EconoMonitor

Nouriel Roubini's Global EconoMonitor

RGE Content: Weekly Roundup

Check out all the great contributions that were published during the past week on RGE’s Nouriel Roubini’s Global EconoMonitor, RGE Analyst’s EconoMonitor, U.S. EconoMonitor, Emerging Markets Monitor, Global Macro EconoMonitor, Finance & Markets Monitor, Asia EconoMonitor, Latin America EconoMonitor and Europe EconoMonitor.

The probability is growing that the global economy – not just the United States – will experience a serious recession. Recent developments suggest that all G7 economies are already in recession or close to tipping into one. Read Nouriel’s “The Perfect Storm of a Global Recession: An Op-Ed for Project Syndicateon Nouriel Roubini’s Global EconoMonitor, and take a look at “CNBC and NPR Interviews; Guest Bloggers; and the Severe Worsening of Financial Market Conditions and of the Credit Crunch”.

On the RGE Analyst’s EconoMonitor, Christian Menegatti, Elisa Parisi-Capone and Rachel Ziemba take a look at the state of the credit markets in the U.S., Europe, Asia and the Middle East one year after the beginning of the credit crunch. Read: “One Year Later, Still Crunch Time”.

On the U.S. EconoMonitor, Christian Menegatti looks into the link between home equity withdrawal (HEW) and personal consumption in the U.S. and provides the most recent estimates for HEW. Read: “Life Without Home Equity (Withdrawal) – Down to $24bn in Q1 2008”. In another piece, the same author parses the U.S. Q2 preliminary real GDP growth release. He analyzes the components that contributed to an apparently strong growth rate for the second quarter and the trends that we can expect in the quarters to come. Read: “Where Is this U.S. Recession?”.

Former US Secretary of Labor Robert Reich offers an anecdote for Labor Day reflections on job quality in “An Ode to Labor Day”. In “Fannie and Freddie, and the Bailout Around the Corner”, Reich decries the imminent bailout of Fannie & Freddie as yet another instance of socialized capitalism, wherein risks are socialized and profits are privatized. In “The Fed and Authoritarian Capitalism”, Reich highlights the Fed as an aberration of America’s ostensible democracy because it lacks accountability to voters, or even to Congress or the President.

For the 12 months through July, retail sales rose a modest 2.7%. The casual observer may think that the numbers don’t look so bad. Year-over-year growth, after all, is still growth, and in the current environments that’s pretty good. Putting the numbers in economic context, however, suggests that the slowdown of late still has the upper hand. Take a look at “Retail worries” by James Picerno.

Also on the U.S. EconoMonitor this week:

On the Emerging Markets Monitor, Nirvikar Singh writes three valuable articles. One on “Currency futures trading in India”, another interesting piece on the challenges China faces in obtaining sustained growth: “Is China’s Future Hazy?”. And also an article on how exports pattern could be crucial for a nation’s sustained growth: “Growth Analytics and Emerging Economies”.

Also on the Emerging Markets Monitor:

On the Global Macro EconoMonitor, Thomas Palley in “Speculators at the Pumps” argues that speculation driven high oil prices can persist only for a considerable time before economic fundamentals eventually bring them down as being witnessed presently. In: “Is dollar-based salvation coming?”, James Picerno questions if the strengthening of U.S. dollar will end the inflation grip in the current cycle and also suggests that lower commodity prices and stronger dollar are a powerful combination to battle inflation.

Mark Thoma’s “The State of Macro” explores the progress, convergence and contributions of the new-Keynesian and new-Classical economic models in explaining short-run business cycles and long-run trends. In: “If Only Central Bankers Would Hit Bottom”, Yves Smith critically assesses the role of central banks’ monetary policy and liquidity manageme
nt in maintaining a stable economy and financial system, and emphasizes on their shortcomings to improve financial regulation and structural reforms. Finally, Chris Whalen analyzes the balance sheet of Downey Financial and asserts that the bank’s liquidity risk is below ‘excessive’ level.
Read: “Why Downey Financial is Not IndyMac”.

Also on the Global Macro EconoMonitor this week:

On the Finance & Markets Monitor, London Banker takes a fresh look at “Dubai and Johannesburg” and reports of the reasons for a new-found optimism on the region. In “Five-year-olds in pursuit of a football”, Tim Price revisits Mohamed El-Erian’s just published ‘When Markets Collide: investment strategies for the age of global economic change’ and offers his own take on how investors should position themselves in our times of global structural change. In “Trade Policy and Moral Leadership”, Mark Thoma argues against ignoring moral hazard both in politics as in economics – a thorough review of trade history offers valuable lessons in this regard. In “Restructuring, Tightened Credit, and Betting the Bank”, Joseph Mason notes that CDARS products, which split up large investment balances into pieces below $100,000 so as to be covered by deposit insurance, are again flowing into the industry, creating a classic Thrift-crisis hot-money signal indicating which banks are next to fail.

Also on the Finance & Markets Monitor this week:

On the Asia EconoMonitor, Michael Pettis explains why the Chinese stock market continues to behave poorly. In his view, the weak rally was driven mostly by higher-than-expected profits among consumer-related companies and to a less extent by the one-off jump in Olympic-related spending. Read: “Post-Olympic slowdown and AMCs troubles paying their debt”. In another piece, the author explains that whatever the fate of the Olympics, the up-and-down struggling in the stock markets that characterized the Olympic period is certainly not over. Read: “Making sense of what comes after the Olympics”.

Mary Stokes explains the shift in the forecasts regarding the latest data on Japan’s quarterly GDP. The author explains that until recently some analysts still believed Japan would escape recession. However, the release of the Q2 GDP numbers forced most to change their tune with a decrease in real GDP in the second quarter (Apr-Jun) to -0.6% qoq (-2.4% yoy). While Japan’s downturn may yet be mild, it’s important to keep in mind that considerable downside risks exist to this scenario. Read: “Why Japan’s Downturn May Not Be So Mild After All”.

Arpitha Bykere explains that the leading Asian economies will suffer from the G-7 recession. In her opinion, Asian economies dependent on exports to the US and Europe and having large current account surpluses (China, Taiwan, Hong Kong, Singapore and others) will suffer from the G-7 recession. Those with current account deficits (India, Vietnam) might suffer from the global credit crunch and a sudden stop of capital, which also exacerbates home grown liquidity squeezes (South Korea). Read: “South and South-East Asia in the Midst of a Global Recession”.

Also on the Asia EconoMonitor:

On the Latin America EconoMonitor, Javier Guillermo Gomez Pineda explains that the combination of inflation and a financial crisis in the US has complicated the outlook for dollarized countries. The roller coaster that dollarized countries are riding is better understood in the Panama’s economy. Read: “The roller coaster that dollarized economies are riding”.

Before the fiscal numbers for Brazil were released for the month of July, Italo Lombardi correctly forecasted that the strong fiscal figures suggested a federal government primary surplus of R$7.1 bn in that same month. Read:“Brazilian Fiscal Accounts Booming”.

For Walter Molano, the Mexican economy is a sea of relative tranquility in a convulsed world. Economic activity grew about 3% y/y in second quarter, exceeding most forecasts. The budget surplus was $8.5 billion during the same period, and Mexico is slowly diversifying its exports away from its North American partner. Yet, one should read the whole piece in order
to understand its title: “Mexico: The Winds of Revolt”.

According to Tom Trebat, a Democratic president, if Obama is elected in November, would have a rare opportunity to recast U.S.-Latin American relations in ways that could be transformative for the region and a boost to the economic growth prospects of the Western hemisphere over the long-run. Read: “Latin America: A Long Way from Denver?”.

Antonio Carlos Lemgruber explains it is possible that the next increase of nominal interest rates in Brazil will not impact the exchange rate or economic activity. This is so because real interest rates will go down significantly. People will begin to fear devaluation and higher inflation. Read: The Role of Monetary Policy under An Inflation Target Model: Brazil 2008”.

On the Europe EconoMonitor, Elisa Parisi-Capone notes that the latest ECB data confirm that the credit cycle has definitely turned in the Eurozone and analyses how many more write downs and credit losses are expected, both in the U.S. and abroad. Read: “No Credit Crunch in the Euro Area? Part II”.

Also, on the Europe EconoMonitor, Sebastian Dullien says that the latest data signal that German economy may be slipping into a recession and criticizes the German political elite for being complacent about the risks. In his opinion, there is no political support for a stimulus program and improved labor market can hardly contain the shocks stemming from the appreciation of the euro and the global economic slowdown. Read: “Germany on the verge of recession: Why are politicians so far behind the curve again?”.

For Jason Welker, the over-consumption of alcohol by British tourists is creating spillover costs for the societies (and police forces) of the nations in which the tourists get themselves into trouble. Read: “Britain’s largest export: “inebriated hooligans””.

74 Responses to “RGE Content: Weekly Roundup”

GuestAugust 30th, 2008 at 5:58 pm

Allow me to bring to you my biased version of events yet to unfold in full fruition:1. Global socio-economic collapse due to incompetence and stupidity at the political, bureaucratic, scientific and economic levels leading towards a dark aged depression in terms of global demographics; your mileage will vary.2. The above global socio-economic collapse being accelerated due to a total lack of economic comprehension by those making decisions which shouldn’t be being made out of a sense of the lobby from all and sundry who are crowding out the room so that they get bailed with public funds first.3. A bifurcation of human society between the elite wealthy, influential, political, bureaucratic, corporate and financial and the rest (the unwashed masses). Seeds of revolution and these will be funded by those of the elite which will eventually fear for their lives. (Think: French Revolution)4. A complete breakdown in the USA social ordering due to financial stresses brought about by the failure of the mortgage (housing) markets, the equity markets, volatility in living costs (inflation and deflation), irrational and inconsistent MSM bulls#$%, panic, the lack of visibility of responsible leadership for the immediate future,losses of job, lack of credit, peer pressure, family pressures, a shortage of cash in the pocket, loss of home, car, boat and distressed kids, a sense of no hope, helplessness and an overall sense that one should commit suicide.5. Bottom feeding by opportunistic money pools buying long at fire-sale costs using credit and influence at almost no-cost and no-risk. Attributes: Bottom feeders, vultures, hyena, crabs, ticks, gnats, parasites, virus, preying mantis, etc.6. US Cities declaring bankruptcy; loss of services, schools, teachers, police, firemen and other social services such as garbage collection and disposal, water reticulation, gas and electricity supply, heating fuel distribution and a massive reduction in people mobility and communication.7. An increasing pressure from telecoms, internet, broadband and other such groups in logarithmic billing fraud leading to a reversal of communications usage due to over cost of services. And, a lack of regulatory actioning by government bureaucracy in reacting to public complaints.8. And increase in job losses across the nation as support industry throw in the towel after remaining unpaid by the larger groups after 90 and 120 day broken payment promises; a wave of foreclosures, suicides and bankruptcies.9. Increased police and military visibility and actioning. Expect an increase in corruption in these areas as eventually, everyone will revert to a survival mode in a more peaceful co-existence, which is normal, and this processed will be naturally fed by the non-visibility of “leadership”.10. High Increase in low level networked crime syndication brought about by the attraction – NEED – of youth from families ruined by the incompetence and stupidity of the US ruling elite and their “faith-based” consensual “Moral Hazard” leveraged socialization stripping.11. Increase in corruption throughout the Law System of the USA as crime money becomes far more ubiquitous and pervasive and survival the name of the game all will eventually play.12. The USA degenerates into a type of society which the USA imposed of the Philippines and also tried to impose on Vietnam and failed. It is ironic that their social destruction disease which the USA once exported, has now been well seeded in the USA. I can’t help but believe that the US strain of this virus will be a Master Strain.13. Eventual: revolution and civil unrest after years of in-country fighting by a huge variety of groups, for territory. IOW a return of a feudal system of eventual family based power strongholds.Bottom-line: The USA has no “leadership”. This is a “leadership” crisis; no more, no less!Ho humPeterJB

