Saturday, September 13, 2014

Turkey did not break NATO

This morning, I woke up to an infuriating editorial in the Wall Street Journal.

It is a pity Bill Clinton and Barack Obama worked so hard to break NATO. It is an even greater pity that they have succeeded.

First, ponder the following questions:

  1. Which European countries would be willing to invoke Article 5 to help Turkey in case of all out war between among Turkey, Syria, and Iran?

  2. Which European countries would actually be able to help Turkey militarily in such a case?

  3. Would President Obama risk a nuclear confrontation with Russia to save Turkey?

In the Middle East, President Obama has been trying to outdo every previous stupid decision with a stupider new decision over and over again.

His first stupid decision was to undermine the U.S. war effort, among with his fellow Democrats, starting almost immediately after the decision to invade Iraq. Once he became president, he immediately decided to undermine the only uprising in the Middle East he should have supported. He immediately followed that with declarations of American weakness, and hightailed it out of Iraq to create a void to be filled by Russians and Iranians.

Having declared and followed through on U.S. weakness, he went on an Arab Spring rampage, demolishing existing systems while the U.S. military was used as a tool to eliminate existing structures in haste. Libyans are now worse off than they had been under Gaddafi. Egyptians are now worse off than they had been under Mubarak. Iraqis are now much worse off than they had been during the worst days following OIF.

This clueless U.S. President's feckless policies are responsible for incredible death and destruction.

In Syria, the Obama administration recruited Turkey to channel support for the rebels. Turkey also shouldered the responsibility of accommodating an incredible number of refugees. According to the UNHCR, there are 850,000 Syrian refugees in Turkey. That is about 1% of the whole population. In border areas, Syrian refugees have been overwhelming local populations.

Of course, there is no reason to assume that only innocent people recorded by humanitarian agencies have made through the border. In fact, a lot of really unsavory characters, representatives of the "Syrian opposition", had been meeting openly with U.S. representatives in Istanbul and Ankara, until the U.S. decided to abandon President Obama's red line last year.

Turkey faces a significant threat of domestic upheaval caused by the fact that it had to absorb a huge flow of humanity created by the fact that Assad decided to call his old American friends' bluff (remember when Democrats supported Assad because he was undermining the Bush administration?)

As the U.S. seemed about ready to intervene forcefully in Syria last year, Putin pulled the reins on Obama, and the U.S. butted out of the Russians' way. Now, Putin is organizing an Assad comeback.

It is not hard to imagine he would try to provide more support to help Assad in the presence of U.S. and allied forces pounding positions in Syria. One way he would do that is by sending ships through Istanbul straits. Would Obama just sit there, and watch the Russian Navy once again kick American forces out of the region?

Or, would the U.S. ask Turkey to try to prevent the Russians from crossing the straits?

Where would that confrontation go?

Could Turkey rely on U.S. and NATO support in the face of Russian aggression even if Putin were to not so subtly threaten use of nuclear weapons?

The answers to none of these questions is heartening.

President Obama, and the Democrats broke the one thing that used to hold NATO together: The credible threat that anyone attacking a NATO country would find the full might of the United States of America bearing down on them.

By declaring at the outset that the U.S. is not willing to do anything other than bomb from air, and maybe say nonsensical things at rallies, Obama has ensured that neither friend nor foe can expect Article 5 of NATO to be upheld.

Given his history of non-committal violent action, it is folly to expect the current U.S. action across Syria and Iraq to lead to anyplace good for the inhabitants of the region.

It is not surprising that others do not want to follow him to the hell he has been creating the moment his ambitions propelled him to the national political stage.

As for the person who wrote the Wall Street Journal editorial: You are clueless, my friend.

When the then freshly elected Prime Minister Recep Tayyip Erdoğan tried to get a resolution to allow 4th ID to be based in Turkey prior to OIF, his efforts were undermined mainly not by Islamists, but the so called "secular" factions of Turkish society. The milder segments of those factions are connected more to the Democrat-voting, Vietnam-abandoning, New York Times-reading crowd in the United States than anything else. The less mild segments of those factions are remnants of various Red groups, fed mostly by the KGB during the 70s.

More to the point, the Turkish opposition to full-fledged Turkish support for Operation Iraqi Freedom was much more closely aligned with Obama's and the rest of the Democrats' view points than anything else. The failure of Mr. Erdoğan government to pass a resolution through the parliament at that point was due to such opposition, fueled also by the propaganda disseminated by 9/11 Truther groups nurtured by the Democrat and liberal establishment in the United States.

