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Monthly Archives: August 2013

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Economic Statistics for 30 Aug 13

The Reuter’s/University of Michigan’s consumer sentiment index rose 2.1 points to 82.1 in August.

July personal income and spending both rose 0.1%.  Similarly, the PCE Price index rose 0.1% at the headline and core levels. On a year-over-year basis, the PCE price index is up 1.4% while the core is up 1.2%.

The Chicago PMI for August rose 0.7 points to 53, hopefully a harbinger for the national report due Monday.


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Will Obama go “solo” on Syria?

The likely answer is “yes” since it appears the administration is of the opinion that if it doesn’t act, it will appear weak and ineffective  (yes, France has said it too will strike, but in essence this will still be mostly a solo venture in the region’s eyes).  Demagoguery and ego have combined to get us to this point. However, the question remains how effective any strike on Syria will be in reality if it is, as the President has said, short, limited and tailored (just muscular enough not to be mocked).

After leaking the proposed plan all over the place it is unsurprising that what most of us knew would happen has begun to happen in Syria:

In recent days, U.S. intelligence agencies and the Pentagon have watched with alarm as Mr. Assad has taken advantage of the Western deliberations to spread out his forces, complicating U.S. planning for strikes.

“We know [Assad] has been dispersing assets,” said a senior U.S. official briefed on the intelligence.

U.S. officials said Mr. Assad has moved assets such as military helicopters and artillery pieces around the country, forcing a U.S. recalibration of the possible military response.

If Mr. Obama sticks with what originally was a finite set of prospective military and intelligence targets, officials said, then cruise-missile strikes would cause less damage than originally intended because at least some of the targets have been taken out of the line of fire.

Officials said Mr. Obama could adjust to Mr. Assad’s tactics by expanding the number of strikes to hit more targets, but doing so could increase the risk that U.S. cruise missiles will cause unintended damage, including civilian casualties, officials said.

Another senior official said the dispersal of Mr. Assad’s military assets was “certainly detrimental” to target planning.

Funny how that works, isn’t it?

Meanwhile, US military officers have deep concerns over a strike on Syria:

The recently retired head of the U.S. Central Command, Gen. James Mattis, said last month at a security conference that the United States has “no moral obligation to do the impossible” in Syria. “If Americans take ownership of this, this is going to be a full-throated, very, very serious war,” said Mattis, who as Centcom chief oversaw planning for a range of U.S. military responses in Syria.

The potential consequences of a U.S. strike include a retaliatory attack by the Lebanese militant group Hezbollah — which supports Assad — on Israel, as well as cyberattacks on U.S. targets and infrastructure, U.S. military officials said.

And it also stirs the possibility of terror attacks on US embassies, interests abroad and even the homeland.  Gen. Mattis is correct.  If the US strikes Syria, then the US takes ownership of this war.  By that I mean if Assad then uses chemical weapons again, we’re in a position of having no choice but to address their use again.

Marine Lt. Col. Gordon Miller, a fellow at the Center for a New American Security, warned this week of “potentially devastating consequences, including a fresh round of chemical weapons attacks and a military response by Israel.”

“If President Asadwere to absorb the strikes and use chemical weapons again, this would be a significant blow to the United States’ credibility and it would be compelled to escalate the assault on Syria to achieve the original objectives,” Miller wrote in a commentary for the think tank.

An acceptable risk?

Even the Chairman of the Joint Chiefs of Staff (a highly political job) has tried to warn the administration off of this path:

Gen. Martin Dempsey, chairman of the Joint Chiefs of Staff, has warned in great detail about the risks and pitfalls of U.S. military intervention in Syria.

“As we weigh our options, we should be able to conclude with some confidence that use of force will move us toward the intended outcome,” Dempsey wrote last month in a letter to the Senate Armed Services Committee. “Once we take action, we should be prepared for what comes next. Deeper involvement is hard to avoid.”

Dempsey has not spoken publicly about the administration’s planned strike on Syria, and it is unclear to what extent his position shifted after last week’s alleged chemical weapons attack. Dempsey said this month in an interview with ABC News that the lessons of Iraq weigh heavily on his calculations regarding Syria.

“It has branded in me the idea that the use of military power must be part of an overall strategic solution that includes international partners and a whole of government,” he said in the Aug. 4 interview. “The application of force rarely produces and, in fact, maybe never produces the outcome we seek.”

But the application of force seems to be the only tool in the Obama bag at the moment.  And Dempsey is correct.  It isn’t particularly difficult for the US to reach out and swat someone.  But what is and always has been difficult is to predict what will follow such an application of force.  The law of unintended consequences has a terrible history of rearing its ugly head each and every time force is applied in this manner.

