Weekday NEWS to Comfort the Disturbed and Disturb the Comfortable.
Fri 02.06.2009
Gold Disconnects from US Dollar The gold price has finally disconnected from its nemesis, the USDollar. This news should be read as the coming of spring after months of wintry torment, or as the sighting of land after 30 days adrift at sea in a derelict vessel. From 2002 to very early 2008, the gold price had risen from the massive speculative fervor that swept the United States and Europe, whose economies had been supplied largely by Asian factories. The mines from Latin America to South Africa to Australia greatly aided the process. The very paradoxical event of the USDollar rising this past autumn amidst truly horrendous news, one disaster after another, one major bank failure after another, one nationalization of a large financial institution after another, makes the disconnect all the sweeter for gold investors. That set the stage for a powerful gold price move.
Gold slides on profit taking Gold prices eased in Asia mainly on profit taking by speculators despite record high exchange-traded fund holdings underlined strong investor interest amid continuing turmoil in the financial sector. Gold was trading at $910.40 an ounce, down $3.35 from New York's notional close on Thursday, when it hit a session high of $924 an ounce.
The Action Americans Need By Barack Obama Washington Post Thursday, February 5, 2009; Page A17 By now, it's clear to everyone that we have inherited an economic crisis as deep and dire as any since the days of the Great Depression. Millions of jobs that Americans relied on just a year ago are gone; millions more of the nest eggs families worked so hard to build have vanished. People everywhere are worried about what tomorrow will bring. What Americans expect from Washington is action that matches the urgency they feel in their daily lives -- action that's swift, bold and wise enough for us to climb out of this crisis. Because each day we wait to begin the work of turning our economy around, more people lose their jobs, their savings and their homes. And if nothing is done, this recession might linger for years. Our economy will lose 5 million more jobs. Unemployment will approach double digits. Our nation will sink deeper into a crisis that, at some point, we may not be able to reverse.
Obama must pare-down stimulus Bill Kristol's RESPONSE to Obama's OpEd piece in Washington Times (above) The Republicans' Opportunity “This plan is more than a prescription for short-term spending -- it's a strategy for America's long-term growth and opportunity in areas such as renewable energy, health care and education.” -- Barack Obama With this key sentence from his op-ed in the Washington Post today, President Obama has given Republicans a golden opportunity: Insist on splitting the legislation being debated on the Senate floor into a true short-term stimulus, which can pass quickly, and long-term policy proposals, which require serious debate. Republicans should stop trying to improve the unimproveable with small-bore amendments to the current legislative package. Instead, they can point out that Obama is supporting under the guise of emergency legislation a bloated catch-all of stimulus, pork and (often bad) policy. They can make clear that Republicans will support a real short-term stimulus (pro-growth tax cuts, housing measures and a few targeted spending provisions unemployment and COBRA extensions) that meets Larry Summers’s criteria of being targeted, timely and temporary. They should introduce such a measure as a substitute -- "The Emergency Economic Growth Bill of 2009” -- and trumpet their vigorous support of it. And they should insist that all the "energy, health care and education" proposals be debated in an orderly and serious way in the regular legislative process -- not jammed through as part of an emergency “stimulus."
White House Now Plans Limited Bank Aid Package The Obama administration has decided on a new package of aid measures for the financial services industry, including a bad bank component, and is expected to announce them next Monday, according to a source familiar with the planning. The plan will be "smaller" than originally expected, said the industry source, and centered around government guarantees and insurance of troubled assets, what's called a "ring fence" concept. "Eveybody seems to like that," said the source. "There's a lot of internal conflict about whether this [the bad bank] makes sense ... they realize they have to do something with the bad bank." The latest round of discussions also appear to have addressed the most controversial aspect of the big bank concept: Pricing.
