From The Street...
Tuesday, December 30, 2003
Will Japanese Bank Save US?
From TDR 12/30:
================
*** "Will there be a dollar crisis?" asks our friend Martin
Spring.
"The most astonishing figure I've seen reported in recent
weeks is the Japanese provision for currency intervention,
essentially to support the dollar. It's Y100 trillion -
about $930 billion at the current yen/dollar exchange rate.
"That's the amount of yen the Japanese central bank has
been authorized to borrow in a year to spend on buying
foreign currencies to hold down the yen's exchange rate.
"The mind-boggling size of the provision - about 50 per
cent greater than America's forecast foreign trade deficit
next year - alerts us to two conclusions:
* The Japanese authorities see a significant risk of a
major dollar crisis which would send money flooding into
alternative major currencies.
* If that happens, they are determined to keep a lid on the
yen - which would both help the dollar to resist decline
and divert most of the money flood into the euro.
For more from Mr. Spring's, see his article on the DR
website: A Dollar Crisis?
(http://www.dailyreckoning.com/body_headline.cfm?id=3651)
=====================
Saturday, December 27, 2003
Europeans are different...again
Professor Victor Davis Hanson scores again, in a December NRO piece.
=================
December 19, 2003
Stuck on Calypso’s Island
Dialoguing with the Europeans.
What follows is a fair summation of about 20 or so dialogues I had recently with a series of Europeans — a good cross-section really of Scandinavians, British, Germans, Greeks, and Dutch. Questions and answers are taken almost verbatim from our exchanges.
Europeans: What we object to most is the unilateralism and the language of the Bush administration, more so than any particular policy decision. Can't they tone it down?
Dumb American: Maybe this cowboyism is akin to a similarly southern-accented president's previous failure to consult both our Congress and the U.N. when we bombed Milosevic? Or are you guys ticked off at the litany of needlessly provocative and uncouth asides — like "German way," "sh*tty little country," "Nazi manner," "problems with Miami and New York," etc.? Or perhaps Mr. Bush — in the manner of President Putin — threatened castration to a French journalist?
Europeans: Moving on — you need to study our past to learn why we will no longer accept war as a method of adjudicating disputes.
Dumb American: We long ago did that — and in 1941 figured war was the only way to restore what you nearly destroyed.
Europeans: Well, war is simply not an option any longer for us, like it or not. You started this mess in Iraq and now want us to bail you out; so, yes, there is a sort of "I told you so" self-righteousness over here — and why not?
Dumb Americans: And do Osama bin Laden, General Mladic, Saddam Hussein, and Kim Jong Il — all suitably impressed with your elegant forbearance — agree about the futility of war? As far as Iraq goes, forget about the war, look at the peace. We are not asking you to help us fight, but to send some aid to a consensual government emerging in Iraq. Are we to assume that you would extend $100 billion in military and trade credits to a mass-murdering fascist, but almost nothing to his victims, who got very little from your lucrative trade deals?
Europeans: Perhaps our growing divide arises out of a sort of American simplicity about Israel and Sharon — now that the neocons have taken over Washington and have ignored the legitimate aspirations of the Palestinians. The United States simply is not as sensitive as we in Europe are to the problem of refugees and the abuse of power that is seen as so threatening to the Muslim world.
Dumb American: Do you mean the 50-something dead in Jenin last spring or the 80,000-something Muslim dead in Grozny over more than a decade — or is the rub the 250,000 Muslim dead in Kosovo and Bosnia? Is it the "hyper" reaction of IDF or of the Russian and Serbian armies that grates on you?
Europeans: True, there are legitimate differences in both points of view. But we worry that the Americans are not really aware of the depth of the European venom toward the United States. The anger is really cascading.
Dumb American: Do you think such populist fury will result in the wholesale expulsion of our soldiers from Germany, Suda Bay, or Spain? Or maybe even the ejection of the United States from NATO?
Europeans: Don't laugh — an all-EU force is months away.
Dumb American: Centered around the Charles de Gaul or the Luxembourg Air Force?
Europeans: Come on. You know that the animus is directed at Bush, not the American people.
