71 Comments

1. Pajamas Media » Musharraf Steps Down as Pakistan’s President:

[...] Read the full post here… [...]

Aug 18, 2008 - 3:07 am 2. a Duoist:

Richard,

The Taliban are only one hundred miles from Lahore and Islamabad. Isn’t the political vacuum in Pakistan likely to be an opportunity too good to pass up, enticing the Taiban to expand their ‘Islamic Republic of Waziristan’ toward Lahore and/or Islamabad?

Democracy in Georgia teeters, but if democracy in Pakistan falls to the Taliban anytime around the anniversary of 9/11, then who gets elected to be the American president?

Aug 18, 2008 - 3:11 am 3. wretchard:

I think Pakistan is unlikely to “fall” in the short term. If it gets messy enough, the military will likely step in. But this doesn’t answer the long term question of what will happen to a country which has nuclear weapons but no really stable institutions.

You can always “call” Pakistan like a radio announcer calling a riot in the streets. But that wouldn’t tell you much more than who was hitting who. What we are really interested in is getting to a situation where Pakistan can be “fixed” so it will prosper, thereby de-fanging Islamism and improving the lives of Pakistanis. The $64 million question, to which I have no clue, is whether anyone or anything can fix Pakistan.

Aug 18, 2008 - 3:21 am 4. Jim in Virginia:

If Pakistan falls to the Taliban, will Obama cite this as a victory for demcorcy or cause for us to invade Pakistan?

Aug 18, 2008 - 3:23 am 5. Rufus:

Pakistani Missiles would have to fly reasonably close to Poland, right?

Aug 18, 2008 - 3:26 am 6. Teresita:

Democracy in Georgia teeters, but if democracy in Pakistan falls to the Taliban anytime around the anniversary of 9/11, then who gets elected to be the American president?

Pakistan has been ruled by a military junta until just now when Musharraf stepped down, and you’re worried about what happens if this democracy falls in another three weeks?

Aug 18, 2008 - 4:26 am 7. mark_b:

Pakistan needs Hope and Change.

Aug 18, 2008 - 5:28 am 8. Doug:

They need to get their communities organized.
Send ACORN!

Aug 18, 2008 - 5:46 am 9. buddy larsen:

Pakistan has a substantial middle class, western-oriented. Investment was flowing in, not out, until Musharraf stepped into the crosshairs via the judiciary challenge.

(”oriented” –just dawns on me, what a revealing word.)

Aug 18, 2008 - 6:20 am 10. Bobby Mcgill:

I am free this after the summer if they need someone to step in to the political vacuum.

Bobby

Aug 18, 2008 - 6:29 am 11. buddy larsen:

Do you come with a corner attachment? and how about that little dealie for the furniture?

Aug 18, 2008 - 6:45 am 12. The Anti Jihadist:

Nowadays, Pakistan suffers from something of a bum rap. I think they are very much overdue for an image makeover. To this end, I would like to humbly submit a list of suggested marketing slogans for Pakistan that truly capitalize on this splendid country’s many laudable attributes:

10. Enter the Land of Real Jihad… Rocks are for Palestinians!
9. A madrassa for everyone!
8. Sharia ISO 6001 Compliant!
7. There are no terrorists here…honest! (nudge & wink)
6. Building nukes for Allah since 1998
5. Proud Sponsors of the Taliban
4. We’re allied with the Great Satan…honest! (wink & nudge)
3. Wanna see Honor Killings? We got ‘em!
2. Free Female Containment Units for all female visitors!
1. We love Jihad!

Aug 18, 2008 - 7:19 am 13. S:

Buddy,

Your comment on LEH and the KGB manipulating stock prices demands comment. Im sure that was in a movie, actually a TNT mini series with Chris Odonall I belive. You are well off the mark. The US banking systme is teetering. The Fed doesn’t invoke little known clauses for stabalization. The Treaasury doesn’t assume a further $5T of debt/guarantees if the system is ok. The US has debt to GDP iof 360% vs. 250% fduring the 1920s. The problem with the US equity market is that it is inflated and totally unssupported by fundamentals. The KGB didn;t have to do anything, useful idiots, borrowers and bankers, did a better job than any black op possible.

As for LEH, companies don;t do desperate things just becasue. YTake a klook at what short sellers have been saying and compare them against the outcomes. Seems the short sellers have actually been right. Capitalism is about creative destruction, you remember the vaunted phrase of the .com era. Cheer when it goes up whine when it goes down. The founding fathers are turning in thier graves.

