The BP Oil Disaster
I’m one of those who believes birds are smarter than they’re given credit for. Forget dancing parrots on YouTube…ever watched a crow? And so it is that like many of you, I imagine, I’m most touched these days by the pelicans we’re seeing on the newscasts. I’m particularly struck by the shots of those who are being cared for, lined up in those boxes, shivering, helpless, scared, and amazingly well-behaved. That’s what gets me…the last part. It’s as if these smart birds are saying, “I know I need your help and you need my cooperation. I wish I could tell you in a way you’d understand. I can’t slobber you with kisses like a dog, but thank you.”
If it’s not being shown on television, from time to time I pull up the oil spill live feed. Part of me wants to believe Mother Nature is resilient…and it’s true, our vast bodies of water are. The Gulf, for example, is constantly being replenished by millions of gallons of fresh water from the Mississippi River, to cite one example, and the sun and microbes are continually dealing with poisons on the surface, effectively. We know that in most cases, as some surmised, including BP early on in the Deepwater Horizon disaster, that the damage would be limited from a spill that far out…that the oil would never make it to shore, and that it would be scooped up near the blast site.
But then as the oil kept gushing out, before we were given access to the underwater feed, some of us had at least part of the story figured out. In fact, I just have to repeat what I wrote on Sat. April 24, 2:00 AM Eastern Time, from my hotel room in Beirut, Lebanon.
“The Transocean oil rig disaster 50 miles off the Louisiana coast that claimed 11 lives and left 4 critically injured, could have enormous implications for energy policy in the U.S. should a feared major oil spill materialize…the industry needs to pull out all the stops to keep the Transocean/BP well plugged up.”
“I would just add to my original comments that the Obama administration should have known enough to come out in full force on Monday (April 26) at the very latest, not Thursday. For this they will pay a price at the polls come November…at least that’s my first reading of the situation….
“From a political standpoint it’s a true nightmare for the administration. From a human standpoint, it’s gut-wrenching. Once again, these good folks are going to need our help.”
I knew more about the potential consequences of this disaster, from Beirut (and once I got home), than this sorry administration knew with all the resources at its disposal.
Yet it was so typical when President Obama, thinking we’re all a bunch of morons because we couldn’t possibly be as smart as he is, told Matt Lauer of “Today”:
“I was down there a month ago, before most of these talking heads were even paying attention to the Gulf. A month ago, I was meeting with fishermen down there, standing in the rain talking about what a potential crisis this could be.”
Bull, Mr. President. No one blames you for the spill, rather it was your total lack of competence, and understanding early on, including an instinct for what the people in the region needed to see. It’s also about some of the bozos you have working for you.
Like Coast Guard Admiral Thad Allen, who is a B.S. artist of the highest order.
One of the first things you learn in the business world, with your first job, is not to fake it. When you don’t have an answer, say “I don’t know.” This clown is incapable of that.
There’s a good reason why it’s important to have some basic understanding of how much oil is coming out of this mammoth well…you have to know if you have a containment cap that can deal with the size of the flow and whether the relief wells could be compromised, let alone if you have enough resources to deal with it when it comes ashore.
But from April 28 – May 27, Thad Allen just parroted the BP line…5,000 barrels per day (210,000 gallons).
I wrote the following on May 29, following my trip to New Orleans and Grand Isle.
“Before it was announced on Thursday and Friday that the estimate of the amount of oil that has been leaking was not BP’s initial 5,000 barrels per day but rather 12,000-19,000 (and maybe up to 25,000), I saw others taking it to 30,000-40,000. With all the reading I’ve done on the topic, I think it’s the latter.”
We’re now saying 40,000 (and there are some estimates of as high as 100,000).
The other day, Thad Allen strode forth and proudly said of the capture operation, “We’re only at 15 (15,000 barrels) now and we’ll be at 28 (28,000 barrels) next week.”
Of course anyone who heard this, and was watching the pictures, thought, gee, I’m really happy BP is working up to 28,000…but didn’t you say 5,000 for an entire month, yet it looks like more continues to pour out than before?
I also have to note that on May 29, I wrote that I believed “the disaster represents an existential threat to (BP).” That week, Wall Street’s analysts were estimating BP’s liability to be anywhere from $12 billion to $20 billion. On Friday, Goldman Sachs hiked it to $70 billion.
Let me just give those of you playing BP’s stock, or thinking about it, some markers.
April 20…explosion…BP shares close at $60.48
April 22…Deepwater Horizon platform goes down…shares close at $59.55
April 23…Friday, shares close at $59.88
May 28…$42.95
June 4…$37.16
June 9…$29.20
June 11…$33.97
I’m not touching it. If it were to go back to $60 at some point, great. That would say a lot of positive things about the market in general. But this is going to play out for a long, long time and comparisons to Exxon and how its shares reacted in the years following the Exxon Valdez spill have zero to do with today’s catastrophe and its complexities.
Billy Nungesser, president of Louisiana’s Plaquemines Parish, told a Senate subcommittee on Thursday:
“I still don’t know who’s in charge. Is it BP? Is it the Coast Guard?….I have spent more time fighting the officials of BP and the Coast Guard than fighting the oil.” What is needed, he said, is someone “with the guts and the will to make decisions.” [CNN.com]
According to a Washington Post/ABC News poll, 69% of Americans give the government’s response a thumbs-down. Two weeks after Katrina, 62% found fault with the way President Bush handled the aftermath.
[And to interject another worrisome number if you’re a Democrat, 74% of independents take a dim view of the White House’s response.]
The Justice Department announced it would conduct criminal and civil investigations, but to file criminal charges, against BP, let’s say, Justice would have to find evidence the companies involved orchestrated a cover-up, destroyed key documents or lied to government agents.
The administration’s six-month moratorium on 33 previously approved deep water drilling rigs in the Gulf could result in the loss of 3,000 to 6,000 Louisiana jobs in the next two to three weeks alone and potentially 10,000 in the coming months, according to the Wall Street Journal. “To put that in context, the entire U.S. economy created only 41,000 new private jobs in May.”
[BP is being told by the administration that it is responsible for compensating these folks. I in no way defend Tony Hayward and his Band of Idiots, but this logic is absurd. In the interest of the truth, it also needs to be pointed out that there are “a large group of charter captains (in Venice, La.) who have been known to spend their days sitting around at the marina, earning $2,000 a day without ever attacking the oil.” Sorry if some don’t want to hear the facts. Heck, I told you how when I went to Grand Isle, two days before Obama’s visit there, my driver and I could easily see that boom was being laid without any rhyme or reason.]
President Obama, playing the role of Dirty Barack, told Matt Lauer that he was talking to fishermen and oil-spill experts “so I know whose ass to kick.”
Wow, Mr. President. You really told them! I know a bunch of mullahs in Iran that got that message as well and they’re cowering in one of their underground nuclear facilities.
Republican Congressman Eric Canter told the Financial Times, “What we are seeing out of the administration has been utter outrage, blame, vilification, cursing on TV instead of focusing on stopping the gushing of the oil. How does that help? There is going to be plenty of time for demonizing, punishing, what have you, OK?”
When asked about the “ass to kick” comment, Canter, a perfect Veep candidate in 2012, said, “I have been somewhat dismayed by the lack of adult leadership.”
Of course now our president has pissed off the British for his demonization of BP, including the White House designation of “British Petroleum,” 12 years after it dropped the name. To be fair, however, Prime Minister David Cameron said he “completely understands” America’s frustration with the company, though on Friday vigorously defended the company’s importance to the British economy. He talks with the president shortly.
“An intriguing aspect of the BP oil spill is that, before the accident, deepwater drilling seemed to be a technological triumph. About 80% of the Gulf of Mexico’s recent oil production has come from deepwater operations, defined as water depths exceeding 1,000 feet. In 1996, that was 20%. Jack-up rigs, which are oil platforms on stilts in a few hundred feet of water, have given way to the ‘mobile offshore drilling unit’ (MODU). It keeps its position through the interaction of global positioning satellites and on-board engines that activate directional propellers to offset ocean currents and wind.
