Author: Matthew G. Saroff

Iraq

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The major Sunni parties have agreed in principle to rejoin the Iraqi government, and Moktada al-Sadr has called on his supporters to “to wage open war against the Americans” but forbade them from “raising a hand against another Iraqi citizen.”

I’m not sure how this will all play out.

Since it’s Iraq and Maliki, both of whom have never failed to disappoint, I think that any concessions on the part of ISCI and Dawa would be primarily as a a part of a deliberate strategy to isolate Sadr in time for the elections, so wonders how long this Sunni-Shia rapproachment last, given that it is clearly seen as short term by Malki.

Zimbabwe

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Well, it looks like things are going to get worse, Zimbabwe police raided MDC, and the independent electoral observer, offices in Harrare, looking for evidence of an “attempt to overthrow the country”.

This does not look like it will end well.

Hopefully the talk of immunity for Mugabe in exchange for stepping down, talk in which Mugabe has taken no part, will amount to something.

This has been on a gentle slope down for weeks, but I think that there is a cliff up ahead.

This is Most Unfortunate

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It appears that the UK’s Office of Government Commerce’s new logo will be modified.

Some people have noticed a problem, see here:

Do you see the problem?

OK, tilt your head to the left……

A bit more…..

Nope a bit more…..

See it?

Needless to say, someone there need to take this issue well “in hand”, and get a “firm grip” on the situation.

Obviously, if this is what fourteen thousand quid buys from a graphics house in the UK, there is a problem somewhere.

New Chinese Boomer Deploys to Hainan Island

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The Chinese appear to aggressively moving towards some sort of submarine based deterrent according to this report by the Federation of American Scientists.

They have a satellite picture (commercial resolution) of one of the boomers at a dock:

There appears to be significant development at the Yulin naval base to accommodate this, including tunnels and a demagnetization facility.

The reports that the island is very near the edge of the continental shelf, which means that the subs could get into deep water quickly, which is typically where you want a boomer, except, of course for the fact that US boats have been doing deep water for the past 50 years.

If China gets a meaningful SSBN deterrent, it represents a threat to US military power, though it is probably a stabalizing factor, because it prevents a nut like Lynne Cheney from going postal on a nuclear level on them with nuclear weapons.

And In the Conuing Tradition of Fanboi Pimping for SAAB

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It appears that SAAB has a pretty competitive entry into the smaller AEW field, the Saab 2000 Airborne Early Warning (AEW) system:

SAAB had previously created a system for the Swedish Military based based on a slightly smaller member of this turboprop family.

The E-2 C/D from Northrop Grumman, and the IAI’s Conformal AEW (CAEW) based on the Gulfstream G550 airframe are its nearest competitors.

Things Looking Good for Zack Space

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He won election in Ohio’s 18th district after Bob Ney withdrew following corruption allegations, and now CQ has upgraded the district from “Leans Democratic” to “Democrat Favored”.

Space has $1 million in the bank, as versus $36k for his Republican opponent.

I’m really beginning to think that 2008 will be worse than 2006 for the ‘Fants.

A lot of this is because the people who vote for power will now vote Democratic.

Then again, we know how my predictive powers work.

In a Blow to Fans of Franz Kafka

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Magistrate Judge Schenkier of the Chicago Federal Court has ruled that the government must tell people if they are on the federal terrorism watch list.

The government argued that telling people that they were on the list would reveal state secrets.

Of course when people have petitioned the courts to be removed from the list, the government has argued that they have no standing, because they don’t know if they are on the watch list.

I think that the body cavity searches are a pretty good indicator though.

Liberty City 7 6 To Be Tried For Third Time – Miami News Story – WPLG Miami

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This is getting ridiculous. A bunch of sad sacks wanted some uniforms so that they could play soldier, the were contacted by a paid informant, and while they though that they were scamming him, he was scamming them, and the FBI, to get an al Queida payoff, but they will try these bozos again.

They are trying to get a conviction based on the fact that these guys are black and scary, which might work if they weren’t utterly pathetic instead of scary.

This is Not About Oil Production, It Is About Privitization

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I was wondering how long it would take, but the PAN and its ilk have been salivating at the possibility of privatizing Mexico’s state owned oil industry for decades, and now they are trying to make public theft of state assets a reality.

State ownership of the oil industry is a core value of the Mexcan body politic, so much so that there is a national holiday to commemorate the nationalization of the industry. It is considered to be a pillar of national sovreignty.

The reason that PAN loves the idea of privatization is because it will provide the opportunity to generate huge salaries and consulting commissions to the pale skinned Mexican elites who went to university at places like Harvard and Brown.

The facts are simple:

  • Mexican oil production is dropping.
  • Mexican oil revenues are at an all time high because of high oil prices.
  • It cost nothing to leave unexplored oil where it is right now.
  • There is no need to rely on big oil for the technical expertise to get at that oil.

When the Oil industry downsized and consolidated in the 1980s and 1990s, thousands of petroleum engineers and the like were without jobs, and many of them found positions with the oil services industry, which now arguably more technically capable than the big oil.

If they want these fields developed, the Mexican government could contract with companies with Halliburton and Slumberger*, and get the job done without signing over future earnings. What’s more they would get more local employment out of it, because big oil tends to employ lots of expats to get the job done.

The claims that Pemex “lacks the money and expertise” to get this done are driven by a desire among Mexican conservatives to sell $100 of oil for $1 today, because them and theirs will get an additional 50¢ in sweetheart deals.

Pemex does have problems, but these can be fixed.