Dumb American: No; I think the divide is even worse than that, I'm afraid. You see, the reaction over here is just the opposite — we have nearly given up not so much on European governments but Europeans themselves, which we see as essentially the same.
Europeans: In some ways you're right. After all, over half our population now believes that you — not the North Koreans or the Iranians — are the real threat to world peace.
Dumb American: I suppose a similar poll 65 years ago would have revealed the same thing about your fear of a unilateral Churchill and your ease with a multilateral Hitler, who seemed to get a nod from the Russians, Italians, Spanish, Eastern Europeans, and Japanese when he went into Poland. But in any case, we wish you luck with the Iranian mullahs. And as far as Tehran goes, for your sake — as long as we are not yet in missile range — we hope that your Nobel Prizes, trade credits, lectures, and so-called "soft power" provide better deterrence than an ABM.
Europeans: Our disagreement is not so simplistic as that. But part of the problem is that Americans simply do not know much outside their shores and listen to silly Fox News and Rush Limbaugh for their information.
Dumb American: Do you prefer instead the erudition and scholarship of Michael Moore, Noam Chomsky, Gore Vidal, or Thierry Meyssan, who, if the best-seller lists are any indication, have taught Europe much about America since 9/11?
Europeans: I'm talking about snap judgment and simple solutions to complex problems.
Dumb American: Like Bonapartism, Prussian militarism, Nazism, Italian fascism, Francoism, Marxism, and Communism?
Europeans: Well, it is precisely our experience with those nightmares that guides us today, and explains why we would never allow a South Central or Harlem. And certainly we wouldn't unleash someone like this Ashcroft — or wage a preemptive war in Iraq.
Dumb American: Marseilles is a socialist paradise? But tell me: Are Jews safer in Paris than Arabs are in Detroit? And is it a more moral thing for us to jail and try terrorist killers or, like you, turn them loose, as we saw all the time during the last two decades?
Europeans: But don't simply scoff; for us the idea that you would spend $87 billion on fighting in Iraq while your own people don't have health care is preposterous.
Dumb American: But was the death rate this August higher in the Sunni Triangle or Paris? We believe that a nanny state is not only inefficient, but, when the temperature rises, downright lethal.
Europeans: You can see what we need is more communication — what concrete steps need to be taken to resolve the issue?
Dumb American: For starters? Perhaps forgive Iraq's multibillion-dollar debt to France and Germany that Saddam ran up for imported weapons that killed thousands of his own people and some of us as well. Build a couple of aircraft carriers and learn how to use them to promote freedom and democracy. Impose a trade embargo on Syria and Iran. Don't give any more money to those who funnel it to suicide bombers on the West Bank. If you are in NATO, send 50,000 troops to Afghanistan to finish off those who attacked your ally; otherwise get out or dissolve NATO.
And so it typically goes. Most of these European interlocutors are impressively educated. They are naturally inquisitive and well versed in the nuances of culture. But there is also a great fear among them — almost as if the United States is a painful reminder that the world might not be so calm beyond their shores. If we would just not stir things up, leave it alone, not worry about it — the "problem" of terror might go away — as if the Soviet Union once collapsed due not to billions invested in American deterrence, but to a change of heart by well-meaning Marxists in Moscow.
Europeans fixate on American and Israeli foibles — and not the far greater transgressions of Russians, Chinese, Iranians, or Arabs. Why? Because we alone listen to them, and with us they are not overwhelmed by the magnitude of a Grozny, Tibet, mass hangings in Tehran, the obliteration of an entire town in Hama, or the gassing of Kurds. And of course Mr. Bush does not threaten to cut off any European journalist's testicles, or brag about not clicking his heels to Germans.
I'm sure that the Europeans are light-years ahead of us in the use of public transportation. They probably are wiser in their per-capita energy utilization, and their primary and secondary education may be superior. But there is also something of Calypso's island about them. For all their professed enjoyment of food, shelter, and lovemaking, the Europeans are bored silly with their listless routine and are increasingly timid — this from a great people who should not, but really do, live in terror of their own past. Like Odysseus in his comfy subservience to Calypso, these mesmerized and complacent sensualists sometimes contemplate leaving the comfort of their fairyland atoll and in boredom weep nightly, gazing out at the seashore. But as yet they lack the hero's courage to finally build a raft and sail rough seas to confront suitors who are trying to crash their civilization.