GuestAugust 30th, 2008 at 6:17 pm

Speaking of algorithmic billing fraud, and variations on this popular theme:”In the words of a Citibank executive, “Stealing from our customers is a business decision, not a legal decision.” The same executive later said that the sweep program could not be stopped because it would reduce the executive bonus pool, Brown charged.”http://www.consumeraffairs.com/news04/2008/09/ca_citibank.htmlHo humPeterJB

kilgoresAugust 30th, 2008 at 6:57 pm

@ Anonymous on 2008-08-28 19:26:41 (previous thread)@ Anonymous on 2008-08-29 22:31:50 (previous thread)FYI, I’ve replied to these posts on the immediately preceding thread.SWK

GuestAugust 30th, 2008 at 7:17 pm

I saw her today at the receptionIn her glass was a bleeding manShe was practiced at the art of deceptionWell I could tell by her blood-stained handsKeep calling like it is Dr. Roubini!

kilgoresAugust 30th, 2008 at 7:41 pm

@ PeterJB 2008-08-30 17:58:38Peter – I think you need to change your Post name to “Mr. Sunshine.” 😉 Hope you print out and save some of these posts of yours to read 20 years from now so you can take some measure of the accuracy of your prognostications!SWK

kilgoresAugust 30th, 2008 at 7:47 pm

Anyone want to venture a guess and to whether the DOW will drop Monday in light of Hurricane Gustav’s potential impact on oil and gas prices, and if so, how low it will go?I was driving back home from Orlando this afternoon and ran into “white out” conditions on I-4 from the heavy rain. Turned out it was the outer bands from Gustav, whose eye was still SOUTH of CUBA! This is one huge and scary storm. At least the good people of New Orleans no longer have to rely on “Brownie” to help them respond to the storm…SWK

GuestAugust 30th, 2008 at 8:45 pm

“… so you can take some measure of the accuracy of your prognostications!”SWK@ kilgores on 2008-08-30 19:41:09Actually, I am an optimist for the long term, a realist, an opportunist (I buy at fire-sales), a frugalist, a hard intense worker, paranoid, sentient and normally of good and happy nature. I am extremely prejudiced against stupidity and cannot tolerate dumb bureaucracy and / or bulls%$#.There can be no doubt whatsoever that blatant corporate corruption supported by government – fascism – is growing and is a trend that is gaining much support amongst the ‘do lunch’ crowd.And, all of the above have already becomes trends, so I don’t think that I will have to wait 20 years to know if I am right, as it is all already fact!I might add that these money pools that are building are really grassroots syndication’s and they are an extrapolation from the big corporates and financial institutions that are in panic to grow revenues and I think that this activity is why it appears that massive manipulations are occurring.There is no doubt that the CB’s led by the FedRes are playing hardball, but these guys n gals each report to their body politic and in the end will serve their own interests. And there is no doubt that the FedRes see the rescue of the Banks and financial house as paramount; they need the status quo, a priori and its just too bad for the real economy. The secondary economy rules by Prime decree, where it is this fact that will crumble the empire as, the priests do not understand basic physics!The facts suggest many small powerful interests with varying targets and one function (to make huge profits legally or illegally; it doesn’t matter as you can always pay off a judge and or congressman). And, this is precisely how human activity functions as does physics while there can never be one huge conspiracy because of the “Judas factor” (fundamentally, a priori). So you get irrationality and insanity; nothing new and historically consistent.On the other hand, I am well aware that the Messenger usually loses his head.;-)>Ho humPeterJB

GuestAugust 30th, 2008 at 9:03 pm

Did I mention the “faith-based” system?:”The plot is already familiar: the Friday night, FDIC prepack, in this case, with Birmingham, Alabama-based Regions bank assuming all $974 million of deposits and $34 million of assets. The New York Times reported that the bank focused on real estate lending and had a “faith based culture”. The results suggest that they might have relied overmuch on divine intervention at the expense of due diligence.”http://www.nakedcapitalism.com/What you get is not necessarily what you prey for (pun intended:)Ho humPeterJB

kilgoresAugust 30th, 2008 at 9:09 pm

@ wawawa on 2008-08-30 20:46:02>Is not market closed on Monday?!Yes, you’re right. How could I have forgotten Labor Day? ;-}SWK

kilgoresAugust 30th, 2008 at 9:13 pm

@ PeterJB 2008-08-30 20:45>Actually, I am an optimist for the long term, a realist, an opportunist (I buy at fire-sales), a frugalist, a hard intense worker, paranoid, sentient and normally of good and happy nature. I am extremely prejudiced against stupidity and cannot tolerate dumb bureaucracy and / or bulls%$#.Don’t forget to mention that you’re entertaining, too. 😉 You crack me up…SWK

Average JaneAugust 30th, 2008 at 9:27 pm

@ Peter JB, generally—you’ve been most prolific so far this weekend and as per usual, I thoroughly enjoy your blunt remarks. I too believe the USA has devolved into a fascist state (the christian cross wrapped in a flag, quite so) with the end game being—what? The Unwashed Masses, armed to the teeth (even in our gradeschools, for crying out loud) with concealed-and-carried handguns, protecting our children from—what? Overindebted lifestyles? Manufactured “terrorists”? This massive financial mess is simply the tip of the iceberg and I’m under no illusions that all of this has been anything but completely orchestrated, not exactly in a logical or neat manner, but orchestrated nonetheless by the ubiquitous, stealthy Masters of the Universe. But of what, and/or whom, will they become Masters? There are only so many people, so much land and so much bling that can be bought with their Billions. Then what is left? The earth is a finite thing. We The People are but a blip on the Grand Radar Screen. There are only so many islands the Dubai sheiks can carve out of the sea. There are only so many diamonds one can wear on one’s fingers. There are only so many servants the Masters can have. And so my question, as always, remains: What. Is. The Point of it all? Finally, Peter JB, you are absolutely right about the leadership issue. Thank you, sir.

GloomyAugust 30th, 2008 at 9:37 pm

The apocalypse is coming. We wait in the calm, waiting for the flood. Waiting for all the coming washing away of financial institutions and of our currency as an uncontrollable torrent of deleveraging comes crashing and destroying everything in its path.I had dinner tonight with an old acquaintance, a former investment advisor and executive for a prominent financial firm. He is now retired and clueless, as I suspect he spent his career handing out the advice given to him by the higher ups rather than thinking for himself. He will not survive the storm. “If I get out of the market I will not know when to get back in”, he says. This is the mantra of all those carefully conditioned by Wall Street. They will be saying this even as the water rises around them and they cannot escape. I suppose it has always been like this before a financial calamity. There is nothing that can be done to save the brainwashed masses.

ChristopherAugust 30th, 2008 at 9:42 pm

Hurricane Gustav and gasoline prices.I am curious if gasoline prices will increase after the damage to oil rigs in the Gulf of Mexico from Hurricane Gustav. With the elections coming up in November, they may hold steady or go down more – even if the oil price increase. Regular gasoline is now $3.45 – down from $3.95 just a few months ago.I am really curious to see what happens.

GuestAugust 30th, 2008 at 10:14 pm

Talking about cracking up:http://www.nakedcapitalism.com/“Now given that the bank was only eight years old and may have have used its religious positioning to hide some less-than-upstanding practices, the magnitude of the bust may reflect fraud, and well executed fraud harder to detect than good old fashioned recklessness or shoddy controls.This little story is just nothing but hillarious and is well worth reflecting for sometime on the merits of the expectation of divine intervention as the priests clean out your pockets, steal your car, rape your wife, take your girl friend, enslave your kids and collect the insurance on your house – which they burnt as you left to attend that prayer meeting at your local Bank. Really takes the “faith-based” ideology to new levels. And in walks the government and pays top dollar so the godly ones can live a life of hell on the shores of Nice. AmenThank you Average Jane and SWK – happy to bring you some levity in these hours of global insanity.Actually I haven’t stopped laughing for at least an hour since I first read it – its just well, er, wonderful; talk about the endless story.Life is about you, yourself; and learning your lessons. Being good comes naturally but takes to work to maintain. Life is also about cycles and we are at the cusp of a cycle now; your survival depends on you so don’t bet it at your local “faith-based” Bank. LOL (still)Or, you don’t need government as those who choose to govern need you.Sorry, I need to go laugh some more and I am getting crampsHo humPeterJB

MASIACH BEN CHANAAugust 30th, 2008 at 10:20 pm

THE RUSSIANS ARE COMINGMoscow halts Iran cooperation with US, will complete Bushehr reactorDEBKAfile Special ReportAugust 30, 2008, 7:32 PM (GMT+02:00)Bushehr nuclear reactor to be ready to go by end of 2008Bushehr nuclear reactor to be ready to go by end of 2008The Georgia quarrel has all but derailed US-Russian cooperation on the Iran issue. Moscow is not only pulling out of the diplomatic and sanctions front against Iran’s nuclear program; according to DEBKAfile’s Russian sources, Moscow has decided to finally finish building Iran’s nuclear reactor in the southern town of Bushehr before the end of the year, after holding back for five years at Washington’s insistence.Russian prime minister Vladimir Putin said in reference to the impact of the Georgia row on US-Russian cooperation on Iran Thursday, Aug. 28: “If nobody wants to talks with us on these issues and cooperation with Russia is not needed, then for God’s sake, do it yourself.”Moscow has now committed to completing the reactor within four months. DEBKAfile’s military sources report that the functioning plant will enable Iran to operate a heavy water plant and produce plutonium as an alternative to enriched uranium for building a nuclear bomb. Tehran had originally counted on the Syria’s North Korean reactor at al Kibar for plutonium. It was demolished by Israel last September.Putin’s sharp comment means the West can forget about Russian support for another round of harsh sanctions to punish Iran for refusing to suspend uranium enrichment. He made it clear that Western nations will have to resolve the standoff without Russian help if they refuse to cooperate with Moscow on Georgia.The Russians have lost no time in following through on their threat. This week, they are sending the head of their Nuclear Energy Board, Sergei Kireinko, to Tehran at the head of a large delegation. They will stay for at least ten days to clear away the problems for getting the Bushehr reactor up and running by the end of 2008.HELLO RUSSIAGOOD BYE NATO