Despite the failure of the resolution, then Prime Minister Erdoğan's support for OIF caused a significant segment of Turkish society to label him as a puppet of the U.S. and Israel, and made him vulnerable to the only real political opposition he faced—harder line Islamist challengers.

After working the Obama administration to support Syrian rebels, his government was left to pick up the pieces following Obama's abandonment of Syria at Putin's behest. The Turkish press have been publicizing the ISIS threat for more than a year. Thanks to an Iraqi Army which President Obama abandoned, ISIS is holding quite a few Turks hostage.

Do you think Turkey would remain stable at all if ISIS savages chopped the heads of a few hundred Turks?

In the United States, we have a President who does not take the Cold War seriously. Whose ideology is more in line with Dev-Genç and Dev-Sol, and their derivatives, than Reagan's.

In Washington D.C., we have a President who mocked Romney because he understood the Russian threat.

A President who promised Putin that he would be more flexible after the 2012 election.

A President who stands by as a former KGB source becomes the next NATO general secretary.

Put simply, the current U.S. action in Iraq, and the rest of the Middle East has no hope of success (by any reasonable definition of success). There is no vision, there is no thinking beyond the U.S. elections in November. In the coming months, when Europeans are freezing, when Russia annexes more of Ukraine, when it bullies more former Iron Curtain countries, would a United States of America that has essentially abandoned Israel in the Middle East hesitate to abandon Turkey?

Why would anyone descend into a pit with such a President's rope (as one would put it in Turkish)?

Sunday, September 7, 2014

Arctic sea ice extent seems not have reached its minimum for the year, yet

A few days ago, I wondered out loud if Arctic sea ice extent had reached its minimum for this year. The graph up to that point seemed to indicate that.

As if to highlight once again the perils of visual extrapolation, the numbers started decreasing at rates much higher than last year's. The last few days saw sea ice extent in the Arctic decline by 0.71%, 0.97%, and 0.83%, well above the 0.22% average daily decline for the first two weeks in September 2013.

In 2013, ice extent reached its minimum on September 12 which does dampen that rate. If this year's decline continues at a sustained rate of 0.52% per day until then, by September 15 this year's Arctic sea ice extent will be less than next year's.

In the graph below, the orange dots are this year's data, blue dots are extrapolated from the last available data point assuming a 0.52% daily rate of decrease.

Currently, this year's level is 126,397 km² greater than last year's. But, that difference can close fast.

And, if this year's minimum level is even 1 km² lower than last year's, you can bet a number of people will act as if Al Gore was right.

Friday, September 5, 2014

The Democrat Effect on Family Incomes

Back before the 2008 election, I challenged the notion that the American middle class has been shrinking. I presented a graph showing the percentage of American families with more than $75,000 annual pretax income in inflation adjusted dollars had been steadily increasing in the previous decades. All dollar amounts are real 2012 dollars.

Census data being what it is, the data set I used for my 2008 post only covered the period before the Democrats took control over both houses of the U.S. Congress, and set us and the world on a disastrous path in pursuit of power.

In 1967, only 9.9 million, that is, 20% of American families had annual pretax incomes above $75,000. By the time Reagan came to office in 1981, that number had almost doubled to 18.7 million, representing 31% of families. In 1993, the year Bill Clinton was sworn in, the number stood at 25.3 million, corresponding to 37% of families. The first year of George W. Bush's first term, the year terrorists launched mass attacks against targets in the U.S., the number was up to 32.9 million (44% of families).

In the subsequent years, the number of families with pretax incomes greater than $75,000 grew to 35.1 million (45% of families). Then came the overreaction to the 2008 crisis, and silly Keynesian interventions, championed by then Senator, and President Obama.

As a result, by 2012, the number of families with pretax incomes greater than $75,000 had fallen to 33.5 million representing 41% of all families.

This matters because despite all the president's talk about soaking the rich, he can't finance his plans that way.

It matters that median real pretax family income in 2007 was $67,944, and it went down to $62,241, declining by 8.4%.

It matters not just because of the fact that most transfer programs determine eligibility in terms of pretax income (i.e. now you need to take more from people who produce more, reducing productive incentives), but it also matters because while money is not happiness, we have the potential to make ourselves and others happier when we have more resources.

