miercuri, 28 august 2013

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

Tired of Perpetual War? What Can You Do About It?

Posted: 28 Aug 2013 07:32 PM PDT

The warmongers are flooding the airwaves, beating the drums of war, even though UN inspectors have not even had time to investigate whether Syria uses chemical weapons.

The Financial Times is at the head of the list.

Financial Times Case #1

Writer Gideon Rachman says Echoes of the Iraq war are eerie but misleading.
The probable lack of a UN resolution authorising the use of military force in Syria does carry an unfortunate echo of Iraq. Indeed, the UN basis for war in Syria could be even harder to establish than over Iraq. While Messrs Bush and Blair were unable to get a second UN resolution on Iraq – unequivocally establishing the right to use force – they were, at least, able to argue that an earlier UN resolution gave them a legal basis for war. On Syria, partly because of the experience of Iraq, it seems unlikely that the Russians and Chinese will even agree to a weak first resolution.

However, while the international legal context on Syria has echoes of Iraq, the international political context is very different. In 2003, the open split in the western camp was arguably even more disturbing than the lack of a proper UN resolution. The fact that President Jacques Chirac of France and Chancellor Gerhard Schröder of Germany stood shoulder-to-shoulder with President Vladimir Putin of Russia in opposition to the war with Iraq will stay long in the memory.

This time, the French, far from leading the opposition to military action, are in the forefront of those calling for the use of force. The Germans also seem to be supportive. Turkey, another important US ally that refused to co-operate on Iraq, is also onside on Syria. Russia, it is true, remains adamantly opposed to military action over Syria. But this time it has no overt supporters in the western camp.

What about the failure to think through the consequences of military action? In some respects, the risks may be even greater with Syria.

But the other big difference between Iraq then and Syria now is more reassuring. It is clear that the scale and ambitions of any military intervention will be far, far smaller this time around. The Iraq war involved a full-scale land invasion, with the express purpose of toppling the regime and then reconstructing the country. In Syria, by contrast, even the most gung-ho interventionists are insistent that they are not contemplating putting "boots on the ground".
Financial Times Case #2

Compromise? Who needs it? Let's just go to war. Financial Times writers Jim Pickard and Elizabeth Rigby say Cameron's volte-face robs Syria vote of purpose.
MPs who rushed back early from their holidays for a historic Commons vote on military action in Syria will instead be engaging in a little more than a grand parliamentary gesture after David Cameron was forced into a last-minute compromise by Labour.

The prime minister started the day with ambitions to put military action against Syria into motion with a decisive vote in the Commons. But he ended it with little more than a "dog's motion" after Ed Miliband threatened to vote down his plans.

The Labour leader had previously signalled that he broadly supported of plans to back the US in a missile strike on Syria after several conversations with the prime minister this week.

But his position shifted after Ban Ki-moon, UN secretary-general, said inspectors in Syria needed more time to gather evidence of the alleged chemical attack in eastern Damascus.
Time? We Don't Need No Stinkin' Time

Time? Who needs time? Who needs approval either?

"Public opinion in Britain is largely sceptical of intervention, with a YouGov poll showing 50 per cent opposed and 25 per cent in favour."

Who cares about that? Obviously not Cameron.

Financial Times Case #3

In US and UK face fight to keep attack plan on track writers James Blitz and John Aglionby in London and Richard McGregor in Washington speak of the need to "keep the war on track".
The US and Britain were battling to keep their plans for a weekend military strike against Syria on track after the UN secretary-general said time was needed to investigate allegations that the regime had used chemical weapons against civilians.

As the White House and Downing Street prepared to unveil evidence setting out how they claim Syrian government forces launched chemical weapons in an attack last week, officials in London said the Security Council had a "responsibility to act" in response to the atrocity.

Mr Cameron earlier tweeted: "We've always said we want the UN Security Council to live up to its responsibilities on Syria. Today they have an opportunity to do that."
To be completely fair, the third article just provides evidence that warmongers want to rush to war as opposed to the writers making a case for war.

Nonetheless, I am quite tired of wars, warmongers, and their ilk, and articles slanted towards making a case for war.

Boehner Sends Letter to Obama Over Syria

In contrast to perpetual war proponent John McCain who hopefully will retire soon, the Wall Street Journal reports House Speaker Boehner Sends Letter to Obama Over Syria demanding an explanation of the mission.
House Speaker John Boehner (R., Ohio) is sending a letter to President Barack Obama criticizing his level of consultation with lawmakers about potential military action against Syria and demanding a clear explanation of any mission in advance of its start.

