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Monday, December 29, 2008




The Curse of the Jew

Last updated: December 29, 2008

February 8, 2007


The Big Pharaoh responds to the latest Sunni attack on a Shia market in Baghdad:

. . . What makes me so angry is the fact that the Arab/Muslim world have no time to think about the mass murderers it's pumping out everyday, it's busy rioting over cartoons 4 months after they were published, busy complaining about "Islamophobia" in the West.

Whenever a Muslim blows up himself to kill hundreds of other Muslims I always tend to call that "the curse of the Jew". We allowed and justified suicide bombings against innocent Israelis in cafes and malls. We religiously sanctioned the actions of every Palestinian suicide bomber who killed and maimed Israelis. Now it seems the suicide bombers are killing far more Muslims than Jews.

The deafening silence of the Arab/Muslim world towards the mass slaughters in Iraq indicate one thing: this region will stay in the abyss of darkness, ignorance, and backwardness for a very long time until someone really rises up, takes it by the neck, and forces it to look in a mirror and see the ugly reflection.

Source

This is indeed the impression of many. With hundreds of Muslims now dying every week in suicide attacks from Pakistan to Iraq, the boomerang of death and carnage appears to have gone the full circle finally coming back to where it rightfully belongs to: The Arab nation and the World of Islam.


April 19, 2007

Sadriyah Market attacked in Baghdad

!!! Warning: some images are very graphic !!!


From the BBC site. Yesterday attack on the Sadriyah market in Baghdad.

In one of the deadliest attacks of the last four years, some 140 people were killed in a car bombing in a food market in Sadriya district.

A witness said the area had been turned into "a swimming pool of blood".

Source


The Sadriya attack (Reuters/AFP/Getty)








PS

I started using images after becoming convinced that people fail to grasp the scale of attacks launched by the Sunni insurgents against Shia civilian population in Baghdad and elsewhere in Iraq, despite my attempts to give my readers an adequate perspective on the scale of this insurgency, like, for example, this one:

The destruction left behind by a truck loaded with 500 kilos of explosives can make a whole street look as if hit by hurricane Catarina. Yet truck bombs have been intercepted carrying even more more powerful payloads than this. One of such trucks intercepted recently was reported to be loaded with 2 tons (!!!) of explosives and an unspecified amount of chlorine. In comparison the average payload of a ballistic missile is about 500 kilos.

This means that one truck bomb attack equals or comes close to the impact produced by one ballistic missile, and in this sense Baghdad is a city that is hit by a few ballistic missiles almost daily. Yet even more devastating than the physical impact of the attacks is their toll in psychological terms and in this regard most people in Baghdad probably went total psychos long time ago. There is no warning or sirens going on before, in a split second, one finds oneself scattered over a wide area covering a few neighborhoods.

Source


April 22, 2007

The IHT says the Sadriya market was devastated by a truck bomb loaded with one ton of explosives:

The attack was the work of a suicide bomber who detonated about ton of explosives in the bustling Sadriya market, in a largely Shiite enclave, as shoppers finished buying food for dinner and men sipped coffee at the popular cafes nearby, the police said . . .

. . .

The bomber struck close to the middle of the narrow market, which stretches for about an eighth of a mile, killing everyone nearby and dozens more in collapsed apartment buildings and coffeehouses that line the market, witnesses said.

"Look at all these buildings," shouted Qadir Ali Ismael, a 41-year-old vegetable seller who escaped the 5 p.m. blast. "There were families living in these apartments and they didn't find anyone alive in there. All of those people were killed!"

Two buildings were flattened and 10 more seriously damaged. The attack left a crater 15 feet long, 10 feet wide and 5 feet deep. Blast waves left buildings a block away badly damaged.

Source


At a hospital morgue in Sadr City, an Iraqi mourned yesterday over the coffin of his brother, who was killed by a car bomb in Sadriya.

Source



February 5, 2008

Gaza celebrates Dimona

Faithful to a long established tradition Palestinians in Gaza were celebrating the latest suicide attack with flowers and pastries. The double suicide attack on a shopping center in Dimona was no great success by any standard as the second kamikadze had been shot dead before he was able to detonate his explosives. An elderly woman was killed and her husband critically injured, another dozen of people were wounded but otherwise it was a minor attack in terms of casualties. All photos by Reuters.







