Best of Both Worlds

Another generation's high stakes

2009-12-08T03:43:00.002Z

This is the opening film from the UN Climate Change conference in Copenhagen.

It's effective. But is it just a slicker version of the Lyndon Johnson 1964 Daisy Commercial?

We have our own den of thieves

2009-12-02T20:06:00.002Z

Writing at National Review's The Corner, David Yerushalmi of the Center for Security Policy outlines the thesis that Sharia-compliant finance is a Trojan horse used by Islamic radicals to institutionalize Islamism in the west --

What makes this institutionalization a bit tricky is that the financial jihadists must convince the Western financiers and their governmental counterparts that Shariah-inspired finance is somehow distinct from Shariah-inspired global jihad against the infidel West. In other words, how do you export a financial model among infidels when that model is built upon a doctrine that manifestly calls for the death and destruction of the infidels and their political and social systems? The answer to this quandary is found in the second group of SCF advocates: the Western facilitators.

The financial jihadists built their strategy upon both sovereign wealth and the cravenness and fecklessness of the Western facilitators who would sell their own well-being and physical security for a place among the Fortune 500. Led by the Saudis but also joined by the other oil-soaked Persian Gulf regimes, the Shariah-inspired jihadists learned quickly that Western financial institutions and their professional lackeys in the legal and accounting fields would do anything for that next billion-dollar transaction.

Greed, self-indulgence, and even treason are of course not new to the international banking and multinational corporate worlds. But what the Shariah advocates have found even more to their liking is the fact that the Western technocrats and government policymakers have been more than willing to ignore Shariah’s call for global jihad and its resonance as the common doctrine articulated by jihadists around the globe.

There are a few practical problems with this thesis, as the factual evidence surrounding it signals. From the minor errors elsewhere in the post ("the Carter-era oil embargo" -- it was Nixon) to more on-point mistakes --

Dubai World, a company wholly owned by the Dubai sovereign, has funded itself through debt to the tune of $60 billion in the form of Shariah-compliant bonds (or “sukuk”).

Much of Dubai World's funding is boring old conventional syndicated loans or bonds. And the real Islamic scholars aren't sure if its sukuk was actually Sharia-compliant.

But most of all there is the absence of any demonstrable objective or outcome of all this Islamo-infiltration of western finance. As the global financial crisis shows, Wall Street and London did a fine job pulling down the roof all on their own, and likewise this massive Persian Gulf conspiracy to popularize Islamist finance helped pull down the roof in, er, the Persian Gulf.

The bottom line: trying to look at financial crisis through the War on Terror lens is just not very helpful. Sometimes a sukuk is just a sukuk.

New Dubai

2009-12-02T19:23:00.000Z

Headline -- Qatar to Build World's Largest Chandelier

Yemeni rebels have Saudi POWs

2009-11-26T23:50:00.002Z

As if it was news-dumped on Thanksgiving/Eid -- official statement from Saudi Ministry of Defence:

An official source at the Ministry of Defense and Aviation and General Inspection said that some media carried through their sources with the infiltrators attacking our country"s southern borders with Yemen pictures of persons who were said to be Saudi prisoners of war as a result of the military operations currently underway. For clarification, we would like to state that there are 9 missing of our people. We were not informed of their martyrdom or otherwise. They are:

1- Lieutenant colonel Saeed bin Mohammad bin Ma"atooq Ala"amri
2- Corporal A"aedh bin Ali bin Saeed Alshihri
3- Under sergeant Ahmad bin Ali bin Ali Madadi
4- Sergeant Mohammad bin Mohsin bin Sultan Ala"mri
5- Under sergeant Ahmad bin Abdullah bin Mohammad Ala"mri
6- Sergeant Miflih bin Jama"an bin Miflih Alshahrani
7- Corporal Ali bin Salman bin Ali Alhiqwi
8- Under sergeant Khalid bin Salih bin Omar Alo"oodah
9- Private first Yahya bin Abdullah bin A"amir Alkhzae"i

Their families are aware of their status and we are in contact with their families constantly.

The source said, "As we announce this, we hold all forces dealing with them fully responsible for protecting their lives. We also remind them of the Islamic Sharia (Law)-ordained rights and duties toward this category of fighters.

This is going to make for an interesting case study in what exactly Sharia law says about combatant prisoners.

