More From Dallas Fed President Richard Fisher

Posted By on February 10, 2011

From Art Cashin on the floor of The New York Stock Exchange

Deserving A Second Look – On Tuesday, Richard Fisher, President of the Dallas Fed spoke.  The speech drew headlines on Mr. Fisher’s contention that he would be hard pressed not to dissent on any extension or expansion of QE2.

It was suggested that we take another look at the speech, not because we misread the QE2 bit, but because the speech contained some blunt criticism of Congress and the Executive Branch.  The criticism centered on their handling (or rather non-handling) of the budget and the deficit. 

Here’s a bit:

But here is the essential fact I want to emphasize and have you think about today: The Fed could not monetize the debt if the debt were not being created by Congress in the first place.

The Fed does not create government debt; Congress does. Deficits and the unfunded liabilities of Medicare and Social Security are not created by the Federal Reserve; they are the legacy of Congress. The Fed does not earmark taxpayer money for pet projects in local communities that taxpayers themselves would never countenance; only the Congress does that. The Congress and administration play the dominant role in creating the regulatory environment that incentivizes or discourages job creation.

It seems to me that those lawmakers who advocate “Ending the Fed” might better turn their considerable talents toward ending the fiscal debacle that has for too long run amuck within their own house.

A look within the United States makes clear the overriding influence of fiscal and regulatory policy. Monetary policy is uniform across the 50 states; the base rate of interest paid on a business or consumer loan or a mortgage in Michigan, California, Ohio or New York is the same as that paid in Texas. Yet there is a reason that Michigan and California each lost more than 600,000 jobs over the past decade while Texas added more than 700,000 over the same period.

 There is a reason that the population of Ohio grew by only 183,000 residents over the past 10 years, while Texas grows by that number every five and a half months. There is a reason that with each passing census, the state of New York has been losing congressional seats and Texas has been adding them; a reason that, in the recent census, California failed to gain any while Texas gained four. There is a reason that, as documented in the Jan. 12 issue of the Wall Street Journal, college graduates—the best and brightest of the successor generation—are leaving New York and Cleveland and Detroit and moving to Austin, Texas. There is a reason no state in the union houses more Fortune 500 headquarters than Texas. There is a reason for the disparate employment growth that has taken place in the 12 Federal Reserve districts over the past two decades, data that are documented in the graph at your place setting.

That reason has nothing to do with monetary policy. It has everything to do with the taxation and fiscal and regulatory policies of the states. The cost of capital does not explain the different economic performances of the states; the cost of doing business has everything to do with those differences. However well-meaning tax and regulatory initiatives in the laggard states may have been when they were conceived and levied, they have had unintended consequences that have led to economic underperformance and job destruction.

Similarly, the key to correcting the underperformance of the American economy and American job creation does not presently rest with the Federal Reserve. It is in the hands of those who make fiscal and regulatory policy.

A bit later he turns to how severe the problem may be:

We shall see if the new Congress will prove worthy of the power the American people have “loaned” them, and, together with the president, actually draw the spirits of fiscal reform and sanity from the “vasty deep” to at long last implement meaningful fiscal and regulatory policy that incentivizes private-sector job creation here at home while arresting the hemorrhaging of our Treasury. If they do, then more Americans will find work and be better off, better paid and freer to make their own decisions about the economy.

If they don’t, then woe to our children, their children and the American Dream.

It’s a great and insightful presentation.  Go to the Dallas Fed website and pull it up.  While you’re there pull up his prior speech filled with more “straight from the shoulder” discussions.  Thanks Mr. Fisher

Stratfor Alert: The Egyptian Military’s Options

Posted By on February 10, 2011

February 10, 2011

The decision by Egyptian President Hosni Mubarak not to resign seems to have shocked both the Egyptian military and Washington. CIA Director Leon Panetta spoke earlier as if his resignation was assured and a resolution to the crisis was guaranteed. Sources in Cairo spoke the same way. How the deal came apart, or whether Mubarak decided that transferring power to Vice President Omar Suleiman was sufficient cannot be known. What is known is that Mubarak did not do what was expected.

This now creates a massive crisis for the Egyptian military. Its goal is not to save Mubarak but to save the regime founded by Gamal Abdel Nasser. We are now less than six hours from dawn in Cairo. The military faces three choices. The first is to stand back, allow the crowds to swell and likely march to the presidential palace and perhaps enter the grounds. The second choice is to move troops and armor into position to block more demonstrators from entering Tahrir Square and keep those in the square in place. The third is to stage a coup and overthrow Mubarak.

The first strategy opens the door to regime change as the crowd, not the military, determines the course of events. The second creates the possibility of the military firing on the protesters, which have not been anti-military to this point. Clashes with the military (as opposed to the police, which have happened) would undermine the military’s desire to preserve the regime and the perception of the military as not hostile to the public.

That leaves the third option, which is a coup. Mubarak will be leaving office under any circumstances by September. The military does not want an extraconstitutional action, but Mubarak’s decision leaves the military in the position of taking one of the first two courses, which is unacceptable. That means military action to unseat Mubarak as the remaining choice.

One thing that must be borne in mind is that whatever action is taken must be taken in the next six or seven hours. As dawn breaks over Cairo, it is likely that large numbers of others will join the demonstrators and that the crowd might begin to move. The military would then be forced to stand back and let events go where they go, or fire on the demonstrators. Indeed, in order to do the latter, troops and armor must move into position now, to possibly overawe the demonstrators.

Thus far, the military has avoided confrontation with the demonstrators as much as possible, and the demonstrators have expressed affection toward the army. To continue that policy, and to deal with Mubarak, the options are removing him from office in the next few hours or possibly losing control of the situation. But if this is the choice taken, it must be taken tonight so that it can be announced before demonstrations get under way Feb. 11 after Friday prayers.

It is of course possible that the crowds, reflecting on Mubarak’s willingness to cede power to Suleiman, may end the crisis, but it does not appear that way at the moment, and therefore the Egyptian military has some choices to make. Read more »

Recovery….Uh,What Recovery?

Posted By on February 10, 2011

Here is a chart of the total number of employed Americans over the past ten years.  Hmm, we heard there was a recovery going on….must have some wax in the ears, come again on that?

Oklahoma Cold Snap Sets New Records

Posted By on February 10, 2011

BARTLESVILLE, Okla. – A record amount of snow has fallen across Oklahoma while temperatures across the state Thursday morning were lower than North Pole, which was a balmy 16 degrees.

In Bartlesville, the National Weather Service recorded the temperature reaching -28 degrees below 0, setting an all-time city record.

