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    Front Page
    
THE SUBPRIME ICEBERG
A year later, the band plays on

A year after the subprime crisis came to public attention, the rot in the financial system continues to spread, leaving the US Federal Reserve with at least one very important question to answer - should it come directly to the rescue? As the Fed and other actors dance the subprime twostep, the tune is reminiscent of the music on the Titanic as the lifeboats sailed away. - Julian Delasantellis (Mar 5, '08)

Pakistan's grand bargain falls apart
Pakistan has no option, given pressure from the United States, but to continue military operations against Taliban and al-Qaeda militants in the tribal areas. Yet under a scheme devised by the new top brass, the militants were to be given an easy ride as long as they retreated to remote border areas. Militants, initially receptive, have shown through a spate of suicide attacks on the military in cities across the country that they are having grave second thoughts. - Syed Saleem Shahzad (Mar 5, '08)

Icy hand of China corruption bared
The discovery that substandard power poles exacerbated the fatal consequences of China's brutal winter snowstorms has thrust the icy specter of provincial corruption once again into national debate. China's vociferous websites and chat rooms are blasting official corruption and transparency, and it seems President Hu Jintao, for one, is listening. - Zhang Yi (Mar 5, '08)

CAMPAIGN OUTSIDER
Mud flies, Clinton wins
On the night John McCain made it official as the Republican presidential nominee, Hillary Clinton saved her campaign for the Democratic nod by doing McCain's dirty work. (Mar 5, '08)

Muhammad Cohen puts the US presidential campaign into sharper focus from afar.

Rice now too costly to give away
Global rice prices, driven by the sagging US dollar, fuel costs and China's increasing food demands, soared 40% last year just as the world's rice stocks hit a 20-year low. Even international aid agencies are struggling to afford sufficient quantities of rice for the impoverished people they're meant to serve in Asia. (Mar 5, '08)

The Taliban's teleban
The Taliban have started to attack mobile-phone towers in Afghanistan following their demand that telephone companies shut off all signals during the night. The Taliban's argument that occupation forces use signals to track them down doesn't make much sense; the more likely reason is to hurt the economy, of which telecommunications is one of the fastest-growing and most profitable sectors. (Mar 5, '08)

Europe alert to triple terror threat
Al-Qaeda has never made a secret of its eagerness to target Europe, but the continent faces a triple threat: al-Qaeda of the Islamic Maghreb, al-Qaeda Pakistan and the rogue, al-Qaeda-affiliated "lone jihadis" whom the French have termed just as dangerous as an entire organization. - Olivier Guitta (Mar 5, '08)



UN deepens the Iran nuclear crisis
The third round of United Nations Security Council sanctions now hanging over Iran's head in connection with its nuclear program is the harshest yet. Tehran has dismissed the measures as "legally defective". But with US and French ships in the Persian Gulf poised to carry out the interdiction of vessels suspected of carrying nuclear cargo to and from Iran, the stage is set for the next chapter - physical confrontation. - Kaveh L Afrasiabi (Mar 4, '08)

Sunnis make merry on US's dime
Iraq's Sunni-dominated Awakening Councils, bankrolled by the United States, have certainly blunted al-Qaeda, but they continue attacks on US and Iraqi forces. The Sunnis, using a "fight, bargain, subvert, fight" approach, are all the while working towards their ultimate goal of the complete withdrawal of US troops and reducing the power of the Shi'ite-dominated government. - Gareth Porter (Mar 4, '08)

SPEAKING FREELY
The 'rape' of Okinawa
Another month, another suspected rape incident involving a US soldier on Okinawa island in Japan. Both US ("regret") and Japanese ("unforgivable") officials make the right noises. But until Tokyo questions why a large standing army of Americans is still garrisoned on Japanese territory, the problem will persist. - Chalmers Johnson (Mar 4, '08)

Pre-election hopes for Malaysian opposition
The weekend's elections in Malaysia have been called the best chance the opposition has had to weaken the ruling party's grip on power in at least a decade. Economic and social problems have beset Prime Minister Abdullah Badawi, but the opposition may struggle to convert popular discontent into votes. - Ioannis Gatsiounis (Mar 4, '08)

Russia lays new tracks in Korean ties
The new administrations coming into the Kremlin in Moscow and Seoul's presidential Blue House, together with a new generation of leaders in Pyongyang, can radically change the political climate in the region and help resolve the peninsula's nuclear problem. - Leonid Petrov (Mar 4, '08)