Obama Warns of 'Catastrophe:' What Happened to 'Hope' and 'Change?' Barack Obama's cap on executive pay for bailout recipients yesterday overshadowed his comments about the stimulus bill, which deserve greater scrutiny. "A failure to act, and act now [on the bill], will turn crisis into a catastrophe," Obama said, sounding a lot more like his predecessor than the candidate of hope and change. Even as he sees the potential for a near-term rally, Todd Harrison, CEO of Minyanville.com, says Obama is understandably worried about the risk of Congressional inaction. "He's right there's potential for this [economy] to get much worse and manifest itself not only financially, but through societal unrest," he says.
Geithner plans to unveil bailout plan Monday Treasury Secretary Timothy Geithner to unveil plan to overhaul $700 billion bailout on Monday Treasury Secretary Timothy Geithner and other top officials are putting the finishing touches on a plan to overhaul the government's $700 billion financial rescue program. A Treasury official said Geithner will deliver a speech on Monday outlining the new plan. But Treasury officials would not comment on reports Thursday that changes were being considered to the current accounting standard that requires banks to carry assets such as mortgage-backed securities on their books at fair value, a process known as "mark to market." Critics of this process contend that it has made the current financial crisis worse by forcing banks to slash the value of assets that are currently depressed because of market conditions. Treasury officials said the administration's plan was not yet complete and would be revealed in Geithner's speech in Washington next week.
Bernanke thinks he can use inflation to lower unemployment By all accounts Bernanke is a thoroughly decent man and a smart one to boot. But I fear what most of his circle would call smart others would biting call "book smart", a disparaging term for someone who has mastered the requisite texts but not the art of thinking. This melancholy conclusion was delivered by the revelation that he still clings to the discredited Phillips curve.
In-Depth Look - Central Bank Interest Rate Decisions
Infighting begins within Obama’s team We are barely two weeks into Barack Obama’s tenure and reports are surfacing everywhere that his “team of rivals” is at each other’s throat. President Obama had said just after the election that he was looking to pull together the best and the brightest. However, this strategy comes with a cost as the outsized egos assembled in his team are starting to jockey for political position. A well-informed reader alerted me to the latest and most depressing story, which involves former Harvard President and Treasury Secretary Larry Summers shunting aside legendary ex-Fed Chairman Paul Volcker. Summers is trying to exclude Volcker, who is legendary for righting the U.S. economy after the stagflation of the 1970s. If he succeeds in sidelining Volcker, we will be the worse for it.
Volcker accuses Obama’s National Economic Council Director - and consummate financial insider - Lawrence Summers for slowing down the effort to organize a panel of outside advisers on the crisis
Warren has discovered that Paulson overpaid by $78 billion dollars for toxic assets purchased from financial institutions
And Stiglitz writes: "Perhaps the entire strategy is flawed? Perhaps what is needed is a fundamental rethinking. The Paulson-Bernanke-Geithner strategy was ... based on a failure to grasp some of the fundamental changes in our financial sector since the Great Depression, and even in the last two decades."
Regulator Says Bailout Fund Is Misleading the Public Watchdogs monitoring the government's bank bailout called for an overhaul Thursday, with one accusing those running it of misleading the public, while senators slammed the program as chaotic and poorly managed. Under the $700 billion program meant to stabilize the financial system, the Treasury Department has so far spent nearly $300 billion to bolster financial institutions and automakers in exchange for preferred shares and warrants. But in buying those securities, Henry M. Paulson Jr., then the Treasury secretary, misled the public about how it was going to price them, said Elizabeth Warren, a Harvard law professor and head of an oversight panel for the bailout, known as the Troubled Asset Relief Program, or TARP.
Ron Paul's Statement on Federal Reserve Board Abolition Act Madame Speaker, I rise to introduce legislation to restore financial stability to America's economy by abolishing the Federal Reserve. Since the creation of the Federal Reserve, middle and working-class Americans have been victimized by a boom-and-bust monetary policy. In addition, most Americans have suffered a steadily eroding purchasing power because of the Federal Reserve's inflationary policies. This represents a real, if hidden, tax imposed on the American people.
