Global Thoughts — 21 August 2012

Those last two pictures are of Jeremy celebrating his 5th birthday with his “Train Cake” and Karen and I with my Great Aunt Fay at her 100th birthday party.

In the “you can’t put anything past them” department — Jeremy was eating a sugary cereal at his grandparents house and at the breakfast table they were commenting about how he doesn’t get it at home. My mother jokingly said that he doesn’t get the cereal because they don’t have that cereal where he lives (which is what we used to tell him). Jeremy said “I don’t get the cereal because my parents don’t buy it.”

Jeremy asked his mum why he has a belly button. Karen explained that when he was in her tummy, that’s how he got food which was whatever Karen was eating. So he asked, what happened if he didn’t like the food? (Which was an interesting question to ask since he tends to be oppositional about anything he is served these days.) Well, Karen said, that was the last time you ate anything you were given.

Elizabeth loves to choreograph dances and at some point I’ll have to point you to one of her videos.

My kids were watching the Olympics and I walked into the living room to screams of “Go USA Go USA” — they were watching a swimming race and I think they quickly got the idea of what the Olympics is about.

Ever wonder why it takes so much longer for barbers to do haircuts on bald people? It’s not my imagination but rather this important fact has been confirmed by my barber.

AHEM!!!! From December 10, 2009: Congressman Paul Ryan is a man to watch. He is a Republican, young and highly placed. Not terribly ideological and a good deal-maker with vision and well designed plans. Was lost in the Obama excitement of last year’s campaign.  If the Republicans make a comeback, he will get a lot of credit for it.
Ryan is an interesting choice for Romney — he will move the focus from the person to the issues. It is up to Ryan to help Romney make a case for his economic program and to make that vision of America electable to the majority. It will fire up the party base, but it will have to sell to get the rest of America to vote for it. I watched a video of Ryan making a speech — he is 42 and he looks really young and he is a good speaker. He is not a lightweight — people will not confuse him for Dan Quayle. Should be interesting but ultimately I don’t expect Ryan to make much of a difference for Romney in a general election. He appeals to the party’s base but not to centrist voters which is what swings a general election and he will ensure the loss of swing states such as Florida which will feel threatened by Ryan’s declared war against social security and medicare. Once again, the Republicans have had to pander to their base with a lackluster candidate and lose the war with the general public.

Here’s another important question. If the US population constitutes a third of the world’s weight and only 5% of the world’s population, why doesn’t the world turn on its side? The next 4 countries in line with fatties as the highest percentage of their population are the Gulf — Kuwait, Qatar, UAE and Bahrain. I guess since they are on the opposite side of the globe, they balance it out.

Iran — Just because the Iranian rial currency has lost 50% of its value this year doesn’t mean they are poor in Iran. Porche has sold more cars in Teheran last year than in any other city in the Middle East.   At this point, I have enough reason to believe that Israel will strike Iran in the next 2-3 months, with or without the US. The strike will go beyond the nuclear facilities and target infrastructure such as electricity and refineries, as per the prior recommendations in GlobalThoughts. This will be true whether or not Obama is seen as re-electable. If he is on the ropes, then a strike makes sense because he cannot oppose it. If he is going to win, then better to do it before he becomes a second-termer and says no. He has no choice during the campaign but to back it once it happens. If it is successful, he will ensure his re-election. If it is not successful because he opposed it he will be seen as a Jimmy Carter and will be thrown out. If it is successful, the Palestinian track will become much more viable and a second-term Obama will have a much better chance at getting a peace agreement between Israel and the Palestinians. So he really has no choice. I have always said that the route toward a peace agreement runs through cutting Iran down the size in the region and a nuclear Iran will ensure that there will never be peace. I think at this point the decision has pretty much been made and that the Israeli government is preparing the public for it. The talk about striking is akin to a boy crying wolf; if they don’t just do it already, they look like a big bluff and lose their deterrence. However, all this talk may also be part of a strategy to desensitize people to the ultimate eventuality of the military mission (as in, oh yeah, so they did it already). Also, with Egypt and Syria breaking down around them, they need to do something to maintain their deterrent ability. I also think their strategy will be to utterly demoralize and humiliate the Iranian government by showing that their nuclear program did not succeed but that it also set the country backward. The goal will be to focus citizen anger against their government for bringing sanctions and destruction upon a country with no gain, and for financing international revolution in the region for no gain as Syria and Lebanon throw off Hizbullah, and to throw the clerics out of power.

The Syrian government doesn’t control more than 50% of the country’s territory and it is running low on cash. The tide is turning there and I think at this point the main reason Assad is still in power is that the major powers haven’t figured out how to get him out without having the country fall into chaos. Funny how the various analysts all said as recently as the close of the last quarter that the regime was going nowhere. I said in December he would be out in 2012; in March I said we are at the beginning of the middle of the end, and this month we are at the beginning of the end of the end. In Syria, at this point, the various powers that are backing the rebels want Assad to fall, but not too quickly lest there be chaos, especially with 40-50 sites of chemical and biological weapons around the country and a bunch of jihadists running around. The Russians to their credit are acting responsibly; according to a Western diplomat Assad thought in early July about using chemical weapons and the Russkies got in touch with him and told him No Way. Even the Israelis and Turks are getting back together because they need to cooperate over Syria.
Feel bad for the Syrian prime minister who defected. According to the NY Times, Assad told him in June that either he accepts the prime minister’s job or he will have him killed.

