Europe's Crisis: Beyond Finance
By George Friedman
Everyone is wondering about the next disaster to befall Europe.
Italy is one focus; Spain is also a possibility. But these crises are already under way. Instead, the next crisis will be political, not in the sense of what conventional politician is going to become prime minister, but in the deeper sense of whether Europe’s political elite can retain power, or whether new political forces are going to emerge that will completely reshape the European political landscape. If this happens, it will be by far the most important consequence of the European financial crisis.
Everyone is wondering about the next disaster to befall Europe.
Italy is one focus; Spain is also a possibility. But these crises are already under way. Instead, the next crisis will be political, not in the sense of what conventional politician is going to become prime minister, but in the deeper sense of whether Europe’s political elite can retain power, or whether new political forces are going to emerge that will completely reshape the European political landscape. If this happens, it will be by far the most important consequence of the European financial crisis.
Syria, Iran and the Balance of Power in the Middle East Read more: Syria, Iran and the Balance of Power in the Middle East | STRATFOR
By George Friedman
U.S. troops are in the process of completing their withdrawal from Iraq by the end-of-2011 deadline. We are now moving toward a reckoning with the consequences. The reckoning concerns the potential for a massive shift in the balance of power in the region, with Iran moving from a fairly marginal power to potentially a dominant power. As the process unfolds, the United States and Israel are making countermoves. We have discussed all of this extensively. Questions remain whether these countermoves will stabilize the region and whether or how far Iran will go in its response.
Iran has been preparing for the U.S. withdrawal. While it is unreasonable simply to say that Iran will dominate Iraq, it is fair to say Tehran will have tremendous influence in Baghdad to the point of being able to block Iraqi initiatives Iran opposes. This influence will increase as the U.S. withdrawal concludes and it becomes clear there will be no sudden reversal in the withdrawal policy. Iraqi politicians’ calculus must account for the nearness of Iranian power and the increasing distance and irrelevance of American power.
Resisting Iran under these conditions likely would prove ineffective and dangerous. Some, like the Kurds, believe they have guarantees from the Americans and that substantial investment in Kurdish oil by American companies means those commitments will be honored. A look at the map, however, shows how difficult it would be for the United States to do so. The Baghdad regime has arrested Sunni leaders while the Shia, not all of whom are pro-Iranian by any means, know the price of overenthusiastic resistance.
U.S. troops are in the process of completing their withdrawal from Iraq by the end-of-2011 deadline. We are now moving toward a reckoning with the consequences. The reckoning concerns the potential for a massive shift in the balance of power in the region, with Iran moving from a fairly marginal power to potentially a dominant power. As the process unfolds, the United States and Israel are making countermoves. We have discussed all of this extensively. Questions remain whether these countermoves will stabilize the region and whether or how far Iran will go in its response.
Iran has been preparing for the U.S. withdrawal. While it is unreasonable simply to say that Iran will dominate Iraq, it is fair to say Tehran will have tremendous influence in Baghdad to the point of being able to block Iraqi initiatives Iran opposes. This influence will increase as the U.S. withdrawal concludes and it becomes clear there will be no sudden reversal in the withdrawal policy. Iraqi politicians’ calculus must account for the nearness of Iranian power and the increasing distance and irrelevance of American power.Resisting Iran under these conditions likely would prove ineffective and dangerous. Some, like the Kurds, believe they have guarantees from the Americans and that substantial investment in Kurdish oil by American companies means those commitments will be honored. A look at the map, however, shows how difficult it would be for the United States to do so. The Baghdad regime has arrested Sunni leaders while the Shia, not all of whom are pro-Iranian by any means, know the price of overenthusiastic resistance.
Personal income increased 0.4% in October while personal consumption increased 0.1%
Data Watch
________________________________________
Personal income increased 0.4% in October while personal consumption increased 0.1%
Brian S. Wesbury - Chief Economist
Robert Stein, CFA - Senior Economist
Personal income increased 0.4% in October while personal consumption increased 0.1%. The consensus expected each to gain 0.3%. (Including revisions for prior months, both income and consumption were unchanged in October.) In the past year, personal income is up 3.9% while spending is up 4.7%.
Disposable personal income (income after taxes) was up 0.3% in October, but down 0.1% including revisions to prior months. Disposable income is up 2.5% from a year ago. Private sector wages and salaries, up 0.5%, accounted for most of the income gains in October.
________________________________________
Personal income increased 0.4% in October while personal consumption increased 0.1%
Brian S. Wesbury - Chief Economist
Robert Stein, CFA - Senior Economist
Personal income increased 0.4% in October while personal consumption increased 0.1%. The consensus expected each to gain 0.3%. (Including revisions for prior months, both income and consumption were unchanged in October.) In the past year, personal income is up 3.9% while spending is up 4.7%.
