Tuesday, November 30, 2010

Call Me An Alarmist - But Show Me Where I am Wrong!

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The fix is in: This was an article in the St. Petersburg , Fl. Times. The
Business Section asked readers for ideas on: "How Would You Fix the
Economy?"

This guy obviously cannot multiply but you have to admit he is clever. I just hope Obama does not get the letter because he might do what it suggests. (See 1 below.)
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Far too many conservatives believe they can beat Obama. I agree with John Bolton on just about everything he says but he could not beat Obama and should not even think of running.

It is obvious that Obama and the Pentagon have bought into The State Department's theory that bombing Iran would unite the nation. They have no more proof of that than they do that not bombing Iran will bring peace.

That said, John Bolton is right about our bombing Iran but that still does not mean he should run for the presidency. He would not get any of the Spanish and black vote and therefore could not win.

There are two more reasons: a) I doubt he could raise the hundreds of millions that it would take and b) He would have to cut off his mustache. (See 2 below.)
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Wikileaks has not bothered Israel. In fact the leaked documents confirms what Israel has been stating. (See 3 below.)
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Daniel Pipes suggests Turkey and Iran may be about to switch positions. (See 4 below.)
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Call me loopy but I believe we are fast moving towards the day when the dollar will no longer be considered the world's reserve currency. It is coming about because we have engaged in profligate spending, are no longer able to meet our debt obligations without printing money and thus, creditor nations will be forced to reconsider accepting dollars in payment.

If I am right, our standard of living will drop like a stone, inflation will rise like a feather and we will be lucky if we stave off rioting. Commodity prices already have been rising - food, gold, silver, cotton to name a few. When oil producing nations cease accepting dollars in payment of oil gasoline prices could soar and our economy would be badly crippled.

The meeting of Obama and the Republican/Democrat leadership yesterday did not address any of these matters in a serious way and time is not our ally. It was largely a photo-op sham.The participants could not even start early in the morning like most business executives when there is a crisis to be resolved.

I hope I am wrong but fear I am not. Our debt pigeon is coming home to roost and the government is helpless to stop it from happening and in fact continues to add logs by printing more and more money. Perhaps this is what Obama seeks because it would end American exceptional-ism as we know it but it will not result in the transfer of wealth but rather the redistribution of misery.

40 million Americans are now on food stamps, several states are technically bankrupt and most all state budgets are ballooning out of control as well. Fannie and Freddie continue to hemorrhage billions and yes, the Fed and Treasury keep printing money thinking that we can pay off our debt by creating more debt. Creditor nations will remain suckers for only so long.

Increasing taxes is not the way to go, cutting spending is but even that has ominous consequences though it is the right but painful medicine. Abnegation is always resisted - riots in Britain , Greece etc. attest to that.

Call me an alarmist but before you do show me where I am wrong.(See 5 and 5a below.)
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Dick
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1) Dear Mr. President,

Please find below my suggestion for fixing America 's economy. Instead of
giving billions of dollars to companies that will squander the money on
lavish parties and unearned bonuses, use the following plan.
You can call it the "Patriotic Retirement Plan":

There are about 40 million people over 50 in the work force. Pay them $1
million apiece severance with no taxes due on it, for early retirement with
the following stipulations:

1) They MUST retire. Forty million job openings - Unemployment fixed.

2) They MUST buy a new AMERICAN Car. Forty million cars ordered - Auto
Industry fixed.

3) They MUST either buy a house or pay off their mortgage - Housing Crisis
fixed.

It can't get any easier than that!!

P.S. If more money is needed, have all members in Congress pay their taxes..

Mr. President, while you're at it, make Congress retire on Social Security
and Medicare. I'll bet both programs would be fixed pronto!
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2)Bolton: Military strike only way to stop Iran nukes
By HILARY LEILA KRIEGER


In interview with 'Post,' former US ambassador to UN during the Bush administration says he is mulling GOP presidential run to reassert strong American foreign policy; "This is a very weak administration," he contends.

John Bolton is mulling a run for president because he believes the US needs to recover its international standing and be more assertive, including being willing to bomb Iran and scrap the two-state solution.

“Both our friends and our adversaries alike have assessed this as a very weak administration, uncomfortable with asserting American interests or defending them, particularly through the use of force internationally,” Bolton told The Jerusalem Post in an interview Tuesday.

“To raise national security back into the center of the debate – which is where I think it belongs – it could well take a presidential candidacy, because that is what helps focus people’s attention on these issues and that’s why I’m thinking of doing it.”

