Failure.
The engineering miracle of the 98-ton containment cap has failed in the Gulf, and the spill continues unabated. BP is fiercely pursuing a solution, but the best hope now is the two relief wells under way. Best estimate is 60 days, and perhaps as long as 90. This translates into continuing nightmare political scenarios. The White House manages the crisis by repeating that BP must pay. Spoke to the NYT about the maneuvers of the Congress to raise the cap of $75 million that is mandated by law. Senator Robert Menendez seeks to raise the cap to $N billion retroactively -- sometimes known as a bill of attainder. There are too many twists to guess, except that POTUS has not managed any crisis at all so far, just ridden them out. This is presidential of him; however the ride may be in the bumpy part now. The euro is dire. The British lack a leader. The Democrats are shrinking like a wicked witch. And the NY markets are about as reliable as jello. If the jobs number would improve, POTUS could clutch a talking point. However, there is only the drip, drip of the tentative hiring --which encourages the long-term unemployed to start looking, and this will inccrease the jobless percentage in the summer months. Is POTUS unlucky?
Euro Hurricane
The major unknown of the moment remains the EU. The Gulf leak, BP relief wells and the inadequate containment cap are at least capable of correction. There is no known fix for the Democratic weakness. Spoke to Greg Giroux, CQ, to learn that even the 14-term Alan Mollohan, WV-1, who was re-elected by 99.9 in 2008, is now in a losing position to a challenge from his own party, a young state senator named Oliverio, who is hammering Mollohan as unethical. This puts a deeply blue CD into play, adding a likely swing seat to the GOP target zone. What threatens POTUS the most? A complete collapse of the House? No. The polls? Yes. POTUS still rattles on with a professorial wave of the hand about healthcare (he was never a professor; he was a lecturer by grace of the snobs at Chicago; and his professorial airs are aspirational). By the August recess, we will know if POTUS can hold 40% approval. The new question is hurricane season, which begins June 1, and BP works now to get those relief wells in place before a blow.
Some argue that the only effective way of stopping the oil spill in the Gulf is to detonate a thermonuclear device. As this would require POTUS to actually take a decision, we can expect the oil leak to continue indefinitely. Obama will be able to take refuge in his own personal Tora Bora: blame Bush; blame Big Oil; blame America.
The job of being president has overwhelmed Obama. He will ride out his term on the now thread-bare trappings of the office. It is scary to think that, despite what happens, 40% will continue to support him. Whatever you might say, that’s an awful lot of people. Using the oil spill analogy, that’s an awful lot of oil spilled to pollute the potential good will and effectiveness of the next administration.
The focus of global terrorism will now center on oil rigs. It’s a model that was initially developed by the Somali pirates. It was duly noted that the West is incapable of responding even to minor threats; and that each failure to respond diminishes it ten-fold. The time has come to buckle up; to know that we are not being told even the half of it; and that, if we ever were to find out the whole truth, we would realize that none of it is good.
http://peterkoelliker.blogspot.com/
Not to leave out the pesky Jihadis on Broadway:
# posted by Pundita : 5/09/2010 06:01:00 AM
U.S. to Pakistan: We're really, really upset with you this time so we'll have to give you more money
WASHINGTON AT DEFCON1
"The new pressure from the Obama administration is a departure from its more usual courteous encouragement to tackle Islamic militants. The ease with which [Times Square bomber] Shahzad was able to move between the US and Pakistan, often carrying tens of thousands of dollars, has increased fears in the White House that another attempt at a terror attack could succeed."-- Times Online, May 9
Whereupon the U.S. departments of defense and state try out the Good Cop Bad Cop Routine on General Kayani
May 7 (Reuters) - The United States has warned of "severe consequences" if a successful extremist attack in America were traced back to Pakistan, Secretary of State Hillary Clinton said on Friday in an interview with CBS "60
Minutes" [to air Sunday] ...
"We've made it very clear that if -- heaven-forbid -- an attack like this that we can trace back to Pakistan were to have been successful, there would be very severe consequences," she said, without elaborating. ... "We've gotten more cooperation. It's been a real sea change in the commitment we have seen from the Pakistani government. We want more, we expect more," Clinton said ...
May 7 (Reuters) The United States is prepared to provide more assistance to Pakistan, if it wants it, in the wake of last week's attempted car bombing in New York, Defense Secretary Robert Gates said on Friday. ... But Gates, far from publicly calling on Pakistan to do more, renewed praise for Islamabad's efforts against insurgents and acknowledged Pakistan's armed forces were already stretched.