Egypt meanwhile puts the press under the control of the Moslem Brotherhood and started shutting down the rest of it. Once in power in this region, everybody wants to become a dictator.
The Egyptians coveted the land of the Sinai, but not its people, said an oped piece I saw somewhere this month.  This basically refers to the fact that since the Sinai was turned over to Egypt a generation ago, the Egyptians never took an interest in providing services for the people who lived there, which is why they make so much trouble to get attention. This Sinai stuff is strategically important; Morsi wants trouble in the Sinai as a pretext to renegotiating the Camp David treaty to get full Egyptian sovereignty in the Sinai. In another few years, Egypt’s military will be controlled by the Moslem Brotherhood and after Morsi leaves power, nobody knows who the next Moslem Brotherhood leader will be. The Israelis have to be concerned about the precedents that might exist for a new Pharaoh arising in Egypt in the next generation who knew not Joseph.

In Egypt, the Israelis and Egyptians agreed this past year to allow 7 more Egyptian brigades in the Sinai to police the area, but the Egyptians only wound up sending one more brigade. So the answer to the lawlessness in the Sinai is not to renegotiate the treaty so that the Egyptians can have more forces there but rather for the Egyptians to police their side of the border.
To my mind, the strategic imperative for Israel is to work out a peace arrangement with Hamas. Hamas is increasing its power in Jordan and they are already the power in Gaza and Egypt. The Palestinian Authority is an enemy to Hamas and controls only the West Bank. Making peace between the PA and Israel separately will only infuriate Hamas and lead to more instability.

It is working well for the Americans to ride the tide of history without having to actually intervene in the affairs of the countries of the Middle East. The Russians, Chinese and Iranians have intervened more so, and they are the ones on the run today. The American challenge is not to get sucked in to another war because the American interest is to disengage from entanglements abroad and focus on economic development at home. Money counts, and that’s why Saudi Arabia and not Egypt is the lead in the Arab world today. Because Egypt comes hat in hand to Saudi Arabia and plays off Iran to keep the Saudis’ attention.

Israel should draft all the haredim (ultra-orthodox men who don’t want to serve in the army and instead try to spend their life learning in seminary); if they do what they threaten, they will leave the country and the country will be a whole lot richer. It will ensure the country’s future. Bibi ain’t going anywhere and it is not a big surprise that Mofaz couldn’t stay in a coalition with him. He is a bit flighty.

I suspect that Hillary Clinton will go down as a historically effective secretary of state and that the US has a lot more going on around the world than people realize in terms of covert action and the Arab Spring. I think the Obama administration speaks quietly but probably has been much effective promoting American interests abroad than the Bush administration ever was. On the other hand, every once in a while, I come across somebody who says that Hillary has basically presided over photops and made sure never to get her hands dirty, and that all she is about is running for president in another 4 years. I really don’t know but if you ask me to make a bet, I’ll bet the former is true.

Nuclear power is on the way out being supplanted by gas and other kinds of power.

Europe is never going to get it together. They just are really not of the same interests. The Euro is just not going to work and the longer it drags on the more expensive the breakup is going to be.  People in Australia care if Europe’s economy tanks.

Turkey is probably lucky it stayed away from Europe. It will cooperate with Europe on energy because they both don’t want to be dominated by Russia on this front. Right now Turkey and Israel are cooperating in terms of Syria.

There are fewer doctors in America than required; the shortage will be 50,000 by end of decade. More universal health coverage in the country, but more people who can’t see a doctor. It is the unintended consequence of all this regulation. Actually, my company’s insurance spend went down 50k as a result of all these changes, so frankly it hasn’t hurt me.

Is Algebra Necessary” is an oped piece written in the NY Times on Sunday July 29 by Andrew Hacker, a local professor. I totally agree with his comment that algebra and the stuff that comes afterward is totally overrated and just put in there to make things look rigorous and to create hoops to jump through. I passed algebra on the curve, totally flunked all the other stuff and today I’m the CFO-emeritus of a company and I am always second-guessing the accountants and the professionals.

Here’s a good travel tip for those who need a one way business class ticket. I’ve been noticing that if you call the airline and book a roundtrip ticket with an upgradable coach fare to business class one way and then buy a cheap ticket in coach on the return, that you can get a fare that is significantly lower than the one way business class fare and even lower than the contractual rates that some travel agents get. Those contracted rates usually come with severe restrictions for refunds and cancellations, and these other fares come directly from the airlines as published fares so you don’t have to deal with agency fees and the stricter cancellation policies. Also, if you buy an upgradable coach fare you can often move a few miles from American Express Mileage Rewards over to the airline’s frequent flyer program (ie: Iberia, Alitalia) and then get the ticket at a better rate without a bunch of restrictions.

Here’s a heads up: If the US Federal Reserve doesn’t do any Quantitative Easing in the next month, they are basically throwing the election to Romney, because they are not going to make things look better come November than they are and right now the economy is not helping Obama.

For more commentary on the upcoming election, see my newest posting: 85 Days Before Elections.

I’ve been thinking about the Secrets to a Happy Life. For my secret ingredients, click here.
This month we are heading to Germany for 2 weeks on our family summer vacation. So enjoy your vacation and the end of the Ramadan month if that’s on your agenda, and see you back in September.


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