Friday, February 22, 2008

Musings on our current affairs

Bill Clinton in a derogatory and a highly manipulative statement last month said that black vote will go to Obama and the women will vote for Clinton (before the primaries in South Carolina). The facts stated otherwise and blacks and women seemed to vote for Barak in that primary. Mr Barak has gone onto to win about 11 states in a row after Bill Clinton made that statement. I really do not care who wins (we could live comfortably with either of Barak or Clinton after the current quagmire), but it is educational to think that had the reverse have happened (if Hillary would have won wins 11 states in a row), Barack would have been counted as a nobody who ran a empty, defunct campaign...

On the economic front, Henry Paulson, the current Treasury secretary, does not seem to have as much as a clue on how to strategically look at his current job (he used to look after the top job at Goldman Sachs before this). While he worked a bit in renegotiating mortgages and putting together a fund to deal with structured investment vehicles (both produced as a result of lax governmental oversight that produced the sub prime mortgage mess), the efforts seem to be too little, too late and not indicative of an individual who is supposed to be endowed with strategic thoughts on how best to lead the country out of this mess. Now it is clear that the sub prime mortgage debacle (talked about in this blog multiple times) is turnign out to be a side story with the main story turning out to be the fact that the credit markets are being sucked dry of any or all available credit. Without credit, companies will not invest in any new initiatives, leading to layoffs, leading to a higher rate of unemployment, leading to reduced consumer spending /confidence, leading to a further reduction in available financing options and so on - a deadly spiral.
Added on top of these woes, it seems that about 25 percent (see graph of projections here) of American homeowners will see zero or negative equity in their homes (think about how you would feel if you were told that the 500,000 dollar home you bought three years ago is only worth about 250,000 now, but you still need to make mortgage payments on the original amount and you have would have to make additional payments on the home equity line of credit that you took out believing in the bullish predictions two years back)... The New York Times states: 'Not since the Depression has a larger share of Americans owed more on their homes than they are worth. With the collapse of the housing boom, nearly 8.8 million homeowners, or 10.3 percent of the total, are underwater'. All of this points to a lack of clear strategic thinking both at the Federal Reserve and at the Treasury.

In other developments, it is indeed sweet that the erstwhile dictator of Pakistan, General Musharraf (now morphed through tremendous self preservative powers into the role of President of Pakistan) has finally been dealt with an electoral verdict that tells him 'enough is enough'. Of course, he is now seen making funny noises that include words like 'harmonious coalition' after his party was roundly smacked at the polls. Yesterday's news that Nawaz Sharif (himself a wily one) and Asif Zardari (propelled into the limelight after the assasination of his wife, Ms. Bhutto) will form a hopeful alliance is indeed heartening. It is also sweet that the new alliance will also reinstate the judges (including the Chief Justice Chaudhary) who were summararily removed by Musharraf because they did not toe the official, corrupt line. Payback is sweet. On the other hand, this might be a bit of a problem for India as the militancy in Kashmir was held in check by some of the hard-line policies adopted by Mr. Musharraf – but then, after a point, one can only endure so many undemocratic actions until one is tired of the compromises and starts to opt for any change (kind of like the elections here, right?).
Also sweet is the fact that Kosovo has declared independence (talked about in Simplistic here) and America has put its full weight behind the same. It is about time the cultural and political underdogs in the Balkans got their due. Of course, as expected, Russia and the Bosnian Serbs in the north of Kosovo seems to be wagging their long tails, but this moment indeed belongs to Kosovo.
In other news, it is a good thing that Mr. Moqtada al Sadr has agreed to tamp down on his militia and agreed to a cease fire for another six months giving that much more time for the Iraqi lawmakers to get their act together. One of the many reasons the surge succeeded was because the Shiite Mahdi militia had agreed to a cease fire over the last six months. Looks like this might indeed work…
The battle against Creationism was dealt another blow when the state of Florida agreed to substantiate the study of evolution as a ‘scientific’ study rather than just another theory that rivals the creationist theory.
After camping out in Kenya for a month, former chief of the United Nations, Mr. Kofi Annan finally seems to have brokered a truce between Mr. Kibaki (the declared winner after a rigged election) and Mr. Odinga (the aggrieved loser). Both sides have tentatively agreed to create a prime ministerial post for Mr. Odinga, but are yet to agree on its terms and responsibilities. When Mr. Kofi Annan made news that he was flying out to Kenya to try and broker an accord, I had thought that here is another individual aiming to do a fly-by and get some good press karma for stopping momentarily and spouting the right things, but he seems to have stuck it out there, endured the warring sides and after about a month, the results are slowly filtering to the top … Great stuff… That’s really all I have time for now, but I hope to do a similar round up every month – let’s see.

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