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25 arrested over embassy attack in Yemen
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Caucasus/Russia/Central Asia
08/18/08 Transcript of President Saakashvili's Briefing [Georgian mfa]
AoS: put source html into the 'source' box of the poster, NOT in the article.
I don't believe the Georgian side of things has been adequately addressed. The media has been horribly biased, printing & believing every word of propaganda uttered by the Russians.

Saakashvili's statements here are striking. It astounds me that it took me over a month to find a Georgian account of what happened.




Continued on Page 49
Posted by: logi_cal || 09/18/2008 10:43 || Comments || Link || [4 views] Top|| File under:


Home Front: Politix
Will McCain Waste Palin?
The media is turning the news into a presidential video game. "Hurricane Ike" or "Wall Street Meltdown" appears onscreen, and the media boots up Barack Obama and John McCain to see how well they talk the problem. Mostly they are speaking gobbledygook about things they barely understand. Whatever a credit default swap is, I'm against it. The public is left to wonder if they are voting for a commentator in chief or commander in chief.

Rather than be dragged into the path of the financial storm, the McCain campaign especially needs to refocus on its postconvention momentum. It needs to worry about wasting the political capital Gov. Sarah Palin deposited in the Bank of McCain three weeks ago.

Once Mr. McCain picked Mrs. Palin as his running mate, he demoted "experience" and elevated a government "reform" message. It was the right thing to do. Presidential voters are ambivalent about Beltway-marinated senators like Mr. McCain and Joe Biden. John McCain's edge is his famous reputation as a reform maverick. So far, though, he is not casting his reform message in large enough terms.

Washington is arguably at its lowest ebb in the public mind since before World War II. Join that fact to Sarah Palin's personally gutsy and professionally strong reform credentials, and Mr. McCain has the chance to offer voters a reform presidency in historic terms.

Yes, the Obama campaign is trying to hang the Bush presidency around his neck. Mr. McCain knows -- and should give -- the answer to that: Voter disgust with Washington goes far beyond George W. Bush.

In the 2006 off-year election, voters threw out the Republican bums and turned over control of Congress to the Democrats. In an odd thank-you, the Democratic Congress earned the lowest approval ratings ever recorded in opinion polls.

This decline is not part of the normal ebb and flow of politics. The fall, the malfeasance, is deeper. It's bipartisan. It's endemic. The most acute comment on what Washington has become -- and what the American public knows it has become -- was a federal judge's Sept. 4 sentencing statement for convicted Beltway favor-meister Jack Abramoff.

Standing before federal Judge Ellen Huvelle, Abramoff said, "So much that happens in Washington stretches the envelope, skirts the spirit of the law and lives in loopholes." Agreed, said Judge Huvelle, who hammered Abramoff with an additional 48-month sentence, more than prosecutors had asked. She said simply: "The true victims are members of the public who lost their trust in government."

Forget the Tina Fey SNL mockery and all the marginalia being written about Sarah Palin now. She did four real things in Alaska that make her fit for anyone interested in a reform presidency.

She took on: her party's state chairman, her party's state attorney general, GOP Gov. Frank Murkowski's tainted gas pipeline project, and then she supported a GOP candidate who ran against Alaska's "untouchable" GOP congressional earmarker, Don Young.

One way or another, each episode involved severing the sleazy ties that bind public officials to grasping commercial interests, something even the Democratic left purports to favor.

It isn't just Washington and Juneau. You could open the nozzle on the same reform fire hose to wash the public-private slime out of the capital hallways of New York, New Jersey, California, Illinois and onward.

You say Sarah Palin doesn't have enough "experience" to run Washington? Washington is barely fit to be run.

The problem isn't standard political corruption. The problem is that the $2.8 trillion federal budget is a vast ocean of Beltway pilot fish feeding off scraps from the whale -- lawyers, lobbyists, ex-Members of Congress. No one runs the Sea of Washington. It's too big, too deep.

Barack Obama wants to dig a deeper hole. John McCain should ask the American people if they want this to go on, because it's nonsense to vote for government to do "more" and then whine when it doesn't work or degrades into sweetheart-deal hell.

Unfocused "reform" rhetoric from Mr. McCain isn't enough. The public has been there, heard that. Sen. McCain should talk about what he knows -- fat Fannie and Freddie, farm-bill bloat, the ethanol subsidy fiasco, the federal procurement mess. Show people Gov. Palin's 18 single-spaced pages of 2007 vetoes. Then identify Congress's bipartisan supporters of the Legislative Line-Item Veto Act and ask the voters' support. Appear with GOP congressman from Sarah's new generation who want to help -- Eric Cantor of Virginia, Paul Ryan of Wisconsin, Kevin McCarthy of California. There are others.

Promise to spend the first two years on this historic political reform effort, and if a Democratic Congress laughs, promise to barnstorm in 2010 for a Congress willing to act, from any party.

One hears talk of John McCain's temper. My guess is voters want someone to lose it with Washington, big time. Oh, and he should ask what's the difference between a reformist pit bull and a six-term senator. It isn't lipstick.

Posted by: GolfBravoUSMC || 09/18/2008 16:10 || Comments || Link || [5 views] Top|| File under:

#1  Oh, and he should ask what's the difference between a reformist pit bull and a six-term senator.

Mainly knee deep in the Culture of Corruption(c). The pit pull hasn't had enough time to be bought.
Posted by: Procopius2k || 09/18/2008 16:32 Comments || Top||

#2  Mainly knee deep in the Culture of Corruption(c). The pit pull hasn't had enough time to be bought.
Posted by Procopius2k


This is my main concern. I recall a freshman Congress (staring Fred) that was all full of piss and vinegar. Anyone recall what, if anything, they actually acomplished?

I'm all in favor of turning Sarahcuddah lose inside the beltway. I have some vague hopes that her faith as an Evangelical will keep her focused that God is indeed watching her and He doesn't compromise.

But people, all people, can be corrupted if you know what their price is. The only real question is does Washington have Sarah Palin's price? I don't think they do, they don't deal in that type of "currency".
Posted by: DLR || 09/18/2008 16:44 Comments || Top||

#3  McCain needs to hammer the "culture of corrution and self-dealing". Given that 2 of Obama's closest advisors profited millions by running Fanny Mae and Freddie Mac into the ground, and OIbama was taking tons of money form their lobbyists, MCCain was trying to pass laws to regulate them better, and was stopped by - Harry Reid and Obama.

That's a very good big stiick with which to beat Obama, and he needs to hurry it up and put that out there, something along this theme:

WHile John McCain was trying to reform how Freddie Mac and Fanny Mae did their business, Barak Obama was taking large amounts of money form their lobbiests, and Obama, wiht Harry Reid and the Dem senta blocked these reforms. Now 2 former heads of these failed agencies, whoi profited with millions while americans are losign their homes, are now Obama's top advisors.

Obama's and his advisors profited, while McCain fought them in an attempt to reform. Now the taxpayers are stuck with the bill while Obama and his advisors go home to their mansions.
Posted by: OldSpook || 09/18/2008 17:13 Comments || Top||

#4  The One may be more corrupt than Biden.
Posted by: Nimble Spemble || 09/18/2008 17:42 Comments || Top||

#5  "Now the taxpayers are stuck with the bill while Obama and his advisors go home to their mansions."