Bhutto goes down on her return to Pakistan and is whisked off to a Hospital with no autopsy and burried in due course. First it was a bomb and she hit her head, then it was an assasin (s) bullet(s). First blamed on ISI, then a shadowy Tribal lord. Speculation comes back to Mushariff, but why? Is his fate merely the unintended consequence of an unholy alliance between foes? What about Sharrif? He seemed to be a winner from Bhutto going down? Why would the US want Bhutto gone? Rumors aboutd about her talking about Osama being dead, but what else? The chatter about her cracking down on the tribal areas was nothing new, Musharrif sent in troops. Seems there is a dearth of analysis on why Bhutto was cut loose.

Aug 18, 2008 - 7:19 am 14. steveaz:

I hold to the first line of thinking: Musharraf’s departure will remove the point-person around which the current coalition formed.

I’ve witnessed this occurrence in smaller committees: members who cannot win quorum votes will manufacture a proxy issue to build a new coalition around. This is usually a non-sequitur issue such as a member’s personality flaws, an etiquette issue, or a distant, vague externality (such as an IPCC report on Global Warming).

But this personalization of policy differences only lasts as long as the point-person remains moored in the committee. By leaving, the “controversial” figure removes the shared locus, rendering the contrarians rudderless.

Along with Musharraf, “W” is just such a figure. Another could be America itself, if one considers the EU’s Leftists, radical Islamists and the US’s Democratic party, and the NYT’s editorial board the revised quorum in this equation.

None can get a majority of Americans’ votes, so they coalesce around Americans’ weight problem, our “carbon footprint,” and “Bush’s Illegal War(s).”

Aug 18, 2008 - 7:26 am 15. cjm:

the only question relevant to pakistan is: what did we do to neutralize their nukes?

Aug 18, 2008 - 7:51 am 16. buddy larsen:

S, sometime later, i’ll write you a respectable reply –for now, yes, i agree, many many people & institutions are over-leveraged, and having to painfully correct to what the demand side of the system can support. Your ratio is not clear to me –debt:GDP is far less than 1, and tho trends are in the wrong direction, that’s a new development and hopefully temporary. Debt would have to increase by a third to get to that alarm bell 1:1, all else equal. That said, Fannie & Freddie have become a gigantic DC sucking machine, and with lending banks and primary dealers having to borrow from the taxpayer @ current rate of 17 bbl/day, we have a scary vulnerability to a run up in long rates that will kick the Dollar back down again. There’s a war going on in this market –shorts are on a rampage. more later –

Bhutto i can’t add anything, except your post implies USA was involved in the assassination? -that’s just rank speculation, S, don’t you think?

Aug 18, 2008 - 7:56 am 17. 13times:

What happens to US and NATO supply lines to Afghanistan? Are US troops in danger of being cutoff from resupply?

Where will Mush retire to? it ain’t gonna be Kennebunkport.

The Pakistani military has exhibited little desire in halting the creeping advance of Taliban provincial rule – and this has happened under the watch of a dictatorial military leader.

Democracy cannot survive in such an environment.. are we just viewing a dead democracy like so many Russians walking past the Lenin cryo-chamber?

Aug 18, 2008 - 8:03 am 18. Konyok:

Musharraf was an SOB, but he was our SOB. More or less …

Aug 18, 2008 - 8:08 am 19. buddy larsen:

S, quickie, re “Take a klook at what short sellers have been saying and compare them against the outcomes. Seems the short sellers have actually been right” –remember there’s the ’self-fulfilling prophecy’ effect –because so much of capitalism is based on confidence in the future, enormous bear raids can have an effect beyond fundamentals –the raiding itself, the market risk, the second derivatives, can become a ”fundamental”. The best ‘tell’ is in the index’s price/earnings ratio –how much you are willing to pay for a percentage of future earnings. SP500 is reaching some historic lows. This is bear-raiding becoming a market fundamental. It’s pretty serious. There’s a lag, but it affects main street, you can bet yer booty.

Aug 18, 2008 - 8:08 am 20. The Anti Jihadist:

I’m guessing Perv heads to London by way of the UAE. London is a perennial fave amongst the discredited third world rulers’ clique. Just ask that Thaksin fellow.

Aug 18, 2008 - 8:14 am 21. trish:

“The biggest unknown following the resignation of Pakistani President Pervez Musharraf is who will replace him.”

He who has the loyalty of pivotal people and institutions.

I don’t know who that is, and, without being cynical about it, I’m sure we have our favorite.

If Musharraf has been granted immunity, he’ll probably stay. If not, Canada looks good. London has too much to lose.

Aug 18, 2008 - 8:41 am 22. Dave:

Buddy Larsen: For fundamentals of our overall situation, the best ratio is Double Eagle to Peacemaker.