“Seismology and submersible robotic technology have also advanced. The Deepwater Horizon rig was not testing new limits. It was drilling in about 5,000 feet of water when others have approached 10,000 feet. The safety record was good. The American Petroleum Institute, the industry’s main trade group, says that since 1947, oil companies have drilled more than 42,000 wells in the Gulf of Mexico and recovered about 16.5 billion barrels of oil. Against that, spills totaled about 176,000 barrels from 1969 to 2007. In a typical year, it was a few hundred barrels. By contrast, recent production is about 1.6 million barrels a day.
“Cost-cutting by BP, careless rig operators and lax regulators have all been fingered as plausible culprits in the blowout….There will be extensive analyses. But the stark contrast between the disaster’s magnitude and the previous safety record points to another perverse possibility: The success of deepwater drilling led to failure. It sowed overconfidence. Continuing achievements obscured the dangers.
“This pattern applies to other national setbacks. Consider the financial crisis. It was not the inherent complexity of subprime mortgages or collateralized debt obligations (CDOs) that caused the crisis. It was the willingness of presumably sophisticated investors to hold these securities while ignoring the complexity and underlying risks….
“The economy seemed to have become less risky. High inflation had been suppressed. Since 1982, there had been only two relatively mild recessions…Economists talked of the ‘Great Moderation.’….
“Well, if the economy and markets had become less risky, then traders and investors could take what once would have seemed greater risks to increase profits. They did – and created new vulnerabilities for markets and the economy….
“There’s a cycle to our calamities or, at any rate, some of them. Success tends to breed carelessness and complacency. People take more risks because they don’t think they’re taking risks. The regulated and the regulators often react similarly because they’ve shared similar experiences. The financial crisis didn’t occur so much because regulation was absent (many major financial institutions were regulated) but because regulators didn’t grasp the dangers. They, too, were conditioned by belief in the Great Moderation and lower financial volatility.
“It is human nature to celebrate success by relaxing. The challenge we face is how to acknowledge this urge without being duped by it.”
Wall Street
There was only one major release of U.S. economic data and it was rather telling, and in keeping with my script. For the first time since last September, retail sales fell in the month of May, an unexpected 1.2% when a slight gain was forecast. Federal Reserve Chairman Ben Bernanke spoke this week of a “continued recovery, but it won’t feel terrific.” Unemployment would remain high. Lenders remain “cautious.” And looking longer-term, the federal budget is on an “unsustainable path.”
For its part, the International Monetary Fund said risks to the global economy have “risen significantly,” while legendary investor George Soros said “we have just entered Act II” of the crisis as Europe’s fiscal mess worsens and governments slash deficits, which in turn pushes the global economy back into recession.
“The collapse of the financial system as we know it is real, and the crisis is far from over,” Soros said at a conference in Vienna. “Indeed, we have just entered Act II of the drama.”
Germany’s ruling coalition is prepared to slash 15,000 public sector jobs amidst spending cuts of $96 billion.
Spain’s government failed to broker new labor rules and civil service pay is being cut 5%. Public sector workers staged a one-day walkout, with more to follow.
The UK’s David Cameron warned the public sector would bear the brunt of his budget cuts, this as factory production in April unexpectedly fell 0.4%.
The battle between the EU and the U.S. is quite telling. The U.S., as postulated by Treasury Secretary Timothy Geithner this week, is about promoting growth, while the EU is about reducing budget deficits. The EU is hoping increased confidence in the financial system will trump worse unemployment. The U.S. is hoping that in promoting growth, it can begin to grow out of the deficit without drastic spending cuts at this stage. Geithner is also urging the likes of Japan and China to promote domestic demand and not rely so heavily on exports.
Speaking of Asia, while there was little economic data released this week in the States, China came out with everything but the kitchen sink.
The markets’ cockles were warmed by news exports in China rose 48.5% in May, far better than expected just days earlier, while imports rose a like amount.
But at the same time, the government’s efforts to slow the economy are beginning to bear fruit. Bank lending dropped 17% in May and May industrial production fell to 16.5% from April’s 18.8% pace. But both are actually good news. Even property prices, up another 12.4% for the month, hid the fact that real estate sales in some major cities are plunging. Prices, you’d think, will stabilize and eventually fall some.
I staked my claim on this story awhile ago in saying China would be able to engineer a soft landing. This week’s figures bolstered the case. Whereas the economy grew a smokin’ 11.9% in the first quarter, most expect GDP to come in at 10-11% in the second and fall a little further from there. JPMorgan still estimates a full year growth rate of 10.8%.
But some say that this week’s inflation figures are worrisome as consumer prices rose 3.1% in May, above the government’s target. I say my reading of things is that prices will stabilize shortly. Food prices, for example, which have been rising sharply, appear to be falling a bit.
However, there is a huge developing issue in China, that I fleshed out awhile back, that being labor (I wish you could see a comment I made on a conference call with the CFO of my China holding back in April…I was increasingly concerned then about labor costs).
With the high-profile strikes at two Honda facilities and a giant Foxconn plant, the latter being China’s largest employer, Taiwan-owned, with 800,000 workers on the mainland who do contract work for the likes of Apple and Hewlett-Packard, the wage issue has come to the forefront. There were reports at week’s end that labor strife, with some violence, was spreading. In response, Foxconn not only hiked wages 33%, it is raising them an additional 66% for some workers down the road.
Labor represents 10% of operating costs in China vs. 50% in developed countries. Officials in Beijing are actually on the side of the workers. Why? Nothing scares them more than labor unrest and it must be nipped in the bud.
But there’s a fine line between fighting for one’s rights, such as a living wage and adequate working conditions, and social unrest. This, more than engineering a soft landing, is where China needs to thread the needle. Can they do it? I’m not prepared to issue an opinion as yet. It certainly is as big an economic issue as the world faces today. Wages need to be hiked and owners, who won’t be able to pass off all the costs, will have to accept lower margins, as will shareholders (which is why your editor really cares, given my substantial holding here). This week, Foxconn’s owner, supposedly the richest man in Taiwan, said the previously unthinkable. He was contemplating moving some production back home to gain more control.
Stephen Roach, who is leaving his perch at Morgan Stanley Asia to teach at Yale, had the following in a Financial Times op-ed.
“(Asia will rely) more and more on China for sustained growth and prosperity. Yet China’s challenges can hardly be minimized – as underscored by the latest property and credit bubbles, as well as the labor-related pressures…But just as surgical administrative measures seem likely to contain the damage from the bubbles, rapid productivity growth should offset deferred minimum wage rises and keep unit labor costs in check. That does not diminish China’s most daunting structural imperative – an increasingly urgent need to stimulate private consumption….
(Asia) has a full plate. In the late 1990s, exports made up about 35% of developing Asia’s gross domestic product. Ten years later, that ratio had risen to 45%. The region has become more dependent on external demand just as the aftershocks of the 2008-09 crisis are likely to take a lasting toll on this demand in both the U.S. and Europe.
“In this context, it is critical for Asia to adapt yet again – to move towards greater reliance on its own internal markets. Asia’s post-crisis imperative is now to stimulate private consumption – very different from the imperative of repairing financial vulnerability after the crisis of the late 1990s.
“My bet is on Asia – that the next three years are going to be even better than they were during my recent stint in the region. I think China definitely gets it – that the post-crisis era leaves it with little choice other than turn to its own 1.3 billion consumers as a major source of internal growth.
“But I leave Asia with one big worry – that the rest of the world doesn’t get it. I worry, in particular, about the steady drumbeat of China-bashing in Washington – especially as we approach mid-term elections this year. I fear that America, with a massive multilateral trade deficit that stems from an unprecedented shortfall of domestic saving, will make a major mistake in seeking a bilateral ‘remedy’ to a jobless recovery by imposing trade sanctions on China.
“More than ever, the U.S. needs to stop taking out its frustration on others. It should look in the mirror and deepen its understanding of the self-inflicted nature of its problems. This is America’s re-education imperative. That is a key reason why I am heading off to Yale.”
