The John Batchelor Show

Wednesday 27 May 2015

Air Date: 
May 27, 2015

Photo, left: Iraqi Army Loses Ramadi to ISIS Militants after Heavy Fighting (Iraqi army bugs out; SecDef Ash Carter mentions this; Pres Obama's spokespersons vigorously disagree).
JOHN BATCHELOR SHOW
Co-hosts: Gordon Chang, Forbes.com. Dr. David M. Livingston, The Space Show.
Hour One
Wednesday   27 May 2015  / Hour 1, Block A: Arthur Waldron, Lauder Professor of International Relations in the Department of History at the University of Pennsylvania, in re:  PLA navy has built artificial islands in the South China Sea to intimidate its neighbors: Japan Philippines, Indonesia, Micronesia, Australia. Global Ties says hat war with the US in inevitable unless the US "lets China have its way" in ht Spratleys.  China did not expect that anyone would much object to China's taking over; when it decided to bash its weakest neighbor,  Philippines, which it did several times, Had that world according to plan, other states would have given in.  However, Philippines went to the World Court, is sedulously  pursuing, Japan has been donating the latest patrol craft to Manila, which has not bowed. China has got itself impaled on that self-created problem and the other neighbors are all upset, Problem is beginning to crest. Cf Schlieffen-Plan* to sweep through Belgium and take Paris.  Didn't count on Belgium resisting; has the only rail link 'twixt Berlin and Paris.  Nazis so angry they burned Louvain's priceless library of Medieval manuscripts; finally failed.  Germany's master plan failed on its first move; similar to China's master pan, which has got hung up. Now the US Secy of Defense has said,  "We'll all go wherever it's legal to go and ignore Chinese restrictions." Will China shoot down US planes? Not a great idea. The seminal Global Times editorial was not only in English, was also in Chinese.  Oops. No easy climbdown.
US Navy has four options: can fly over; sortie with warships; blockade; or land on one of the artificial islands. There'll likely be some shooting incident; we need to find a way for China to back off.  Russia has fouled up negotiations with China – esp since there's a lot of Pacific territory that China thinks was stolen.
* Der Schlieffen-Plan war ein strategisch-operativer Plan des Großen Generalstabs im Deutschen Kaiserreich, der auf eine Denkschrift zurückgeht. Er wurde nach ...
Wednesday   27 May 2015  / Hour 1, Block B: Scott Harold, full political scientist and deputy director, Center for Asia-Pacific Policy at The Rand Corporation, in re:  . . . Who decided to destroy all that coral and create the islands? Probably Chairman Xi Jinping ; proactive, "strive for achievement," macho terms on the USSR Party downfall.   Were in the most intense political envt for the CCP in over two decades, and Xi daren't be criticized for being soft on foreigners. Chinese is prepared for confrontation, maybe not for conflict. Vietnam and Philippines.
Wednesday   27 May 2015  / Hour 1, Block C: Hotel Mars, episode n. Marcia Smith, NASA budget expert SpacePolicyOnline.com, in re: Congress allocated the right amount but allocated it in ways – to planetary science - that upset NASA scientists – lessened Earth sciences.  Barbara Mikulski is a major advocate of Earth sciences.   . . .   SpaceX and Boeing are bldg craft to take people back and forth to the Space Station. NAA speaks of a "commercial crew" with a different meaning – taxpayer-drive; whereas other firms, such as Blue Origin, want to build [genuinely] commercial craft. . . .  NASA, NOAA, and other agencies are all allocated money [together].
Wednesday   27 May 2015  / Hour 1, Block D:  Robert Zimmerman, behindtheblack.com, in re: Telescopes. X37-B. 
Hour Two
Wednesday   27 May 2015  / Hour 2, Block A: Anne Stevenson-Yang, co-founder of J Capital Research in Beijing and author of, China Alone: The Emergence from, and Potential Return to Isolation, in re: Chinese fiscal spending up 33% this year; haven’t created much growth so have to go out and build something.  China reverting to six-year-old strategies: new investment and stimulus programs – not needed – up to 42  trillion RMB.  Wen Jiabao created an asset bubble; Xi is doing the same thing, maybe even in the same size. "Panic & desperation."  Shows how few strategies the Chinese govt can do. Extravagant announcements – in 209 were pushing n a stick; today, pushing on a string. Nobody really wants RMB today.  Best thing any leader could do would  be to say: Stop. But no one can take that political pain.   Growth in coal mining and steel, but not in coastal cities. State enterprises buy empty apts, thus creating more demand for – empty apartments. Timeline?  When can they no loner hide it by printig money?  The currency forces honesty in the ned. Right now, rich Chinese can get one dollar for 6 RMB know this won’t work in future. Amt of money leaving
Wednesday   27 May 2015  / Hour 2, Block B: Greg Scarlatoiu, executive director of Committee for Human Rights in North Korea, in re: North Korean women who'd managed to escape and go to South Korea were deeply affronted by the Gloria Steinem love-fest for the North.  Made statements – via KCNA, the DPRK propaganda org – released a statement praising Kim Il-sung. Steinem refused to address the grave human rights matters; blames the whole Korean problem on the US.  Let the North allow the refugees imprisoned in the North go home to the south. Steinem's goal was an exercise to praise the Kim regime. Said she'd become a "permanent presence" to lobby the US govt for lifting of sanctions against North Korea.  To do this, require irreversible dismantlement of its nuclear military program with which it's been threatening its neighbors.    125,oo people in gulags and prison camps. Christine On: "the cold war mentality" is the problem.  
Wednesday   27 May 2015  / Hour 2, Block C: Abheek Bhattacharya, Heard on the Street WSJ in Hong Kong, in re: The fairy tale crashes. Stock rose seven times in a year, then lost 40% of value in les than an hour. Like  a flash crash at 10:16 AM last Wednesday. Sell orders overwhelmed the buy orders and the price plummeted. How much was mania, how much was manipulation.  Fellow had 7% of stock.  To short in Hong Kong is: a derivative position where I have a loan and in exchange promise to deliver you shares – a sort of Hong Kong short. Owner may have used that as a collateral to get loans.  May have lost $14 billion. Stock is still suspended from trading and we don't know why a week later.
Hanergy and Modi, tale of two markets  Hong Kong is abuzz with the story of Hanergy, the solar stock that rose nearly seven-fold in the past year to $40 billion and then lost half its value in less than an hour of trading last Wednesday. Then on Thursday, bubbles in two somewhat linked stocks were pricked, too (though have since slightly reflated), these episodes hurting the investors naive enough to play along.

