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The Yid with Lid blog posts on what Bush understood about the Middle East that his successor does not.
It was just about three years ago that America elected a president who was going to repair our relationship that was that he was going to “repair” our relationship with the world (especially the Muslim world) after eight years of that “cowboy” George “W” Bush. But three years into the Obama Presidency, our “relationship repairer-in-chief” has increased the divide between the US and the Muslim Middle East, while opening up a divide with Israel, a nation who continues to provide this country counter-terrorism, intelligence and technology useful in urban warfare.
After three years of a very slow learning curve there are still things about the Middle East that George Bush understood and Barack Obama doesn’t get.King Abdullah of Jordan, a long-time ally of the US told the Washington Post’s Lally Weymouth that Obama has a lot to learn about being an ally, and seemed to indicate that the United States is no longer trusted in the Muslim Middle East:
Weymouth: It is astounding that Tantawi [head of Egypt’s military ruling council] did not take President Obama’s call for hours the night the Israelis were trapped in their embassy in Egypt.
Abdullah:The feeling I got from the Egyptian leadership is that if they stick [their] necks out, they will just get lambasted like [former president Hosni] Mubarak did. So I think they are playing safe by just keeping their heads down, which I think .?.?. sometimes allows things to get out of control. .?.?. Tantawi thinks there is too much pressure on him. …
… Unlike Bush, Obama does not seem to understand the strategic value of our most solid ally in the Middle East. Even worse, he gives no support to Israel and instead sides with a Palestinian Government who does anything it can to avoid making peace. He bashes Israel but when the PA was not responding to Israel’s ten-month-long freeze on building within existing settlements he was silent; in October 2009, when the PA rejected Obama’s plea for intense talks to be held in Washington he was silent, and even last week when Mahmoud Abbas said I’ve said it before, and I’ll say it again: I will never recognize the Jewishness of the state, or a ‘Jewish state,” Obama is silent
It has been three years since Barack Obama was elected the president who was going to “repair” our relationship with the world, instead he has hurt our relationship with our strongest allies in the Muslim Middle East while attacking Israel, a strategic partner who has helped us with insights and technology to fight the war on terror.
Michael Rubin says the Kurds in Iraq have figured us out.
The Iraqi Kurds have prided themselves on being America’s allies throughout the Iraq war and its aftermath. Repeatedly, regional leader Masud Barzani? told visiting American generals and dignitaries that the Kurdish region was the most pro-American in Iraq.
The Kurdish authorities, however, have never made ideological alliances, but are the ultimate realists: Barzani forms partnerships with whomever he believes can most fulfill his own interests. With the U.S. withdrawal from Iraq, it is clear that anyone with an ounce of self-preservation is rushing to cut deals with the Iran. After all, the most common Iranian influence theme, Iraqi politicians say, is that “You may like the Americans better, but we will always be your neighbors.” Hence, on October 29, Barzani traveled to Iran where, on Sunday, he warmly embraced both Iranian President Mahmoud Ahmadinejad, and Supreme Leader Ali Khamenei. According to press reports, Barzani declared, “We will not forget the assistance of the Iranian people and government during the hard times passed by Iraq. To preserve our victory we need Iranian assistance and guidance….”
Everyone in the region knows that the way Iraqis negotiate is to state extreme positions as a deadline approaches, and then go behind closed doors in a smoke-filled room to hash out agreements. The Iranians often quip that they play chess while the Americans play checkers. No one expected Obama to forfeit before the game actually began. But, alas, now that he has done so, he will discover just how deeply he has lost Iraq and Iraqis.
David Harsanyi says if you want more equality, you need more capitalism.
… You will notice that the Occupy Wall Street crowds — and the progressives who support them — focus on bringing the wealthy down to earth rather than lifting the 99 percent. They have a nearly religious belief that too much wealth is fundamentally immoral and unhealthy for society. The economic systems they cheer on would coerce downward mobility for the sake of equality but ignore prosperity for the people they claim to represent.
If progressive were interested in mitigating inequality, they would support the dynamism of free markets to allow the merit of ideas, products and services to win the day rather than stifle companies and pick winners in the name of imagined “progress.” Yes, “too big to fail” means banks, but it also means union-backed bureaucracies, political parties, car companies and green energy — and more.