MASHIACH BEN CHANAAugust 30th, 2008 at 10:22 pm

THE AMERICAN ARE COMINGDutch sabotage agent recalled from Iran over “impending” US attack – reportDEBKAfile Special ReportAugust 30, 2008, 5:36 PM (GMT+02:00)America’s largest unmanned aerial vehicleAmerica’s largest unmanned aerial vehicleA Dutch AIVD Secret Service ultra-secret operation underway in Iran in recent years has been halted and an agent recalled in view of “impending US plans to attack Iran,” within weeks, writes Joost de Haas, known for his good intelligence contacts, in the Dutch newspaper De Telegraaf.The AIVD operation aimed to infiltrate and sabotage the weapons [and nuclear] industry in the Islamic Republic.According to intelligence sources in the Netherlands, the US [or Israel] was expected to make a decision within weeks to attack nuclear plants with unmanned aircraft, used to avoid risking the lives of air crews and warplanes.DEBKAfile’s military sources report this would be the first time drones operated by remote control were used against major strategic targets, necessary in Israel’s case to hold its air fleet and flight crews ready to defend the country against reprisal from Iran’s allies. Syria and the Lebanese Hizballah have stockpiled thousands of rockets for this purpose.The Iranian targets to be bombed would include also military installations brought to light partly by the Dutch espionage operation, described by De Telegraaf as extremely successful. “One of the agents was able to infiltrate the Iranian industry” and for years shared information with the American CIA. “Various supplies could also be sabotaged and stopped. These were parts for missiles and launching equipment.”According to DEBKAfile’s sources, the expectation disclosed by the Dutch newspaper would explain the fresh spate of threats from Iran.Thursday, Aug. 28, Iranian sources told the London-based Arabic al Quds that Tehran had recently transferred to Hizballah new long-range rockets capable of hitting every inch of Israeli soil with great accuracy.They were to be fired if Israel or the United States attacked Iran.Dep. Chief of General Staff Masus Jazairi said Saturday, Aug. 30, that any attack on Iran would mean the beginning of a new world war. He said the “greed of the US and Zionists” is gradually leading the world to collapse as demonstrated in Sudan, Iraq, Afghanistan and the Caucasus.DEBKAfile’s Iran sources report a shakeup is in progress in the Islamic Republic’s top military command.Amir (Maj. Gen.) Seyed Abdollrahim Mousavi was named acting chief of staffof the armed forces – a new post created as backup in case the army chief comes to harm in combat.Amir Mohamad Hosseyn Dadras becomes deputy chief of staff for coordination.Amir Reza Pourdastan is the new commander of the army’s ground corps.HELLO USA.GOOD BYE IRAN

MASHIACH BEN CHANAAugust 30th, 2008 at 10:24 pm

THE AMERICAN ARE COMINGAny attack on Iran will start new world war – Iranian generalDEBKAfile Exclusive ReportAugust 30, 2008, 12:52 PM (GMT+02:00)Dep. Chief of General Staff Masus Jazairi said Saturday, Aug. 30, that any attack on Iran would mean the beginning of a new world war. He said the “greed of the US and Zionists” is gradually leading the world to collapse as demonstrated in Sudan, Iraq, Afghanistan and the Caucasus.DEBKAfile’s Iran sources report that Jazairi’s attack aimed at confirming his credentials in Tehran during a major shakeup of the Iranian high command.Amir (Maj.-Gen.) Seyed Abdollrahim Mousavi has just been appointed acting chief of the General Staff of the Armed Forces, Amir Mohamad Hosseyn Dadras, Dep. Chief of Staff on Coordination and Amir Ahmad Reza Pourdastan is the new commander of the Armed Forces’ Ground Corps.HELLO USAGOOD BYE IRAN

artichokeAugust 30th, 2008 at 10:58 pm

@PeterJB,I am interested in understanding these money pools and exactly what they are doing. You say they are “grassroots syndications”, what does that mean, can I get in on it as a smalltime private citizen?Are they accumulating portfolios of REO properties they have foreclosed on, and going to bundle them and sell them as a package? I’ve thought about this and am not sure how to make it work, maybe you know of some clever ideas they have?It does seem they are foreclosing very aggressively, as if they have a good idea what to do with REOs.

artichokeAugust 30th, 2008 at 11:04 pm

Here’s a crazy idea I just had:Will the Fed basically give the banks a mortgage on those REO properties? After all they’ve allowed everything else as collateral, why not REO houses? That would give the banks a huge cash infusion.

PonderAugust 30th, 2008 at 11:39 pm

@Average JaneThen you enter the realm of spirituality. The battle is for your soul. All the questions you ask make no sense if applied only to the physical world, hence your perplexion. Extend your questions to who you really are and you will see that this has always been a spiritual war.

GuestAugust 30th, 2008 at 11:42 pm

“It does seem they are foreclosing very aggressively, as if they have a good idea what to do with REOs.”@ artichoke on 2008-08-30 22:58:54What I know is this:1. House prices are going to fall to next to 10 to 20% and maybe less subject to circumstances and there are massives amounts of whole communities available as well as exclusive properties and all this where economic and financial stress in paramount.2. It has been reported in the Press (Internet) that I have seen (don’t ask me where) that there are many syndicates preparing computerized databases for prime property locations all over the USA.3. I have spoken to two foreign groups (friends) that intend / are preparing to do the same to sell into foreign markets.4. The house pricing conditions, are ideal as I have previously stated, for profit opportunism and obtaining the best deals will rely on and proceed through the application of available resources and technology and access; People, Banks et al are desperate and as such, deals WILL be done.Moral Hazard is now the end game as the USA has now NO leadership.5. Receivers will get / are getting lots of business – too much in fact and will be / are very willing to turn over deals quickly so cash gets back into the system and the receiver gets cash /fees fast – (so they can get in on the feasting).As far as I am aware the game is well afoot and the target will be cheap and or little risk. And, after all, for foreigners, this is a chance to own a lot of America for their future generations and the USA government obviously don’t care much.I believe that housing will be the main target but there will be variants that suit each particular need such as eg commercial properties and small stressed technology private companies.To contact these groups is your task. The groups I know are family oriented and not very receptive to outsiders while having abundant funds to invest. I have no interest in such matters from an investment point of view.Hope that this helps – try searching the Internet.The bottom line is that the USA is for sale and its cheap, particularly if you leverage influence.Ho humPeterJB

AnonymousAugust 30th, 2008 at 11:43 pm

Revolution is not so easy to pull off. People up to their eyeballs in debt can’t take time off from their 60 hour workweeks to plan and organize. Their financial transactions are closely monitored. What would they do, storm the mansions of City bankers?

RedCreekAugust 30th, 2008 at 11:49 pm

Hey people – stop worrying – Dubya says it’s over!!!Bush Says Stimulus Helping Economy Start to `Improve’ (Update2)By Holly Rosenkrantz and Nadine ElsibaiAug. 30 (Bloomberg) — President George W. Bush said the U.S. economy is “beginning to improve,” and he credited the $168 billion stimulus this year with helping to ward off a recession.Bush, in his weekly radio address today, cited several economic indicators that he said show signs of improvement: the decline in home sales has leveled off and sales are rising in some parts of the country. Orders for some durable goods are increasing, and the economy grew at an annual rate of 3.3 percent in the second quarter, he added.“There are signs that the stimulus package will continue to have a beneficial impact on the economy in the second half of the year,” Bush said.Bush’s comments drew criticism from the campaign of Democratic Presidential nominee Barack Obama, who has sought to make the economy a central focus of the election and has tied his presumptive Republican opponent, Senator John McCain of Arizona, to Bush’s policies.“When it comes to being out of touch with what middle- class Americans are going through, George Bush and John McCain are two of a kind,” Obama campaign spokesman Bill Burton said in a statement.House Speaker Nancy Pelosi and other Democrats in Congress have endorsed a plan for an additional $50 billion in economic stimulus from the government to help overcome the effects of the biggest housing slump since the Great Depression and near-record gasoline prices. Bush’s top economic adviser, Edward Lazear, said in an interview on Bloomberg Television this week that the economy doesn’t need it.Domestic DrillingInstead, Bush pressed Congress in his radio address to focus on increasing domestic oil and natural gas exploration, passing free-trade deals with Colombia, Panama and South Korea, and making his tax cuts permanent. Lawmakers return to Washington from a summer recess the week of Sept. 8.Bush said the “election season” may make it challenging for Congress to focus on the legislative agenda.“We still have time to accomplish important goals for our country,” he said.Burton cited seven months of job losses, declining weekly wages and home values and rising inflation as evidence that Americans are worse off under President Bush.A Commerce Department report yesterday showed that personal spending growth slowed to 0.2 percent in July from 0.6 percent in June, underscoring economists’ forecasts for a weaker economy in the second half of the year.Adjusted for inflation, personal spending dropped 0.4 percent, the biggest drop in four years. The report showed that the department’s gauge of consumer prices tied to spending patterns rose 4.5 percent from a year earlier in July, the biggest gain in 17 years.Incomes DeclineIncomes dropped 0.7 percent, the first decrease since August 2005, reflecting the end of the tax rebates, after a 0.1 percent gain the prior month, the report showed.Economic growth will slow to an annual pace of 1.2 percent in the third quarter and 0.45 percent in the fourth quarter, according to the median forecasts in a Bloomberg survey of 78 economists.Senator Hillary Clinton, giving the Democratic radio address today, said McCain would continue Bush administration policies that she described as failures.“With Barack Obama in the White House and Democrats leading in Congress, we will lead the charge to revitalize the economy, create jobs, make college affordable again, and enable hard-working Americans to pay for gas, food, utilities and cover the monthly bills,” Clinton said.To contact the reporters on this story: Holly Rosenkrantz in Washington at hrosenkrantz@bloomberg.net; Nadine Elsibai in Washington at nelsibai@bloomberg.netLast Updated: August 30, 2008 17:15 EDT

MASHIACH BEN CHANAAugust 31st, 2008 at 12:07 am

THE RUSSIANS ARE COMING.MY DEAR NON-JEWISH BROTHERS FROM EASTERN AND WESTERN EUROPE. AND THE WHOLE WORLD.THE WAR BETWEEN NATO AND RUSSIA IS IMMINENT. THE WHOLE WORLD WILL EXPLODE ONCE USA OF AMERICA GOES TO WAR WITH IRAN.THE LIFE OF ALL OF YOU IS IN DANGER. THE ONLY WAY YOU CAN SAVE YOURSELF IS TO FOLLOW THE SEVEN COMMANDMENTS OF CHILDREN OF NOAH.FOR MORE INFORMATION ABOUT THE NOAH COMMANDMENTS. REFER TO LINK FROM WIKIPEDIA BELOW.http://en.wikipedia.org/wiki/Seven_Laws_of_NoahHELLO MESSIAHGOODBYE SATAN.