H.R.833 : To abolish the Board of Governors of the Federal Reserve System and the Federal reserve banks, to repeal the Federal Reserve Act, and for other purposes. Sponsor: Rep Paul, Ron [TX-14] (introduced 2/3/2009)
Peter Schiff: Stimulus Bill Will Lead to "Unmitigated Disaster" The fiscal stimulus bill being debated in Congress not only won't help the economy, it will make the recession much worse, says Peter Schiff, president of Euro Pacific Capital. Schiff scoffs at the notion the economic decline is starting to level off and concedes no government action means a "terrible" recession. But the path of increased government intervention will lead to "unmitigated disaster," says Schiff, who gained notoriety in 2007-08 for his prescient calls on the housing bubble and U.S. stocks. The problem, he says, is the government is trying to perpetuate a "phony economy" based on borrowing and spending. With the U.S. consumer tapped out, the government is "now taking on the mantle" of consumer of last resort, he continues, predicting the bond bubble will soon burst - if it hasn't already - ultimately leading to a collapse of the dollar and an "inflationary depression worse than anything any of us have ever seen."
Stimulus package gets hard sell President Obama and the Democrats are toughening their tone as public doubts grow over the economic stimulus plan, aggressively attacking Republicans in local ads and warning of the dire consequences if it fails. As Democratic leaders were struggling to whittle the Senate's $885 billion version, Vice President Joseph R. Biden Jr. was reminding Republicans what "the American people voted for" in an effort to boost support for the administration's plan and break the legislative impasse.
Obama Stresses Energy Independence in New Plan
Democrats push vote on huge stimulus plan U.S. Senate Majority Leader Harry Reid abruptly halted debate on a $937 billion rescue bill late on Thursday, but said lawmakers would resume work Friday and remained upbeat they would pass the measure demanded by President Barack Obama to combat a deepening recession. "I would hope that we could complete this legislation tomorrow (and) I'm cautiously optimistic," Reid told colleagues after a third day of considering amendments to the measure. Obama urged members of the Senate as well as the House of Representatives to resolve their differences and get a final bill to him within the next week or so. "If we do not move swiftly to sign the American Recovery and Reinvestment Act into law, an economy that is already in crisis will be faced with catastrophe," Obama said during a meeting with House Democrats in Williamsburg, Virginia.
GE Capital’s looming time bomb (see video) I do not think General Electric is AAA company — far from it. Their finance arm GE Capital is at the center of the private equity and asset-backed security time bombs that have yet to explode. And this makes the cash flow expected from GE Capital vulnerable because they are under-reserving. Translation: their financial results are artificially goosed by not reserving for likely losses.
Treasury overpaid for bank stocks Oversight panel chair says Treasury paid billions over market value . . . government watchdog group says the federal government overpaid for stocks and other assets from financial institutions under its $700 billion rescue program. The chairwoman of the Congressional Oversight Panel for the bailout funds told the Senate Banking committee Thursday that Treasury in 2008 paid $254 billion and received assets worth about $176 billion.
Bad news means bad news Frank Holmes at USFunds.com writes, "When it comes to the global economy, there's a huge surplus of bad news and there's a good chance that more is coming" - so much so that "Positive indicators are in short supply", which he qualifies by saying, "but there's a good chance that more of these are coming, too." One of these positives, he says, is that the current recession is now 13 months old, whereas the worst recessions since the Great Depression lasted only 16 months (and there were two of them: 1973-75 and 1981-82). Well, this is just the kind of technical-analysis thing that drives me crazy, and I was just getting ready to try and grab a little of the limelight and ream this guy out for using such technical-trading crap, when he obviously sees me coming down towards the podium.
The Jobs Number for January Could be Quite Bad, Much Worse than Expected The non-seasonally adjusted number could come in around -3,400,000 jobs. Luckily for the BLS January is the worst month for actuals, and therefore has the largest seasonality factor. The 'imaginary jobs' number will not be a significant factor, since January is also the month in which they adjust out many of the imaginary jobs they added in the last six months that are obviously non-existent.