Disposable personal income (income after taxes) was up 0.3% in October, but down 0.1% including revisions to prior months. Disposable income is up 2.5% from a year ago. Private sector wages and salaries, up 0.5%, accounted for most of the income gains in October.
New orders for durable goods declined 0.7% in October
Data Watch
________________________________________
New orders for durable goods declined 0.7% in October
Brian S. Wesbury - Chief Economist
Robert Stein, CFA - Senior Economist
New orders for durable goods declined 0.7% in October versus a consensus expected -1.2%. Orders excluding transportation gained 0.7%, easily beating the consensus expectation of no change. Overall new orders are up 7.5% from a year ago, while orders excluding transportation are up 11.7%.
The drop in overall orders was primarily due to the civilian aircraft, which are extremely volatile from month to month. Orders for motor vehicles/parts were up 6.2%. Orders for primary metals and machinery were also up.
________________________________________
New orders for durable goods declined 0.7% in October
Brian S. Wesbury - Chief Economist
Robert Stein, CFA - Senior Economist
New orders for durable goods declined 0.7% in October versus a consensus expected -1.2%. Orders excluding transportation gained 0.7%, easily beating the consensus expectation of no change. Overall new orders are up 7.5% from a year ago, while orders excluding transportation are up 11.7%.
The drop in overall orders was primarily due to the civilian aircraft, which are extremely volatile from month to month. Orders for motor vehicles/parts were up 6.2%. Orders for primary metals and machinery were also up.
Buffett May Be No Match for Mobsters With Tattoos: William Pesek
News that Warren Buffett is looking for opportunities in Japan is as good as it gets for a nation that has had an awful year.
All Japan needs to do is convince the most famous value investor that it’s deserving of his money. Yet a curious juxtaposition involved in Buffett’s first-ever Japan visit showed why that’s easier said than done.
Buffett was touring a tool plant in Fukushima prefecture, where a nuclear-power plant damaged by the tsunami in March has contaminated the surrounding area. There, he was asked about another calamity putting Japan in a harsh and negative spotlight: the Olympus Corp. scandal. The Berkshire Hathaway Inc. chairman said: “The fact that Olympus happens here or Enron happens in the U.S. doesn’t affect our attitudes at all.”
Think about it, though. The most-watched market guru is standing near one crisis caused by political corruption and being queried about another involving corporate malfeasance. At the heart of both storylines are growth-killing dynamics that have long given Buffett and his ilk pause. While different in their details and magnitude they show how Japan may be too wedded to the past to thrive in a world of intensifying competition.
All Japan needs to do is convince the most famous value investor that it’s deserving of his money. Yet a curious juxtaposition involved in Buffett’s first-ever Japan visit showed why that’s easier said than done.
Buffett was touring a tool plant in Fukushima prefecture, where a nuclear-power plant damaged by the tsunami in March has contaminated the surrounding area. There, he was asked about another calamity putting Japan in a harsh and negative spotlight: the Olympus Corp. scandal. The Berkshire Hathaway Inc. chairman said: “The fact that Olympus happens here or Enron happens in the U.S. doesn’t affect our attitudes at all.”
Think about it, though. The most-watched market guru is standing near one crisis caused by political corruption and being queried about another involving corporate malfeasance. At the heart of both storylines are growth-killing dynamics that have long given Buffett and his ilk pause. While different in their details and magnitude they show how Japan may be too wedded to the past to thrive in a world of intensifying competition.
Mandatory Insurance Is Wrong Fix for Health Care: Ramesh Ponnuru
Mandatory Insurance Is Wrong Fix for Health Care: Ramesh Ponnuru
Illustration by Leif Parsons
During the 2008 Democratic primaries, one of the few differences he had with rival Hillary Clinton was that her health-care plan featured an individual mandate to purchase health insurance, while Obama rejected a mandate on principle. But the health-care law he eventually signed included a mandate, and the court has now agreed to rule on whether that is constitutional.
Pakistan’s Spy Agency Picking the Wrong Fight: Jeffrey Goldberg
The Pakistani military and its spy agency, the Directorate for Inter-Services Intelligence, have an expansive menu of options before them in their endless campaign to subvert democracy.
And subverting democracy (as opposed to, say, winning wars against India, or helping the U.S. defeat the Haqqani terrorist network in Afghanistan) is the real specialty of Pakistan’s military.
On many occasions, the intelligence service, known as the ISI, achieves its goals through sheer brutality. Such was the case in the beating death of Saleem Shahzad, a Pakistani investigative journalist, in May. His murder was sanctioned by the ISI, according to Admiral Mike Mullen, the just-retired chairman of the U.S. Joint Chiefs of Staff. In a recent article in the Atlantic, Marc Ambinder and I reported that U.S. officials saw intelligence showing that officials in the office of General Ashfaq Kayani, the head of Pakistan’s army (and the most powerful man in a country ostensibly led by a civilian president), ordered the head of the ISI to “take care of the problem” posed by Shahzad. His body was soon found on the bank of a canal.