A: I though it was McCane (pun) who had eight of them.
Posted by: General_Comment || 09/18/2008 23:08 Comments || Top||

#6  Actually, they belong to his wife, whose family earned them through work rather than speculation with other people's money.
Posted by: Procopius2k || 09/18/2008 23:35 Comments || Top||

#7  whose family earned them by selling beer.
Posted by: General_Comment || 09/18/2008 23:37 Comments || Top||

#8  We may say that he "married up." Of course, the fact that McMansions technically belong to his wife, makes it legally distinguishable from his ownership. Buddy, you are right on that one.

One thing though, how come we so carefully splitting hair here, but God forbid we make meaninful distinctions in case of Obama?
Posted by: General_Comment || 09/18/2008 23:41 Comments || Top||

#9  O'Bamas corruption is really in a different class - namely Chicago machine politics. Aside from Rezko, which is small potatos in Chicagoland, Obama's career is wholly tied to Cook county machine - one party, one rule no matter how clean and articulate the package looks.

McCain and Palin have plenty to dsitinguish themselves from that, and even Sen. Biden (D-MBNA) is comparatively far more rounded.

As I foresee it, we'll learn all about Ayers and Rezko, along with Gov. Blag's and assorted others local pols, throughout late October.

Keep in mind that between them, Sen's Obama and Biden have had only one close election race, and that was Biden's first run in the early 70's. It will be interesting to see if a non-Clinton machine can hold it together nationally own the stretch, if it remains close.
Posted by: Halliburton - Asymmetrical Reply Division || 09/18/2008 23:52 Comments || Top||

#10  No matter Obama's political origins, I don;t thinks he could have possibly had it any other way. You know, one of the reasons Italians formed an Italian mafia, was b/c they had no other way to survive. Irish - same. It all got cleaned up and laundered eventially, but . . .
Posted by: General_Comment || 09/18/2008 23:55 Comments || Top||


Ace: Obama's Troubling Tendencies
OK, I'll put it in Home Front Politix, but I want it in writing, I think they've crossed the line into both Lurid Crime Tales and Short Attention Span Theater

Hey, Obama...people are starting to notice:
Here's how it works. A message goes out over Barack Obama's Web site with the names, phone numbers and e-mails of editors and producers foolish enough to host Obama critics. With Mr. Obama's extensive digital following, and his extensive fund-raising and contact lists, shutting up the Democratic nominee's critics with a fraction of Mr. Obama's millions of supporters is relatively simple. The digital legions plug phone lines, crash servers and intimidate the advertisers of these media outlets. This must be another instance of the "new" politics that Mr. Obama frequently talks about.
(h/t: Hot Air)

Treacher:
"This is not free speech. This is not "people expressing their opinion." This is people expressing Obama's opinion. This is a powerful politician arrogantly abusing his power to try to silence his critics, without even bothering to hide behind Media Matters or Kos, because he knows he can get away with it. This is wrong."

McCain may not be perfect, but he's preferable to Obama, who has allowed his mask to slip a bit in the last few weeks. He's a typical machine politician who seems far too comfortable shutting down speech he doesn't like. Is encouraging such thuggery an example of the "community organizing" of which Obama is so proud?

One of the great ironies of this election is that liberals are worshiping a guy who embodies everything they claim to hate about the Bush administration.
Add into this that he has a bunch of flying monkeys who will try to break into your email without him having to say anything and things look much worse than outlined above. It's starting to look less like a political campaign and more like the mafia.

It's a beautiful plot. There's no coordination. There doesn't have to be. It's a self-organizing phenomenon. One we not only don't have a decent strategy of fighting, but one we're too hung up on morals to fight. We think of ourselves as too decent for this sort of thing.

Perhaps in 2012 we'll look back at our present selves and think we were retarded for believing in anything other than power. Welcome to the race to the bottom.
Posted by: Abdominal Snowman || 09/18/2008 10:27 || Comments || Link || [1 views] Top|| File under:

#1  I won't play, not like that.
Nobody should, shit like that won't affect the election one little bit. If you don't know who you are going to vote for by now you are one fickle SOB.
If you change your mind twice a week after see a few news clips of the candidates then your vote is not worth going after, don't flatter yourself.
Posted by: bigjim-ky || 09/18/2008 14:26 Comments || Top||

#2  One thing - these little fuckers dont realize - they push us too far, we go to the guns, and they lose permanently.
Posted by: OldSpook || 09/18/2008 17:18 Comments || Top||


Responding to Obama's goon-squad tactics
by Mike

Over the past week, the honorable junior senator from Illinois, the candidate of hope, change, and unity, has:

* Said he would "take the gloves off" and campaign more aggressively

* Called Governor Palin a pig

* Mobilized a squad of rabid enthusiastic supporters to try to intimidate a radio station into not airing opinion programming critical of him

* Run a television commercial mocking Senator McCain's war injuries

* In general, confirmed that he is a jerk

In addition, his enthusiastic supporters (with or without official encouragement) have hacked Governor Palin's e-mail. This reminds me more than a little of what President Nixon's enthusiastic supporters did (with or without official encouragement) 36 years ago. So far as I know, Obama has not condemned this action.

So what is a concerned citizen such as yourself to do? (I mean besides registering to vote, voting for McCain, volunteering, putting up yard signs and all that.) I have a suggestion.

Call Senator Obama's campaign headquarters ((866) 675-2008) or his Senate office in Washington ((202) 224-2854) or Chicago ((312) 886-3506) or the DNC main office in Washington (202-863-8000). When you get to a live person, express your disgust. Keep the following guidelines in mind:

* Whoever you are talking to is a worker bee, not Barack Obama. (They're probably getting minimum wage and no benefits.) You're not angry at them, you're angry at the thugs they work for. Don't make it personal.

* Do not cuss. You are not a Kos Kiddie. You are better than that. Show it.

* Do make your points forcefully.

* If the worker bee protests that Barack didn't approve of this or that offense, remind him/her that Barack approved his commercials (and even says so in his own voice) and his speeches, and he hasn't officially disapproved of anything his enthusiastic supporters have done.

Every call which criticizes Obama ties up the phone line for a while, absorbs staff time, and gets counted--organizations like this, if they are at all smart, track what people are calling them about. You may persuade the worker bee that the people he/she is working for are not the wonderful folks they thought they were. You may affect office morale. Every little bit counts.
Posted by: Mike || 09/18/2008 07:06 || Comments || Link || [1 views] Top|| File under:


Lileks: a suggested cure for Palin Derangement Syndrome
Anything in the Sarah-Palin-is-the-fifth-horsewoman-of-the-apocalypse-and-hence-rides-sidesaddle department? Well, there's this from the New Yorker:

There are two kinds of folks: Élites and Regulars. Why people love Sarah Palin is, she is a Regular. . .

Where was I? Ah, ye: I hate Élites. Which is why, whenever I am having brain surgery, or eye surgery, which is sometimes necessary due to all my non-blinking, I always hire some random Regular guy, with shaking hands if possible, who is also a drunk, scared of the sight of blood, and harbors a secret dislike for me.

