I'm only sleeping

(h/t The Sideshow)

Credit

Where credit is due.

Obama's speech today put forward an unequivocal time-line for US withdrawal from Iraq. It ain't quick, almost three years from now, but at least it has been said, and said in a way that it will be difficult to fudge on down the line.

Hopefully, this will not be the beginning of a further build-up in Afghanistan. It's time to look for a way out of there as well, temporizing will only delay the inevitable.

Unbelievable

I guess Ciiti passed their stress test as a new round of the never ending bailout occurs:

The U.S. government ratcheted up its effort to save Citigroup Inc., agreeing to a third rescue attempt that will cut existing shareholders’ stake in the company by 74 percent. The stock fell as much as 37 percent.

The Treasury Department said it would convert as much as $25 billion of preferred shares into common stock provided private holders agree to the same terms, the government said in a statement today. The conversion would give the U.S. a 36 percent stake in the New York-based company.

Somehow this is not, I repeat not, nationalization, a term that raises the hackles of all true Americans. But if it's not nationalization, what is it?

“It’s just unbelievable,” said David Rovelli, managing director of U.S. equity trading at Canaccord Adams Inc. in New York, in a Bloomberg Television interview. “The government is making up the rules as they go. A continued breakup is probably in the cards.”

I'm glad we could clear that up.

Failed state in progress

Just when it looked like things might calm down:

The ruling by the Supreme Court Wednesday barring opposition leader, Nawaz Sharif, from holding elected office plunged Pakistan into political crisis as Mr. Sharif called for nationwide protests and the president imposed executive rule in the important province of Punjab.

Executive rule? Zardari walks down the path of Musharraf. The lawyer's protest that helped bring down Musharraf was backed by Sharif but has got the cold shoulder from Zardari.

Fighting an insurgency on the frontier is difficult when everyone focuses on the centers of power. Is keeping the Sharif brothers out of office that important to Zardari and the US? PM Gilani had appealed the previous decision of the Musharraf appointed court, is he going to take a side now?

Meanwhile, Afghanistan and Pakistan FMs are in Washington making nice to each other, with Kerry and Hagel calling for $4-5bn in financial aid to Pakistan. I don't expect their new found friendship to last.

Bernanke's back!

For a while it was all Geithner, but now we must be in need of some big bearded bullshit, Ladies and Germs, the head of the Fed!

Wild applause, the market goes crazy!

Read this post by Bruce Krasting. Here's the start:

Bernanke laid it on the line today. I heard him say that the Fed and Treasury were going to provide debt and equity capital to many of the Nation's banks. Failure to do so was not an option. He pledged that the Risky Lending Standards of the past would be eliminated. He promised to ‘fix’ the errors that had been made by the misguided bankers.

It sure sounded good. The market even liked it. It is bunk.

B. Krasting goes on to say why. Read it.

Reading posts like the above and then listening to Barack Obama tonight is like begging for a cerebral lesion. The rhetoric of the media and the pronouncements of the politicians have no connection to the facts of the great unraveling.

UPDATE: More good news from Bernanke:

"We're not making it up," Bernanke told the House Financial Services panel.

"We're working along a program that has been applied in various contexts," he said. "We're not completely in the dark."

(h/t Calculated Risk)

Liar, liar...

pants on fire. Barack Obama:

And that is why I can stand here tonight and say without exception or equivocation that the United States of America does not torture.

But I hear the screams. Listen, don't you?

Chinese chums

How do you say 'pretty please' in Clintonese?

"We are in the same boat," she said. "Thankfully, we are rowing in the same direction, toward landfall."

In an interview with Yang Lin of Shanghai-based Dragon TV, Clinton said the Chinese understand that the United States "has to take some drastic measures" with the stimulus package to restore American spending, which in turn will help revive Chinese exports.

By continuing to buy U.S. Treasury bonds, "the Chinese are recognizing our interconnections," she said. She said that the purchases were a "very smart decision" because the bonds are safe and stable.

Naysayers, the club of which Blog Simple has been a member since its inception, beg to differ, we may be in the same boat with the Chinese, but it is not heading towards landfall, it's pointed downstream, where we can hear the roaring of the falls.

