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JOHN BATCHELOR SHOW
Co-hosts: Thaddeus McCotter, WJR, the Great Voice of the Great lakes, and author of Liberty Risen; and John Fund, National Review Online.
Hour One
Monday  24 August 2015 / Hour 1, Block A: Tom Joscelym Long War Journal, and Bill Roggio, Long War Journal, in re: 
The Islamic State wants Mokhtar Belmokhtar dead - The Islamic State's men in Libya have added Mokhtar Belmokhtar to their "wanted dead" campaign. The Islamic State has released dozens of online posters targeting its pro-al Qaeda opposition in North Africa. Some of the men have been killed. The campaign was launched as a response to the Islamic State's losses in Derna, Libya. "Wanted, dead" posters: al Q personalities. Posters are revelatory.
 
US says Baghdadi’s top deputy killed in airstrike - The White House announced today that Fadhil Ahmad al Hayali (a.k.a. Hajji Mutazz), the deputy leader of the Islamic State, was killed in an airstrike on June 18. US military officials previously reported that he had been killed in December 2014. Al Hayali was one of the most senior leaders in the "caliphate," and had wide-ranging responsibilities.
 
Islamic State attacks Iraqi troops near Fallujah - The attack near Fallujah coincided with the release of a video by the Islamic State shows the corpses of more than 30 Iraqi troops in Saqlawiyah in 2014. The jihadist group also seized a number of armored vehicles.
 
Islamic State branch says caliphate’s ‘soldiers’ bombed Cairo courthouse, national security building - The Islamic State's so-called Sinai "province" has claimed responsibility for a car bombing outside of a Cairo courthouse and an Egyptian national security building earlier today.
 
Ayman al Zawahiri discusses the importance of jihadist mediaa  In his third media appearance this month, the al Qaeda emir discusses the Battle of Tora Bora and the value of a united jihadist media. The video is the seventh installment in Zawahiri's "Days with the Imam" series, in which he recounts episodes from Osama bin Laden's life. The first video in the series was released in November 2011.
 
Islamic Movement of Uzbekistan: offshoot: Islamic Jihad Union, members and leaders' claiming allegiance to Taliban in Kunduz. Others going with ISIS. Central Asian groups split over leadership of global jihad.
Monday  24 August 2015 / Hour 1, Block B: Tom Joscelym Long War Journal, and Bill Roggio, Long War Jou0rnal, in re:  . . . ISIS playing a home game: pedigree going back to Saddam so they know the turf and the local enemies.  Was in a vehicle near Mosul [home to slave camps of women, mostly Yazidis and Christians]; sigint? ground-level humint?  American suicide bomber killed himself at Baji? _____al Amriki, unconfirmed. Al Zawahiri has been invisible for  along time, then issued three messages this months, esp claiming close friendship and collegiality with bin Laden.  Goal is to unite jihadists via the media world rather than create rifts, the goal of ISIS. 
Monday  24 August 2015 / Hour 1, Block C:  Gordon G. Chang, Forbes.com, in re:   Beijing invited PM Abe to the Chinese "Victory over Japan" parade in commemoration of the end of WWII.  He declined.  Meanwhile the market has been parachuting downward; today was a rout. Chinese economy falling precipitously, Beijing doesn't have the juice to stop it. "Market Leninism."  Stats from China have been opaque, unlikely; now, the curtain is being drawn back.  That 7% growth that Beijing touted is now seen to be 5%, which itself is bogus. Try 2% or maybe flat, at zero.  Can the PBoC buoy the RMB?  In Vietnam, two formal devaluations of the dong; also the Korean won has gone down.  Economics mtg at Jackson Hole next week; Yelling can't raise rates yet in view of China's turbulence.  This makes the world economy more dangerous and prone to collapse – we ought to see banks' doing the opposite. Because of the China factor, we'll see a lot of bad decisions.  Acceleration of massive [humongous] Chinese capital flight – outrageous prices in London, West End - this week, faster even than last week. Chinese capital controls are fierce on paper but don't work. Chinese people are geniuses in avoiding regulation.   Shanghai has just opened down 6.41%; Nikkei eke dow.  Look for civil unrest – a Shanghai crowd detained a metals ___ and turned him over to the police; a sort of citizens's arrest.  There could be no PRC by the end of this year, as Anne Stevenson-Yang said on this program last week.   A theory for Beijing's seemingly inexplicable devaluation of the renminbi:   http://www.forbes.com/sites/gordonchang/2015/08/23/did-china-just-sucker... &   https://twitter.com/ThatElJefe/status/635839484127526913   The Korea Parlor Games.
