Money talks

From The Wall Street Journal:

Iran Deal Could Open Door to Gulf Businesses

While executives see opportunities, governments remain at loggerheads on other issues

By Rory Jones and Nicolas Parasie | August 31, 2015 5:30 a.m. ET

DUBAI–In the 10 years since RAK Ceramics opened a $40 million tile manufacturing plant in Iran, the United Arab Emirates-based firm has racked up millions of dollars in losses in the Persian country, fired hundreds of employees and all but stopped its kilns from burning.

But then Iran struck a nuclear deal with the U.S. and other foreign powers this summer. Now with sanctions expected to ease, RAK Ceramics is looking to boost output of the kitchen and bathroom tiles it sells in Iran and the wider region. Executives for one of the world’s largest manufacturers of tiles and sanitary ware by capacity are now betting the long wait on Iran is about to pay off.

“We were a patient investor,” says Abdallah Massaad, RAK Ceramics’ chief executive.

RAK Ceramics is one of a handful of Arab-owned firms positioning their businesses to profit from a post-sanctions neighbor, even as frosty political ties between Iran and most of the Gulf Cooperation Council–Saudi Arabia, Bahrain, the U.A.E., Oman, Qatar and Kuwait–show few signs of thawing.

The week after the U.A.E. joined Saudi Arabian-led airstrikes in April against Iranian-backed Houthi rebels in Yemen, U.A.E.-owned Etihad Airways launched a daily commercial service to Iran’s capital Tehran. Dubai-owned FlyDubai has launched seven new routes to Iran this year after a bilateral aviation agreement was signed in January between the U.A.E. and Iranian governments.

Click to enlarge

There’s more at the original. But this tells you why the Congress won’t block President Obama’s nuclear arms deal with Iran: too many people see too much money to be made by normalizing trade relations. And even if someone sensible like Scott Walker or Carly Fiorina or Ted Cruz is elected to be our next President, American sanctions won’t be re-imposed, because American businesses will be making money off the deal.

Bank of America Merrill Lynch predicts that with the removal of sanctions Iran’s annual import needs could soar to $200 billion from $80 billion in 2014. The U.A.E. is among those countries best positioned to benefit from the trade flows, analysts at the bank said in a note to clients.

The article doesn’t mention much in the way of American businesses making money on this, but you can count on it: European businesses will, and the Europeans have American business interests as well. And if the Europeans don’t continue with the sanctions, then there’s little use in the United States doing so; that wouldn’t stop Iran from making money, or obtaining anything it wanted in trade, but it would hurt American business interests.

President Obama has gotten his way on this one: he structured the deal in such a fashion that both Houses of Congress would have to override his veto of any law disapproving the deal, something which would require 2/3 supermajorities in both Houses, and in a way which makes the reimposition of sanctions by a subsequent President cost American businesses money.

Completely missing the point

From The Philadelphia Inquirer:

Worldview: A shocking silence on ISIS’s sex slavery

Trudy Rubin, Inquirer Opinion Columnist | Posted: Sunday, August 30, 2015, 1:08 AM |

Kayla Mueller, a U.S. aid worker, was captured in Syria in 2013 and reportedly subjected to months of rape before her death. The lack of outrage is troubling. JO. L. KEENER / Daily Courier

One of the most heinous of the endless war crimes of the Islamic State has been the systematic rape of thousands of young girls and women – who are sold as sex slaves.Most of the victims come from the Yazidi religious minority, labeled nonbelievers by ISIS. They were captured when ISIS invaded northern Iraq last year and wiped out their communities.

But one of the sex slaves was a fresh-faced blond American, a 25-year-old aid worker who was captured in Syria in August 2013. Kayla Mueller was chained in a room and raped for months by the leader of ISIS, Abu Bakr al-Baghdadi, before being killed in February (supposedly by a Jordanian air strike, but the true cause is uncertain).

What astonishes me is the paucity of global outrage at the buying and selling of sex slaves – not to mention U.S. outrage at the enslavement of Mueller. American women organized to protest the Taliban’s repression of women but not ISIS atrocities that make the Taliban’s war crimes look mild in comparison. How can this be?

You can read the rest here.

An obvious question: would Mrs Rubin have ever written this article if there hadn’t been “a fresh-faced blond American” among the victims of Da’esh’s1 sex slavery?2

But, to answer Mrs Rubin’s question, “How can this be?” that Americans and other Westerners are not protesting this, the Taliban were an insular group, imposing their brand of Islam in Afghanistan and parts of Pakistan, but they were not seen as a particular threat to the United States or the rest of the civilized world. Da’ish, on the other hand, are trying not only to seize Syria and Iraq, but are exporting, as best they can, their own form of violence to the Western world, and much of the West is just plain too cowardly to say anything about it. Je suis Charlie didn’t last long.