And subverting democracy (as opposed to, say, winning wars against India, or helping the U.S. defeat the Haqqani terrorist network in Afghanistan) is the real specialty of Pakistan’s military.
On many occasions, the intelligence service, known as the ISI, achieves its goals through sheer brutality. Such was the case in the beating death of Saleem Shahzad, a Pakistani investigative journalist, in May. His murder was sanctioned by the ISI, according to Admiral Mike Mullen, the just-retired chairman of the U.S. Joint Chiefs of Staff. In a recent article in the Atlantic, Marc Ambinder and I reported that U.S. officials saw intelligence showing that officials in the office of General Ashfaq Kayani, the head of Pakistan’s army (and the most powerful man in a country ostensibly led by a civilian president), ordered the head of the ISI to “take care of the problem” posed by Shahzad. His body was soon found on the bank of a canal.
Protesters Ignore American Love of Entrepreneurs: Edward Glaeser
The Occupy Wall Street movement is fighting an almost unwinnable battle against the ghost of Steve Jobs.
America’s love affair with entrepreneurship complicates any attempt to mount an effective European-style war of have-nots against haves. To be successful, the new economic populists must connect their message with the American embrace of those, like Jobs, who become rich by improving our economy and the world. To be wise, the advocates of free markets should worry more about ensuring economic opportunity for all.
America’s love affair with entrepreneurship complicates any attempt to mount an effective European-style war of have-nots against haves. To be successful, the new economic populists must connect their message with the American embrace of those, like Jobs, who become rich by improving our economy and the world. To be wise, the advocates of free markets should worry more about ensuring economic opportunity for all.
Supercommittee Fails to Identify Even Bogus Cuts: Caroline Baum
It took a fictional jury of “12 Angry Men” 96 minutes to agree on a verdict of not guilty. It took “12 good people,” as supercommittee co-chairman Jeb Hensarling referred to them, three months and countless hours to produce ... nothing.
Just to put things in perspective, the Joint Select Committee on Deficit Reduction was charged with finding a minimum of $1.2 trillion in savings over 10 years. These wouldn’t have been cuts in the normal sense. A salary cut means my paycheck is smaller each month. A deficit cut, in federal budget speak, isn’t a reduction in the deficit. The only thing being cut is the rate at which the deficit is growing.
Just to put things in perspective, the Joint Select Committee on Deficit Reduction was charged with finding a minimum of $1.2 trillion in savings over 10 years. These wouldn’t have been cuts in the normal sense. A salary cut means my paycheck is smaller each month. A deficit cut, in federal budget speak, isn’t a reduction in the deficit. The only thing being cut is the rate at which the deficit is growing.
Paralyzed Congress Better Than Self-Destruction: Clive Crook
One way or another, the U.S. will deal with its budget deficit. It’s unavoidable. The job could be done intelligently, gradually and without fuss, by adopting a few undrastic measures, or it could be left until the roof falls in and all the choices are bad. Congress is thinking, let’s go with the roof option.
Obama Stepping Aside for Hillary Clinton Is ‘Ridiculous’ Idea, Tanden Says
The idea of President Barack Obama stepping aside to let Hillary Clinton run for the White House, as posed by two pollsters this week, is “ridiculous,” said Neera Tanden, a former aide to both politicians.
“It was fascinating that the right uses Hillary against Obama,” said Tanden, who served as her policy director during the 2008 campaign for the Democratic nomination and has worked in the administrations of both Bill Clinton and Obama.
“It was actually just the president’s political enemies using Hillary as a battering ram against him,” Tanden, who now runs the Democratic Party-aligned Center for American Progress, said in an interview on Bloomberg Television’s “Political Capital with Al Hunt,” airing this weekend. “The only people that that serves is very conservative Republicans.”
“It was fascinating that the right uses Hillary against Obama,” said Tanden, who served as her policy director during the 2008 campaign for the Democratic nomination and has worked in the administrations of both Bill Clinton and Obama.
“It was actually just the president’s political enemies using Hillary as a battering ram against him,” Tanden, who now runs the Democratic Party-aligned Center for American Progress, said in an interview on Bloomberg Television’s “Political Capital with Al Hunt,” airing this weekend. “The only people that that serves is very conservative Republicans.”
Russia Prepares to ‘Destroy’ U.S. Shield, Medvedev Says
Russian President Dmitry Medvedev ordered the military to prepare to “destroy” the command capability of the planned U.S. missile-defense system in Europe.
