Streetwise Professor

July 2, 2013

Mr. Snowden, Please Pick Up the White Courtesy Cluephone in Terminal 7

Filed under: Military,Politics,Russia — The Professor @ 7:14 pm

A Bolivian government plane carrying president Ivo Morales was diverted to Vienna on its flight from Moscow because it was believed that Snowden could be aboard. (There is some chatter saying the plane landed because of a fuel gauge problem, but this seems to be a cover story.  Here’s a map of the flight track.  Nice u-turn. Since the plane would have to refuel anyways before proceeding to La Paz-its range is about 4500nm and the distance Moscow-La Paz is about 7000nm-a glitchy gauge wouldn’t have necessitated such a reversal.)  France and Portugal supposedly denied the plane overflight rights.

I wonder if Snowden has crossed France and Portugal off his list.  So far: Germany, Finland, Netherlands, Switzerland, Brazil, India . . . I could go on.

This is consistent with what I told commenter Charles a couple of days back: any flight-commercial, charter, private, or government-would have to file a flight plan, and any country along the route could deny access to its airspace. The apparent fact that France and Portugal exercised that right against a plane carrying a head of state makes it very plain-no pun intended-that no plane with Snowden aboard is likely to make it far beyond Russia’s borders.

Assignment for the class: design a flight plan between Moscow and the western hemisphere that does not overfly countries allied with the US, or likely to want to avoid taking Snowden’s side over that of the US.

Go ahead.  I’ll wait.

So will Eddie.

So here’s the cluephone message: Eddie, you have three choices: 1) live the real-life version of The Terminal, with screenplay adapted by Dostoevsky, and no Catherine Zeta-Jones, 2) give yourself up and return to the US, and 3) um, sorry, there’s no third choice: just effing with you, like the Russians are doing now.

Nobody wants to take you, either on principle, or because they don’t want to incur the wrath of the US.  Even if someone wants to take you, there’s no way of getting there.

Maybe I exaggerate.  You could fly to Pyongyang or Tehran.


A Marvelous Feat of Arms, Utterly Barren of Results

Filed under: History,Military — The Professor @ 2:25 pm

At approximately this hour, 150 years ago, two divisions of James Longstreet’s First Corps of the Army of Northern Virginia launched an assault at Gettysburg that has been called the greatest single afternoon of fighting in history.  And with justice.  In a mere few hours, Longstreet’s two divisions wrecked five Union divisions and a part of a sixth (Caldwell’s division of the Second Corps, Birney’s and Humphrey’s of the Third Corps, Barnes’s division of the Fifth Corps, and the Regular Brigade of Ayres’s division of the Fifth Corps).

But in the end, it was for naught. Longstreet (with an assist from a division of A.P. Hill’s Third Corps) succeeded in smashing back the Union left to the line Cemetery Ridge-Little Round Top it never should have left in the first place, but could go no further.  Like virtually all frontal assaults in the war (with a few exceptions like Missionary Ridge and Nashville and maybe Third Winchester or Cedar Creek), no matter how initially successful, Longstreet’s attack eventually ground to a halt as the result of casualties, friction, exhaustion, and the disorder that inevitably resulted from an assault.  In the Civil War, there was no way to exploit an initial success: infantry could smash infantry, sometimes, but could not exploit a breakthrough.  There were no reserves to build on the hard won gains won by Hood’s and McClaws’s divisions, and Union commander George Meade was able to rush troops from all over the battlefield (including units of the Twelfth Corps from the opposite end of the Union line, at Culp’s Hill) to shore up his flank.  Indeed, at the very end of the struggle on the 2d, a Fifth Corps division (Crawford’s Pennsylvania Reserve Division) swept across the Valley of Death (more prosaically, the valley cut by the meandering Plum Run) below Little Round Top and drove the Confederates out of the Wheat Field.  The Confederates finished the day not far from where they had started it.

The action on the Union left on the Second is one of the most complex and interesting actions of the entire war.  Prosaic agricultural features (the Wheat Field and the Peach Orchard) and rather exotic geographic ones (Devil’s Den, Little Round Top) became forever etched in the American lexicon and consciousness as a result of what happened during those few short hours.  Formerly pastoral settings became a vast charnel house.  And in this vortex, the Union army won by not losing.  The stolid Longstreet, reputed a defensive genius, had launched one of his four great assaults of the war (Second Manassass, Chickamauga, the Wilderness being the others) but fell short of victory.