Monday  24 August 2015 / Hour 1, Block D: Jim McTague, author,  & Aaron Task, analyst; in re: Janet Yellen to begin the clawback of the Fed's reputation and raise rates in September, which she probably cannot do under the circumstances in view of the fundamentals of the global economy and the carnage in asset prices (the mkt + commodities).   Fed mtg in Jackson Hole will have competing agendas: dove vs hawk.  The mkt volatility this morning was chaos.  The trading robots shut off the exchange-traded fund sector, crushing retail investors, trades couldn't be executed; tape was stale.  If the rate stays at 0%, the effect on Americans will be no return on savings, punish retirees and anyone living on savings. Natl perception is that this whole thing is a house of cards. Zero interest rates are a form of corporate welfare – marginal bz couldn't survive in an ordinary economy; we have no creative destruction, a day of reckoning will come, probably cause a recession.  We had a Fed started only in 1913, has at least as bad a record as no Fed; we doe we worship at the altar of Greenspan and Bernanke.  US society has become greatly more dependent on financial matters than actual productivity – predicated on Wall St and the moving of paper rather than production of things. I think the Fed is at a dead end – nothing to do to stimulate the economy. Congress shd think of [work projects] – president needs to [organize this]. 
Love VIG traders.  They live on lava lattes. WH announcing energy subsidies for renewables on a day oil trades below $40.  Timing! Kansas Democratic Party (and Boss McCaskill of MO)
Jerry Moran re-elect vs Dr Wolff?  The governor's tax cut plan and governance. Trump in Kansas polling.  Bush in Kansas polling.
Hour Two
Monday  24 August 2015 / Hour 2, Block A:  David Drucker, Washington Examiner, and John Fund, NRO, in re: Joe Biden met with Eliz Warren: why? Pres Obama blesses the story that Joe Biden is entertaining a challenge to Mrs Clinton.  A "kissing-the-ring" sort of meeting for the sitting VP to honor her by asking for a consultation.  Does Elizabeth Warren want to be on the ticket? Anyone from Hvd who enters the Senate would; and if Joe Biden became president for one term (by dint of his age) that would leave his VP to run for the presidency.  . . . DCCC; too early to tell. Delaware gossip has been very low; also, Biden has always been a loyal foot soldier; were he to jump in now that'd create a huge division in the party, but he's letting everyone know that if he's needed he's available.  Let's say htat by Jan, Sanders and the other midgets may derail Mrs Clinton, leaving the Dems in a panic. Who'd be ready? Biden.  However, he doesn't have claim on hte future of the party. Kerry might. Also other lawmakers. Cd dvp swiftly into a free-for-all.  Cd be on the scale of 1968when Johnson announces that he won't run for re-election – even though he'd won New Hampshire. Mrs C has raised SO much money, has such a vast amt of money, she'd have to be driven out as she will not go on her own. This lady is not for turning.  The Clintons do not quit.  If Mrs Clinton withdraws from the fray, John Kerry will enter.