He thinks he's the head of state

2009-11-25T13:28:00.002Z

National Review's Kevin Williamson

President Obama welcomed Indian Prime Minister Manmohan Singh to the White House with words that have inspired snickers in New Delhi:

"Yours is the first official state visit of my presidency, its fitting that you and India be so recognised," 48-year-old Obama told the 77-year-old Indian leader.

The general reaction in India has been: Who the heck does this guy think he is?

Note first that this "general reaction in India" doesn't extend to providing a link. Given the lack of evidence, we might as well assume that the source is the same Hindu chauvinist/neocon alliance that has been busy briefing against other aspects of the post-Bush India-USA relationship. But note finally PM Singh's remarks at the state dinner last night --

PRIME MINISTER SINGH: Mr. President; the First Lady, Mrs. Michelle Obama; distinguished guests. I feel privileged to be invited to this first state banquet, Mr. President, under your distinguished presidency. You do us and the people of India great honor by this wonderful gesture on your part. We are overwhelmed by the warmth of your hospitality, the courtesy you have extended to us personally, and the grace and charm of the First Lady. (Applause.)

Mr. President, your journey to the White House has captured the imagination of millions and millions of people in India. You are an inspiration to all those who cherish the values of democracy, diversity, and equal opportunity. (Applause.)

Mr. President, I can do no better than to describe your achievements in the words of Abraham Lincoln who said -- and I quote -- "In the end, it's not the years in your life that count. It is the life in your years." (Applause.)

Mr. President, we warmly applaud the recognition by the Nobel Committee of the healing touch you have provided and the power of your idealism and your vision. (Applause.)

The general reaction of this blog is: who does this guy think he is?

The more dioxide the better

2009-11-25T01:15:00.005Z

Powerline's "Hindrocket" is wading through the Univ of East Anglia Climate Research Unit file dump. He highlights an interesting sequence where various scientists are informally discussing why the predicted increase in global temperatures has not been observed in recent years. One discussant raises the possibility that it's because China and India are producing so much sulphur dioxide from their industries that the resulting cooling effect of all that stuff in the atmosphere is offsetting the warming from carbon dioxide. He goes on to propose, seemingly sarcastically, that we should be encouraging pumping of even more of the stuff into the atmosphere for precisely this reason. Of course to Hindrocket, this is merely a glorious free lunch: by letting China and India pollute all they want, we wouldn't need to anything about global warming.

A couple of points. First, the e-mails complain that there's no data on China and India sulphur dioxide emissions that would help verify the cooling hypothesis. Scientists like having data before making radical proposals. Second, there's the link to the Superfreakonomics idea that caused so much controversy -- the geo-engineering plan hyped in the book to directly pump SO2 into atmosphere and achieve global cooling by design. Although the advantage of their plan was cheapness, it appears they missed the freest lunch of all -- the status quo! It's amazing that the Earth seems to feature of a form of "intelligent design" if you will, allowing us to scale up all our forms of pollution in proportion and carry on as before.

Except for the acid rain, diminishing sunlight, polluted oceans, and increasingly dioxified air. Though it would probably set the stage for a resurgence of Impressionist art.

The history of 2008 is still being written

2009-11-24T20:26:00.002Z

One of the strange things about the global economic crisis is that prescriptions for how to end it (or claims about what ended it) are flowing freely despite a lack of understanding of what was going on during the crisis.

Consider today's news dump from the Bank of England that this time last year, it was running a secret lending program to RBS and HBOS --

Use of the facilities peaked at £36.6bn for RBS (on 17 October) and at £25.4bn for HBOS (on 13 November). Total use of ELA [emergency liquidity assistance] across both banks peaked at £61.6bn on 17 October. At this point the two banks provided the Bank with collateral (residential mortgages, personal and commercial loans and UK government issued debt) with a total value in excess of £100bn. The banks were charged fees for the use of the facilities.

Although the fact that RBS and HBOS were on the brink was generally known, the scale of the assistance was not. Essentially there was a 2 month period where their only willing lender was the government -- and the Bank of England got a guarantee from the Treasury to cover potential losses.

What this means is that conclusions about the effectiveness of policies that are drawn from only publicly disclosed policies now have to be revised. Yes Gordon Brown convinced himself -- and others -- that he had saved the world through the equity injections to the banks. Now there's the little matter of how he was also lending them $100 billion and not telling anybody about it.