Which is probably exactly why he contemplated Lee’s plan for July 3d with such trepidation.  But that’s the subject of tomorrow’s post.  For now, take a minute to think of what transpired at this minute, 150 years ago.  A marvelous feat of arms, which like so many others, proved utterly barren of results except for the bounteous harvest of brave young men.

July 1, 2013

Deleveraging is Devilish Hard: Just Ask the PBOC

Filed under: China,Economics,Financial Crisis II — The Professor @ 8:19 pm

The WSJ has a very long and interesting article about the PBOC’s ham-fisted handling of the liquidity crunch of the past weeks.  The central bank was trying to send a signal that it wanted to restrain credit growth, especially in the shadow banking sector, but things got out of hand:

Since early June, the PBOC has sought to force Chinese banks to redirect their lending away from shadow bankers—a mélange of trust companies, pawnbrokers, leasing companies and others—whose lending is putting further stress on an economy already slowing, economists say.

To achieve this, the central bank withheld cash from the interbank market, essentially twisting the arms of traditional bankers to force them to change their lending practices.

On June 20, China’s leaders feared the credit squeeze was getting out of hand. Overnight interest rates at which banks borrow from each other spiked to as high as 30% that day. A rumor circulating in Shanghai that Bank of China had defaulted on an interbank payment was given more credence when a Chinese newspaper, the 21st Century Business Herald, reported the alleged default on its website around 6 p.m. According to the newspaper, Bank of China defaulted during that afternoon, “deferring transactions for half an hour due to a fund shortage.”

But shadow banks are holding a large amount of assets.  How are those assets going to be funded?  Does the PBOC want banks to bring them on their balance sheets?  Really?  If not, where will they go?  Another reason that the PBOC’s crackdown was not credible last month, and hence will be unlikely to have disciplinary effects going forward.

Deleveraging is hard, because leverage funds assets.  To reduce leverage, you have to reduce the assets, or find equity to finance them.  How?  Dump them, leading to fire sales and substantial declines in asset prices that spill over and harm the balance sheets of banks and other institutions?  If not, where is the equity going to come from to hold these assets?

The PBOC is probably right in its diagnosis that China is over-leveraged and that the leverage is particularly fragile.  But making the diagnosis is one thing.  Finding the cure is something different altogether.  The PBOC has found that cutting off funding to shadow banking isn’t feasible, because the assets it holds have to go somewhere.  And if a lot of those assets are bad-which is likely the case here-it’s truly a challenge.  Extend and pretend is the path of least resistance, meaning that the problem is deferred, and likely to matastasize. Meaning that even the most clever central banker is likely to find it very difficult to wean the financial system off cheap credit.  There is a path dependence here that makes that task very, very difficult.  So it’s likely that we haven’t read the last story about a liquidity crisis in China.

Will No One Rid Me of This Meddlesome Geek? A Snowden Snowflake?

Filed under: Politics,Russia — The Professor @ 7:18 pm

Lots of Snowden news today.  Starting with Putin, who gave a statement that managed to come down on every side of the matter.  Russia never extradites anybody anywhere no way, no how.   But Snowden “must choose a country of destination and go there.”  He can stay in Russia, but on “one condition”: “He must stop his work aimed at harming our American partners, as strange as that sounds coming from my lips.”

So Snowden must go; but Putin won’t make him; and if he doesn’t, he has to avoid harming the US.  Got it.

Thanks for clearing that up for us, Vova.

This seems to me to indicate that Putin has put himself in a box here.  It would be totally humiliating to turn over Snowden to the Americans, so that’s not an option.  But the propaganda and intelligence benefits of Snowden’s presence in Russia (and yes, he’s “in Russia” despite legalistic Russian denials) are depreciating rapidly, and his presence in Moscow is becoming a major headache: as satisfying as it is to tweak the Americans, Putin is enough of a realist to understand he has to deal with the US.  He’s gotten the benefits from the tweak, and from here on out Snowden is a total liability.  From Putin’s perspective, the best thing would be for some other country to grant him asylum, but nobody wants to embrace the tar baby, leaving Putin stuck with him.   I can hear him lamenting: “Will no one rid me of this meddlesome geek”?

I interpret Putin’s statement as being intended to keep all options open-except for an outright handover.  I wonder what carrots and sticks are being waved around to persuade/cajole/dragoon some other country to take Snowden off Putin’s mitts.

More news: Snowden, via Assange consort/groupie Sarah Harrison (who is allegedly with Snowden in SVO), applied for asylum in Russia, and 14 other countries.  Except the Russian Immigration Service denies this.