The Oklahoma Mesonet released a statement saying Nowata reached -31 degrees. Whichever temperature is recorded, it will be an all-time low for Oklahoma. The previous state record was -27 in Watts in 1930 and -27 in Vinita in 1909.

Pirates Of The….Indian Ocean

Posted By on February 9, 2011

A tanker with $200 million in oil is hijacked off Oman  as Piracy spins out of control on the Indian Ocean’ shipping lanes….The hijacking came a day after an Italian tanker carrying oil worth more than $60 million was snatched by Somali pirates.

LONDON/ATHENS — Suspected Somali pirates captured a U.S.-bound tanker carrying around $200 million worth of crude oil in the Indian Ocean on Wednesday in one of the biggest hijackings in the area so far.

The hijacking marks a significant shift in piracy and the crisis could “strangle” vital shipping lanes, the association of supertanker owners warned.

The Irene SL, the length of three soccer pitches and with 25 crew members on board, was carrying about 2 million barrels of oil, or nearly one fifth of daily U.S. crude imports.

The hijacking came a day after an Italian tanker carrying oil worth more than $60 million was snatched by Somali pirates, reinforcing industry fears that the piracy scourge is “spinning out of control”.

“This morning the vessel was attacked by armed men,” the Irene SL’s Greece-based manager Enesel said. “For the moment there is no communication with the vessel.”

Turn Out The Lights….The Party Is Over For State And Local Government Spending

Posted By on February 9, 2011

This title wave will hit just as the federal stimulus money runs out! Question: So, where is the money going to come from to support all of the broke states?  Answer: It’s going to come from you and me, one way or another!

New Jersey rating cut while Arizona outlook negative…..

SAN FRANCISCO (Reuters) – Standard & Poor’s on Wednesday cut New Jersey’s bond rating a notch due to an unfunded pension shortfall and high debt, while Moody’s Investors Service warned Arizona of a possible downgrade by revising its outlook on the state to negative from stable.

Concerns are mounting about the finances of state governments. Some in Congress have even suggested legislation to allow states to declare bankruptcy to help them put their finances in order.

State governments continue to struggle with the effects of the 2007-2009 recession. Their revenue remains weak and altogether they face budget deficits of at least $100 billion for the next fiscal year, beginning for most in summer.

S&P’s action turns up the heat on New Jersey Governor Chris Christie. S&P downgraded New Jersey to AA-minus from AA two weeks before the Republican governor proposes his own fix for the state’s shaky finances.

President Barack Obama is expected to propose some financial relief for states in his budget plan but Republican lawmakers say there is no support for the kind of rescue mounted for states in the $814 billion economic stimulus approved by the Democrat-run Congress in 2009.

What Caused The Economic Meltdown In 2008-09….If You Said Housing Subprime Lending And Derivatives, You Get A Gold Star!

Posted By on February 9, 2011

According to the Office of the Comptroller of the Currency’s Quarterly Report on Bank Trading and Derivatives Activities for the Second Quarter 2010 (most recent), the notional value of derivatives held by U.S. commercial banks is around $223.4 TRILLION.  Yep, that’s T as in Trillions!

Five banks account for 95% of this. Can you guess which five?  Yep….



The Dance Of The Strandbeests

Posted By on February 9, 2011


Inquiring Minds Want To Know…What Will These Numbers Be By 2014

Posted By on February 8, 2011

Pimco’s El El-Erian… U.S. In Denial Of The New Normal

Posted By on February 8, 2011

The following is part of an interview of Pimco’s El-Erain by Germany’s SPIEGEL . Here are a few of his key points……

In 2006 we undertook a very comprehensive U.S. housing study and we said this housing market is very unstable and investors should reduce their exposure and manage risk better. Nothing happened in 2006, and nothing happened the first half of 2007.  And there are many other examples, including our 1999-2000 acute concern about Argentina.

We have said from day one that part of the problem in this country (U.S.) is there isn’t a sufficient recognition that there are new dynamics in play. It’s what we have called the bumpy journey to a new normal. Growth will be viewed as unusually sluggish. Unemployment will remain unusually high, and for an unusually long period. And we will see an accelerated realignment of the global economy.

SPIEGEL: The U.S. does not have a real plan for ridding itself of its debt problem.

El-Erian: There are several ways that a country can deal with its debt issues. I suspect the U.S. will end up with a mix of some fiscal adjustment and inflating its way out.

SPIEGEL: Washington never publicly talks about that option.

El-Erian: Europe and Germany, especially, have been very scared of hyperinflation. The U.S. is influenced by a different historical experience, that of the fear of another Great Depression. So this country has a huge aversion to recession, huge. And if you ask a policymaker if you’re going to make a mistake, which mistake would you rather make, they would say I’d rather make an inflation mistake than make a growth mistake.

SPIEGEL: But, everyone will have to suffer the consequences. The Fed is flooding the markets with another $600 billion that will impact not only the U.S. but the rest of the world as well.

El-Erian: It’s inflating the whole world, that’s absolutely right. We are concerned that QE2 …

SPIEGEL: … the name given to the US central bank’s quantative easing program …

El-Erian: … will be disappointing in terms of its own objectives because it’s a very imperfect instrument to deal with the headwinds to U.S. growth. The U.S. economy cannot productively absorb all this liquidity. So when all the liquidity is injected into the system, it also goes elsewhere. Its like pouring water on a hard surface, it splashes everywhere. That explains the large skepticism about QE2 outside the U.S.

SPIEGEL: Is there a better way?

El-Erian: We have said from day one that part of the problem in this country is there isn’t a sufficient recognition that there are new dynamics in play. It’s what we have called the bumpy journey to a new normal. Growth will be viewed as unusually sluggish. Unemployment will remain unusually high, and for an unusually long period. And we will see an accelerated realignment of the global economy.

SPIEGEL: What will that new global economy look like?

El-Erian: It is a multispeed world. While several advanced economies are dealing with debt overhangs, systemically important emerging economies will hit a development breakout phase. So our view has been if you’re faced with this world, policymakers around the globe should not be using just fiscal and monetary policies. They should also be using the whole array of structural reforms. The U.S. should be doing something about its labor market like Germany did. Many countries should be doing more to improve the functioning of the financial system, and not just pouring in liquidity.

SPIEGEL: How long do you see the dollar remaining the world’s reserve currency?

El-Erian: At some point, we’re going to evolve into a genuine world of multiple reserve currencies, but it cannot happen overnight because there are certain requirements.

SPIEGEL: For example?

