Tuesday 17 September 2013.
Photo, above: Prince Bandar, head of Saudi intelligence, with Vladimir Vladimirovich Putin, in the Kremlin. See: Hour 3, Blocks A & B, Stephen F Cohen, NYU & Princeton Russian Studies Prof Emeritus. Soviet Fates & Lost Alternatives, on, "Russia is a country such that no matter what you say about it, it’s true."
JOHN BATCHELOR SHOW
Co-host: Larry Kudlow, The Kudlow Report, CNBC; and Cumulus Media radio
Tuesday 17 September 2013 / Hour 1, Block A: Larry Kudlow, in re: Janet Yellin as Fed head?
Messers Boehner and Cantor on defunding ACA using the CR. Let's say 50 very hawkish members want to abolish and wholly defund ObamaCare via the Continuing Resolution (govt runs out of money on 30 Sept). Cannot, as Obama Care is 80% mandatory spending, whereas CR works only on discretionary funding. It'll pass the House, then go to the Senate, where it will not pass. If the House version fails in the Senate, somebody has to pass a CR or else the Pentagon, or veterans, and others, will have zero funding. Will send a clean bill at the sequester levels of lower spending. Boehner: Every dollar increase in debt needs to be accompanied by an equal diminution of spending – or by reforms.
ObamaCare is sinking under its own weight – even the unions are rejecting it. The mercy death is just to stand back while the president cannot explain. LK: No verification of income eligibility. President and HHS wd love to put the individual mandate through without verification of eligibility to sign up oodles and boodles of people – who'll vote for h Obama Dems. Most cynical ploy I've ever seen.
FED: . . . Most important, she has led a committee devoted to improving the Fed’s communications with its primary audience, investors, and with the broader public, a goal she shared with Mr. Bernanke. Under Ms. Yellen, the committee built an internal consensus for changes, including Mr. Bernanke’s regular news conferences and the declaration that the Fed thinks 2 percent annual inflation is just right. “The problem is at the moment, Republicans in Congress don’t seem to be focused on how to grow the economy and build the middle class,” he said in one of 11 direct references to the GOP. “I say ‘at the moment’ because I’m still hoping that a light bulb goes off here.” Obama even knocked Washington — the city under siege as he spoke — for failing to find “common purpose.” “If we follow the strategy I’m laying out for our entire economy — and if Washington will just act with the same urgency and common purpose that we felt five years ago — our economy will be stronger a year from now, five years from now, a decade from now,” he said.
Republicans were clearly rankled by the political attack on the heels of the outbreak of violence.
“It’s a shame that the president could not manage to rise above partisanship today,” House Speaker John Boehner (R-Ohio) said in a statement. “Instead, he should be working in a bipartisan way to address America’s spending problem — the way presidents of both parties have done before. [more]
Tuesday 17 September 2013 / Hour 1, Block B: Phil Izzo, WSJ lead editor, Real Time Economics blog, in re: slowdown in job creation down to 150K in the last three mos. Fed wont taper on Wednesday at all? Even a "tiny taper" of 15 bil less? Smart money is on 10 bil, but considering Yellin, I wouldn’t be surprised if they don’t act. Some say the Fed will lower its own internal economic forecast tomorrow – second or third time in a row. Yellin: Obviously thinks that employment is an important part of the mandate, not worried about inlfation; and probably thinks keeping foot on gas is good. Maybe even the chairman agrees with that. Paul Krugman's column today: "Pls Mr Chairman, do nothing." N prss conf in October, so have to taper now or not report till December.
Unemployment Rate Drops for Wrong Reasons The U.S. unemployment rate dropped 0.1 percentage point to 7.3% in August and a broader measure of unemployment fell to 13.7% from 14%, but the declines came from the wrong reasons.
Secondary Sources: Fed and Jobs, Housing Inflation, Euro Crisis .A roundup of economic news from around the Web.