Incidentally, the B of E's phrasing in explaining why it kept the program secret is a Sir Humphrey classic --

In most cases, confidence can best be sustained if the Bank’s support is disclosed only when the conditions that gave rise to potentially systemic disturbance have improved to a point where the disclosure itself should not be a cause of such disturbance

In other words, we only tell you when telling you wouldn't have any impact. Trebles all round!

India has its interests

2009-11-24T17:28:00.003Z

Recent news articles leave one with the impression that people are trying to use India as a stick with which to beat the Obama administration. Yet consider this remark from Indian PM Manmohan Singh last night at the Council on Foreign Relations --

The social agenda has come to dominate the domestic political discourse, both in India and the United States. This was the verdict of our general election held in May 2009, and I believe it was also of yours.

The time is therefore opportune for us to substantially enhance our cooperation in critical areas of education, health, energy, science and technology and agriculture. Collaboration between our software industries has powered the global knowledge economy. We can build and we must on this experience and look at new frontiers of cooperation.

So although the geopolitical angle to US-India discussions is inevitable, the PM apparently believes that one ignores domestic social concerns at one's electoral peril. Sometimes, wars have to wait.

A 15 year cycle

2009-11-24T01:00:00.002Z

Paul Krugman, building on his NYT column --

So does 1994 carry lessons for today? Well, I guess everything does. But the differences were large — and 1994 does not offer an example of bond vigilantes derailing a recovery: despite the vigilante attack, growth just kept on rolling.

The specifics of what happened --

Then as now there was a large “carry trade” motivated by the spread between long rates and short rates; when the long rate started to rise, there was a balance sheet squeeze that caused a stunning, albeit short-lived spike:

The context for Krugman's account is worth filling out because it has a strong implication for the relevance of the 1994 comparison -- the Fed was tightening like crazy in 1994 in reaction to the bond market. Here's the Fed's tabulation of the policy interest rate changes in 1994-95:

Increase Decrease Level
1995
December 19: ... 25 5.50
July 6: ... 25 5.75
February 1: 50 ... 6.00

1994
November 15: 75 ... 5.50
August 16: 50 ... 4.75
May 17: 50 ... 4.25
April 18: 25 ... 3.75
March 22: 25 ... 3.50
February 4: 25 ... 3.25

That's a 275 basis point increase in rates before they eased off. In other words, those bond market vigilantes got what they wanted. So if there's a 1994 message for today, it's that when the central bank responds to the vigilantes, interest rates come back down. But that's not that message that we want for 2009, right?

The bigger picture is that 1994 was arguably the beginning of the mess the world is in today. It confirmed Alan Greenspan's credentials as the man who would do what the bond market said, and so promoted the idea that Wall Street risk had declined for good. Because of the vigilante attack, growth just kept on rolling. Hence the piling into ever riskier stuff on the assumption that the macroeconomic risk was gone.

And here we are.

Opium of the people

2009-11-23T18:00:00.002Z

Very interesting account of how the Egyptian media engaged in deliberate stoking of tensions with Algeria before and after last week's World Cup qualifier in Khartoum. Which serves as an illustration of the way that "rage" in the Arab media can be turned on and off, with Israel as the usual subject. Predictably, the soccer rantings included a claim that the Algerians were fronting for the Israelis.

The Ireland-France tensions over Le Main de Thierry are not quite as heated of course, but the question is going to be whether the minds of ministers were busy with foreign quarrels as the flood waters rose in Cork and Galway.

Le mot juste

2009-11-19T13:25:00.001Z

In the light of the Thierry Henry row, consider that the French word for disappointment is --

déception

Indeed.

One French person defends Thierry Henry

2009-11-19T12:01:00.003Z

It's the Secretary of State for Sport, Rama Yade, who has been on a downward trajectory in Sarko's government since being elevated into a high profile Minister of State for Human Rights position at the start of his administration. So anyway --

la secrétaire d'Etat aux Sports Rama Yade a estimé qu'elle ne pensait pas "que l'on puisse parler de triche" : "Vous ne pouvez pas savoir exactement d'où vient le ballon et où il part. D'ailleurs l'arbitre n'a rien vu", a déclaré Mme Yade. "Thierry Henry lui-même a reconnu avoir touché le ballon. Il n'y a que lui qui sait si c'était volontaire", a-t-elle estimé, ajoutant : "Je ne crois pas qu'un joueur de son envergure, avec son expérience, avec son palmarès, le nombre de sélections qu'il a eues en équipe de France, avec l'amour qu'il a du jeu, qu'il soit un homme à faire de la pratique anti-sportive".