El-Erian: Take China as an example. From the outside, we all look at China and see the second largest economy in the world. As the second largest economy in the world, we say it should have global responsibilities. The currency should be convertible and flexible. But go to China, and they will ask you what you are talking about. Look at per capita income, they will say. We’re number 99 in the world, not number two. At number 99, our responsibility is domestic because we have lots of people that are poor. So we don’t want our currency to appreciate and to be volatile. When we get closer to number two, we’ll take on global responsibilities.

For the whole interview, click here:,1518,744297,00.html

The Suez Canal, Egypt

Posted By on February 8, 2011

The Suez Canal is a global chokepoint and passage for goods in todays world.  What that means is….. news of Suez Canal workers going on strike won’t help the situation in Egypt or the World for that matter!.

Nomura has a great map showing just exactly what that means.  This map shows it’s  the dominant route for goods from Asia to Europe.

World Oil Reserve Rankings

Posted By on February 7, 2011

Canada is #2

Dallas Fed’s Richard Fisher Is On The Tape…He Says He Won’t Vote For QE 3

Posted By on February 7, 2011

What Dallas Fed Fisher is saying in a nutshell is basically the national debt can’t get any bigger without destroying the Dollar and causing inflation.

Dallas Fed’s Richard Fisher 

Bloomberg Headlines:


Consumer Credit Rises $6.09 Billion In December, First Increase Since August 2008

Posted By on February 7, 2011

We’ll see how long this lasts, best guess is it’s a short lived event…..why do we say that?  Well, just look around you, what do you see….states, counties and cities getting ready for large budget cuts and layoffs, and taxes will have to go up. We have not solved any of the problems that caused the 2008-2009 economic crisis, but our national debt has grown faster than at  any time in history.  We might as well add the demographic’s in here too, as the largest segment is getting older and by nature spending less.  Once the government stimulus runs out, most likely by mid year, either the economy slides backwards again or QE III starts, and the national debt gets even larger. 

Revolving consumer debt grew in December (at an annualized pace of 3.5%), which represents growth for the first time since 2008.

Cold Weather Hits Mexico

Posted By on February 7, 2011

Freezing weather and snow paralyzed the border city of Ciudad Juarez, knocking out electricity and water in thousands of homes and closing roads and factories.

Record low temperatures hit the city, across from El Paso, Texas with temeratures fluctuating between -0.4 and 10 degrees Fahrenheit (-18 and -10 degrees Celsius).

“There have been cold temperatures in the past, but nothing that has lasted for so many days. It’s been 40 years since the city has seen an emergency like this,” said Efren Matamoros, head of the city’s civil protection service.

Units at 17 power stations — with 6,792 megawatts of generating capacity — in northern Mexico shut down due to the unusually cold weather, forcing the national electricity monopoly to ask factories to curb usage.

“Chicken” Of The Sea………If You Get Our Drift

Posted By on February 6, 2011

Captain:  That’s an awful big looking Tuna (inquiring minds think it might be a shark)……yep, it’s bigger then the USS Recovery ship can handle for sure! So what do we do?   Hint: Start those engines and run, baby…run.

Egypt Has A Classic Run On Their Banks

Posted By on February 6, 2011

Egyptian banks have been closed for almost two weeks.  As they reopen they will have what is commonly called a “run on the banks”….in Egypt!
Egypt’s return to normalcy begins with the banks re-opening.  According to Bloomberg, the Egyptian government was forced to use military cargo planes carrying $854 million to deliver cash to various banks, in order to satisfy the large number of nervous depositors looking to make withdrawals.


Cyclone Yasi Devastates Australian Crops

Posted By on February 6, 2011

World commodity supplies will by the time summer is over, be called world commodity shortages!  We are likely (barring a miracle) going to see a dynamic increase in food prices across the board.  Let’s hope that the U.S. Midwest snow cover melts in a slow ordinary way….if not, we’ll have floods and crop damages here too.  Not what a world short of food needs to hear!

World sugar supplies will  fall short of demand, said Rabobank Groep NV, after a cyclone with winds stronger than Hurricane Katrina destroyed homes and smashed crops in Australia, driving sugar prices to 30-year highs.

Tropical Cyclone Yasi ripped through northern Queensland, a region growing a third of the country’s cane, cutting output potential in the area by about 50 percent, producers group Canegrowers said Feb. 4. The storm, which the government says may have wiped out at least A$500 million ($507 million) of agricultural production, raised speculation that the world’s third-largest sugar exporter may struggle to match last year’s output that was the lowest in two decades.

PIMCO’s Bill Gross Has Some Harsh Words For TPTB (The Powers That Be)

Posted By on February 4, 2011

Here are some snippets from Bill Gross’s February Investment Outlook Newsletter….
Devil’s Bargain
  • Money has become the economic and political wedge for profound changes in American society.
  • Perhaps the most deceptive policy tool to lessen debt loads is the “negative” or exceedingly low real interest rate that central banks impose on savers and debt holders.
  • Old-fashioned gilts and Treasury bonds may need to be “exorcised” from model portfolios and replaced with more attractive alternatives both from a risk and a reward standpoint.

This country desperately requires a rebalancing of priorities. After readjusting the compensation scales via regulation and/or free market common sense, America needs to anoint a new set of Mensans who can create something more than a cash machine and make this country competitive again in the global marketplace. We need to find a new economic Keynes or at least elect a chastened Congress that can take our structurally unemployed and give them a chance to be productive workers again. We must have a President whose idea of “centrist” policy is not to hand out presents to the right and the left and then altruistically proclaim the benefits of bipartisanship. We need a President who does more than propose “Win The Future” at annual State of the Union addresses without policy follow-up. America requires more than a makeover or a facelift. It needs a heart transplant absent the contagious antibodies of money and finance filtering through the system. It needs a Congress that cannot be bought and sold by lobbyists on K Street, whose pockets in turn are stuffed with corporate and special interest group payola. Are record corporate profits a fair price for America’s soul? A devil’s bargain more than likely.

To rebalance debt loads and re-equitize financial institutions that should have known better, central banks and policymakers are taking money from one class of asset holders and giving it to another. A low or negative real interest rate for an “extended period of time” is the most devilish of all policy tools. And the asset class holder that it affects, or better yet, “infects,” is the small saver and institutions such as insurance companies and pension funds that hold long-term fixed income assets. It is anyone who holds bonds with coupons that cannot keep up with inflation or the depositor in a local bank who cumulatively holds trillions of dollars in time deposits that don’t earn a real rate of interest. This is the framework that has been created by modern-day policymakers who have innovated far beyond their biblical counterparts. To put it bluntly, they are robbing savers and taking money surreptitiously from longer-term asset holders who are incorrectly measuring future inflation.

Persons Not In The Labor Force But Who Want Jobs Are Now At All Time Record!

Posted By on February 4, 2011

Interesting Tid Bit!