In the beginning, Double Eagle was $20, Peacemaker $16. The latter stayed at 80% of former into the 1980s. (exception to policy:
a couple of run-ups in gold price that proved temporary).

Then in the mid to late 80s, things got reversed. The Double Eagle declined to be worth but 80% of the Peacemaker. Reason: The use value of the coin declined and the hoard value no longer inspired purchases. The old thumbuster still performed as it always had.

In recent months, gold shot up to make the two equal in price. Latest reports say we are back to normal. The spiking of all commodities looks more like nervousness to me, not (as some have claimed) a result of generalized currency debasement.

So like they say in Fort Worth: Don’t put too much faith in long hair, you might be selling Luke,short.

Aug 18, 2008 - 9:01 am 23. buddy larsen:

heh –helluva ratio, Dave –wonder what the dollar value is roughly these days, on them two –first guess, no goog, $3k ?

Aug 18, 2008 - 9:19 am 24. a Duoist:

Richard, several points:

1. Pakistan has long been a ‘bomb-a-month’ country, giving lie to instituional stability.

2. Pakistan has not less than 30,000 and as many as 80,000 new madrassas built since the collapse of the Soviet Union; 15% are estimated to be radicalized. That’s roughly 5,000 to 9,000 radical Pakistani madrassas, graduating between 50,000 to 300,000 radicalized students every year. The madrassas, like the Pakistani Army, are considered sacrosanct in Pakistani culture.

Isn’t the ISI key here? The ISI in Pakistan has deep tribal ties to the tribes providing safe haven for Osama bin Laden and the Taliban in the two Waziristan provinces.

Pakistan has the Deobandi and Mawdudi, fierce puritans who provide intellectual justifications for Islamic revolution, just as Ruhollah Khomeini did in Iran.

If the Shah’s entire US financed and trained army and secret police were completely unable to stop one old man from mounting a radical Islamic revolution from his pulpit, why is the Pakistani Army and the ISI going to be able to hold Pakistan together in the face of Mawdudist calls for revolution?

Aug 18, 2008 - 9:20 am 25. NahnCee:

I think India will be unleashed to take out Pakistan at the same time Israel and the US take out Iran, between now and January. I just hope when that happens that Musharref is still close enough to home to receive a really bad sunburn.

Aug 18, 2008 - 9:22 am 26. S:

Debt to gdp as per Fed site (total economy wide debt – govt $5T plus household plus other) is 360% of GDP). TSee Fed flow of fuinds data. Gov’t debt as reported in the 60% range excludes intra govt debt (not a real read).

Interesting that Drudge is running a report that the US is subject to cycber attacks which we know already, but it is particularly interesting considering someone here speculating on a balck flag op to hack, servers (cyberbakcout) and currncy aswap slash revalue. Extreme, perhaps, but the field of alternatives are narrowing.

Best tell. What chart oare you examing. EPS fall an average of 30-40% in normal recession periods. PE in the GD ! were in mid sinlges. likewiase in the 70s with nifty fifty was the rage. So mid teens PE are hardly cheap and estimates are still way too high which amkes the index even more expensive. So as to tells, I’d say look at the bond market. 2 year 239, and going lower. FDed feunds heading to 1%.

bear rading is a jingoistic agitprop. bears have the facts on their side. Now if you want to make an argument that lkeeping equity inflated as a matter of national security a different conversation. i hardly think you want to stake an argument on fundamnetals. It is a loser. This is what is occuring. The Fed has decided that consumer wealth is tied to hosuing and equity for large part. Therefore, houses cant be helped but equity must be kept afloat. Cutting rates is a herding technique to get people to break risk aversion, but it isn;t going to work. Driving gold down is also a necessity for a number of reasons, well detailed (psychology foremost and USD hegemony protection).

The USA needs a new strategy on the dollar. A salvage op if you may.

As for Bhutto, not trafficing in inuiendo, just asking what are the possible reasons for the pre emptive strike. Why would Musharriff close eyes to ISI hand in takeout. Reasons are many, but he lost it all. So now the US is left in the cold. Also US has been hitting a few major Taliban/AQ targets lately 9Egyptions). Tryingt o make sense of why such a big move to push the Bhutto aside. With Mushariff gone,. the tribal areas are ebven more likley to be hit by US as they don;t have to velvet glove it in deference to Musharrif. So the tribal guys seem to be better off with a delicate ISI, US military accomidation as opposed to the US being cut loose (in some repsects) and given a fre hand. it is afterall the most dangerous place on earth notwithstanding the headlines over Georgia. Interesting that some pieces reporting the Russia rehearsed this op months ago and had been planned for August regardless. In such a situation US must have known. Seems a lot of interesting things are happening…

Aug 18, 2008 - 9:25 am 27. trish:

“In such a situation US must have known.”

