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Live Blogging: Obama's National Security Team Update

Monday, December 01, 2008

  1. Hillary Clinton - U.S. Secretary of State (no surprises there).

  2. Robert Gates - U.S. Secretary of Defense (ugggh!)

  3. Eric Holder - U.S. Attorney General

  4. Janet Napolitano - U.S. Secretary of Homeland Security

  5. Susan Rice - U.S. Ambassador to the United Nations

  6. Gen. James Jones - National Security Advisor


Live Blogging: Obama's National Security Team

Oceans don't protect us any more? Isn't that a Schrub line?


Hillary Clinton's Disdain for International Law -- Change We Can Believe In?

Hillary Clinton is our new Secretary of State -- will she continue the United States' hypocrisy on human rights and the rule of law?

By Stephen Zunes

For those hoping for a dramatic change in U.S. foreign policy under an Obama administration -- particularly regarding human rights, international law, and respect for international institutions -- the appointment of Hillary Clinton as Secretary of State is a bitter disappointment. Indeed, Senator Clinton has more often than not sided with the Bush administration against fellow Democrats on key issues regarding America’s international legal obligations, particularly international humanitarian law.

This will be particularly disappointing for those in the international community who were so positive about Obama’s election as president. The selection of Hillary Clinton, at best, represents a return to the policies of her husband’s administration.

Because the Bush administration had taken things to new lows, many seem to have forgotten the fact that the Clinton administration had also greatly alienated the international community. Regarding Iraq, Iran and Israel, the Clinton administration engaged in a series of policies which put the United States sharply at odds with most of its Western allies and a broad consensus of international legal scholars. And these were not the only issues during the Clinton years over which the United States found itself isolated from the rest of the international community: there was U.S. opposition to the land mine treaty, the strengthening of the embargo against Cuba, support for Morocco’s occupation of Western Sahara, foot-dragging on the Kyoto Protocols, support for Turkey’s vicious military offensive in the Kurdish regions of that country, among others....(Click for remainder).


Kristol’s Next War

Everyone knows that Bill Kristol is a retard (no offense to the developmentally disabled). This is just more proof. I only have one question for this chicken-hawk-fuckwad: When did you become an expert in military operations? This man never served in the military he proclaims to love. Someone needs to put a bullet in this guys brain, and save us all the agony of hearing his name come up as some sort of "expert".

By Matthew Yglesias
Think Progress

In addition to being a booster of the two actual wars in Afghanistan and Iraq, Bill Kristol and/or his publication has, at one time or another, also called for the United States to go to war with North Korea, Syria, Iran, and Sudan. And now he’s got another war he’s like to start:
And while [Bush is] at it, perhaps he could tell various admirals to stop moaning about how difficult it would be to deal with the pirates off the coast of Somalia (isn’t keeping the shipping lanes open a core mission of the Navy?) and order the Navy to clobber them. If need be, the Marines would no doubt be glad to recapitulate their origins and join in by going ashore in Africa to destroy the pirates’ safe havens.
I’m not one to say that we should blindly defer to the preferences of the military brass, but surely they’re due some deference. Is the Navy really “moaning” about how difficult it would be to stop the pirates, or are they perhaps accurately describing difficulties? Where does Kristol get off adopting a condescending tone on this subject? The Marines “would no doubt be glad” to spearhead an amphibious assault on land-based Somali targets? Has he asked anyone about that? I think a lot of Marines feel that the Corps has a lot on its plate in Iraq and Afghanistan. And certainly I’ve never heard someone with legitimate knowledge of the regional situation indicate that a simple “destroy the pirates’ safe havens” operation would work. You’d need to address the fact that the whole country is in a persistent state of anarchy....(Click for remainder).


Hu Sees China Losing Its Competitive Edge

By Maureen Fan
Washington Post Foreign Service

BEIJING, Nov. 30 -- Chinese President Hu Jintao warned at a weekend meeting of the Communist Party's elite Politburo that China is losing its competitive edge as international demand for its products is reduced, according to official state media reports Sunday.

China's growth rate has been forecast to be about 9 percent in 2008, down from 11.9 percent the year before and close to the 8 percent that economists say China must maintain in order to keep the labor market stable.

"China is under growing tension from its large population, limited resources and environment problems, and needs faster reform of its economic growth pattern to achieve sustainable development," Hu said, according to the People's Daily, the official Communist Party newspaper. He did not provide specifics.

"External demand has obviously weakened, and China's traditional competitive advantage is being gradually weakened" as international demand is reduced, Hu told members of the Political Bureau of the party's Central Committee, according to the state-run New China News Agency.

Protectionism has also started to increase in investment and trade, Hu added. China's export growth in October was 19.2 percent, down from 21.5 percent in September.

His comments came as China prepares to celebrate next month the 30-year anniversary of the opening and reform policies begun by Deng Xiaoping, who led the country from the late 1970s to the early 1990s. The anniversary has prompted both hard-liners and reformers to weigh in on the path China must now take, and Hu is striving to strike a balance....(Click for remainder).