The number of people who are not in the labor force, but who want a job now  just hit  6,643K, a jump of 431K from December.  It is the highest number in history. If included in the labor statistics, it would send the unemployment rate to about 12.8%.

Demographics Doo Doo In Congress

Posted By on February 4, 2011

The House is the youngest since Eisenhower was elected in 1952.  And the Senate, well….it’s the oldest Senate we’ve ever had going back to the Civil War.  No wonder they can’t agree on anything!

Bernanke Says No Inflation Problem Here In The United States…

Posted By on February 3, 2011

Uh…OK let her rip Big Ben….Speaking at the National Press Club in Washington,  Ben Bernanke said it’s up to other countries to control their own inflation. It’s not a U.S. problem!  By the way big Ben, the continuous commodity index is on a roll to the upside…oh well, guess that doesn’t count.

Just so you know…….

By Definition:   The Thomson Reuters Equal Weight Continuous Commodity Index is recognized as a major barometer of commodity prices. The index comprises 17 commodity futures that are continuously re-balanced: Cocoa, Coffee, Copper, Corn, Cotton, Crude Oil, Gold, Heating Oil, Live Cattle, Live Hogs, Natural Gas, Orange Juice, Platinum, Silver, Soybeans, Sugar No. 11, and Wheat. The index trades on the ICE Futures Exchange.

Bernanke said the recovery should gain speed this year, but continued support from the Fed is needed amid high unemployment and low inflation, he shrugged off higher commodity prices.

The United Nations apparently has a different opinion on inflation!

Surging food prices that contributed to sparking uprisings in Tunisia and Egypt threaten to fuel more unrest. The United Nations said Thursday its index of global food prices reached a new all time high last month, eclipsing the peak in July 2008, due to rising prices for cereals, sugar and vegetable oils. The gauge rose 3.4%, its seventh straight monthly gain, putting prices at their highest point since the U.N. Food and Agriculture Organization started measuring global prices in 1990.

U.S. And China Threaten Each Other According To WikiLeaks Documents

Posted By on February 3, 2011

The United States threatened to take military action against China during a secret “star wars” arms race within the past few years, according to leaked documents obtained by The Daily Telegraph.


By Tim Ross, Holly Watt and Christopher Hope

The two nuclear superpowers both shot down their own satellites using sophisticated missiles in separate show of strength, the files suggest.

The American Government was so incensed by Chinese actions in space that it privately warned Beijing it would face military action if it did not desist.

The Chinese carried out further tests as recently as last year, however, leading to further protests from Hillary Clinton, the US Secretary of State, secret documents show.

Beijing justified its actions by accusing the Americans of developing an “offensive” laser weapon system that would have the capability of destroying missiles before they left enemy territory.

The disclosures are contained in the latest documents obtained by the Wikileaks website, which have been released to The Telegraph. They detail the private fears of both superpowers as they sought mastery of the new military frontier.

More at:

Gallup Finds U.S. Unemployment Up Slightly in January to 9.8%

Posted By on February 3, 2011

It will be interesting to see if the government figures come in the same…so where is the “big economic recovery” that we hear about on a daily basis from the talking heads…looks more like a “small economic recovery” to us…inquiring minds want to know!


by Dennis Jacobe, Chief Economist

PRINCETON, NJ — Unemployment, as measured by Gallup without seasonal adjustment, increased to 9.8% at the end of January — up from 9.6% at the end of December, but down from 10.9% a year ago.

Underemployment Essentially Unchanged in January

Underemployment — the combination of part-time workers wanting full-time work and Gallup’s U.S. unemployment rate — was 18.9% in January, essentially the same as the 19.0% of December. Underemployment now stands one percentage point below the 19.9% of a year ago.

The Story Of Johann Gutenberg….Who’s That You Say? Read On

Posted By on February 3, 2011

From Art Cashin on the floor of The New York Stock Exchange

On this day in 1468, one of the most influential figures in the last 2000 years (and maybe all of history) died.  To keep things in perspective try to remember a few things:  Leonardo Da Vinci was seven years old, Michelangelo had not been born yet and a guy named Christopher Columbus was just a teenage apprentice on a Genovese Ferry.

If it had not been for this guy who died on this day, none of those guys would have become as famous as they are today.  In fact, if it had not been for this guy who died, the Dark Ages might have remained dark and 90% of what we know today would be unknown.  He had created a revolution that changed the way ideas were processed and began the knowledge revolution.

The deceased was Johann Gutenberg….yes the inventor of “moveable type”….and thus printing….and thus knowledge for the common man.  So, you say, let’s hear about his grand and laudatory funeral.

Well, the man who changed much of history died blind, poor, and virtually unnoticed.  Now, before you cynically assume this dismal end was the result of the failure of early printing, check again.  Gutenberg’s printing was a winner from the get go.  He started it in 1450 and within five years the Gutenberg Bible was almost due.  Also due, however, was a loan to a certain Johann Fust (seed money for the print shop).  Fust knew a good thing when he saw one and refused to extend the loan for even one day.  In default, Gutenberg handed over the print shop (type, press, paper, coffee-pot) to Fust who completed the Bible and became fabulously wealthy.

Australia’s Cyclone Yasi Will Have An Impact On Commodities And Economies Worldwide

Posted By on February 2, 2011

Australia’s cyclone Yasi is one of history’s worst…and will have impacts on commodities worldwide!  This will be a tough summer for inflation which the U.S. government says we don’t have!

Starbucks To Introduce New Logo Without Name

Posted By on February 2, 2011

Logo changes carry with them certain challenges, but most at least show the name!

Starbucks has emerged over the last 20 years as one of the premier consumer brands in the world, alongside icons like Apple and Nike. Now, the company has decided to give that brand a facelift, revamping its ubiquitous logo. While logo overhauls can successfully communicate a company’s evolution and growth, those changes are also fraught with peril. Redesigns that are poorly conceived, or considered too radical, have triggered a backlash among loyal customers, the very people who give the brand its power. In the case of Starbucks, the new logo highlights a strategic shift for the company — but it has also sparked criticism from many outspoken fans.

The new Starbucks logo is an obvious departure, but not a radical shift, from the logo that has adorned the coffee chain’s cups since 1992. It retains the company’s signature siren (a twin-tailed mermaid figure) still in the traditional Starbucks green. When Starbucks was founded in the 1970s, the mermaid was selected as a nod to the seafaring nature of the coffee business (the chain’s namesake is Starbuck, the first mate character on the whale ship depicted in Herman Melville’s Moby-Dick). But gone are the words “Starbucks” and “Coffee,” a move that highlights the company’s expansion plans.

