My appearance on FBN has been canceled, or at least delayed. Apparently there’s an election going on, or something, and in the producer’s “news judgment” it’s more important to devote the entire hour of the program to election coverage, and not even spare a few minutes for a discussion of the earth-shattering issue of FERC and Barclays and power market manipulation.
I’ll let you know if they decide to go with the segment at a later date, but I’m not holding my breath.
Following the CIA’s explanation of its actions in Benghazi on 9/11/12, the Defense Department is justifying its actions-or lack thereof. In an nutshell: The Pentagon’s defense of our failure to deploy military force to defend those under attack in Benghazi is that the US did not have the capability in the region to intervene.
If true, this is a very sad defense indeed.
According to this NYT story, the American command responsible for Libya-AFRICOM-did not have armed drones, AC130s, or special operations forces at its disposal. Special Forces were in Croatia; Delta Force in North Carolina; AC130s in Afghanistan; Marines in Spain. According to the Pentagon, none were able to reach the beleaguered in Benghazi in time. (The conflicting stories about AC130s is particularly vexing.)
This is troubling indeed. Note that it makes Panetta look deceptive: he implied that the reason that we did not come to the aid to those under attack was a lack of intelligence on the location of the attacking forces, not a lack of ability to act on the intelligence. There is a big difference.
And pushing back against the Pentagon’s assertion that the defenders of the annex in Benghazi never designated the mortars that killed them with targeting lasers, Fox News’s Jennifer Griffin reports that (a) those in the annex were highly trained and eminently capable of designating targets, (b) had the capability to do so, (c) asked for air support, but (d) none was forthcoming:
The GRS team that was present at the CIA annex provided security for the CIA station, as they do around the world. They are highly trained in countersurveillance, close target reconnaissance and in depth reconnaissance. Enemy fighters have learned in Afghanistan and Iraq to use their cell phones to follow or intercept these “passive” lasers without having night vision or NODS.
The Annex team also had Ground Laser Designators, or GLD. This kind of laser equipment emits code and signal when there is overhead air support, unmanned aerial surveillance, drones or Spectre gunships, for instance.
A source present the night of the attack says that the GRS team that was defending the annex asked where the air support was at midnight. Former SEALs Tyrone Woods and Glen Doherty were killed 5 hours and 15 minutes later.
Five hours, fifteen minutes. An eternity, if you are under attack.
This gives the lie to Panetta’s assertion that lack of intelligence impeded a strike against the attackers. One can hardly imagine better information than that provided by trained eyes on the ground, with the equipment to pinpoint those attacking them. Which leaves two alternatives: the US wouldn’t come to the aid of those under attack, or it couldn’t.
Taking the Pentagon at its word, no AC130s or special operations forces or armed drones were available to strike. But what about fixed wing air, e.g., F-16s from Europe, armed with precision munitions (including laser-guided weapons)? Presumably the answer will be that this would have endangered civilians on the ground.
If that’s the case, let’s hear it, instead of having to infer it.
Another answer, less defensible, is that we did not have Libyan permission to engage, and took a Mother May I? attitude instead of one of Nelsonian defiance. (Could General Ham’s premature departure from AFRICOM be due to his desire to act like Nelson at Copenhagen, and turn a blind eye to orders to observe diplomatic niceties?)
Again, if that’s the case, let’s hear it.
So why did the Pentagon wait so long to provide this information, and grudgingly? Certainly all these facts were known when the attack occurred.
The only explanation I can offer is that it was loath to admit that we are for all practical purposes completely defenseless in Northern Africa. For defenselessness is what this Pentagon justification for passivity in Benghazi on 9/11/12 implies.
If this is true, I can understand their reticence. It is a shocking revelation, that the US has virtually no ability to intervene in a region that is (a) in upheaval, (b) is a potential source of terrorism, and (c) is indeed quite clearly a cauldron of Al Qaeda/Islamist/Salafist activity.