Continued on Page 49
Posted by: Mike || 09/18/2008 06:53 || Comments || Link || [1 views] Top|| File under:

#1  She's insane. Literally insane.
Posted by: Parabellum || 09/18/2008 7:21 Comments || Top||

#2  James is awesome.
Posted by: newc || 09/18/2008 8:19 Comments || Top||

#3  Article link doesn't give similar text.
Posted by: 3dc || 09/18/2008 8:36 Comments || Top||

#4  The New Yorker writer is dishonest cause he plays a game with the usage of the word elite intentionally confusing the use as a descriptive of functionality than respond to it as a descriptive of political identification. In the political environment elite has nothing to do with quality as with perception.

Elites believe they’re entitled to power. Regulars believe power is a responsibility.
Elites believe that they’re exempted from the laws and principles they believe should be impose upon other [“for their own good”]. Regulars actually buy into the concept of equality before the law, that no citizen is fundamentally better than another unless that individual demonstrates by his/her own actions that they should not be.
Elites believe that position, birth, or other descriptive entitle them to privilege. Regulars believe you earn your position in life regardless of circumstances that put you there.
Elites believe that education is triumphant. Regulars believe that there are just as many SOBs with degrees as there are without them.

No where in this descriptive is there any mention of social economic geographic color race or creed as an adjectival modifier.
Posted by: Procopius2k || 09/18/2008 9:15 Comments || Top||

#5  He's a brilliant writer but he insists on writing about quirky food and nostalgic stuff. Come on James. Edit and retask some old articles into a book. You'd compete with Dave Barry if you did that.

Brilliant writer.
Posted by: rjschwarz || 09/18/2008 11:28 Comments || Top||

#6  The Gobbler is not about nostalgia, it's about quality motels in the upper midwest.
Posted by: .5MT || 09/18/2008 11:51 Comments || Top||

#7  Not sure what the article Title links to, but the article text is here.

And drink more water.... Probably bottled, snobbish water.


Posted by: DLR || 09/18/2008 16:30 Comments || Top||

#8  Try this for the article link.
Posted by: Mike || 09/18/2008 17:51 Comments || Top||


Obama Doomed With Dem Drool
Discovered on the WaPo editorial page, from yesterday.
Seldom has there been a larger contrast between the style of a candidate and the strategy of his campaign. Barack Obama is cool, firm and permanently unruffled. It is precisely this quality of steadiness that has made him seem a credible prospective president with the thinnest of résumés.
So THAT's what it was!
But Obama's campaign is rootless, reactive and panicky. At every stage since securing the nomination, it has seemed fearful of missteps and unsure of its own organizing principle. So it has invariably adopted the Democratic drool conventional wisdom of the moment.

Obama's first major decision was his running mate. He could have reinforced a message of change and moderation with a Democratic governor who wins in a Republican state, or reached for history by selecting Hillary Clinton. But his choice came soon after Russia invaded Georgia, and the conventional wisdom demanded an old hand who knew his way around Tbilisi. When the Georgia crisis faded, Obama was left with a partisan, undisciplined, congressional liberal at his side. This has served to undermine Obama's message of change - and has allowed Sarah Palin to pilfer a portion of that appeal.
The nerve!
Obama's second decision concerned the tone and content of his convention. Here the Democratic conventional wisdom was nearly unanimous. Obama should shelve his highfalutin rhetoric and talk like a real Democrat. Go after McCain. Talk about "bread and butter" issues - code words for class-warfare attacks on consumers of blinis and caviar.

Obama took this advice to the letter - at the cost of his political identity. In his Denver speech, it seemed that every American home was on the auction block, every car stalled for lack of gasoline, every credit card bill past due, every worker treated like a Russian serf. And John McCain? He was out of touch, with flawed "judgment." His life devoted to serving oil companies and big corporations. And, by the way, he didn't have the courage to follow Osama bin Laden "to the cave where he lives." In obedience to the best Democratic advice, Obama managed to be conventional, bitter and graceless.

Now Obama has made his third major campaign decision - to finally for the last time get really tough on McCain. In response to attacks and dropping polls, the Democratic wisdom is once again nearly uniform: Democrats lose because they are not vicious enough. And once again, the Obama campaign has taken this advice without hesitation. "We will respond with speed and ferocity to John McCain's attacks, and we will take the fight to him," says Obama's campaign manager.

Obama feels provoked - and he has been. There is no evidence that Obama supported explicit sex education for kindergarteners, as a McCain ad implied. Having already accused McCain of being a cowardly corporate tool who is disconnected from reality, escalation is not an easy task for Obama. But he has managed. In one recent commercial, McCain is clearly mocked for his age - compared to a disco ball and a 10-pound cellphone. Another ad uses the word "dishonorable" next to a photo of McCain - an attack from a candidate who has little practical familiarity with the cost of honor.
Ouch! Too bad many readers will have no idea what this means, 1972 being sooo long ago!
Who is hurt most by this race to the bottom? McCain, by the evidence of his own convention, wants to be a viewed as a fighter - which a fight does little to undermine. Obama was introduced to America as a different and better kind of politician - an image now in tatters.

Even worse for Obama, all these shifts to catch the prevailing winds confirm the most serious concerns about his political character. As a senator, he has almost never opposed the ideological consensus of his party. (The ethics reform he often cites as his profile in courage eventually passed the Senate 96 to 2.) And now as a presidential candidate, Obama has run his campaign with all the constancy of a skittish sailboat on an erratic ocean.

Here is a different strategy. Obama could attempt to "beat back the politics of fear, and doubt, and cynicism." He could try to build a coalition that "stretches through red states and blue states." He could reject "the politics where we tear each other down instead of lifting this country up."

The candidate who said those words the night he won the Iowa caucuses did pretty well. But whatever the outcome of this presidential election, that candidate is no longer in the race.
Posted by: Bobby || 09/18/2008 05:58 || Comments || Link || [1 views] Top|| File under:

#1  Is this the WaPo getting ready to throw Obama under the bus?
Posted by: Snaitch Sproing2496 || 09/18/2008 8:39 Comments || Top||

#2  Can change what he can't see. This happens when someone lives in a different time and spacial universe from the real people of America, aka 'the little' people, the one's THEY claim they represent as they aggrandize more power to lord over them.
Posted by: Procopius2k || 09/18/2008 8:54 Comments || Top||

#3  Can't change...[sheesh]
Posted by: Procopius2k || 09/18/2008 8:55 Comments || Top||

#4  WaPo editorial page never let him on the bus.
Posted by: Nimble Spemble || 09/18/2008 8:58 Comments || Top||

#5  It's not Obama's fault. He's cool. It's his campaign's fault, the democratic party's fault, and McCain's fault.

oh ...but wait!! .... Even worse for Obama, all these shifts to catch the prevailing winds confirm the most serious concerns about his political character. As a senator, he has almost never opposed the ideological consensus of his party. (The ethics reform he often cites as his profile in courage eventually passed the Senate 96 to 2.) And now as a presidential candidate, Obama has run his campaign with all the constancy of a skittish sailboat on an erratic ocean.