The deletion of the words “Starbucks Coffee” from the logo is obviously significant. Dispensing with a direct connection to coffee signals that the chain, which sells sandwiches, baked goods, music and other products in its stores as well as branded coffee through supermarkets, is angling to diversify further. “Our brand identity will give us the freedom and flexibility to explore innovations and new channels of distribution that will keep us in step with our current customers and build strong connections with new customers,” founder and CEO Howard Schultz wrote on the company’s website in early January.

At the same time, dropping the name altogether plays to the company’s global ambitions. In the spring of 2010, Schultz said Asia represented the company’s biggest growth opportunity and that the chain would ultimately open thousands of stores in China. In early 2011, the company also announced plans for entering the market in India. With no verbiage on the new logo, the company avoids the complication of translating its name into the languages of those countries as well as other future markets.


Commodities On A Tear…But, The U.S. Government Says Nope, “No Inflation”

Posted By on February 2, 2011

Commodities are now setting new records almost daily.  Where the stock markets still have some catching up to do, commodities are exploring new high territory.

Minimum Wage Comparisons…Europe Vs. The United States

Posted By on February 2, 2011

The European Commission reported the monthly minimum wages for European countries for 2011…here is how it compares to the United States.

More at:

Massive Cyclone Of Epic Proportions Makes Landfall In Australia

Posted By on February 2, 2011

Australia is fighting its worst weather in a 100 years, first rain and floods, now a huge cyclone.  Cyclone Yasi, which is now projected to be a category 5 storm according to the Australian Weather Bureau, is making landfall in Queensland and will add to the continent’s flooding misery, which has already incurred over $20 billion of damages to eastern states. Yet in a case of supreme irony, the West of the continent, unlike the East which has been having flood after flood, and which is the source of Australia’s bread basket and where the bulk of the grains come from, is wrapped in a drought that threatens to impair an already week wheat harvest.

From Bloomberg: “At stake is the output of the country’s biggest wheat- growing state at a time when global food shortages have pushed prices to records. The drought has already prompted the government of Western Australian state Premier Colin Barnett to cut its economic growth forecast for the year to June 30 to 4 percent, from 4.5 percent.”

CAIRNS, Australia (AP) — The eye of the most powerful cyclone to hit northeast Australia in nearly 100 years has made landfall. Cyclone Yasi’s eye came ashore at the small resort town of Mission Beach early Thursday morning. Thousands of residents huddled in evacuation centers or hid at home in bathrooms behind piles of blankets and mattresses.

Australian leaders issued dire warnings of potential devastation for cities and towns dotted along a stretch of coast more than 190 miles (300 kilometers) long in north Queensland state, in an area considered the gateway to the Great Barrier Reef.

“This is a cyclone of savagery and intensity,” Prime Minister Julia Gillard said in a nationally televised news conference as the storm moved toward the coast. “People are facing some really dreadful hours in front of them.”

Winds at the center of the storm were gusting up to 186 mph (300 kph), and the front was about 300 miles (500 kilometers) across. The worst of the winds were expected to last up to four hours on the coast, though blustery conditions and heavy rain could last for 24 hours.

Stratfor: Mubarak Declines To Run For Re-Election

Posted By on February 1, 2011

Looks like a stalling tactic…If we were Egyptian President Hosni Mubarak, we’d be getting out of Dodge (Egypt) and fast!

February 1, 2011

Egyptian President Hosni Mubarak said Feb. 1 he would not seek another term as president in elections slated for September but that he will complete his current term. In a televised national address, his second since the Egyptian unrest began the previous week, Mubarak said he would use the remainder of his term to oversee the transition of power. He also called on the parliament to amend the Egyptian Constitution’s Article 76 (which narrows the pool of potential presidential candidates) and Article 77 (which allows for unlimited presidential terms). It is currently unclear whether these measures will be considered.

The opposition immediately rejected the pronouncement. Each political concession offered during this crisis by the Egyptian political establishment — which until this point had ruled with absolute authority since the 1950s — has only emboldened the opposition. Unrest is thus likely to continue, which means the Egyptian military likely will attempt to force Mubarak to step down before the elections. However, even this will not likely resolve matters, as the need to create a neutral caretaker government until elections can be held will be the basis for further struggles between the regime and the opposition.

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Food Stamp Usage Continues Higher…Up 14% From One Year Ago

Posted By on February 1, 2011

We’re looking at nearly 15% of the population now on food stamps….and the drift between the rich and the poor continues to get wider by the day! 

As of November, the SNAP program had 43.6 million participants, an increase of 400k from October, and a 14% increase, or 5.3 million from a year prior. The chart below says it all.

A Fabulous Story, My Good Watson

Posted By on January 31, 2011

From Art Cashin on the floor of The New York Stock Exchange

On this day in 1876, an already legendary medical professor at Edinburgh University began to address a new group of students.  He began his lecture with his usual demand for observation.  He pounded on his theme of the “vast importance of little distinctions” of the “endless significance of trifles.”  “Yeah, yeah!,” thought the students (or whatever the 1870’s equivalent of a cynical “yeah, yeah” was).  Sure you’re a famous surgeon and professor but what will all this minutia get us.

He called for the first patient.  Then, according to published reports, the following happened….

A man walked in and stood for a moment.  The professor walked around him slowly, twice.  Then the professor said something like – “Army…recently discharged….probably Scots Highland regiment.  (“Aye! Sir!” came the reply).  Next – you were likely a non-commissioned officer…likely in the West Indies – perhaps Barbados.”

When the patient confirmed the correctness of every guess, the class was intrigued.  When Professor Joseph Bell explained each guess they were amazed.  “The man appeared courteous and respectful but did not remove his hat.  Members of the Army do not, so he was likely recently discharged.  His gait and tone tell me he’s Scottish thus the Highland regiment and he had an air of authority suggesting he was a non-com.  And the mild elephantitis evident on his arms tell me he was stationed in Barbados where there have been recent outbreaks.”

Needless to say, the class was impressed.  One student in particular was awed.  For the next few years, he observed Bell observing things. Every day was fascinating – like the time a student knocked on Bell’s door.  Bell, without looking up, said – “What are you worried about?”  Startled….the student said, “How did you know I was worried?”  Still not looking up, Dr. Bell said – “You knocked four times.  The timid knock once.  Most men knock either two or three times.  The worried, knock four times.”  Time and again the awe-struck student watched Dr. Bell make amazing deductions from simple observations.  He vowed he would never forget Dr. Bell – and he never did – and he made sure none us would either.