The former under secretary of state for arms control and US ambassador to the UN during the George W. Bush administration, Bolton identified proliferation of weapons of mass destruction and international terrorism as the top challenges facing America, along with the threat of nuclear Iran.

Bolton, who would seek the Republican nomination should he run, rejected the idea that sanctions could eventually affect Iran’s nuclear ambitions as some in the US and even Israel have suggested.

“The most likely outcome with respect to Iran is that it gets nuclear weapons and very, very soon,” he said. “Given that diplomacy has failed, given that sanctions have failed, the only alternative to an Iran with nuclear weapons is a limited military strike against the nuclear weapons program.”

Though he said he doesn’t prefer such action, he believes it’s better than the alternatives. And he dismissed the argument that a focused strike would cause regional instability, pointing to Wikileaks’ dissemination of diplomatic cables this week showing Arab support for an attack.

“A preemptive military strike against Iran’s nuclear program would not cause chaos in the Middle East because the Arab states don’t want Iran to have nuclear weapons any more than Israel does,” he said.

Bolton noted, however, that taking coordinated action could be harder because of the leaks and the concerns allies abroad will now have about working with America. But he assessed it would be a temporary rather than long-term setback.

Bolton does not believe two-state solution is working

He also said the revealed Arab support also punctures the Obama administration’s contention that progress on the Israeli-Palestinian peace process was needed to help rally the Arab world’s help on Iran.

When it comes to the Israeli-Palestinian conflict, Bolton doesn’t think the current effort to forge a two-state solution is working.

“I think the entire model of the two-state solution has failed,” he declared. “There’s nobody on the Palestinian side that you can trust who will make the hard commitments necessary to achieve peace or who will be able to carry them out into the future.”

Instead, he proposed a “three-state solution” which would include the admittedly unpopular moves of returning Gaza to Egypt and the Palestinian areas of the West Bank back to Jordan.

According to Bolton, the current US-Israel negotiations to extend the settlement freeze in return for 20 F-35 fighter planes also makes for unwise conditioning.

“That’s a destructive kind of relationship for both countries,” he warned.

Still, he said it wouldn’t be difficult to reset relations with Israel under a new White House.

“I don’t think that would be hard,” he estimated. “Frankly, I’m not aware of any potential Republican candidate for president who couldn’t do a better job on this issue than Obama.”

Whether he could be a successful Republican candidate, however, is another question.

Bolton acknowledges that he’s never run for elected office let alone the presidency and would need to consult with his family and give serious thought to the obstacles before making a decision.

Political expert Thomas Mann of the Brookings Institution, however, gave Bolton no chance of being successful in getting the nomination.

“He has little visibility and no support except among a very small group of neoconservative interventionists,” he said. “Moreover, he has no experience in elective politics and has an abrasive personality not well-suited to retail politicking.”

Larry Sabato, director of the University of Virginia’s Center for Politics, called Bolton “the longest of long shots” for the Republican nomination, adding that he’s “enough of a realist to know that.”

Instead of running to win office, Sabato saw Bolton as launching a campaign in order to raise the profile of certain issues.

“If you want to get some of the issues that you believe need to be discussed on the table, you run for president,” he explained.

“This could be a campaign that is dominated overwhelmingly by economic and other domestic issues,” Sabato continued, noting Bolton’s interest in ensuring that foreign affairs are also addressed.

Bolton himself admitted his interest in highlighting international and security priorities, saying, “I’ve been concerned for the past two years that there has not been adequate attention to foreign policy and national security issues.”

But he emphasized that if he enters the race it will be a sincere bid.

“If I get in this, I get in it to win,” he said.
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3)Israel greets WikiLeaks cables as vindication of its Iran policy
By Joshua Mitnick

The latest "document dump" is a coup for Jewish State, giving proof that her Arab neighbors, even those that are sworn enemies, share concerns


Wikileaks' publication of US diplomatic cables could have sparked a fresh controversy between Israel and its most important ally after a year of strained relations.

But instead, Wikileaks' release of the documents on Sunday has proved to be something of a public relations coup for Israel: on-the-record confirmation that its Arab neighbors are just as frightened as the Jewish state by a nuclear Iran. The cables confirmed previous anonymous reports that Israel has quiet partners in the region pushing the US to take bolder steps to stop what they consider an existential threat.

"I don't see any damage. Quite the opposite,'' said Israeli Finance Minister Yuval Steinitz, in an interview with Israel Radio. "Maybe there's an indirect benefit that the truth is coming out, that the entire Middle East, including Arab states, are very fearful from the Iranian nuclear threat, and are calling on the West to be much more aggressive toward Iran.''