If they were interested in spreading wealth, they would support lifting barriers that inhibit markets and make life difficult for entrepreneurs and businesses rather than spreading the destructive notion that life can only be “fair” if we rely on dependency and entitlement and tear down those who have more.
A week ago, a great piece appeared in the Wall Street Journal with more background on the credsis. We continue to believe it is important to understand the origins of this crisis. Here we learn how middle management at Freddie Mac was pushing back against the lowering of standards.
Occupy Wall Street is denouncing banks and Wall Street for “selling toxic mortgages” while “screwing investors and homeowners.” And the federal government recently announced it will be suing mortgage originators whose low-quality underwriting standards produced ballooning losses for Fannie Mae and Freddie Mac.
Have they fingered the right culprits?
There is no doubt that reductions in mortgage-underwriting standards were at the heart of the subprime crisis, and Fannie and Freddie’s losses reflect those declining standards. Yet the decline in underwriting standards was largely a response to mandates, beginning in the Clinton administration, that required Fannie Mae and Freddie Mac to steadily increase their mortgages or mortgage-backed securities that targeted low-income or minority borrowers and “underserved” locations.
The turning point was the spring and summer of 2004. Fannie and Freddie had kept their exposures low to loans made with little or no documentation (no-doc and low-doc loans), owing to their internal risk-management guidelines that limited such lending. In early 2004, however, senior management realized that the only way to meet the political mandates was to massively cut underwriting standards.
The risk managers complained, especially at Freddie Mac, as their emails to senior management show. They refused to endorse the move to no-docs and battled unsuccessfully against the reduced underwriting standards from April to September 2004. Here are some highlights: …
Streetwise Professor on Jon Corzine’s fall.
FCM, investment bank, primary dealer, and wanna be Goldman MF Global declared bankruptcy today. As is typical with financial firms, the end came quickly. The firm’s problems metastasized quickly last week. Another quarterly loss, a ratings downgrade, and worries about losses on trades in European government bonds led to the typical downward spiral of lost funding and lost customers. These firms are very fragile. When they fall, they usually don’t get up.
Ironically, MF’s FCM operation was acquired from . . . REFCO, which cratered almost exactly 6 years ago, in October, 2005. Will anyone dare to take on this cursed franchise?
Piecing things together, I surmise that the firm bought about $6 billion in Italian and other southern Euro bonds and repo’d them out. Due to the decline in the prices of these bonds, and the firm’s deteriorating financial condition, the repo counterparties demanded higher haircuts. The firm couldn’t come up with the cash, and in desperation maxed out its credit lines. But that couldn’t stop the hemorrhaging.
The most likely explanation for all this is that the firm was already foundering, and CEO John Corzine tried to gamble on resurrection by ramping up the risk. As is so often the case, this more often results in a more rapid descent to financial hell than resurrection.
One major irony is that MF Global was pushing hard for low capital requirements for members of OTC derivative CCPs. How’s that idea looking now, GiGi?
Especially since suspicions are rife that MF has misused segregated customer funds, presumably to keep the resurrection gamble going. Reports state that the firm is stonewalling regulators on turning over records, and that about $300 million in customer funds are missing. This is one of the most egregious things a brokerage firm can do.
This is already a major fall for former Goldman CEO, US senator, and NJ governor Corzine. He is also a major Obama fundraiser, who is presumably now a Nonperson. If the suspicions about misuse of customer funds prove true, major fall won’t even come close to describing what lies in store for Mr. Corzine. He will long to be merely a Nonperson.
On the news Jon Corzine’s firm mixed customer and firm accounts, Contentions’ Seth Mandel says;
… Stanford business professor Darrell Duffie told Bloomberg: “It’s kind of considered the third rail of the brokerage industry that when you’re holding your customers’ funds in their names, you don’t touch them — even in an emergency situation when you’re running short of cash.”
It’s not only the third rail, it’s common sense. But an executive who has already bet many millions of his firm’s dollars on the prospect that President Obama was going to toss him a cushy federal appointment is probably not being too careful about other people’s money.