December 29, 2008

Reap what you sowed...

I doubt there can be a better proof of the mess the Arab world has made of itself...

Suicide bomber hits anti-Israel protest in Iraq
1 day ago

MOSUL, Iraq (AFP) — A suicide bomber on a bicycle in Iraq's northern city of Mosul targeted a protest condemning Israeli air raids on the Gaza Strip, killing one civilian and wounding 16 on Sunday, police said.

"One civilian was killed and 16 were wounded when a suicide bomber blew himself up when he rode his bicycle into the middle of an anti-Israeli demonstration in the city," local police Major Wael Rasheed told AFP.

Source: AFP

Beware, cousins. Our curse is now fully on you.

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Saturday, December 27, 2008




Everybody Surprised

This time the IDF has plainly surprised not only Hamas but itself just as much. After another week of what seemed to be the regular unconvincing mumbling about a harsh response about to come if Hamas doesn't stop firing rockets, there came a massive well planned and executed attack. It appears that all security compounds, military outposts and police stations came under attack at the same time. Nowhere it appears the personnel has received any advanced warning and none of the buildings was evacuated prior to the attack. The elevated number of military commanders reported dead suggests that Hamas was caught completely off guard. It's a sure bet that neither IDF had expected the operation to turn into such a decisive blow.

Of course Hamas is not fatally wounded by any means, but still this one should hurt a lot. Given Israeli unwillingness to go back into Gaza in full force in order to reoccupy the strip, there may follow a limited ground operation but otherwise the so called ceasefire should be back soon. Hamas will moderate rocket fire to a couple of Kassams per day while the IDF will continue dragging its feet on providing anti missile defenses to the frontline towns.

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Tuesday, December 23, 2008




Global Crisis Spreading

Last updated: January 23, 2009

December 23, 2008


Russian economy is deteriorating fast taking by surprise even Russoskeptics. The industrial production and services went into free fall with the rest of economic indicators hardly fairing any better. Russia stemmed the initial onslaught of the global crisis by tapping into its huge forex reserves but succumbed later to a combination of massive capital outflows as investors were fleeing the country and relentless decline of the price of oil. All around Russia, its East European neighbors are already either on the floor or under with Eastern Europe emerging as a region most devastated by the economic tsunami.

The crisis in Russia is rapidly deflating a local bubble inflated in recent years by billions of petroroubles. Years of a runaway imports driven consumption, grotesque structural imbalances of an increasingly lopsided economy, are all fast getting undone. The World Bank called on Russia to abandon its policy of supporting the rouble in view of the speed with which Russian government is burning through its rainy day funds and forex reserves. All in all the huge amount of forex at the disposal of the government is down by almost 1/3 from the peak of almost 600 billion dollars as Russia is occasionally spending close to 10 billion dollars a week in what starts looking an increasingly hopeless battle to save the rouble. A collapse of the rouble is bound to rock Russian society sustained by an economy that over recent years has been steadily falling into a pattern of exporting lots of oil and gas, manufacturing little and importing almost everything else. Actually oil production was stagnating in recent years as well and is expected to start shrinking next year.

Russian economy in run-off to crisis


Source: Russia Economy Watch

By the middle of the next year the massive supply cuts initiated by OPEC should kick in and this is the main reason to remain optimistic about Russia. If OPEC fails to stabilize the price of oil, Russia may find itself losing control over the situation. Without some sort of recovery of the energy market, an economy that moved from a 7% economic growth into full recession in a matter of months may find the next year an impossible one. A prolonged and violent contraction of Russian economy, if not stopped, may send to the bottom what's left of the economies of the Baltic region, Ukraine and others still hanging on thanks to uninterrupted bailouts by the IMF.

Through Russia the global crisis is spreading fast into Central Asia and the region of Caucuses where some countries owe up to a half of their GDP to remittances sent home by their nationals from Russia. There are signs that the flow of remittances is already shrinking and many migrant workers are returning home. Apparently the crisis is exacerbating ethnic tensions in big cities with attacks on foreigners growing both in number and cruelty.

On the bright side three Russian naval ships have arrived in Cuba a few days ago. This is the first visit of this kind since the fall of the Soviet Union. Russian warships also took part a month ago in joint exercises with Venezuela's navy. Cuban state media reported that Russian crews would spend a week in Cuba for meetings and cultural exchanges.