And, of course, there is another reason. The Taliban took power in Afghanistan in September of 1996, before the September 11th attacks, and while Bill Clinton was President. For the American left, criticizing the Taliban would not have been somehow aligning themselves with George W Bush.

While there was a huge initial surge of support for President Bush following the World Trade Center attacks, it didn’t last long, and the Republicans’ perceived hostility to Muslims3 was anathema to the oh-so-inclusive politically correct left; to say anything which could be perceived as hostile toward Muslims could be interpreted as supporting conservatism and the Republican Party, and they couldn’t have that. And Mrs Rubin was careful enough in her article to not write anything which could be seen as insulting to Muslims in general.

It isn’t only sex slavery. There was an international outcry over the Taliban’s decision to destroy the 1700 year old Buddhas in the Bamiyam Valley, but that disgust was muted when Da’ish destroyed 2000 year old monuments in Iraq.

One would think that the very supportive of homosexuals Democratic Party would be outraged by Da’ish’s habit of executing homosexuals by throwing them off of multi-story buildings, but, again, that would be criticizing Muslims, so it’s Just Not Done.

Mrs Rubin recognizes that President Obama’s policies haven’t helped:

President Obama’s policies for fighting ISIS are so inept and contradictory they have helped the group’s so-called caliphate to sink ever-deeper territorial roots. The White House still doesn’t seem to recognize the long-term security threat the group poses to the U.S. homeland, as ISIS inspires ever more disgruntled youths to adopt its fanatic values.

But, after writing that, and saying that “there are things to be done” to combat Da’ish’s so-very-illiberal treatment of women, she suggests nothing. So let me be clear here: the ideology of Da’ish isn’t something somehow separate from the leadership and the soldiers, but something that each of them carry in their heads and hearts. The way to defeat Da’ish is to wage real war against them, to seek them out and kill them, to kill so many of them that the few survivors will be so mentally beaten that there will be no will to revive the movement. President Obama is loath to put any American soldiers on the ground to combat Da’ish, and in that, he probably reflects the will of the majority of Americans. That being the case, the only alternative is a massive, massive bombing campaign which will simply destroy everything in the Da’ish controlled areas, combatants and non-combatants alike.

That was how the last war we won was done. The firebombings of Tokyo and Yokohama and Dresden didn’t somehow discriminate against enemy soldiers, and leave the civilians alone; in going after munitions factories and railroad terminals in the Third Reich, we also destroyed the homes and schools and churches around them, we killed not just the factory workers,4 but their wives and children as well. It wasn’t just the Nazis who were killed, but men and women and children who had nothing to do with National Socialist ideology were slain as well.

Even a massive, indiscriminate bombing campaign might not be enough; we destroyed almost all of Germany’s and Japan’s infrastructure, and killed hundreds of thousands of their civilians, but it still took the advance of the American, British, Canadian and Soviet armies to finally conquer Germany, and it was only the two atomic bombings of Hiroshima and Nagasaki which gave the Emperor Hirohito the leverage to force the military government to surrender.

Da’ish will not be defeated by precision drone attacks and indignant articles in the Western press; we have been trying that, and Da’ish still seems to be winning, not falling back. Da’ish will only be defeated with bullets and burning and bombs; Trudy Rubin needs to recognize that.

  1. Your Editor is not particularly fond of the initials ISIS, and the reduction to just IS, for Islamic State, seems even worse. Da’ish is an acronym for the Arabic al-Dawla al-Islamiya fi Iraq wa al-Sham, and, according to the BBC, the group “objects to the term and has advised against its usage.” Therefore, I shall use it! The Editor shall not edit comments using other commonly-used terms, but the use of Da’ish is now the accepted form in The First Street Journal’s stylebook.
  2. I remember the Inquirer’s coverage of the 2009 murder of cute white girl Rian Thal, when so many killings of black Philadelphians by other black Philadelphians barely get a paragraph. Even now, when the Inquirer’s website,, deletes many older articles, a site search for “Rian Thal” returns 24 articles.
  3. President Bush went out of his way to insist that the “Global war on Terror” was not a war against Muslims.
  4. Despite manpower shortages in Germany, the Nazis never made the change to women working in the factories to free men up for the Wehrmacht.