This war would be over far sooner if 350 million Europeans insisted on a modicum of behavior from Middle Eastern rogue regimes, rounded up and tried terrorists in their midst, deported islamofascists, cut off funding to killers on the West Bank, ignored Yasser Arafat — and warned the next SOB who blew up Europeans in Turkey, North Africa, or Iraq that there was a deadly reckoning to come from the continent that invented the Western military tradition. Indeed, European sophistication and experience, combined with real power, could be a great aid to the West in its effort to promote liberal and consensual governments outside its shores. But if they do not even believe in the unique legacy of their civilization, then why should we — much less their enemies?
So for now we should not lament that the Europeans are no longer real allies, but rather be thankful that they are still for a while longer neutrals rather than enemies — these strange and brilliant people who somehow lost their way, and no longer can distinguish between a noisy Knesset and Arafat's hangmen, much less between those racing to topple a tyrant in Baghdad and others lounging at Sebrenica.
Friday, December 26, 2003
India, not China....
India has one of the highest literacy rates in the world, and most speak better English than most Americans. Their many and diverse religions and languages keep them from being an effective "unified" world power, as they continue to fight amongst themselves. With little concept of private property, it's improbable that they can become a "#1 contender".
Here's a view from The Daily Reckoning -
====================================
From Bill Bonner, back in Ouzilly...
*** Oracle pleased investors with its announcement that sales had risen 8%. Many of the sales were made overseas...and adjusted back into dollars, the increase was only 1%...but investors seemed not to notice. Nor did they seem to mind the accompanying announcement that Oracle was letting 1,364 employees in the U.S. go. It will, meanwhile, add 1,334 employees overseas.
We did not check, but we wouldn't be surprised if many of these new employees were hired in India, which seems to be picking up more and more jobs in the software/service sector.
*** A recent issue of India Today comes with the cover headline: "Champion of the World." In the race of global economic competition, India says it is the lead position...and pulling away.
The numbers are suspect, but India has one of the highest GDP growth rates in the world. While China hogs the headlines, India is where English-speaking outsourcers look first when they are trying to cut costs. The country is a bureaucratic mess, as everyone knows. But it is growing fast...with a labor pool that is nearly as big as China's and growing at a faster rate. In terms of mouths to feed and hands to employ, India is expected to surpass China in less than 2 decades.
India is a relatively free country. China is relatively unfree. From the little we can tell, India's growth is chaotic, but real. China's growth, by contrast, has developed into a bubble...based largely upon lending to customers (Americans) who cannot really afford to buy. China's bubble is destined to blow up...like all bubbles...and lead to God-knows-what kind of problems - social, political and economic. India's growth - while less visible and understandable to the outside world - may actually be more durable.
*** It is the Christmas holiday season. We have brought the whole family to the country for a week of conviviality.
Our oldest son, Will, has come from Florida, bringing his fiancée. Our daughter, Sophia, has returned from her college in West Virginia. Our mother has come back from her visit to Virginia. And the rest of the family has come down from Paris.
Our friend, Michel, has taken a keen interest in India. He is convinced that China is a giant fraud and compares it, unfavorably, to India at every opportunity. He has also become a fan of Bollywood - India's huge film industry - and is fascinated by all that it produces.
Last night, the family settled down to watch one of Michel's favorites - Gadar - a movie in some subcontinent language, with subtitles in some form of English. At first, we all laughed at the odd translations, stylized acting and strange song and dance scenes. But gradually the film engaged us and then finally captivated us.
"It was ridiculous," said film critic, Maria, "but we liked it anyway."
The theme is a love story, which takes place at the time of the partition of India and Pakistan in 1947. Despite what appears to us as an undeveloped or even naïvely simpleminded view of courtship, the film's presentation of politics is remarkably sophisticated and cynical. There is not a single politician, military man, or bureaucrat in the film who is not a moron or a scoundrel. And every scene of collective action is a horror of mob violence. The most 'political' character in the movie is a lunatic who has lost his mind and talks incessantly of liberation from the British and the glories of the new India. He is, alas, a Pakistani, mortal enemies of all Indians!