... they actually criticized him. I feel faint.
Posted by: Betty Grating2215 || 09/18/2008 9:53 Comments || Top||

#6  I'd begin to really wonder if the Obama campaign is loosing them in droves. My own daughter voted for him in the primary - she's any 'anyone but Hillary' voter, and if anything was apolitical when she was in the Marines.

Now, she is just so revolted about the Obamanauts going after Sarah Palin's family, and the sheer floods of vicious misinformation being poured onto various newsgroups that she follows that that she's going to vote McCain with a vengeance. It's only anecdotal... but still you have to wonder. The more she find out about Obama and his happy little band, the more she dislikes them all, and regrets taking him at all seriously earlier this year.
Posted by: Sgt. Mom || 09/18/2008 11:04 Comments || Top||

#7  The Democrats have the voices of the fringe yelling at them at high volume. Some advice good, most bad. Its got to be confusing.
Posted by: rjschwarz || 09/18/2008 11:24 Comments || Top||

#8  sgt mom, wake up calls are sweet. With the slanted MSM it's amazing anyone can see the light. It's actually alot of work finding the truth, I pass it on freely to my friends and co-workers.
Posted by: Jan || 09/18/2008 11:33 Comments || Top||

#9  The only reason for Obama to really panic is if he runs out of buses. Otherwise, he can dance from one Democratic conventional wisdom to another, well for just about forever. If he loses in November, he can draw on vast Democrat supplies of sour grapes.
Posted by: Richard of Oregon || 09/18/2008 11:34 Comments || Top||

#10  Obama could attempt to "beat back the politics of fear, and doubt, and cynicism." He could try to build a coalition that "stretches through red states and blue states." He could reject "the politics where we tear each other down instead of lifting this country up."

Fat chance. Obama's primary campaign was run on Axelrod's usual campaign' model, where the emphasis is placed on wooing African Americans in urban, already Democrat-heavy, environments. Hence the emphasis on showmanship; the secular-preacher mode, the 'hip urban jerks', and the general bypassing of traditional Democrat demographic groups in favor of a selective campaign machine. There is no consensus-building.

(the only thing different was the campaign using a strategy similar to Clinton's 1992 campaign, but for the primaries rather than the general election.)
Posted by: Pappy || 09/18/2008 13:49 Comments || Top||

#11  John is the one saying the American people don't want us yelling at each other anymore.

John's taking the high road, but The Machine is stuffing the ballot boxes........
Posted by: anonymous2u || 09/18/2008 16:23 Comments || Top||


Obama does a little "Illinois Sidestep" when it comes to reform
For those of you who still cling to the fantasy that Barack Obama is "about change," you should note how he, or his minions, want nothing to do with reforming politics in Illinois, perhaps the most corrupt state in the Union.

"Throughout his political career, Barack Obama has fought for open and honest government," proclaims his campaign Web site. Apparently, no longer. When the Democratic presidential candidate--now his party's industrial-strength voice for our deliverance from political corruption everywhere--was asked by a reformer if he would help get his political mentor back home to get off the dime and move the most minimal of state ethics legislation toward passage, the Obama campaign sent word back that amounted to a "no."

State Sen. Emil Jones (D-Chicago) is the Chicago machine politician who might have been most instrumental in jump-starting Obama's political career. Now, as Illinois Senate president, Jones is the one sitting on the reform legislation, refusing to call it for an expected favorable vote before it officially dies of neglect.

Jones is the pal of Gov. Rod Blagojevich, no friend of reform, who used his amendatory veto power to change the legislation after it passed both houses so that Jones would get another chance to kill it.

If all that's confusing, welcome to Illinois politics, where intricacy is the best camouflage for chicanery. Suffice to say, neither Blagojevich nor Jones is working for reform.

So, along comes Cindi Canary, director of the Illinois Campaign for Political Reform, thinking that now might be a good time for Obama to parlay his friendship with Jones to do a good deed: Won't you intervene with Jones and try to get him to call the Senate back into session to get this law passed? "[T]his is a place [Obama] could come in and quickly clean up some of the damage and serve his state," she told the Chicago Sun-Times. After all, her group and Obama worked together during those halcyon days when he actually supported reform in Illinois, so maybe he'll be receptive to a plea to intervene on behalf of Illinois folks who have been getting gouged for years by the likes of Jones. "A 30-second phone call to the Illinois Senate president could yield huge dividends to this state," she said.

In response, Obama's campaign issued an oozy statement reaffirming Obama's alleged commitment to reform, while getting no more specific than urging everyone to get together and love one another right now. What Canary was asking Obama for wasn't all that much. Maybe a 30-second phone call to back up his usual pap of, "Look, ah, I've, ah, always been for, ah, reform." For most people, the reform that we're talking about is so basic that they might ask, "You mean it's not illegal already?"

The legislation would make illegal the widespread abuse called pay-to-play politics, by which companies doing business with the state contribute to the state official in charge of ladling out contracts. The new law wouldn't let you do it if you have more than $50,000 in state contracts, which, even at that, leaves open a nice loophole. In Illinois, this is a huge leap forward from how things are done. Blagojevich, who has reaped bundles of cash from state contractors, could be one of the pols most jolted by the prohibition. That explains why he rewrote the legislation in a way that would make it ineffective and why the House overwhelmingly rejected his changes.

Jones now is the only one standing in the way of the reform, with Obama abetting.

Here's another example of how Obama has revealed himself to be a creature of the Chicago machine. Who can forget his silence when he could have affirmed his reformer credentials by endorsing Democrat Forrest Claypool over machine creature Todd Stroger as Cook County Board president? When things got too hot, Obama severed his ties from his racially inflammatory pastor, Rev. Jeremiah Wright Jr. That's not too hard; you can always find another pastor.

But betraying your political godfather(s) in Chicago and Illinois is an entirely different matter. Especially if you lose the presidential election and return to being just another senator from Illinois. Cutting his ties with the corrupt Chicago machine is one bridge you will not see Obama burn. Not now, not ever.

Agent of change, my foot.

Posted by: GolfBravoUSMC || 09/18/2008 01:14 || Comments || Link || [0 views] Top|| File under:

#1  BO's "about change" slogan is pure BS. Change is inevitable. Not all change is desirable. Some changes are preferable to others. One of the reasons we elect political leaders is for them to handle unforeseen and unforeseable changes.
Notice how the MSM is repeating BO's slogans word for word in their news coverage.
Posted by: Anguper Hupomosing9418 || 09/18/2008 6:10 Comments || Top||

#2  If you want to understand Obama, you've got to understand Illinois politics. Bryne (along with John Kass, also of the Chicago Tribune) understands. It's all one big, happy squabbling family (as in crime family). The only change Obambi represents in a change from a white crook to a black crook.
FYI, I'm sitting here in downtown Chicago as I write. I think I can hear Da Mayor laughing.
Posted by: Spot || 09/18/2008 8:58 Comments || Top||

#3  Remember those old camera ads with some tennis star - Agassi, I think. the slogan was "Image is Everything". Obama's striving for the image of another Jack Kennedy, supercharged with the "I'm black but still white enough not to be scary" meme. Trying to find a slogan that will resonate with the Camelot crowd and carry him to victory. Looking for the soundbite that will be remembered like "Ask not.." (apparently stolen from Cicero, I never knew until recently) or "I have a dream...". Trouble is the chosen slogan "Hope & Change" is at odds with his personal reality and it's beginning to wear badly with nothing concrete to back it up.
Posted by: Mercutio || 09/18/2008 14:45 Comments || Top||