As for the critical question, the question that all military operational planners ask first and then tailor a plan to achieve … well there is no obvious answer.  That’s likely because the administration hasn’t an answer and has provided no guidance to those planning this misadventure:

“What is the political end state we’re trying to achieve?” said a retired senior officer involved in Middle East operational planning who said his concerns are widely shared by active-duty military leaders. “I don’t know what it is. We say it’s not regime change. If it’s punishment, there are other ways to punish.” The former senior officer said that those who are expressing alarm at the risks inherent in the plan “are not being heard other than in a pro-forma manner.”

Going through the motions of “listening to all sides” when, in fact, the decision to act militarily has been decided.  It is down to how big or how small the strike will be.  And, as we see above, Assad is doing everything he can to make Obama’s deliberations and decision making as difficult as he can.

~McQ

Economic Statistics for 29 Aug 13

Real GDP growth for 2Q 2013 was revised to an annualized 2.5% from the initial estimate of 1.7%. The GDP Price Index was revised to 0.8%.

Initial claims for unemployment last week fell 6,000 to 331,000. The 4-week moving average rose 2,500 to 330,500. Continuing claims fell 14,000 to 2.989 million.

Corporate profits in 2Q 2013 were $1.830 trillion, up from $1.785 trillion in 1Q.

The Bloomberg Consumer Comfort Index continued to fall sharply, down almost -3 points to -31.7, a 4-month low.

The Fed’s balance sheet fell $-1.2 billion last week, with total assets of $3.644 trillion. Reserve Bank credit increased $12.0 billion.

The Fed reports that M2 Money Supply fell by $-18.3 billion last week.


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UK and France backing away from Syria strike?

The shaky coalition of Western nations promising to strike Syria for its alleged use of chemical weapons is getting even shakier.  In the UK, Prime Minister David Cameron is reconsidering:

David Cameron backed down and agreed to delay a military attack on Syria following a growing revolt over the UK’s rushed response to the crisis on Wednesday night.

The Prime Minister has now said he will wait for a report by United Nations weapons inspectors before seeking the approval of MPs for “direct British involvement” in the Syrian intervention.

Oh look … Cameron plans on getting the approval of Parliament before committing British troops to war.

That’s because opposition British politicians apparently play hardball while ours … well they talk and complain a lot:

Senior sources had previously suggested that Britain would take part in strikes as soon as this weekend which meant an emergency recall of Parliament was necessary on Thursday.

However, following Labour threatening not to support the action and senior military figures expressing concerns over the wisdom of the mission, the Prime Minister on Wednesday night agreed to put British involvement on hold.

The climbdown is likely to be seen as an embarrassment for Mr Cameron as he was determined to play a leading role in British military strikes, which had been expected this weekend.

France too is showing signs of waffling:

French President Francois Hollande said on Thursday that Syria needed a political solution, but that could only happen if the international community could halt killings like last week’s chemical attack and better support the opposition.

Hollande sounded a more cautious note than earlier in the week, when he said France stood ready to punish those behind the apparent poison gas attack that killed hundreds of civilians in Damascus.

He indicated that France was looking to Gulf Arab countries to step up their military support to the opposition to President Bashar al-Assad, after Paris said this week it would do so.

Not exactly the saber rattling that was going on a few days ago.  It appears a “political solution” may be code words for “yeah, we’re climbing down too.”

Don’t expect a climbdown here.  At least not anytime soon. Not only has President Obama said he doesn’t need Congress’s approval, he’s also decided he doesn’t need to inform the American people of his decision via a televised Oval Office announcement.  However he would like the cover of a coalition (my, the shadenfreude here is delicious, isn’t it?).

If one had to guess, however, any strike this week would be sans the British and the French.  And that may be enough to delay an American strike (don’t forget, President Obama claims he hasn’t made a decision yet).

Meanwhile in the Med, tensions spiral up as Russia decides to flex a little naval muscle in the area:

Russia will “over the next few days” be sending an anti-submarine ship and a missile cruiser to the Mediterranean as the West prepares for possible strikes against Syria, the Interfax news agency said on Thursday.

“The well-known situation shaping up in the eastern Mediterranean called for certain corrections to the make-up of the naval forces,” a source in the Russian General Staff told Interfax.

Interesting.  And, if the strikes don’t happen now, who will claim to have helped call the coalition’s bluff?