Separately, 114 House lawmakers—some 97 Republicans and 17 Democrats—have signed a letter calling on Mr. Obama to seek congressional authorization before embarking on military action in Syria.

Together, the letters mark an intensification of pressure on Mr. Obama to consult with Congress about the potential move against Syria for the regime's alleged use of chemical weapons.

Mr. Boehner's letter calls on Mr. Obama to inform Americans and members of Congress of his objectives, policy goals and overarching strategy in Syria before the first missiles are launched, according to a copy reviewed by The Wall Street Journal. Mr. Boehner also asks Mr. Obama to address the cost of a potential mission and to provide the White House's legal justification for the use of force in Syria, including why administration officials believe none of the military options under consideration require congressional approval.

"[I]t is essential that you provide a clear, unambiguous explanation of how military action . . . will secure U.S. objectives and how it fits into your overall policy," Mr. Boehner wrote.

He called on Mr. Obama to "personally make the case to the American people and Congress for how potential military action will secure American national security interests, preserve America's credibility, deter the future use of chemical weapons, and, critically, be part of our broader policy and strategy."
Perpetual War

Obama should make the case, but he won't. Bush should have made the case and he didn't. Colin Powell looked like a complete idiot in front of the UN as a consequence.

The only people who care about such things are opponents to the party in power. Republicans still support Bush. Democrats still support Obama.

If Mitt Romney won the election and wanted to intervene in Syria (and it is 90% certain he would have), would Boehner have sent the same letter?

Heck, would Boehner have raised an eyebrow if Romney wanted to attack Iran (and it is 90% certain he would have)?

The answers to both questions is "No".

If you have come to the conclusion perpetual war is nearly certain regardless what political party controls the White House, you are likely correct.

Tired of War?

If you are tired of war and needless interventions, please support someone who may actually do something about it. That person is Rand Paul.

Unfortunately, the task is not easy. Warmongers will try and discredit Rand Paul every step of the way.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Mortgages Plunge 42% from Year Ago in Spain, 38th Consecutive Drop; Signs of Recovery? Spain Need Another Bailout?

Posted: 28 Aug 2013 12:42 PM PDT

Prime Minister Mariano Rajoy wants you to believe the Spanish economy is improving. One look at housing suggests any improvement is an illusion.

Here are some highlights from a translation of the La Vanguardia article Mortgages plummet 42.2% in June

  1. The number of mortgages for home purchase in June fell 42.2% compared to June of 2012
  2. Mortgages declined every month for 38 months. June signed just 14,053 home mortgages, the lowest monthly figure of the last ten years.
  3. The six-month total from January to June 2013 was 115,895 signed mortgages. That is less than the one-month total for May of 2007 which had 118,669 signed mortgages.
  4. The average value of mortgages dropped, down 9% from a year ago to 97,495 euros.
  5. This was the worst half-year since the data series for this indicator began, in 2003.


Signs of Recovery

The Telegraph says More pain in Spain but signs of recovery.
The latest government figures show that in June Spain's exports surged 10.5pc from a year earlier, a boom that nearly wiped out the nation's trade deficit. Spain's trade deficit was €106m in June, a steep drop from the €2.7bn deficit registered a year earlier and a figure heralded by the conservative government of Mariano Rajoy as a long period of recession was finally coming to a close.

Last month Spain's national statistics agency reported that GDP had decreased by only 0.1pc in the second quarter of 2013 compared to the first, which saw a bigger decline of 0.5pc. That and a drop in unemployment figures, largely considered to be a result of seasonal hiring in the tourism industry, are the first signs of the "light at the end of the tunnel" that the government has been promising since initiating a series of deeply unpopular austerity measures.

Ministers and officials have been keen to hammer home the message that the worst of the crisis has passed. "Our economy has turned the corner and we are at the start of a change in trends which will allow us, with effort, to create jobs again. The foundations have been laid," Rajoy said at an event in July, shortly before leaving Madrid for his summer holidays. Luis de Guindos, Spain's Economic Minister meanwhile was quick to point out that "the recession has come to an end".
Foundations? What Foundations?

I would like to ask Rajoy "precisely what foundations have been laid?"

  1. Is the banking crisis over?
  2. Is Spain out of the Eurozone?
  3. Was there pension reform?
  4. Work rule reform?
  5. Have banks written off all bad property loans?
  6. Are Spanish banks recapitalized.


The answer to each of those question is "No".

Spain Need Another Bailout?

Here is a bonus question "Does Spain need another bailout?"

The answer to that question is "yes".