Gold, diamond sales crash by 40% in Russia Even as diamond traders in Mumbai and Surat are struggling to keep their business afloat, the situation in Antwerp and Russia is not different. Antwerp, world headquarters of diamond rough trade, is feeling the pinch now with demand falling to unimaginable levels. Russia’s diamond trade is also suffering huge losses and there are not takers for diamonds now. It is a clear hint that during the time of crisis people have decided to say bye to luxuries. But, gold has still managed to stay afloat because of its investment safe haven tag. According to media reports, Russia is registering the biggest fall in diamond production in the world.
Dubai gold jewelry sales crash by 60 percent DUBAI: Dwindling property prices, daily reports of thousands of job losses and decline in tourist arrivals have adversely hit the gold sales in Dubai. Retail sales of gold and gold jewelry have crashed by as high as 60% in January despite the ongoing Dubai Shopping Festival. A sharp decline in the sales of gold has been reported by leading gold chains in Dubai, known as the City of Gold. Gold retailers such as Joy Alukkas, Damas, Pure Gold and Atlas Jewellery have launched several innovative promotions schemes and prizes to lift the sagging gold sales in Dubai.
Peter Schiff - Client is Pissed! - Friends down 30% - 50%
Trying to Help Financially Troubled Homeowners People seem to pass certain milestones on the road of financial desperation. First the unpaid bills pile up. Then the bank forecloses. Finally, they reach the end of the line: bankruptcy court. But now policy makers are talking about redrawing this map by putting the bankruptcy court before foreclosure to give people a chance to keep their homes. It has been done before, on a relatively small scale and with some success. In the midst of the farm crisis during the 1980s, Congress gave bankruptcy judges the power to reduce onerous farm loans to reflect a steep drop in land prices. The Obama administration and Congressional Democrats are pushing a similar idea to stem the swelling tide of home foreclosure. Yet a close look at the farm experience raises questions about how widespread any relief would be.
The Road to Bank Nationalization This week, seven major corporations announced major layoffs, adding 72,000 to the unemployed. At the same time, lending by the big banks fell. With falling demand for loans, it is little wonder that President Obama described the national economic situation as "worsening day by day." Clearly, we are heading into a deepening and severe recession that is spreading worldwide. As the reckless speculation of the major money center banks became clear in the second half of 2008, there was resistance to rescue efforts. However, the perceived wisdom was that these banks were too large to fail. Congress approved the $700 billion TARP to rescue them and the financial system. Now, there is growing demand by politicians for the banks to lend, in the face of falling loan demand. Clearly, a Democrat Congress is intent upon using Wall Street to dispense taxpayer funds to Main Street. This is socialism and strikes at the very heart of the 'American Way' of free enterprise.
Obama labor secretary-nominee faces tax questions U.S. President Barack Obama's pick for Labor secretary faced questions over her husband's unpaid business taxes on Thursday, the latest in a string of embarrassing tax revelations that have hampered Obama's efforts to seat a cabinet. A U.S. Senate panel delayed its vote on Labor Secretary-designate Hilda Solis after the newspaper USA Today reported that her husband paid about $6,400 on Wednesday to settle tax liens that had been outstanding against his business for as long as 16 years. The Senate Labor Committee's Democratic chairman and its top Republican made no mention of the USA Today report but said the vote was indefinitely delayed to "allow members additional time to review documentation submitted in support" of Solis, a Democratic member of the House of Representatives from California.
Parallels With the Great Depression What began early last year as a "credit crunch" and an "economic downturn" is now being characterized as a "long, severe recession." Once upon a time, such a crisis was known as a "depression" before Americans became squeamish about such stark language. As with our reluctant semantic retreat from "credit crunch" to "recession," the reality of another Great Depression will probably not be acknowledged until years after the fact. But America and the rest of the modern world, by doggedly pursuing the same mistaken policies of the 1920s and '30s, have made a full-blown depression - lasting years, not months, and featuring catastrophic failures in entire economic sectors along with chronic double-digit unemployment and monetary malaise - all but inevitable. In fact, the parallels between the run-up to the Great Depression and today's economic havoc are stunning.
