Jeremy joins the crew.
As you’ve heard, Elizabeth Regina got a new baby brother, Jeremy Robert. It’s been a bit of an adjustment. She has been trying to collapse out his pack ‘n play from the bottom and throw things in from over the side, and we had to bolt the front door since she keeps trying to run away from home. Yesterday I could hear her screaming from the 5th floor while I was in the building’s lobby. But today she let us know that she wanted to hold him and she kisses him (at least in front of us). Elizabeth is quite intuitive at 20 months — when I got out of the bathtub this morning, she anticipated that I would want a towel and brought one. She takes my cellphone off the dining room table, walks off to our bedroom, sits on the couch, turns on the phone and starts making calls with very heavy conversation that is obviously future-teenager slang because I can’t understand it. She calls out “taxi” before we’re even out of the lobby and wanted to sit down and enjoy a jazz concert today while we were at Central Park. Quite the urban child. Jeremy is developing very well; he already flipped over on his side at the doctor’s office a week ago; doctor said he never saw a kid do that before 3-4 months. Our 3 weeks with a baby nurse ends tomorrow and we expect all hell to break loose after that.
Anyway, it is Labor Day weekend now in the United States and all is quiet. Outside our window was a tugboat race going down the Hudson River along the west side of Manhattan and New Jersey.
Karen will be on maternity until December and we have a few holidays planned before she returns to work. In October we are to fly to southwest Virginia to the Blue Ridge Mountains to the home of Thomas Jefferson and then in November we will visit Key West, Florida, the most southernmost city in the US. In between whilst her mum checks in from Australia, I am planning a visit in late October / early November to Rome, Jerusalem, Hong Kong, Shanghai and Hangzhou, China with an eye toward seeing what’s new in China.
A few global thoughts:
Israel/Syria: Looks like tensions finally went down and my gut feeling was right — that the Russians were stirring up trouble trying to get the Syrians riled up. Turns out the Israelis let it be known that the Russians were trying to sell the Syrians arms and getting them nervous so as to buy more of them. The Israelis were nervous about Russian offers to sell Syria a large defense umbrella, particularly with missile defenses that the Syrians have wanted for a long time.
Israel-Future Elections Landscape: Barak is consistently losing to Netanyahu in polls; If Labor and Kadima merge, they lose to Likud. They must run separately and together they pull in at least 10 more seats. Barak will not try to leave the government till at least 2008. Voters are interested in seeing that he can work with Olmert or Livni to make peace, but as separate parties working together. The monkey with the wrench is that there is a petition in front of the Supreme Court which, if rejected, would cause the early release of the Winograd Report, which could bring down the government and cause early elections. That petition is to be heard in the coming week.
Israel-Palestine: Olmert is really having serious back room talks with Abbas in the search for a final settlement to this problem instead of cosmetic things that change nothing. Condi Rice is raising expectations by trying to have large goals for a November peace conference. Ehud Barak thinks this is pie in the sky and Livni also thinks the stage is being set for failure. Problem for Abbas and Olmert is that they are both too domestically weak to go for major initiatives, although both want to be remembered for successes in peace instead of failure in war. Abbas lost Gaza to Hamas and Olmert lost the Lebanon war, in the minds of everyone but his few supporters.
Subprime Mortgage Mess: So far there is no evidence that the subprime mess will affect the markets en masse. Stratfor has good analysis on this. Says that most of the variable rate mortgages of 5 years started in 2004 and 2005; we will know in 2009 and 2010 how they fare when they renew although many of the mortages defaulted after first payment and odds get better as they go along in payments. In Manhattan if you wanted to know what to expect with real estate looking down the line you’d want to know how many subprime mortages in 2004 and 2005 went to people with bad records but you’d find that you have less risky loans. That there will be fewer bonuses on Wall Street this year will matter more to the Manhattan market. Overall, it is a small factor in the economy, about one-third as much of the GDP at risk as was in the S&L mess in the 80’s. So I see this as a temporary blip but not an overall threat to the markets.
Iraq: Stratfor had a good analysis on this subject this past month and I agree with their assessment— see their article “Endgame” on 27 August. They reviewed 3 options — getting out now, drawing down over time and staying put. All options were lousy in their opinion. The British tied the draw-down over time and were burned. Staying put is not an option. The getting out now option works if you redefine the mission from pacifying Iraq to keeping Iran in check with regard to Arabia. They recommend putting a major base in Kuwait and/or outlying areas in Iraq but basically getting troops away from people in Iraq and assuming that we don’t care what kind of result happens in Iraq due to a vacuum of American troops. I should add that I’ve been recommending this course for a long time now. No matter what, there will be a blood-letting when we step aside and we may as well let them get it over with. Frankly, I’m happy for Iran to try and fill the void as they say they wish to. The Iraqi Sunnis will give them a hard time and the Shiites of Iraq don’t like the Shiites of Iran. Finally, the Turks aren’t going to just let the Iranians have a cake walk and they might also give them a hard time and they have the army to do it. The Iranians have enough trouble running their own country and this will bog them down in many ways. The Sunni rebels keep trashing the oil facilities anyway so I don’t see the Iranians getting a bounty from Iraq.
Pakistan: General Musharraf will be out as predicted in the beginning of 2007; what will replace him is not yet clear. I think there will be an interim government and that it will take a year or two to sort this out. Musharraf didn’t let anyone in the army progress to become a threat to him and now he has a problem because there is nobody in the military that is accomplished and seen as fit for the position. Bhutto is seen as so compromised that a government negotiated between them would not be seen as credible by anyone else.
Best wishes for the best of health, wealth and happiness in the Jewish New Year and for a meaningful Ramadan for those who observe it beginning the same day.
