Sunday, July 30, 2006

Israeli ground offensive next?

Assuming Israel's pledge to halt its aerial bombardment in Lebanon is for real, it may simply be a prelude to a ground offensive. If this is the case, and assuming the "web bot" project described at halfpasthuman.com is as advertised, the ground offensive might begin late next week, but more likely around August 8-9. Much more about the web bots (and my qualms about them) in the week ahead.

Countdown to $200-a-barrel oil

First the micro picture, as painted by Juan Cole, summing up Israel's attack on the Lebanese village of Qana:

In other words, the Israelis are engaged in collective punishment on a vast scale. They maintain that rocket launching sites are embedded in these villages. But since Hizbullah keeps firing large numbers of rockets, it does not actually appear to be the case that the Israelis are hitting the rocket launchers.


Perhaps the Qana attack is a case of helpless fury. As Josh Marshall points out, yesterday brought the highest number of Hezbollah rocket attacks since this current conflict began. Then again, he says there are ominous indicators in the Israeli press that U.S. leaders are actually prodding the Israelis to keep up the attacks as a prelude to an attempt at regime change in Syria -- and maybe Iran, too.

Eric Margolis seconds that scenario in the Toronto Sun:

Israel's attempted destruction of Hezbollah is the first step in a long-planned bid to strip away Iran's allies and effectively turn Lebanon into a joint U.S.-Israeli protectorate. The second step will no doubt be an assault on Syria. Step three: Isolating and crippling Iran by a massive bombing campaign accompanied by renewed efforts to overthrow its government.


Not that the Iran plot is something that just came out of nowhere; as James Bamford details, it goes back to just after 9/11, and a fateful meeting in Rome. Bamford doesn't break a whole lot of new ground with this Rolling Stone article, but it's a good summation of how we got from there to here. $200-a-barrel oil, anyone?

Tuesday, July 25, 2006

Deficits do matter

Wow. Michael Shedlock demolishes some economic poppycock found over at the Motley Fool, where a Mike Norman says, "Don't worry, be happy" when it comes to the national debt, the federal budget deficit, and the trade deficit.

Shedlock's remarks about the trade deficit are especially worthwhile if you're of a mind (as I was once) that if you support free trade, you should automatically discount anyone who raises alarm bells about the trade deficit. In a 21st-century United States that's not manufacturing much of anything the rest of the world wants to buy, it matters a whole lot. It's a longish read, but worth your while.

Monday, July 24, 2006

Am I missing something here?

Josh Marshall at Talking Points Memo has posted the first few paragraphs of tonight's Nelson Report -- the uber-insider Washington newsletter for which subscribers pay hundreds (for all I know, thousands) of dollars. The topic is American diplomacy and the Israeli offensive in Lebanon. A couple of excerpts caught my eye:

The question is, or should be, does the US have a policy with a realistic chance of success, and is the US involved in a process to further that policy...in this case, to resolve the flare-up of the moment?

And:

How much damage is being done, and will be done, to the US ability to be constructively involved in the Middle East is emerging, now, as the big question.


Now, perhaps Nelson explains himself later on; again Marshall posted only the first few paragraphs for public consumption. But did Nelson not read his hometown paper over the weekend? The Washington Post's Robin Wright spelled out plain as day that Team Bush could not care less about, as Nelson puts it, "resolving the flare-up of the moment." Wright says, "the Bush administration has opted for a course that plays out on the battlefield."

From the Bushies' viewpoint, no damage is being done to "the US ability to be constructively involved in the Middle East" because as Wright reports, "the broader goal is to strangle the axis of Hezbollah, Hamas, Syria and Iran, which the Bush administration believes is pooling resources to change the strategic playing field in the Middle East, U.S. officials say." (Of course, Hezbollah doesn't seem to be cooperating with this strategy, but that's another issue.)

It's the whole "creative destruction" thing again. As I say, perhaps Nelson addresses this in the portion of his missive that only subscribers can see. But if he doesn't, I think his subscribers should ask for a refund.

The nightmare scenario

The past few days have been full of pundits spinning scenarios for how the Israeli assault on Lebanon could metastasize into some wider conflict, usually involving Syria and/or Iran.

But commodities consultant Ann Berg posits an altogether different nightmare scenario for a "wider conflict" in the region that's on hardly anyone's radar screen, an analog to Israel using armed force to put an end to Hezbollah attacks plotted in Lebanon: Turkish troops pouring into Iraq to put an end to attacks plotted there by the Kurdish separatist group PKK. Berg has experienced the tensions first-hand while working in Turkey, and she shudders at the implications:

The ramifications of Turkey waging war against the PKK in Iraq amid the chaos of so many armed soldiers could certainly lead to confrontation and skirmishes between U.S. and Turkish forces, similar to what happened in Sulaymaniyah in 2003. The Turkish army is no ragtag outfit, having forcibly ousted four governments in the last 45 years. The scenario of pitting two supposed democratic allies, both members of NATO, against each other was already laid out in the Anatolian best-selling book Metal Storm, in which Turkey, allied with its former nemesis Russia, ended up detonating a nuclear suitcase bomb in Washington, D.C.


Even if the suitcase nukes don't come about, just imagine Iraq's well-armed and well-trained Kurdish peshmerga militias coming to the defense of their homeland against the invading Turks. What do the Shiites running the show in Baghdad do with their vestigial army? (Do they turn to their one-time sponsors in Tehran, who worry about their own restive Kurdish minority?) What if the Turks decide that in addition to smashing Kurdish terrorism, they come to the defense of ethnic Turkmen in the tinderbox city of Kirkuk? The mind reels.

Right on schedule

Headline today:

U.S. Won't Push for Immediate Cease-Fire

In other words, the "three-week war" is proceeding according to plan.

Saturday, July 22, 2006

Prelude to Mexican civil war?

The AP has finally parachuted into Oaxaca, Mexico to cover an uprising that got underway well before the disputed election earlier this month.
Protesters have taken over the center of folkloric Oaxaca, making tourists show identification at makeshift checkpoints, smashing the windows of quaint hotels and spray-painting revolutionary slogans. Police are nowhere in sight.
George Ure at the oddly-fascinating doom-and-gloom site Urban Survival speculates this is the opening shot of a civil war on America's doorstep -- pitting Mexico's relatively prosperous north against its poorer and resentful south. Maybe, maybe not. But the situation bears watching.

Inflated appraisals? Say it ain't so!

The Wall Street Journal has finally figured out (sorry, it's behind a subscription wall) what some of us have known for months -- that one of the contributing factors to the housing bubble is the inflated house values that appraisers willingly furnish to lenders.

Addison Wiggin laid out the scenario very nicely nearly a year ago at the Daily Reckoning:

Lenders, always looking for profits from new loans and from refinancing, hire appraisers to look at properties. If the lender wants to write the loan, you can be sure the appraisal will come out at the level the bank wants, unless claimed value is simply so out of line that the appraiser can't force the numbers.

But appraisers who are paid by lenders understand the game. If banks want to aggressively write mortgages, appraisers will play along.
It's swell for the WSJ reporters to find a good real-person story to illustrate the problem -- a woman in the suburbs of Detroit who refinanced her house and now finds herself owing more than the house is actually worth. But it would have been better for the WSJ (and the financial media in general) to point out these pitfalls before people started falling in.