GuestAugust 31st, 2008 at 12:52 am

BEN CHANA, for the love of god, please show some self-control, self-respect and avoid posting here ever again.. your messages are wasting unnecessary space..what is your major malfunction?..can rge staffs pls bar this freako??..mrskeptical

kilgoresAugust 31st, 2008 at 5:14 am

@ mrskeptical 2008-08-31 00:42:58Ditto. This person never engages anyone in dialogue; he only posts this wacky stuff — all in caps — that more often than not has little to do with the topics raised by the article or subtopics raised by others in the thread.SWK

GuestAugust 31st, 2008 at 5:29 am

MASHIACH BEN CHANA wrote:

THE ONLY WAY YOU CAN SAVE YOURSELF IS TO FOLLOW THE SEVEN COMMANDMENTS OF CHILDREN OF NOAH….REFER TO LINK FROM WIKIPEDIA BELOW.

Not having heard of these laws before, and not having anything better to do, I decided to take a look what the Wikipedia article says. Out of the laws listed, following stood out as interesting…

#5 Prohibition of Blasphemy: You shall not blaspheme God’s name.

“You shall not blaspheme God’s name”? What is Gods name? It can’t be “God” because that is a title.Anyway, no need to answer as this is supposed to be an economy discussion and not a religion discussion.

RedCreekAugust 31st, 2008 at 6:00 am

Something to lighten the moods… : Jon Stewart on The Daily Show showed an extract from a political analysis on Fox, where someone said (more or less, dont remember correctly) that Sarah Palin has great international relations experience given that she has lived so long in Alaska which is right next to Russia; Stewart continued that she must also be friends with Santa given that Alaska is so close to the North Pole!!!

GuestAugust 31st, 2008 at 6:25 am

“Sarah Palin has great international relations experience given that she has lived so long in Alaska which is right next to Russia”.@ RedCreek on 2008-08-31 06:00:08I hope y’all remember that Alaska was purchased from the Russia by the USA.Ho humPeterJB

AnonymousAugust 31st, 2008 at 7:59 am

Hallo Mashiach Ben ChanaConcerning who is coming or going or sitting.Because it is Sunday and Labour Day and we have some more time than usual and therefore can read a longer paper, I will try the following way:I really think, that you can bring your treasure of information to a somehow higher level, if you take in account the following remarks of two American brain-worker:http://www.lrb.co.uk/v28/n06/mear01_.htmlglobumedes

mammonAugust 31st, 2008 at 9:14 am

Dear Mashiach Ben Chana:I personally enjoy reading your capitalized prognostications because you are a reflection of the state of fear that is bringing about a self-fulfilling prophesy in Fundamentalist Scriptural Myopia. The world is now controlled by Fundamentalists of all Religions who are hungry for the End Times Scenarios.Everyone wants to play the part in their script to bring about their own particular version of this sad screenplay. Reflect on the effects on all humans of any further military adventures by any nuclear powers. I know what you are thinking! It is written!I have no animosity towards your view. However, let me give you an observation of the Big Picture, and then you are entitled to criticize my position and I encourage you to do so. It is very convenient that Russia is now at loggerheads with NATO, and willnot cooperate in the European effort to bring Iran to trade the nuclear program for economic incentives. There is now a classic excuse to seek a violent end to the Iranian Nuclear Program. Busher is going to have the nuclear rods in soon. Whatever is to be done, has to be done before the rods are in. The sudden Russia-NATO orchestrated animosity does not help humanity! Whoever orchestrated this is demented!History is the work of men driven by their insatiable hunger for power. Hopefully they will not drive us over the cliff of extinction. Love humanity as a whole, because we are really one but don’t perceive it. Soon humanity will see how interconnected we are!I have great faith that all spiritual people of all faiths will awaken to an ecumenical world view! May you and all of us be blessed by peace, love and compassion. These 3 are the essence of the name we cannot say!

PhilTAugust 31st, 2008 at 9:57 am

@ PeterJB 2008-08-30 17:58:38While reading your biased version of events yet to unfold in full fruition, I couldn’t help but be reminded of the lyrics/voice of the Canadian poet-musician-artist, Leonard Cohen, in the title track of his 1991 album The Future.Best …

PhilTAugust 31st, 2008 at 10:03 am

@ RedCreek on 2008-08-31 06:00:08In the same vein, Bill Maher on Friday evening derived a new campaign moniker for McCain and Palin:” The Maverick and the MILF !”Cheers!

JLCAugust 31st, 2008 at 11:52 am

While I am put off by MASIACH BEN CHANA’s ALL CAPS PROGNOTICATIONS, I do find the news articles he/she refers to both timely and interesting.It certainly seems that a dark and mysterious storm is brewing in the Caucasus. I believe it has a lot to do with oil and control over oil pipelines. I believe the US & Europeans are adding fuel to the fire with their reactions. I also believe it is some sort of a diversion/prelude to action elsewhere, namely Iran. I sure hope that the political posturing and blatant stupidity that seem to be in vogue don’t create the conditions for the unthinkable to occur.We don’t know what really happened, or who was pulling the levers behind the scenes. I am continually disgusted by the blatant propaganda presented by the media. It has become completely Orwellian.So in addition to the dire world economic situation, we have ongoing wars in Iraq and Afghanistan, a potential war in Iran, rising tensions with Russia, a cirus of an election (the Fool or the Fraud?) and a hurricane to boot. Peak credit, peak oil, rising inflation, a slow motion economic meltdown, endless war . . .The future ain’t what it used to be.

GuestAugust 31st, 2008 at 12:29 pm

looks like it was easier for Russia to win the war in Georgia than for U.S. to win the war in Iraq…Of course Georgia and Iraq are very different geographically and Georgia also has a lot smaller population. But if all wars would end really quickly it would be a good thing, same as with recessions and other economical downturns. Unfortunately it seems that, just as the Iraq war, the current U.S. economical downturn has no end.

GuestAugust 31st, 2008 at 12:33 pm

Of course the Iraq war has no end because for that reason the government can bring all sorts of changes “because we are at war”.Probably the economical downturn will also be used to justify who-knows-what.

GuestAugust 31st, 2008 at 12:46 pm

Today’s discussion about finding the direction of the market (Gloomy) and mentions of money pools (artichoke) prompts me to repost the research that I did yesterday on the incestuous hierarchy in our financial system as it was cut off by a new thread. All bets are off if this cannot be remedied. Sorry about the additional post but this is at the base of our problem@ RedCreek: “The standalone investment banking model is being tested as never before. Goldman Sachs – whether by virtue of sophisticated risk management, collaborative culture or sheer luck – has so far weathered the credit storm. Citigroup, meanwhile…”Sophisticated risk management? Collaborative culture? Sheer luck? Let’s opt for collaborative culture if by that you mean Goldman Sachs controls the finance of the U.S. and is moving to control the finance of the world. Goldman’s operatives control:The U.S. Treasury via Henry PaulsonThe Federal Reserve Bank of New York via Stephen FriedmanThe World Bank via Robert B. Zoellick, former executive vice president of Fannie MaeThe IFC via Robert B. Zoellick (The International Finance Corporation is the United Nations agency that invests directly in companies and guarantees loans to private investors)Merrill Lynch via CEO John A. Thain (who left Goldman as president and CEO to take over “the troubled New York Stock Exchange” and now Merrill)The New York Stock Exchange via chief executive officer Duncan Niederauer, formerly managing director of Goldman SachsCitigroup via retiring chairman Robert RubinBank of Italy via governor Mario DraghiBank of Israel via governor Stanley Fischer of CitigroupWhite House Chief of Staff via Joshua B. BoltenThese are just a few of the Goldman people who decide who gets what. Big surprise that Goldman Sachs, as you say, is doing better than the others. Any surrogate, such as SEC’s Chris Cox, obviously is part of the coalition of the willing.

GuestAugust 31st, 2008 at 12:47 pm

And there’s more on Goldman Sachs’ pivotal position in U.S. banking.It was Goldman under Hank Paulson who arranged collateralized mortgage obligation and sold the toxic waste to investors on a scale of billions – one of the top 10 sellers. As Ben Stein writes in the N.Y. Times: “[G}oldman was injecting dangerous financial products into the world’s commercial bloodstream for years…“The point to bear in mind…is that as Goldman was peddling C.M.O.’s, it was also shorting the junk on a titanic scale through index sales – showing, at least to me, how horrible a product it believed it was selling.” (NY Times 2007/12/02)It should be noted what control of the New York Fed Bank means. The New York Fed has a permanent seat on the Federal Open Market Committee (FOMC) – the top monetary policy-making group of the Federal Reserve. The New York Fed conducts open market operations on behalf of the Fed. The New York Fed engages in foreign exchange operations on behalf of the U.S. Treasury and the Fed, as well as for some foreign central banks and international institutions. The New York Fed stores the monetary gold for dozens of countries.The Board of Governors of the Federal Reserve System in July granted the New York Fed the authority to lend to Fannie Mae and Freddie Mac…Let’s just pick one Goldman alumnus to identify — Stephen Friedman, the New York Fed chair who currently is a board member of The Goldman Sachs Group — what he’s done, where he sits.Chair Friedman is the retired chairman of The Goldman Sachs Group and currently serves as chairman of Stone Point Capital, LLC.He joined Goldman, Sachs & Co. in 1966 and became a partner in 1973. He was vice chairman and co-chief operating officer from 1987 to November 1990, and co-chairman or chairman from 1990 to 1994. Friedman is chairman of the President’s Foreign Intelligence Advisory Board and of the Intelligence Oversight Board. From December 2002 to December 2004, he served as assistant to President George W. Bush for Economic Policy and director of the National Economic Council…

GloomyAugust 31st, 2008 at 12:54 pm

FANNIE AND FREDDIE-THE END GAME FOR THE US DOLLAROn the day Fannie and Freddie are bailed out, the dollar will collapse. That day is rapidly approaching. From FT:”Shares in Fannie Mae and Freddie Mac fell on Friday amid concerns foreign investors were reassessing their exposure to the troubled US mortgage financiers’ bonds and guaranteed securities.Bank of China this week revealed it had cut its portfolio of securities issued or guaranteed by the two government-sponsored enterprises by a quarter, or $4.6bn, since the end of June. The sale underscored signs of nervousness among foreign buyers of Fannie and Freddie’s debt.Shares in Freddie Mac were 12.9 per cent lower in morning trade on Friday while Fannie Mae fell 11.9 per cent, halting a strong recovery for the companies’ stocks.Federal Reserve custody data on Thursday showed foreign official and private investors reduced their holdings of agency debt for the sixth consecutive week.Bill O’Donnell, analyst at UBS said: “If this recent theme of cooling passions for GSE’s debt becomes a longer-term trend, then it could be problematic for the GSEs given that the central banks have taken . . . roughly 30 to 60 per cent of new GSE issuance in recent months and years.”Foreign investors have been a mainstay of the market for agency debt in recent years but uncertainty over the mortgage financiers’ capital potisions and the timing and structure of a potential government rescue has made some investors re-evaluate their positions. Asian investors in particular have become net sellers of agency debt in recent weeks, said analysts.The US Treasury was granted powers last month to extend its credit lines to Fannie and Freddie and to invest in their debt and equity. “http://www.ft.com/cms/s/abca79e4-75ef-11dd-99ce-0000779fd18c,dwp_uuid=1c573392-3015-11da-ba9f-00000e2511c8,print=yes.html

kilgoresAugust 31st, 2008 at 12:59 pm

In case you missed it, you should read Rachel Ziemba’s excellent piece, US Oil Production and Hurricanes: Insecurity of Demand Trumps Insecurity of Supply?, which is the article immediately preceding this one on the blog.SWK

