Webb's Just the Reagan Democrat Obama Needs

Commentary by Margaret Carlson

May 22 (Bloomberg) -- It's time for Senator Barack Obama to place the following ad:

WANTED -- Military man south of Mason Dixon line, at home in a helmet, hardhat and combat boots. Political experience in a red state and knowledge of firearms helpful. Applicant must be familiar with bowling, boxing and bass fishing. College degree not required. Wine drinkers need not apply. Interested parties please respond to veepstakes@obama.com.

After another drubbing at the hands of Senator Hillary Clinton in Kentucky, to say that Obama lacks appeal among non- college-educated, working-class Ronald Reagan Democrats -- the voters Clinton calls ``hardworking white Americans'' -- is to call the Grand Canyon a hole in the ground.

Barring putting Clinton on the ticket -- and most Obama folks do -- there's another Democrat who fills the bill, the freshman senator from Virginia, Jim Webb.

Webb is all over the place this week -- ``Meet the Press,'' NPR, ``The Late Show With David Letterman,'' a party at the Four Seasons in New York -- promoting his book, ``A Time to Fight: Reclaiming a Fair and Just America.''

This isn't your typical Capitol Hill book of pasted-together speeches. Webb, 62, has written a vivid analysis of the folly of our foreign policy and the unfairness of our domestic one. He makes the case for the ordinary Joe who punches a clock and goes down in a coal mine to work for The Man, who makes in an hour what he earns in a year.

Perfect Fit

What makes Webb the perfect fit for a party desperately in search of Reagan Democrats is that Webb IS a Reagan Democrat. He left the party in disgust when Jimmy Carter granted amnesty to draft evaders and later went to work for Reagan as secretary of the Navy.

He was a critic of Bill Clinton's lack of military experience and ethics.

``Every time I see him salute a Marine, it infuriates me,'' Webb said. When Clinton was slammed over the pardons he granted as he left the White House, Webb was delighted the president was finally being judged ``for the ethical fraudulence that has characterized his entire political career.''

In 2000, Webb backed George Allen, a son of a one-time Redskins coach and a former governor, against incumbent Senator Charles Robb. Robb lost.

When President George W. Bush's response to 9/11 was to invade the wrong country, Webb returned to the Democratic Party. He fiercely opposed the effort to ``export democracy at gunpoint.'' His opposition was so strong that in 2004 he supported Senator John Kerry for president, even though he had refused to shake Kerry's hand for 20 years after the young Vietnam veteran threw his military ribbons on the steps of the Capitol to protest that war.

Running Against Allen

It also led him to finally run for office, against Allen. He was a long shot, but Allen committed some unforced errors, including making a racist comment, and Webb began to catch on.

He'd written a book extolling the redneck sensibilities of his Scots-Irish forebears who produced President Andrew Jackson and General George Patton, settled in Appalachia and cling (yes) to their guns and religion. He supports their getting a leg up without taking away from those who suffer from institutional racism.

Next to Allen, who spent summers on a dude ranch when Webb was leading 170 men in Vietnam, Webb had standing to hate the Iraq War and love the soldier. He won by 7,000 votes and gave Democrats control of the Senate.

`Proper GI Bill'

In the Senate, he got 58 co-sponsors for his legislation to provide current veterans ``a proper GI Bill'' that's coming up for a vote. He got a commission to try and rid Iraq of fraud and waste.

Recently, the State Department decided to keep doing business with Blackwater, the security company under scrutiny in the shooting deaths of innocent Iraqi civilians that Webb says pays each mercenary almost a half-million dollars a year.

Webb has his drawbacks. Thirty years ago, he derided the idea of women in combat. He is, in fact, a college graduate, having attended the U.S. Naval Academy, where he won a varsity letter in boxing and fought Ollie North. He has written novels, and with reviews comparing him with Ernest Hemingway and Stephen Crane, he could be tarred as an intellectual.

He's the opposite of Obama on the campaign trail: blunt, no frills, no oratorical flourish. He's no backslapper and is rumored to have a temper, although it's hard to imagine him comparing unfavorably to John McCain on anger management.

Rebuking Bush

When Bush asked Webb during a White House reception how his son fighting in Iraq was doing, Webb answered, ``I'd like to get them out of Iraq, Mr. President.''