#4  my mom was all for the O-man... "he is promising some change" she would say. when I asked what kind of change? she said "it doesn't matter, it is such a mess it just needs changed."

she got mad after I pointed out that Dachau was 'change' for the Jews, and that details matter quite a bit.
Posted by: Abu do you love || 09/18/2008 22:31 Comments || Top||


Obama's Hypocrisy On Foreign Spending
Posted by: tipper || 09/18/2008 00:49 || Comments || Link || [0 views] Top|| File under:

#1  Obama speaks out of many sides of his mouth. So, which of his tales do you believe? Or do you look to his past performance to try to judge him?
Posted by: Richard of Oregon || 09/18/2008 4:29 Comments || Top||


India-Pakistan
Washington Is Risking War with Pakistan
By Robert Baer
As Wall Street collapsed with a bang, almost no one noticed that we're on the brink of war with Pakistan.
People who don't read Rantburg didn't notice. We just talked about it a day or two ago.
And, unfortunately, that's not too much of an exaggeration. On Tuesday, the Pakistan's military ordered its forces along the Afghan border to repulse all future American military incursions into Pakistan.
That statement was likely for internal consumption and they're probably chagrined that it made the internationals. Yesterday there was another dronezap of a training camp and it was played up as "cooperation" with us. There's a lot of money coming into Pakistain from the U.S., and they don't call him Mr. Ten Percent for nothing.
The story has been subsequently downplayed, and the chairman of the joint chiefs of staff, Mike Mullen, flew to Islamabad, Pakistan's capital, to try to ease tensions. But the fact remains that American forces have and are violating Pakistani sovereignty.
The Paks are violating Afghan sovreignty as well, and they're sending Pak trained and financed bad turbans to try and kill Americans.
You have to wonder whether the Bush administration understands what it is getting into.
Since Bush has been dealing with the Paks since the afternoon of 9/11/2001, I'd say he probably has a pretty good handle on them by now.
In case anyone has forgotten, Pakistan has a hundred plus nuclear weapons.
I'd heard it was a couple dozen deliverable. I'd guess the Indians know exactly how many are operational and probably where they're located.
It's a country on the edge of civil war.
It's been a country on the edge of civil war almost since its founding, and the process has been accelerating almost exponentially since Zia ul-Haq. The Paks are now, at this moment, in the midst of an undeclared civil war, no longer on the edge but rocketing down the slippery slope. Being Paks, they're hollering "wheee!" and enjoying the ride to oblivion.
Its political leadership is bitterly divided. In other words, it's the perfect recipe for a catastrophe.
That's why we call it a "failed state." Despite its elections and even in spite of its free press, Pak is actually worse off that Bangla this year, though that says nothing about where either country will be next year. It's like saying that someone with terminal cancer is better off than somebody with terminal mutating fungus.
All of which begs the question,
"Oh, please, Mr. Question!"
is it worth the ghost hunt we've been on since September 11?
In a word, yes.
There has not been a credible sighting of Osama bin Laden since he escaped from Tora Bora in October 2001.
Except on tape.
As for al-Qaeda, there are few signs it's even still alive, other than a dispersed leadership taking refuge with the Taliban.
Al-Qaeda is alive and well, with branches all over the world, many of them operating under the al-Qaeda brand, like al-Qaeda in the Islamic Maghreb (formerly GSPC) and al-Qaeda in Yemen (formerly the Islamic Army of Aden) and al-Qaeda in Turkey (formerly the Great Eastern Raiders of Islam or some such gradiose name). There is an al-Qaeda in Britain that's distict from al-Qaeda in Europe, and both are loosely controlled by al-Qaeda headquarters in Pakistain. Al-Qaeda in Afghanistan is mostly distinct from al-Qaeda in Pakistain and both have distinct chains of command leading back to Chitral, where Binny lives.
Al-Qaeda couldn't even manage to post a statement on the Internet marking September 11, let alone set off a bomb.
That's because Azzam al-Marini was either zapped by a Hellfire in Damadola or some such steenking border ville or drowned in his hot tub. That would seem to validate our habit of zapping the occasional turban regardless of which side of the border he's on.
U.S. forces have been entering Pakistan for the last six years. But it was always very quietly, usually no more than a hundred yards in, and usually to meet a friendly tribal chieftain.
Who would later end up with his head chopped off, in many cases...
Pakistan knew about these crossings, but it turned a blind eye because it was never splashed across the front page of the country's newspapers.
It kept the deniability plausible...
This has all changed in the last month, as the Administration stepped up Predator missile attacks. And then, after the New York Times ran an article that U.S. forces were officially given the go-ahead to enter Pakistan without prior Pakistani permission, Pakistan had no choice but to react.
Thankew, Noo Yawk Times... Actually, the Paks could have officially not noticed the article. What set them off was the fact that we were zapping protected jihadi camps, and probably frying precious ISI agents in the process.
On another level the Bush Administration's decision to step up attacks in Pakistan is fatally reckless, because the cross-border operations' chances of capturing or killing al Qaeda's leadership are slim.
Depends on the intel they're getting. Fashions change in the intel world almost as fast as they do in fashionable but Gay Paree, and the current fashion sez there's nothing like HUMINT, the guy on the ground who's seen it with his own eyes and reported it to his controller. I lean more toward the SIGINT side of the house, myself, since it's more difficult to tell your handler what he/she/it wants to hear when you don't know you're being handled. A telephone call saying "I'll meet you at Mahmoud's house in Damadola on the 26th at 5 in the morning" with an imagery confirm of truck stopping at a house in Damadola at 4.45 am is better intel than "Screech is gonna be in Damadola on the 26th."
American intelligence isn't good enough for precision raids like this.
Actually it is. That's why they take place.
Pakistan's tribal regions are a black hole that even Pakistani operatives can't enter and come back alive.
They do it all the time. They just don't want to admit it. ISI has worked with these goobers for years.
Overhead surveillance and intercepts do little good in tracking down people in a backward, rural part of the world like this.
I just gave an example of how they do. Throw in modern RDF systems and ground-based sensors and my guess is that we've got a pretty good handle on things. I've been out of the business for a long time, but I saw the birth pangs of lots of those systems and participated in a few. This is 20 years later. The ones that weren't stillborn or smothered in their cribs are grownup now, and I'll bet they're better than I'd have imagined when I met the early ones in 1968.
On top of it, is al-Qaeda worth the candle?
If you have to ask the question you shouldn't be in the business.
Yes, some deadender in New York or London could blow himself up in the subway and leave behind a video claiming the attack in the name of al-Qaeda. But our going into Pakistan, risking a full-fledged war with a nuclear power, isn't going to stop him.
Allow me to direct your attention to Chechnya. That's not a place I'd like to live, mind you, but things are much more calm and peaceful than they were in the heyday of Shamil Basayev. The Russers kept banging mastermind after mastermind: Khattab, Abu Walid, even Maskhadov himself. But once they hit Shamil the Chechen insurgency was toast. They have to rebuild from the ground up, and it's doubtful they'll find a guy combining the right proportions of military and poltical skills with outright lunacy to make a go of it. The same applies to Iraq, where we're now winning and have almost won. That wasn't the case in the heyday of Zarqawi. Most of these operations are very much personality-dependant, and they burst like bubbles once that personality is spread over a 600x600 meter patch of ground.
Finally, there is Pakistan itself, a country that truly is on the edge of civil war.
You're repeating yourself, bub. And they're in the middle of it, not on the edge.
Should we be adding to the force of chaos?
I vote "yes." I think it's to our advantage to stir the Pakistaini political pot and bring it to a boil. I'll tell you why in a paragraph or two...
By indiscriminately bombing the tribal areas along the Afghan border, we in effect are going to war with Pakistan's ethnic Pashtuns.
That statement might have some validity if we were in fact bombing "indiscriminately." But if it was indiscriminate, we'd be hitting patches of bare ground, or maybe downtown Peshawar. Instead, we're hitting madrassahs and occasionally somebody's house. Women, kiddies, puppies, kittens, baby ducks and fluffy bunnies are minced along with a few bodyguard bad turbans, but the real targets are the Qaeda bigs or the big cheeses in the various Taliban factions. These are fair game whether they're alone or in the bosoms of their families. If you need somebody to drop a 500 pound bomb on a convent full of nuns and Gulbuddin Hekmatyar, sign me up. The nuns are toast, or maybe strawberry jam, as it were.