AnonymousAugust 31st, 2008 at 1:17 pm

Look what I just found in the Belfast Telegraph:”How Goldman Sachs took over the world: Whether it’s a credit crunch to fix or an Olympics to plan, the list of Goldman Sachs alumni is sure to have a candidate”Tuesday, 22 July 2008 –If there’s something weird in the financial world, who you gonna call? Goldman Sachs.The US government, involved in a firefight against the conflagration in the credit markets, is calling in another crisis-buster from the illustrious investment bank, this time Goldman’s most senior banker to finance industry clients, Ken Wilson.And so with this appointment, the Goldman Sachs diaspora grows a little bit more influential. It is an old-boy network that has created a revolving door between the firm and public office, greased by the mountains of money the company is generating even today, as its peers buckle and fall.Almost whatever the country, you can find Goldman Sachs veterans in positions of pivotal power…With Goldman Sachs at the heart of Wall Street, and Wall Street at the heart of the US economy, few expects its power to wane. Indeed, The New York Times columnist David Brooks noted that Goldman Sachs employees have given more money to Barack Obama’s campaign for president than workers of any other employer in the US. “Over the past few years, people from Goldman Sachs have assumed control over large parts of the federal government,” Brooks noted grimly. “Over the next few they might just take over the whole darn thing.”John ThorntonFrom his post as professor and director of global leadership at Tsinghua University in Beijing, the former Goldman Sachs co-chief operating officer John Thornton has become a highly-influential figure in the developing business and poltical inter-relations between the US and China. He was Goldman’s boss in Asia in the mid-Nineties and remains well connected in the East and the West.Duncan NiederauerWall Streeters joked about a Goldman Sachs “takeover” of the New York Stock Exchange. Hank Paulson, the Goldman boss on the NYSE board, moved to oust the chairman, Dick Grasso, and recommended the then chief operating officer of Goldman, John Thain, as Mr Grasso’s replacement. Mr Thain modernised the exchange as demanded by Goldman, and Mr Thain’s old Goldman deputy, Duncan Niederauer, is in charge.Jon CorzineThe former co-chief executive of Goldman went into full-time politics in 1999, having lost the internal power struggle that preceded the company’s stock-market flotation in 1999. He has been governor of New Jersey since 2006, having spent the previous six years in the US Senate. His 2000 Senate election campaign was then the most expensive ever in the US, and Corzine spent $62m of his own money.Joshua BoltenFor five years until 1999, Mr Bolten served as director of legal affairs for Goldman based in London, effectively making him the bank’s chief lobbyist to the EU. The Republican lawyer aided George Bush’s 2000 election campaign, helped co-ordinate policy in the White House and has been the President’s chief of staff since 2006.Paul DeightonThe man heading London’s planning for the 2012 Olympic Games, Paul Deighton amassed a fortune estimated at over £100m during his two decades at Goldman Sachs, where he had been one of its most powerful investment bankers.Robert RubinA US Treasury secretary under Bill Clinton, Mr Rubin could once again emerge as a powerful figure in Washington if Barack Obama wins the presidency, since he has maintained his influence on Democrat politics. Mr Rubin reached the second-highest rung at Goldman, becoming co-chief operating officer before joining the US government in 1993.Gavyn DaviesThe ex-chairman of the BBC still has the ear of Gordon Brown, to whom he has been a good friend and informal adviser. He is married to the Prime Minister’s aide Sue Nye. Mr Davies spent 15 years as an economist at Goldman. He was commissioned to report on the future funding of the BBC by Mr Brown in 1999. Two years later, he was poached to chair it.Jim CramerThis former Goldman trader is, without question, the most influential stock pundit in the US. Hectoring and shouting his investment advice nightly on his CNBC show, Mad Money, he routinely moves share prices. His primal scream against the Federal Reserve (“They know nothing”) was a YouTube sensation last year, as the central bank refused to lower interest rates to ease the pain of the credit crisis on Wall Street.Robert ZoellickGoldman provided a lucrative home to Robert Zoellick, the neo-conservative Republican, between the time he quit as Condoleezza Rice’s deputy at the State Department in 2006 (having not secured the job he coveted as Treasury Secretary, when it went to Hank Paulson) and his appointment last year as head of the World Bank. At Goldman he had acted as head of international affairs, a kind of global ambassador and networker-in-chief.Mario DraghiThe head of the Italian central bank is another example of the revolving door between Goldman and public service. Mr Draghi had been an academic economist, an executive at the World Bank and a director-general of the Italian treasury before joining Goldman as a partner in 2002. He is becoming a significant figure in the response to the credit crisis, chairing the financial stability forum of central banks, finance ministries and regulators.Malcolm TurnbullTreasurer for the opposition Liberal Party, Mr Turnbull is one of the fastest-rising politicians in Australia. He was the aggressive advocate who took on and beat the British Government in the Spycatcher trial of the former MI5 agent Peter Walker, but he then pursued a career in business and ran Goldman Australia from 1997 to 2001, before jumping in to politics to serve as environment minister under John Howard.Hank PaulsonCometh the hour, cometh the man. President George Bush must be delighted he lured a reluctant Hank Paulson away from his $38m-a-year job as Goldman Sachs chief executive in 2006, just in time to deal with the Wall Street crisis that has engulfed the entire US economy. The bird-watching enthusiast had been a surprising choice as Treasury secretary, since his environmentalism was at odds with much of Bush’s policy.http://www.belfasttelegraph.co.uk/business/company-profiles/how-goldman-sachs-took-over-the-world-13918215.html

GuestAugust 31st, 2008 at 2:01 pm

“Obama’s Cheney”Is there a curse on the office of the Vice President? by Justin Raimondo (excerpt)August 29, 2008 — Joe Biden on the ticket with Obama, as we said on Monday, is a big victory for the War Party, which will not, as a result, be shut out of power if the Democrats take the White House.Today Biden denounces the Iraq war in passionate language, and yet it seems like only yesterday that he bloviated on the need to invade with equal if not more passion. Indeed, as chairman of the Senate Foreign Relations Committee, Biden prevented any and all antiwar voices from being given a podium at the Senate hearings.Aside from that, however, he was one of the earliest proponents of the “revanchist Russia” meme that glides merrily along on the strength of pure alliteration, and now has gained a lot of momentum since Georgia’s invasion of South Ossetia was magically turned into Russia’s “invasion” of Georgia.He just couldn’t help himself, in his speech to the Democratic convention, in bringing up the alleged Russian “threat”:”For the last seven years, this administration has failed to face the biggest forces shaping this century: the emergence of Russia, China and India as great powers; the spread of lethal weapons; the shortage of secure supplies of energy, food and water; the challenge of climate change; and the resurgence of fundamentalism in Afghanistan and Pakistan, the real central front against terrorism.”In recent days, we’ve once again seen the consequences of this neglect with Russia’s challenge to the free and democratic country of Georgia. Barack Obama and I will end this neglect. We will hold Russia accountable for its actions, and we’ll help the people of Georgia rebuild.”Russia must be held “accountable” for defending the militarily helpless statelet of South Ossetia under attack from the US-armed –and-trained Georgian military – accountable for avenging a merciless assault on the Ossetian capital city of Tskinvali. Naturally, the U.S. is never to be held accountable for any of its actions anywhere.The U.S. government, you see, is not accountable, not even to its own citizens. Biden sees the Russian “invasion” as a game-changer, a pivotal event that perhaps marks the beginning of a new cold war – and a new bout of U.S. meddling in the region.Upon his return from a trip to Tbilisi, the Georgian capital, Biden averred:”The war that began in Georgia is no longer about that country alone. It has become a question of whether and how the West will stand up for the rights of free people throughout the region. The outcome there will determine whether we realize the grand ambition of a Europe that is whole, free, and at peace.”…Biden is going to put our money where his mouth is, proposing a $1 billion “emergency” aid package for Saakashvili’s regime to do with as it pleases…http://antiwar.com/justin/

PhilTAugust 31st, 2008 at 3:12 pm

@ globumedes 2008-08-31 07:59:50… I really think, that you can bring your treasure of information to a somehow higher level, if you take in account the following remarks…Indeed … each/all of us can rise to a higher level of interaction and understanding as a result of reading this fair and comprehensive piece of work at the LRB link that you have contributed.Although it was published in 2006, it is just as/even more relevant today. Thank you Globumedes for bringing it to this forum, I would have completely missed it otherwise.Be well …

GuestAugust 31st, 2008 at 4:17 pm

Guest on 2008-08-31 14:01:31

Russia must be held “accountable” for defending the militarily helpless statelet of South Ossetia under attack from the US-armed –and-trained Georgian military – accountable for avenging a merciless assault on the Ossetian capital city of Tskinvali. Naturally, the U.S. is never to be held accountable for any of its actions anywhere.

and? some folks would write that that just shows how difficult it is to uphold international law in this complex world… thereby not having to continue the discussion on what you wrote about U.S. not being held accountable, but leading it to the complexities of law-enforcement…(with no mention that the law that we have was often pushed through by the same countries who wanted to enforce it)

AnonymousAugust 31st, 2008 at 4:58 pm

The late great planet earth,The count down to Armageddon, on and on and on. Its so easy to find all kinds of information and make a mountain out of a mole hill. The economy will not collapse and we will go on as usual. Its probably our need for entertainment that’s makes use want to see the things we do.We spent more then we made and that’s the end of it. so lets pay the price and move on.OBAMA has some great ideas and even if humans are not the ones warming things up, well at least in 10 yrs cars will be quieter and smell much better.bush is only here for 3 more months and even though he can do more damage, with desire and hard work we can fix whatever else we let him do.So instead of looking for anything that fits your desire for entertainment like a good disaster movie start looking for fixes and but your money there.I think NR should join OBAMAPeople on wall st are not heroes or even someone to look up to. The real heroes are people like me who work at making something or building something of use for a real wage. Paper pushing and manipulation is cartoonish and just hurts the real people.So all of you religious fanatics and suit wearing sissies get out of the way

GuestAugust 31st, 2008 at 5:02 pm

@ Anonymous: “Just out of curiosity, are you a U.S. citizen?”Very much so, and I am very concerned about my country.