After graduation, the student hung out his medical shingle.  Unfortunately, there was an outbreak of health at the time.  To avoid starving, the student turned to writing.  He needed a new kind of character, so he chose a detective….an incredibly observant detective….someone like Dr. Bell.  And…..for a sidekick he gave him a curious but not so observant doctor….somewhat like himself.  Thus, the author, Arthur Conan Doyle, portrayed himself as Dr. Watson, standing in the shadow of his hero – the great Dr. Bell – whom he renamed – Sherlock Holmes.

Donald Trump Says A Mideast Explosion Could Destroy OPEP While Lowering Oil Prices…And Tells Us How He Would Rebuild America

Posted By on January 31, 2011

Whether you like him or not, most would probably agree after reading this that Donald Trump would show us how an Eagle with clipped wings (the U.S.) can fly again.  This guy gets it.  You want to see growth again in the U.S., then here is the man for the job!

So Donald, tell us how you really feel about China.  But to tell the truth, he makes a number of extremely good point(s)….“If we ever taxed Chinese products coming into this country, we would pay off the debt so fast it would make your head spin. More importantly, we would start creating jobs in our country”.

Part 1 of a 2 part series:

Trump takes aim at America’s “horrible” trade agreements, declares that the Middle East is going to explode, warns about “catastrophic” oil prices, and charges that Obama’s Afghanistan policy is “dangerous and stupid.” He also complains that the United States is a “laughing stock” throughout the world — and confirms that he is seriously considering running for president in 2012.

Referring to President Obama’s State of the Union speech, Trump says: “He didn’t talk about the deficit, he didn’t talk about how to pay off all the debt that we have. Instead he’s telling everybody what a great country China is, that China has the fastest computer in the world. That should be for the president of China to talk about, not President Obama.

“I love the country and I hate what’s happening to the country. In 12 years China will take over as the world’s leading economic power, if not sooner, and the way we’re going this country will not be a great country as it was anymore. That’s so very very sad to me.”

Trump has a lot more to say about China.

“I’m a big buyer of products, and I’m also unfortunately a big buyer of Chinese products,” he says. “It’s very hard not to buy Chinese products, including sheetrock, which has destroyed many a development and many a life.

“I’ll say this: We make better products than China. The problem is they manipulate their currency so badly that it’s almost impossible for a person like me to buy outside China.

“I want to buy an American product. The Chinese products come in, they’re cheaper. They’re not as good but they’re cheaper. And it’s not because of their workers, it’s because of their manipulation of their currency.

“Another thing: If you try to do business in China, it’s almost impossible. They want all your technology. They want you to build your plants in China.

“We have a very weak policy. Whether it’s China, or the horrible agreement just signed with South Korea, or any of the other horrible deals that we make, we don’t have the ability to make good deals with other countries.

We’re like a whipping post for other countries. We are standing there and being beaten by South Korea, by Mexico, by China, by India. If you have a problem with a credit card and you call somebody up, that person is based in India.

“And then they wonder why we’re not going to have jobs for another five or six years.

Trump has a surprising response to speculation that the turmoil in Egypt and other countries in the Middle East could push oil prices to as high as $200 a barrel.

“It also could go the other way. Frankly, the Middle East is a tinderbox. It’s going to explode. OPEC will probably be destroyed if it explodes, and oil prices could go the other way.

“I understand economics. You break up what would normally be an illegal monopoly, OPEC, and break it up very strongly. The Middle East is exploding, and I’m saying that could have a positive impact on oil prices.

“If you look at oil right now, it’s soon going to be $100 a barrel. Far too high. It’s set by OPEC. I think OPEC would explode with the Middle East and that wouldn’t be the worst thing in the world.”

Trump has especially harsh words for OPEC and its grip on oil prices.

“Here you have 12 men, in this case all men, they sit around a table and they set the price of oil.

“We have so much oil. There’s so much oil out at sea. I see $3.50 for a gallon of gas. Cars are lined up trying to get it, and at $3.50. It’s a shame. It’s a ridiculous shame.

“Plus we don’t use our natural gas. We have more natural gas than anybody. Why we not using it is an amazing thing.

Asked where he thinks the price of oil is headed, Trump responds: “I think it could go, with proper leadership, down to $40 a barrel. I think if we continue the way it is, it’s going to go up to $150 a barrel.”

Turning to Afghanistan and the timeline President Obama has proposed for withdrawal of American troops, Trump tells Newsmax: “We should be out of there as soon as possible. At the same time, when Obama announced that he’s going to be out at a certain date, these militants are just sitting back saying, ‘He gave us a specific date. This is fantastic. We’ll just sit back and then we’ll take it over the minute they leave.’

Part 2 latter in the week!

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Home Ownership Rates Continue To Fall

Posted By on January 31, 2011

Home ownership rates continue to fall. History tells us that boom bust cycles tend to overshoot both on the upside and to the downside.  More downside should be expected here.

In the fourth quarter of 2010, 66.5% of Americans owned homes, down from 67.2% a year earlier and the lowest rate since the end of 1998, according the Census Bureau. The ownership rate surged to a record 69.2% in 2004’s second and fourth quarters. After that down she went.

Just 44.8% of black-only households were homeowners in the fourth quarter of 2010, down from 46% a year earlier. The rate for Hispanics also fell, to 46.8% from 48.4%, the Census showed. The rate for white, non-Hispanic households slipped to 74.2%, from 74.5%.

The West was most effected and continues to see high foreclosure rates. It registered the nation’s lowest ownership rate at 61%, down from 62.3% a year earlier. The Midwest had the highest percentage of homeowners among regions, but also saw a year-over-year decline, to 70.5% from 71.3%.

Florida Judge Rules New Healthcare Law Unconstitutional

Posted By on January 31, 2011

Here we go….things are going to get real interesting with the new healthcare law.  A federal judge ruled that Congress violated the Constitution by requiring Americans to purchase health insurance in the new health overhaul, and said the entire law “must be declared void.”

In ruling against President Obama‘s health care law, federal Judge Roger Vinson used Mr. Obama‘s own position from the 2008 campaign against him, when the then-Illinois senator argued there were other ways to achieve reform short of requiring every American to purchase insurance.  “I note that in 2008, then-Senator Obama supported a health care reform proposal that did not include an individual mandate because he was at that time strongly opposed to the idea, stating that, ‘If a mandate was the solution, we can try that to solve homelessness by mandating everybody to buy a house,’” Judge Vinson wrote in a footnote toward the end of his 78-page ruling Monday. 

The Greatest Bank Heist Ever! No, We’re Not Kidding

Posted By on January 31, 2011

Nearly a trillion U.S. dollars are gone, heisted and nobody knows who done it or how!  WikiLeaks might have exposed this mess.  How long has this been going on? Quite a while according to The Times, which has relied on Wikileaks cables to support some of what is being reported. 