– S

Gulf War I. Miscalculation and miscommunication three/four ways.

(Re: Velvet glove.

Musharraf accommodated us to the extent that he felt he could. And then some. We’re hoping for another one.)

Aug 18, 2008 - 9:41 am 28. cjm:

maybe pakistan will break into several pieces, with the tribal lands being given to afghanistan. then all of a sudden issues of sovereignty take on a different hue, with respect to u.s. forces hunting there.

Aug 18, 2008 - 10:22 am 29. steeple:

Nanhcee, I think that India is one of the countries most vulnerable now. They are chronically resource short, more so on a relative basis that China, in a period of continued strain on natural resources ($110 oil almost sounds cheap). Their financial situation is as precarious as any of the top 10 largest nations and they have Pakistan as a not so helpful neighbor. I’m no expert on India, but I would hate to be in their shoes.

S, your posts are unreadable.

Aug 18, 2008 - 10:49 am 30. buddy larsen:

S, okay you were talking about total debt, including public & private. Then the other side of the ratio is total assets, public private. As you know, the gov’t debt:GDP is apples/oranges and is more of a thumb rule pointer, like using DJA instead of Wilshire 5000. That said, total debt of 360% of gdp is high relative to normal but does not imply a tipping point as bears are trying to sell. people, companies, governments often carry long term dept 3 or 4 or more times annual income. If you make 100K/yr and buy a 400K house, you’re in debt 400% of your GDP –but you have a 30 yr mortgage, and no problem cash-flowing the installments. That said, debt sucks unless it’s creating value in excess of costs, in which case it is the very basis of wealth creation.

re PE, truth-seekers (as oppo to something else) will throw out the outliers, such as the bottom of the Carter market as in your example, and find today’s SP500 near bottom of ”channel” (channel = between top and bottom trend lines).

Re term ”bear-raid” sorry if you misunderstood that as jingo agitprop, as well as a bit taken aback, as that is not an ordinary confusion. The ”bear” i mean is not the Rus bear, it’s the old wall street ”bull and bear” slang. The terminology has been around forever, universally used without any reference or hint whatsoever toward politics or nations. It refers to those who think mkt is going up (bulls) vs those who think it is going down (bears). A ”bear raid” is a build up of shorts on a company, coupled with any number of actions, mostly legal, to catalyze a buyer’s strike and create a free fall, where the shorts can cash out large. Bear-raiders are generally just plain old traders who sense an overvalue and try to maximize a gain on the info. As i said, nothing to do with jingo or agitprop –ask around, you’ll get a better feel.

Gold of course is all psychological component, as it can’t be eaten or sprouted or used to plow or transport goods. That said, i think the gold bugs, who are even now emailing scare reports by the bucketful claiming gold is going to 1000 and 2000, are getting nervous in here –it has fallen by 50-60% before, and stayed there for a long time. when demand falls, it starts looking like a no divvy no earning no virtue barbaric relic. However, i have some, in fact about a 15% of holdings right now, in the miners not the actual metal.

I don’t follow the Bhutto commentary –sorry –wish i had an opinion but i don’t even have any facts, i mean the newspaper facts, i just haven’t followed it, other than to feel sad over it, and to regret the hell that we are all of us everywhere visiting upon each other for the sake of our lower rather than our higher instincts.

I too find it outrageous that USA didn’t know about Rus invasion, and i wouldn’t be surprised to learn that some of the financial mkt activity beforehand was a bear raid timed to set up a big crash when the invasion jumped off. Had Rus grabbed Tblisi, broken the gov’t, and grabbed the pipeline, such a crash could’ve happened, judging from the mkts in the months prior, say since mid-June. So, yes, the knowledge may have been out there. I don’t however think USA at high levels of gov’t knew (and more’s the pity), as the scenario playing out from there immediately runs into lunacy, from the cost/benefit angle. Soros is involved with the Georgian gov’t, however, and due to his track record (he’s done it twice, the second more complex & grandiose than the first –meaning any third might zoom off into James Bond Goldfinger nuttiness), and his obsessive drive on his politics and his sense of being entitled to set his own limits on his power and his advancing age and his theatrical denunciations of the Putin as well as the Bush gov’ts, and a few other things, I’d say he may well have known, IF anyone did. And if so, then yes there are questions of passive knowledge vs something else.

Aug 18, 2008 - 10:49 am 31. John Samford:

Here is a real wild thought for you;
Osama bin Laden. That’ll sure put the fat in the fire, the fox in the chicken coop, the Black Panther at the KKK rally, the Russian in Georgia.