*Full disclosure, one of my step mom’s life long friends is one of those Slumbergers.

Must Read On Bond Ratings and Mortgage Crisis

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Roger Lowenstein is a very concise analysis of just how what Atrios and I call the “Big Sh%$pile”* got the high ratings from Moodys necessary for the debt to be resold.

I think that it explains the process in a clear and concise way, though I think that he is far too easy on Moodys.

The process involved is inherently corrupt, since the issuers get to choose their ratings agency.

I would argue that much of this was covered in “Best PowerPoint Ever“, which makes it rather more clear just how corrupt this game was.

*Only the distinguished gentleman from Philadelphia does not mask out the last two letters of the word “Sh%$”

Northrop Grumman Wins BAMS

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The Broad Area Maritime Surveillance (BAMS) has just been awarded to NG, beating Lockheed-Martin/General Atomics and Boeing/General Dynamics.

BAMS! Northrop Wins Billion-Dollar UAS Deal | Danger Room from Wired.com

Basically it’s a large drone and sensor suite optimized for maritime work. NG and LM/GA’s bids were fairly typical (see picture below), and Boeing/GD had presented an “optionally manned” modified Gulfstream biz jet.

As the norm these days, I expect a challenge

Obama Just Did Something Mindboggling Stupid

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I don’t care what the calculus behind this is, his decision to appear on Fox News Sunday is very very stupid.

Because top line Democrats no longer appear on their show, Fox has lost credibility, and they know it, and now Obama is sitting down because he thinks that he’s somehow going to charm them into liking him.

Even if they weren’t dishonest excuses for journalists, this would not happen. Journalists are small people who hold grudges over stuff like this, and they buy ink by the hogshead,* so this is a lose-lose.

It’s sh%$ like this that makes me wonder if he’s not ready for prime time.

*OK it’s hundreds of TV stations, but the analogy holds….

Gripen Demo Rollout

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Well, SAAB has rolled out its Gripen demo, with more thrust*, more fuel, and more carrying capacity, see here and here.

There should be a meaningful (i.e. carrying a meaningful air-to-air load) supercruise, in addition to the greater payload and range in the strike configuration.

Additionally there are some developments in parallel in avionics, most notably an AESA radar.

Here you can see how the landing gear has been moved outboard to the win root to allow for more internal fuel and a second pylon on the fuselage.

Also here:

In addition to being the best value of the current generation of fighters, I also think that it’s just plain cool:


*Cheaper engine too. The RM-12, a GE F404 derivative is actually more expensive than the roughly 25% more powerful GE F414.

Signs of Sanity Appearing with Regard to the GSEs

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It appears that both the Treasury Department and Congress are bedcoming concerned about the increasing exposure of Fannie Mae and Freddie Mac to a potential meltdown, and are looking at increased regulations to prevent this.

Considering the fact that they are the 2nd and 3rd largest borrowers in the world, after the US government, the effects of their needing a bailout are enormous.

On the other side of this are people who want to bolster the housing market, and tighter GSE regulation goes in the other direction, and the fact that they have been aggressively lobbying Congress for years.

Hopefully, this time the bears win, or we may see a trillion+ dollar bailout.

Economics Update

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Unemployment claims fell again, note my standard caveat about noisy measures though.

Note also that new-home sales are unbelievably grim. An 8.5% drop month to month is falling off a cliff, but this is following the numbers being revised downward for the month of February.

If that doesn’t scare you, there is a Credit Suisse research report that suggests that there will be 6.5 million foreclosures by 2012:

The foreclosures could put 12.7 percent of all residential borrowers out of their homes, Credit Suisse analysts, led by Rod Dubitsky, said in the report. That compares with a foreclosure rate of 2.04 percent in the last quarter of 2007, they said, citing Mortgage Bankers Association data.

That is one out of 8 residential borrowers.

That’s too bearish for even me, and I’m the biggest bear out there.

In terms of non-residential real estate measures, we have the Architecture Billings Index (ABI) dropping to its lowest level ever, suggesting that commercial real estate’s about to tank too, and orders for durable goods, items expected to last 3 or more years, fell 0.3% from February, worse than expected.

The drop in unemployment claims triggered a drop in treasuries and a strengthening of the dollar, because it makes it less likely that the Fed will cut rates at its next meeting.

Truth be told, the Fed cutting rates won’t do much anyway, as is shown by mortgage rates continued upward path.

The Fed has lowered rates below the effective inflation rate, and so their rates have decoupled from the commercial rates.

Your Semi-Regular Dose Zimbabwe Elections

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Well, it looks like China has backed down, and the An Yue Jiang will be heading back without having offloaded its weapons shipment to Mugabe and his goons.

The article also notes that Jendayi Frazer, the assistant secretary of state for African affairs is saying that Tsvangirai was the “clear victor” in the race, but given the credibility of the US foreign policy apparatus, this means next to nothing for the principals or the surrounding government.

The recount continues apace with ZANU-PF being awarded one MCD seat so far. If they flip 9, and I think that the electoral commission is doing their level best to make that happen, then the MDC loses its parliamentary majority.

We are starting to see proposals for a unity government being floated, but I see that foundering on the shoals of control of the state security apparatus, which Mugabe will not give up.

Jacob Zuma is one of the people floating this, but he is also ratcheting up the rhetoric with regards to Mugabe and the ZANU-PF too.

I’m not sure how much of this is internal ANC politics, truth be told.

Over the past month, I appear to have gotten about 10 visits from South Africa and Zimbabwe, so if someone has a local perspective, I would appreciate it.