Analysts and officials pointed to candid assessments from the United Arab Emirates, Saudi Arabia, and Egypt that Iran posed the biggest strategic threat to regional stability. The assessments even stressed the need for considering conventional attacks on Tehran before its nuclear program becomes operational. Other officials pointed to a US diplomatic report in which Iranian President Mahmoud Ahmedinejad is compared to Adolf Hitler.

The revelation of regional support for Israel's hard-line approach to Iran was seen as such a boon that Sever Plocker, a columnist for the daily Yediot Ahronot newspaper, quipped, "If the WikiLeaks site did not exist, Israel would have to invent it.''

"The massive leak of American diplomatic telegrams indicates a single picture, sharp and clear," he added. "The entire world, not just Israel, is panicked over the Iranian nuclear program.''

New details about Israel's Iran strategy and relations with Arab neighbors — such as Mossad chief Meir Dagan's plan for regime change in Iran, and repeated Israeli warnings about Tehran's looming nuclear weapons program — were played down by analysts and officials as unsurprising.

But beyond the momentary public relations dividend, one Israeli veteran of diplomacy said the widespread fear of Iran among America's Arab allies does not bode well for the Obama administration's foreign policy — particularly its efforts to engage Iran diplomatically.

"When Obama decided on negotiating with Iran, he was doing exactly the opposite of what the American allies are thinking,'' says Shlomo Avineri, a political science professor at Hebrew University and a former director general of the Israeli Foreign Ministry. "Obama has made all of his friends nervous, and the Iranians are spitting in his face."

Other observers said the publication of classified US communiques weakens the international standing of Israel's most important ally — a trend that could hamper Arab-Israeli peace mediation efforts and ultimately weaken Israel, which relies heavily on the diplomatic and military weight of the United States.

"The superpower looks weakened,'' says Alon Liel, a former director general of the Israeli Foreign Ministry. "The fact that the US doesn't look good especially in the Middle East … lowers the chances for Israel to become an integral part of the region.'
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4)Islamist Turkey vs. Secular Iran?
By Daniel Pipes
The Washington Times

Early in the sixteenth century, as the Ottoman and Safavid empires fought for control of the Middle East, Selim the Grim ruling from Istanbul indulged his artistic side by composing distinguished poetry in Persian, then the Middle East's language of high culture. Simultaneously, Ismail I ruling from Isfahan wrote poetry in Turkish, his ancestral language.


Selim the Grim (r. 1512-20) wrote poetry under the name Mahlas Selimi; his arch-rival Ismail I (r. 1501-24) wrote poetry as Khata'i.

This juxtaposition comes to mind as the populations of Turkey and Iran now engage in another exchange. As the secular Turkey founded by Atatürk threatens to disappear under a wave of Islamism, the Islamist Iranian state founded by Khomeini apparently teeters, on the brink of secularism. Turks wish to live like Iranians, ironically, and Iranians like Turks.

Turkey and Iran are large, influential, and relatively advanced Muslim-majority countries, historically central, strategically placed, and widely watched; as they cross paths, I predicted back in 1994, racing in opposite directions, their destinies will affect not just the future of the Middle East but potentially the entire Muslim world.

That is now happening. Let's review each country's evolution:

Turkey: Atatürk nearly removed Islam from public life in the period 1923-38. Over the decades, however, Islamists fought back and by the 1970s they formed part of a ruling coalition; in 1996-97, they even headed a government. Islamists took power following the strange elections of 2002, when winning a third of the vote secured them two-thirds of the parliamentary seats. Ruling with caution and competence, they got nearly half the vote in 2007, at which point their gloves came off and the bullying began, from a wildly excessive fine levied against a media critic to hare-brained conspiracy theories against the armed forces. Islamists won 58 percent of the vote in a September referendum and appear set to win the next parliamentary election, due by June 2011.


Atatürk excluded Islam from Turkey's public life and Khomeini made it central in Iran's.

Should Islamists win the next election, that will likely establish the premise for them to remain enduringly in power, during which they will bend the country to fit their will, instituting Islamic law (the Sharia), and building an Islamic order resembling Khomeini's idealized polity.

Iran: Khomeini did the opposite of Atatürk, making Islam politically dominant during his reign, 1979-89, but it soon thereafter began to falter, with discordant factions emerging, the economy failing, and the populace distancing itself from the regime's extremist rule. By the 1990s, foreign observers expected the regime soon to fail. Despite their populace's growing disillusionment, the increased sway of the Islamic Revolution Guards Corps and the coming to power of hardened veterans of the Iran-Iraq war, as symbolized by Mahmoud Ahmadinejad, imbued it with a second wind.