India: Please Don't Go Down the Bush- Cheney Road

By Juan Cole
Informed Comment

Many Indians have called the attacks in Mumbai "India's 9/11." As an American who lived in India, I can feel that country's anguish over these horrific and indiscriminate acts of terror.

Most Indian observers, however, were critical in 2001 (and after) of how exactly the Bush administration (i.e. Dick Cheney) responded to September 11. They were right, and they would do well to remember their own critique at this fateful moment.

What where the major mistakes of the United States government, and how might India avoid repeating them?

1) Remember asymmetry

The Bush administration was convinced that 9/11 could not have been the work of a small, independent terrorist organization. They insisted that Iraq must somehow have been behind it. States are used to dealing with other states, and military and intelligence agencies are fixated on state rivals. But Bush and Cheney were wrong. We have entered an era of asymmetrical terrorism threats, in which relatively small groups can inflict substantial damage.

The Bush administration clung to its conviction of an Iraq-al-Qaeda operational cooperation despite the excellent evidence, which the FBI and CIA quickly uncovered, that the money had all come via the UAE from Pakistan and Afghanistan. There was never any money trail back to the Iraqi government.

Many Indian officials and much of the Indian public is falling into the Cheney fallacy. It is being argued that the terrorists fought as trained guerrillas, and implied that only a state (i.e. Pakistan) could have given them that sort of training....(Click for remainder).


What to Do

By Paul Krugman
The New York review of Books

What the world needs right now is a rescue operation. The global credit system is in a state of paralysis, and a global slump is building momentum as I write this. Reform of the weaknesses that made this crisis possible is essential, but it can wait a little while. First, we need to deal with the clear and present danger. To do this, policymakers around the world need to do two things: get credit flowing again and prop up spending.

The first task is the harder of the two, but it must be done, and soon. Hardly a day goes by without news of some further disaster wreaked by the freezing up of credit. As I was writing this, for example, reports were coming in of the collapse of letters of credit, the key financing method for world trade. Suddenly, buyers of imports, especially in developing countries, can't carry through on their deals, and ships are standing idle: the Baltic Dry Index, a widely used measure of shipping costs, has fallen 89 percent this year.

What lies behind the credit squeeze is the combination of reduced trust in and decimated capital at financial institutions. People and institutions, including the financial institutions, don't want to deal with anyone unless they have substantial capital to back up their promises, yet the crisis has depleted capital across the board.

The obvious solution is to put in more capital. In fact, that's a standard response in financial crises. In 1933 the Roosevelt administration used the Reconstruction Finance Corporation to recapitalize banks by buying preferred stock—stock that had priority over common stock in terms of its claims on profits. When Sweden experienced a financial crisis in the early 1990s, the government stepped in and provided the banks with additional capital equal to 4 percent of the country's GDP—the equivalent of about $600 billion for the United States today—in return for a partial ownership. When Japan moved to rescue its banks in 1998, it purchased more than $500 billion in preferred stock, the equivalent relative to GDP of around a $2 trillion capital injection in the United States. In each case, the provision of capital helped restore the ability of banks to lend, and unfroze the credit markets....(Click for remainder).


Swap Defaults: The Next Installment of the Financial Crisis

By masaccio
Oxdown Gazette @ Firedoglake

What will happen if the derivative markets collapse? This is the question we don’t seem to be asking in public. Maybe the answer is too scary. Take a deep breath and read this (thanks a lot, EW).

Remember the basics about credit default swaps. One side buys protection against loss on debt issued by a specified company or nation from the other. The buyer doesn’t even have to own the debt. It just pays a premium based on “market” assessment of risk. The seller gets the premium, and promises to pay the difference between the face value of the debt and the value at the date of a credit event, like bankruptcy or failure to make payments.

Take another deep breath. The ISDA gives the following estimate:
As of December 2007, gross mark-to-market value of all derivatives was approximately 2.4 percent of notional amount outstanding. In addition, net credit exposure (after netting but before collateral) is 0.5 percent of notional amount outstanding. Applying these percentages to the total ISDA Market Survey notional amount outstanding of $531.2 trillion as of June 30, 2008, gross credit exposure before netting is estimated to be $12.7 trillion and credit exposure after netting, but before collateral, is estimated to be $2.7 trillion.
Banks are big players in this stuff. Citigroup has a total portfolio of swaps of various kinds of a sickening $36.8tn. Oops, maybe another deep breath. The largest part of these are interest rate swaps, but it has sold $1.57tn and bought $1.67tn in notional amounts of CDSs, according to the chart on page 40 of Citi’s financial statements. The total portfolio of swaps is about 6.9% of all swaps outstanding.

If we take Citi's portfolio profile to be reasonably like the overall market, which is reasonable because it's so big, we could guess that its exposure to loss is .5% of the notional value of its portfolio, which is $184bn after netting and before application of collateral. Let’s hope it’s only that bad....(Click for remainder).



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