And then there's the question of why it's okay for the Pashtuns of Pashtunistan to make war on us, which they're doing -- just ask Baitullah Mehsud -- but not okay for us to make war on certain segments of Pashtunistan. Why is the obligation upon us to turn the other cheek, but not upon them?

They make up 15% of Pakistan's 167 million people. They are well armed and among the most fierce and xenophobic people in the world.
Yes, yes. They'll tell you all about it in a flash. Pashtuns make up a reputed 40% of the population of Afghanistan, and it's the Pashtun areas that are full of gunfire and explosions. The Uzbeks, Tadjiks, Hazaras, Turkmen, and what have you manage to get along okay except for a few fist fights and the occasional stolen cow. The Pashtuns consider ignorance a virtue, they're fond of rolling their eyes, waving guns, and bragging, and they're the neighbors nobody wants. Fact is, the Pak Punjabis thing they're "controlling" those nutjobs, even while meeting with the Arab Qaeda hard boyz and "controlling" them.
It is not beyond their military capabilities to cross the Indus and take Islamabad.
He says that like it's a bad thing...
Before it is too late, someone needs to sit the President down and give him the bad news that Pakistan is a bridge too far in the "war on terror."
I think Bush has sat down and studied the situation. I hope he's decided to stir that pot, tossing great handsful of seasoning into it to keep it good and spicy, the while pretending nothing's happening. Just like the Paks do with Afghanistan.
Robert Baer, a former CIA field officer assigned to the Middle East, is TIME.com's intelligence columnist and the author of See No Evil and, most recently, the novel Blow the House Down.
Posted by: john frum || 09/18/2008 00:00 || Comments || Link || [9 views] Top|| File under:

#1  A few questions:

They make up 15% of Pakistan's 167 million people. They are well armed and among the most fierce and xenophobic people in the world. It is not beyond their military capabilities to cross the Indus and take Islamabad.


If this is the case, what are the other 85% of the populace doing? If it's a civil war, who's on the other side? Would the Pashtuns rather be Afghan nationals, Pakistani nationals, or both?

Would Pakistan rather fight battles across the Afghan border, or war to the east?

Why does Pakistan exist? What does it mean? What does it signify? Is it a nation? What is its sovreignity? How does it view itself?
Posted by: Halliburton - Idiot Suppression Division || 09/18/2008 1:32 Comments || Top||

#2  VARIOUS MIL FORUM POSTERS > a US invasion of PAKLAND RISKS DIRECT MILPOL CONFRONTATION WID PAKI ALLY CHINA [+ per NK-Taiwan issues]???

Many ordinary Chin + BEIJING already twiddling their fingers over the ISLAMIST THREAT TO WESTERN CHINA [Uighurs], CENTRAL ASIA vee RUSSIA-FORMER SSRS, + NORTH ASIA.
Posted by: JosephMendiola || 09/18/2008 1:33 Comments || Top||

#3  "indiscriminately bombing "

Fucking Liar.
Posted by: OldSpook || 09/18/2008 1:40 Comments || Top||

#4  If war breaks out with Pakistan, who has the most to lose? Is it 'lame duck Bush"? The 15% of wild hellions in west Pakistan? IOr is it the powers that be in Islamabad? The government in Islamabad is my pick. Then you has the most to gain? An exiting American president? A Pak goverment that, at best, has a very tenacious grip on power? Or the Pashtuns in the west? Peace will only come to the regoion when the Pashtuns need it more than the other players there. Look at Iraq as an example of how this problem may be approached.
Posted by: Richard of Oregon || 09/18/2008 4:26 Comments || Top||

#5  The only thing worse than total bullshit is moth-eaten discredited total bullshit.
We heard quite enough about the invincible 10-foot-tall Pashtun mountain-men in the few short weeks between 9-11 and the complete rout of the Taliban late in 2001.
Posted by: Atomic Conspiracy || 09/18/2008 7:17 Comments || Top||

#6  Our intel is MUCH better than this wanker pretends, not all the Pashtuns like the Talibuggers after all.
Beyond that, I hear vague but persistent muttering about a spectacular technological breakthrough that has been applied in Iraq and that will soon be having major effect in Afghanistan. The delay may be related to priorities and the great value, cost, and limited supply of this particular asset, or it may involve the technology itself and the greater suitability of initial versions for the tactical and logistical environment in Iraq.
Sources range from Bob Woodward, who teases about a development whose impact is comparable to the Manhattan Project in World War, to my own contacts in-theater. Something is up, but I don't have a clue what it is and wouldn't say if I did.
Posted by: Atomic Conspiracy || 09/18/2008 7:29 Comments || Top||

#7  RFID and GPS embedded in their personal body lice?
Posted by: 3dc || 09/18/2008 8:23 Comments || Top||

#8  But The One said we should go to war with Pakistan.
Posted by: Spot || 09/18/2008 9:00 Comments || Top||

#9  indiscriminately bombing the tribal areas along the Afghan border-Bullshit

risking war with a nuclear power-Bullshit

Overhead surveillance and intercepts do little good in tracking down people in a backward, rural part of the world like this.-Super-Duper Bullshit
Posted by: bigjim-ky || 09/18/2008 9:23 Comments || Top||

#10  All this wailing and gnashing of teeth and not a single word about the Brutal Pashtun Winter(tm).
Posted by: SteveS || 09/18/2008 14:52 Comments || Top||

#11  You have to put on your Wellies to wade through all the bullshit in this article. Looks like a pre-emptive dem talking point designed to constrain Bush from doing anything about the Pashtun irritant in the tribal belt. But as I've posted elsewhere today, what the heck can we really do with these savages? Cripes, they can't even get along with their neighbors/cousins let alone the rest of the world.