Monday  24 August 2015 / Hour 2, Block B: John Fund NRO, and David Drucker, Washington Examiner, in re: Two moderates, two conservatives: Walker (WI), Kasich (OH), Rubio (FL) and Bush (FL).  A candidate can only be the best that he can be, but Gov Bush sometimes steps on his [ability] – he has the background to know what he's doing in running the country but he makes gaffes; people think, "We thought you were battle-tested."   What happened to Bush? Last campaign was a state-of-the –art 20th Century campaign before Twitter or FB.  He doesn't understand the times, highly anti-dynastic.  Scott Walker: his bio is Unintimidated. Took him 72 hrs to see if he agreed with Trump on birthright citizenship.  DMD: my wife advises Walker on fundraising.  Taking a week to make a decision is not leadership; he needs to decide what he believes and why; use it and move on. You're almost better off being wrong than being mealy-mouthed.  Marco Rubio is a rookie; will the GOP depend on that?   He was House Speaker in the Florida legislature; has he respect of his colleagues in the Senate.  John Kasich:  at the least, is a plausible candidate for VP.
Monday  24 August 2015 / Hour 2, Block C:  Malcolm Hoenlein, Conference of Presidents, in re:  . . . Iran has long been operating freely in Syria next to northernmost Israel, now brazenly flaunting the incipient end of sanctions. Israel was rocketed by Islamic Jihad ops in a car; Israel instantly retaliated by blowing up the car, and named the guys killed to clarify to Iran the level of Israeli intell.  SA-22 air defense system and Cruise missiles from storehouses in Lebanon into Syria, which is critical to Iran – esp as a link from Iranian Iraq to the Med, along with Iran's aspirations to destroy Israel and take over Jordan. The Galilee of Israel is farmland; equally so on Syrian side. The people in between are Druse.   Joint Syrian army, Hezbollah and IRGC, all working together to keep Israel off guard, esp b/c Israel can take out the Iranian nukes, also Iran wants to claim huge swaths of land.  The real question is, since the West knows exactly what's happening, why does it do nothing?  One-third of Americans (Gallup) think the US handling of the situation in Iran is poor.  Seventy-five per cent vs 18%, Americans would vote against the Iran deal Houthis in Yemen killed 14 people on signals from Iran.  Iran keeps testing the response of the Wes;  wherever it's found lacking, Iran presses forward.  Today, cite the [Obama] agreement as giving them license.  Israel has to use all its means to protect that border – Hezb has 80-100K missiles, along w al Nusrah and al Q; Israel has no margin. 
Monday  24 August 2015 / Hour 2, Block D: Malcolm Hoenlein, Conference of Presidents, in re: Mahmoud Abbas tries to visit his sister in Teheran; wants to countervail Hamas efforts to establ close relations w Iran. Iran approached Saudis for money, angering Iran. Iran wants to bld up influence in the West Bank, dangerous for Abbas, who has little power, Theoretically the PLO executive is being replaced but only the PLO legislature can do that. Odd. Josh Ernest at White House remarks on Iran's guaranteeong its own site, with no IAEA inspector invited; so Ernest: "I'm confident they'll get all the info they need." Urgh.  No American inspector is allowed in anywhere ever.  Iran will provide videos and photos, and envtl samples using Iran's authenticated eqpt The criminal does all his own analysis and delivers the result to the authorities.   How many side agreements exist? Dinno – and some may not be written down. Meanwhile, the Kurds of northern Iraq provide the only refuge for Yazidis and also sell [half?] of their oil to Israel. 
Hour Three
Monday  24 August 2015 / Hour 3, Block A: Mary Kissel, Wall Street Journal Editorial Board & host of Opinion Journal on WSJ Video, in re: . . .  The Fed is stuck in not raising rates, but is to blame for distorting prices, shd raise rates in September and explain that the US economy is not in the same place it was several years ago. Opinion Journal: Are Central Banks to Blame? The Liscio Report Chief Market Strategist Danielle DiMartino Booth on easy money policies, asset bubbles and the Federal Reserve’s conundrum.   /   Opinion Journal: Joe Biden’s Political Calculus Main Street Columnist Bill McGurn on Hillary Clinton’s declining poll numbers, and Vice President’s meeting with Massachusetts Senator Elizabeth Warren.  /  Opinion Journal: Birthright Citizenship: Constitutional? Baker Hostetler Attorney David Rivkin on Donald Trump’s proposal to deny U.S. citizenship to the children of illegal immigrants. (1 of 2)
Monday  24 August 2015 / Hour 3, Block B: Mary Kissel, Wall Street Journal Editorial Board & host of Opinion Journal on WSJ Video (2 of 2)
Monday  24 August 2015 / Hour 3, Block C: Michael Auslin, AEI, in re: http://www.wsj.com/articles/abe-sounds-warnings-over-asias-future-144043...