What a bunch of morons, with our public money to boot!  Geez does it ever end?  Yes… ends when we run out of money or morons!

From Joe-Duarte and The New York Times

As if the Obama administration didn’t have enough problems, the next shoe might be the collapse of the Afghan banking system, where the losses at Kabul’s leading bank may be as high as $900 billion according to a report.

Banking “experts” are now expecting a possible “run on solvent banks, destroying the country’s nascent banking system and shaking the confidence of Western donors already questioning the level of their commitment to Afghanistan,” says the New York Times. The situation, according to the Times is a result of “fraud and mismanagement” which could lead to the “collapse” of the bank and a “broad financial panic in Afghanistan” according to American, European and Afghan officials who spoke to the New York Times.

So where did the money go? No one knows, of course. According to The Times: “Afghan officials and businessmen have said the money was invested in a real estate bubble that has since burst in Dubai, as well as in dubious projects and donations to politicians in Afghanistan. Millions of dollars have yet to be traced, and some of the money seems to have gone to front companies or individuals and then disappeared.”  According to the Times “but the problems are so serious that the International Monetary Fund has not yet renewed an assistance program to Afghanistan that expired in September.”

How long has this been going on? Quite a while. In fact, according to The Times, which relied on Wikileaks cables to support some of what it is reporting: “While Afghan and American officials depict a crisis far worse than has been made public, State Department cables released by WikiLeaks show that Afghan and Western regulators were aware of many of the problems, but were most focused on the problem of terrorist financing, rather than the fraud scheme that was the main problem at Kabul Bank.” So the old omelets can’t be made without breaking eggs principle seems to have been applied rigorously here. The problem is that the insurgents continue to operate, and the money is gone, leaving the U.S. and other countries with nothing to show for their efforts, both in terms of money and more important in terms of lives lost.

How long has this been going on? Quite a while. In fact, according to The Times, which relied on Wikileaks cables to support some of what it is reporting: “While Afghan and American officials depict a crisis far worse than has been made public, State Department cables released by WikiLeaks show that Afghan and Western regulators were aware of many of the problems, but were most focused on the problem of terrorist financing, rather than the fraud scheme that was the main problem at Kabul Bank.” So the old omelets can’t be made without breaking eggs principle seems to have been applied rigorously here. The problem is that the insurgents continue to operate, and the money is gone, leaving the U.S. and other countries with nothing to show for their efforts, both in terms of money and more important in terms of lives lost.

And as with the subprime mortgage crisis, accountants and consultants remained quiet. According to The Times: “Deloitte, a top United States accounting firm that had staffers in the Central Bank under a United States government contract over the last several years, either did not know or did not mention to American authorities that it had any inkling of serious irregularities at Kabul Bank. Deloitte was not responsible for auditing the bank’s books; a spokesman for Deloitte did not respond to requests for comment.”

The Times reports that there may be as much as $800 million in loans outstanding and that the bank has negotiated for as much as $300 million to be repaid, but “little” money has actually come back to the bank.

The government there is not likely to fall, at least not yet. But there is a trillion dollars missing. And it is possible that the government, or members of the government may have some of that money in their pockets in one way or another.

The U.S. is trying to balance its budget, yet there is a trillion dollars missing in Afghanistan. Who will answer to this? How did it happen? What if that money had been put toward Medicare and Social Security? Why are U.S. citizens footing the bill for the Afghan government’s graft?

The bottom line is that the lost money is never coming back. If you add the losses of the subprime mortgage crisis, the cost of bailing out the U.S. banking system and the U.S. automobile industry, the cost of the Iraq and Afghanistan wars, you will probably come up with enough money to balance the U.S. budget and to shore up Medicare and Social Security for a few years.

Yet, the U.S. continues on a reckless course of action while it’s about to put the big squeeze on its population. Heady stuff to think about as the streets of Cairo burn.

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Stratfor: Special Report On The Egypt Crisis In A Global Context

Posted By on January 30, 2011

January 30, 2011

By George Friedman

The Egypt Unrest: Full Coverage

It is not at all clear what will happen in the Egyptian revolution. It is not a surprise that this is happening. Hosni Mubarak has been president for more than a quarter of a century, ever since the assassination of Anwar Sadat. He is old and has been ill. No one expected him to live much longer, and his apparent plan, it was a possibility a year ago. There was no one, save his closest business associates, who wanted to see Mubarak’s succession plans happen. As his father weakened, Gamal’s succession became even less likely. Mubarak’s failure to design a credible succession plan guaranteed instability on his death. Since everyone knew that there would be instability on his death, there were obviously those who saw little advantage to acting before he died. Who these people were and what they wanted is the issue.

Let’s begin by considering the regime. In 1952, Col. Gamal Abdel Nasser staged a military coup that displaced the Egyptian monarchy, civilian officers in the military, and British influence in Egypt. Nasser created a government based on military power as the major stabilizing and progressive force in Egypt. His revolution was secular and socialist. In short, it was a statist regime dominated by the military. On Nasser’s death, Anwar Sadat replaced him. On Sadat’s assassination, Hosni Mubarak replaced him. Both of these men came from the military as Nasser did. However their foreign policy might have differed from Nasser’s, the regime remained intact.

Mubarak’s Opponents

The demands for Mubarak’s resignation come from many quarters, including from members of the regime — particularly the military — who regard Mubarak’s unwillingness to permit them to dictate the succession as endangering the regime. For some of them, the demonstrations represent both a threat and opportunity. Obviously, the demonstrations might get out of hand and destroy the regime. On the other hand, the demonstrations might be enough to force Mubarak to resign, allow a replacement — for example, Omar Suleiman, the head of intelligence who Mubarak recently appointed vice president — and thereby save the regime. This is not to say that they fomented the demonstrations, but some must have seen the demonstrations as an opportunity.

This is particularly the case in the sense that the demonstrators are deeply divided among themselves and thus far do not appear to have been able to generate the type of mass movement that toppled the Shah of Iran’s regime in 1979. More important, the demonstrators are clearly united in opposing Mubarak as an individual, and to a large extent united in opposing the regime. Beyond that, there is a deep divide in the opposition.

Western media has read the uprising as a demand for Western-style liberal democracy. Many certainly are demanding that. What is not clear is that this is moving Egypt’s peasants, workers and merchant class to rise en masse. Their interests have far more to do with the state of the Egyptian economy than with the principles of liberal democracy. As in Iran in 2009, the democratic revolution, if focused on democrats, cannot triumph unless it generates broader support.