The Telegraph continues ...
"It's no secret that domestic demand remains very weak because spending is massively impaired by unemployment and austerity," Gilles Moec, analyst at Deutsche Bank, said in a recent report. "Whenever the economy starts breathing, you'll have additional pressure to start cutting the deficit, so we get in to additional austerity and spending will fall. It's going to be a choppy ride."

But perhaps the biggest single factor hampering Spain's recovery is the crippling unemployment which, at almost 27pc, is more than twice the European average. Almost 6m out of 47m Spaniards are without a job – or a quarter of the workforce – and many labour market economists believe that those numbers are unlikely to change dramatically even once Spain returns to growth.
The average Joe on the Street knows Rajoy is a liar.
Spaniards on the street scoff at proclamations of an end to the crisis. "Until the time comes when I don't need to worry how I am going to pay my mortgage and feed my family, then I won't believe what this government says about the crisis being over," said Mercedes Rivas, a 39-year-old supermarket worker from Madrid. She is the sole bread winner in a family of five, after her husband lost his job in construction four years ago, and earns just €800 a month.
End of Recession? When?

Spain's Economic Minister says "the recession has come to an end".

The IMF does not think Spain will return to growth until 2015, and even then only 0.3%. And the IMF has been overly-optimistic every step of the way. Nonetheless, let's assume the IMF finally has things correct and Spain grows 0.3% in 2015.

Is that a "recovery" or stagnation at the bottom with a 25% unemployment rate on top of it all.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

War of "Non-Intervention"

Posted: 28 Aug 2013 11:17 AM PDT

The ludicrous headline of the month goes to Financial Times writer Richard McGregor who claims Barack Obama marshals his forces for war of non-intervention in Syria.
All official US statements, be they on the record or in behind-the-scenes briefings, are peppered with words such as "limited", "surgical", and "intermediate", to emphasise how any action will be quarantined to a few days.

The US-led attack on Syria, in other words, is not about intervening in the civil conflict. It is about not intervening.

The ghosts of Iraq still hover over every decision to go to war, no matter how limited and quarantined the US may want such action to be.

Congress is so wary of having its fingerprints on the issue that its leaders seem more than happy not to have to vote on a Syrian attack. In the House of Representatives, John Boehner, the Republican Speaker, and Nancy Pelosi, the Democratic leader, have asked only for consultation.

Perennial hawks such as John McCain in the Senate have long pressed for a more interventionist US role in Syria. "If this isn't aimed at regime change, then what is it aimed at?" he said with visible frustration on Wednesday.

The US is readying the release of its evidence of the Assad's regime's complicity, probably on Thursday, in what Anthony Cordesman, of the Center for Strategic and International Studies in Washington, called "the US intelligence community's most important single document in a decade".

Memories of Colin Powell's now discredited presentation to the UN before the Iraq invasion on Saddam Hussein's weapons of mass destruction remain raw in the US system, no more so than in the intelligence community.

As Mr Cordesman says, the US has lost its credibility to assert that Mr Assad ordered the use of the chemical weapons and it will be difficult to regain it with a document that is necessarily constrained about revealing its sources.

"The US government may trust the US government," he says. "That is not a trust the world shares, and recent polls indicate that it may not be a trust American people share as well."
Ridiculous Thesis

You can either have a war or not have a war. You can intervene or not intervene. You cannot, in any way, have a war of non-intervention. War is intervention.

The entire article sounds like something from George Orwell's '1984'.

If by some chance you have not read the book, please do. And if you have, consider reading it again.

Huffington Post notes George Orwell's '1984' Book Sales Skyrocket In Wake Of NSA Surveillance Scandal.

Good Riddance to McCain

If anyone should know how stupid wars are it it should be John McCain. He sat as a prisoner of war in Vietnam for six years in one of the stupidest wars in history. And he wants more wars in spite of the fact that the wars in Iraq and Afghanistan solved nothing, and if anything increased the number of US enemies.

I wait for the day McCain retires.

Important Documents?

Anthony Cordesman certainly misses the mark calling a document on chemical usage "US intelligence community's most important single document in a decade".

If we are not going to war, then precisely what use is the document, even if it is true?

Trust Us

I do give Cordesman credit for the general idea I paraphrase as follows: "The US government may trust the US government but the American people sure don't".

Of course it was Obama who stated "Trust Us" to which Reason.Com responds ... "Somebody needs to tell the president that it's not that a lack of trust in government leads to some problems, it's that a litany of problems involving the use and abuse of government's coercive power have eroded any basis for trust."

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.
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