As with most things concerning foreign affairs that this administration involves itself, this is turning into a debacle of major proportion.

Stay tuned.

~McQ

An attack destined to fail

One of the first things any military commander must do is define the mission clearly and succinctly. It must have a goal and that goal must be achievable with the assets the commander is willing or able to commit to the mission.

What it shouldn’t be is some nebulous one-over-the-world hand wave of a mission driven by politics and open to interpretation. Unfortunately, it appears that’s precisely the type mission the Obama administration is ginning up for Syria according to the NY Times:

President Obama is considering military action against Syria that is intended to “deter and degrade” President Bashar al-Assad’s government’s ability to launch chemical weapons, but is not aimed at ousting Mr. Assad from power or forcing him to the negotiating table, administration officials said Tuesday.

“Deter and degrade” are open to interpretation and Syria could and likely would initiate another chemical attack after the US attacks just to point out that they’re neither deterred or degraded.

Here’s the problem:

The strikes would instead be aimed at military units that have carried out chemical attacks, the headquarters overseeing the effort and the rockets and artillery that have launched the attacks, according to the options being reviewed within the administration.

An American official said that the initial target lists included fewer than 50 sites, including air bases where Syria’s Russian-made attack helicopters are deployed. The list includes command and control centers as well as a variety of conventional military targets.

A) We’ve told them where we’ll strike.  Since it is a limited strike and it is going to be against specific units, Syria has the option of dispersing them, an option I’m sure they’ll take.  They’ll also likely disperse them in to highly populated urban areas where they can.

B) We’ve told them what we’re going to strike.  Since they have thousands of artillery pieces capable of firing chemical shells, it is unlikely a limited strike is going to even seriously dent that capability.  Moving artillery into the cities would likely deter the US more than the US would deter Syria.  Helicopters can be moved as well.  They don’t need long runways. Other aircraft will be dispersed  And finally, command and control are easily moved and dispersed.

C) We’ve told them how we’re going to strike.  It is clear that if an attack does happen it is not something that is supported by the majority of the American people for various reasons.  Couple that with a seemingly risk averse commander and you can pretty well define how this will happen – missiles.  Specifically Tomahawk missiles.  Given our history of their use, you can pretty much guess at what and where they’ll be aimed.

D) We’ve pretty well told them it won’t be much of a strike.

Perhaps two to three missiles would be aimed at each site, a far more limited unleashing of American military power than past air campaigns over Kosovo or Libya.

Result?

Well even the administration knows this is a recipe for failure so they immediately engage is a classic attempt to lower expectations:

Some of the targets would be “dual use” systems, like artillery that is capable of firing chemical weapons as well as conventional rounds. Taking out those artillery batteries would degrade to some extent the government’s conventional force — but would hardly cripple Mr. Assad’s sizable military infrastructure and forces unless the air campaign went on for days or even weeks.

The goal of the operation is “not about regime change,” a State Department spokeswoman, Marie Harf, said Tuesday. Seeking to reassure the public that the United States would not be drawn into a civil war in the Middle East, and perhaps to lower expectations of what the attack might accomplish, Obama administration officials acknowledged that their action would not accomplish Mr. Obama’s repeated demand that Mr. Assad step down.

And what would we accomplish?  Well likely the opposite of what we hoped would happen – deterrence and degradation.  Assad would be invited to prove the US wasn’t successful in either by doing what?  Using chemical weapons once again.  His reasoning would be that since he’s being accused of doing so, and supposedly punished for doing so, there’s no reason not to do it again.

Then what?

~McQ

Economic Statistics for 27 Aug 13

The following US economic statistics were announced today:

ICSC-Goldman Store Sales still look weak, with a 0.2% increase for the week, and 1.9% annual increase.  Redbook, on the hand, reports a stronger 3.8% year-on-year same-store sales increase.

The S&P/Case-Shiller home price index rose 0.9% in June, a 12.1% increase from last year.

The Conference Board’s consumer confidence index rose 1.2 points to 81.5 in August.

The Richmond Fed Manufacturing Index rose sharply from -11 to 14 in August as business activity picked up in the mid-Atlantic district.

Confidence among institutional investors remains high, though it declined a bit from 107.6 to 105.1 in August.

~
Dale Franks
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Government abuse: not surprising, not unexpected, but certainly something that needs to be stopped – now!

This has been in the news recently and now it is getting some Congressional attention.  It has to do with possible illegal activities involving the NSA and DEA.  As you know, the NSA’s job is to focus outside the US, not inside, and primarily on enemies of the United States, not it’s citizens:

Eight Democratic senators and congressmen have asked Attorney General Eric Holder to answer questions about a Reuters report that the National Security Agency supplies the Drug Enforcement Administration with intelligence information used to make non-terrorism cases against American citizens.