GuestAugust 31st, 2008 at 5:56 pm

These discussions of law remind me of Frederic Bastiat’s statement about the relationship of law and plunder:“It is impossible to introduce into society a greater change and a greater evil than this: the conversion of the law into an instrument of plunder.”Asks Bastiat: “But how is this legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime.”The apparent takeover of the U.S. financial system by the investment bank Goldman Sachs is presented as a legal action. In my opinion, the definition of plunder from Ambrose Bierce, while humorous, exactly fits the application of law to mask the theft of America’s wealth:Plunder – “To take the property of another without observing the decent and customary reticences of theft.”

kilgoresAugust 31st, 2008 at 6:09 pm

@ Guest 14:01:31>http://antiwar.com/justin/The site describes itself as being politically “libertarian,” “devoted to the cause of non-interventionism” and opposed to “imperialism.” It appears, however, that its content is more or less limited to criticism of purported interventionism and imperialism by the United States alone. The site touts, for example, its history of opposition to “intervention in the Balkans under the Clinton presidency,” to “Clinton’s campaigns in Haiti and Kosovo and bombings of Sudan and Afghanistan.” It is, of course, highly critical of the actions of the U.S. in Iraq. Conspicuously absent is any content critical of intervention or imperialism by countries other than the United States and its allies.The focus of the site’s latest “project” is U.S. policy in the dispute between Russia and Georgia. Its articles on this topic are hardly a model of balanced and objective analysis. Mikheil Saakashvili is characterized as a “war criminal,” Georgia as “the real aggressor,” and any blame of Russia is dismissed as nothing more than the product of “Russophobia.” Apparently, the support for Saakashvili and Georgia by the U.S. and other western countries is wrongful intervention and imperialism, but Russia’s use of military force against Georgia and violation of its territorial integrity, in the absence of any attack or threat of attack against Russian territory, is understandable and justified. It reminds me of certain pseudo-radical elements in the 1960s who would scream “murdering fascist pigs” when someone was killed by the police, but were palpably silent when a policeman was killed. In short, it is hypocritical.Justin Raimondo and his fellow contributors would have you believe that they have some sort of “inside track” to what is really happening in international affairs, and that they are prepared to share boldly with readers the truths that “establishment” sources would distort and hide from the public intentionally. Frankly, however, Mr. Raimondo and his associates strike me as little more than shills for Russia and any other state or non-state actors who routinely oppose U.S. interests.There is plenty of legitimate criticism to be leveled against the United States, but this sort of slanted assessment rarely leads to productive change in misguided U.S. policies because it undermines its own credibility.SWK

GuestAugust 31st, 2008 at 7:27 pm

In case you missed this on RGE’s U.S. EconoMonitor:”Fannie and Freddie, and the Bailout Around the Corner” by Robert Reich | Aug 27, 2008Any day now — perhaps any hour — the plug will be pulled on Fannie Mae and Freddie Mac, and a massive government bailout will ensue. Together, they’ll become the largest government-owned entities in American history, and, once again, taxpayers will pay the bill, which could come to $25 billion or more.One question is how did we ever get to this? The Savings and Loan Bailout of the late 1980s should have taught us that when government guarantees the downside of risks and private investors reap the upside gains, there’s hell to pay. The risks Fannie and Freddie took on weren’t officially guaranteed by the government — that is, by you and me — but investors assumed they were. And so did Fannie’s and Freddie’s executives, who reaped a bonanza with bonuses in the tens of millions each year.Apologists will say that Fannie and Freddie exist to make housing loans to low-income Americans, so it was inevitable that the two giants would get caught in the quagmire of the housing burst. But the fact is, Fannie and Freddie — and the executives who ran them and still run them — have been out to maximize profits. Period. Just the same as every other mortgage and investment bank. High-risk sub-prime loans offered a higher rate of return, so Fannie and Freddie went into them big time. And because of the implicit government guarantee, Fannie and Freddie could take on even more risks and make even more money. Until now.It’s another case of socialized capitalism, folks. The largest, yet. Along with making lots of money for investors and their executives, Fannie and Freddie corrupted our political process. They blocked any attempt to reign in the risks. Their lobbyists were and are the most sophisticated and among the most ubiquitous in Washington.What to do now? Hope that, like the S&L fiasco, taxpayers can get back a fair portion of our dollars. But unlike the S&L fiasco, this time we should make sure we bury socialized capitalism for good. ENDhttp://www.rgemonitor.com/us-monitor/253424/fannie_and_freddie_and_the_bailout_around_the_cornerA good article. But when, may I ask, did the American people adopt a “Too-Big-to-Jail” Criminal System? It is a faulty argument that the American people must bail out shady investment bankers when things go badly, but when things go well the investment bankers get to keep their gold. If this is the way it is, then let those investment bankers give back to the American people the landslide profits they’ve made these past many decades. They say they don’t have the money? Then let them make installment payments, even if it takes years.Public officials who say strapped taxpayers must bail out fraud and protect Wall Street’s billionaire risk takers are on the wrong side of a two-sided argument. The people who say we’re going to be in trouble if we don’t bail them out, are the same people who said Iraq was going to be a “cake walk.”Washington is in desperate need of a thorough House cleaning.

GuestAugust 31st, 2008 at 8:14 pm

On CounterPunch on “Obama’s Speech; McCain’s Palinomy”By ALEXANDER COCKBURN August 30 / 31, 2008EXCERPTS ~Only a few minutes into his speech, Obama was talking tough: pro forma homage to McCain’s military heroism rapidly gave way to punchy gibes that he’s a tired old retread of George Bush who just doesn’t get it. “I get it”, Obama assured the cheering crowd. “It”, of course” is the rotten shape America is in, with jobs gone to China, troops needlessly slaughtered in Iraq, desperate middle class families, homes foreclosed and credit cards maxed out…In answer to McCain’s criticisms that his programs have been heavy on “hope” but void of substance, Obama outlined his program: a tax cut for “95 per cent of all working families” and a cut in capital gains for small business…Obama paid ritual homage to Israel and now Georgia as two states he would stand up for and beyond that mostly steered clear of foreign policy, except to assert that he could carry just as big a stick as John McCain. The foreign policy posture of the Convention was displayed in simple terms, namely the decision not to let Jimmy Carter speak on Monday night. Put the words “apartheid” and “Israel” in the same sentence and a former Democratic President becomes a non-person…The specific proposals Obama put up in his speech exposed another problem. Once the message shifts from diffuse sermons about national unity to concrete proposals on tax cuts for the middle class and closing of corporate loopholes, the Haves will roll out their heavy artillery against this “divisive” spokesman for the Have-Nots, a preacher-cum-populist radical rabble-rouser who has finally ripped off the mask of “bipartisanship”. And of course, if Obama ever presumes to try to alter the distribution of income and wealth in America, “bipartisanship” will indeed have to be tossed aside. But then Obama will need a constituency, a powerful movement, to carry him forward and overwhelm an implacable opposition. Eight years of Clintonism voided the Democratic Party of whatever tiny sliver of potential as a popular movement it might still have retained, with the added irony that one prime constituency Obama needs is to be found precisely among those Hillary Clinton Democrats who will have the most difficulty in voting for him.In fact. Obama has neither a movement or – so far as we know – a plan, except to muddle along the roadmap designed by corporate America and the foreign policy establishment in Washington. In Denver, the disconnect to economic reality was awe-inspiring. You could switch over to Bloomberg News and sniff the panic, then switch back to one cheery speech after another about “taking the country back”. They’ll be only too happy to give Obama back several trillion dollars worth of unpaid bills: “Here, sonny. Now it’s your problem.” The only concrete reference to the credit crisis that I heard came in an excellent little speech on Thursday by Susan Eisenhower.Obama’s prime diagnosis of America’s condition is that it’s bitterly divided. This seems wrong to me. America is more united than in any time in my memory. By a vast percentage it despises George Bush, and thinks America has been hijacked by neo-cons and billionaires…http://www.counterpunch.org/cockburn08302008.html

GuestAugust 31st, 2008 at 8:34 pm

Sizing Up SarahBy ALAN ABELSON (Barron’s September 1, 2008) Items II and IIIGDP, IN COMMON PARLANCE, stands for gross domestic product, or the aggregate value of all the goods and services produced on these blessed shores. Or, at least, that’s what it used to mean in those long-gone days of yore, when life was simpler and government statistics credible. These days, alas, those initials more typically signify “gross deceptive pap.”The insidious change has not gone unremarked, both in this magazine and by more than one skeptical scanner of the turgid flow of numbers flowing out of Washington. Yet purportedly professional seers, who draw handsome paychecks for sifting through the unending streams of digits and making sense of them for hoi polloi like us, deferentially pass along the official numbers unsullied by even a modicum of analysis, as if they were holy writ, especially when they’re upbeat.A case very much in point was last Thursday’s revised report on second-quarter GDP, which helped spark a nice, if something less than enduring, leap forward by the stock market. The initial version released in July posited that the venerable economic barometer had risen by 1.9% — up from the first quarter’s meager 0.9% gain, but obviously no great shakes.Comes now the so-called preliminary estimate that claims second-quarter GDP grew by a much more robust 3.3%. That was hailed by the incorrigibly constructive contingent in the Street as evidence of the resiliency (favorite word) of the economy and prompted the thinned-out ranks of investors to put their worries and their plans for an extra-long weekend on hold and pile into stocks. Hooray! Hooray!But even a cursory look at what they’re drooling over reveals pretty thin gruel. Nothing, for sure, that would cause any sentient being to start humming “Happy Days Are Here Again.” For the ostensibly better GDP showing is a mirage, conjured up by the usual suspects out of smoke and mirrors.The key here is the GDP deflator, which purports to adjust GDP for the impact of inflation; it’s a curious calculation in that, contrary to its moniker, it seems designed to do the exact opposite of deflating GDP.Thus, according to this accommodating measure (accommodating, that is, if you’re determined to put a good face on a dreary report), inflation grew at an improbably restrained 1.33% in April-June. And maybe it did — but not in the good old U.S. of A. However, obviously more important than accuracy to those doing the calculating is this simple equation: The lower the deflator, the greater the growth of GDP.John Williams of Shadow Government Statistics, whose incisive description of the decades of willful distortion of inflation by Washington we cited a few weeks ago, points out that the supposed 1.33% increase in the second quarter would represent the lowest inflation rate in five years. Must be that plain folks stubbornly refuse to recognize the dramatic drop in inflation, because, as Phil Gramm said, we’re such a bunch of whiners.Of course, even by the government’s not entirely extravagant figuring, the consumer-price index was up a hefty 8% in the latest quarter. Perhaps the computer that tallies the CPI doesn’t talk to the computer that measures the deflator.By John’s reckoning, “a second-quarter year-to-year contraction of 2.9% would have been more in line with underlying fundamentals, past methodologies and the ongoing recession.”He suggests that a more telling picture of the economy’s progress or lack of it is the alternative to GDP, known as gross domestic income, or GDI. It’s a rough equivalent of GDP but measures the nation’s income instead of production.According to John, after adjusting for inflation, GDI in the June quarter weighed in at an anemic 0.5%, atop negative growth in the preceding two quarters — which, as it happens, meets the popular definition of a recession.Friday’s disclosure that personal income in July suffered its biggest decline in three years doesn’t exactly portend a rebound in the third quarter, and certainly didn’t come as a big surprise to John, who sees the outlook for the economy remaining glum, with no early end to the banks’ solvency crisis, as he terms it, nor the inflationary recession.THE ASTUTE ECONOMY-WATCHER for Merrill Lynch, David Rosenberg, also strongly advises digesting the suspect GDP report with a “very large grain of salt.” Among other things, he casts a skeptical eye on how the report treats the decline in corporate profits. (We won’t keep you in suspense: The answer is: “gingerly.”)More specifically, he notes, “national-account corporate profits declined at a 9.2% rate in the second quarter.” For domestic industries, he goes on, profits are down 14.4% year over year.But according to the GDP report, domestic nonfinancial profits fell at a much sharper 22% annual rate. The reason the drop in total corporate earnings was limited to 9.2% was that, David relates, profits in the financial sector, so claims the report, surged — get this — at a 27% annual rate.His wonderfully eloquent comment:”Are you kidding me?”http://www.tickerforum.org/cgi-ticker/akcs-www?post=58207