Ah yes, China-bashing. Totally warranted when it comes to some of their products, but not so much when it comes to currency manipulation. Nonetheless, it’s too easy if you’re a congressman in an election year. But, c’mon. Democratic Senator Charles Schumer says, “My colleagues and I intend to move forward with legislation to provide specific consequences for countries that fail to adopt an appropriate policy to eliminate currency misalignment.” How the hell do you judge this? Look at the U.S. relationship to the euro in just the past four months? It went from strongly favoring the U.S. to favoring European manufacturers in a big way. And understand that when it comes to China, American consumers have benefited big time from lower prices, which in turn have helped keep interest rates low.
But as Stephen Roach says, the truly worrisome potentiality is a global trade war.
Street Bytes
–Stocks staged a solid rally with the Dow Jones finishing the week up 2.8% to close at 10211. The S&P 500 added 2.5% and Nasdaq 1.1%. It was about China, global growth, and stability in the euro (for one week, at least).
[Just a follow-up to my Joe Granville comments of last week (I receive his snippets from my Chartcraft subscription). He is projecting a Dow of 3300 once we break 6547. Had to put it out there, you understand. I haven’t deviated one bit from my prediction the major averages this year fall 6-12%.]
–U.S. Treasury Yields
6-mo. 0.15% 2-yr. 0.73% 10-yr. 3.23% 30-yr. 4.15%
Treasurys were basically unchanged on the week, while the Bank of England and European Central Bank left their key lending rates unchanged, 0.50% and 1.00%, respectively. The ECB’s Jean-Claude Trichet said on Friday, “We have a money market which is not functioning perfectly,” and that the ECB, without offering details, would continue to help struggling banks raise cash, as well as buy state debt to keep rates low.
–Bond fund kingpin PIMCO, with over $1 trillion under management, has switched gears and is buying Treasuries, as reported by the Wall Street Journal; this after my old employer had been among those warning against taking a position in the sector. Said a lead trader at PIMCO: “We took risk off the table, and as part of that, Treasurys got some of the flows. The combination of safety and yield, when you compare the U.S. market to other markets around the globe, the U.S. market still looks appealing.” Thus far in 2010, PIMCO is trailing its chief rival, BlackRock, when measuring their two core bond funds’ performance.
–The Federal Reserve reports that nonfinancial corporations had socked away $1.84 trillion in cash and other liquid assets as of the end of the first quarter, up 26% from year earlier figures and the largest increase ever going back to when records were first kept, 1952. But the same companies are of course reluctant to spend the cash on hiring and expansion due to concerns over the strength of the recovery.
–Beleaguered Euro nations Spain, Italy, Portugal and Ireland were able to successfully sell large bond auctions, but at yields significantly higher than before the Greek debt crisis hit full force. For example, Portugal auctioned off about $1.8 billion in 10-year paper for a yield of 5.25%, which compares to German 10-year bunds yielding 2.60%.
–According to RCM Capital Management, China will eclipse the United States as the world’s top economy by 2027, or 8 years earlier than a previous forecast. By 2032, the firm predicts the BRIC nations (Brazil, India, Russia and China) combined, will surpass the G-7 nations becoming the largest economies in the world. Andreas Utermann said he was quite confident that when it comes to the emerging markets, in 10 to 20 years, people around the world will be able to witness today’s emerging economies taking the lead worldwide. Regarding China specifically, Utermann notes:
“In the past 10 years, China’s GDP increased $3.5 trillion which amounts to 75% of the U.S.’s contribution (a $4.7 trillion rise) to global economic growth.” [Global Times]
[In a survey of investors for Bloomberg, though, 4 in 10 picked the U.S. as the market presenting the best opportunities in the year ahead; more than double the percentage from last October, when the U.S. was rated the market posing the greatest downside risk by a majority of respondents.]
–China’s wealth concentration far exceeds that of the U.S. with 1% of the wealthiest Chinese families being accountable for 41.4% of the country’s entire wealth. In the U.S., the wealthiest 5% hold 60% of the wealth, according to the World Bank.
–Aussie Aussie Aussie! The unemployment rate Down Under fell to 5.2%, basically half that of the U.S. of A.
–Other overseas tidbits…India’s industrial production in April climbed 17.6%. Brazil is on track for 9% growth this year. Taiwan’s May exports soared 57.9%, up 68.8% to China. And Japan’s growth came in better than expected in Q1, up 5% annualized.
–Emirates airlines placed an order for 32 A380 superjumbo flying wieners from Airbus in a deal worth $11.5 billion, one of the largest in aviation history (largest in dollar volume). Emirates already had 58 on order, so it will have a fleet of 90 of these 525-seat behemoths. The deal takes Airbus’ backlog to 234 orders from 17 buyers. Dubai-based Emirates said its profits soared to $964 million for the year ending March, while just about everyone else in the business reported record losses. One industry consultant, though, expects the airline group to earn $2.5 billion in 2010.
–General Motors is recalling about 1.5 million trucks, crossovers and cars from model years 2006-2009 because the unit that heats the windshield washer fluid could catch fire, which would kind of suck, though at least you’d have a clear view of the flames shooting out the hood. In most cases the unit will just be removed.
And Chrysler is recalling 700,000 Jeeps and minivans because of brake and wiring problems. This impacts models from 2006-2010.
So there will be lots of unsafe vehicles crisscrossing your local communities on the way to dealerships the next few weeks, sports fans.
–Gary Cohn, president of Goldman Sachs, said there is “no indication” the investment bank is close to settling U.S. fraud charges with the SEC. Cohn was compelled to comment on rumors to this effect as word emerged that Goldman was being investigated for a second mortgage-linked deal on top of the one that led to April’s charges. This comes as Congress is still trying to hash out a final financial reform bill, including what to do with the issue of proprietary trading which the likes of Paul Volcker want to see prohibited from investment banks like Goldman.
Separately, another provision, as put forward by Arkansas Democratic Senator Blanche Lincoln, would force the banks to choose between derivatives trading and access to the Federal Reserve’s emergency window (“derivatives dealing is not central to the business of banking,” said Lincoln), while the private-equity, hedge-fund community awaits a decision among House-Senate conferees on the taxation of “carried-interest” income, which is the share of profits that fund managers receive as part of their compensation. Currently taxed at 15%, a proposal would raise it to first, 30%, and then 33% in 2013.
–On a different issue, Goldman Sachs was subpoenaed by the Financial Crisis Inquiry Commission after panel members said the firm engaged in a document “dump” to hinder a probe.
FCIC Chairman Phil Angelides said, “We did not ask them to pull up a dump truck to our offices and dump a bunch of rubbish. This has been a very deliberate effort over time to run out the clock.”
Kind of like what Iran has done with regards to its nuclear weapons program, not that I’m comparing the two.
–Good news from California. Exports rebounded anew in April, up 21.8% from year ago levels. Container traffic leaving the ports of Los Angeles and Long Beach was up 10%. But now, like everyone else, California awaits the impact of the Euro crisis.
–According to the New York Post, JPMorgan Chase faces a $250 million hit this quarter as the result of a bad coal trade.
–AT&T conceded that a security hole in its Website led to the exposure of over 100,000 iPad users’ email addresses, though as New York Mayor Michael Bloomberg said, he being a victim himself, what’s the big deal?
–Meanwhile, Apple unveiled its iPhone 4, “one of the most beautiful devices we’ve ever made,” said CEO Steve Jobs as he stood on stage, showing it off during the company’s developers conference. Jobs said combined sales of iPhone, iPad and the iPad Touch will surpass 100 million devices this month.
But now Apple needs to be concerned with a pending FTC investigation into possible anti-competitive behavior. The New York Post said previously that the FTC and Justice Department were in a turf war over who should handle the case and the FTC has apparently won out, which the paper points out is bad news for Apple because the FTC has broader powers to prohibit conduct.
–Fox has sold 80% of its ad inventory for the Super Bowl already, which would appear to be earlier than ever that advertisers are moving in such a fashion. For the 2010 Super Bowl, CBS didn’t reach 70% until September. For ’09, by June 2008, NBC had sold only 30% of its slots. Awhile back, Josh P. made an additional observation that with the contentious mid-term elections, television and radio advertising in particular should have a strong run.