Under this interpretation the stonewall-and there has no doubt been a stonewall over all of this-is intended to conceal our deficient capabilities in this seething yet strategic region.
This makes all the other deficiencies in security in Benghazi pre-9/11/12 even more reprehensible. Not only were people put into Indian country, there was no cavalry to ride to the rescue. If we knew there was no cavalry available, it was beyond reckless to put Ambassador Stevens and the other Americans in such a vulnerable position.
The Benghazi story has three parts: what happened (or didn’t) before 9/11; what happened (or didn’t) on 9/11; and what happened after 9/11. If the Pentagon’s explanation is correct, it reduces administration culpability for inaction on 9/11, but makes its responsibility for what transpired before and after even worse. The revelation of the inability of the military to come to the defense of those in Benghazi makes the failure to take precautions even more reprehensible and indefensible. It also makes the stories told post-9/11 look even more like attempts to cover up for egregiously negligent conduct.
This also sheds a very harsh light on Obama’s whole “bayonets and horses” snark. At root, Obama’s sarcastic response to Romney’s questioning of the size of the US military presumed that quality could substitute for quantity: our weapons are so marvelous we don’t need that many of them. We definitely possess weapons and sensors capabilities far beyond those of any other nation. But if the platforms possessing those capabilities are in Croatia or Afghanistan or Fort Bragg or Rota, but not Libya when Americans are under attack in Libya, those awesome capabilities are useless: they might as well be on the moon. Capable platforms are just so much expensive junk if they are not where they are needed when they are needed.
Which means that numbers matter.
If the Pentagon and CIA reports are to be credited: Americans were put at huge risk in Benghazi, without adequate resources to deal with those risks; supremely trained personnel were available to provide the real time intelligence necessary to guide our awesome precision capabilities against those attacking the consulate and annex; but the precision capabilities were not at hand, because we are spread too thin across the globe.
No wonder they want to keep it under wraps.
I will be talking about the FERC show cause action against Barclays for manipulation of the CA power markets on Fox Business News on Monday, 5 CT/6 ET. Hope to see you! Or something.
Ein Volk, Ein Reich, Ein Furher. Yes, that is over the top, but the attached video from the Democratic National Committee that says that government is the “one thing we all belong to” pegged the Creep-o-Meter and brought that phrase to mind because of the video’s collectivist overtones, especially given its release at the time of the personality cult extravaganza also known as the Democratic National Convention.
“Belong to.” Not an unambiguous phrase. It can mean “a member of”-which connotes a voluntary association. It can also mean “owned by”-which is anything but voluntary. Government is much nearer to the latter than the former, and is becoming more so every day. Deal with the IRS and you’ll get a very clear understanding of which meaning is operative where government is involved.
Note the folksy “I’m from the government and I’m here to help you” voice. As Reagan said: those are the nine most terrifying words in the English language.
The claim that government is somehow the collective embodiment of the people is also the stock trope of authoritarians and collectivists of all stripes. Contemporary example: Putin. Standing on the battlefield of Borodino, where 200 years ago the conscripts of one autocracy battled the conscripts of another, Putin called for unity-which in Russia means unity under the control of the wise state:
For the second time in five days he called for unity, underlining his concern that the insurgency could spread and threaten the integrity of Russia, home to many nationalities and religions.
“Only when Russia’s nations were united, were together, they achieved the best results in the development of their fatherland,” Putin told Russian and foreign dignitaries, including former French president Valery Giscard d’Estaing.
“By and large patriotism, which was the basis of all our major victories, comes down to the unity of the Russian nation.”
If you needed confirmation that the Democrats are the Party of Government then (a) you are a slow learner, and (b) you now have it.
Not that Romney and the Republican Party can be confused for even lukewarm libertarians. But at least they pay some deference to individuals acting outside the government. The Dems, on the other hand, raise up government above all other things-meaning that it subordinates us to it, and rejoices.
So if you want a sense of belonging, go right ahead and vote for the Party of Government. You may think you are voting for the warm, cuddly meaning of the word, but you will find out soon enough that you are getting the other.