The Chinese can spend their money as they wish, and if they wish to continue to try to prop up a black hole with their hard earned money, it is their own business. It reminds me of those paintings by Dalí where clocks and shit are held up by crutches. All they can do by continuing to buy is delay the day of reckoning. Their fear of 'reckless policies' is very well founded, and the news out of Washington and New York just makes it all the more clear:

AIG may announce that it is converting the government’s preferred shares into common stock to relieve pressure on the New York-based firm’s liquidity, a person familiar with the situation said. AIG pays a 10 percent dividend on preferred stock, and none on common shares.

So AIG, which has basically been nationalized, except that the clowns that ran it into the ground are still running it, is going to decide what to do with the shares the government purchased to keep it afloat. Calling Mr. Geithner, is that OK with you? Yeah, I thought so.

Oh yes, and AIG also wants another $60bn. Maybe the Chinese would like to pony up? No, I thought not.

Dubya II?

Glenn Greenwald's post today links to two items that fit into the larger pattern of Obama following in George W. Bush's footsteps.

The first, an article in the Guardian details the tortures and resulting injuries suffered by Binyman Mohamed at Guantanamo, including tortures that have occurred up until his departure yesterday. I was under the impression that Obama had ordered torture to be stopped?

The second tells the tale of a reporter who calls the White House press secretary's office and what ensues. The people he talks to there refuse to spell their names or identify their job title, and demand that the conversation is 'off the record'. I thought that Obama had ordered a new era of 'transparency'?

Once again, more evidence that either Obama is not in charge of the DoD (that runs Gitmo) or he he is continuing the Bush administration's policies. (For now, we'll ignore the possibility that he has been kidnapped and replaced by a false president.)

But he's not in charge of his own press office? That's something we might have believed about Bush, but if Obama is unable to control the very people responsible for getting out his message, he is more incompetent than we could have dreamed.

The smell of something rotten gets stronger and stronger.

Idiotic

If Obama wants to destroy the Pakistan state, he's going about it in the right way, assuming what the NYT says is correct:

With two missile strikes over the past week, the Obama administration has expanded the covert war run by the Central Intelligence Agency inside Pakistan, attacking a militant network seeking to topple the Pakistani government.

Using Predators to take out Pakistani Taliban will only make the government seem more weak, more dependent on the Americans, and convince Pakistanis that their country is little more than a satrapy. When people lose pride in their country, it becomes a losing proposition to fight for it, especially if your foes are local.

This type of escalation is forcing Pakistan into a civil war, whose outcome is anything but certain. With moves like this, the US is losing control, it doesn't gain it, despite what the generals say. I never had much hope in Obama, but what little there was is being thoroughly dashed.

Double dog dare ya

Gideon Levy points out that Netanyahu's success in forming a right-wing coalition has put him in the possibly uncomfortable position of being able to carry out his stated goals. Or at least to try to.

Levy also thinks that Obama might not want to join Bibi and McCain in a refrain of bomb, bomb, Iran. But so far, Obama has not made any significant modifications to Bush's foreign policy, he continues to repeat the consensus that Iran has a nuclear weapons program, no matter what the NIE says, and he might think it to be political suicide to stand up to the Israelis. He's probably right about that.

Wow!

I, and probably you too, cannot make this shit up.

NYT:

UBS, the largest bank in Switzerland, agreed on Wednesday to divulge the names of well-heeled Americans whom the authorities suspect of using offshore accounts at the bank to evade taxes. The bank admitted conspiring to defraud the Internal Revenue Service and agreed to pay $780 million to settle a sweeping federal investigation into its activities.

OK. Big Swiss bank gets whacked hard for defying the US tax gods. Well-heeled names will be divulged. Ho hum. But then this follows:

It is unclear how many of its clients’ names UBS will divulge. Federal prosecutors have been examining about 19,000 accounts at the bank, but UBS ultimately may disclose the identities of only a few hundred customers.

Now, if you can read that article and get some idea of whose name might be divulged, not to mention why, I'll eat my Blog Simple baseball cap.

Who shall be pricked next?

Defeat

It's hard to put any other interpretation on the recent deal in Pakistan that implements sharia law in Swat with the government's blessing. Syed Saleem Shahzad of the Asia Times does the summing up, and he sees it as a grave set back to US strategies.