–Speaking of the Super Bowl, Papa John’s International landed a deal to be the official pizza sponsor of the National Football League and the Super Bowl. Terms were not disclosed, but Papa John’s beat out Pizza Hut and Domino’s.
–Gold hit an intraday record high of $1,252 this week over ongoing global debt concerns, as well as the trashing of the euro before it recovered. The price has been aided by some central banks trimming currency reserves and buying the shiny stuff. Some of my friends have been buying gold bars and coins, but I can’t even divulge their initials for fear they’d have to shoot me. I still have a gold signet ring and fake gold leaf on various picture frames. I also have Burl Ives’ “Silver and Gold” continually coursing through my brain, which isn’t a good thing.
–For the second year in a row, Americans cut back on their charitable giving. Donations fell 3.6% to $303.75 billion in 2009, down from $315 billion in 2008, according to Giving USA. 2008’s total was down 2% from ’07.
–I love the talk on government employment, and as discussed further below, how government is the answer to all our problems.
But look at the Minerals Management Service and the SEC. Both agencies were staffed with managers who did little more than view porn, as we’ve now learned.
No, we don’t need bigger government. You want to kick ass, Mr. President? There are others like these two you could barge in on, Secret Service at your side, and just start firing people. Your approval rating would spike 10 points overnight. And you’d be cutting the deficit to boot.
–Hurricane names this season…Alex, Bonnie, Colin, Danielle (a sweet, innocent CAT 1 at worst), Earl (could be trouble), Fiona, Gaston, Hermine, Igor…uh oh…Igor…there’s your big one. It’s a layup.
–According to Time Warner, owners of “Seinfeld,” the show has made $2.7 billion since it went off the air 12 years ago. Jerry Seinfeld and Larry David have an undisclosed ownership stake that has certainly paid them $hundreds of millions. The details emerged in a report. Reruns on regular TV have grossed $2.3 billion since 1998, while cable revenues were another $380 million. Another way of looking at it is that Seinfeld made 180 episodes during its nine-year run, so each half-hour has earned more than $14 million thus far. This doesn’t include what the show earned during the original run. For years, Forbes estimated Jerry Seinfeld made between $65-$80 million a year on syndication. As for co-stars Jason Alexander, Michael Richards and Julia Louis-Dreyfus, they receive a portion of DVD sales, but not the show’s reruns. [David K. Li / New York Post]
–And an update: Debrahlee Lorenzana “repeatedly went under the knife to get her brick-house build,” according to the Daily News.
“A Discovery Health Channel series chronicled Lorenzana’s pursuit of plastic surgery perfection, in which she described her desire to be stacked like a Playboy Playmate….
“ ‘I love plastic surgery,’ Lorenzana said. ‘I think it is the best thing that ever happened.’”
Better than sliced bread? Meanwhile, new employer JPMorgan Chase is desperately trying to shut her up.
Foreign Affairs
Iran: By a 12-2 vote, with Lebanon abstaining, the U.N. Security Council adopted a fourth sanctions resolution against Iran. The two voting against were Brazil and Turkey, who heretofore were part of a last-ditch Iranian effort to avoid further sanctions on its suspected nuclear weapons program.
The measure imposes asset freezes on 40 Iranian companies linked to the mullahs’ nuclear and ballistic missile activities, but places no restrictions on Iran’s energy sector.
Forgetting the timeline for a second, President Obama deserves credit for bringing Russia and China on board, but this is 16 months into his administration and as discussed below, their support came at a heavy price which greatly watered down the sanctions. Arms control expert Gary Milhollin told USA TODAY: “It’s too early to know how effective these sanctions will be, because we don’t yet know what steps countries will take. These sanctions don’t mandate things to be done. They authorize things to be done. What this is in effect is a promise that we’re going to do something real.”
Israel’s Foreign Ministry offered a carefully worded statement that read in part:
“This is the sixth resolution [Ed. fourth with sanctions] demanding that Iran suspend its enrichment and cooperate with the IAEA. Iran blatantly violated all the previous resolutions, and demonstrates blatant disregard for the international community and its institutions. There is great importance in the full and immediate implementation of this resolution.”
As reported by the Jerusalem Post, the Foreign Ministry’s statement went on to say “that it was clear this U.N. resolution by itself was ‘not enough,’ and that what was necessary now was for additional ‘significant steps’ to be taken by various countries and international groupings.
“In an obvious reference to the need to hit the Islamic Republic’s energy sector, the statement read that ‘only such sanctions that focus on a variety of sectors in Iran are liable to impact on the Iranian decision-making process.’
“ ‘Broad and determined’ international action was necessary to make clear to Tehran the price of continuing to ignore the international community’s demands, the Foreign Ministry statement said.
“ ‘The ratification of a marriage between Iran’s extremist ideology and nuclear weapons would be catastrophic,’ it warned.”
In response, the Iranian envoy to the U.N. said, “Nothing will change. The Islamic Republic of Iran will continue uranium enrichment activities.” President Ahmadinejad said, “The resolutions you issue are like a used handkerchief which should be thrown in the dustbin. They are not capable of hurting Iranians.”
“China’s opposition (with quieter help from Russia) has delayed the vote for nine months. It also watered down the package. The new measures target a further 40 companies, including more than a dozen with connections to the Revolutionary Guards. But they do not focus on the oil industry (where China is one of Iran’s best customers) or, in any significant way, the wider economy.
“That does not mean the sanctions are worthless. They represent the combined disapproval of many countries. They can be followed by separate, harsher measures from the U.S. and the EU.
“Yet Turkey’s vote against the sanctions shows how well Iran has courted allies, playing to hopes of influence and resentment of the U.S. Turkey and Iran are trying to establish themselves as regional powers. President Ahmadinejad can count Venezuela and allies in Latin America as friends. Russia, India and China, with commercial contracts in Iran, will never apply much pressure, if any.”
“The Obama administration scored a significant diplomatic success Wednesday when it persuaded the United Nations Security Council to approve new economic sanctions on Iran for failing to curb its nuclear program.
“On that same day, this newspaper’s European edition carried an article reporting that companies in Germany – a nation that nominally supports the sanctions effort – increased their exports to Iran by 48% in March and 15% in the first quarter. Their imports from Iran rose by even greater margins.
“On the German front, at least, if Iran is to be economically isolated, the process has a ways to go.
“Those contrasting pictures illustrate the challenge of making the new sanctions bite the way they’re supposed to – and the extent to which the U.N. action starts rather than ends the American push to turn the economic screws harder.”
“The passage by the U.N. Security Council of a new sanctions resolution against Iran Wednesday was, first and foremost, a diplomatic achievement for the Obama administration. The president and his aides managed to overcome initially stiff resistance from Russia and China to additional sanctions, and they deftly sidestepped a last-minute effort by Iran to derail the resolution through a side deal with Brazil and Turkey. Though the breakthrough was far from unique – the Bush administration managed to win Security Council approval of five resolutions on Iran, including three with sanctions – the administration nevertheless demonstrated effectiveness in building a coalition to increase the pressure on Tehran.
“The question is whether the pressure will be strong enough to cause the regime to rethink its pursuit of nuclear weapons…Though President Obama rightly says that the new sanctions are the toughest ever approved against Iran, they fall far short of the standard – ‘crippling’ – that he originally set. Forty Iranian companies are targeted, which is more than double the existing number, but none are in the energy sector. A Russian-built nuclear plant will go forward, as will massive new investments by China in oil fields and refineries. Sales of heavy weapons to Iran are banned – but not the advanced air defense missile system that Russia has already pledged to deliver.”
“In announcing the passage of a U.N. Security Council resolution imposing sanctions on Iran, President Obama stressed not once but twice Iran’s increasing ‘isolation’ from the world. This claim is not surprising considering that after 16 months of an ‘extended hand’ policy, in response to which Iran accelerated its nuclear program – more centrifuges, more enrichment sites, higher enrichment levels – Iranian ‘isolation’ is about the only achievement to which the administration can even plausibly lay claim.
