Past Year

Thursday, August 14, 2008

The Labor Department’s Consumer Price Index rose .8% in July on a seasonally adjusted basis, double what was expected. This figure helped raise consumer prices from July of 2007 through July of 2008 by a total of 5.6%.

This is the biggest increase in 17 years.

Other good news announced today:

New claims for jobless benefits were higher than anticipated at 450,000 and wages have decreased. From a story by Shobhana Chandra on Bloomberg:

Today’s figures also showed wages decreased 0.8 percent after adjusting for inflation following a 0.9 percent drop in June. They were down 3.1 percent over the last 12 months, the biggest year-over-year decline since 1990. The drop in buying power is one reason economists forecast consumer spending will slow.

And so it continues: higher prices, lower wages, rising unemployment. Anyone who tells you this is over soon is a liar or a fool.

Update (8/19/08): Here’s Brian Wesbury in the Wall Street Journal on the dangers of inflation.


Shock: Wall Street Journal Praises Obama

Monday, August 11, 2008

This actually happened on Friday, but I didn’t get around to reading it until today. The Wall Street Journal, as conservative an editorial page as there is, actually praised Barack Obama for his strong dollar statements at a town hall forum in Ohio. Quoth the Journal:

This ought to be a bigger story. In linking the dollar to oil prices, Mr. Obama is pointedly at odds with the Bush Administration and Federal Reserve, both of which blame high commodity prices on supply and demand, despite falling demand due to slower global growth. Fed officials — in particular, Vice Chairman Donald Kohn — have expressly rejected any strong link between the dollar’s collapse and the oil price surge since last August.

This conveniently absolves the Fed and Bush Treasury of responsibility for the consequences of what has been their destructive and all but explicit dollar devaluation strategy. If the Illinois Senator rejects greenback debasement, that’s the best news to date about Obamanomics.

Not exactly a ringing endorsement but, considering the source, high praise indeed. For what it’s worth, Obama and the Journal are right. Bernanke has done a good job thus far containing the Housing Crisis/Credit Crunch, but inflation is on the march, and it’s spreading around the globe (despite the recent decline in the price of oil). It’s soon time for him to begin hiking rates. This will help control prices and help Bernanke find balance in fighting the many ills afflicting our economy.

In any case, maybe the Wall Street Journal has begun to see that Obama is this country’s best bet for the future. It is frightening to think of the impulsive and disorganized John McCain in charge of the world’s largest economy. I imagine the editors of the Wall Street Journal must sometimes realize that same fear.


Benny Morris and the Inevitable in Iran

Friday, July 18, 2008

The famed Israeli revisionist historian Benny Morris has penned a piece in the New York Times today basically stating that war with Iran is inevitable. Either Israel or America (more likely Israel) will bomb them, he predicts, in the Bush lame duck period between November 2, 2008 and January 20, 2009.

Israel, believing that Iran is building a bomb, is under intense pressure to launch an attack before Bush leaves office. This is a shame. The channels of diplomacy have not been given a chance to work. This timeframe is too short. Israel must hold off until real and serious negotiations can take place, likely after an Obama administration takes office. Provoking a broader war in the region that will certainly draw in the U.S. while America is still under the thumb of an despised and unpopular lame duck (who will support the attacks) may seriously backfire with the American people.

Will Israel be able to count on U.S support? Probably. But just how much is the question. In case you haven’t noticed, we’ve got plenty of troubles of our own, and Americans have no appetite for expanding our war in the Middle East. Bombing Iran will mean, truly, the beginning of full blown regional war.

Let’s not go there just because Bush is leaving office. If, as Morris states, the Iranian’s are really one to four years away from the point of no return, then we still have time to talk. On this front, it’s time for Bush and Olmert to get on the ball.


Seymour Hersh and the War in Iran

Thursday, July 10, 2008

Reading Seymour Hersh in the New Yorker is like reading a spy novel crossed with the blind items on Gawker; lots of dangerous intrigue by politicians, soldiers, and spies, some anonymous gossip, and more than a hint of something still unknown. He’s really in a class by himself with this kind of reporting.

In his latest piece, Hersh travels in the murky areas of the intelligence community to reveal America’s covert operations in Iran and the push, largely by Cheney, to enhance those operations and, it seems, provoke a war. It’s a fascinating article, as all of his writing for the New Yorker has been, and worth reading.

The situation in Iran is a difficult one. For all the obvious reasons, America does not need a war with Iran. With that said, Iran is clearly dangerous and they cannot be allowed to make a nuclear weapon. The Bush/Cheney approach of using Special Ops and indigenous surrogates to carry out attacks and assassinations, according to the article, has met with some resistance from the military and intelligence communities. What has worked in other parts of the Middle East and Pakistan, may not work so well in Iran. So what to do?

Elect Obama President. The reason? He will try to negotiate a legitimate settlement of this issue. If someone actually goes to the Iranians without a belligerent stance (Bush demands that they halt enrichment work before negotiations can start), it might – might – settle the issue. And if it doesn’t? Well, then we know for sure, and the military option becomes legitimate.

After all, just consider all the time Bush has wasted in these years while Iran has continued to enrich uranium. Economists talks about opportunity costs. The entire Bush administration has been an astronomical opportunity cost, not least in our dealings with Iran.

Here’s Michael Schwirtz and Alan Cowell in the New York Times on the recent saber rattling.