This reassertion of Islamist goals also increased the people's alienation from the regime, including a turn away from Islamic practices and toward secularism. The country's growing pathologies, including rampant drug-taking, pornography, and prostitution point to the depths of its problems. Alienation sparked anti-regime demonstrations in the aftermath of fraudulent elections in June 2009. The repression that followed spurred yet more anger at the authorities.

A race is underway. Except it is not an even competition, given that Islamists currently rule in both capitals, Ankara and Tehran.


Erdoğan and Ahmadinejad, in sync at last.

Looking ahead, Iran represents the Middle East's greatest danger and its greatest hope. Its nuclear buildup, terrorism, ideological aggressiveness, and formation of a "resistance bloc" present a truly global threat, ranging from jumping the price of oil and gas to an electro-magnetic pulse attack on the United States. But if these dangers can be navigated, controlled, and subdued, Iran has a unique potential to lead Muslims out of the dark night of Islamism toward a more modern, moderate, and good neighborly form of Islam. As in 1979, that achievement will likely affect Muslims far and wide.

Contrarily, while the Turkish government presents few immediate dangers, its more subtle application of Islamism's hideous principles makes it loom large as future threat. Long after Khomeini and Osama bin Laden are forgotten, I venture, Recep Tayyip Erdoğan and his colleagues will be remembered as the inventors of a more lasting and insidious form of Islamism.

Thus may today's most urgent Middle Eastern problem country become tomorrow's leader of sanity and creativity while the West's most stalwart Muslim ally over five decades turn into the greatest source of hostility and reaction. Extrapolation is a mug's game, the wheel turns, and history springs surprises.

Mr. Pipes is director of the Middle East Forum and Taube distinguished visiting fellow at the Hoover Institution of Stanford University.

Nov. 30, 2010 updates: Two points that did not fit in the main body of my column

(1) Ankara and Tehran work together ever closely these days but I predict that they will soon be rivals for Islamist leadership. Historical pride, sectarian ambition, and geo-strategic competition all suggest that the current moment of harmony will not last long Look for the Turks to dispute Iranian leadership in such arenas as commercial prowess, military power, and religious potency.

(2) I sketched out this rivalry in a 1994 article in the National Interest, "[Turkey vs. Iran and] Islam's Intramural Struggle," in which I noted "a long, deep, and difficult fight" likely brewing "between two of the great countries of the Middle East, Turkey and Iran." Turks , I wrote, "seem not yet to realize what the mullahs know: that fundamentalist Islam will rise or fall depending on what Turks do, and that Iran and Turkey are therefore engaged in a mortal combat. Will Turks wake up in time to hold their own? Much hinges on the result."
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5)Slurpee Summit full of empty calories
By Dana Milbank

A large 7-Eleven Slurpee has upward of 550 calories, 142 grams of carbohydrates, and 0 grams of protein.

So it is appropriate that the first meeting between President Obama and Republican leaders since the election would be called the "Slurpee Summit" - a thing of no nutritional value. The name, embraced by Obama, refers to his line during the campaign about how Republicans stood on the sidelines, "sipping Slurpees," while Democrats pushed the economy out of a ditch.

The Slurpee Summit on Tuesday produced precisely what everybody knew it would: nothing but an agreement to keep talking about areas of disagreement. Indeed, the two sides couldn't even agree on logistics for the empty-calorie summit.

First, Republicans requested a postponement of the meeting, which was supposed to have been two weeks ago. Then on Tuesday, the two sides engaged in an elaborate competition for media attention following the 10:30 a.m. meeting.

Republicans made plans to speak to TV cameras in the White House driveway immediately after the session, but then the White House announced that Obama would be making a televised statement at 12:20. Republican leaders, in response, announced a news conference on Capitol Hill for 12:30. Obama then delayed his 12:20 statement, and, before Republicans could complete their news conference, he began his dueling statement - forcing the cable networks to ditch the GOP event.

Not that either side had much to say. "There's a reason why we have Democrats and Republicans," incoming House speaker John Boehner said at his news conference. "We believe in different things."

"We have two parties for a reason," Obama said a few minutes later. "There are real philosophical differences."

For the duration of the lame-duck Congress, it appears that those differences will prevent much of substance from getting done. There's hope for an agreement on funds to keep the government running - temporarily. There's hope for an accord on extending the Bush tax cuts - temporarily. Actions beyond the Band-Aid variety - immigration, energy, tackling the federal deficit - will have to wait.

Writing in Tuesday's Post, Boehner and Senate GOP leader Mitch McConnell made clear they weren't going to the White House to negotiate. "Republicans heard the voters loud and clear," they wrote, claiming they would be giving Americans "a voice at that table" in the Roosevelt Room.