December 28, 2008

This is what they call total meltdown.


Source: Ukraine's Economy Tunnels South In Search Of Australia


January 23, 2009

Russia's forex reserves plunged below $400 billion after the Central Bank has spent in a matter of week about $30 billion in an attempt to hold back the ruble's relentless decline. Shortly afterward the CB announced a one time 10% devaluation by expanding the currency corridor and leaving to the speculators to do the rest of the work. Some analysts say the economy has contracted last month by more than 1% on a y-o-y basis, so Russia is now in a full-blown recession. For an economy that was growing at the rate of 7% just a few quarters ago, this pace of decline is nothing short of amazing. One can be only wondering how much GDP the economy is going to shed in this quarter. Out of the $500 billion worth short term debt owed by Russian companies, more than $100 billion are about to mature, which means that at this rate the bulk of Russia's once staggering $600 billion strong forex reserves will be wiped out by the end of the year.

A one time sharp devaluation at the beginning of the year was actually expected by many. There were speculations about such possibility. However, the huge amount of dollars the CB spent last week, suggests that this is not it. Apparently the ruble came under such intense pressure that the CB decided to take a break. It will take a while for the currency to get to the next barrier of 41 rubles against a mixed basket of dollars and euros, while the CB will be busy licking its wounds. If its next showdown with the forex markets goes no better, the CB may well give up on the whole thing completely and float the ruble.

On the streets of East Europe, from Bulgaria to the Baltic region, social protests were raging on this week. Russia's economy is still trailing the rest of the region in terms of the severity of economic downturn, mainly thanks to the massive forex reserves. However, the only question one can be asking now is when Russia is going to finally catch up with her neighbors. I would bet on something like another six months. Watching Russia's economy being decimated by the global crisis makes one cringe at the idea of a multipolar economic world where the four BRIC countries (Brazil, Russia, India, China) will offset the collapse of the global economy by expanding their internal demand.

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Friday, December 5, 2008




Wishing Well

Last updated: March 10, 2009

December 5, 2008


President Ahmadinejad was reported to have fallen ill a few weeks ago due to his heavy workload. A great patriot of his country mr. President never spares himself when it comes to serving the nation. Ahmadinejad had eventually reappeared on the public scene vowing that nothing can stop Iran and its nuclear program. A few days ago the president had the following to say to his people baffled by the country's unending inflation, the highest in the Middle East, and persistently high unemployment.


By NASSER KARIMI, Associated Press Writer – Wed Dec 3

. . .

"Suppose we plan to base next year's budget on $30 per barrel of oil; we have to leave a major part of our projects behind. But we are obliged to set it on $30-$35 because we do not decide the price of oil on the global market," the president said.

Source

This blog continues wishing well to mr. President and hoping for his speedy recovery.


December 13, 2008

More Wishing Well

As more details are emerging about the recently announced reform of China's energy market the picture becomes more clear. In recent years the government was hiking gas prices several times in line with the mess that was engulfing the oil market. However when the the price of oil took a 70% plunge, the Chinese government has "forgot" to lower its prices accordingly with Chinese drivers eventually ending paying almost twice as much as their American counterparts. Now we know why.

The proposed energy reform that may take effect as early as January seems to have been designed with one goal in mind - to take advantage of the current situation in order to massively hammer on the domestic demand for gasoline and other oil derived products. The reform includes a retail fuel tax on both gasoline and diesel, more flexible pricing to better reflect global prices and possibly phasing out subsidies to local fuel producers. In short, the government will let the price drop but not before these measures are put in place to prevent the price from spiraling down out of control. Needless to say, the government did not promise anybody that the taxes can be revoked and subsidies returned should the market reverse its decline.

Meanwhile the Saudis have been cutting supplies to the market at an accelerating pace after the Saudi monarch let the world know what his country thinks should be a fair price for oil. It's impossible to fail to notice that $75 per barrel will make happy not only Brazilian ethanol producers who sell profitably even at $40-50 per barrel. The heavily subsidized US corn ethanol growers will find the Saudi ideal price very ideal indeed. This makes one start wondering whether the Saudis understand that their desired price leaves the market biggest importer with no long term incentives to continue buying their oil? Let alone at a time when this importer is about to be taken over by a president whose close circle is densely packed with ethanol hawks, including Barak Obama himself.