Apologies for the light posting. I’ve been immersed in commodities. That’s not unusual, but the commodities that have submerged me are: Platinum, palladium, and milk and cheese. I have learned more about the mysteries of milk and cheese pricing and marketing in the past month than you can imagine.* And as an added bonus, this cheese drill-down gave me an opportunity to learn about wine through show & tell & taste.
I hope to make up for the slow blogging pace of the last week with a blitz of posts today and over the weekend (especially if the remnants of Isaac keep my cooped up indoors on Saturday). I’ll start with a few short ones, and then some longer pieces that I’d been hoping to get to.
*Although ironically my first exposure to commodity manipulation litigation involved an alleged cheese squeeze in 1987 or 1988 undertaken by Kraft. That took place on the National Cheese Exchange. Really. There was such a thing, in Green Bay, WI. (The cheese auction has since moved to the CME.) I have a vague recollection that the WSJ had an article about that that I will try to track down. Little did I know that would foreshadow a big slice of my professional career 🙂 (I could have said “a block of my professional career”-because, as I now know, cheese is marketed in blocks and barrels.)
The impending closure of the ICE floor made me somewhat nostalgic-despite the fact I have long predicted that the floors were doomed, and I recognize that their demise is an example of creative destruction. I like history, and get somewhat wistful when tangible connections to the past pass on. In that frame of mind, I have been thinking of the many colorful accounts I have read of events on the floors in Chicago and New York. In the late-19th and early-20th centuries, dramatic events on trading floors were covered by major papers in the news section. Commodities were much more important then (in large part because a much larger fraction of the population and the economy was agrarian), and big moves in commodity prices-often the result of dramatic manipulation attempts-were front page news.
A case in point, from cotton (which I chose deliberately due to the ICE connection), is this article from the New York Times on May 19, 1903: “VIOLENT ADVANCE IN COTTON MARKET – New Bull Leader, Col. W.P. Brown, Here from New Orleans. May Option Reaches 11.68, July 11.26, and August 10.93.” (Confusingly, during this era-and even more recently, though less so-it was common to refer to “futures” as “options.”) Scenes like this will not be seen again:
Before the hour of the opening arrived the pit was filled with a crowd of brokers seven rows deep. Col. Brown [who was running a corner] was there also, and everybody kept a watchful eye on him . . . .
From that moment on until the gong sounded the close for the day the pit was one surging, seething mass of men, all of them excited and many of them evidently on the anxious seat. They were all closely watching the man from New Orleans, who was supposed to be in the main responsible for the activity of the market.
A “surging, seething mass of men, all of them excited,” is already pretty much a thing of the past, as even the remaining pits are shadows of their former selves.
Google news archives can turn up some interesting articles in a similar vein. So can some time spent looking at old editions of Chicago papers available in some databases, which covered the markets closely. For a fictional treatment, Frank Norris’s The Pit (based fairly closely on the Leiter wheat corner) is excellent.
Though some things are changing, other things are enduring. Like corners. Including, quite probably, in cotton.
Russia’s soon to be ex-Potemkin president Medvedev gave a condescending lecture to Mitt Romney in response to the Republican presidential candidate’s identification of Russia as America’s pre-eminent geopolitical foe:
Russian President Dmitry Medvedev on Tuesday sharply suggested that Mitt Romney use his head and remember what year he’s living in after the Republican presidential contender said Moscow was America’s “No. 1 geopolitical foe.”
Romney described Russia in those terms while criticizing President Barack Obama for his caught-on-tape remarks to Medvedev that he would have more room to negotiate on missile defense if he is re-elected in November.
During a briefing Tuesday in Seoul, where he and Obama were attending a nuclear security summit, the Russian leader said Romney’s remarks “smacked of Hollywood” and sounded as if they came from the Cold War era.