``That's not what I asked you,'' the president said. ``How's your boy?''

Webb replied, ``That's between me and my boy, Mr. President.''

Where Obama is weak is exactly where Webb is strongest, which is why he's at the top of many lists of prospects for vice president.

Whether he gets chosen, he is the finest writer Washington has seen in decades. In his book, he walks across the Capitol over marble steps polished by generations of hard-soled shoes, describing the workings of democracy with its elaborate courtesies that keep the most cunning creatures on Earth engaged in debate, rather than a brawl, to preserve America's greatness.

Stare Into Future

He arrives at the Senate chamber with its spittoons and school desks with names carved into the compartments by now-dead hands and reminds us of the brief window to do good.

``Sit at your desk, open up the drawer, and stare directly not only into history but into the future when you yourself will simply become a carved memory,'' he writes.

He's written the best tour of the Capitol I've ever taken. It's yours at the nearest book store.

Singapore's GDP Grows Less Than Estimated; CPI Jumps (Update2)

May 23 (Bloomberg) -- Singapore's economy expanded less than initially estimated in the first quarter and inflation accelerated to a 26-year high last month, adding to concerns growth may ease as global demand weakens.

Gross domestic product increased 6.7 percent in the first three months of the year from a year earlier, less than the government's April 10 estimate of 7.2 percent, the trade ministry said today. Consumer prices rose 7.5 percent last month from a year earlier, a separate report showed.

Asia's export-dependent economies have been hurt by a slowdown in the U.S., with Malaysia and the Philippines forecast to report weaker first-quarter growth next week. Singapore's central bank today said its currency, which has gained 5.8 percent against the U.S. dollar this year, remains the most effective tool to fight inflation.

``In an environment where oil and food prices are at very high levels, the outlook is cloudy for Singapore and the rest of Asia as we head into the second half,'' said Song Seng-Wun, an economist at CIMB-GK Securities Pte. in Singapore. ``Inflation is a big worry and the top priority for most governments.''

Singapore's accelerating inflation prompted the central bank's decision to allow the currency to strengthen further last month. The monetary authority said today its currency stance ``remains appropriate'' and it has no plans to review its policy before its next meeting in October.

Malaysia, Philippines

Consumer prices are expected to rise between 5 percent and 6 percent in 2008, from a previous forecast range of 4.5 percent to 5.5 percent, the government said today.

The Singapore dollar, Asia's second-best performing currency this year, was little changed at S$1.3591 against its U.S. counterpart as of 10:55 a.m. local time. The Straits Times Index rose 0.1 percent to 3,164.85.

Economists surveyed by Bloomberg News expect Malaysia's growth to have slowed to 6.4 percent in the first quarter from 7.3 percent in the previous three months. Philippine growth may have eased to 5.9 percent from 7.4 percent, a separate survey showed. Malaysia will release its first-quarter data on May 28, and the Philippines the next day.

Asia is almost twice as reliant on exports as the rest of the world, with 60 percent of shipments abroad ultimately destined for the U.S., Europe and Japan. The Japanese government yesterday cut its view on exports for the first time in three months and maintained its assessment that a recovery in the world's second-largest economy is ``pausing.''

Exports to Ease

Singapore's trade promotion agency today lowered its forecast for export growth this year to between 2 percent and 4 percent, from an earlier range of 4 percent to 6 percent. Overseas shipments rose 0.6 percent last quarter.

Some Asian governments and central banks are predicting economic growth will be at the lower end of their targets this year, or are cutting their forecasts, even as they raise estimates for inflation.

Philippine growth may have slowed to as little as 5.2 percent last quarter as accelerating inflation dented consumer spending, Economic Planning Chief Augusto Santos said yesterday.

Rising energy and food prices are also stoking inflationary pressures and crimping domestic consumption across the region. Oil has more than doubled in the past year, and prices of grains such as rice and wheat reached unprecedented levels in 2008.

Singapore's economy increased an annualized 14.6 percent in the first three months of the year, less than an earlier estimate of 16.9 percent. The government today reiterated its forecast for the economy to grow between 4 percent and 6 percent in 2008.

`Remain Weak'

The island's manufacturing industry expanded 12.4 percent last quarter from a year earlier, accelerating from a 0.2 percent gain in the fourth quarter.