Loose translation: One shouldn't speak of trickery. We can't know exactly where the ball went. The officials saw nothing. Thierry Henry himself acknowledges having touched the ball. Only he can say if it was intentional. I don't think that a player of his stature, with his experience, with his honours, his number of caps, with his love for the game, that he's a man who would engage in unsporting conduct.

Looser translation: Screw this fairness business. I'm going to South Africa.

Perfidious Gaul

2009-11-18T23:35:00.003Z

Irish soccer fans should note that there is a template for responding to perceived outrages inflicted by the French. Replace Jacques Delors' picture with that of Thierry Henry and we're getting somewhere.

Another Iron Curtain

2009-11-18T21:52:00.003Z

Weird World Cup 2010 Fact: The only two eastern European countries in the tournament will be two countries that did not exist as sovereign countries when Communism fell: Slovakia and Slovenia*. And neither host country for the Euro 2012 championship (Poland and Ukraine) will be there. It's a funny old game.

*It depends on whether you consider Serbia as the successor to Yugoslavia and indeed whether Yugoslavia was an Iron Curtain country. The point is that for all the talk about an eastward shift in soccer (which was used to rationalize the location of Euro 2012), there's no sign of it in the qualifying.

Not in the mood

2009-11-17T02:07:00.001Z

One of the heckles at Yusuf Islam (Cat Stevens) at his Dublin concert on Sunday night --

play Peace Train, you f***ing b******

The ghosts of November

2009-11-13T13:01:00.002Z

Jonah Goldberg --

Whatever his faults, President Bush got to say one thing that the American people always appreciated: After 9/11, he kept us safe from a terrorist attack on the homeland. If Hasan acted as a jihadist terrorist and not a disgruntled psychiatrist, Obama can’t even make the same claim about his first year in office.

Two things to note. First, a perfect example of the desire of conservatives to write 9/11 out of Bush's record. Ignoring the huge disaster 8 months into his term, he did a great job. Which means incidentally that, as written, Goldberg's swipe at Obama is just wrong. Bush can't make the claim that he says Obama can't make.

But anyway, did Bush get through the rest of term without any more Islamist-inspired attacks? The Jonah Goldberg of 2002 didn't think so -- because he thought that the Washington DC-area sniper attacks were Islamist terrorism. Before the culprits were found, there was the speculation --

The D.C. sniper is demonstrating many of the skills and techniques taught at al-Qaida's terrorist training camps, including hit-and-run attacks and facility with military weapons. Also, eyewitnesses say the sniper is an "olive-skinned man" -not that anyone wants to racially profile. Also, there's the fact that the sniper attacks are in and around Washington, D.C., the nation's capital. The coincidence that this is happening at the seat of the U.S. government is relevant.

And after they were caught? --

IS JOHN MUHAMMED A THREEFER? [Jonah Goldberg]
We know the Sniper is a Nation of Islam Muslim (which is to say he belongs to a cult that uses Islamic jargon). We know he's black. But I've got this nagging feeling we might find out that he also practices an alternative lifestyle -- I mean besides from all of the murdering. There's just something about this Batman and Robin act -- Malvo is his "ward"? --- that strikes me as odd, in a specific way. Call it a hunch. Not that there's anything wrong with that.

Could Mr Hasan be the new threefer?

Those were the days

2009-11-13T11:06:00.002Z

Wall Street Journal article on the fallout from the demise of the Dynamic Decisions Growth Premium Master Fund Ltd. --

Grant Thornton has said the fund had about $550 million in unaudited assets on Dec. 31. The Dynamic Decisions Growth Premium Master Fund delisted its shares from the Irish Stock Exchange a year ago.

There was a birds of a feather quality to the Irish boom. A property sector gone wild at home and a financial sector looking all sophisticated by being part of a hedge fund administrative archipelago. Good times.