“ ‘Isolation’ may have failed to deflect Iran’s nuclear ambitions, but it does enjoy incessant repetition by the administration. For example, in his State of the Union address, President Obama declared that ‘the Islamic Republic of Iran is more isolated.’ Two months later, Vice President Biden asserted that ‘since our administration has come to power, I would point out that Iran is more isolated – internally, externally – has fewer friends in the world.’ At the signing of the START treaty in April, Obama declared that ‘those nations that refuse to meet their obligations [to the Non-Proliferation Treaty, i.e., Iran] will be isolated.’
“Really? On Tuesday, one day before the president touted passage of a surpassingly weak U.N. resolution and declared Iran yet more isolated, the leaders of Russia, Turkey and Iran gathered at a security summit in Istanbul ‘in a display of regional power that appeared to be calculated to test the United States,’ as the New York Times put it. I would add: And calculated to demonstrate the hollowness of U.S. claims of Iranian isolation, to flaunt Iran’s growing ties with Russia and quasi-alliance with Turkey, a NATO member no less.”
So what’s the bottom line? It’s about compliance, of which there will be none. Independent commissions are to be set up in various areas and just putting them together will undoubtedly take months, while we already know key nations such as Russia, China and even Germany will look the other way.
And critically important as well, it’s about Russia’s sale of the S-300 air-defense system to Iran. As I go to post, in the past two days there have been totally conflicting statements on the topic. On one hand the Russian defense ministry says it is proceeding with the sale; on the other, the Kremlin said on Friday the sanctions barred the transfer to Iran.
Another item involving Russia was resolved during negotiations for its support. Two Russian scientific institutes and the state arms trader, which had been under separate U.S. sanctions aimed at punishing organizations suspected of helping Iran’s weapons programs, were lifted.
So we’re yet another step closer to an inevitable Israeli attack…regardless of their abysmal relations with the rest of the region these days. At this stage, however, Israel has to let the sanctions regime play out a bit for appearances, even as the London Times broke this story in Saturday’s edition… “Saudi Arabia gives Israel clear skies to attack Iranian nuclear sites.”
“Saudi Arabia has conducted tests to stand down its air defenses to enable Israeli jets to make a bombing raid on Iran’s nuclear facilities, The Times can reveal….
“(Sources) in the Gulf say that Riyadh has agreed to allow Israel to use a narrow corridor of its airspace in the north of the country to shorten the distance for a bombing run on Iran. To ensure the Israeli bombers pass unmolested, Riyadh has carried out tests to make certain its own jets are not scrambled and missile defense systems not activated. Once the Israelis are through, the kingdom’s air defenses will return to full alert.”
Far more on this next time. I’ll take you back to the scenario I envisioned last fall. It could be playing out after all.
A few other notes. The White House is now trying to get the U.S. Congress to cool its jets when it comes to its own sanctions efforts that focus on punishing Iran’s energy sector. The administration worries, rightfully so (though they are decidedly wrong), that should Congress approve its own harsh penalties, President Obama’s relations with Russia, China and the EU will suffer because many cooperated on the basis that Congress would lay off the topic. [Britain’s David Cameron, on the other hand, is urging the EU to impose tougher restrictions of their own.]
Then there is Turkey. Prime Minister Erdogan called the sanctions vote “a mistake.” [U.S. Defense Secretary Robert Gates, in turn, blamed the European Union for its reluctance to admit Turkey into the EU years ago as a reason for Turkey’s ‘no’ vote.]
But Erdogan later said, “Those who allege Turkey has broken away from the West are the intermediaries of an ill-intentioned propaganda.” Then he took a shot at the United States.
“We are still paying a price in Iraq and Afghanistan. Millions of people have been killed, aged from 7 to 70. There are hundreds of thousands of widows in Iraq. Who is responsible for this figure? We have to answer this.”
[Erdogan also wants to create an economic free trade zone among Arab states. Kind of ironic that this is likely to be accomplished before our Congress ratifies any free trade agreements with the likes of South Korea and Colombia.]
As for Lebanon and its pathetic abstention, understand they are the Arab League’s current non-permanent council member but they couldn’t take a stand because half the government favors the West, and the other half, led by Hizbullah, has ties to Iran.
Lastly, Saturday represents the one-year anniversary of Iran’s presidential election but the opposition isn’t likely to mount any serious challenge in demonstrations held in Tehran. The Financial Times had a piece on Friday that discussed the rupture between Ayatollah Ali Khamenei and Rafsanjani, the cleric I long said was the man the United States should have been secretly negotiating with. Rafsanjani had supported Moussavi, the main reformist candidate, last year but now the regime has threatened two of his children with trial for allegedly fomenting post-election unrest. Just another example of the growing split in Iran, with the United States lending feeble support to the moderates, like some decoder rings and such.
For his part, Ayatollah Khamenei commented, “You cannot be a follower of Imam Khomeini if you openly support the disgraceful events of the past months…and back those who created such events,” he said to chants of “Death to Hypocrites,” a term used for opposition leaders.
One of the prime opposition leaders, Mehdi Karrubi, interviewed for Newsweek, was asked:
“Do you think the international community, especially the United States, should support the struggle of the Iranian people?”
Karrubi: “Foreign governments shouldn’t support us, because the government would then accuse us of being foreign agents. But I ask people all around the world and Iranians in the diaspora to support our struggle.”
I understand where Karrubi is coming from today, but President Obama had his chance last year to take a stand that could have placed him in the history books for all the right reasons. But look what’s happened over the past 12 months…Iran has moved along with its weapons program, the opposition has been silenced, and the region is closer to war.
Israel: The head of U.N. forces in Southern Lebanon, the multinational peacekeeping force, told the Jerusalem Post that he found no evidence Hizbullah was gearing up for war and that the situation was far more stable than it was before war broke out in July 2006. Well, I saw an example of the stability in my recent trip to Lebanon, but UNIFIL’s commander said he also didn’t see any evidence of Scuds or other ballistic missiles being smuggled into Hizbullah territory. Israel would beg to differ.
But on my favorite topic of Israel’s constant invasion of Lebanese airspace, Maj.-Gen. Cuevas said, “The U.N. continues to urge Israel to end the overflights, and this point was made once again by the U.N. Secretary-General during his meeting last February with Defense Minister Ehud Barak. The daily air violations not only exacerbate local apprehensions, but also undermine the overall credibility of UNIFIL and the LAF (Lebanese Armed Forces).”
As for the Flotilla disaster post-mortem, Israel announced it would set up a panel of experts to examine the raid, as well as an independent inquiry that would allow foreign observers, in a bid to squelch any U.N. investigation. A second attempt by pro-Palestinian activists to break the blockade on Gaza was stopped without incident last weekend. Additionally, four Palestinian militants in diving gear were killed off the Gaza coast and the silence among the international community on this one is quite telling.
But as the Netanyahu government mulled a lessening of the blockade (including lifting the ban on items such as jam and biscuits…pitiful), the Obama administration pledged $400 million in aid to Gaza and the West Bank, calling on Israel to reconsider its actions.
An editorial in the June 5 edition of The Economist titled “Israel’s siege mentality” concluded:
“Israel is a regional hub of science, business and culture. Despite its harsh treatment of Palestinians in the land it occupies, it remains a vibrant democracy. But its loneliness, partly self-inflicted, is making it a worse place, not just for the Palestinians but also for its own people. If only it can replenish its stock of idealism and common sense before it is too late.”
Afghanistan: It’s been a disastrous stretch for the U.S. and its allies as at least 17 Americans were killed in separate incidents, including in the always-disturbing downing of a U.S. helicopter (especially as we find out about more homegrown terrorists, with ties to Pakistan and the Taliban, here in the U.S.). Two Aussies were killed, as were at least four Brits. The latter’s death toll now exceeds 290, putting huge pressure on the new Cameron coalition government. Cameron went to the Afghan theater this week and strongly hinted Britain’s 10,000 troops would start to return home next year, regardless of the status of the Afghan army. [Britain’s security forces detected an assassination plot while Cameron was on the ground…a plan to bring down his helicopter…so he never made it to one stop on the agenda.]
On the issue of the critical mission to take control of Kandahar, General Stanley McChrystal said the operation would happen “more slowly” in order to ensure local support. I can’t imagine it being any more slowly than anything else we’ve done here since fall of 2001.