#CarlyFiorina and a big campaign problem

From The Wall Street Journal:

Carly Fiorina: ‘I’ve Earned a Place on the Main Stage’

By Reid J Epstein

Carly Fiorina, shown at an ice cream parlor in Iowa Thursday, has seen her poll numbers improve since her performance in the Aug. 6 GOP presidential debate. Zuma Press

Carly Fiorina deserves to be in the next prime time debate, she said Friday.

“Based on every meaningful metric, I’ve earned a place on the main stage,” Mrs. Fiorina wrote in an email to The Wall Street Journal.

Mrs. Fiorina’s claim to a spot in the big show is the latest salvo in her campaign’s effort to pressure CNN, which is airing the Sept. 16 debate from the Reagan Library in Simi Valley, Calif., to alter its rules to improve her odds of appearing with the first-tier candidates.

The problem for Mrs. Fiorina, the former chief executive officer of Hewlett-Packard Co., is CNN’s rules. In May the network announced its debate qualification criteria. For the main debate in prime-time, CNN will take the top 10 candidates according to an average of national polling taken between mid-July and mid-September. Lesser candidates will be relegated to a late-afternoon debate.

Fox News Channel employed similar qualification standards for its Aug. 6 debate in Cleveland. After Mrs. Fiorina’s standout performance in the second-tier debate there, her poll numbers spiked. If CNN used only polls taken after that debate, Mrs. Fiorina would undoubtedly make the main debate stage at the Reagan Library Sept. 16.

Mrs. Fiorina is now in seventh place in the Real Clear Politics average of GOP primary polls. She tied for sixth place, with 5% support, in CNN’s own poll of Republican primary voters released two weeks ago. But she is weighed down by preponderance of polling before the Aug. 6 debate, when she was mired below 2%.

August is a slow month for national polls. CNN will almost certainly be weighing more polls from before the Fox News debate than after it. The Fiorina campaign wants CNN to weigh the collection polls taken before the Fox debate equally with the set of polls taken after it.

There’s more at the link, but this is a tweet I sent to her campaign on Saturday:

And this one:

I’ve said previously that my early support was for Governor Scott Walker (R-WI), though I did note that I found his early lack of an issues page on his campaign website was disappointing. While not putting up a specific issues page, Mr Walker’s website now contains plenty of information for voters through its news page.

Now, I like Carly Fiorina. I haven’t jumped ship with Governor Walker yet, but I like Mrs Fiorina’s feistiness, and her take-no-prisoners approach, but her’s doesn’t exactly seem like a professionally organized campaign when her own campaign website, the place where people who are interested in her candidacy would naturally go to find her stands on the issues — her campaign website is the top listing, because it’s an advertisement, on a Google search for Carly Fiorina — doesn’t have that information. Instead, the reader gets just three choices, to Meet Carly, to join the campaign, and, of course, to make a donation. You can eventually find an “Answers” page, in which the website suggests videos of Mrs Fiorina as answers to typed in questions, but it isn’t very good, and it’s hard to spot. Perhaps she has some bigger problems, as in trying to get on the first tier debate — where she ought to be — but fixing her campaign website is the expenditure of a few hundred dollars, not millions and not even thousands. Does the former Chief Executive Officer of Hewlett-Packard have a rank amateur running her website?

To be fair, Mrs Fiorina’s twitter campaign has the following:


both of which were posted after my tweet to her campaign — not that I would assume that my tweet was in any way responsible for those :) — but they have an obvious problem to a half-deaf voter like me: written answers work best, not only for me, but for any reporter or blogger who wants to quote the candidate exactly.

Rule 5 Blogging: Training!

It’s the weekend and time, once again, for THE FIRST STREET JOURNAL’S version of Rule 5 Blogging. Robert Stacy McCain described Rule 5 as putting pictures of pretty women somewhat déshabillé, but, on this site, our Rule 5 Blogging doesn’t put up pictures of Anne Heche in her summer clothes, but women, in full military gear, serving their countries in the armed forces. The terribly sexist authors on this site celebrate strong women, women who can take care of themselves and take care of others, women who have been willing to put their lives on the line in some not-so-friendly places, women who truly do have the “We can do it!” attitude. Today: it’s time for more training! Click any picture to enlarge.

She looks worried, but she won’t get quite the same haircut her barber has!

Continue reading ‘Rule 5 Blogging: Training!’ »

From Around the Blogroll

From The New York Times:

Hillary Clinton’s Handling of Email Issue Frustrates Democratic Leaders

By Patrick Healy, Jonathan Martin and Maggie Haberman | August 27, 2015

Former Secretary of State Hillary Rodham Clinton

Democratic leaders are increasingly frustrated by Hillary Rodham Clinton’s failure to put to rest questions about her State Department email practices and ease growing doubts among voters about her honesty and trustworthiness.On top of that, many say, her repeated jokes and dismissive remarks on the email controversy suggest that she is not treating it seriously enough.