IBM to Move Retirees Off Health Plan Big Blue's Health-Exchange Move Ends Once-Common Benefit International Business Machines Corp. plans to move about 110,000 retirees off its company-sponsored health plan and instead give them a payment to buy coverage on a health-insurance exchange, in a sign that even big, well-capitalized employers aren't likely to keep providing the once-common benefits as medical costs continue to rise. The move, which will affect all IBM retirees once they become eligible for Medicare, will relieve the technology company of the responsibility of managing retirement health-care benefits. IBM said the growing cost of care makes its current plan unsustainable without big premium increase
Tuesday 17 September 2013 / Hour 1, Block C: John H. Cochrane, Hoover and Wall Street Journal, Chicago Booth School of Business, in re: The Danger of an All-Powerful Federal Reserve. Jonathan Edwards: Dangers of an All-Converted Clergy. John Taylor was on CNBC tonight; monetary policy has run amok, as has the balance sheet. Can we ever restore rule-making in the Fed? "It'd be nice." We had rules through the first half of the Twentieth Century; gold was $35/oz. Since then it's been discretionary. If you hold to rules, the chairman can’t bail people out, although he as the discount window. Taylor Rule: a good description of how things ought to be – interest rates shd go up 1.5 times inflation and .5 times rate of employment. The real story of the Fed now is that it's pretty powerless in monetary policy; sclerotic. They can tell the banks "lend more, lend less" – and that's the real danger. People call on the Fed to manage bubbles, macropolicy Fed didn’t see these and shdn't be expected to. Capitalism misprices and corrects. If the Fed always stabilizes then individuals have no incentive to [be careful]. Larry Summer as Superman? Fed chair needs to be low-key. John Taylor said: Yellin has used a "modified Taylor rule," emphasizing output and employment gaps rather than inflation. What does the Fed have to do with jobs?
The Danger of an All-Powerful Federal Reserve Interest rates make the headlines, but the Federal Reserve's most important role is going to be the gargantuan systemic financial regulator. The really big question is whether and how the Fed will pursue a "macroprudential" policy. This is the emerging notion that central banks should intensively monitor the whole financial system and actively intervene in a broad range of markets toward a wide range of goals including financial and economic stability. For example, the Fed is urged to spot developing "bubbles," "speculative excesses" and "overheated" markets, and then stop them—as Fed Governor Sarah Bloom Raskin explained in a speech last month, by "restraining financial institutions from excessively extending credit." How? "Some of the significant regulatory tools for addressing asset bubbles—both those in widespread use and those on the frontier of regulatory thought—are capital regulation, liquidity regulation, regulation of margins and haircuts in securities funding transactions, and restrictions on credit underwriting." This is not traditional regulation—stable, predictable rules that financial institutions live by to . . . [more]
Tuesday 17 September 2013 / Hour 1, Block D: Avik Roy, Manhattan Institute, in re: ("Love the dark and dreary music you introduced this with.") Well played, Mr. President. Last week, prior to the big AFL-CIO convention in Los Angeles, President Obama personally spoke to AFL-CIO chief Richard Trumka, asking him to water down several anti-Obamacare resolutions that union leaders were planning to pass there. Trumka obliged, keeping calls to repeal Obamacare out of the official AFL-CIO resolution on the health law. Then, on Friday evening, after the convention was over, the Obama administration revealed that it would ignore unions’ demands to subsidize their members using Obamacare. As a result, some unions fear that they will wither away. “I guarantee you by your next convention four years from now, you won’t meet a quarter of this room,” said Joseph Nigro, president of the Sheet Metal, Air, Rail and Transportation Union. “We won’t be here.” Labor Unions' Latest Problem: Obamacare's 'Cadillac Tax' Harms Their Gold-Plated Health Insurance Plans
Tuesday 17 September 2013 / Hour 2, Block A: Michael Auslin, AEI natl security & foreign policy, in re: the deep concern at home and abroad is utter confusion on what the Administration is trying to accomplish. Conflicting parts of the govt working against each other; WH not only can't keep up with events but is adding to the confusion. Before this crisis erupted, we were observing that the relations between Russia and the US were at a historic nadir. Now Obama's spinning that he knows what’s going on and has figured out the process. Rather, we're being played by the Russians. Next: the UN – which process actually achieves almost nothing. Policy not shaped, no direction ahead. No one has seen such a hash of crisis and longer-term foreign policy. Stunning incompetence and unwillingness to face up to the consequences. Putin and Obama speaking this for the last year? Eke Kerry and Lavrov for two weeks? Iran has always been the long game. Bush inherited a bad situation w North Korea and turned it into a catastrophe. This all cuts to questions our allies have: does the US know what it's doing in ht world? Nuclear North Korea; Syria; Iran. President's credibility is at stake.
. . . about the damage of Syria capitulation: this is the conflict where the fearful Obama is seeking a fiction of reconciliation to get away from unpleasant facts. . . . the Obama policy in Asia has bolstered our allies with gunboats and the Marines at Darwin. General observation is from history -- that the devils think they can get lucky whenever the US (or the Royal Navy, once upon a time) shows shyness. . . . Obama's complete collapse into Putin's arms will be Lesson Number One at the Chinese Communist Party School starting next week.