Pakistan is swirling the toilet bowl right now. I see no reason, other than our maintaining a logistics corridor, to not let them get flushed.
Posted by: remoteman || 09/18/2008 16:57 Comments || Top||

#12  I like to think of it as "Pakistan is Risking War with Biggest, Baddest Military Power on Earth", but whatever. Go ahead, start some shit. See what that gets ya.
Posted by: mojo || 09/18/2008 17:18 Comments || Top||

#13  Well, Pakistan has been at war with Wasington---via it's ISI operated proxies---for several years now.
Posted by: g(r)omgoru || 09/18/2008 18:44 Comments || Top||


Iraq
Iraqi Shiites Torture With Drills, Sunnis Like Beheading
Reading ``The Forever War,'' Dexter Filkins's totally addictive account of the conflicts in Afghanistan and Iraq, is like making your way into a labyrinth. It keeps getting darker and, in fact, there's no exit, just an ending -- for the reader, with the last page; for too many people in those wrecked countries, with a bullet or a bomb.

Filkins was in Afghanistan before and after Sept. 11, and in Iraq from the beginning of the American invasion in March 2003, first as a correspondent for the Los Angeles Times and then for the New York Times. His focus is the human cost of the wars; he isn't out to lambaste U.S. policy or strategy (except implicitly), and so readers anywhere on the political spectrum can respond to his writing.

``The Forever War'' suffers a bit from unshapeliness. A long and affecting opening section on Afghanistan precedes (and has little to do with) the meat of the book, the reporting on the ghastly war in Iraq. Even within these separate sections, the chapters fall together only loosely.

What Filkins has to offer is stories, dozens of them. He's a master of the moment, of the concrete, of texture; where others try to explain, he wants you to know what being there feels like. He fell in love with Afghanistan, and he depicts the drawn-out conflict between the Taliban and the Northern Alliance as a strangely gentle war in which soldiers would blithely switch sides when they sensed a shift in the winds of power: ```Yesterday, my enemy,' one soldier said, `today, my brother.'''

Sweetness and Brutality

Their sweetness didn't prepare him for the brutality he was to come up against in Iraq, and even the severity of his first years there didn't steel him for the full-blown insanity of the civil war:

``Electric drills were a Shiite obsession. When you found a guy with drill marks in his legs, he was almost certainly a Sunni, and he was almost certainly killed by a Shiite. The Sunnis preferred to behead, or to kill themselves while killing others. By and large, the Shiites didn't behead, didn't blow themselves up. The derangements were mutually exclusive.''

The wonder is that Filkins's tone never loses its warmth. He is a war reporter who has finally freed himself from the long shadow of Michael Herr, the reporter who covered the Vietnam War for Esquire and published the now classic ``Dispatches'' in 1977. Herr's voice was so strong -- pitch-black and disgusted -- that it has colored practically all war reporting since then.

Filkins's personality is very different. In his writing you sense a man striving to hold onto his decency in the midst of a slaughter that would drive most of us deep into cynicism. Maybe that's why he can connect with so many of the run-of-the-mill Iraqis who are trying to do the same thing.

Trained Killers

He's even better on the American soldiers. Not that he's soft on them. ``There wasn't any point in sentimentalizing the kids; they were trained killers, after all. They could hit a guy at 500 yards or cut his throat from ear-to-ear. And they didn't ask a lot of questions ... sometimes I wished they asked more questions.''

Filkins asked. He knew how to get people to talk -- and talk and talk. He put his life on the line and came close to losing it often enough that he has a hard time explaining, even to himself, why he stayed.

There were soldiers, too, who went through the worst and then re-upped. Herr wrote about the same phenomenon -- getting hooked on war. It makes sense to me, though I can't explain it, and it probably has something to do with why I couldn't put this book down.
Posted by: GolfBravoUSMC || 09/18/2008 01:37 || Comments || Link || [0 views] Top|| File under:

#1  Everybody has "their thing".
Posted by: newc || 09/18/2008 8:30 Comments || Top||

#2  Yup, even the Mexican Police have their trademark tortures they use when interrogating. Shooting a well shaken bottle of 7-Up up your nose until it comes foaming out your mouth is one of their favorites. I sounds laughable, but I bet it hurts like hell.
Posted by: bigjim-ky || 09/18/2008 9:09 Comments || Top||

#3  Now, now, we must be sensitive to cultural differences....
Posted by: Grampaw Cloter4136 || 09/18/2008 14:35 Comments || Top||

#4  Might clear my sinuses, though. Does it work with Mentos too?
Posted by: Nimble Spemble || 09/18/2008 15:06 Comments || Top||

#5  And they didn't ask a lot of questions ... sometimes I wished they asked more questions.''

Think of it as evolution in action.
Posted by: g(r)omgoru || 09/18/2008 18:13 Comments || Top||

#6  I forgot what I was going to say.
Posted by: Clunter Gonque5361 || 10/08/2008 13:17 Comments || Top||


Home Front Economy
Wall Street's Unraveling
WASHINGTON -- Wall Street as we know it is kaput. It is not just that Merrill Lynch agreed to be purchased by Bank of America or that the legendary investment bank Lehman Brothers filed for bankruptcy or that the insurance giant AIG is floundering. It is not even that these events followed the failure of the investment bank Bear Stearns or the government's takeover of Fannie Mae and Freddie Mac, the largest mortgage lenders. What's really happened is that Wall Street's business model has collapsed.

Greed and fear, which routinely govern financial markets, have seeded this global crisis. Just when it will end isn't clear. What is clear is that its origins lie in the ways that Wall Street -- the giant investment houses, brokerage firms, hedge funds and "private equity" firms -- has changed since 1980. Its present business model has three basic components.

First, financial firms have moved beyond their traditional roles as advisers and intermediaries. Once, major investment banks such as Goldman Sachs and Lehman worked mainly for their clients. They traded stocks and bonds for major institutional investors (insurance companies, pension funds, mutual funds). They raised capital for companies by underwriting -- selling -- new stocks and bonds for the firms. They provided advice to corporate clients on mergers, acquisitions and spinoffs. All these services earned fees.

Now, most financial firms also invest for themselves. They use partners' or shareholders' money to place bets on stocks, bonds and other securities -- so-called "principal transactions." Merrill and other retail brokers, which once served individual clients, have ventured into investment banking. So have some commercial banks that were barred from doing so until the repeal in 1999 of the Glass-Steagall Act of 1933.

Second, Wall Street's compensation is heavily skewed toward annual bonuses, reflecting the profits traders and managers earned in the year. Despite lavish base salaries, bonuses dominate. Managing directors with 15 years' experience can receive bonuses five to 10 times their base salaries of $200,000 to $300,000.

Finally, investment banks rely heavily on borrowed money, called "leverage" in financial lingo. Lehman was typical. In late 2007, it held almost $700 billion in stocks, bonds and other securities. Meanwhile, its shareholders' investment (equity) was about $23 billion. All the rest was supported by borrowings. The "leverage ratio" was 30 to 1.

Leverage can create huge windfalls. Suppose you buy a stock for $100. It goes to $110. You made 10 percent, a decent return. Now suppose you borrowed $90 of the $100. If the price rises to $101, you've made 10 percent on your $10 investment. (Technically, the price has to exceed $101 slightly to cover interest payments.) If it goes to $110, you've doubled your money. Wow.