Feds Release National Gang Threat Assessment According to the 2009 National Gang Threat Assessment released by the National Gang Intelligence Center (NGIC) and the National Drug Intelligence Center (NDIC), approximately one million gang members belonging to more than 20,000 gangs were criminally active in the U.S. as of September 2008. The assessment was developed through analysis of available federal, state, and local law enforcement information; 2008 NDIC National Drug Threat Survey (NDTS) data; and verified open source information such as material provided by the National Association of Chiefs of Police and the Fraternal Order of Police. "Gangs have long posed a threat to public safety, but as this study shows, gang activity is no longer merely a problem for urban areas. Gang members are increasingly moving to suburban America, bringing with them the potential for increased crime and violence," said Assistant Director Kenneth W. Kaiser, FBI Criminal Investigative Division.
THERE'S NOT ENOUGH GLOBAL INVESTMENTS President Barack Obama is stuck between a rock and a hard place on America's financial crisis, not to mention what used to be called the "Global War on Terror, beginning with Iraq and Afghanistan. Both are equal priorities for the U.S. Government and America's taxpayers. Obama already has gotten rid of the term "Global War on Terror." That changes nothing. We're still stuck with terrorists willing to blow up America the moment they get the green light from Osama bin Laden, who was responsible for the destruction of the symbolic World Trade Center twin towers on 9/11/01. These attacks on America cost our country several trillion dollars. That was the beginning. Where is the end? Vice President Joe Biden announced last year that the Obama Administration better be ready for another attack on America because President Obama is seen as a "weak" President when it comes to national defense. Obama already is dismantling the Defense Department. So much for protecting America's citizens and economic system!
Economy Shed 598,000 Jobs in January The United States lost almost 600,000 jobs last month and the unemployment rate rose to 7.6 percent, its highest level in more than 16 years, the Labor Department said Friday. It was the biggest monthly job loss since the economy tipped into a recession more than a year ago, and it was even worse than most forecasters had been predicting. In addition, the government revised the estimates for previous months to include another 400,000 job losses. For December, the government revised the job loss to 577,000 compared with an initial reading of 524,000. Over all, it said, the nation has lost 3.6 million jobs since it slipped into a recession in December 2007.
Pink slips stack up as recession drags on Worn down by a drawn-out recession, cost-cutting employers are laying off workers at an alarming clip and there's no end in sight. The Labor Department releases a report Friday expected to show that January was another cruel month for workers and companies. With employers in no mood to hire, the unemployment rate is expected to jump to 7.5 percent in January from 7.2 percent in December, according to economists' forecasts. If they are right, that would mark the highest jobless rate in 17 years. And after suffering heavy job losses last year, the country probably lost another 524,000 jobs month, getting the new year off to a rotten start. Some think the number of jobs reductions in January will be higher - 600,000 or 700,000.
Jobless claims hit '82 levels amid gloomy data Markets defy reports; Dow ends up 106 after early losses The number of Americans filing for jobless benefits for the first time surged unexpectedly to a seasonally adjusted 626,000 last week, the Labor Department reported Thursday - the highest level since October 1982. A separate labor report showed productivity rose at an annual rate of 3.2 percent in the final three months of last year, far above the 1.1 percent rise that economists had expected, reflecting the massive wave of layoffs that occurred during the fourth quarter. The Commerce Department said factory orders fell by 3.9 percent in December, a record fifth straight drop. And retailers reported another month of slumping sales in January.
Rising unemployment hits 98 percent of metro areas Metropolitan areas across the Southeast and Midwest are seeing some of the steepest increases in joblessness, stung by their dependence on factories serving the struggling housing and auto sectors. That is one of the key trends that emerges from a Labor Department report released Wednesday showing December unemployment rates rose in 98 percent of the country's largest metropolitan areas, compared with a year earlier. More than 100,000 job cuts have been announced since then by a wide range of industries, sparing few communities. The government's next monthly snapshot of nationwide unemployment is expected to show the January rate climbed to a 17-year high. "It used to be they'd at least take your application. They don't even do that any more," said Heather Allen of Elkhart, Ind., an area that had the biggest annual gain in its unemployment rate. "Places just aren't hiring."