As the eighth year of the Afghan war continues, it is clear that the Taliban, and according to Shahzad also al-Qaida, have succeeded in making Pakistan one of the front lines of the war. The weakened state structure there has reached the point that the Pakistan government is forced to make overt, rather than covert, deals with the Taliban in order to keep the insurgency from spreading to Punjab and Singh.

Shahzad also says that the deal will free up trained fighters currently in Swat for Afghanistan. Obama's decision to escalate could now be met with a further escalation of Taliban. Meanwhile Petraeus is off trying to convince Uzbekistan to allow supplies to be delivered through their country. But the war in Afghanistan, even if ripe for disaster for the US and NATO, is now just a sideshow to the big war in Pakistan. There the US is far more circumscribed in its actions, and those actions it can take seem only to make matters worse.

Obama's escalation is still not the full 30,000 troops requested by the generals, and may be necessary just to avoid a general breakdown. I would think that the upcoming weeks will tell the tale of how the US will be proceeding. From what I've seen so far of the new administration, I fear the worst.

I love teh Internets!

(h/t The Poor Man Institute)

Rebuilding Iraq

The NYT deigns to publish a slight lifting of the veil concerning the massive corruption that occurred during the early, fun times in Iraq. This topic has been mostly ignored up until now, so as usual at Blog Simple we ask the question, why now?

We've tried to follow this story since when only Guillermo Contreras of the humble San Antonio Express News was on the beat, and noted the deafening silence in the midst of an election campaign. God knows the NYT doesn't want their reporting to interfere with the election cycle, as usual.

Where the investigation might lead is anyone's guess. The top ranking officers targeted in the investigation are colonels as far as we know, the generals are still out of the loop. Suspicious minds, ours amongst them, wonder if pressure is being applied to some of our prominent and powerful officers.

FUSA

Dmitry Orlov gave a talk yesterday in San Francisco where he paints a picture of the future for the US that is dire. It makes a lot of sense, unfortunately.

His prediction is not of a recession, or even a depression, it is of a collapse, hence the F is for 'Former' in FUSA. When such happenings occur, as they did in the USSR, essentials come to the front, and the catchwords we've used in our politics fade into black. He says it well:

So, what is there for them to do? Forget “growth,” forget “jobs,” forget “financial stability.” What should their realistic new objectives be? Well, here they are: food, shelter, transportation, and security. Their task is to find a way to provide all of these necessities on an emergency basis, in absence of a functioning economy, with commerce at a standstill, with little or no access to imports, and to make them available to a population that is largely penniless. If successful, society will remain largely intact, and will be able to begin a slow and painful process of cultural transition, and eventually develop a new economy, a gradually de-industrializing economy, at a much lower level of resource expenditure, characterized by a quite a lot of austerity and even poverty, but in conditions that are safe, decent, and dignified. If unsuccessful, society will be gradually destroyed in a series of convulsions that will leave a defunct nation composed of many wretched little fiefdoms. Given its largely depleted resource base, a dysfunctional, collapsing infrastructure, and its history of unresolved social conflicts, the territory of the Former United States will undergo a process of steady degeneration punctuated by natural and man-made cataclysms.

There's a lot of good stuff in the talk about how the Russians got through their collapse without degenerating into anarchy, or worse. Unfortunately, the US lacks most of the assets that the Russians have, though undoubtedly it has others. The problem is that there is a huge class divide here, with the privileged class ready, willing and able to use the most drastic and violent means to preserve a dead system. A gigantic repressive apperatus has been contructed that will try to maintain the status quo at all cost. Even if half the houses are vacant, allowing the homeless to use them will never be allowed, it's immoral to do so.
(h/t Global Guerrillas)

Success means crisis?

The latest incarnations of Masters of the Universe, at least in their own minds, are the so-called COIN (counter insurgency) experts. A number of them roost over at abu muqawama, where, apart from cutely referring to themselves in the third person, they take turns slapping each other on the back for all the great successes recently in our excellent adventures in Iraq and Afghanistan.

This post is of some interest, it seems they had a bash over at the Center for a New American Security to help launch Thomas Ricks' new book, Gamble, and the COIN crowd was there in force. CNAS seems to be the new, hot think tank, putting people into the Obama administration's FP team, and probably getting some big money. Ricks is now a member, and his latest boosterism of Petraeus and Odierno fits in well with the COIN people.