Pharmaceutical production by companies such as Merck & Co. rose almost 52 percent last quarter from a year ago, government figures show, offsetting faltering electronics output.

Singapore's electronics exports have declined for 15 consecutive months and the island's central bank in April said it expects the industry to ``remain weak.'' Electronics account for about 30 percent of Singapore's manufacturing and drugs make up around 22 percent.

Services climbed 7.5 percent in the first quarter from a year earlier, while the construction industry grew 14.7 percent, according to today's report.

City Developments Ltd., Singapore's second-largest real estate company, this month said it will delay sales of new residential projects. Confidence among prospective home buyers has been eroded by the subprime-mortgage crisis in the U.S. and the contraction in global credit markets, the company said.

Singapore home sales totaled 787 units in the first quarter, about half of the 1,449 sold in the previous three months, according to the city state's Urban Redevelopment Authority. Prices rose 3.7 percent, the smallest gain in a year.

China Has `Long' Task of Aiding Quake Area, Wen Says (Update1)

May 23 (Bloomberg) -- China has begun the ``long-term'' task of rehabilitating survivors of last week's earthquake, Premier Wen Jiabao said, as disease and rising waters in blocked rivers threaten 5.5 million displaced people in Sichuan province.

Relief work has shifted to helping survivors from rescuing people, Wen said yesterday during his second visit to Sichuan since the disaster, the official Xinhua News Agency reported. ``It will be a harder and long-term task.''

The deadliest earthquake in China in 32 years left more than 80,000 people dead or missing, destroyed 5.4 million homes and damaged another 21.4 million. Wen told rescuers to clear rivers in Sichuan where landslides created 33 artificial lakes that may burst their banks and to evacuate people in danger, Xinhua said.

The death toll reached 55,239 people with 24,949 missing and 281,066 injured as of 7 p.m. Beijing time yesterday, Li Chengyun, Sichuan's vice governor, said in the capital today. Rescuers have brought almost 84,000 people from the rubble of buildings, he said.

Workers yesterday saved a victim who was buried for 214 hours, Li said. ``As long as there's even a flicker of hope, we won't give up our efforts,'' he said.

Rains are forecast across the southwest next week and will raise water levels in the rivers and lakes, Xinhua cited the Chinese National Meteorological Center as saying.

Flooding, Mudslides

The government is trying to prevent the spread of diseases and secondary emergencies such as flooding and mudslides, Li said. It wants to settle 98 percent of survivors within a month and restore all roads within three years, he added.

As many as 48,680 medical and first aid workers have been brought into the region, Li said.

The government is setting up a 70 billion yuan ($10 billion) fund to pay for reconstruction work, and government departments have been told to cut spending by 5 percent to divert funds for rebuilding. Disaster-relief allocations reached 13.96 billion yuan yesterday. Sichuan received 5.4 billion yuan in quake donations, according to Li.

New Town

Wen, visiting Beichuan, the worst-hit county, told residents yesterday to turn to the task of rebuilding. ``Building a new hometown is the best consolation for dead relatives,'' Xinhua cited him as saying.

More than 12 million people were displaced by the May 12 quake that hit Sichuan and surrounding provinces. The affected zone covers about 100,000 square kilometers (39,000 square miles) or about 1.5 times the area of Ireland.

China needs 3.3 million tents to shelter survivors, the Foreign Ministry said yesterday, adding that about 400,000 tents have been sent to Sichuan since the disaster.

``Tents are badly needed now,'' Weilin Kuang, China's deputy consul-general in New York, said during a news conference in Manhattan yesterday.

More than 150,000 tents have been provided by Saudi Arabia, Pakistan, the U.K., U.S. and the United Nations Refugee Agency, Xinhua cited China's State Council, or cabinet, as saying.

Aftershock Damage

Some students have returned to class in areas affected by the temblor, and some of the 29,000 kilometers (18,000 miles) of roads that were damaged have been repaired and reopened, Kuang said in New York. Damage from aftershocks is hampering efforts to keep roads open, get medicine and other supplies to affected areas and bring injured people out, he said.

There have been 167 aftershocks with magnitudes of 4 or higher since the quake, Kuang said. A 4.5 magnitude shock hit the area at 3:18 p.m. local time yesterday, the U.S. Geological Survey said on its Web site.