Aug 18, 2008 - 10:55 am 32. trish:

“maybe pakistan will break into several pieces, with the tribal lands being given to afghanistan. then all of a sudden issues of sovereignty take on a different hue, with respect to u.s. forces hunting there.”

US guys in Waziristan are still US guys in Warziristan. The PakMil got their asses kicked and they’re Pakis, for crying out loud. They can and do pass for locals.

To be kept in mind is that Karzai has to do just what Musharraf did – namely, apologizing/begging for eternal forgiveness for any and all civilians – or “civilians” – killed.

We have far greater ability to act in Afghanistan. But the same basic domestic political constraints apply there as well.

Aug 18, 2008 - 11:00 am 33. cjm:

could the biggest prize of all, be served up soon?! what effect would the capture of bin laden have on u.s. elections? “john edwards will be representing me in court; i hear he’s very good”

Aug 18, 2008 - 11:15 am 34. buddy larsen:

bloody damn weekend in Afghan –70 or so killed, all but 15 or so Talibans. Karzai has big national celebration day coming up — last similar event a sniper in an apartment a few blocks away damn near got him. did get a guy nearby. Jeezis K Rist wot a freaked out situation –is there an end point? what would it take to at least envision one? i wonder what our mil guys think about ends and how to make them.

Aug 18, 2008 - 11:16 am 35. cjm:

once you start comparing the pakistani military to the u.s. military, i stop reading.

if the tribal lands stop being part of pakistan, we can operate in there a lot more freely. at that point an “Anbar Awakening” becomes a lot more feasible.

Aug 18, 2008 - 11:17 am 36. trish:

It’s their own backyard, cjm.

And with beard and manjamas, we get another 30 seconds.

Aug 18, 2008 - 11:27 am 37. poul:

in the modern economy, the only thing that matters is hitech. pakistan has enormous cadre of software engineers, many of whom work abroad but could return, and if political conditions encourage stability and foreign investments, has a good chance to become one of the world centers of hitech.

that’s what squabble is about – pakistani elite is looking across the border at india and wondering why don’t they get the piece of the pie. the rest is decorations for the naive.

Aug 18, 2008 - 11:33 am 38. Teresita:

Nahncee: I think India will be unleashed to take out Pakistan at the same time Israel and the US take out Iran, between now and January. I just hope when that happens that Musharref is still close enough to home to receive a really bad sunburn.

Hey bobal, here’s another one thinks nuclear war is a good idea. What is this, Habu Week on the BC?

CJM: what effect would the capture of bin laden have on u.s. elections?

The same speculation of a bin Laden “October Surprise” was served up in 2004. And it will be served up again in 2012, 2016, heck, probably in 2100.

Aug 18, 2008 - 11:40 am 39. cjm:

big difference: this is bush’s last shot at the bastard.

Aug 18, 2008 - 11:41 am 40. trish:

And he’s not in Waziristan.

Aug 18, 2008 - 11:45 am 41. Commentary » Blog Archive » Musharraf Resigns:

[...] his nation lose? Its economy is crumbling and the coalition arrayed against him is now bound to break apart, ensuring political instability for the indefinite future. Islamic militants are certain to make [...]

Aug 18, 2008 - 11:53 am 42. Doug:

If Bobby goes as a Robot Vacuum, we can send him as a remotely controlled IED.
“Osama Killed by Bobby the Booby Trap“

Aug 18, 2008 - 12:30 pm 43. bobal:

Mushy can come live with me. I always thought he had a pretty good sense of humour.

Aug 18, 2008 - 12:45 pm 44. bobal:

Russian Bear assured us yesterday that the rooskies would be on the move today, and he was right.

RUSSIAN WITHDRAWAL

Russian tanks and troops moved freely around the Georgian city of Gori on Monday and appeared to be moving toward the capital despite Russia’s announcement that it had begun a withdrawal from the conflict zone

Aug 18, 2008 - 12:48 pm 45. Doug:

Westhawk – Who will miss Musharraf?

Aug 18, 2008 - 1:05 pm 46. Triton'sPolarTIger:

“Russian tanks and troops moved freely around the Georgian city of Gori on Monday and appeared to be moving toward the capital despite Russia’s announcement that it had begun a withdrawal from the conflict zone”

Good grief – the world is absolutely stuffed to the gills with folks in need of a good ole’fashioned @ss kicking…

A number of our Democrat friends come to mind…

Aug 18, 2008 - 1:08 pm 47. buddy larsen:

read this

Aug 18, 2008 - 1:21 pm 48. Doug:

They enjoy a variety of targets, Buddy.