Six year of ruinous policies both at home and abroad have painted us in a corner. There are no good alternatives left.

Wednesday, September 3, 2014

Revisiting the scary DJIA crystal ball

It has been about 6 ½ months since I looked at the scary DJIA graph supposedly making the rounds in Wall Street circles.

I thought this was as good a time as any to update my version of the graph.

In my version, instead of giving me infinite freedom in lining up two separate time series, I choose meaningful 11 year periods, one covering January 1, 1920 through December 31, 1930, and the other covering January 1, 2004 through today to correspond to the depression, and modern eras, respectively, Within those periods, I lined up trading days (again, to remove my ability to move around lines until they matched). This means September 2, 2014 is the 2638rd trading day since the beginning of the modern period, and is matched with December 17, 1928.

At the end of yesterday's trading day, DJIA stood at 17,067.56, about 64% higher than its January 2, 2004 level. In comparison, on December 17, 1928, DJIA closed 150% higher than its January 1, 1920 level.

Back in February, if one expected DJIA to follow the depression era path, it looked poised to soar to amazing heights. Sure, it's kept its upward momentum, but so far has not followed the giant zit like climb predicted by the original "Scary DJIA" graph.

For comparison, here are three graphs: The original "Scary DJIA" graph cited by various news sources, my version of it from February, and the updated version using data up to today:

I do consider the coming months to be fraught with danger and instability. However, war in Europe, and the Middle East will have crippling effects on our, and other economies throughout the world. That means, we may get the crash without the giant bubble. It might also mean the U.S. stock market might be the least bad place for all sorts of money to escape to. At this point, it is pretty difficult to tell what effect the combination of a crippling winter, war & destruction, irresponsible economic policies, and a rock-star-wannabe U.S. president in an election environment will do to U.S. financial markets.

So, don't believe crystal balls, and look to the future.

I do not give investment advice. I am not an investment adviser. Nothing I say should be construed as giving investment advice. All trademarks belong to their respective owners. The McClellan/DeMark chart reproduced to put my comments in context.

Sunday, August 31, 2014

Has the Arctic Sea Ice already reached its minimum for this year?

Looking at data provided by Japan Aerospace Exploration Agency (CSV), and interesting graph emerges:

Of course, it is always perilous to visually extrapolate a graph into the future, but given that the rate of decrease in the extent of Arctic sea ice during this summer has slowed down to 0.05%, it looks like it may already be close to its minimum point for this year.

Looking ahead at a bone-freezing winter in the Northern hemisphere, I am looking forward to screams of weather is not climate from certain circles:

Last September 21, as the Northern Hemisphere tilted away from the sun, scientists reported with unprecedented distress that the North Polar ice cap is "falling off a cliff." One study estimated that it could be completely gone during summer in less than 22 years. Another new study, to be presented by U.S. Navy researchers later this week, warns it could happen in as little as 7 years.

Seven years from now.

(emphasis mine)

Yes, Al Gore said this seven years ago.

Today, we are very close to the minimum of summer ice cover around the North Pole. And, there are 5,215,532 square kilometers of ice there (approximately two million square miles).

Yet, on the say so of people whose predictions have been regularly off the mark, we must make it more expensive to fly. We must make it more expensive to heat our homes. We must make it more expensive to eat well.

For what?!

Friday, August 1, 2014

What is happening with U.S. government's passport and visa database?

A week ago, news outlets reported:

State Department spokeswoman Marie Harf said the problem is worldwide, and not specific to any country, documents or visa category. She says it will stall the issuance of U.S. passports, visas and reports of Americans born abroad.

The State Department is working to correct the problem but has given no time for when a fix will be in place.

(emphasis mine)

It turns out, they are still working on the problem.

Here is an excerpt from yesterday's briefing by the U.S. State Department:

QUESTION: The Washington Post reported today about a computer glitch in the U.S. State Department’s visa and passport record keeping --

QUESTION: Some of us reported about it last week.

MS. HARF: Uh-oh.

QUESTION: Well, they reported today. That’s what I remember. (Laughter.) And so the question is: What is being done? How serious is this?

MS. HARF: Yes.

QUESTION: Because some of the – apparently it’s affecting people who are seeking to adopt children?