Retail sales drop again in January Shoppers grappling with rising layoffs and shrinking retirement accounts dug deep into survival mode last month, leading to sharp January sales declines for many retailers. The poor results raised more concerns about the financial health of the industry. The malaise crossed the spectrum of retailing, from department stores to teen chains. Gap Inc., luxury retailer Saks Inc. and Children's Place Retail Stores Inc. were among those posting deeper-than-expected sales declines.
Factory Orders Fall Again With No Clear End in Sight Orders to factories fell for a record fifth month in December, closing out the worst year for American manufacturers since 2002. Analysts say the deepening recession will mean further weakness in coming months. The Commerce Department said Thursday that orders dropped by 3.9 percent in December, an even bigger decline than the 3 percent that economists had been expecting. The weakness was widespread with a range of industries, including autos, heavy machinery and computers, reporting big declines in demand. For all of 2008, factory orders rose 0.4 percent, the weakest showing since orders actually fell by 1.8 percent in 2002. Analysts are forecasting that manufacturers will continue to face hard times this year because of a deepening recession and weakness that has spread worldwide, cutting sharply into demand for exports.
Ford Said to Be in Talks to Sell Volvo Unit to Geely Ford Motor Co., seeking to raise cash to avoid a federal bailout, is in talks to sell its Volvo Car unit to China's Geely Automobile Holdings Ltd., according to three people familiar with the discussions. Ford probably will get less than the $6.4 billion it paid for Sweden-based Volvo in 1999, said one of the people, who declined to be identified because the preliminary talks are confidential. Ford has also approached China's Chery Automobile Co. and Chongqing Changan Automobile Co., the people said. Dearborn, Michigan-based Ford lost a record $14.6 billion last year and is trying to avoid asking for government loans to survive as U.S. auto sales plunge to the lowest level in almost 27 years. Geely founder Li Shufu, 45, may want to buy Ford's last European luxury brand after the addition of sedans to the Chinese automaker's range of low-cost compacts helped boost profit "significantly" last year.
Pay attention to this Legislation in the works! (2nd Amendment issue - read Text of H.R. 1022) Gun Law Update by Alan Korwin, Author Gun Laws of America Jan. 5, 2008 Gun-ban list proposed Slipping below the radar (or under the short-term memory cap), the Democrats have already leaked a gun-ban list, even under the Bush administration when they knew full well it had no chance of passage (HR 1022, 110th Congress). It serves as a framework for the new list the Brady's plan to introduce shortly. " http://www.govtrack.us/congress/billtext.xpd?bill=h110-1022
HOUSE MEMBER SAYS RESOLUTION ON 10TH AMENDMENT ISN’T ABOUT PARTISANSHIP An Oklahoma lawmaker wants to put the federal government on notice to stop doing things that he says are abusing its authority over the state. With a Republican-controlled Legislature set to convene next month for the first time in state history, chances are good the measure will pass, said Rep. Charles Key. A similar resolution failed to advance last year. Key, R-Oklahoma City, said he thinks many federal laws violate the 10th Amendment of the U.S. Constitution, which states the powers not delegated to the federal government “are reserved to the states respectively, or to the people.” The Constitution lists about 20 duties required of the federal government.
Oklahoma Declares Sovereignty Under Tenth Amendment A Joint Resolution claiming sovereignty under the Tenth Amendment to the Constitution of the United States over certain powers; serving notice to the federal government to cease and desist certain mandates; and directing distribution.
Tenth Amendment United States Constitution Tenth Amendment states that any power not granted to the federal government belongs to the states or to the people.
The Tenth Amendment is being exercised in New Hampshire and Arizona state legislatures. 10th Amendment — The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.