Someone there asked this question, more or less, as recounted by abu himself:

"The successes of Iraq have given rise to some very prominent and powerful officers in the U.S. Army. Has one of the side effects of the development of counter-insurgency theory been a new crisis in political-military relations?" (This is the question as I remember it and was probably not what Thomas said. But I think the "soldier and the state" question post-Iraq is a really good one.)

Calling Iraq a success demands some curious reasoning, what with 144,000 troops still there, but the idea that it might cause a new crisis in political-military relations pushes against some boundries that most military people usually don't want to go. As we've seen, Petraeus has already shown some distain for the chain of command, are his latest 'successes' going to push him further down that road? The reactions in comments at abu muqawama indicate that if he does, the COIN people are going to be behind him. If I were Obama, I be careful about these CNAS appointments, and make sure they know who they are working for.

Oops?

As you might have heard, two satellites crashed into each other at a high rate of speed (25,000 mph). One was part of the Iridium network of satellite communication and weighed about 900 lbs, the other was a defunct Russian military communication satellite that weighed about a ton.

cryptogon has dug up some interesting facts about Iridium. It was built by Motorola at the cost of about $5bn, chump change these days, but a lot of money back in the 90s. It soon went bankrupt, and was bought in December 2000 for $25mn by 'private investors'. That same month, the DoD awarded Iridium a $72mn contract.

Read the whole cryptogon post, as he says, it's an excellent description of how sausage gets made.

The Vatican Cellars

Les Caves du Vatican, a 'non-novel' by Andre Gide, revolves around a scam that uses the rumor that the pope has been kidnapped, while a false pope sits upon the throne of St. Peter.

Our current domestic pope, Barack Obama, also seems to have been kidnapped. The policies that our young President espoused during the campaign, of transparency, accountability, and change seem to have been forgotten, radical policies devised during the Bush adminstration of torture and secrecy are being reasserted within a month of the inauguration.

A grave economic crisis looms, but the same cast of characters continues the disasters of the past years.

Does it matter if he's been kidnapped, marginalized, or just part of the program? Not really.

Creditors getting restless

And I don't mean just mine.

China is starting to speak up publicly about concerns that I'm sure they have already expressed in private, namely that they are worried about the $682bn they hold in US Treasury bonds.

China should seek guarantees that its $682 billion holdings of U.S. government debt won’t be eroded by “reckless policies,” said Yu Yongding, a former adviser to the central bank.

The U.S. “should make the Chinese feel confident that the value of the assets at least will not be eroded in a significant way,” Yu, who now heads the World Economics and Politics Institute at the Chinese Academy of Social Sciences, said in response to e-mailed questions yesterday from Beijing. He declined to elaborate on the assurances needed by China, the biggest foreign holder of U.S. government debt.

I'd be worried, too, especially after the latest from Geithner that seems to be just more of the same failed policies of the Bush administration. Also, we learned today that Freddie and Fanny are going to need more than the $200bn pledged to date. Surprise, surprise.

But I fear the Chinese, like the rest of us, are going to have to bite the bullet. Asking for guarantees from the driver of a truck that has already gone off the cliff might disturb the driver's last moments, but won't have any other effect.

Honeymoon's over, Part 2

The DOJ has just maintained Bush's position that the US government can whip out the 'state secrets' excuse anytime they don't feel like revealing something. As Greenwald points out, this is a travesty:

That's what Barack Obama is now shielding from judicial scrutiny. Those are the torture victims he is preventing from obtaining judicial relief in our courts. And he's using one of the most radical and destructive tools in the Bush arsenal -- its wildly expanded version of the "state secrets" privilege -- to accomplish all of that dirty work.

I'm getting the feeling that there will be many more parts to this series.

A question

If Thomas Rick's account is accurate with the following assertion:

As Centcom commander, Fallon was technically Petraeus's new boss. In practice, however, Petraeus bypassed the chain of command and answered directly to Bush, enjoying what was probably the most direct relationship between a frontline general and his commander in chief since the Civil War.

then Petraeus was also bypassing Gates and whoever else is in between Gates and Fallon in the chain of command. Fallon is gone, and Petraeus is now the head of Centcom.

While Petraeus was acting directly under the orders of Bush, Gates was out of the loop didn't say anything.