W.T.H.C.August 31st, 2008 at 9:20 pm

kilgores on 2008-08-31 18:09:25There is plenty of legitimate criticism to be leveled against the United States, but this sort of slanted assessment rarely leads to productive change in misguided U.S. policies because it undermines its own credibility.——hum-ho, if a slanted assessment undermines the credibility of a group of writers, then most of U.S. newspapers have none:-) I am sure that there is plenty of legitimate criticism to be leveled against Iran and Russia (to name two countries heavily criticized in the U.S.) but that sort of slanted assessment…etc, etc…

kilgoresAugust 31st, 2008 at 10:06 pm

@ W.T.H.C. 21:20:02I take your point. Every source of information carries with it some potential bias, but some sources are so utterly one-sided that it is difficult to take anything they express seriously, and to me, this is Anti-War.com site is one of them. The New York Times and the Wall Street Journal each may have their respective implicit prejudices, but in general, at least in terms of straight news, there is some bona fide effort on the part of each to be factually accurate and to present both sides of any given story or issue.SWK

MASHIACH BEN CHANAAugust 31st, 2008 at 10:13 pm

THE RUSSIANS ARE COMINGTHIS ARTICLE COMES FROM FABIUS MAXIMUS BLOGInformed CommentThoughts on the Middle East, History, and ReligionJuan Cole is President of the Global Americana InstituteSaturday, August 30, 2008OSC: Russia- Iran Alliance?The USG Open Source Center translates an article from the Russian press proposing a strategic alliance between Russia and Iran.Pundit on Possible Russia-Iran Alliance To Counter ‘Unfriendly’ US MovesArticle by Radzhab Safarov, General Director of the Russian Center for Iranian Studies: “Iranian Trump Card. Russia Can Take Control of Persian Gulf”Vremya NovosteyFriday, August 29, 2008Document Type: OSC Translated TextThe recognition of South Ossetia’s and Abkhazia’s independence by Russia is a timely step to protect these republics from new Georgian aggression. However, taking into account the United States’ plans to expedite Georgia’s and Ukraine’s accession to the NATO military-political bloc, the situation near the Russian border remains alarming. At the same time Moscow has a lot of possibilities to take balanced counter measures to the United States’ and entire NATO’s unfriendly plans. In particular, Russia can rely on those countries that effectively oppose the United States’ and their satellites’ expansion. Only collective efforts can help to create a situation which would, if not eliminate then at least reduce the risk of the Cold War’s transformation into local and global conflicts.For instance, Moscow could strengthen its military-technical ties with Syria and launch negotiations on the reestablishment of its military presence in Cuba. However, the most serious step which the United States and especially Israel fear (incidentally, Israel supplied arms to Georgia) is hypothetical revision of Russia’s foreign policy with regard to Iran. A strategic alliance presuming the signing of a new large-scale military political treaty with Iran could change the entire geopolitical picture of the contemporary world.New allied relations may result in the deployment of at least two military bases in strategic regions of Iran. One military base could be deployed in the north of the country in the Iranian province of Eastern Azerbaijan and the other one in the south, on the Island of Qeshm in the Persian Gulf. Due to the base in Iran’s Eastern Azerbaijan Russia would be able to monitor military activities in the Republic of Azerbaijan, Georgia and Turkey and share this information with Iran.The deployment of a military base on the Island of Qeshm would allow Russia to monitor the United States’ and NATO’s activities in the Persian Gulf zone, Iraq and other Arab states. With the help of special equipment Russia could effectively monitor whois sailing toward this sea bottleneck, from where, and with what cargo on board to enter the World Ocean or to return.For the first time ever Russia will have a possibility to stop suspicious vessels and ships and inspect their cargo, which the Americans have been cynically doing in that zone for many decades. In exchange for the deployment of its military bases Russia could help the Iranians to deploy modern air defense and missile defense systems along the perimeter of its borders. Tehran, for instance, needs Russia’s modern S-400 SAMs.The Iranian leadership paid close attention to reports stating that the Georgian Government’s secret resolution gave the United States and Israel a carte blanche to use Georgian territory and local military bases for delivering missile and bomb strikes against Iranian facilities in the event of need. Another neighbor, Turkey, is not only a NATO member, but also a powerful regional opponent and economic rival of Iran. In addition to this, the Republic of Azerbaijan has become the West’s key partner on the issue of transportation of Caspian energy resources to world markets. The Iranians are also concerned at Baku’s plans to give Western (above all American) capital access to the so-called Azerbaijani sector of the Caspian Sea, which is fraught with new conflicts, because the legal status of the Caspian Sea has not been defined to date.Russia and Iran can also accelerate the process of setting up a cartel of leading gas producers, which journalists have already dubbed the “gas OPEC.” Russia and Iran occupy first and second place in the world respectively in terms of natural gas reserves. They jointly possess more than 60 percent of the world’s gas deposits. Therefore, even small coordination in the elaboration of a single pricing policy may force one-half of the world, at least virtually entire Europe, to moderate its ambitions and treat gas exporters in a friendlier manner.While moving toward allied relations, Russia can develop cooperation with Iran in virtually all areas, including nuclear power engineering. Russia can earn tens of billions of dollars on the construction of nuclear power plants in Iran alone. Tehran can receive not only economic, but also political support from Russia in the development of its own atomic energy sector.In addition to this,in view of the imminent breakup of the CIS from which Georgia already pulled out, Russia could accelerate the process of accepting Iran as an equal member of the Shanghai Cooperation Organization (SCO). By accepting Iran, one of the key countries of the Islamic world, the organization could change fundamentally both in terms of its potential and in terms of its regional role. Meanwhile, as an SCO member Iran will find itself under the collective umbrella of this organization, including under the protection of such nuclear states as Russia and China. This will lay foundations for a powerful Russia-Iran-China axis,which the United States and its allies fear so much.(Description of Source: Moscow Vremya Novostey in Russian — Liberal, small-circulation paper that sometimes criticizes the government)posted by Juan Cole @ 8/30/2008 12:05:00 AM

MASHIACH BEN CHANAAugust 31st, 2008 at 11:22 pm

@ Written by Guest on 2008-08-31 05:29:18@ mammon on 2008-08-31 09:14:15HERE IS YOUR REPLY, THE LINK BELOWmms://216.53.71.16/Ohrtmimim/Noahide/bn33.wmv

MASHIACH BEN CHANASeptember 1st, 2008 at 12:38 am

THE RUSSIANS ARE COMINGRussia threatens to supply Iran with top new missile system as ‘cold war’ escalatesRussia is deploying the threat to sell a “game changing” air defence system to Iran as a high stakes bargaining chip in its new “cold war” with America, The Sunday Telegraph has learned.By Philip Sherwell in New York and William Lowther in WashingtonLast Updated: 11:29AM BST 31 Aug 2008HUS intelligence fears the Kremlin will supply the sophisticated S-300 system to Tehran if Washington pushes through Nato membership for its pro-Western neighbours Georgia and Ukraine.The proposed deal is causing huge alarm in the US and Israel as the S-300 can track 100 targets at once and fire on planes up to 75 miles away.That would make it a “game-changer”, greatly improving Iranian defences against any air strike on its nuclear sites, according to Pentagon adviser Dan Goure. “This is a system that scares every Western air force,” he said.Senior US intelligence operatives believe that Russia is planning to use a stand-off over the S-300 to create a foreign policy showdown that would test the mettle of a new US president.Republican candidate John McCain has taken a strongly anti-Kremlin line on a series of international issues and backed Georgia’s desire to join Nato. His Democratic rival Barack Obama has also indicated he supports Nato membership for Georgia.”The message from Moscow is very clear,” said George Friedman, director of Stratfor, a leading US private intelligence agency. “They are saying if you don’t stop meddling in our sphere of influence, this is what we are going to do.”Back Georgia and Ukraine for Nato membership and you’ll see the S-300 to Iran. It is a very powerful bargaining chip and a major deterrent to US actions in the region. Moscow is playing very strategically on America’s obsession with Iran.”Moscow has been infuriated by the steady encroachment of Nato into the former Soviet bloc and the recent granting of independence to the ex-Serbian province of Kosovo against its wishes.After American condemnation of Russia’s foray into Georgia, Moscow invited Syria’s dictator Bashar al-Assad, a long-time US foe, to discuss military deals in a deliberate signal of how it could cause trouble for Washington.A senior US intelligence operative who recently returned from the Middle East said Russia is believed to have struck a tentative deal to sell the S-300 to the Islamic regime. There are reports that Russia has already moved some basic components for the system to its close ally Belarus, ready for possible transfer to Iran.”Moscow cannot simply threaten to strike the deal,” the official told The Sunday Telegraph. “Iran certainly thinks it has a deal. And the Israelis believe that a deal has been reached but that they can still block it.”The outgoing Israeli prime minister Ehud Olmert is expected to pass that message on to his counterpart Vladimir Putin and President Dmitri Medvedev when he visits Moscow next month. Israel has already ended military assistance to Georgia in an effort to placate Russia.Russia has denied previous assertions by senior Iranians that a deal has already been finalised on the S-300.Dan Goure, a long-time Pentagon adviser, said: “If Tehran obtained the S-300, it would be a game-changer in military thinking for tackling Iran. That could be a catalyst for Israeli air attacks before it’s operational.”Dr Friedman said that if it became operational, it would effectively rule out Israeli air raids and seriously complicate any US aerial bombardment.The system would take up to a year to become operational. In the meantime, Israel would come under heavy domestic pressure to launch an attack on Iranian nuclear plants, which the West believes are part of a secret atomic weapons programme but which Tehran claims are for civilian energy.A senior Iranian military commander warned yesterday that any attack on Iran would start a major conflict. “Any aggression against Iran will start a world war,” deputy chief of staff for defence publicity, Brigadier General Masoud Jazayeri, said in a statement. “The unrestrained greed of the US leadership and global Zionism… is gradually leading the world to the edge of a precipice.”

