Month: August 2008

Pakistan Coalition Fails to Agree on Restoring Judges

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Well, now that Musharraf is gone, we have Nawaz Sharif threatening to pull out of the coalition government, (see also here) because the phenomenally corrupt (even by Pakistani standards!!!) Asif “Mr 10%” Ali Zedari is trying to renege on the deal he had with Sharif to restore all the judges, particularly chief justice of the supreme court Muhammad Chaudhry:

The basis of Zardari’s opposition to Chaudhry rests with a fear that he might undo an amnesty agreement that absolved Mr. Zardari of corruption charges, lawyers said. The amnesty, which applies to bureaucrats and politicians who faced corruption charges, was part of a package arranged by Musharraf when Zardari returned to Pakistan after his wife, former Prime Minister Benazir Bhutto, was assassinated in December.

Chaudhry is viewed as a danger because he appears to be a serious and non-corrupt jurist, and an independent and clean judiciary is something essential right now in Pakistan, whether or not that Zedari ends up in jail as a result or not.

Economics Update

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the producer price index rose 1.2% in July, that comes to about 15% inflation, and the year over year rate was 9.8%.

Inflation is back….Truth be told, it was never gone, it’s just that the government statistics concealed it, and we are now running into the limits of such accounting artistry.

We also are seeing housing starts at a 17 year low, so it looks like stagflation to me.

I just hope that it isn’t an Argentina/USSR style collapse.

I would note that a lot of this inflation is commodities, and they are down.

Both oil and gasoline (33rd straight day) fell again.

That being said, the dollar was down again today. Those inflation numbers probably scared traders.

Finally it looks like Lehman may be forced to sell its money management division in order to raise capital to offset its losses.

Normally, I Boycott the AP, But In This Case….

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But sometimes, someone there screws up, and reports the truth:

Obama veep announcement expected in coming days

By NEDRA PICKLER

…..

His top contenders are said to include Minnesota Gov. Tim Pawlenty and former Massachusetts Gov. Mitt Romney. Less traditional choices mentioned include former Pennsylvania Gov. Tom Ridge, an abortion-rights supporter, and Connecticut Sen. Joe Lieberman, the Democratic vice presidential prick in 2000 who now is an independent.

Too true.

It hasn’t been corrected yet, and I need a screen cleaner.

Details on the AP boycott here.

Draft Beer Not People

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I began my drinking college career before the universal 21-year-old drinking age, it was 20 in Massachusetts, and it did not interfere with my drinking at all, so I approve of the efforts by over 100 college presidents to lower the drinking age to 18 (the Amethyst Initiative).

They believe that the current regime leads to unsafe habits and binge drinking, and I agree.

My observation, and I was at college through the transition, is that the change in the law did not make for safer drinking, or a reduction in drinking and driving.

Iraq Sweetheart Oil Deals Appear Dead

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It appears that the short term sweetheart deals that Bush and His Evil Minions™ engineered are not sweet enough for the oil companies.

The theory was that these short term contracts would lock in, or nearly lock in, longer term more lucrative contracts, but it appears that the Iraqis were driving a hard bargain.

It appears that these folks can’t even pay their supporters in the oil bidness competently.

Details here.

Pension Benefit Guaranty Corp. Doubles Down

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As has been known for some time, the Pension Benefit Guaranty Corp. (PBGC) is underfunded as a result of pension obligations that it has had to assume over the past few years, and now its management is looking toward a more aggressive, and hence riskier, investment strategy.

It was 75% to 85% bonds and 15% to 25% in stocks, and it’s going to 45% stocks, 45% bonds, and 10% in “alternative investments”.

Alternative investments? What’s that, rare coins?

I’m a bear by nature, but to me it looks like this has EPIC FAIL written all over it.

Missing the Point

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The Wall Street Journal discusses the netroots campaign against Representative Chris Carney (D-PA 10), but they miss a big point: in 2006 Chris Carney lied though his teeth to get the support of Blue America, Moveon, etc. on any number of issues (the example that springs to mind is that he flipped flopped completely on sexual orientation based hate crimes legislation).

Carney has welded himself to George W. Bush in Congress, despite protestations to the contrary in 2006, and I approve of Blue America welding him to George W. Bush, “Mr. 29%,” back in his district.

Unions Warn Obama on “Rubinomics”

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AFL-CIO Secretary-Treasurer Richard Trumka just cut Bob Rubin a new one:

Blaming unfettered global trade and inadequate government regulation for lost manufacturing jobs and a staggering economy, Trumka’s presentation cautions that “it will do us little good if, when the next Democrat moves into the White House, Wall Street takes command of our country’s economic policy.”

Trumka leaves no doubt that the rebuke is aimed at Rubin, Wall Street’s most prominent Democrat. It’s “hard to tell the difference” between Rubin and Republican Treasury Secretary Henry Paulson, the presentation says. Trumka’s critique reflects the concern among organized-labor officials that Rubin and like- minded Democrats may win the behind-the-scenes battle to shape Obama’s economic thinking.

“I’m hearing Rubin’s name more and more associated with the campaign’s economic policy,” says James Torrey, a top Obama fundraiser and chief executive officer of New York-based Torrey Associates LLC, a hedge-fund investor.