Once assembled, these components created a manic machine for gambling. Traders and money managers had huge incentives to do whatever would increase short-term profits. Dubious mortgages were packaged into bonds, sold and traded. Investment houses had huge incentives to increase leverage. While the boom continued, government remained aloof. Congress resisted tougher regulation for Fannie and Freddie and permitted them to run leverage ratios that, by plausible calculations, exceeded 60 to 1.

It wasn't that Wall Street's leaders deceived customers or lenders into taking risks that were known to be hazardous. Instead, they concluded that risks were low or nonexistent. They fooled themselves, because the short-term rewards blinded them to the long-term dangers. Inevitably, these surfaced. Mortgages went bad. The powerful logic of high leverage went into reverse. Losses eroded firms' tiny capital bases, raising doubts about their survival. This year, Lehman lost nearly $8 billion in "principal transactions." Otherwise, it was profitable.

How Wall Street restructures itself is as yet unclear. Companies need more capital. Merrill went to Bank of America because commercial banks have lower leverage (about 10 to 1). It seems likely that many thinly capitalized hedge funds will be forced to reduce leverage. Ditto for "private equity" firms. In time, all this may prove beneficial. Financial firms may take fewer stupid and wasteful risks -- at least for a while. Talented and ambitious people may move from finance, where they were attracted by exorbitant pay, into more productive industries.

But the immediate effect may be to damage the rest of the economy. People have already lost their jobs. States and localities, particularly New York City and New Jersey, that depend on Wall Street's profits and payrolls will face further spending cuts. Banks and investment banks may tighten lending standards again and impede any economic recovery. The stock market's swoon may deepen consumers' pessimism, fear and reluctance to spend. There may be more failures of financial firms. It's hard to know, because financial crises resemble wars in one crucial respect: They result from miscalculation.

Posted by: Bobby || 09/18/2008 11:14 || Comments || Link || [8 views] Top|| File under:

#1  What we are seeing is the deleveraging of Wll Street, du to the failures of the derivative markets.

What it means is that banks are going to be overly-tight with money, which will lead to less money available, therefore less demand for goods, and eventually less goods produced. Its called a deflationary spiral, and can lead to an economic depression if the hoarding of capital and resultant lack of demand (due to lack of cash) eats into production capability.

Basically, a lot of the derivative markets and futures, etc that sprung up in the 90's have demolished the banks because they lent those hedge fund investment fat-cats tons of money that has now vaporized.
Posted by: OldSpook || 09/18/2008 11:42 Comments || Top||

#2  An interesting article from the Sun on how the leveraging occurred.
Posted by: Nimble Spemble || 09/18/2008 11:48 Comments || Top||

#3  So how about mandatory financial institutional collapse insurance 'tax' upon the players/firms for in the future. Since they're getting us to pay, in devalued inflated spending dollars with the Fed pumping billzions into the market, maybe its time the players fork over sums to finance future cyclic debacles like this. The level of the tax to be graduated by the riskiness of the activity pursued. Since no one 'in charge' is willing anymore to tell them to suck it up and die [because of 'ramifications' or other rationalization], time to get some control on the process.

Talented and ambitious people may move from finance, where they were attracted by exorbitant pay, into more productive industries.

Preferably making license plates.
Posted by: Procopius2k || 09/18/2008 11:59 Comments || Top||

#4  I wonder how many of these big bank players and 'managing directors' have 'golden parachute' clauses in their contract?

I'm thinking that that (any any bonuses) should the the very first thing to be forfit up by any bailout.
Posted by: CrazyFool || 09/18/2008 12:27 Comments || Top||

#5  The problem is that they separated the risk from the profit and loss. They made money on origination fees on mortgages and then sold the junk to others. Those who made the loans did not lose the money, they made it and cared not a whip what happened either to the homebuyer or the loan. It was one big Ponzi scheme with the American public left holding the bag.
Posted by: Betty Grating2215 || 09/18/2008 13:38 Comments || Top||

#6  Isn't borrowing money to buy stocks what led to people jumping out of buildings in 1929?
Posted by: Ebbang Uluque6305 || 09/18/2008 15:21 Comments || Top||

#7  Bingo, Ebbang.

I borrowed money for my house (still paying) and my car (paid off early). I "borrow" money with my credit card each month merely for convenience - I have the money already and the bill gets paid as soon as it comes in - no interest paid.

I don't borrow money to buy intangibles, such as a vacation. And I don't borrow money to buy stocks - otherwise known as buying on margin.

I'll never be Donald Trump (thank heavens!), but I'll also never cost normal people billions of dollars and damage the country's economy by playing fast and loose with other people's money.

**Spit**
Posted by: Barbara Skolaut || 09/18/2008 15:45 Comments || Top||

#8  Ebbang, I don't see any jumping this time. Perhaps many of them need to be pushed instead, sine they have no honor nor any integrity to make good the results of their dereliction of duty. Defenestration woudl be a proper punishment of the fat cats who demolished the economy.
Posted by: OldSpook || 09/18/2008 17:15 Comments || Top||

#9  People were borrowing lots of money 50-60 times for each dollar held. I guess they call this leveraging. I call it poor business practices.
Posted by: JohnQC || 09/18/2008 19:20 Comments || Top||

#10  I'd call it RICO.
Posted by: Procopius2k || 09/18/2008 19:48 Comments || Top||

#11  ION CNN + FOX AM > seems Wall Street stocks have REBOUNDED APPROXI 410 POINTS + is anticipated to still rise slighlty further as financial markets stabilize???
Posted by: JosephMendiola || 09/18/2008 20:27 Comments || Top||

#12  Nothing wrong with leverage in and of itself. Lending is a neccessary tool for growth.

Problem was, money was so cheap that a ton of that leverage went to bad investments because there wasn't enough good ones to keep up with all the money.

Posted by: Mike N. || 09/18/2008 21:22 Comments || Top||

#13  BArb: I always thought that Trump was a true American Hero. And today on Larry King, he endorsed McCain. What's your problem? Don't you love McCain?
Posted by: General_Comment || 09/18/2008 23:14 Comments || Top||

#14  Correct Mike N., which is why the situation south of the border is fascinating. Some countries are screaming buys needing investment, after centuries of abuse (Brazil/Chile/Peru/Columbia) while others are headed the wrong way in a hurry (Bolivia/Chavezville).

A shame if they get shorted in the fallout, but Brazil is likely finally big enough to thrive regardless, and could drag the other well-behaved types along with it.
Posted by: Halliburton - Asymmetrical Reply Division || 09/18/2008 23:16 Comments || Top||



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Thu 2008-09-18
  25 arrested over embassy attack in Yemen
Wed 2008-09-17
  Odierno takes over as US commander in Iraq
Tue 2008-09-16
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Mon 2008-09-15
  Pak Troops open fire at US military helicopters
Sun 2008-09-14
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Sat 2008-09-13
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Fri 2008-09-12
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Thu 2008-09-11
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Wed 2008-09-10
  Head of al-Qaeda in Pakistain dead in Haqqani raid
Tue 2008-09-09
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Mon 2008-09-08
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Sun 2008-09-07
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Sat 2008-09-06
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