THE MOGAMBO GURU
A world without demand
The amount of money that has been lost in the derivatives business is worrisome, as sales tumble 93% from the year before. Without demand, supply is overwhelming, prices plummet, and without new derivative sales to finance the existing clot of derivatives, things go from bad to worse! (Mar 4, '08)

SUN WUKONG
Green whirlwind sweeps China
China's National People's Congress this week upgrades its State Environmental Protection Administration into a mega-sized environmental ministry. This is part of a green policy geared to strengthening the country's "toothless tiger" laws. Whether other departments and provinces cooperate is another matter, particularly when their own interests are at risk. - Wu Zhong (Mar 4, '08)

The 'laptop of mass destruction'
The "laptop documents" - 1,000 pages of data allegedly stolen from an Iranian computer - have been the US's hardest evidence of Iran's supposed intentions to build a nuclear weapon and an obstacle to the International Atomic Energy Agency declaring that Iran has resolved all questions about its nuclear program. Now there are indications the documents were obtained from Israel's Mossad via a terrorist organization. - Gareth Porter (Mar 3, '08)

Iran makes its mark in Iraq
Iranian President Mahmud Ahmadinejad is making the most of his red-carpet treatment in Iraq, handing out platitudes as well as the offer of a US$1 billion loan. Baghdad's government needs all the support it can get, and plenty comes from Tehran. What it does not need is Iran's backing of the al-Qaeda-backed insurgency. But for Iran, this is a separate issue that has everything to do with Afghanistan. - Syed Saleem Shahzad (Mar 3, '08)

INTERVIEW
Let's talk about bombs
Matthew Bunn, non-proliferation expert
Given Iran's extended period of violating its nuclear safeguards agreement, says US award-winning Bunn, many countries will probably not accept Tehran's claim that all of the information that suggests weaponization activities is fabricated and baseless. Nevertheless, there is still room to negotiate, he tells Kaveh Afrasiabi. (Mar 3, '08)

CHAN AKYA

Dead dollar sketch
The demise of the world's reserve currency reads like a financial version of the infamous Monty Python Dead Parrot sketch. The arguments of US dollar supporters appear increasingly hollow. The implications are much more geopolitical than merely economic. (Mar 3, '08)

Why Arroyo won't go
Besieged with mass protests and allegations of mismanagement and moral impropriety, Philippine President Gloria Macapagal-Arroyo is standing her ground. Former presidents Corazon Aquino and Joseph Estrada have joined the calls for her resignation, but with the political, business and religious forces still aligned behind Arroyo, her downfall will likely need to come through the courts rather than the streets. - Shawn W Crispin (Mar 3, '08)

SPENGLER
Sing, o muse, the
wrath of Michelle

The release of Michelle Obama's undergraduate thesis from Princeton has revealed more about the woman who could be America's First Lady. Complete with rage and guilt, it is, among many things, a poignant cry from the heart of a young black woman from a working-class Chicago home. It also furthers the supposition that her wrath could keep her husband from the White House. (Mar 3, '08)

China, India play it again for Uncle Sam
With US Secretary of State Condoleezza Rice in Beijing and Secretary of Defense Robert Gates in New Delhi, the US's evolving Asian strategy is on display. Washington is out to convince China and India that each is a privileged partner of the US's global strategies, a part of which is containing a resurgent Russia. Beijing has welcomed the US "invitation", but Delhi is convinced the US is building up Indian capabilities just to make it a counterweight to China. - M K Bhadrakumar (Feb 29, '08)

Mouth-to-mouth will fail economies
The US government might yet pull the economy out of the jaws of recession through the short-term fix of raising spending on the military or the related disaster capitalism complex. But one way or another, the forces making for long-term global stagnation are now too heavy to be shaken off by the equivalent of mouth-to-mouth resuscitation. - Walden Bello (Feb 29, '08)

Medvedev ready for his Russian moment
Judging by his record, the presumptive next president of Russia, Dmitry Medvedev, can be expected to pursue a concerted liberalization of politics as the next logical stage in the country's evolution. He aims to make business in Russia the most profitable in the world. And in foreign policy, the likely leitmotif is that security will be enhanced when countries share risk - that is, the West and Russia should cooperate. - Nicolai N Petro (Feb 29, '08)