Aug 18, 2008 - 1:52 pm 49. bobal:

Where’s blogger Russian Bear? Hibernating?

Aug 18, 2008 - 2:15 pm 50. buddy larsen:

Fury –they’re creating all the fury they can –we thought we had a problem with identity politics here in America –this is where it goes if there’s if there’s –what –i can’t finsh the sentence. a void. avoid. murder happens in a void.

Aug 18, 2008 - 2:25 pm 51. S:

BL – the economic discussions best left for another place. i only mnention them as pertains to to the Us trying desperately to maintian $ hegemony.

As for PE, if I exclude the financials the S/P is up. I’m exaggerating for purpose. I’ll not bore you with an esoteric derivation of PE, but suffice to say if growth is lower PE is lower (think Malthus meets Roubini). That is the future of the US. Throw in the inevitable higher interest rates and those cash flows are worth a lot less and (WACC a lot higher). As for eliminating outliers, well we could ignore quality of earnings altogether and just make numbers up. Dow 17,000 fair value.

As for debt, the question is how much economic value is it creating. wealth is a transient measure. 2 years ago J6P was flush with an equity line and home price over the moon. Today he is suffocating under mountain of mrotgage debt, a second and credit cards. Wealth changes. For a picture of national wealth, again pull of Fed flow of funds and check it out. Short answer it is falling (and that ignores the massive overstatement to begin with). Take a look at GDP by decade and see how much incremental GDP is created for each unit of debt. not a pretty picture at all. The problem with the US economy is it takes ever more debt to create a $1 of GDP. I did the fact check. In 1975: 1.6:1 debt to GDP. In 1985: 2:1. In 1995: 2.45:1. In 2000: 2.72:1. In 2005: 3.3:1. Today it is 3.5:1. So, those are the facts. Now, exactly how is the Us going to generate growth without leverage?

That ever more debt is financed by the RoW, not US savers. Bubbles were blown to mask the gutting impact of globalization/wage arbitrage.

Gold is a store of value nothing more. It is massively undervalued at $800. Since you brought up ratios, check out the historical gold, silver, oil ratios.

”
If you make 100K/yr and buy a 400K house, you’re in debt 400% of your GDP”

Actually if you look at the historical ratios the average mortgage debt to income ratio is 2-2.5x. Not 4x. low interest rates used as a prop for those arguing higher prices were justified will now pay higher taxes to bail FNM and FRE and still pay a higher mortgage rate when they go to refi or buy. What this indicates clearly is that balance sheets 9as we know from the banks) are static, a point in time and not a reflection of reality (level III anyone). The problem with 3-4x is that it turns into 6-8x when you lose your job. Taken together is it really a surprise the Fed is taking rates to lows and likely going lower. Lower rates are for banks to recap themselves via NIM (net interest margin) at your expense (deposit rates & higher mortgage rates).

Bear raid is a propaganda term. Period. What exactly where you calling the bull raid when stocks were going up irrationally? i don;t recall any outrage. I don’t recall the ritous indignation when house prices were out of control. The new American way right.

Stasis is the natural order of things. The leverage fueled US markets masked an internal rotting that will take a while to correct itself and the other side is frankly unknowable at this stage as the playing field has changed.

By the way, what exactly do you call the SEC putting short stops on banking stocks and the commensurate rally? Frankly the only bear raid is the one executed by the SEC in the growing socialization of the US capital markets. Econ 101 – command economies fail. Self delusion and hope are not strategies.

Aug 18, 2008 - 2:53 pm 52. Alexis:

I still think Asif Zardari was somehow involved in his wife’s murder. He had everything to gain from Benazir Bhutto’s demise. Although I’m one of the few with the foolishness to express such sentiments in public, I doubt I’m the only person who suspects “Mr. 10%”, especially given how he swaggered after his wife’s death.

With Musharraf gone, I think the lid will be off of the cauldron of Pakistani politics. I will likely get nastier from here on out. We want to defeat the Taliban; most Pakistanis don’t and moreover resent the entire idea that they should be expected to fight other Muslims. It’s the fashion now in Pakistan for cocky Pakistani officials to hint at arming the Taliban while tartly telling the Americans to go to Hell. Musharraf, to his credit, knew the Americans meant business in the aftermath of 9-11 and knew that Pakistan would be attacked by the United States if Pakistan didn’t cooperate, Pakistan’s nuclear deterrent be damned. Now, Musharraf is vilified in Pakistan because America is perceived to be a paper tiger by Pakistan’s ruling elite (and that includes the Pakistani press).

I am inclined to take CIA officials at face value when they claim that the ISI is aggressively attacking American forces. I’m reminded of what Boss Tweed once said:

“What are you going to do about it?