MS. HARF: Well – so it’s affecting people all over the world, but let – we have talked about it a little bit. Let me give a little bit of an update. We are continuing to work to restore our visa system to full functionality. We anticipate it will take weeks to restore full visa processing capacity. We have been prioritizing immigrant visas, including adoption cases. So there is a backlog, but we are prioritizing adoption cases. So far we have been able to issue most cases with – of those cases with few delays. Nearly all passports are currently being issued within our customer service standards even despite the system problems, and we are able to issue passports for emergency travel.

Matt, you had asked yesterday – I think Matt asked about numbers --

QUESTION: Backlog.

MS. HARF: Or – right, numbers of backlog, though. To give you an idea of the progress and sort of the challenges, from the start of the operational issues on July 20th through July 28th, we issued more than 180,000 non-immigrant visas globally. Based on our average production figures, we would have anticipated issuing closer to 370,000 in that same time period.

QUESTION: All right, so –

MS. HARF: So we’re –

QUESTION: Virtually cut it in half?

QUESTION: In fact, there’s been significant improvement since the last time you updated about this – updated us about this, which was – what’s today, Thursday – which was like Monday or Tuesday.

MS. HARF: Yeah, we continue to make improvements, but there is quite a significant backlog, and we are not yet working at full functionality.

QUESTION: So – but – okay. So can you – maybe not quantify it, but if you had like some kind of a meter between when this first came an issue on the --

MS. HARF: On the 20th.

QUESTION: -- 20th, and the basically kind of catastrophic failure where everything was down, right?

MS. HARF: Mm-hmm.

QUESTION: And now --

MS. HARF: Mm-hmm.

QUESTION: -- where are you on that? 50 percent? 60? 70 percent? Is there a way to --

MS. HARF: In terms of the number we’ve issued or our functionality?

QUESTION: No, in terms of functionality, right. In terms of --

MS. HARF: I don’t know the answer. Let me see if I can check on that.

QUESTION: Is this an issue with Oracle?

MS. HARF: It is in part, because they are the ones that run the hardware and software, I believe.

QUESTION: And they’re dealing with it, or is this something the State Department --

MS. HARF: We are working together to deal with it. It is limited in part by our outdated software and hardware, which we are attempting to work to fix.

QUESTION: Can we move onto – I’ll let someone else --

MS. HARF: Yes.

QUESTION: -- go --

MS. HARF: No, let’s – Matt, let’s --

QUESTION: I want to talk about these talking points that the White House --

MS. HARF: Okay.

QUESTION: -- inadvertently put out on the torture report.

MS. HARF: Mm-hmm.

I find it amazing how willing Ms. Harf is to move away from the "glitch" to the CIA torture memo …

I can think of a millions things that might have happened with their systems before someone realized what was going on, and shut down the system. In times of non-transparency, minds wander.

Incompetence is omnipresent in government at all levels, because governments and their workers do not bear the full costs of their errors.

In this case, there is also the possibility that someone had figured out either how to manipulate the database itself, or, more likely, how to sit in between consular offices and the database, and cause U.S. passports and visas to be issued to people who should not be issued such precious travel documents.

Oracle means there was Java involved. I have seen some "enterprise" setups where clients were using some custom forms interface quickly cobbled together by "IT personnel" to interface with the database. Some such setups were so whacky that they required the clients to be running almost 10 year old versions.

I have absolutely no knowledge of what the State Department uses. I am just going on the information contained in these press releases.

Pure speculation on my part.

It is useful to watch the briefing itself. The topic comes up the 45 minute mark.

Wednesday, July 23, 2014

Inflation adjusted Dow Jones Industrial Average, 2004 - 2014

Here is a quick look at DJIA, between August 2004 and June 2014, both nominal, and inflation-adjusted using CPI (CUUR0000SA0, 1982-84=100):

Nominally, the Dow-Jones index is about 142% higher than its lowest point, right around the time of President Obama's inauguration. On that day, the DJIA closed at 7,949, and by February 27, 2009, it was down to 7,063. Today, it's hovering around 17,100. That reflects an average annual growth rate in the nominal value of the index of about 19%.

Once the index is adjusted using the Consumer Price Index, the February 2009 value falls to 3329, and the current value falls to about 7060, reflecting an annual rate of growth in the inflation adjusted DJIA of about 16%.

According to the BEA, the real GDP of the U.S. was about 10% higher in the first quarter of 2014 than in the first quarter of 2009, reflecting an average annual growth rate of about 2% in the amount of goods and services produced by the U.S. economy.

An adjustment, and that may be an understatement, especially given the world situation, is probably on the way.