Meaning: the editors and reporters of The New York Times are increasingly frustrated that their preferred candidate is stumbling so badly. They aren’t really concerned about her innate untrustworthiness, but are concerned that she might blow the election.

Interviews with more than 75 Democratic governors, lawmakers, candidates and party members have laid bare a widespread bewilderment that Mrs. Clinton has allowed a cloud to settle over her candidacy — by using a private email server in the first place, since it was likely to raise questions about her judgment, and by not defusing those questions once and for all when the issue first emerged in March.

Those questions couldn’t be defused, because they speak to what everybody already knows: Mrs Clinton cannot be trusted.

I am getting hugely frustrated with the spammers, and have contracted through We Watch Your Website for constant monitoring and cleaning of The First Street Journal,as well as the old Common Sense Political Thought and Bridging the Gap. So far, those sites don’t seem to have had issues, but I s’pose that could be because they haven’t had any activity on them. It doesn’t cost me any more to include those sites. I hope that this solves the problem!

And now, on to the blogroll!

That’s all for this week, and I hope that We Watch Your Website has managed to get the redirects under control!

  1. The embedded Amazon link will yield a small commission to Patterico if you purchase the book through that link.

For whom is the Federal Reserve supposed to work?

From The Wall Street Journal:

Overseas Bankers, Officials Urge Fed Not to Waver on Interest-Rate Rise

Some international officials have a message for the U.S. central bank: Get on with it already

By Jon Hilsenrath | Updated Aug. 27, 2015 7:04 p.m. ET

Jacob Frenkel, chairman of J.P. Morgan Chase International and former head of the Bank of Israel, said market drama would be increased by a delay. Photo: Andrey Rudakov/Bloomberg News

JACKSON HOLE, Wyo.—After months of forewarning by Federal Reserve officials that they are preparing to raise short-term interest rates, some international officials attending the Fed’s annual retreat here this week have a message: Get on with it already.Fed policy makers are wavering on whether to move rates up in September. Volatile stock prices, falling commodities, a strong dollar and signs of a deepening economic slowdown in China have created doubts at the U.S. central bank about the outlook for global growth.

International officials have been saying for months they will be prepared when the Fed moves rates higher, a message that is being echoed as central bankers, academics, journalists and others converge now in Jackson Hole for the Federal Reserve Bank of Kansas City’s annual symposium.

“If you delay something that you were planning to do, then you leave the impression that your compass is different than what you led markets to believe,” Jacob Frenkel, chairman of J.P. Morgan Chase International and former head of the Bank of Israel, said in an interview Thursday. Market drama is increased by delay, he added.

Fed officials have said they plan to raise their benchmark short-term interest rate from near zero this year, but haven’t agreed on when to start. The Fed’s Sept. 16-17 policy meeting was shaping up as a close call for a decision to move, and then market turmoil caused some officials to waver. New York Fed President William Dudley said Wednesday that a rate increase in September had become “less compelling.”

Some observers say they will be relieved when the Fed finally acts. “It’s better for the U.S. to make a decision,” Bambang Brodjonegoro, Indonesia’s finance minister, said Wednesday in an interview in Jakarta. “What makes the financial markets volatile is the uncertainty.”

Raising rates would signal that the Fed is confident about the U.S. economy, Bank of Japan Governor Haruhiko Kuroda said Wednesday in New York, before the Fed gathering. “That is not only good for the U.S. economy, but also for the world economy, including the Japanese economy,” he said.

As always, there’s more at the original.

I have to ask: why should the Federal Reserve move to increase interest rates? Banks are already sitting on large reserves that aren’t being loaned out, in part because there is insufficient demand for loans from reasonably credit-worthy customers; how will increasing interest rates help in this regard?1

The Fed is looking at increasing interest rates in part because they want to “push inflation up from below 2%.” Given that wages have been stagnant in our economy, pushing up inflation2 without a concomitant guarantee of wage increases will only make Americans poorer in real terms.

  1. The Editor is unlikely to notice any personal effects from an interest rate increase, unless such lead to an increase in savings account interest rates. However, savings account interest isn’t a significant part of our income.
  2. By which I mean price inflation; Patterico and I have had a bit of a disagreement on the use of the term.