``Given that there are still aftershocks occurring and that June is the rainy season, landslides and mudflows are likely and flooding of barriers is likely,'' Yun Xiaosu, vice minister of land and resources, said in Beijing yesterday.

The earthquake was the most powerful to hit China, the world's most populous country with 1.3 billion people, since a magnitude-8.6 quake struck Tibet in 1950, killing 1,526 people. A 7.5-magnitude temblor in Tangshan in the northeast killed 250,000 in 1976, according to the USGS.

China's seismology department said last week's quake had a magnitude of 8.

Dollar Set for Weekly Drop as Oil Costs Rise, Home Prices Fall

May 23 (Bloomberg) -- The dollar headed for a third weekly decline against the euro as a U.S. housing slump and record oil prices slow growth in the world's biggest economy.

The U.S. currency traded near a three-week low against the British pound and the weakest level in one-month versus the Swiss franc before an industry report today that may show U.S. home sales dropped for a second month.

``The selling pressure the dollar faced this week is likely to continue,'' said Tsutomu Soma, a bond and currency dealer at Okasan Securities Co. in Tokyo. ``There aren't many positive things you can say about the U.S. economy. I can't be optimistic about the dollar.''

The dollar traded at $1.5731 per euro at 12:17 p.m. in Tokyo from $1.5733 late yesterday in New York and from $1.5577 at the end of last week. It bought 104.05 yen from 104.07 yesterday and 104.04 on May 16. The euro was little changed at 163.66 yen for a 0.9 percent gain this week. The dollar may decline to $1.5755 per euro and 103.70 yen today, Soma forecast.

The U.S. currency fell 1.1 percent against the pound this week to $1.9785 and weakened 1.6 percent to 1.0312 Swiss francs. It also slid versus the New Zealand dollar, dropping 1.5 percent from a week ago to 78.57 U.S. cents and declined 1.4 percent against the Canadian dollar to C$0.9854.

The Australian dollar rose 0.2 percent to 95.71 U.S. cents this week, its fourth weekly gain, on speculation rising commodity prices will allow the central bank to keep interest rates at a 12-year high.

`Arm Twist'

The dollar has fallen 14 percent against the euro in the past 12 months as the Federal Reserve has slashed its benchmark interest rate to 2 percent from 5.25 percent in September. The European Central Bank has kept its benchmark rate at 4 percent. The Federal Reserve this week reduced its economic growth forecasts and raised its projection for inflation.

French Finance Minister Christine Lagarde said she would like policy makers to seek a stronger U.S. dollar and Chinese yuan against the euro.

``I would arm twist whoever is holding these strings to pull the dollar up,'' Lagarde said in an interview. ``I would like to do that for the yuan as well.''

The yuan has fallen 6 percent versus the euro in the past year, which European officials say makes their exports less competitive. The yuan was at 10.9130 against the euro.

Housing Market

U.S. home resales declined 1.6 percent to a 4.85 million annual rate in April, according to the median estimate of a Bloomberg News survey. The National Association of Realtors will release the data at 10 a.m. in Washington today.

Futures on the Chicago Board of Trade showed traders saw a 92 percent likelihood the Fed will keep its target rate for overnight lending between banks at 2 percent on June 25, up from odds of 88 percent on May 21.

The dollar has fallen against 13 of the 16 most-traded currencies this week as the cost of a barrel of oil yesterday rose to a record $135.09 on the New York Mercantile Exchange. The U.S. is the world's biggest importer of oil.

The euro headed for its biggest weekly gain in two months against the dollar and a second weekly advance versus the yen on speculation the economies of the 15 countries that share the currency will withstand record high oil prices, lessening the need for a reduction in interest rates.

The Munich-based Ifo institute said on May 21 its business climate index, which is based on a survey of 7,000 executives, unexpectedly rose to 103.5 in May from 102.4 in the previous month. Germany is Europe's largest economy.

``It's certainly possible for the euro to rise to $1.60,'' Masafumi Yamamoto, head of foreign-exchange strategy in Tokyo at Royal Bank of Scotland and a former Bank of Japan currency trader, wrote in a research note today. ``The Ifo numbers show the German economy isn't deteriorating as much as some assumed. Expectations for an interest-rate cut may recede.''

European Rates

Wolfgang Franz, president of the ZEW Center for European Economic Research and one of five economic advisers to the German government, said on May 20 the ECB may have to raise its benchmark 4 percent rate to slow rising prices.