AfASeptember 1st, 2008 at 2:10 am

@ MashiachWhat is your point?? What is your project, objectives?? Do you have any other hobbies, interests ??”The Russians are coming”?? OK, we understood that, no need to remind us every now and then? Speak if you have something to say.”Any aggression against Iran will start a world war,”?? Is this an information. Even a school kid would implicitly assume this.You have some message to deliver? Speak I am all ears if what you say will earn me new knowledgeReligious propaganda? I am a religious person, so when I want to discuss these things I can have access to better blogs and discussions. I am split between so many religions and bloods that I have enough debates at home, I don’t need your propaganda, but thanks. When I come here, I expect to find something useful and remotely connected to economic topics and discussions. Bringing religious and racial BS to this sinful board is the 8th Law of Noah if you wish:Prohibition of RGE: You shall not bring any propaganda BS to RGE board (Roubini 9:6)Hope you would understand

AfASeptember 1st, 2008 at 2:38 am

The Prestige”Every great magic trick consists of three acts. The first act is called “The Pledge”; The magician shows you something ordinary, but of course… it probably isn’t. The second act is called “The Turn”; The magician makes his ordinary some thing do something extraordinary. Now if you’re looking for the secret… you won’t find it, that’s why there’s a third act called, “The Prestige”; this is the part with the twists and turns, where lives hang in the balance, and you see something shocking you’ve never seen before.”Where are we now?The magicians did show us something ordinary … but it probably isn’t (e.g. mortgages, credit). Then, through a magical trick, our magicians made of the ordinary thing, which probably isn’t, somehing extraordinary (e.g. MBS, CDS, CDO, Level II, Level III…). Now you see it. Now you don’t:”Now you’re looking for the secret… but you won’t find it because you’re not really looking. You don’t really want to know the secret… You want to be fooled.”Now what is the PRESTIGE? Where will all the money show up after it has been made disappear, just like by miracle?”You never understood, why we did this. The audience knows the truth: the world is simple. It’s miserable, solid all the way through. But if you could fool them, even for a second, then you can make them wonder, and then you..then you got to see something really special.. you really don’t know?..it was..it was the look on their faces..”I guess we had all our answers, Average Jane. The “”sheople”” are in a state of wonder (I wonder what kind, but I guess not the one leading to philosophy). And the “”masters”” did it to “see the look on their faces when they discover reality”. I guess it is a plausible and worthwhile objective, how many times did you run into trouble to see the look on others’ face?

DaltoniSeptember 1st, 2008 at 3:28 am

SWK: “The New York Times and the Wall Street Journal each may have their respective implicit prejudices, but in general, at least in terms of straight news, there is some bona fide effort on the part of each to be factually accurate and to present both sides of any given story or issue.”The decline of what we now call the MSM is very complicated. I spent my entire career in newspapers, and I am appalled by, and ashamed of, what has happened. I don’t think anyone fully understands the death spiral that newspapers are in, but it’s probably a perfect storm. Circulation has been declining for ages; the Internet sped up the process. Newsrooms were once ivory towers of independence; now the business side meddles freely. Staffs keep being reduced. Web editions have made the staffs very “hits conscious,” and it’s the fluff and gossip that gets the hits. Newspapers used to attract good young talent, now they don’t. Publishers used to have an ethic of public service; now they don’t. The accelerating death spiral of newspapers coincided with a government with unprecedented and brilliant propaganda machinery. The people who run this propaganda machinery are far, far smarter than most of the people working in newsrooms. In the Washington press corps in particular, more and more so-called journalists get entangled with the powers that be and seem to feel more of a duty to their sources than to their readers.You seem to have bought into one of the most destructive memes, the idea that there are two sides to any given story, so all you have to do is quote “both sides” and call it a day. But one side, or even both sides, may be lying. Somewhere along the line, newspaper people forgot that the point is to find the truth, not to merely quote “both sides.” Some TV personalities are very explicit about this and say that it’s not their job to “debate the government.” And increasingly the American public even seem to demand these “two sides,” so that they are fed something that is pre-mangled to fit their prejudices, their ignorance, their faith-based realities, and their short attention spans.The Washington Post, in my opinion, has devolved into Pravda. The New York Times is struggling to stay aloft, but as the Judith Miller case shows, even the New York Times is unable to consistently stand up to government propaganda machinery.Newspapers are dead. I don’t know what lies ahead for those of us who really care what is going on in the world. My guess is that, via the Internet, we must somehow find what I call trusted experts, specialists in particular areas, and we must sort through a huge amount of open source intelligence. Ninety-nine percent of the population just don’t have the time, or the judgment, or even the interest, to do this. The powers that be know this, hence the propaganda.This is what led most of us to Dr. Roubini’s blog, I’m sure. We were searching for a trusted expert in the area of economics, because we knew we were getting bunk and spin from the media.

P1AQLSeptember 1st, 2008 at 4:22 am

Anonymous on 2008-08-31 13:17:36 wrote:

bird-watching enthusiast

“You can observe a lot just by watchin'”Money and Power. Politics and Economics. It’s all there in the “Cash Nexus : Money and Power in the Modern World, 1700-2000” by Niall Fergusonhttp://www.amazon.com/Cash-Nexus-Money-Modern-1700-2000/dp/0465023266The Rothschilds and France and now, Goldman and public service. Why are we not surprised?It’s survival for the fittest (brains).Watch ’em lemmings go! And as always,Enjoy the ride!P1AQL.P.S. Watch the shareholders of the GSEs being asked a lot of interesting questions by the bird watcher this weekend!

AnonymousSeptember 1st, 2008 at 5:26 am

To Guest 20:14:21 Without hope panic and chaos will rule. If both houses become demarcate then a President like OBAMA will be able to do enough to fix the damage done by bush and to a degree fix the trouble that greedy bankers and those on wall street and the like who live a life on illusion, have them pay a much hight tax to make up the trillions they have stolen.There are many more of us who work for a real wage making and building real things. Through out history, If you push us to much we will take back what we gave you.OBAMA is a politician but he is by far way ahead of anyone else in that world. He has got the following and has the votes.

mammonSeptember 1st, 2008 at 7:13 am

War has always been a handy solution for Financiers! Creative Destruction of Oversupply! Cause enough damage and their will be a need to rebuild. The rebuilding process yields just as much profits as the War Profiteering that preceeds it. Don’t understimate the power of the mass media to manufacture whatever consent is necessary to have the population vote against their own interests. History is a cyclical repetition of basically the same events in different time periods. The acquisitor mentality has only one preoccupation and that is the accumulation of wealth at any cost. There are no rules for an extreme acquisitor psyche.The financier is the epitome of this psyche. The psyche is akin to the myth of the dragon who has kipnapped a woman. He can’t do anything with her, but he wants her anyway. Niall Ferguson clearly states that there is no “end of history” scenario. The needs of financiers are such that they need to fix their excesses with War. We are just the morons that go along with the program, until one day we will see ourselves incinerated. Financiers must be reigned in to their proper function of providing funds for production and innovation capitalism. Whenever capitalism allows the financiers to run the show, we end up in war to fix their mistakes. We must go back and re-examine how to regulate finance to subordinate it to its proper role. When the politicians are not owned by the financiers society runs much better.

kilgoresSeptember 1st, 2008 at 9:48 am

@ Daltoni on 2008-09-01 03:28:37You make some very excellent points. I truly appreciate your providing the benefit of your perspective here, which is substantial. Some comments in reply:> I don’t think anyone fully understands the death spiral that newspapers are in, but it’s probably a perfect storm. Circulation has been declining for ages; the Internet sped up the process. Newsrooms were once ivory towers of independence; now the business side meddles freely. Staffs keep being reduced. Web editions have made the staffs very “hits conscious,” and it’s the fluff and gossip that gets the hits. Newspapers used to attract good young talent, now they don’t. Publishers used to have an ethic of public service; now they don’t.Shoot! When was the last time you read an article in the newspaper with a truly well-written lead? All I want to know is who, what, when, where, and how. I don’t need a young reporter with a bachelor’s degree in journalism and no life experience or broader knowledge of the world to opine in a straight news story about what’s really happening or what’s really significant, or speculating about what might be happening or might be significant.>The accelerating death spiral of newspapers coincided with a government with unprecedented and brilliant propaganda machinery. The people who run this propaganda machinery are far, far smarter than most of the people working in newsrooms. In the Washington press corps in particular, more and more so-called journalists get entangled with the powers that be and seem to feel more of a duty to their sources than to their readers.Well, this has been going on for some time. I remember a poignant scene from All The President’s Men in which the editors of the Washington Post are discussing Woodward and Bernstein’s work on the Watergate story, and one of them suggests that his people in the White House Press Corps should take over the investigation because “they know all the right people.” With the benefit of hindsight, the audience cringed because it knew that Nixon’s White House was lying daily about Watergate (and a lot of other things).>You seem to have bought into one of the most destructive memes, the idea that there are two sides to any given story, so all you have to do is quote “both sides” and call it a day. But one side, or even both sides, may be lying.To take another example from the cinema, ever see Akira Kurosawa’s 1950 film, Rashoman? I believe there are often MORE than one side to any given story, but that there is only one truth. I’m a fifty-year-old lawyer, so I understand something about the complexities of ferreting out the truth from myriad versions of the facts.>Somewhere along the line, newspaper people forgot that the point is to find the truth, not to merely quote “both sides.” Some TV personalities are very explicit about this and say that it’s not their job to “debate the government.” And increasingly the American public even seem to demand these “two sides,” so that they are fed something that is pre-mangled to fit their prejudices, their ignorance, their faith-based realities, and their short attention spans.Well, this represents the transformation of the news media into the infotainment media, doesn’t it? Muddled is the right word. I guess this enhances ratings, especially among the ignorati, because no matter what the story, they can take away, a la carte, the bits and pieces they like and work themselves up about what they don’t like. They don’t have to actually learn anything, and they’re never bored.>The Washington Post, in my opinion, has devolved into Pravda. The New York Times is struggling to stay aloft, but as the Judith Miller case shows, even the New York Times is unable to consistently stand up to government propaganda machinery.A lot of Jayson Blairs could do more in the way of potential damage to the integrity of the paper than one Judith Miller, because that goes to the fundamental quality of the standards of reporting throughout the paper. It is true, however, that reporters have become too entranced by opportunities to mingle with the powerful and have lost their objectivity in the process.>Newspapers are dead. I don’t know what lies ahead for those of us who really care what is going on in the world. My guess is that, via the Internet, we must somehow find what I call trusted experts, specialists in particular areas, and we must sort through a huge amount of open source intelligence. Ninety-nine percent of the population just don’t have the time, or the judgment, or even the interest, to do this. The powers that be know this, hence the propaganda.Right, exactly. Unfortunately, the key is finding reliable, trustworthy sources. A lot of folks seem to glom on to anyone with a web site and an opinion and accept uncritically what they have to say about this or that issue. More often than not, this seems to be a function of hitting the right emotive buttons for them — appealing to their innate prejudices and fears — because, again, it’s more about being entertained than informed.>This is what led most of us to Dr. Roubini’s blog, I’m sure. We were searching for a trusted expert in the area of economics, because we knew we were getting bunk and spin from the media.Here, here! I will say that I found this blog by way of a reference to it and to Dr. Roubini in a story in The New York Times, so nobody can tell me that there aren’t some great things to come out of that paper, even today! ;-)SWK

Average JaneSeptember 1st, 2008 at 10:17 am

@ Daltoni, SWK and dear Afa–I agree, agree, agree. You guys are the best. Bless you a thousand times.And–To Thine Own Self Be True.