Further down in the article, it notes that Obama is talking up a strong dollar policy, a shibboleth of Bob Rubin.

This is a bad sign, and not just because it indicates a tilt toward Rubin. It’s also no longer sustainable, and tremendously damaging to the economy, at least if you are not a big ticket stock broker like Bob Rubin.

The fact is that much of the Clinton administrations economic policy was driven by Rubin, and it was not Democratic Party economics, it was Eisenhower Republican economics, and the credit crunch is largely a function of these policies now coming home to roost.

Georgia Update

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Russia says that it is pulling troops out of Georgia, though Pentagon sources are disputing this.

My guess is that there is a withdrawal going on, the Russians don’t want to deal with an insurgency, but that it is proceeding with all deliberate slowness.

Aviation Week has analysis of the relative success of Georgian air defense systems (Paid Subscription Required), specifically of the SU Tu-22M3, and suggest that it was shot down because of Israeli aid in upgrading the Soviet era air defense systems.

Additionally, they note that the Georgian air defense system was less sophisticated, less networked, and less automated than the Syrian one, and as such, it may have been less vulnerable to the cyber attacks that were allegedly used by the Israelis when they struck the Syrian reactor complex.

Shades of Battlestar Galactica, the new one, not the old one.

As to the Su-25 losses, they suggest that these were shoulder launched SAMs, and I agree, as the Su-25 is really a close air support aircraft, which puts them in the sweet spot of such weapons.

American Psychological Association Debates Torture

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There is nothing wrong with a psychologist participating in a legitimate military interrogation, but what the APA is debating now is whether psychologists should participate in torture.

Water-boarding, sleep deprivation, beatings, stress positions, extremes in temperature, threats to children…These are torture, and any psychologist, or for that matter any medical professional who aided in this, should never be licensed to practice medicine ever again.

Zimbabwe Negotiations Appear to Go Nowhere

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Tsvangerai is insisting on real executive power as prime minister, which makes sense, as he won the election, but this is a major sticking point, which is why the SADC summit ended without a deal.

So the SADC is pressuring Tsvangerai to cut a deal with Mugabe that does not involve real power for the MDC, with the threat that the splinter MDC-Mutambara would ally with the ZANU-PF in parliament otherwise, which indicates to me that the SADC, or some of the members of the SADC, don’t really care about the quality of governance in Zimbabwe, they just want the problem to go away.

Questions Grow on Anthrax Case

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Details here, and here

Additionally, the FBI will be releasing more evidence to buttress their claims.

Personally, I’m not as concerned about the timeline to mail the letter from New Jersey as the complete lack of evidence of weaponization equipment or experience.

It’s clear that he could lyophilize (freeze dry) his anthrax, but then it would have to be milled in some manner to a very small particle size, and then coated with a substance that gives it a static charge so that it would aerosolize well, and this was not something done at the lab.

Economics Update

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It looks like concerns about GSEs are roiling the markets again, so one wonders when the government will nationalize Fannie and Freddie.

It won’t happen under Bush and His Evil Minions™, needless to say, but I see it as inevitable for the next president.

Meanwhile, energy is still trending downwards, with oil falling as the path of Fay becomes clearer, and gasoline falling fo the 32nd straight day.

The dollar is down a bit, but I’m not sure if this is a pause in a rally as people take profits, or a change in direction.

In any case, it looks like labor day air travel is going to be way down, yet another sign of the slowing economy, and the fact that airlines have become so bloody awful.

Finally, home prices in the UK fell by 4.8% year over year, showing again just how well the “Anglo Saxon Model” of capitalism works when things go bad.

Our Third World Export Economy

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When we talk about how the falling dollar has increased exports, they rarely note what it is that the US actually exports.

We are exporting, “decidedly low-luster commodities like corn, wheat, ore and scrap metal. Commodities are 42% of export increase in the first half of 2008, and manufactured goods, only 12% (Note that this is only the percentage of the delta, percentage of the whole is 26% commodities and 40% manufactured goods).

Part of the reason for this is that much of the manufacturing capability of the US no longer exists. It has been shut down and either shipped overseas or sold as scrap, so there are very real limits to the degree that US manufacturing can take advantage of the dollar in the short term.

What Atrios Said

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He, of course, paraphrases Senator Joseph Biden, when he says, “A Noun, A Verb, POW in response to the story that John McCain was in a position to hear the questions that Saddleback church pastor Rick Warren put to Barack Obama, and so get a leg up on his responses.

The response to the allegations from McCain Spokesman Nicolle Wallace:

The insinuation from the Obama campaign that John McCain, a former prisoner of war, cheated is outrageous.

A noun, a verb, and POW.

That should be a talking point from the Obama campaign, but direct it at the McCain campaign, not at the candidate, so it won’t seem disrespectful.

Iran Claims Launch of Satellite Capable Launcher

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Certainly the ability to launch their own satellites is a capability that most nations desire, though I would note that a rocket that can put 100 lbs in low earth orbit could most likely put a 1000 lb warhead on a sub-orbital flight to almost anywhere on earth, based on my limited sens of orbital mechanics.

That being said, the Pentagon is saying that they doubt that the launch was successful.