So, [drum roll] the question is: who is now giving Petraeus his orders? Anyone?

Honeymoon's over

My, that was quick.

We've kept our mouths mostly closed over Obama's picks for his team, even as they went from bad to worse, spiced up by the idiotic tax problems that no one but the media gives a shit about. Signs and symbols, indeed.

But now we are seeing the policies the team is picking come into form, and they are hardly different from Bush/Cheney in all the major areas. The economy is being run by a subset of the same zombies, in David Sirota's words, that brought us to this point.

With the wars and foreign policy it is, if possible, worse. The talk of talk with Iran is just talk, talk, talk. There is no change in policy, Biden says were going to have to be more 'aggressive' in Iraq if we want to pull out in 16 months, and the pull out is still resisted by our holy generals, blessed be they. In Afghanistan, an eight year old war that never had any purpose, except for shooting off a bunch of munitions (and as Rumsfeld complained), there's nothing there worth shooting at anyway. But the war is now set to continue, ad infinitum. There is no end game.

Obama is already in a box. The only way out is to start to lead, and try for a way out of the collective box. To follow the same policies that got us here is cowardice, and it's also madness. We're at a time when one must to the necessary, or do nothing. Obama seems to have opted to do nothing.

UPDATE: Is this true? Note that the article is completely unsourced. Time will tell.

Outrage!

The liars and thieves that make up the US federal government got away with another $78bn for their buddies:

The Bush administration received assets that were worth $78 billion less than the amount it invested as part of the massive infusion of capital into the country's banks, congressional investigators have found.

The investigators concluded that the Treasury under the federal bailout had invested $254 billion into companies but the preferred stock it got in return had a market value at the time of only $176 billion, or 69 percent of what the government paid, according to a congressional oversight panel report scheduled to be released today.

Who'd a thunk it? Certainly not Congress, who, apart from stealing for their buddies, could never imagine that Hank Paulson would overpay with the bailout funds. Listen to the squealing, behold the outrage:

Lawmakers were furious about the panel's findings and said they provided an example of incompetence and waste in the government's $700 billion bailout program.

"Isn't that a terrible way to look after the taxpayers' money and to make purchases anywhere?" Sen. Richard C. Shelby (R-Ala.), ranking member on the Senate Banking Committee, said at a hearing on oversight of the bailout.

In a way, of course, it doesn't matter. The assets really aren't worth anything at all, it's all just a black hole that will suck up however much money that is dumped into it. Sure they can suck out more bonuses before it disappears, but sooner or later the truth will have to be faced, these banks and insurance companies are deader than dead broke. To pay anything at all for them is to overpay.

The dust clouds roll...

You had to know that when Halliburton moved to Dubai the place would go to the dogs:

Now, faced with crippling debts as a result of their high living and Dubai’s fading fortunes, many expatriates are abandoning their cars at the airport and fleeing home rather than risk jail for defaulting on loans.

Police have found more than 3,000 cars outside Dubai’s international airport in recent months. Most of the cars – four-wheel drives, saloons and “a few” Mercedes – had keys left in the ignition.

They've built man-made islands full of condo, hotels, etc. Probably some good deals on real estate as well as on cars, now. All they need is for Cheney to move there for the whole place to blow away.
(h/t Calculated Risk)

UPDATE: Oops, forgot the link to the article, inserted also above.

The best catch there is

Bibi Netanyahu has endorsed Avigdor Leiberman's call for passing a loyalty test to be a full Israeli citizen. As Badger points out, this bears an eerie resemblance to a 1935 Nazi Germany law that required citizens to have a 'citizen certificate'. And there is also a fictional precedent that comes to mind.

Of course Lieberman is betting that Israeli Jews will think that only Israeli Arabs will fit the bill, but there's no assurance of that, since Lieberman's party doesn't think so:

Lieberman is not talking about us, say most citizens. Yet he is. Lieberman is talking about anyone who disagrees with his perception of the State and its path. Please read Yisrael Beiteinu's platform; it doesn't hide a thing. In the "Citizenship and Equality" clause, under the headline "stricter attitude to subversion," it says: "We shall act to ban parties or bodies whose words or acts constitute incitement against the State of Israel as a Jewish Zionist State and undermine its existence."