AZ HCR 2024 A CONCURRENT RESOLUTION CLAIMING SOVEREIGNTY UNDER THE TENTH AMENDMENT TO THE CONSTITUTION OF THE UNITED STATES OVER CERTAIN POWERS, SERVING NOTICE TO THE FEDERAL GOVERNMENT TO CEASE AND DESIST CERTAIN MANDATES AND PROVIDING THAT CERTAIN FEDERAL LEGISLATION BE PROHIBITED OR REPEALED. . . .
From our friends down under . . . Wanted: A new economic theory Now that Prime Minister Kevin Rudd has hailed in his "Monthly' essay a new political era of ''social capitalism'' and embarked on another stimulus package it merely remains to find an economic theory to accompany it. Economics has failed manifestly to see the global financial crisis coming. Only those once derided as doomsayers and crackpots were anywhere near the mark. An entire generation of richly-remunerated experts got it wrong, once again. Even now there is a reluctance to accept that the Global Financial Crisis is, as much as anything, just one big bad property bust. When the economy was veering towards its last meaningful recession in this country in 1991 - another property bust - the pundits were collectively predicting growth of 2%-plus. The IMF, OECD, market economists, government forecasters, you name it. They were 2% too high. There was recession. Le plus ca change. Capitalism has always had a single point of failure: the interaction of real estate markets and finance.
Japan Says Clinton's Visit Shows Country's Importance to U.S. Secretary of State Hillary Clinton's visit to Tokyo as her first stop on a four-nation tour this month shows the importance the U.S. places on ties with Asia's biggest economy, Japan's top government spokesman said. In her first trip abroad as President Barack Obama's top diplomat, Clinton will spend a week going to Tokyo, Jakarta, Seoul and Beijing beginning Feb. 15. The agenda will focus on efforts to halt North Korea's nuclear-arms program, the global financial crisis, security and climate change, State Department spokesman Robert Wood said in Washington yesterday. "Making Japan the first overseas destination is meaningful and a concrete demonstration of the importance that President Obama and the secretary attach to the Japan-U.S. alliance," Chief Cabinet Secretary Takeo Kawamura said today in Tokyo.
Japan on the brink of the abyss? The economic outlook in Japan is very grim, as brief overviews below [1] indicate. Right now, Japan has the worst growth outlook in Asia. That is a surprising fact, if one recalls that this is a country presumably dusting itself off from the collapse of its own bubble nearly two decades ago. After such a long period of economic crisis, Japan should be renovated and ready to thrive. Instead, it may be in worse shape than even the United States (though clearly not Iceland and much of Eastern Europe). Exports plunged a record 35% annually in December, while the industrial production figures for November revealed a record 8.9% month-over-month drop.
Obama admin. seeks treaty to cut US, Russia nukes The Obama administration, reversing the Bush administration's limited interest in nuclear disarmament, is gearing up for early negotiations with Russia on a new treaty that would sharply reduce stockpiles of nuclear warheads. Secretary of State Hillary Rodham Clinton has notified Congress and her staff that she intends to get started quickly on talks with the Russians, who have voiced interest in recent weeks in settling on a new treaty calling for cutbacks in arsenals on both sides. The 1991 Strategic Arms Reduction Treaty expires at the end of the year. It limited the United States and Russia to 6,000 nuclear warheads each. The American stockpile is believed to be about 2,300 warheads, and the Russians' even lower.
MOSCOW REACTS TO US BUILDUP IN AFGHANISTAN Moscow has correctly assessed that the announced Obama troop buildup in Afghanistan has no relevance to the stated aim of combatting the 'Taliban', but rather with a new attempt by the Pentagon strategists to encircle both Russia and China on Eurasia in order to retain US global military dominance. It is not waiting for a new policy from Washington. Rather Russia is acting to secure its perimeter in Central Asia through a series of calculated geopolitical moves reminiscent of the famous Great Game of more than a Century ago. The stakes in this geopolitical power game could not be higher-the issue of world war or peace in the coming decade. Secretary of Defense Robert Gates and Joint Chiefs of Staff chairman Admiral Mike Mullen are asking Obama to double US troop presence in Afghanistan. Both Gates and Mullen said that while they're thinking about the war in Afghanistan in terms of a 3-5 year time frame, their immediate goals are 'unclear.'