The problem with that is Americans are essentially asking for Slurpees: In the abstract, they want a balanced budget, but they reject the hard choices needed to get there. The November Wall Street Journal-NBC News poll found that 70 percent of Americans are uncomfortable with cuts to Medicare, Social Security and defense spending, while 59 percent are uncomfortable with increasing taxes. What Americans need aren't lawmakers who satisfy their cravings for empty calories but leaders who convince them to eat the roughage.

Such leadership was not in evidence at the Slurpee Summit. On the eve of the meeting, incoming House majority leader Eric Cantor (R-Va.), told Politico that Obama should heed a two-word message from the voters: "Stop it." In case anybody missed that taunt, Cantor's office distributed the article in an e-mail with the subject line "Stop It."

The White House, in turn, did its best to make sure the visiting Republican leaders wouldn't get a chance at the spotlight. Photographers and TV cameras were not admitted to the room for the customary "spray" - a few seconds to shoot photos or roll tape. And the "stakeout" location in the West Wing driveway - the spot where White House visitors address the cameras - was rendered inhospitable by a fleet of backhoes and cement trucks working on a construction project.

Still, network crews dutifully manned the stakeout location for more than two hours before it began to dawn on them that the lawmakers had given them the slip.

This Story
Slurpee Summit full of empty calories
Stephen Stromberg: What's with Obama and summits?
"Did you see them leaving?"

"Let's go home."

"Is it over?"

"Looks like it."

"It was over before it started."

It certainly was. Boehner, in his news conference, wasn't unduly optimistic as he explained: "We had a very nice meeting today. Of course, we've had a lot of very nice meetings. The question is, can we find the common ground?"

That was about the time Obama began his competing statement, which included a lament about the "hyperpartisan climate" in which "both sides come to the table. They read their talking points. Then they head out to the microphones, trying to win the news cycle instead of solving problems." Obama called that "a game that we can't afford."

The statement might have carried more weight if Obama hadn't just preempted his opponents' news conference.


5a)Is the Great Bond Bull Market finally coming to an end?
By Mark Hulbert

Countless commentators (myself included) in recent months have concluded that it has, though in retrospect we’ve at best been premature — if not outright wrong.

But there is the distinct possibility that this time may be different: The tide appears to be turning in the huge flow of funds into bond mutual funds and ETFs.

That fund inflow — better described as a tsunami — has been widely noted over the past couple of years, of course, during which investors exhibited an insatiable appetite for bond funds, consistently transferring more money into those funds than they withdrew.

In fact, according to TrimTabs Investment Research, a quantitative research firm, the sustained period of fund inflows into bond funds began nearly two years ago, in mid-December of 2008. The only other occasion in recent stock market history that even comes close to matching this, according to Vincent Deluard, Executive Vice President at Trim Tabs, is the sustained period of fund flows into stock mutual funds in the late 1990s leading up to the bursting of the Internet bubble.

That’s an ominous parallel, of course.


But especially now, given that the string of weekly inflows into bond funds has finally been broken. That string, for those of you keeping score, was for 99 straight weeks.

It came to an end in the week ending Nov. 17. For that week, Trim Tabs estimates that $4.3 billion was pulled out of open-end bond funds in the U.S. Though the pace of this outflow did not continue in the week ending Nov. 24, it didn’t reverse itself either: Though TrimTabs estimates that there was a tiny inflow of $207 million into open-end bond bunds in that week, it was more than counterbalanced by a $592 million outflow from bond-oriented exchange-traded funds.

What makes the bond market particularly vulnerable to this nascent turning of the tide is that it wouldn’t take much to turn it into an avalanche just as big as the previous inflow. In an interview, Deluard pointed out that it’s been 26 years since the bond market suffered a “really severe correction. That means that the vast majority of investors in bond funds have never lived through a decline of that severity. This in turn means that, should a decline begin to gather steam, these inexperienced investors could easily panic and dump much of their bond fund holdings in very short order.”

That would cause the bond market to fall even faster, of course.

To be sure, a two-week outflow doesn’t in and of itself reverse 99 weeks of inflows. Nevertheless, given how precarious the situation is, what with huge inflows from inexperienced investors who could easily panic, it certainly appears as though the bond market is at a tipping point. If so, it won’t take much to precipitate a huge rout in the bond market.

“They don’t ring a bell at market tops,” goes the old Wall Street saw. Nevertheless, if indeed a major bond bear market has begun, the outflows over the last two weeks might eventually be seen in retrospect as very close to just such a bell.
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