The Success of Socialism

From The Wall Street Journal:

Venezuela’s Food Shortages Trigger Long Lines, Hunger and Looting

Violent clashes flare in pockets of the country as citizens wait for hours for basics, such as milk and rice

By Maolis Castro and Kejal Vyas | Aug. 26, 2015 5:30 a.m. ET

LA SIBUCARA, Venezuela—Hours after they looted and set fire to a National Guard command post in this sun-baked corner of Venezuela earlier this month, a mob infuriated by worsening food shortages rammed trucks into the smoldering edifice, reducing it mostly to rubble.

The incident was just one of numerous violent clashes that have flared in pockets around the country in recent weeks as Venezuelans wait for hours in long supermarket lines for basics like milk and rice. Shortages have made hunger a palpable concern for many Wayuu Indians who live here at the northern tip of Venezuela’s 1,300-mile border with Colombia.

The soldiers had been deployed to stem rampant food smuggling and price speculation, which President Nicolás Maduro blames for triple-digit inflation and scarcity. But after they seize contraband goods, the troops themselves often become targets of increasingly desperate people.

“What’s certain is that we are going very hungry here and the children are suffering a lot,” said María Palma, a 55-year-old grandmother who on a recent blistering hot day had been standing in line at the grocery store since 3 a.m. before walking away empty-handed at midday.

In a national survey, the pollster Consultores 21 found 30% of Venezuelans eating two or fewer meals a day during the second quarter of this year, up from 20% in the first quarter. Around 70% of people in the study also said they had stopped buying some basic food item because it had become unavailable or too expensive.

There’s a lot more at the link, but the important statistic is a simple one: Venezuela is South America’s largest petroleum exporter.

Socialism, under the late Hugo Chavez and his hand-picked successor, Nicolás Maduro, has turned a reasonably prosperous country into one which is solving the chronic shortage of toilet paper by cutting back on food, thereby giving the people less digestive waste products to have to clean up. Meanwhile, in the United States, not a few Democrats want to elect Bernie Sanders to be our next President, so that he can lead us down the same path as the Venezuelans.

Can the Democrats really be that dumb?

Site issues

We’ve been battling accursed spammers installing malwate and site redirects. This has necessitated updating the theme — the physical appearance of the site — to get rid of it. I’ll be slowly working back to the original presentation, but I can’t do everything at once.

Obligatory Stock Market Drop Post

There’s a fairly good discussion going on on Patterico’s Pontifications. And from The Wall Street Journal:

Investors Grasp for Answers Amid Wild Stock Rout
Investors try to assess whether selloff is just a short-term pullback or a signal of deeper trouble
By Corrie Driebusch | August 24, 2015 7:58 p.m. ET

Concerns about China’s economy intensified, accelerating the selloff across global markets as investors tried to assess whether the rout was just a short-term pullback or a signal of deeper trouble.

The Dow Jones Industrial Average began Monday with a drop of 1,089 points, a bigger decline than the “flash crash” five years ago, and closed down 588.40 points, extending a slide that has left the index off 11% this year.

Few markets were spared. European and Asian stocks suffered even deeper declines, with the Shanghai Composite Index tumbling 8.5%, entering negative territory for 2015, having risen as much as 60% at its peak in June.

Oil slid below $39 a barrel in New York, and emerging-market currencies like Turkey’s lira and Russia’s ruble fell against the dollar.

The euro and U.S. Treasurys were notable exceptions, gaining in value as investors sought out safer havens for their money.

More at the link.

The Editor considers this to be a buying opportunity, at least for longer-term investors. If you aren’t looking to retire this year or next, and don’t panic and sell at a loss, my guess is that you will be alright in a couple of years. When the crash of 1987 occurred, investors who didn’t panic and sell were made whole again by the beginning of 1988. The same thing happened after the crash of 2008, though it did take longer.1

The severity of the selloff in stocks—shares of J.P. Morgan Chase & Co. were down more than 20% at one point early Monday—confounded some observers, because the U.S. economy is showing few of the red flags that preceded major market downturns in the past. The economy continues to expand, corporate earnings outside the energy sector are staying aloft, and credit remains widely available at historically low interest rates even for some junk-rated companies.

It’s really very simple: the stock market and the economy are really only tangentially connected. For example, Ford finished the day at $13.19, down $0.67, or 4.87%, but what happened to the Ford Motor Company which actually makes it worth 4.87% less than Friday? Yet, in 2008, Ford hit $1.94 per share, and the supposed economic geniuses at the Motley Fool told us that it was not a good buying opportunity.

The stock market is driven at least as much by emotion and politics as it is by actual economics. Prices move on perceptions, and it seems to me that those perceptions frequently have little to do with economic fundamentals.

  1. This assumes a portfolio which reasonably matches the various stock indices; individual portfolios would have different results, but, on the various indices, stocks made up all the ground that was lost.