Monday  24 August 2015 / Hour 3, Block D: Bruce Webster, And Still I Persist.com, in re: Again, with nearly 16 years of reading e-mails for litigation analysis purposes, I have to conclude that the Clinton team took deliberate steps to remove information from the e-mails they did produce, to destroy any backing electronic evidence of those e-mails, and to make them as difficult to search and analyze as possible. I’ve certainly seen it in my own professional work, and I know what is typically behind it.  http://andstillipersist.com/2015/03/why-and-how-emails-matter-clintonemail-com/
Hour Four
Monday  24 August 2015 / Hour 4, Block A: Michael Ledeen, FDD, in re: http://www.forbes.com/sites/michaelledeen/2015/08/22/the-marines-on-the-french-train/
Monday  24 August 2015 / Hour 4, Block B:  Liz Peek, Fiscal Times and Fox, in re: Stock markets in the U.S. and around the world swooned Monday, responding to losses posted in Asia overnight. The Dow Jones traded off more than 1,000 points Monday morning before retracing about half that decline. The U.S. markets are now in correction territory, down more than 10% from recent highs. The swift collapse, after months of unusual serenity, shocked investors here and overseas. It shouldn’t have; the trigger – a slowdown in China -- has been visible (but largely ignored) for months.  
The stock market in China dropped 8.5% overnight – a shocking follow-on to losses posted last week as investors came face-to-face with the reality that the world’s number two economy is not growing at its 7% targeted rate. The Shanghai index is down 40% since June, after soaring 140% last year. It has been clear for some time that Beijing was faltering, with the authorities hyping local stock markets and more recently devaluing the Yuan to boost growth. But, the possibility that China would no longer fuel global expansion, as it has done for decades, took a while to percolate through to investors. It is way too early to project the hit that multinational companies (and emerging markets) may sustain from a slowing China; global stock markets are suggesting it could be big.
The other looming problem worrying investors is that there’s not much the U.S. or other governments can do about a weakening economy. The reason that many have advocated for raising interest rates, even during this especially sluggish recovery, is that six plus years of easing have left the monetary quiver empty. Rates cannot go lower – in the U.S. or in the dozens of countries that have similarly relied on monetary policy to sustain growth.
For most governments around the world, that leaves fiscal policy as the best weapon to ward off another slowdown. In the U.S., though, increased government spending is a political no-go zone. Though our deficits have declined from the trillion-dollar-plus level incurred during the financial crisis, we are still borrowing roughly $500 billion a year, and the national debt continues to grow. A Republican Congress will not allow deficits to ramp back up again. In Europe, excessive budget gaps brought on by the Great Recession are similarly controversial, and would be opposed.
There is no question that China is running out of steam, and that the authorities in Beijing are in panic mode. For six years the stock market has levitated on zero percent interest rates, enjoying one of the longest and most profitable bull runs on record, courtesy of the Federal Reserve. For years, investors have wondered when the party would end. As Fed Chair Janet Yellen signaled the likelihood of a rate increase this fall, traders were paralyzed, watching the approaching disaster like someone unable to jump out of the path of a freight train. All it took to shake the markets was a trigger, and Beijing delivered that in spades.
There is no question that China is running out of steam, and that the authorities in Beijing are in panic mode. Second-quarter growth was officially reported at 7%; no one believes the figure. Exports in the quarter dropped 8.3%, imports were off 8.1%, car sales were down 6.6%. When a country begins to lie about its economic results, you can bet there’s a problem.  