Alternative history

2009-11-09T18:55:00.000Z

Watching the 20th anniversary of the end of the Berlin Wall led to an interesting television moment. The French channels covering the event live were stuck with the German audio feed during the Sarkozy speech, meaning that viewers could only hear the German words as their president spoke. For one moment maybe, a reminder of the jitters that accompanied Mauerfall in real time.

Truth in advertising

2009-11-04T18:00:00.000Z

RTE headline --

Cannabis seized in Hempstown

You can't eat gold

2009-11-04T04:02:00.002Z

Indian Minister of Finance --

“We have money to buy gold. We have enough foreign exchange reserves.” He contrasted India’s strength with weakness elsewhere: “Europe collapsed and North America collapsed.”

So India celebrates its strength by paying $6.7 billion for an asset that doesn't pay interest and doesn't serve any physical function. It does make for a highly speculative financial play. Apparently that's the new business of central banks.

You can't get there from here

2009-11-02T19:57:00.003Z

The Arab League has found the single cause of the Israel-Palestine problem --

The Arab League's Palestine and Arab occupied territories division in a statement on the memory of the declaration formed nearly a century ago, said that "the Palestinian people live under difficult conditions and suffer under violations of their most simple of rights as a result of Israeli occupation.
"This requires our joint efforts with Britain and the international community to enable these people to regain their national legitimate rights." The statement furthermore stressed that the Balfour Declaration was the major reason behind the human catastrophe that has become of the Palestinian people and still continues to this day.

If that's the diagnosis, good luck with the cure. But keep your day jobs.

Even the Victorians understood the need for public health

2009-11-02T18:14:00.004Z

There's a new anti-healthcare reform talking point stalking the USA. That the swine flu vaccine experience proves that a government run healthcare system can't work. This meme was working around the blogosphere in the last couple of weeks and hits the big time today -- Bill Kristol:

After all, we're seeing a big government health care program in operation right now--the Obama administration's effort to deal with the swine flu problem. No, come to think of it, it's now the swine flu emergency. Last week, President Obama so legally designated it. How's that test case in government-run emergency care going?

Turn on your local news to find out. You'll see false reassurances, broken promises, rationing which doesn't provide the promised rations, queues lengthening while supplies run out, and lots of bureaucrats explaining just why things aren't working quite as their centrally planned plans had planned.

At the all-Obama-hating-all-the-time blog of Commentary magazine, Jennifer Rubin identifies "swine flu Moms" as the successor to soccer moms who likewise will rebel against the Obama plan on the basis of their swine flu vaccination experiences.

Which may be the most abysmal talking point yet. Consider the alternatives to a public vaccination program. The government could just get completely out of the business of procuring vaccines and let the invisible hand decide how much vaccine is produced and who gets access to it. Which raises problems so obvious it's amazing to have to spell them out. Contagious disease vaccination campaigns only work when lots of people get the vaccine -- especially for a quickly mutating virus like flu. And "lots of people" includes people with not much money, or no doctor, or with lack of time to go a doctor's office -- but who still breathe the same air as Bill Kristol and Jennifer Rubin. A long time ago, governments of very different political stripes decided that there was a basis for them being involved in public health programs. Apparently the deal is off.

And if you don't like the trip through successively smaller waiting rooms that is a visit to the doctor's office now (Seinfeld joke) just imagine what it would be like with a mob there convinced that they're the ones who need the vaccine more than anybody else.

Another perspective: the US swine flu vaccinations are being run by state and local governments, who vary in their access to the vaccine, their capacity to deliver it, their criteria for deciding who gets it, and their procedures for enforcing those criteria. We could simplify by putting the federal government in charge of the whole thing and then it would be uniform procedures throughout the country. But then the accusation would be that Obama is "federalizing" healthcare -- and that's before the crazies would get working on the idea of the federal government giving everyone injections. Especially if the government decided to manufacture the vaccine itself -- given the production problems that have arisen with letting private firms do it.

So anyway, the point is that if you don't like the current approach to swine flu vaccination, the alternative is more free market provision of it, or more government provision of it. Which do Kristol and Rubin prefer?