Next, watch Yisrael Beiteinu's election ads on TV, which feature examples of disloyalty, followed by a voiceover ominously: "No citizenship without loyalty." And what is the example provided? Protesters against the operation in Gaza holding up signs near the fence of the Hebrew University in Jerusalem. The conclusion is that those protesting against government decisions are disloyal. Loud and clear. And where do we mark the loyalty threshold? Balad? Hadash? Meretz? Or perhaps Kadima, which is engaging in talks on returning the Golan Heights?

Sounds like in Catch-22, where Captain Black knew that the only way to determine of someone is loyal is to have them swear an oath of loyalty, preferably often and whenever they interact with the state. If someone refuses to swear, they're obviously disloyal, and if they seem disloyal, it is enough to not let them take the oath to confirm their disloyalty.

The tendency of Israel to embrace its own brand of fascism thus gets another shot in the arm. It is a very slippery slope. And as Badger points out, it is seemingly unnoticed here in the US.

River wild

'Hope is flickering,' ACLU declares

After the British High Court ruled that evidence of a British resident's rendition and harsh interrogation at the Pentagon's Guantanamo Bay prison must remain secret because of threats made by the Bush administration to halt intelligence sharing, the Obama Administration offered a terse statement seemingly expressing support to the BBC.

Obama is not just getting off on the wrong foot, he's setting a course down the main current of the river, towards the falls, when the only hope is to steer hard for shore. He has yet to make any real statement, on anything, to the US public. I can certainly believe that he still does not have sufficient control over the government for that. Clinton II? The stakes are far higher now, and the freedom to act much is more constrained. Is he up to the job? It's not looking good.

Hurry

According to Yves Smith of naked capitalism, and if the WaPo source is correct, the Obama administration is about to flush what's left of US solvency down into the black hole of the 'banks'.
Here's a little quote, but read the whole thing:

So we the taxpayers are going to eat a ton of bank losses that should instead be borne first by stockholders and bondholders This program should be labeled the Pimco bailout plan, since the giant bond fund holds a lot of bank debt. That show what a fiction Obama's populism is. It's mere posturing and empty phrases. Look at where the dough goes, and it is going first and foremost to the big money end of town.

Evidently, Hank Paulson's effort to impoverish the US middle class were not sufficient, our new leader will have to finish the task, change or no change.

One consolation is that if we are laid off here in the US, there might be a future in another land.

As we pointed out in our last post concerning foreign policy, Obama is following the Bush/Cheney administration's policies, both foreign and domestic. But the stalling tactics that have been used in the last few years are not going to work much longer, either in Afghanistan, Iraq, or on the home front. President Obama had better get his act together, and quickly.

The noose tightens

Today was chock full of bad news for our excellent adventure in Afghanistan. First, a bridge leading to the Khyber pass was blown up, cutting off truck movement. Then, Kyrgyzstan's president said that the US must leave a key air base in that country.

True, Gen. Petraeus did inform reporters that the good president was in error and that the US was not leaving that base. It could be that there is just some brinkmanship on Kyrgyzstan's part, and they'll be contented with more money, and an apology from the US for gunning down a local, raising tempers. And the US always insists after a bunch of trucks have been blown up or stolen, or the route has been interrupted, that there is no supply problem. I remain unconvinced.

Clearly, air transport can't substitute for overland deliveries. Fuel especially, which the US military uses in vast quantities, needs to be trucked in. b, at Moon of Alabama, shows the available routes to Afghanistan. Looking at the map there, the only practical alternative to Pakistan is, yep, Iran.

But there are few signs that the Obama administration will be trying to defuse tensions with Tehran. In fact, apart from still (and for how long?) calling for a draw down from Iraq, one is hard put to find any substantive changes from the Bush/Cheney policies. Iran had the nerve to successfully launch a satellite today as well, something that they're not supposed to do, though it's not clear why. The new Clintonized State Department called it 'worrisome'. They'd better start worrying about getting supplies to Afghanistan. And maybe Petraeus, though clearly the greatest general EVAR, might not be the greatest diplomat EVAR.

Ridiculous

Gen. Petraeus should have better things to do than flip a coin at the Superbowl. The guy is such a relentless self-promoter that it's ridiculous. Is the US military so corrupted they don't see anything wrong with that?