And Defense Secretary Gates played down the removal of two top Afghan security ministers, both of whom enjoyed strong U.S. support, as an “internal matter.” The two were dismissed following the attack on last week’s circle jerk, loya jirga, where rockets were fired on the gathering of 1,600 Afghan elders.
Separately, a U.S. government audit to be released later this month will show that the $25 billion effort to build a viable Afghan police and military force has been a waste as the abilities of the Afghan forces are substandard at best. Earlier categorizations that 22 units were considered “fully capable” are said to be gross exaggerations. And today, the New York Times reports that Afghan President Karzai doesn’t believe the West can win, thus his moves to negotiate with the Taliban.
Iraq: Two American soldiers were killed in a car bombing on Friday, an example of how U.S. forces, while positioned outside the main urban areas, still face dangers. We also had a situation this week where Turkish warplanes bombed several Kurdish positions in northern Iraq, and there were reports Iranian soldiers made an incursion into the region as well. They reportedly are building a fort on Iraqi territory.
Meanwhile, it’s been over three months since the March 7 election and still no sign a government will be formed. Two members of Iyad Allawi’s Iraqiya party have been assassinated; Iraqiya having secured two more seats than Prime Minister Nouri al-Maliki’s party. Allawi had an op-ed in the Washington Post on Thursday.
“As the winner of the election, our political bloc should have the first opportunity to try to form a government through alliances with other parties. Yet Maliki continues seeking to appropriate that option for his party, defying constitutional convention and the will of the people. Because his bloc placed second, our slate wants to meet him, without preconditions, for face-to-face talks. We are determined to build a government based on competence and professionalism instead of ethnic or sectarian identities. Regrettably, Maliki has thus far declined to meet with us.”
Yet another case of Obama’s lack of leadership. He should call Maliki up and say, “Listen, dammit. You two need to get together. Do it.”
“Washington still has unrivaled leverage in Iraq, as well as a moral responsibility to the Iraqi people, whom it freed from tyranny to do all it can to deliver sustainable peace and stability. Vice President Biden recently said that the United States was ‘going to be able to keep our commitment’ to reduce troop levels in Iraq to 50,000 by this summer. While I have long supported the withdrawal of U.S. troops, Iraq cannot be allowed to revert to an unstable state of sectarian strife, dominated by regional influences.
“Such an outcome would insult the tens of thousands of Iraqi civilians whose lives were stolen in terrorist attacks and the thousands of U.S. soldiers who sacrificed their lives; it would also put at risk every U.S. and international policy priority in the region – the planned troop withdrawals, nuclear containment, a stable energy supply, even the chances of success in the Israeli-Palestinian issue.
“Iraq has an unprecedented opportunity to create a successful and democratic force for moderation in the heart of the Middle East. We must reward the faith of ordinary Iraqis who turned out in droves because they believed that change is brought about by votes, not violence. The seeds of democracy have been planted; they need to be nurtured. Only by working together and with international support can Iraqis lay the foundation for what we all believe should be a stable, prosperous and democratic nation.”
North/South Korea: The Seoul government said “no practical benefits” would come out of an attempt to ram through further sanctions against Pyongyang in the U.N., but insists there should be action in the Security Council. For its part, the North Korean parliament met in a rare session to fire the country’s prime minister and promote a family member of Kim Jong-il’s to the regime’s second most powerful position as part of Kim’s efforts to strengthen his power base ahead of the transfer of power to his youngest son in 2012.
But this week a North Korean border guard shot and killed three people on the Chinese side of the border, an act for which it was forced to apologize to Beijing.
China: Beijing broke off top-level military links with the U.S. because of Washington’s continued arms sales to Taiwan, though while much is being made of this, lower-level contacts were continuing. This is nothing more than a propaganda ploy for China. Defense Secretary Gates addressed the tiff in Singapore (see my “Hot Spots” link), but I seem to be the only one not in the least concerned about Chinese moves on this front. [I am greatly concerned about China’s growing sea power, however.]
“Defense Secretary Robert Gates made a notable contribution to the free world’s defense this weekend, and it didn’t involve money, missiles or troops….
“ ‘The South China Sea is an area of growing concern,’ Mr. Gates told fellow defense officials Saturday…The U.S. supports ‘stability, freedom of navigation, and free and unhindered economic development,’ and the Pentagon objects to ‘any effort to intimidate U.S. corporations or those of any nation engaged in legitimate economic activity.’…
“Mr. Gates’ comments suggest the Pentagon thinks it’s time to draw brighter lines around this kind of misbehavior.”
On the issue of the pending Economic Co-operation Framework Agreement (ECFA) between the mainland and Taiwan, many on the island fear an influx of cheaper goods and labor, though the government in Taipei said the ECFA would create over 260,000 jobs, increase GDP by 1.7%, and further deepen a trade relationship that is already essential to Taiwan’s export-driven economy, so says the government.
[And a side note…former Taiwan president Chen Shui-bian had his sentence for graft and money-laundering reduced from life to 20 years in the country’s first criminal case against a former leader. Chen has one last appeal to the Supreme Court.]
Russia: Prime Minister Putin and President Medvedev are already considering their roles in the 2012 presidential election, Putin told French media. Putin added the two “have decided not to make much fuss about it, not to let ourselves be distracted by this problem.” Putin can run for president again in 2012 and stay in office until 2024 should he so desire. I still believe there is a third force at work in Russia…the leader of which has yet to be revealed.
South Africa: 16 years after the end of white minority rule, this place is a mess and the rift between the ruling ANC and the black poor has been widening rapidly. At the same time, both blacks and whites look at the World Cup, which started on Friday, with pride. [South Africa tied Mexico, 1-1, in the opening match.] Meanwhile, President Jacob Zuma, who has done nothing since taking office, faces a new sex scandal. One of his wives, said to be the least popular, may be carrying a love child by her bodyguard. According to a Durban paper, the bodyguard, knowing the fate that awaited him as a Zulu warrior when this was found out, committed suicide. The wife, Ntuli, reportedly apologized to Zuma with the traditional Zulu fine of one goat, which was killed and eaten. [I’m not a big fan of goat.]
All of which makes me want to whip out my copy of the movie, “Zulu,” one of the better flicks of all time…but I digress.
Now recall that Zuma fathered a child out of wedlock himself. He currently has three wives (he once had two others; one committed suicide, the other divorced him) and 20 children, with more on the way, and numerous girlfriends. ANC elders consider him a joke and it’s likely he’ll be replaced at a party congress in 2012.
Meanwhile, on the crime front, there have already been a series of robberies against journalists and tourists at the World Cup, including three reporters from China. This was before the event even got underway. The Irish Times reports that tourists are flocking to local security companies to hire bodyguards for their stays. It’s going to be a long month.
Netherlands: Geert Wilders, who faces prosecution for comparing Islam to Nazism, defied predictions to become the third-largest force in Dutch politics when his anti-immigration party (Party for Freedom, or PVV in Dutch) doubled its representation from 12 to 24 seats in parliamentary elections. “More safety, less crime, less immigration and less Islam is what the Netherlands has chosen,” he said on Wednesday.
But a sidebar to this story, which I picked up in the New York Times, as reported by Stephen Castle and Steven Erlanger. The reporters don’t name Wilders’ party! That’s journalism?!
And I can’t help but remind you what I wrote last week, just days before the Netherlands’ surprising vote.
“With all of Europe’s economic and growing social issues, there is little doubt the attitudes towards immigrants will worsen rapidly.”
Random Musings
“Two historic events happened in the Gulf of Mexico this spring. Unimaginable amounts of accidental oil rose from a hole one mile below the water’s surface. Bigger than that, the federal government was exposed as the Wizard of Oz, unable to do anything about it.
“In the movie, Dorothy and her friends in Oz admit the Wizard’s limits. Not here. After a century of faith in the government’s omnipotence, the discipleship can’t believe this is happening.
“As the oil gushed – with the perpetrator a flailing private corporation – the American left popped a gasket. James Carville thundered for presidential ‘control.’ Spike Lee demanded that Mr. Obama ‘go off.’ The left instead went off on Mr. Obama for not ordering his bureaucracies to make the oil recede. Then this week, like Will Ferrell in a ‘Saturday Night Live’ sketch, the president himself said he was looking for ‘ass to kick.’ Pay no attention to that man behind the curtain.