The proliferator in chief

2009-11-01T14:44:00.002Z

Mark Steyn thinks there's some kind of message in the fact that George W. Bush was well received in India on a weekend visit having let India legitimise its nuclear weapons while Hillary Clinton had a tough time in Pakistan since she avoided the happy talk that usually accompanies such visits. It would be worth asking the Indian government whether they thought Hillary was asking the right questions.

But anyway, George Bush is apparerently proud of his Indian nuclear deal. His secret service people have other worries --

Confirming the incident, S G Amin, Assistant Deputy Fire Officer (ADFO), Fort area, reveals to Sunday MiD DAY, "They (Bush security officials) were keen to know whether the MFB [Mumbai Fire Brigade] is capable of handling situations arising out of chemical or atomic attack. Our reply was a blatant no as we are not trained to handle such emergencies."

Leave aside the Bush team's focus on a WMD attack in a city whose most recent terrorist atrocity was a plain old guns and bombs affair. Under this great nuclear deal, India gets access to even more nuclear technology without any more capacity of first responders to deal with the situation where something goes wrong. Another Bush cost that got dumped into the future.

Greece and Afghanistan

2009-10-31T00:50:00.002Z

It's worth keeping track of what the neocons are saying about Afghanistan. They think that they have Barack Obama on the back foot on this one, with Iraq "proving" that a troop increase can have powerful effects in taming an insurgency and with the US (thanks to 7 years of neglect) facing some very awkward choices when ideally the choices would be either scale up massively or just go home. But anyway, one critical issue in both Afghanistan and Iraq is whether the USA (or similar power) can ever really "win" a war fought via a domestic proxy. Here's Max Boot --

The worst thing the Obama administration could do is throw up its hands in despair and claim we can’t win in Afghanistan because of [Hamid] Karzai’s problems. In fact, every counterinsurgency effort in history has faced a problem of governmental legitimacy; if the government were generally accepted as legitimate and efficient, there would be no insurgency to begin with. Enhancing governmental credibility is a tough task but by no means a mission impossible — we’ve helped achieve that outcome in countries as varied as Greece, the Philippines, and El Salvador.

So let's take Greece which is perhaps the least well-known example in the US. The Wikipedia article on the period on question is excellent. There are a few things to note.

First, this was a civil war in which the US picked a side. The Cold War made things relatively simple since they could mapped into 2 sides: Communist and not-Communist. Do Iraq and Afghanistan have 2-sided civil wars?

Second, what eventually did in the Greek Communists? A falling out between Tito and Stalin. They needed Tito for the logistical support but Stalin for the ideology, and when there was a row, most of the leadership chose the latter. Which was a huge mistake. Yugoslavia was a lot closer.

Third, Greece does resemble Afghanistan in one important respect. The locals had seen off a hated foreign occupier (Nazi Germany and the USSR respectively) pretty much on their own. Having someone else waltz in at the end to declare themselves in charge didn't go down very well with the people who had stuck it out at home. Hence the legitimacy problems to which Boot obliquely refers.

And finally, if we are looking at outcomes following US interventions to boost a local client, Greece is close to the best case scenario. It's now a rich country in the European Union and NATO, with a significant foot in eastern Mediterranean/Adriatic politics and good (if complex) relations with most of its southeastern European neighbours. But that's 50 years after its civil war ended. In between there's been military coups, dictatorships, the partition of Cyprus, a terrorism problem that never really went away, mass emigration, street riots, and poisonous domestic politics.

If the American people are to be told the truth about what a prolonged Afghan adventure would involve, shouldn't this decades-long scenario be part of the sales pitch?

Is there anything they can't do?

2009-10-30T23:33:00.000Z

Wall Street Journal -- One of Russia's most powerful tycoons -- barred entry to the U.S. for years due to U.S. government concerns about possible ties to organized crime -- visited the country twice this year under secret arrangements made by the Federal Bureau of Investigation ...

A State Department official said Mr. [Oleg] Deripaska doesn't hold a valid U.S. visa.

FBI investigators, as well as authorities in Britain and Spain, have probed Mr. Deripaska's business interests in the past amid allegations of money-laundering from investigators and prosecutors. He has never been charged with a crime in those probes. Mr. Deripaska has met with FBI investigators before. It isn't known what was discussed ...

During the early October trip he met top investment-banking executives including Goldman Sachs Chief Executive Lloyd Blankfein, according to people familiar with the meetings.