And yet more news: Snowden allegedly sent a manifesto proclaiming his intention to fight on.

One interesting part from his snowflake (the Rumsfeld name for one of his memos from on high) comes at the very top: “I remain free and able to publish information that serves the public interest.”  Did he write this before or after Putin made his “American partners” remark?  It was released afterwards, which could be interpreted as a major FU to Putin.  Putin: You can stay if you STFU about the Americans.  Snowden: I’ll say what I want.

Or perhaps I should say “if he wrote this” instead of “did he write this.”  The document came “via Wikileaks”, and Reuters obtained a version in Spanish-which Snowden does not speak.  It sounds suspiciously Assange-ish, and contained an interesting verbal slip: it said the “United States have” instead of the “United States has.”  Now, the former usage was quite common prior to the Civil War.  Since 1865, not so much.  No American would write that c. 2013.  Ecuadoran Spanish translated into English via computer software (e.g., Google Translate)?  (The letter sucks up to Ecuador.)  Or do Aussies sometimes say “the United States have”?  Interestingly, after this was pointed out on Twitter, Wikileaks edited the statement to say “United States has.”  Busted.

And why would Snowden route this through Wikileaks, instead of blasting it to many journalists via email, along with some verification that it came from Snowden?

So did Wikileaks/Assange create this out of the whole cloth?  Or did the Russians, who then sent it to Wikileaks?  I go for the former interpretation, because since Snowden is in Russian control they could easily make it look like it came directly from him.  They wouldn’t need Wikileaks as a cutout, and it would appear more credible if it came from him directly.  And if Assange/Wikileaks has in fact created this, with such friends Snowden could use a few enemies.

After initially breatlhelessly running with the “Message from Snowden” story, the media is now backing off, and saying “attributed to Snowden.”  I think that his authorship is the least likely explanation.

Whoever the author was, he is a grandiose narcissist-a category that includes both Snowden and Assange.  It’s mainly self-righteous bloviation, but this sentence stood out: “Although I am convicted of nothing, it has unilaterally revoked my passport, leaving me in a stateless person.” Um, Eddie, you’re a fugitive who has been indicted, and who has fled precisely to avoid conviction, you twat: if conviction is the big deal here, stand trial  (Yeah, yeah, I know you claim you can’t get a fair trial.  But you’ve admitted taking the material.  Hard to walk that back.  “I’m special” isn’t a defense.)  Believe it or not, governments from municipalities to nation states attempt to do things to restrict the ability of fugitives to escape.  And you’re not stateless.  You’re passport-less: precisely because there is a particular state that wants to claim you as its own, at least for the purpose of prosecuting you.  And although I say “Eddie”, Assange has expressed similar things over his years on the run, which could provide another piece of evidence in favor of Assange’s authorship.

What a collection of pathological characters.  Snowden. Assange. Putin.  And to the mix of the pathological, some righties are reveling in the fact that Snowden “unload[ed] on Obama.”  As little regard I have for Obama, it is beyond stupid to embrace such an anti-American idiot who has traipsed from one anti-American country to another, just because he criticizes Obama.  And for things that they would find perfectly copacetic if a president with an R after his name had done them.  To put an exclamation point on this, Glenn Greenwald will appear on Fox tomorrow.

This seems to be one of those very situations where everyone will lose.  Everyone.

Update.  Here’s Snowden’s list of teams to which he’s willing to be traded:

Te Republic of Austria, the Plurinational State of Bolivia, the Federative Republic of Brazil, the People’s Republic of China, the Republic of Cuba, the Republic of Finland, the French Republic, the Federal Republic of Germany, the Republic of India, the Italian Republic, the Republic of Ireland, the Kingdom of the Netherlands, the Republic of Nicaragua, the Kingdom of Norway, the Republic of Poland, the Russian Federation, the Kingdom of Spain, the Swiss Confederation and the Bolivarian Republic of Venezuela

Good luck with most of those.  But what a rag-bag collection.  I especially like the juxtaposition of Switzerland and Venezuela.  Question: “What do Switzerland and Venezuela have in common?” Answer: “Nothing, except that Edward Snowden wants them to take him in.”  Oh.  And Switzerland is not in the Snowden fan club, given the president of the country has called him out as a liar.  Finland and Cuba is another excellent pairing.  I am at a loss to find any rhyme or reason in this list.  Does he really think France or Germany or Italy would let him in?  Seriously?  Bolivia-Will he play Butch or the Sundance Kid?

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