“This may well be Obama’s Katrina, but presidencies come and go. The more lasting lesson of the Gulf fiasco is to discover how belief in the omnipotence of government had risen to the level of mysticism for so many, and not just on the left. Some conservatives joined the do-something chorus to ‘stop’ oil gushing with hellish force from deep inside the earth’s core. (Set aside for now the interesting matter of just how vast the reserves of oil actually are down there.)
“Coming as it did on the heels of various other government fiascoes and embarrassments – the subsidized-mortgage crisis, ethanol, California issuing IOUs, Bernie Madoff, ultra-deep public debt, infrastructure turning to dust everywhere – the Gulf mess is the moment for the American people to reconsider just what they think government can do, or should do….
“Re-read Barack Obama’s nomination-acceptance speech in Denver, an amazing compendium of promises ending with: ‘America, we cannot turn back (applause) not with so much work to be done; not with so many children to educate, and so many veterans to care for; not with an economy to fix, and cities to rebuild, and farms to save; not with so many families to protect and so many lives to mend.’
“The speaker of those words can’t stop the oil, but his language shows how indiscriminate faith in government omnipotence has become, and how incapable the believers are of targeting discrete goals, rather than vapor-filled clouds such as ‘saving the planet’ or ‘mending lives.’
“But Toto has pulled the curtain back, and it looks like this year’s clear-eyed electorate is ready to go home to Kansas.”
“Concerning the job numbers from May, one can almost echo Henry James’ exclamation after examining letters pertaining to Lord Byron’s incest: ‘Nauseating, perhaps, but how quite inexpressibly significant.’ Except that the May numbers’ significance can be expressed: A theory is being nibbled to death by facts.
“Private-sector job creation almost stopped in May. The 41,000 jobs created were dwarfed by the 411,000 temporary and low-wage government jobs needed to administer the Census. Last year’s stimulus having failed to hold unemployment below 8% as predicted, Barack Obama might advocate another stimulus – amending Article I, Section 2 of the Constitution, which mandates a Census every 10 years. If it were every year, he could take credit for creating 564,000 – the current number of Census-takers – permanent jobs….
“Obama is the first president whose presidential campaign was his qualification for the office he sought. He almost said so on Sept. 1, 2008, as a large hurricane made landfall on the Gulf Coast. Megan McArdle of the Atlantic has resurrected Obama’s answer when he was asked if he could handle such a crisis. Using perhaps the royal plural – a harbinger of grandiosity to come – he cited the size, cost and complexity of his campaign.
“ ‘Our ability to manage large systems and to execute, I think, has been made clear over the last couple of years,’ and ‘indicates the degree to which we can provide the kinds of support and good service that the American people expect.’
“Progressives generally, and Obama especially, encourage expectations as large as the 1,428-page (cap-and-trade), 1,566-page (financial-reform) and 2,409-page (health care) bills they churn out as ‘comprehensive’ solutions to this and that. For a proper progressive, anything short of a ‘comprehensive’ solution to, say, the problem of illegal immigration, is unworthy of consideration. For today’s progressive president, the prospect of a jobless recovery is a comprehensive nightmare.”
–The same Washington Post/ABC News poll that registered disgust with the handling of the oil spill notes 29% of Americans now say they are inclined to support their House representative in November, even lower than in 1994, when voters swept the Democrats out of power. But half also express disapproval of the “tea party” movement. Barack Obama’s job approval, however, is 52%, and for the first time since last fall, half approve of his handling of the economy. [Other polls continue to show Obama with an approval rating in the 47-48 range.]
At the same time, though, 48% say that Obama does not understand the problems of people like them, the highest of his presidency.
–As for Tuesday’s primary, in Nevada, Sharon Angle, with Tea Party support, defeated more established rivals to win the Republican nomination for U.S. Senate as she now faces off against Senate Majority Leader Harry Reid. Reid, though, will have the benefit of having his son, Rory, on the ballot at the same time as he runs for governor. [At least I think that is an advantage.]
In California, former Hewlett-Packard CEO Carly Fiorina won her primary and will square off against incumbent Sen. Barbara Boxer, while Meg Whitman, former eBay CEO, won the right on the Republican side to go against former California Gov. Jerry Brown, as both seek to replace Arnold Schwarzenegger.
The only one of these four running in November that I like is Brown. Can’t stand Fiorina, in particular. And talk about an idiot, for some reason, Carly, before doing a television interview, decided to mock Sen. Boxer’s hair. Laughing, she told staffers someone had seen Boxer on television and “said what everyone says, ‘God, what is that hair?’ So yesterday!’”
First off, while I can’t stand Boxer either, this is one guy who sees nothing wrong with her hair. But the incident proved what a lightweight, not-ready-for-prime-time player, Fiorina is.
Meanwhile, Democratic Senator Blanche Lincoln held on in her hotly-contested Arkansas primary fight, while in South Carolina, Nikki Haley, a 38-year-old Indian-American, won the Republican primary in her attempt to become her state’s first female, and minority, governor despite two charges of infidelity, which she vehemently denied.
–Vice President Joe Biden talked to Charlie Rose. See if you can follow this.
Rose: Has (President Obama talked about the oil spill) in a way that has resonated with the American people?
Biden: He talked about it privately with me from the get-go. But here is what he did. He immediately authorized the call-up of the National Guard. He mobilized 20,000 paid personnel for the cleanup. He personally told the Coast Guard to go out and find every [oil containment] boom you can. He has acted swiftly.
Biden: They have responded to almost every request I’m aware of – from going out and putting 20,000 people on the payroll…to beginning to clean up where [the oil has] gone ashore. The one place that they were slow was in characterizing the number of barrels of oil spewing from that pipe.
So I’m just wondering…who put the 20,000 to work? Or is it 40,000? Of course this was also a few days before the administration changed its tone and Obama sought to kick ass.
“When the White House sent word to Senate Republicans on May 21 that President Obama wished to come to their weekly lunch to talk about bipartisanship, Republicans agreed. But they were baffled. Just the day before, a story on the front page of the Washington Post had cited the successful efforts by the Obama administration to kill bipartisan agreement on the recently passed bill to stiffen regulation of financial markets.
“The president was unabashed. He told Republicans he needed their help – their bipartisanship – on seven pieces of legislation on subjects ranging from immigration to energy to a ‘jobs’ bill. It was, Republican senators later noted, not so much an appeal as a lecture.
“Senator Bob Corker of Tennessee, who’d sought to negotiate a bipartisan financial reform bill, was among the first to question Obama. Corker started by recalling the ‘warm relations’ they’d had when Obama was senator.
“But the cordiality vanished as Corker continued. He told Obama there was ‘a degree of audacity in your being here today.’
“ ‘My prologue is not long,’ Corker replied. He asked the president to ‘show me the respect…of listening to all of it.’ Then he mentioned the Post story on how the White House tried ‘to keep [bipartisanship] from happening.’
“Obama was asking for bipartisanship from Republican senators, but he had rejected it on financial reform, health care, and the economic stimulus. ‘How do you reconcile that duplicity?’ Corker asked Obama.
“The president’s response was meandering. It reminded Corker of Obama’s inconclusive 17-minute answer to a question about tax increases at a town hall meeting in early April. It was, Corker said, ‘a nothing answer.’….
“At his press conference on May 27, Obama exploited the oil spill to tout his energy and global warming legislation. Cap and trade would ‘jumpstart a permanent transition to a clean energy economy,’ he said. Fine, but how about dealing with the economy we have now?….
“And no matter how many times Obama’s tales are knocked down, he never lets go. ‘When I went to meet with [House Republicans] about the need for a Recovery Act, in the midst of crisis, they announced they were against it before I even arrived at the meeting,’ he said at Carnegie Mellon last week. He didn’t mention that the Democratic stimulus bill – in effect, his bill – had been introduced the day before. Republican input: none.