Medvedev advised the White House hopefuls, including Romney, to “rely on reason, use their heads,” adding, “that’s not harmful for a presidential candidate.” He further said, “It’s 2012, not the mid-1970s, and whatever party he belongs to, he must take the existing realities into account.”
Given that Putin’s presidential campaign was wall-to-wall with snarling Cold War rhetoric straight out of the 1970s-rhetoric far more extensive, virulent, and dramatic than anything Romney said-I’m metaphysically certain that Medvedev called Putin into his office and “sharply” lectured him about the benefits to a presidential candidate of relying on reason; using his head; avoiding language smacking of Hollywood; and taking existing realities into account.
It’s actually quite amusing to imagine how that would have played out. Probably not that amusing for Medvedev, in the same way that the process of becoming a steer isn’t that amusing for the calf. Which is exactly why it didn’t happen, and never could have happened.
What’s less amusing is the administration’s blindness to the fact that Putin’s rhetoric isn’t rhetoric, and the fact that the lowing steers in the American media (and popular entertainment, like Jay Leno) are also unable-or unwilling-to evaluate Putin’s Russia, and its adversarial posture to the US, with clear-eyed reason. I’m hardly a Romney fan by any stretch, but on this issue he is far more realistic, and relying far more on reason, than all those carping on him.
And when it comes to Russia, he is certainly far more realistic and reasoned than the man whose job he wants.
Obama is in Stillwater, OK, where I spent a wilderness year before coming to Houston. He then travels to beautiful Cushing, OK, where he will tout the construction of the Keystone XL Market Link connecting Cushing with the Texas Gulf.
Talk about chutzpah. Unbelievable. It is worse than the rooster claiming credit for the sun rising, because the cock doesn’t know any better, but Obama should.
Fact: the US government generally, and Obama and his administration particularly, have nothing to do with the construction of this pipeline. It is an eminently rational commercial response to price signals. It is the market in action. It is what happens when the market is allowed to operate.
If Obama were a thoughtful, fair minded man, rather than a somewhat dim political hack and complete economic ignoramus bent on re-election, instead of conscripting Keystone into his demented narrative about his cockamamie energy policy, he would learn a lesson. That lesson would be: market participants responding to price signals will undertake the investments necessary to produce and transform energy. Maybe I should get out of the way and let the market work.
But Obama will never acknowledge any such thing. The only thing he is invested in is a delusional energy policy that is determined to ride roughshod over price signals. A policy that is predicated on a worldview that distrusts-and arguably hates-markets. A policy that is hell-bent on subsidizing losers (the losses being a flashing red-light price signal) and stymieing winners.
And the hits keep on coming. He wants to tax Chinese solar panels because the Chinese subsidize their production. Look, solar is one of the biggest losers, but if the Chinese are going to be so generous as to make them less loser-like by selling panels below cost, we should thank them. It means that the Chinese are bearing some of the cost of our stupidity.
But I forgot. The solar manufacturing sector is teeming with Obama supporters and donors. Go figure.
Taking heat on his energy policy, such as it is, Obama had the loathsome and aptly named Jay Carney (who makes me pine for Robert Gibbs!, which is a staggering thought) lecture the world on the subject. Apparently anyone who disagrees with Obama’s policy has “severely diminished capacity.” (For a suitably outraged response by my eminent colleague Paul Gregory, check this out.)
Want to talk “diminished capacity” Jay? How about this. Thus spaketh Obama:
We have subsidized oil companies for a century. We want to encourage production of oil and gas, and make sure that wherever we’ve got American resources, we are tapping into them. But they don’t need an additional incentive when gas is $3.75 a gallon, when oil is $1.20 a barrel, $1.25 a barrel. They don’t need additional incentives. They are doing fine.
Overlook the confusing of barrels for gallons. Overlook the fact that Obama apparently believes that the gross margin between output price and raw material input cost is profit. (If so, then WTF are those huge refineries costing billions of dollars virtually within view out my window from where I sit needed for? )
He. Can’t. Even. Do. Arithmetic.
Seriously.