Corzine is one of the Obama re-election campaign’s major “bundlers,” and he hosted a fundraiser to shower the Obama campaign with Wall Street cash several months ago. One expects his federal appointment to be abandoned rather quickly now, and Corzine’s political future is probably over as well. Residents of New Jersey now have yet another reason to be happy they voted Corzine out of office in favor of Chris Christie in 2009. Corzine’s political career was devastating for the state. …
Michael Barone calls attention to an important vote on taxes in Colorado.
While Washington was transfixed by the evolving responses of Herman Cain to the unfolding sexual harassment story and the financial press was transfixed by the sudden decisions of the Greek government to hold a referendum on the current (evolving?) bailout settlement and to fire the heads of all the military services, Coloradans went to the polls and voted on Proposition 103, championed by Boulder state Senator Rollie Heath, which would have raised the state income tax from 4.63% to 5% and which was marketed as a way to aid teachers and kids. Democratic Governor John Hickenlooper, elected with 51% in 2010 against split opposition, stayed neutral. Voters weren’t: they voted 64%-36% against 103.
The county by county returns provide an interesting insight on which Democratic constituencies backed the tax increase. …
…Relevance for 2012? Well, Obama strategists have pointed to Colorado as the model for a state they hope to carry again–relatively high income, high education–and it voted 54%-45% for Obama in 2008. The results for the university towns and the skitopias bode well for him. The results from the rest of the state don’t.
In the above piece, Barone refers to a post by Megan McCardle that linked to a fascinating blog post on the two tiers of new elites in the country. That post was by Kenneth Anderson in Volokh Conspiracy. This wanders, but has the germs of interesting thoughts about the people involved in Occupy Wall Street.
Even more frightening is the young woman who graduated from UC Berkeley, wanting to work in “sustainable conservation.” She is now raising chickens at home, dying wool and knitting knick-knacks to sell at craft fairs. Her husband has been studying criminal justice and EMT — i.e., preparing to work for government in some of California’s hitherto most lucrative positions — but as those work possibilities have dried up, he is hedging with a (sensible) apprenticeship as an electrician. These young people are looking at serious downward mobility, in income as well as status. The prospects of the lower tier New Class semi-professionals are dissolving at an alarming rate. Student loan debt is a large part of its problems, but that’s essentially a cost question accompanying a loss of demand for these professionals’ services.
The OWS protestors are a revolt — a shrill, cri-de-coeur wail at the betrayal of class solidarity — of the lower tier New Class against the upper tier New Class. It was, after all, the upper tier New Class, the private-public finance consortium, that created the student loan business and inflated the bubble in which these lower tier would-be professionals borrowed the money. It’s a securitization machine, not so very different from the subprime mortgage machine. The asset bubble pops, but the upper tier New Class, having insulated itself and, as with subprime, having taken its cut upfront and passed the risk along, is still doing pretty well. It’s not populism versus the bankers so much as internecine warfare between two tiers of elites.
The downward mobility is real, however, in both income and status. The Cal graduate started out wanting to do “sustainable conservation.” She is now engaged in something closer to subsistence farming.
Saturday night comes the biggest college football game of the year. Undefeated (#1) LSU travels to undefeated Alabama (#2). One month ago, the WSJ ran an article explaining how LSU had worked for a year to slim down their defense to prepare for Oregon who they defeated. While explaining the complexity of the Division One college game, the article closed with this caveat;
… When the Ducks (Oregon) met LSU, they faced a fitter, faster and, in some instances, smaller defense than they’d seen on tape. It was, in some ways, a perfect doppelganger of their offense. After taking down the Ducks 40-27, LSU has since run its record to 5-0 (Now 8-0) and ranks No. 5 in the country in total defense in terms of yards allowed per play (3.8), while playing four ranked opponents. Those whippet-strong linemen—Mingo, Montgomery and Logan—lead the team with 4.5 tackles for loss and two sacks apiece. And 5-foot-9 cornerback Tyrann Mathieu leads the team with four forced fumbles and 25 solo tackles. (It’s worth noting that Oregon has averaged 60.3 points in three wins since playing LSU.)
If there’s likely to be a reckoning for the skinnied-up Tigers defense, it might come on Nov. 5 when they head to Tuscaloosa to play Alabama. The Crimson Tide runs a conventional, pro-style offense from behind a jumbo-size line that averages 6 feet 4, 313 pounds. Those blockers, paired with 224-pound running back Trent Richardson, can make any defense look small.