The other element in this uprising is the Muslim Brotherhood. The consensus of most observers is that the Muslim Brotherhood at this point is no longer a radical movement and is too weak to influence the revolution. This may be possible, but it is not obvious. The Muslim Brotherhood has many strands, many of which have been quiet under Mubarak’s repression. It is not clear who will emerge if Mubarak falls. It is certainly not clear that they are weaker than the democratic demonstrators. It is a mistake to confuse the Muslim Brotherhood’s caution with weakness. Another way to look at them is that they have bided their time and toned down their real views, waiting for the kind of moment provided by Mubarak’s succession. I would suspect that the Muslim Brotherhood has more potential influence among the Egyptian masses than the Western-oriented demonstrators or Mohamed ElBaradei, the former head of the International Atomic Energy Agency, who is emerging as their leader.

There is, of course, the usual discussion of what U.S. President Barack Obama’s view is, or what the Europeans think, or what the Iranians are up to. All of them undoubtedly have thoughts and even plans. In my view, trying to shape the political dynamics of a country like Egypt from Iran or the United States is futile, and believing that what is happening in Egypt is the result of their conspiracies is nonsense. A lot of people care what is happening there, and a lot of people are saying all sorts of things and even spending money on spies and Twitter. Egypt’s regime can be influenced in this way, but a revolution really doesn’t depend on what the European Union or Tehran says.

There are four outcomes possible. First, the regime might survive. Mubarak might stabilize the situation, or more likely, another senior military official would replace him after a decent interval. Another possibility under the scenario of the regime’s survival is that there may be a coup of the colonels, as we discussed yesterday. A second possibility is that the demonstrators might force elections in which ElBaradei or someone like him could be elected and Egypt might overthrow the statist model built by Nasser and proceed on the path of democracy. The third possibility is that the demonstrators force elections, which the Muslim Brotherhood could win and move forward with an Islamist-oriented agenda. The fourth possibility is that Egypt will sink into political chaos. The most likely path to this would be elections that result in political gridlock in which a viable candidate cannot be elected. If I were forced to choose, I would bet on the regime stabilizing itself and Mubarak leaving because of the relative weakness and division of the demonstrators. But that’s a guess and not a forecast.

Geopolitical Significance

Whatever happens matters a great deal to Egyptians. But only some of these outcomes are significant to the world. Among radical Islamists, the prospect of a radicalized Egypt represents a new lease on life. For Iran, such an outcome would be less pleasing. Iran is now the emerging center of radical Islamism; it would not welcome competition from Egypt, though it may be content with an Islamist Egypt that acts as an Iranian ally (something that would not be easy to ensure).

For the United States, an Islamist Egypt would be a strategic catastrophe. Egypt is the center of gravity in the Arab world. This would not only change the dynamic of the Arab world, it would reverse U.S. strategy since the end of the 1973 Arab-Israeli war. Sadat’s decision to reverse his alliance with the Soviets and form an alliance with the United States undermined the Soviet position in the Mediterranean and in the Arab world and strengthened the United States immeasurably. The support of Egyptian intelligence after 9/11 was critical in blocking and undermining al Qaeda. Were Egypt to stop that cooperation or become hostile, the U.S. strategy would be severely undermined.

The great loser would be Israel. Israel’s national security has rested on its treaty with Egypt, signed by Menachem Begin with much criticism by the Israeli right. The demilitarization of the Sinai Peninsula not only protected Israel’s southern front, it meant that the survival of Israel was no longer at stake. Israel fought three wars (1948, 1967 and 1973) where its very existence was at issue. The threat was always from Egypt, and without Egypt in the mix, no coalition of powers could threaten Israel (excluding the now-distant possibility of Iranian nuclear weapons). In all of the wars Israel fought after its treaty with Egypt (the 1982 and 2006 wars in Lebanon) Israeli interests, but not survival, were at stake.

If Egypt were to abrogate the Camp David Accords and over time reconstruct its military into an effective force, the existential threat to Israel that existed before the treaty was signed would re-emerge. This would not happen quickly, but Israel would have to deal with two realities. The first is that the Israeli military is not nearly large enough or strong enough to occupy and control Egypt. The second is that the development of Egypt’s military would impose substantial costs on Israel and limit its room for maneuver.

There is thus a scenario that would potentially strengthen the radical Islamists while putting the United States, Israel, and potentially even Iran at a disadvantage, all for different reasons. That scenario emerges only if two things happen. First, the Muslim Brotherhood must become a dominant political force in Egypt. Second, they must turn out to be more radical than most observers currently believe they are — or they must, with power, evolve into something more radical.

If the advocates for democracy win, and if they elect someone like ElBaradei, it is unlikely that this scenario would take place. The pro-Western democratic faction is primarily concerned with domestic issues, are themselves secular and would not want to return to the wartime state prior to Camp David, because that would simply strengthen the military. If they win power, the geopolitical arrangements would remain unchanged.

Similarly, the geopolitical arrangements would remain in place if the military regime retained power — save for one scenario. If it was decided that the regime’s unpopularity could be mitigated by assuming a more anti-Western and anti-Israeli policy — in other words, if the regime decided to play the Islamist card, the situation could evolve as a Muslim Brotherhood government would. Indeed, as hard as it is to imagine, there could be an alliance with the Muslim Brotherhood designed to stabilize the regime. Stranger things have happened.

When we look at the political dynamic of Egypt, and try to imagine its connection to the international system, we can see that there are several scenarios under which certain political outcomes would have profound effects on the way the world works. That should not be surprising. When Egypt was a pro-Soviet Nasserite state, the world was a very different place than it had been before Nasser. When Sadat changed his foreign policy the world changed with it. If Sadat’s foreign policy changes, the world changes again. Egypt is one of those countries whose internal politics matter to more than its own citizens.

Most of the outcomes I envision leave Egypt pretty much where it is. But not all. The situation is, as they say, in doubt, and the outcome is not trivial.

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The Class Structure Favoring The Rich And Powerful Is About To Be Fully Challenged

Posted By on January 30, 2011

Got a good point here…the powers to be and the rich should pay attention to this… before it’s to late!
When a country, among other shortcomings, relinquishes its financial system and its population’s well-being to the pursuit of ‘good deals’, there is going to be substantial fallout. The citizens protesting in the streets of Greece, England, Tunisia, Egypt and anywhere else, may be revolting on a national basis against individual leaderships that have shafted them, but they also have a common bond; they are revolting against a world besotted with benefiting the powerful, the rich and the deal-makers at the expense of ordinary people.

Heads Up On The United States And Egypt…

Posted By on January 30, 2011

In a nut shell it’s not going well for the U.S. interests in Egypt, as our favorability rating in Egypt hit an all time low of 17% in 2010!

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