The inevitable impact of rising labor rates and the exodus of manufacturing from China to neighboring countries resulted in the 2011 decision to shift to a consumer-driven economy. The wealth of China’s emerging middle class was meant to fuel continued growth. As export gains slowed, the consumer would pick up the slack. The problem is, the Chinese consumer is a saver, not a spender. The new model is not working.
Worried leaders decided to boost consumer spending by touting the stock market, luring in newcomers last year by softening restrictions on buying shares with borrowed money. As a result, the market soared, fueled by margin purchases. Now, millions of first-time investors have lost not only their money, but also their confidence.   
That markets in Europe and the U.S. have followed China lower is not surprising. China’s economic problems undercut the prospects for growth in developed and emerging countries alike, and consequently for earnings for companies around the world. Guidance from companies like Apple, for which China is an important market, will likely be lowered. It is too early to know how much damage will be done, as estimates for China’s growth are highly speculative at this point. The direction is clear.
The good news is that U.S. markets were valued above the long-term average before the selling wave hit, but they were not wildly expensive. With the recent sell-off, and assuming that there is a modest further downdraft, valuations will be in comfortable territory, based on current earnings estimates. The market gurus at ISI Group put S&P earnings for next year at $120 and the market’s price/earnings ratio at 16. They describe current levels as “fair value.” However, note that those estimates will probably drop.
There are always uncertainties facing investors. Today’s list includes not only the economic uncertainty in China, but the ongoing Greek drama, the collapse in oil prices, and the contraction in Japan, where the economy shrank in the last quarter. The tone of the markets has swiftly moved from carefree to dire. Most likely, investors will find a middle ground, as stocks descend to attractive prices. The sell-off is not unique or even unusual. That doesn’t make it any the less painful. It still hurts like hell.
Liz Peek is a writer who contributes frequently to FoxNews.com. She is a financial columnist who also writes for The Fiscal Times. Visit LizPeek.com. Also Twitter@LizPeek.
Monday  24 August 2015 / Hour 4, Block C:  Abbas Milani, Hoover, in re: What the Iran-Deal Debate Is Like in Iran (by Abbas Milani, Michael McFaul via The Atlantic) The agreement has divided Iranians into camps that could shape the future of the country. The nuclear deal with Iran has sparked a vigorous debate not only in the United States, but in Iran as well. The discussion of the agreement among Iranians at times echoes the American discussion, but is also much deeper and wider. Reports in Iranian media, as well as our own correspondence and conversations with dozens of Iranians, both in the country and in exile, reveal a public dialogue that stretches beyond the details of the agreement to include the very future of Iran. And it seems that everyone from the supreme leader to the Iranian American executive in Silicon Valley, from the taxi driver in Isfahan to the dissident from Evin Prison, is engaged. The coalitions for and against the deal tend to correlate closely with those for and against internal political reform and normalized relations with the West.   
The mere fact that there is such a debate says something about the nature of the Islamic Republic of Iran today. Iran is a dictatorship. One man, the supreme leader, has most of the power. He is the commander in chief and thus formally controls the military, the very powerful internal militia, the Islamic Revolutionary Guard Corps (IRGC), and its external wing, the Quds Force. The supreme leader appoints the head of the judiciary, the head of the Iranian national radio and television organization, and most of the National Security Council—an advisory body similar to the U.S. National Security Council. He also controls tens of billions of dollars in revenues from religious endowments and foundations. And, as stated in the constitution, he is the spiritual leader of the country, combining religious and political power in one office.   And yet nowadays the supreme leader does not decide everything on his own. Some formal institutions of the
Monday  24 August 2015 / Hour 4, Block D:  Luke Spencer, atlasobscura, in re: EXPLORING THE SECRET NAZI TUNNELS UNDER A GERMAN VACATION TOWN  Deep in the mountains of Bavaria is a concrete doorway set into the side of the mountain. Even in the height of summer, the thick steel door is cool to the touch, and drips with condensation. From the edges of the door frame comes a chilling cold breeze. It isn’t marked on any tourists guide maps, as the government would prefer that you had no idea that it exists.
Behind the steel door lies the underground secret bunker complex of Adolf Hitler.  . . . [more]
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