SEX IN DEPTH
Cell swingers in Cambodia
From university sweethearts married in Paris to kingpins in the brutal Khmer Rouge regime in Cambodia, 82-year-old Ieng Sary and his wife Khieu Thirith, 75, now bide their time in detention awaiting trial for crimes against humanity. They're in separate cells, and Sary has requested conjugal visits. While the two await an answer, they could reflect on one of the Khmer Rouge's practices - separation of man and wife. - William Sparrow (Feb 29, '08)

THE ROVING EYE
A long road from Kosovo to Kurdistan
The embrace by Washington of Kosovo's declaration of independence has less to do with democracy than with hard-nosed pragmatism. The US's biggest foreign military base since the Vietnam War - Camp Bondsteel - is in Kosovo, and the region will be home to a US$1.1 billion pipeline that will get oil from the Caspian Sea ultimately to refineries in the US. Kurds in Iraq, believing Kosovo to be a precedent for an independent Kurdistan, will be disappointed: the US-sanctioned Turkish invasion of northern Iraq has seen to that. - Pepe Escobar (Feb 28, '08)

IN THE DRAGON'S LAIR

US prowls for China in the Philippines
With China fast becoming the US's greatest competitor, Washington needs the Philippines more than ever. Not only is it ideally located, its government has been far more willing than other Southeast Asian countries to align itself with the demands of the US. Thus Washington is steadily transforming and deepening its military presence and intervention in the Philippines in preparation for any face-off with China. In return, Beijing is aggressively courting Manila. - Herbert Docena (Feb 27, '08)

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China confirms inflation is enemy No 1

Premier Wen Jiabao told China's Parliament on Wednesday the government would take more steps to curb inflation and cool the economy. His determination was underlined by setting a GDP growth target well short of non-government forecasts. - John Ng and Olivia Chung

ASIA HAND
Mixed reviews for Thai cap controls
Thailand's new government, which this week removed capital controls imposed by its military-led predecessor, seems willing to sacrifice exports for more domestic demand-led economic growth. Overlooked are other capital controls still in place, while inflation and the prospect of an ever-stronger currency will challenge policymakers. - Shawn W Crispin

Iran's gas: China waits
as India wavers

The possibility of India buying Iranian gas by way of a pipeline running through mutual neighbor Pakistan has been a talking point for the past decade. Yet as Islamabad and Tehran prepare to sign a gas purchase agreement this month, India is holding back amid security concerns and US disapproval of the plan. Energy-hungry China may seize the opportunity. - Siddharth Srivastava

 THE MOGAMBO GURU

Silver pills for inflationary ills
The scourge of inflation is sweeping the land, but fear not. The ideal prophylaxis measures are at hand, not least shiny, solid and still cheap-at-the-price silver. Cheap? With the US dollar falling, falling, falling and demand rising, rising, rising, even $135 an ounce won't look expensive.

CREDIT BUBBLE BULLETIN
No simple repeat
of LTCM fiasco

The crisis at award-winning Peloton Partners highlights that this is no repeat of the LTCM meltdown of 1998. The American economic rot goes far, far deeper. Meanwhile, the Fed, blind to its impotence regarding risk asset prices, should start attending to currency markets, where it might at least have some impact. (Mar 3, '08)
Doug Noland reviews the previous week's events each Monday.

MARKET RAP
Beware the wings
of the butterfly

The fear that an American downturn will significantly hurt Asian corporate earnings seems to have been at least temporarily overcome. Yet the future of structured investment vehicles remains a threatening shadow that can engender yet another crisis with incalculable effects far from the US. (Feb 29, '08)
R M Cutler runs his eye over the ups and downs in the week's markets.



... I have called Spengler a total moron a half a dozen times ... but when I read his article about Obama's women reveal his secret, Feb 26, I giggled the whole time that someone finally saw and wrote the obvious ...
Krischer
   Go to Letters to the Editor



  <IT WORLD>

Pakistan site swipe
exposes web fragility

Pakistan's efforts to prevent its citizens from viewing a YouTube video affected the Internet far beyond its borders. No less worrying, the country's censors indicate they have no inclination to prevent a repeat of the global blackout.
Martin J Young surveys the week's developments in computing, gaming and gizmos.



1. Sing, o muse, the wrath of Michelle

2. Obama's women reveal his secret

3. UN deepens the Iran nuclear crisis

4. Sunnis make merry on US's dime

5. The 'rape' of Okinawa

6. A world without demand

7. The 'laptop of mass destruction'

8. Dead dollar sketch

9. Russia lays new tracks in Korean ties

10. Pre-election hopes for Malaysian opposition

(24 hours to 11:59 pm ET, Mar 4, 2008)




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