Month: July 2008

Mexican Oil Industry Legislation Update

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I think that it’s fairly clear that the right wing PAN is attempting a back door privatization of Pemex, the state own oil producer, while the PRD sees any change as an theft from the Mexican people, and the PRI falls somewhere in between.

The problem is that Pemex has not been run well, and it is lacking resources as a result, so some sort of reform is necessary.

I still believe that purchasing the necessary expertise, as opposed to “risk sharing partnerships” that are a back door way of privatizing the system, are the way to go.

Core of US Army Corroding

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While the military press, and military experts, have been wringing their hands over the flight of junior officers from the military, I’m not concerned.

The US military has 1 officers for every 5 enlisted men, twice the historical rate of 1:10, so I think that there is plenty of margin there.

That being said, Salon’s report that the army is now being forced to promote unqualified soldiers to senior NCO positions to meet the challenges of the Iraq campaign is very troubling.

Senior NCOs are the heart and soul of the army, and when the NCO corps starts failing, the whole military does.

Russia Gains Control of Turkomen Gas Exports

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This development cements Gazprom’s position as the 800 lb gorilla in the world natural gas market.

It looks like they will sign similar projects with Kazakhstan and Uzbekistan.

An interesting note is that the deals appear not to be particularly good for Gazprom, it’s unlikely that they will make much money out of them, but what it does do is likely kill a gas pipeline on a southern route through Turkey, which the US had been pushing to minimize Russian influence in Europe.

The IOC: The First Bastards Up Against the Wall When the Revolution Comes

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The IOC just meekly assented to allowing the Chinese government to filter internet access for the reporters at the games, despite promising otherwise just weeks ago.

What a bunch of losers.

That being said, ShaMao’er asks the question that immediately comes to mind, “The same old question… why are they so dumb?”

Meaning the Chinese government. They had to know that this would be found out in short order, and they had to know that the consequences of being found out would be worse than anything that a reporter pulled off Amnesty International’s web site.

My only guess is that is about a need to be in control trumped their need to get good foreign press.

A number of analyses have suggested that the primary audience that is being targeted by the PRC for the Olympics is internal, not external, and that would explain this action.

I’d Call This Kafkaesque, but the Term Seems Wholly Inadequate

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A press release from the ACLU:

Justice Department Asks Intelligence Court To Review New Wiretapping Law In Secret (7/30/2008)

ACLU Says Any Proceedings On New FISA Law Should Be As Transparent As Possible

FOR IMMEDIATE RELEASE
CONTACT: (212) 549-2666; media@aclu.org

WASHINGTON – In a brief filed late yesterday with the Foreign Intelligence Surveillance Court (FISC), the Bush administration asked that any review of the new warrantless surveillance law be kept secret and that the court refuse to accept legal briefs from anyone other than the Justice Department itself. The government is responding to a motion the American Civil Liberties Union filed earlier this month asking the FISC to ensure that any proceedings relating to the scope, meaning or constitutionality of the FISA Amendments Act (FAA) be open to the public to the extent possible.

The following can be attributed to Jameel Jaffer, Director of the ACLU National Security Project:

“The government is proposing that the intelligence court should consider the constitutionality of the new surveillance law in proceedings that will be entirely secret. If the government’s request is granted, the court won’t hear arguments from anyone except the government and those arguments will be presented to the court in secret briefs. At the end of the process, the court will issue a ruling that is also secret. The process the government is proposing is completely unacceptable. Especially because the new surveillance law departs so significantly from the standards that have applied to government surveillance for the last 30 years, any proceedings relating to the new law’s constitutionality should be adversarial and as informed and transparent as possible.”

In a separate legal challenge in the U.S. District Court for the Southern District of New York, the ACLU seeks a court ruling declaring that the FAA is unconstitutional and ordering its immediate and permanent halt. Plaintiffs in the case include Amnesty International USA, Human Rights Watch, the Nation and PEN American Center.

(emphasis mine)

I’m Speechless.

McCain Loses…..

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Time’s Karen Timulty, “So how many more times are the McCain campaign and the Republicans going to repeat what is a thoroughly baseless charge?” (emphasis mine)

The front page of the Washington Post, “For four days, Sen. John McCain and his allies have accused Sen. Barack Obama of snubbing wounded soldiers by canceling a visit to a military hospital because he could not take reporters with him, despite no evidence that the charge is true.” (emphasis mine)

And the New York Times Editorial Board, “Many voters are wondering whether a McCain presidency would be an extension of Mr. Bush’s two disastrous terms. If the way Mr. McCain is running his campaign these days is an indication, Americans don’t have to wait until next January for the answer to that one.” (emphasis mine)

Could it be that the “Straight Talk Express” has worn out the batteries? Because this stuff looks suspiciously like journalism.

Oh Crap! The US-Iraq Forever Deal Seems Back On

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It looks like the status of forces agreement is back in active negotiation, complete with bullsh@% “time horizon”.

The Bush administration’s embrace of a flexible timeline for pulling U.S. troops from Iraq has accelerated negotiations between Washington and Baghdad over a long-term security pact, officials from both sides said.

The optimism marks a turnaround from just a month ago, when big differences seemed to have deadlocked talks over the terms of a continued American military presence in the country. In June, Iraqi Prime Minister Nouri al-Maliki said the talks were at a “dead end,” dimming hopes of reaching a deal by July 31 — a goal the Bush administration has pushed hard to meet.

This month, however, the White House said it had agreed to a “general time horizon” for troop withdrawals, breaking from its long-held public resistance to the notion. The change has helped overcome differences on other issues, such as immunity for U.S. troops, negotiators on both sides said.

…

Great googley moogley.

Economics Update

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Well, you know that the economy sucks when lawyers are being laid off, in this case at Cadwalader, Wickersham* & Taft because the 70% decline in the commercial real estate market had created redundant personnel.

When you consider the fact that Citi will likely write-down its CDOs to the tune of $8 billion, following Merrill Lynch’s $5.7 B writedown of its CDOs, it’s not surprising nothing is moving.

Citi currently values its CDOs at 53¢ on the dollar, but Merrill sold at somewhere between 22¢ and 5.5¢ on the dollar (see this post), so this will be ugly for them, and for a lot of other financial institutions.

Some people are predicting writedowns of over $100 billion for Fannie Mae and Freddy Mac, but it could be worse if there is a rush to the exits.

I think that it’s also pretty likely that the credit crunch had a lot to do with Mervyns, department stores filing for bankruptcy, reorganization, not liquidation, as the straw that breaks the Camel’s back is typically the withdrawal of credit.

Still, we have a decent numbers in the ADP jobs report, which has also strengthened the dollar.

Additionally, the efforts by government institutions continue with Federal Reserve extending its loan program to Wall Street banks, “Cash for Trash,” from mid-September to January 30 and the SEC has extended its naked short-selling ban until August 17.

In energy, oil is up, and retail gasoline is down.

*Interestingly enough, I probably would not have even noticed the story, but for the fact that the name Wikersham was there. he first political story that I have any recollection about was about that ship, and the problems that developed as a result of cabotage related issues with the Jones Act, which required it to stop in Canada between American ports,

I actually rode on the ship when my family was leaving Alaska.