Aug 18, 2008 - 2:54 pm 53. Alexis:

The saying is…

What are you going to do about it?”

Aug 18, 2008 - 2:55 pm 54. cjm:

nothing has happened yet there. so nothing to do.

Aug 18, 2008 - 3:07 pm 55. ash:

S wrote:

“If you make 100K/yr and buy a 400K house, you’re in debt 400% of your GDP”

WRONG! You should study up on Gross Domestic Product, it is not Gross National Income. Big difference.

Aug 18, 2008 - 3:14 pm 56. Lifeofthemind:

Rumors that Biden is Obama’s VP pick.

Aug 18, 2008 - 3:26 pm 57. whiskey:

There are two big risks for the US in Pakistan without Musharraf:

1. Chaotic, no one in charge politics leads to defacto blockade of US re supply in Afghanistan, creating an Alamo-Chosin Reservoir defeat of US forces, running out of ammo, fuel, food, water, etc.

2. Chaotic, no one in charge politics leads to loss of control over the nuclear arsenal, and Taliban/AQ getting and using a few nukes on American cities.

We are likely to see both happen, and a direct conflict between the fantasy of utopian elites like Obama, Dems, Media, etc. and the hard reality of the erosion of military dominance by nuclear proliferation.

Can we retaliate if Pakistan does not even exist other than a nominal state with squabbling political coalitions? No. We’ll lose cities and won’t be able to retaliate. How can we? Legalism and the desire for fantasies will prevent any response to stop the mass-killing by nukes. Until the fear over-rides the fantasies and the US “solves” the problem with finality.

IF DC or NYC were nuked today, and tens of millions of US dead, the cry would go out “why do they hate us?” and the usual apologies would be made. Any retaliatory response would threaten the power base of the elites and so would be off-limits. Until more cities died and sheer self-survival led to overthrow of the elites.

But we are going to find out that nations led by Entertainment-Legal-Financial-Minority Grievance coalitions of elites cannot respond to absolute ruthlessness by tribal leaders armed with nuclear weapons. Nukes in the world demand absolute seriousness in modern nations, including the demonstrated willingness to wipe out dangers when red lines are crossed. Fantasies of imposing legal and moral restraints on people and groups with none, will come up a disaster. No end of history, Clintonian parties for the US.

Aug 18, 2008 - 3:27 pm 58. bobal:

Obama’s Shortened Veep List
Writer eliminates those scheduled to speak.
—
IF DC or NYC were nuked today,

That elimates a lot of the elites. We’d be running on marital law for a good long time. Hopefully a Patton or Curt LeMay would be waiting in the wings.

Aug 18, 2008 - 3:43 pm 59. whiskey:

bobal –

Not particularly — San Francisco, Los Angeles, Austin, Chicago, Minneapolis, many other “hip” cities are filled with the elite rentiers. Finance, Entertainment, Law, and Minority Grievance coalitions would be as strong as ever.

Much of the domestic paralysis to respond to how technology has eroded Western military dominance to the point where tribes in Pakistan can nuke without reprisal DC and NYC, is based on the struggle between middle class “exurb” dwellers in say, outlying suburbs of Forth Worth and Simi Valley, and the “hip-cool” trendoids in the Upper East Side, Georgetown, Malibu, and Scarsdale.

Aug 18, 2008 - 5:15 pm 60. whiskey:

Let me add, this is because the trendoids know very well that the dominance they hold in the political system will be erased by engineers, military men, and machinists if the danger (loss of military dominance) is recognized and steps taken to restore it (by building up and using a whacking great military AND nuclear arms system).

Who needs Barbara Streisand’s opinion when security, that of major US cities not being blown up, rests on engineers, trained military men, and skilled machinists, electricians, and so on?

Aug 18, 2008 - 5:19 pm 61. fedya:

OFF TOPICS:

1) Access seems very spotty. Are there problems?

2) Russians in every city of Georgian central corridor from [in/outside?] Poti up to a few miles shy of the citadel of Mtskhetia, gateway to Tbilisi.

Russians reported 9-10 miles South of Gori, reported moving on Borzhomi from Kashuri. Borzhomi controls the Lesser Causcasus via gorges/roads running toward South-West and South-East.

Russian air reported to be preventing Turks from fighting forest fires the Russians set in national parks outside Borzhomi.

WTF!?!

Of course the Euro-weenies are all talk, but Rice and Bush, too? Where’s the “bright line? When do we up the ante on the ground?

Why did we just spend all that money, blood and treasure in Iraq, just to throw it all away in little Georgia? At least we’d have some hard power leverage in Georgia (unlike Pakistan), if we’d be willing to help the Georgians fight.