The escalating war of the summits Earlier this week, nine Arab foreign ministers met in Abu Dhabi. In attendance were the representatives of the UAE, Egypt, Saudi Arabia, Morocco, the (West Bank) Palestinian Authority, Jordan, Yemen, Bahrain and Tunisia. The gathering was officially held to support Egyptian efforts to broker a cease-fire between Israel and Hamas-controlled Gaza. Its underlying, more significant focus was to bring together Arab states concerned at Iran's growing attempts to gain influence in the Arab world. The gathering and some of the remarks made at it offered the latest evidence of the emergence of a new Middle East Cold War as the defining local strategic pattern. This emergence is of real significance, though it neither constitutes nor heralds a deep change in the prevailing political culture of the region.
The contest for global domination A long succession of post-World War II United States presidents, starting with Harry S Truman and ending with George W Bush, has presided over the strategic interests of the West in an epic match for domination of the globe, a grand contest pitting the forces of US-style liberal capitalism and liberal democracy against the post-World War II scourges of totalitarianism and communism, and now, in the post-Soviet era, against authoritarianism ("sovereign democracy") and Eastern-style statism ("managed capitalism"). Until the collapse of the Soviet Union circa 1989-1991, the contest was mostly a draw, with neither side emerging in the undisputed lead. When the West did emerge in the clear lead in 1991, it was wrongly assumed that the epic match was over - it most certainly wasn't. Global developments, especially since George W Bush took office in 2001, proved the epic match over global domination continued to be played out between the forces of East and West, with the weakened and fractured East obliged to regroup, and to radically adapt its approach to its much stronger Western opponent, and to refine and modify its fundamental strategies in the enduring quest for global domination.
US dilemma as Iran's nuclear file reopens Amid growing momentum for direct United States-Iran dialogue, the new US administration of President Barack Obama is poised to press ahead with the multilateral approach as well in light of the meeting of the "Iran Six" nations that was due to begin in Frankfurt, Germany, on Wednesday, to discuss the Iranian nuclear standoff. At the same time, Iranian Foreign Minister Manouchehr Mottaki, in an exclusive interview with the Japanese television network NHK, has stated that Iran needs "greater details regarding American intentions". By all indications, Iran is not alone and the US's European allies in particular, some of whom are nervous about a separate US-Iran deal, are also in dire need of better education about Washington's "new strategy" toward Iran and the broader Middle East.
Moscow, Tehran force the US's hand It may seem there could be nothing in common between the blowing up of a bridge in the Khyber, the usage of an air base nestling in the foothills of the Pamirs and the launch of a 60-pound (37.2 kilogram) satellite into the night sky that will circle the Earth 14 times a day. But band them together and they trigger the political and diplomatic equivalent of what is known in the game of chess as zwischenzug, which means an intermediate move that improves a player's position. Persians, who invented chess, would have mastery over zwischenzug. Iranian Foreign Ministry spokesman Hassan Qashqavi said in Tehran on Wednesday, "Iran has no plans to stop its nuclear activity. At its forthcoming meeting, the 'Iran Six' should draw up a logical approach and accept the fact that Iran is a nuclear state." The Taliban don't play chess
GE head warns against salary caps, protectionism GE head knocks salary caps for heads of banks that take taxpayer money, "Buy American" drive General Electric Co.'s chief executive warned Thursday that capping the salaries of bank executives whose companies take taxpayer bailout money undermines the government rescue effort. Jeff Immelt, who has run the financial services, media and infrastructure conglomerate since 2001, also said "Buy America" provisions in the nearly $1 trillion federal stimulus bill jeopardizes U.S. exports. "We're against the 'Buy America' clause," he said at a breakfast meeting. "It hurts trade and General Electric is a big net exporter. There is a danger of protectionism in this cycle." Immelt's warning against executive salary caps came just hours after the administration issued a rule requiring banks that receive "exceptional assistance" from the government to cap salaries, including cash bonuses, at $500,000 for senior executives.
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