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Economic Statistics for 04 Sep 13

August US Auto sales were the best in seven years, with GM sales up 15% and both Ford and Chrysler up 12%. Toyota showed a 22.8% gain, while Nissan showed a 22.3% increase. VW posted a -1.6% decline.

The MBA reports mortgage apps rose 1.3% last week, with sales down -0.4% but re-fis up 2.0%.

In weekly retail sales, ICSC-Goldman reports a -0.6% sales decline for the week, and a week 1.8% increase from last year. Conversely, Redbook reports a strong 4.7% year-on-year same-store retail sales increase. So, the two major reports of weekly retail sales activity are wildly divergent.

The Census Bureau’s quarterly services survey shows information revenue rose 0.6% in 2Q 2013, and is up 4.2% from a tear ago.

The Fed’s Beige Book reports that economic activity continues to increase at a "modest to moderate pace". Translation, economic growth is still sluggish and below trend in this  fourth year of the "recovery".

The Gallup U.S. Job Creation Index rose a point to 22 in August.

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As usual, Obama tries to pass the buck

President Pass-the-Buck is at it again.  This time he wanders out of the country to do it. In Stockholm he tells the world:

“My credibility’s not on the line. The international community’s credibility is on the line, and America and Congress’ credibility is on the line because we give lip service to the notion that these international norms are important,” Mr. Obama said, referring to international laws against the use of chemical weapons.

America and Congress is it?  Is it America and Congress who shot their mouth off?  Nope.  It was Mr. Obama.  It is indeed his credibility (what’s left of it) that’s on the line.  And, as I pointed out yesterday about how he was going to try to find someone or something to blame all this on, this is simply him validating my point.

He shoots his mouth off, he then goes to Congress and now it’s Congress whose credibility is on the line?  I don’t think so.

Oh, and apparently, the crediblity of Congress (and one supposes America) is only on the line if they vote “no”.  And if they do, who cares, he doesn’t need them anyhow:

President Barack Obama said he retains the right to order strikes against Syria even if Congress doesn’t authorize them, but he is seeking approval from U.S. lawmakers because he thinks it will strengthen America’s response.

*cough* BS *cough* This weasel we’ve elected president, who is so far in over his head he doesn’t know which way is up, is looking for political cover – period. He’s only going to Congress to strengthen his hand, even as pathetically weak as it is.  The “I/me” president has put himself out on a limb and sawed it most of the way through.  Now he just want’s some one to share it with him (and as usual Lindsey McCain – er, John McCain and Lindsey Graham are amenable to the idea).

This is raw politics at its worse.  Obama goes out of the country to take a swing at Congress and the American people after finally asking for their approval.

This is what some of you elected.

Thanks.

~McQ

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Economic Statistics for 03 Sep 13

The PMI Manufacturing Index fell 0.6 points in August to 53.1. Conversely, the ISM Manufacturing Index showed a 0.3 point rise to 55.7 in August.

July Construction Spending rose 0.6%, led by a 1.3% increase in private residential outlays. June’s originally-reported -0.6% decline was revised upwards to unchanged.

The Gallup Economic Confidence Index fell a point to -13 for August.

The Gallup US Consumer Spending Measure’s August self-reported average daily spending climbed to $95 from $89 in July.


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So what has Obama wrought?

A mess.  Yes, a gold-plated, only-Obama-could-manage-it, mess.  All because he has absolutely no leadership experience and still hasn’t figured out you have to be careful what you say when you’re the president.

It’s not like he hasn’t had enough time on the job to figure that out, but apparently he’s a slow learner.

This is all about him putting himself in a box.  He shot his mouth off, his “red line” was crossed and now he’s stuck trying to back up his words with no support.  The problem is then compounded by his not having the diplomatic skills or relationships to put any sort of coalition together.  Nor did he really try to put one together.  He assumed it would just happen, like with Libya (Europe led that one, he just tagged along).

And, arrogantly, he claimed he had all of the authorization he needed to pretty much do whatever he wanted.  He’d just use his army.

Then the UK parliament said “no” to PM Cameron, Russia said “no” in terms of the UN security council and he was left twisting in the wind with … just France on his side.  And they made it clear they wouldn’t act alone.

So how to get out of the pickle?  Well, of course, he reverted to the only thing he seems to really half-way understand.

Politics.

It was the parliamentary vote in the UK that brought the idea to mind.  After essentially dismissing both “the people” and Congress, Mr. Obama suddenly decided both were critical to policy (or lack there of) on Syria.

So he “took it to the people” in a Rose Garden speech (on a Saturday afternoon, on a holiday weekend and the first weekend of college football) and announced that he was going to ask Congress for authorization to strike Syria.  And then he immediately hit the links.

Wow … so much for immediacy.  Congress is in recess and won’t be back for another week.  The Syrian rebels are hung out to dry (not that I mind that at all, but again he’s the one spouting off about immediacy).

But …

Now he’s set up something that can help ameliorate the total fiasco he’s fostered. At least at home.  Sort of a win-win.  If Congress says “ok” then he attacks and he can claim leadership (or if something goes terribly wrong, he can point to Congress and try to blame them).  If Congress says “no”, then he can back down and immediately politicize the decision claiming his favorite whipping boy, the GOP, doesn’t care about Syrian children … or something.

Not that any of that will change how the world views him … weak, timid, unreliable and incompetent.

I can’t imagine how long it will take to rebuild the image of the US in not only the Middle East, but the world.  When you have other leaders openly mocking  yours, well, that’s not much of a sign of respect, is it?

~McQ

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Observations: The QandO Podcast for 01 Sep 13

This week, Bruce, Michael, and Dale discuss Syria.

The direct link to the podcast can be found here.

Observations

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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

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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

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