Perhaps there is more rot in the Georgian military than anyone is letting on. Any bets on how soon Saakhasvili [sp?] will be moving into a new Upper East Side apartment?

Aug 18, 2008 - 5:21 pm 62. bobal:

where tribes in Pakistan can nuke without reprisal DC and NYC

I’d hope we’d have the good sense to drop a bomb every forty miles or so all across that landscape.

Aug 18, 2008 - 5:23 pm 63. bobal:

We’ll have to wait for Russian Bear to explain all this to us.

Aug 18, 2008 - 5:26 pm 64. A Second Hand Conjecture » Bad News for Pakistans’s Government:

[...] Belmont Club In the words of the Economist, “the danger is that, once Mr Musharraf has gone and it has no common hatred to unite its disparate parts, it descends into feuding and paralysis [...]

Aug 18, 2008 - 5:51 pm 65. Teresita:

Bobal: Writer eliminates those scheduled to speak.

Michelle Obama is scheduled to speak. Not that she was in the running for VP, but we could get another surreal Teresa Heinz moment (I say we in the generic sense, I won’t be watching the Donks).

That elimates a lot of the elites. We’d be running on marital law for a good long time. Hopefully a Patton or Curt LeMay would be waiting in the wings.

Some people don’t understand there’s no such thing as a nuke attack against the US without reprisals. Somebody will pay, maybe a whole lot of somebodies. We could do like Michael Corleone in the end of the Godfather and square away “all the Family business”. Basically, everyone on America’s shit list at that time would end up glowing in the dark, and we’d get a pass in the court of world opinion. More assuredly, there’d be nary a peek from the dove wing of the Legislature.

Aug 18, 2008 - 5:57 pm 66. cjm:

also, taking out American cities would heavily slant the remaining population away from the dems. after the first attack, we would demand every nation with nukes give them up. we might even go so far as to round up everyone with nuke making knowledge.

oh, and our nukes work.

Aug 18, 2008 - 6:07 pm 67. Bridget:

“Basically, everyone on America’s shit list at that time would end up glowing in the dark, and we’d get a pass in the court of world opinion.”

Now who was accusing her of being a lefty? ROTFLAO

Aug 18, 2008 - 6:17 pm 68. Teresita:

Lifeofthemind:Rumors that Biden is Obama’s VP pick.

Delaware voted Demo the last four elections, and carried Obama in the Primary. So Biden, if he is the VP pick, doesn’t come along just to bring Delaware. That means Obama thinks his total lack of foreign policy credentials really are an issue. And that means McCain can go long with a pick like Marsha Blackburn to peel off some of Hillary’s voters.

Aug 18, 2008 - 6:22 pm 69. John Samford:

Teresita;
Can you read? NOBODY thinks Nuclear war is a good idea. Period. Some of us think it is inevitable.
That is a whole ‘nother critter dearie.
Those of us that realize it’s inevitable like to theorize on the particulars. That doesn’t make us in favor, just curious.
Meanwhile, those like you who think putting their head under the pillow will make it all go away are just helping make it come about.
You are exceptionally nescient on these matters, aren’t you?
I’m a natural optimist. I figure that terrs will get their hands on a nuke in the next few years. With only one device, the best place to use it is New York, New York. So I see the MSM, Wall Street, Madison Ave. and about a million Democrats gone in a few thousandths of a second. America will be a much better place.
Understand, I’m NOT in favor of this, I happen to think it will happen and I’m looking at the positive aspects.

Aug 18, 2008 - 6:50 pm 70. Teresita:

John Samford: Teresita; Can you read? NOBODY thinks Nuclear war is a good idea. Period.

John, I can read. Did you see where Nahncee wrote, “I just hope when that happens that Musharref is still close enough to home to receive a really bad sunburn.” Did you read where somebody named John Samford wrote: WW3? Bring it on! The Russians are bluffing. And if they are not, then we will win it and get on down the road ??? And then later, the same John Samford said, “So I see the MSM, Wall Street, Madison Ave. and about a million Democrats gone in a few thousandths of a second. America will be a much better place.”

al-Bobal calls this crazy talk.

If taking out a million people in Manhattan will make America a “much better place” then I suppose you think the smaller scale genocide of just three thousand people in Manhattan made America just a better place.

Aug 18, 2008 - 7:55 pm 71. Pakistan « 36 Chambers - The Legendary Journeys: Execution to the max!:

[...] thing that they did not bring up, though, is the fundamental instability of the remaining parties.  You have a coalition of two very different groups united by a shared hatred of Musharraf and a [...]

Aug 21, 2008 - 5:34 pm

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