The euro may rise to $1.60 in the next few weeks according to the technical analysis of its price chart, said Kengo Suzuki, currency strategist at Shinko Securities Co. in Tokyo.

Resistance at $1.60 is near the euro's record high of $1.6019 on April 22. The common European currency is poised to gain as it is breaking out of a cloud on its daily Ichimoku chart that analyzes the midpoints of highs and lows, he said.

Clouds are used to indicate resistance, a level where sell orders may be clustered, and support, which is a price where traders may buy.

``The euro is just starting to poke its head above the clouds,'' Suzuki said. ``Its appreciation is likely to accelerate fairly soon.''

Oil Set for Third Weekly Gain as Demand Growth Outstrips Supply

May 23 (Bloomberg) -- Crude oil headed for a third weekly gain after surging to a record yesterday as rising demand, led by China and India, may outstrip supply increases.

Oil reached $135.09 a barrel yesterday, a gain of 20 percent since the start of the month. The International Energy Agency, the adviser to 27 nations, plans to cut its long-term projection for oil supply after studying depletion rates at the world's 400 largest fields, Executive Director Nabuo Tanaka said.

``This gain is more related to longer-term views of the market rather than shorter term,'' said Gerard Burg, an energy economist at National Australia Bank Ltd. in Melbourne. ``The forward curve we're seeing now with prices higher across the curve later out really indicates that the market is focused on the long-term supply prospects.''

Crude oil for July delivery rose as much as 44 cents, or 0.3 percent, to $131.25 a barrel at 11:30 a.m. in Singapore on the New York Mercantile Exchange. Yesterday, oil fell $2.36, or 1.8 percent, to settle at $130.81. Prices are up 3.9 percent so far this week and 99 percent in the past year.

The biggest gains in prices were for futures for later delivery. The December 2016 contract has gained 7.9 percent since May 16.

U.S. Stockpiles

U.S. crude oil stockpiles posted an unexpected decline of 5.3 million barrels in the week ended May 16, the Energy Department report showed. Gasoline supplies also fell at a time when they normally increase ahead of the summer driving season in the Northern Hemisphere.

``The mood seems very positive, the market is taking some positive leaps from the tight report,'' said Mark Pervan, commodity strategist at Australia and New Zealand Banking Group Ltd. in Melbourne.

Brent crude oil for July settlement rose as much as 74 cents, or 0.6 percent, to $131.25 a barrel, on London's ICE Futures Europe exchange. It touched a record $135.14 yesterday.

Oil in New York climbed above $135 a barrel yesterday as OPEC ministers said they could do nothing to prevent higher prices because they are pumping at capacity.

The Organization of Petroleum Exporting Countries has ``no magic solution'' to high prices, Qatar's Oil Minister Abdullah bin Hamad al-Attiyah said yesterday in a telephone interview from Doha.

Speculators' Role

OPEC's Secretary General Abdalla el-Badri said yesterday in Quito, Ecuador, that speculators are playing an ``important role'' in the gains in oil prices.

Even if OPEC were to increase production, in the short term, it would only add to a supply glut, he said. The group is currently producing 32 million barrels a day, 200,000 barrels more than necessary amid a global demand that OPEC pegs at 87 million barrels a day, he said.

``When supplies are so tight and adherence to OPEC quotas is virtually ignored, OPEC doesn't have so much power at the present,'' said National Australia's Burg. ``There are a number of producers that are struggling to maintain their supply, Nigeria, Venezuela and Indonesia spring to mind, while there are a number of countries that are well above. So the collective force is probably not as strong as people think.''

Asian Commodities Stocks Drop After Oil Retreats; Chugai Rises

May 23 (Bloomberg) -- Asian commodities stocks fell, led by Cnooc Ltd. and Mitsubishi Corp., after oil and metals prices retreated, countering gains by drugmakers after Roche Holding AG offered to buy more shares in its Japanese affiliate.

Cnooc, China's largest offshore oil explorer, slumped in Hong Kong after crude futures dropped the most in three weeks. Mitsubishi Corp., which gets more than half its profit from commodities dealing, tumbled in Tokyo after gold retreated from a one-month high and copper fell. Chugai Pharmaceutical Co. climbed to the highest since January in Tokyo following Roche's offer.