Tuesday 17 September 2013 / Hour 2, Block B: Charles Pellegrino, author and explorer, in re: Success of the raising of the Freedom Tower. The whole strange story of Americans' and Russians' being sort of stranded at the Titanic for a month after 9/11, where Charlie Pellegrino was then with James Cameron. All were somewhat isolated; learned of the attack from a friend on the ship who said a plane had crashed into one tower, plus some pixillated photos. For a while, Russians were concerned that one of their allies was involved. I ascended just as the attacks were occurring; I was on the com tower; Russians took our communications away from us for a while so we couldn't even communicate with our submersibles. So a we called the space station – asked ISS what they'd seen of New York from low-Earth orbit? "Thread of smoke 150 km out to sea, aimed at you. Tears do not flow the same way in microgravity." Titanic. Raising the Costa Concordia.
Tuesday 17 September 2013 / Hour 2, Block C: Robert Zimmerman, behindtheblack.com, in re: Orbital Sciences has decided to delay the first launch its Cygnus capsule to ISS by one day.
They found a bad cable and are replacing it. The first launch of SpaceX’s upgraded Falcon 9 rocket has probably been delayed by at least a week. No new launch date has been set, but the article suggests that a September 30 date is being considered. Meanwhile, the company will perform another static engine test today.
India’s space agency has decided to completely replace the second stage of the GSLV rocket that leaked during the rocket’s scrubbed launch last month. “Although the exact reasons for the leakage in the second stage of the engine, which prevented the launch on August 19, are being probed by the team headed by K Narayanan, it has been decided that a new liquid second stage (GS-2) will be assembled to replace the leaked stage,” said the official. He added that the process of assembling has begun, and that besides the GS-2, all the four liquid strap-on stages are being replaced with new ones. That leak must have been quite significant for them to make this decision.
Tuesday 17 September 2013 / Hour 2, Block D: John Tamny, RealClearMarkets, in re: It's an historical lie when 'financial' and 'crisis' are put together to describe what happened in 2008. In truth, mostly capitalist markets properly put financial firms out of business that were overly exposed to the sink of wealth that is housing. The latter could never have caused a crisis, nor did it. Instead, it was meddling in that which was healthy that turned something positive into a horror film. There Was Nothing 'Financial' About The 2008 Crisis "'Your No. 1 client is the government,' John J. Mack, Morgan Stanley's chairman and chief executive from 2005 to 2009, told current CEO James Gorman in a recent phone call. Mr. Gorman, who was visiting Washington that day, agreed." - Wall Street Journal, September 10, 2013.
The five-year anniversary of the 'financial crisis' has predictably generated all manner of commentary about its presumed causes. What's most unfortunate five years later is that 'financial' and 'crisis' are still used together. It's unfortunate simply because despite what you read, the crisis was decidedly not financial, nor was it caused by a crackup in the housing market, nor was it caused by the failure of Lehman Brothers.
Tuesday 17 September 2013 / Hour 3, Block A: Stephen F Cohen, NYU & Princeton Russian Studies Prof Emeritus. Soviet Fates & Lost Alternatives; in re: In Russia, Putin seen mostly well; in England, was seen as not too good until last week. In China, Africa, parts of Europe, majority have come to think of the US as a trigger-happy nation. US media have written very ill of Putin for years; Pres Obama: "slouching schoolboy in ht back of the room." This demonization of Putin is strange, since Brezhnev was much [worse]. This will come to get in the way of our foreign policy. After Putin essentially offered to save parts of Obama's presidency, even MSNBC demonized Putin; out of control. if you took Putin's name off his NYT op-ed, 60% of Americans w0uldagree. His only mistake was gratuitously to criticize American exceptionalism; otherwise, was almost letter-perfect. Last week, Lavrov delivered! The quintessential foreign minister, our apparatus would do well to emulate his polish. The confused and inarticulate Mr Kerry. Mr Putin took a country on its knees, pensioners out of hope, and rallied the citizens while reorganizing the economy.
"Influential segments of the US political-media establishment will vehemently object to any central role for Russia. For years, they have demonized Putin rather than analyze what he actually says about international developments. But given his longstanding argument that aggressive American policies have been fostering dangerous instability and jihadism in the Middle East, not democracy, there have been good reasons all along to think Putin would be receptive to this kind of diplomatic approach to the Syrian crisis. After the September 9 proposal made by his foreign minister, there can hardly be any doubt. (If nothing else, Putin's insistence on a peaceful resolution should be tested.)