There are 42 gallons in a barrel. At about $110/barrel (the price of WTI at Cushing), one gallon of oil costs about $2.61: at $120+/barrel (the cost of the marginal barrel of something like LLS that drives the price of gasoline) one gallon of oil costs $3.
Meaning that the gasoline crack (the difference between the price of gasoline and the cost of the oil needed to produce it) is around $.75-$1.00. A differential that must cover all refining costs (including, in the long run, the return on the immense capital invested in refining) and the costs of bringing the gasoline from the refineries to consumers. (And by the way, refining is not noted as an extremely profitable business.)
The difference between the price of a gallon of gas and the price of a gallon of oil is not a profit to the seller of gasoline. And it surely ain’t $2.50/gallon.
But we’re supposed to listen to him pontificate about energy, and have his pathetic flack challenge our intellect, without challenge.
It is a challenge to listen to him speak about energy, actually. The challenge being keeping breakfast down.
Witnessing Obama hold forth on energy indeed brings the word “crack” to mind, but not in sense of the process of using catalytic processes to refine crude oil. No, I’m reminded of another product of a chemical refining process, a white crystaline substance known to impair mental function, as in: if his recent speeches reveal what he believes about energy, he must be on crack.
People associated with Wikileaks appear to be very anxious about the prospect that Jules Assange will be implicated in the Stratfor criminal hack. One example: Christiane Assange, Jules Assange’s mother tweeted me: “Perhaps u are unaware that the U.S.Doj will try to indict Julian using the term ‘hacker’ not ‘journalist’.” This in response to her earlier tweet in which she said there was a difference between hacking and journalism, to which I asked about the Wikileaks-Stratfor connection.
The complaint against alleged Stratfor hacker Jeremy Hammond contains many tidbits that suggest, as I suspected as soon as the LulzSec bust was revealed, that anyone associated operationally with Wikileaks has a lot to worry about.
The highlights:
It is clear that CC-1 has to be someone associated with Wikileaks. So Wikileaks is a co-conspirator. The entire transfer of the Stratfor information was monitored by the FBI, and even if the downloader [fixed-had said uploader] had used Tor, the FBI would presumably know the IP or IPs used to connect to the server on which the information was stored.
Some interesting issues.
Right now there are more questions than answers, but there is more than enough to conclude that Wikileaks and Assange indeed have much to fear from the Stratfor/LulzSec events. The FBI watched at least some of the transaction involving the transfer of stolen information to someone at Wikileaks. As the “man in the middle” they presumably know very much indeed about those at either end-including Wikileaks-most of which has to be inferred right now. But not for too long, I’m guessing: and if Christiane Assange’s tweet means anything, it means that people very close to Assange are guessing the same.
Some very eye opening reading regarding Daniel Ivandjiiski (aka Tyler Durden) of Zero Hedge (big h/t @ReginaldQuill). In a nutshell, the allegation is that (a) a certain Keith Dalrymple, and others, sold short the shares of Gerova, and (b) Ivandjiiski/Zero Hedge and a Forbes.com blogger*, Neil Weinberg, working with Dalrymple, spread negative information on the company. The plaintiff, investor Noble Investment, claims a loss of millions.
There’s a lot of interesting subplots here, including a byzantine Bulgarian connection.
Another interesting thing to note. The complaint claims that zerohedge.com is registered to Krassimir Ivanjiiski’s ABC Media. You’ll remember Krassimir. The guy with the Warsaw Pact CV from central casting. Footnote 2 is particularly intriguing.
This is a complaint, and no verdict has been rendered. But this is the kind of thing I was talking about in my post on ZH last week.
Interestingly, ZH, which normally is quite, er, verbose, hasn’t said a word about this. I’m shocked! Shocked!
Some folks, notably Felix Salmon, raised questions about ZH in 2009, then lost interest. Perhaps it’s worth a second look.
* Forbes really needs to take a closer look at its bloggers. Some-like my colleague Paul Gregory-are great. Others, umm . . .
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