``Some investors want to reduce their holdings of commodity- related stocks as volatility increases,'' said Hideo Arimura, a senior fund manager in Tokyo at Mizuho Asset Management Co., which oversees $26 billion. ``Pharmaceutical stocks have missed the recent rally. I expect the stock market's nauseating gyrations to continue.''

The MSCI Asia Pacific Index fell 0.2 percent to 151.06 as of 12:53 p.m. in Tokyo, after earlier advancing as much as 0.2 percent. The benchmark has rallied 14 percent since reaching a two-month low on March 17, while the measure's group of health- care stocks has gained by about half that.

The broader gauge is on course for a 1.8 percent retreat this week, the largest loss since the five days ended March 7. A measure of financial shares led declines among 10 industry groups, slumping 4.3 percent after Macquarie Group Ltd. said a 16-year streak of rising profits may come to an end and Mitsubishi UFJ Financial Group Inc. said profit will be little changed this year.

Japan's Nikkei 225 Stock Average climbed 0.7 percent today to 14,069.30 for the biggest gain among Asia's benchmark indexes, half of which advanced. Singapore's Straits Times Index was little changed after the government lowered its first-quarter growth estimate and said inflation soared to a 16-year high.

U.S. Rebound

U.S. stocks rose for the first time in three days yesterday after an unexpected drop in jobless claims and the retreat in oil prices spurred optimism that the economy can avoid a recession. Citigroup Inc. and International Business Machines Corp. gained, helping the Standard & Poor's 500 Index to a 0.3 percent advance.

Cnooc, China's largest offshore explorer, dropped 4.7 percent to HK$15.06 in Hong Kong. Santos Ltd., Australia's No. 3 oil and gas explorer, slumped 4.9 percent to A$19.60 after jumping yesterday to the highest since March 1981. Woodside Petroleum Ltd., the second-biggest in Australia, lost 2.9 percent to A$67.98, retreating from yesterday's high.

Crude oil for July delivery dropped 1.8 percent yesterday in New York to $130.81 a barrel after rising to a record $135.09. Prices have doubled in the past year. Crude futures surged as much as 7 percent from last week's close before retreating yesterday by the most in three weeks.

Copper, Gold

Copper futures fell 0.9 percent in New York, while gold decreased by 1.1 percent. Mitsubishi Corp. dropped 2.6 percent to 3,810 yen. Newcrest Mining Ltd., Australia's largest gold producer, fell 4.2 percent to A$33.69. Sumitomo Metal Mining Co., Japan's biggest gold producer, lost 3.4 percent to 1,887 yen.

Shipping costs tracked the decline in commodity futures. The Baltic Dry Index, which measures the price of transporting bulk commodities, dropped 1 percent yesterday in London, the largest retreat since April 2. The index rose to a record on May 20.

Mitsui O.S.K. Lines Ltd., the world's largest merchant fleet operator, dropped 3.3 percent to 1,546 yen. Nippon Yusen K.K., Japan's largest shipping line, lost 2.8 percent to 1,055 yen. STX Pan Ocean Co., South Korea's largest shipping line for iron ore and coal, slipped 2.5 percent to 2,690 won.

Chugai Jumps

In Japan, Chugai rose 3.5 percent to 1,652 yen, on course for its highest close since Jan. 30. Roche, Switzerland's largest drugmaker, offered to pay 1,730 yen a share to boost its stake in Tokyo-based Chugai to 59.9 percent from 50.1 percent currently.

The companies sell the Avastin, Herceptin and Tarceva tumor treatments and developed the Actemra arthritis medicine together.

Takeda Pharmaceutical Co., Japan's largest drugmaker, advanced 2.1 percent to 5,890 yen. Astellas Pharma Inc., the nation's second-biggest, rose 3.1 percent to 4,390 yen.

Also in Japan, Aloka Co. jumped 4.4 percent to 1,368 yen, advancing the most since May 2006 after Nomura Securities Co. raised its rating on the medical equipment maker to ``buy'' from ``neutral.''

Chiyoda Corp., a Japanese factory engineering and construction company, rose 10 percent to 1,134 yen, the largest advance on MSCI's Asian index. UBS AG raised its share-price forecast for the stock to 1,100 yen from 900 yen.