"Certainly, the advantages of US-Russian cooperation would be enormous, possibly a turning point in international relations. The United States would avoid a military action that's likely to kill many more innocent Syrians without eliminating Assad's chemical weapons capacity."
Putin to Teheran is a major step for he region, while Rouhani travels to New York to negotiate with the US. Demonizing Putin and endangering US security. Obama says Syria deal could offer lesson for Iran talks | Reuters
Tuesday 17 September 2013 / Hour 3, Block B: Stephen F Cohen, NYU & Princeton Russian Studies Prof Emeritus. Soviet Fates & Lost Alternatives, in re: Iran, China back Vladimir Putin on Syria crisis | The Australian Pres Vladimir Putin has won the support of Iran and China at a regional summit on Russia's . . .
Tuesday 17 September 2013 / Hour 3, Block C: Julie Bykowicz, Bloomberg, in re: GAMING. Indian Tribes Getting Obama Support for Casinos Blocked by Bush — Fights over expanding Indian gaming are breaking out across the country as the Obama administration rolls back Bush-era restrictions on Native Americans, easing their way into the growing $27 billion market. “Obama has been seen as a real friend to the tribes,” said Steven Light, professor at the University of North Dakota. “His administration has changed course on some key dimensions of Indian gaming, dimensions that had seemed set under the Bush administration.” [more]
Tuesday 17 September 2013 / Hour 3, Block D: Joshua Green, Bloomberg Businessweek, in re: GORILLA IN THE MIST Richard Fuld was known on Wall Street as the “The Gorilla” for the terror he instilled whil building Lehman Brothers into a global financial power. Five years after the fall, he has faded from memory, scorned or forgotten even by those who worked alongside him. But Fuld hasn’t gone away. Even after presiding over the largest bankruptcy in U.S. history, he’s fighting to get back in the game. “Hi, I’m Dick Fuld, the most hated man in America.” It was just after the crisis, and Fuld was making a rare social appearance at a party in the Sun Valley, Idaho, mansion of Jim Johnson, the former head of Fannie Mae. The self-mocking introduction, described by a guest, was Fuld’s armor—his way of broaching, and deflecting, the first thought that leaps to mind whenever someone hears his name: Dick Fuld was the CEO who, on Sept. 15, 2008, led Lehman Brothers into the largest bankruptcy in U.S. history, setting a torch to the global financial system.
The party was a reminder of Fuld’s old life before the fall, packed with familiar faces from the highest levels of business and government, including former Countrywide CEO Angelo Mozilo. Fuld still owns a $19 million compound in Sun Valley, property records show. But he couldn’t escape his new status as a pariah. One guest at the party recalls President Obama’s then-national security adviser, Tom Donilon, who also owns a home nearby, showing up, spotting Fuld and Mozilo, turning white as a sheet, and slipping back out the door. (Johnson, Donilon, and Mozilo all declined to comment. Through a friend, Fuld said he wasn’t able to talk to reporters.) Five years after the fall, Lehman Brothers no longer evokes the intense public anger it did in the weeks after the crash, when Fuld was hauled before Congress and made to answer for the firm’s demise. “If you haven’t discovered your role,” Republican Representative John Mica of Florida told him, “you’re the villain.” Overnight, Fuld became the face of the crisis. [more]
Tuesday 17 September 2013 / Hour 4, Block A: Fallujah Awakens: Marines, Sheikhs, and the Battle Against al Qaeda (Blue and Gold) by Bill Ardolino (1 of 4)
Tuesday 17 September 2013 / Hour 4, Block B: Fallujah Awakens: Marines, Sheikhs, and the Battle Against al Qaeda (Blue and Gold) by Bill Ardolino (2 of 4)
Tuesday 17 September 2013 / Hour 4, Block C: Fallujah Awakens: Marines, Sheikhs, and the Battle Against al Qaeda (Blue and Gold) by Bill Ardolino (3 of 4)
Tuesday 17 September 2013 / Hour 4, Block D: Fallujah Awakens: Marines, Sheikhs, and the Battle Against al Qaeda (Blue and Gold) by Bill Ardolino (4 of 4)
.. .. ..
Hour 1: Season of the Witch. Dark Shadows.
Hour 2: Zero Dark Thirty. James Horner's Titanic. Girl with the Dragon Tattoo. The Missing.
Hour 3: Clash of the Titans.