I've been writing since January about how Hanergy was a dubious company on many counts, and how its stock valuation never made sense. But while we can be relieved that gravity exists in Hong Kong, honestly, Hanergy remains a question mark. There was never an intellectual debate about whether the stock *should* rise or fall -- we all thought it should fall. Instead, the issue was how precisely the stock kept rising. How much of it was mania and how much manipulation?



Speaking of India, this week marks the one-year anniversary of Narendra Modi's tenure. After many months of talking itself into a mini-mania about Modi (though thankfully nothing Hanergy-esque), India's stock market fell earlier this month as investors realized they were expecting too much. But that actually presented a buying opportunity: the market may finally reflect the reality that, while there won't be transformational reform in India, there is some bit of progress (though stocks have slightly run up again).
Wednesday   27 May 2015  / Hour 2, Block D:  Peter Berkowitz, Hoover, in re: Pres Obama and Iran.
Hour Three
Wednesday   27 May 2015  / Hour 3, Block A:  Monica Crowley, Fox, & Washington Times Online opinion editor (1 of 2)
1.  Certainly today we can mention the cognitive dissonance of Obama's praising himself for the end of the Afghanistan war while the Afghan government is under attack.  And Ash Carter says the Iraqi army won't fight in the war that Obama says he ended for the US. Taliban claims attack on guesthouse in Afghan capital - Al Jazeera English
After Ramadi, what options does US have for ISIS fight in Iraq? (CNN) U.S. Defense Secretary Ash Carter's remarks that the Iraqi military " showed no will to fight" during the fall of the key city of Ramadi to ISIS ...
2.  Also, there's panic for the Obama team over Ash Carter's remark: witness how Ezra Klein sent one of his spin soldiers to knock Ash Carter and claim that the Iraqi army didn't run at Ramadi.  This is silly – it's so completely Emperor Has Clothes by the few Obama apologists left:
3.  Mostly I want to talk about the Fifth Circuit decision that blocks the Obama work permit/driver's license order last November.  This is a blow to Obama, as he cannot take credit for five million new voters owing him allegiance.  However, it's also a blindside tackle to Hillary's amnesty program, as she's to the left of Obama.
4.  What does the Fifth Circuit ruling do to the Republican candidates on immigration?  Who gains and who loses?
America’s most powerful former law professor is getting a re-education in the Constitution, and on present course President Obama might flunk out. Witness Tuesday’s federal appeals-court rebuke of his 2014 immigration order, including language that suggests the Administration will also lose on the legal and policy merits.
Wednesday   27 May 2015  / Hour 3, Block B: Monica Crowley, Fox, & Washington Times Online opinion editor (2 of 2)
Wednesday   27 May 2015  / Hour 3, Block C:  Paul Barrett, Bloomberg Businessweek, in re: David Boies, Esq. 
Wednesday   27 May 2015  / Hour 3, Block D:   Jed Babbin, Washington Times, in re: Fourth Amendment.
Hour Four
Wednesday   27 May 2015  / Hour 4, Block A:  Tunku Varadarajan, Hoover, in re: FIFA.
Wednesday   27 May 2015  / Hour 4, Block B:  James Taranto, Wall Street Journal, in re: The Clintons and their LLC.
Wednesday   27 May 2015  / Hour 4, Block C: Richard A Epstein, Hoover Institution, Chicago Law, in re: The critical political struggle of the 2016 presidential election may well be the redistribution of wealth. How that issue plays out is likely to depend on whether it is cast in terms of economic growth or income inequality. If the Republicans successfully push the growth agenda, then the Democrats will be on the defensive. If the Democrats drive home the theme of income inequality, then the Republicans will squirm. This is a contest that the Republicans should win if they play their cards correctly. http://www.hoover.org/research/income-inequality-warriors (1 of 2)
Wednesday   27 May 2015  / Hour 4, Block D: Richard A Epstein, Hoover Institution, Chicago Law, in re: The critical political struggle of the 2016 presidential election may well be the redistribution of wealth. How that issue plays out is likely to depend on whether it is cast in terms of economic growth or income inequality. If the Republicans successfully push the growth agenda, then the Democrats will be on the defensive. If the Democrats drive home the theme of income inequality, then the Republicans will squirm. This is a contest that the Republicans should win if they play their cards correctly. http://www.hoover.org/research/income-inequality-warriors (2 of 2)