The film's hero, an Indian, almost single-handedly defeats the entire Pakistani army, wielding a pump that he has pulled out of the ground.
==========================
Sunday, December 14, 2003
Travel Much?
Most everyone who writes has to travel occasionally; and everyone who travels has a horror story. After 2 million plus miles on Northwest, this is mine.
The DC-10 is an old old airplane, made by the now defunct McDonnell-Douglas company acquired some years ago by Boeing. But Northwest Airlines and their partner KLM are trying to keep a few going. Not successfully.
When the “pneumatics” failed and engine number two shut down one hour into Wednesday’s flight from Amsterdam, all of the excess fuel was dumped out the ports on the wings…to the great surprise of window side passengers. The Captain lazily intoned: “For those of you who noticed, we have made a 180 degree turn and are going back. The dumping of fuel is a standard safety precaution…”.
We landed safely, and began three days (THREE DAYS!!) of waiting in lines and being told little. Attempts to fix the aging aircraft were unsuccessful, and all 250-plus souls had to be rebooked. The ensuing chaos has not been since Before Mao Died in Remote Provincial Airports, or the Tuesday Ghee Run From Calcutta. Pushing screaming demanding lineless crowds dispelled all notions of doubt about Darwin’s belief that we Descended From Animals, and our Reverting To Form – Only The Strong Survive.
“Don’t ask all these questions!” complains an aging female KLMer “…or we will not get anything done.” (I am not making this up…)
Crowds if screaming tired hungry families implored endlessly for information and assistance; but unsuccessfully, to the impeccably-clad blue-uniformed blue-eyed blond cyborgs of all sexes used by KLM to handle such matters. Until Break Time Came..or The Shift Was Nearing End. After waiting in one of seven 30-person lines to get answers and tickets fixed, more than once the KLMer servicing the line stood up and said…”No more in this line, I have to go”, and the next people in line got to start over at the end of an adjacent line. Little in the way of compensation was offered, (Discounts on Future Travel! Discounts on Onboard Headphone Purchase and Savings on Northwest Merchandise!) except extreme regrets, of course, "but there is nothing we can do, we are awaiting further information."
Rumors circulated like wildfire at the gate. “Go down to the ticket office (a quarter mile away at the other end of the airport)..they can rebook you easily.” After waiting in the crowd there, the Number Machine was discovered. After taking a number (182) and noticing three cyborgs behind the desk were now working on number 131, I gave up. At ten minutes minimum per waiting soul, 500 minutes translated to over eight hours.
Where is the errant DC10 airplane that was being repaired? ..”It is currently being flown by the captain to determine if it is airworthy”. The mind boggles…
The Stranded Passenger Business is a growing one, and a New Revenue Stream. KLM will not give you your checked bags back, no matter what your story (“I am a Type 1 insulin dependant diabetic and will fall into a Large Damage Suit-Inducing Coma if I can not Get To My Packed Medicine" – finds few listeners and little response. Lotsa opportunities for Trail Lawyers Over Here, but few Expressions of Concern when their Use is Threatened.
The two hotels we were offered on subsequent nights WERE BUILT for just this business; the cheap fixed-menu free dinners and breakfast buffets are pushed at the hundreds of souls who are The Real Victims of the Lack Of Maintenance Policies in Amsterdam. This happens almost every day, said the locals at the hotels who now have all the signs and forms preprinted and ready to go; even handing out the aerogramme sheets for Letter Of Complaint, preaddressed to KLM.
And of course You Have No Recourse. They have your bags locked up in “deep storage”, they have your flight coupons, and they wisely string you along for DAYS! With the promise that Escape Is Just Around The Corner. What Can One Do? Legally, little. Ancient Revenge Fantasies erupt with Plans to Find All The Members of the NW Board and Seed Their Lawns in Minnetonka With Salt, and To Release Feral Bulldogs on their Children's Routes Home From School....
And as Nina Simone applies the Special Nina Treatment As Only She Can over the constant Euro-jazz piped-in music to the classic I’ll Be Home For Christmas, we hope we can escape this antiseptic kafkaesque level of Dante’s Inferno and Git Home Soon….