Russia may also station strike missiles on its southern and western flanks, including Iskander rockets in the Kaliningrad exclave between Poland and Lithuania, both members of the North Atlantic Treaty Organization and the European Union, Medvedev said on state television today.
Russia may also station strike missiles on its southern and western flanks, including Iskander rockets in the Kaliningrad exclave between Poland and Lithuania, both members of the North Atlantic Treaty Organization and the European Union, Medvedev said on state television today.
U.S. Stocks Slump as Europe Bond Risk Climbs. By Rita Nazareth -
U.S. stocks fell, sending the Standard & Poor’s 500 Index down for a sixth straight day, as the cost of insuring European government debt against default rose to a record on concern the region’s crisis is worsening.
Bank of America Corp. and Citigroup Inc. slumped at least 2.5 percent. Mosaic Co. and Halliburton Co. slid more than 0.5 percent, pacing losses in commodity producers. Deere & Co. rallied 4.4 percent as the world’s largest farm-equipment maker reported profit that topped analysts’ projections.
The S&P 500 retreated 1.2 percent to 1,173.44 at 9:45 a.m. New York time. The benchmark gauge tumbled 6.5 percent in six days, the longest losing streak since August. The Dow Jones Industrial Average retreated 128.66 points, or 1.1 percent, to 11,365.06. U.S. equity markets will be closed tomorrow for the Thanksgiving holiday and will end trading at 1 p.m. Nov. 25.
Bank of America Corp. and Citigroup Inc. slumped at least 2.5 percent. Mosaic Co. and Halliburton Co. slid more than 0.5 percent, pacing losses in commodity producers. Deere & Co. rallied 4.4 percent as the world’s largest farm-equipment maker reported profit that topped analysts’ projections.
The S&P 500 retreated 1.2 percent to 1,173.44 at 9:45 a.m. New York time. The benchmark gauge tumbled 6.5 percent in six days, the longest losing streak since August. The Dow Jones Industrial Average retreated 128.66 points, or 1.1 percent, to 11,365.06. U.S. equity markets will be closed tomorrow for the Thanksgiving holiday and will end trading at 1 p.m. Nov. 25.
Tuesday, November 22, 2011
When Counterfeiting is Legal
When Counterfeiting is Legal
But if I then mentioned that — oh by the way — I also owed $1.6 trillion to a bunch of people, you’d realize that I probably belonged to the lowest cohorts of the 99%, rather than the very highest echelon of the 1%. In other words, you’d realize that I wasn’t über-rich; but über-poor.
But if I then told you, “Hey, don’t pity me. I can print as much money as I want. In fact, all of the $1.6 trillion I have in the bank is money I printed for myself.”
At that point, you wouldn’t know whether I belong to the 1% or the 99%, but you’d be pretty sure that I belonged in jail. And you’d be right…until you realized that even though counterfeiting is always criminal, it is not always illegal.
Cutting Federal Spending…One Way or Another
Cutting Federal Spending…One Way or Another
“Deficit Effort Nears Collapse”
Thus did yesterday’s Wall Street Journal describe the latest Congressional failure. To put it into perspective, a group of well-meaning, intelligent members of Congress had been asked to do something very simple. Every head of a household in the nation does it. Every businessman does it. Even some college students do it.
Members of Congress are very good at cashing checks. They are very bad at balancing the national checkbook. They haven’t done it for 10 years. They’re out of practice.
The situation is simple. The feds are spending too much. Every half-wit and democrat can see that they can’t go on like this.
How China Will Defeat America
An article by Yan Xuetong, translated from mandarin, tells “How China can defeat America.” The gist of Mr. Xuetong’s thought is that rising hegemons are a lot nicer than declining ones. Besides that, history is on the side of the rising power.
The US has become a tyrannical power, he insinuates, throwing its weight around wherever it can. China, on the other hand, is a helpful hegemon…a “humane authority.” While the US has military alliances all over the world…China has none. While the US has fought numerous wars over the last two decades, China’s military hasn’t been involved in conflict since 1984.
China has been preoccupied with her own internal issues…mostly related to employment and growth. But China’s economy grew 71 times faster than the US over the last 4 years. At that rate, it won’t be long before US output is actually lower than China’s.
Mr. Xuetong believes China should do as it did during the Tang dynasty, when it brought in foreigners as high ranking officials to help it take its place on the world stage.
No doubt there are other Chinese who are more hardnosed about it. Rarely does one empire give way to a successor peacefully. There are bound to be Chinese thinkers, whose works aren’t translated, who are speculating about how the Chinese can defeat the US in a real war. They’re surely devising a strategy…and developing new technologies…right at this very moment.
How could China defeat the US? Easy, it could spook US lawmakers into spending more money…wasting more military resources…and driving the nation into bankruptcy. In short, it could just wait.
Regards,
No comments:
Post a Comment