“Who’d have thought Obama would be so inflexible? A new reality sets in and the president declines to recognize it. ‘He’s doing what he wants to do instead of dealing with the country as it is today,’ says Corker. Obama proceeds on this course at his peril.”
–My friend Michael Young, opinion editor of the Daily Star, on the demise of reporter Helen Thomas.
“When Thomas was publicly challenging George W. Bush about his war in Iraq, much of the American literati applauded. The crusty old cow has spunk, they muttered admiringly. Now she’s a pariah, and faint echoes of admiration are accompanied by embarrassed coughs and the clearing of throats. And yet for me, the real worth of Thomas was her complete blindness as to the genocidal nature of Saddam Hussein’s regime, her abridgment of the Iraqi issue so that it mainly encompassed her dislike of Bush and her verbal jousting with the president – a parochial endeavor implying that Iraq was only really important as part of a Washington conversation.
“Helen Thomas was a good reporter, and for that she merits kudos. But reporters don’t necessarily always think things through, and many of them are no better than stenographers with an attitude. That someone of Thomas’ experience should have been so easily betrayed by impulse suggests that lately she had veered into the latter category. It’s a shame, but there you have it. We really don’t need to disgrace ourselves by trying to discern reason in her unreason.”
–Nicholas Carr has written a book, “The Shallows: What the Internet Is Doing to Our Brains.”
For example, as a review in Bloomberg Businessweek puts it:
“One study (Carr) refers to shows that people watching a CNN news spot retained far more information without the headlines scrolling by at the bottom of the screen. Another shows that the more links there are in an article, the lower the comprehension of the reader. A third indicates that our brains automatically overvalue information simply because it’s new. Carr quotes neuroscientist Michael Merzenich, who says we are ‘training our brains to pay attention to the crap.’”
“Taken to its extreme, Carr’s arguments suggest the Internet Age is less likely than previous eras to produce Einsteins, Edisons, and Tolstoys. Such extraordinary people were not forever distracted from their work by 140-character bursts or incessant YouTube videos. Nor were they tempted to throw their semi-finished work out on the Web, safe in the knowledge that they could easily update it later. Indeed, Carr argues, they owe their mastery, in part, to the difficulty of achieving it. Absorbing entire hard-to-find texts – rather than forever Googling random facts – may have been a key to their development.”
Writing in the Wall Street Journal, Carr himself adds:
“What we seem to be sacrificing in all our surfing and searching is our capacity to engage in the quieter, attentive modes of thought that underpin contemplation, reflection and introspection. The Web never encourages us to slow down. It keeps us in a state of perpetual mental locomotion.”
–Incredibly, in essence the FBI gave Joran van der Sloot $25,000 in sting money, which he gladly accepted, went to Peru to play in a poker tournament, met the girl there, and broke her neck. The FBI was trying to build an extortion case against him, Van der Sloot having attempted to shake down Natalie Holloway’s mother, but the agents didn’t arrest him on the spot and just let him go!
Plus, the sting operation had been set up so that Van der Sloot was supposedly going to show an intermediary where Holloway’s remains were in exchange for the money, yet the house wasn’t even built when she disappeared. Van der Sloot then admitted he was lying…and the FBI still didn’t take him into custody. You can’t make this stuff up.
–The Census reported that nonwhite minorities accounted for 48.6% of the children born in the U.S. between July 2008 and July 2009, up from 46.8% two years earlier. Additionally, minorities made up 35% of the U.S. population during the same period, up from 31% in 2000.
–Sorry, I have zero sympathy for the family of the 15-year-old Mexican kid who was shot and killed by a U.S. border guard after the guard was being pummeled by rocks.
–Solar activity is about to pick up, thus imperiling our satellites and communications systems, as well as our power grids, financial markets, etc. Said Richard Fisher, head of NASA’s Heliophysics Division:
“The sun is waking up from a deep slumber, and in the next few years we expect to see much higher levels of solar activity. At the same time, our technological society has developed an unprecedented sensitivity to solar storms.”
–Army investigators have discovered that officials at Arlington National Cemetery were heading up a “dysfunctional” and chaotic management system that has resulted in at least 100 unmarked graves and scores that are not marked on cemetery maps. Incredibly, there is no one computerized database either. John McHugh, secretary of the Army, issued a scathing reprimand for outgoing superintendent, John C. Metzler Jr., and the appointment of a new director to oversee operations. The deputy superintendent was placed on administrative leave pending further review.
There were two cases, later corrected, of mismarked graves in section 60, which holds mostly Iraq and Afghan war dead, but the other impacted sites are older. In addition, at least four urns were found to have been unearthed and dumped elsewhere.
Over 300,000 are buried at Arlington and it averages 27 funerals each workday, about 100 a week.
–And in yet another example of our dysfunctional government, Peggy Noonan opines on the recent report from the Inspector General of the Justice Department saying it is not prepared to ensure public safety following a terrorist attack in which a WMD is used.
“ ‘The Department is not prepared to fulfill its role…to ensure public safety and security in the event of a WMD incident,’ says the 61-page report. Justice has yet to assign an entity or individual with clear responsibility for oversight or management of WMD response; it has not catalogued its resources in terms of either personnel or equipment; it does not have written plans or checklists in case of a WMD attack. A deputy assistant attorney general for policy and planning is quoted as saying ‘it is not clear’ who in the department is responsible for handling WMD response. Workers interviewed said the department’s operational response program ‘lacks leadership and oversight.’ An unidentified Justice Department official was quoted: ‘We are totally unprepared.’ He added. ‘Right now, being totally effective would never happen. Everybody would be winging it.’….
“After the Inspector General’s report, Paul McHale, a former Democratic congressman from Pennsylvania who also served as an assistant secretary of defense under George W. Bush, told the Los Angeles Times: ‘There is a sense of complacency that has settled in nearly a decade after Sept. 11.’ The paper also quoted Randall Larsen, the former executive director of the commission that gave the government low marks in January: ‘They just don’t see the WMD scenario as most likely,’ he said.
“They don’t? They must be idiots. They must not be reading all the government reports of the past eight years, declaring terrorist attacks on U.S. soil not only likely but virtually certain. There are many reasons for this, and just one has to do with something Ronald Reagan mused about in his office 25 years ago. ‘Man has never had a weapon he didn’t use,’ he said, to a handful of aides. If you develop the atom bomb, it will be used, as it was. If man, in his darkness, can develop and deploy nuclear, biological and chemical weapons, they will be used, too….
“On 9/11 we were rocked but held together. In a second and more devastating attack, public safety and public unity would be infinitely more stressed. The event, having had a precursor, would be infinitely more painful. You’d think this would focus the government’s mind.”
–But let’s end on a high note, shall we? Australian researchers have proved that crocodiles can surf ocean currents to take long leisurely journeys across open seas in the South Pacific. As reported by Rod McGuirk of the AP:
“Like a surfer catching a wave, estuarine crocodiles – which can grow up to 20 feet – can ride currents to cross hundreds of miles of open sea.”
For example, a 20-minute swim for a croc is hard work, but “eight of the tagged crocodiles repeatedly took long journeys out to sea from their river home area that was more than 35 miles upstream.”
“One 13-foot male swam 367 miles over 25 days to another river system where it stayed for seven months before returning.
“ ‘Why he went there, we have absolutely no idea, but it seems very deliberate, purposeful movements,’ said Hamish Campbell, a University of Queensland ecologist.” And they can go months without food or fresh water!
Kind of makes you want to treat these beasts with even more respect. And to close the circle, this really isn’t ending on a high note because it’s yet another reason not to go into the ocean.
Pray for the men and women of our armed forces, and all the fallen.
God bless America.
—
Gold closed at $1230
Oil, $73.78
Dow Jones +2.8% [10211]
S&P 500 +2.5% [1091]
S&P MidCap +3.0%
Russell 2000 +2.4%
Nasdaq +1.1% [2243]
Returns for the period 1/1/10-6/11/10
Dow Jones -2.1%
S&P 500 -2.1%
S&P MidCap +4.4%
Russell 2000 +3.8%
Nasdaq -1.1%
Bulls 38.5
Bears 31.9 [Source: Chartcraft / Investors Intelligence]