[Approximately 650,000 personnel are on active duty in the Pakistan military which is the world's 6th largest armed force as of 2010. Combined with the 302,000 strong Paramilitary forces and 528,000 in reserve, the Military of Pakistan has a total size of over 1,000,000 personnel.]
Rule #1 for a happy relationship with Pakistan's military: Never ever try to monitor where your humanitarian aid money goes in Pakistan
May 8 (New York Times) ... The Obama administration was planning to use the failed terrorist attack [in Times Square] to impress on the Pakistanis the urgency of getting American development aid in place in the tribal areas where militancy thrives, and into Karachi, the biggest city, where radical religious schools, known as madrasas, are popular.
“Last week’s incident makes it more urgent and more true” of the need to bring stability and security to these areas where the militants have multiplied, an American official said.
About $150 million was appropriated by Congress for assistance to the tribal areas in the coming period for reconstruction and other projects. But a host of problems, including American insistence on being able to monitor the money being spent, has made it a slow process. ....
As a last resort threaten General Kayani with a policy debate
May 9 (Washington Post) Washington After more than a year of doling out carrots to Pakistan, the Obama administration has reminded its strategic partner on the Afghanistan border that the U.S. mood could quickly sour if FBI investigators confirm ties between the Times Square bombing suspect and Pakistani insurgent groups.
The warnings so far have been nonspecific and publicly couched in confidence that the Pakistanis will do whatever is required. But the administration has indicated that anything less than full cooperation on the May 1 bombing attempt could make the continued flow of billions of U.S. economic and security dollars "problematic," officials from both countries said. ...
An ever-closer relationship with Pakistan is at the core of Obama's war strategy in Afghanistan and against al-Qaeda. The nature and outcome of the threatened consequences for noncooperation are subjects the administration has barely begun to contemplate.
"There's going to be enough here to trigger a policy debate," predicted one senior official with access to U.S. intelligence on Pakistan and involvement in White House discussions about the bombing attempt. ...
What U.S. intelligence on Pakistan?
Cut to the sound of chirping crickets.
And then there are those decisive Europeans:
The euro slid to $1.2715 from $1.3293 during the week, and is down 15 percent since late November. European stocks sank the most in 18 months, with the Stoxx Europe 600 Index tumbling 8.8 percent to 237.18.
The extra yield that investors demand to hold Greek, Portuguese and Spanish debt instead of benchmark German bonds rose to euro-era highs. The premium on 10-year government bonds jumped as high as 973 basis points for Greece, 354 basis points for Portugal and 173 basis points for Spain.
Europe came under pressure on a hastily arranged conference call of Group of Seven finance chiefs before the summit. All agreed on “the need for a clear, timely and strong response,” Canadian Finance Minister Jim Flaherty, who chaired the call, told reporters in Ottawa. “We hope to see a strong, early policy response in Europe.
To contact the reporters on this story: James G. Neuger in Brussels at jneuger@bloomberg.net Gregory Viscusi in Brussels at gviscusi@bloomberg.net
Forget the Shadow! The Market knows!
http://www.ft.com/cms/s/0/c56eeec6-5b4d-11df-85a3-00144feab49a.html
Speculators extend record bets against euro
By Peter Garnham
Published: May 9 2010 14:15 | Last updated: May 9 2010 14:15
Speculators have ramped up their bets against the euro to fresh record levels as concerns over contagion from the Greek debt crisis threaten the very existence of the single currency.
Positioning data from the Chicago Mercantile Exchange, often used as a proxy for hedge fund activity, showed speculators increased their short positions in the euro to a record 103,400 contracts, or $16.8bn in the week ending May 4.
This left short positions in the euro outnumbering long positions by a ratio of four to one, highlighting the negative sentiment towards the single currency.
“The market is extremely one-sided, which increases the odds of a round of short-covering,” said Camilla Sutton at Scotia Capital. “However, developments to date leave us unable to to find a reason to buy the euro.” ***
The bond vigilantes had this pegged before Greece hit the Obama-dazzled press smack in the face:
http://www.ft.com/cms/s/0/e16906ce-1062-11df-a8e8-00144feab49a.html
these shorts will be covered fast (probably already in hong kong singapore and tokyo).
almost a trillion all in by the pols? time to hedge out and wait.
but the trillion will erode and evaporate and the time will come.
This is not the largest oil spill, Katrina and Exxon Valdez were much bigger.
Obama and MSM have REFUSED to acknowledge Nashville is still under water and dozens killed by the flooding. Not mentioned in days.
ABC news just reported Twitter was down for an hour!
I guess White Rednecks drowning are less important than Oil spills and Twitter