The August report revealed that a secretive DEA unit passes the NSA information to agents in the field, including those from the Internal Revenue Service, the FBI and Homeland Security, with instructions to never disclose the original source, even in court. In most cases, the NSA tips involve drugs, money laundering and organized crime, not terrorism.

Five Democrats in the Senate and three senior Democrats on the House Judiciary Committee submitted questions to Holder about the NSA-DEA relationship, joining two prominent Republicans who have expressed concerns. The matter will be discussed during classified briefings scheduled for September, Republican and Democratic aides said.

“These allegations raise serious concerns that gaps in the policy and law are allowing overreach by the federal government’s intelligence gathering apparatus,” wrote the senators – Tammy Baldwin of Wisconsin, Ron Wyden of Oregon, Tom Udall of New Mexico, Richard Blumenthal of Connecticut and Sherrod Brown of Ohio.

Why, other than the fact that the NSA has no charter or permission to pass its information about American citizens on to other agencies, is this important?

The Reuters reports cited internal documents that show how DEA’s Special Operations Division funnels information from overseas NSA intercepts, domestic wiretaps, informants and a large DEA database of telephone records to authorities nationwide to help them launch criminal investigations of Americans.

The documents show that agents have been trained to conceal how such investigations truly begin – to “recreate” the investigative trail to effectively cover up the original source of the information, raising questions about whether exculpatory information might be withheld from defendants at trial.

The internal documents describe the process of recreating the evidence trail to omit any reference to the Special Operations Division as “parallel construction.” For example, agents said in interviews, they act as if a drug investigation began with a traffic stop for speeding or a broken taillight, instead of a tip passed from the NSA. An IRS document describes a similar process for tax agency investigators.

Emphasis mine. So not only is passing such information to these agencies unauthorized, the government then instructs its agents on how to lie about the source of their information (a lie of omission). And, of course, it is also legitimate to ask whether or not exculpatory evidence could also have been available but not passed to these agencies.

Is this really the type government we want?  One that spies on us, intercepts our electronic messages and phone calls and uses them secretly by passing what should be private to various other government agencies and then lies about it?  Peggy Noonan addresses those questions quite directly today:

If the citizens of the United States don’t put up a halting hand, the government can’t be expected to. It is in the nature of security professionals to always want more, and since their mission is worthy they’re less likely to have constitutional qualms, to dwell on such abstractions as abuse of the Fourth Amendment and the impact of that abuse on the First.

If you assume all the information that can and will be gleaned will be confined to NSA and national security purposes, you are not sufficiently imaginative or informed. If you believe the information will never be used wrongly or recklessly, you are touchingly innocent.

If you assume you can trust the administration on this issue you are not following the bouncing ball, from Director of National Intelligence James Clapper, who told Congress under oath the NSA didn’t gather “any type of data at all on millions or hundreds of millions of Americans” (he later had to apologize) to President Obama, who told Jay Leno: “We don’t have a domestic program.” What we do have, the president said, is “some mechanism that can track a phone number or an email address that is connected to a terrorist attack.”

Oh, we have more than that.

Almost every politician in America lives in fear of one big thing: a terrorist attack they can later be accused of not having done everything to stop. And so they’ll do anything. They are looking to preserve their political viability and historical standing. We, as citizens, must keep other things in mind, such as the rights we are born with as Americans, one of which is privacy.

Lord Acton nailed it when he said “Power corrupts …”.  We’re currently in the midst of watching exactly that happen to an even greater degree than in the past. If you give government power, it will do everything it can to expand that power – whether legitimately or illegitimately.  It is the nature of the beast.  And we have to put up a hand to stop it.

If you’re wondering why the Tea Party is characterized in such nasty ways by the establishment of both parties, it is because it does indeed attempt to put up a hand to stop these sorts of abuses and remove power from the abusers.  They threaten the very base of power the political establishment has worked so hard to build over the years.

~McQ

Economic Statistics for 26 Aug 13

Here are today’s statistics on the state of the economy:

Durable goods orders fell -7.3% in July, with ex-transportation orders down -0.6%. On a year-over-year basis, orders are down -0.3%, but ex-transportation orders are up 5.9%.

The Dallas Fed Manufacturing Survey shows overall business activity in Texas rose 0.6 points to 5.0, but the production index fell 4.1 points to 7.3.

~
Dale Franks
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