In view of the above, this blog is extending its well wishing to Saudi Arabia... and actually to all peace loving people of the Middle East.


March 10, 2009

And More...

US Agriculture Secretary Tom Vilsack said the mandatory ethanol blend can be quickly expanded to 12-13% while the feasibility of 15-20% blends is being studied, and on this Vilsack seems to have support of other Democrat leaders including the House Speaker.

House Speaker Nancy Pelosi, D-Calif., said she also supports raising the cap after a separate speech to the group.

"It seems to me we should be able to do that," she said.

Source: Associated Press

The US ethanol industry, heavily hit by the collapse of oil prices and drying up of credit lines, has been lately lobbying for moving the blend below what's generally considered the upper safe limit for blending ethanol in regular engines. A bilateral free trade agreement with Peru that took effect in January this year is bound to exacerbate the situation of the industry by breaching protectionist barriers the US regulators have been erecting in recent years to block access of cheap Latin American ethanol into the country.

Vilsack's recent announcements indicate he is just all too happy to be helpful. However, any decision to expand the blend to anything between 15% and 20% is bound to have far reaching consequences for the future of the energy market in the US. For starters, the ethanol camp and interest groups are becoming huge and even more powerful. Two, the US is getting another few years to keep the local ethanol industry expanding, though it's hard to see this moving beyond the 20% blend. Three, it's not clear how damaging to regular engines the 20% blend can be, but it may shorten the lifespan of some currently deployed engines which in its turn will give a boost to the auto industry and paradoxically accelerate adoption of flex engine cars among US motorists.

But the most important of them all is of course a possible impact this decision may have on energy markets outisde the US and the price of oil. This second phase of ethanol expansion, if it does start, may happen to be markedly different from the previous one. More aspects of the RFS should become mandatory this and next year, until this year gas stations had to comply with RFS standards only when gasoline was getting more expensive than ethanol. Much of the effect of the first stage was dissipated in replacing MTBE. The next stage will be a pure gas replacing one. Throw in the world's slowing demand for oil, phasing out of domestic fuel subsidies by some of the OPEC members (this may free more oil for global markets) and for a few next years this region may well be teeming with more candidates for our well wishing.

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Thursday, December 4, 2008




Smashing through the Blending Wall

Last updated: May 9, 2008

December 4, 2008


The US regulators are raising the mandatory ethanol blend for the next year to 10.21% from the 7.76% established for this year in what appears to be the final phase of the first stage of this remarkable expansion. In a span of a few years a whole biofuels market was created from scratch. To use blends higher than 10% the car fleet should be switched to flex engines as ethanol is more corrosive than gasoline. The US biofuels industry has thus hit the blending wall.

To be sure, these percentages are misleading. The ethanol market is actually shrinking right now and the 2009 renewable fuel standard (RFS) of 10.21% will be imposed on a contracting market as the US drivers are driving less and switching to more energy efficient cars. Nevertheless the achievement is obvious. But for this expansion to continue the blend wall has to be brought down. The question is how.

The ethanol industry lobbyists are calling on preliminary studies of E15 and E20 blends. The E20 blend will double the ethanol market while replacing 20% of the gasoline market that accounts for 70% of the US total oil consumption. However, the probability of such a blend to be approved is very low. So until the regulators find ways to make flex engines mandatory, the industry will be stuck. Another question, and one that has direct bearing on the first one, is how much of America's gasoline market can be switched to ethanol. It's basically whether going into so much trouble is worth at all.

Recently ethanol was variously accused of being inefficient in energy terms, environmentally dubious and responsible for the food crisis. The last claim was adopted with equal enthusiasm both by many fanatics of free markets and the leaders of green squads to unleash attacks on this first generation biofuel with a view to discredit it. Clearly, if ethanol is making people die from hunger, then expanding its production becomes problematic from the ethical point of view. It's on this claim that I would like to say a few words.

For starters, the so called food crisis has disappeared as the prices of corn and wheat followed the rest of the commodities on their way to the bottom. Thus this particular argument has simply lost the main body of evidence that supported it. In fact, the situation seems to be so dire that economists have started discussing in serious the possibility of a prolonged deflation in the US and other countries. In such a situation markets need any help they can get to lift themselves. Anything that can stir the markets up pass for good these days.

However the primary reason to doubt the validity of the ethanol vs food competition is the fact that the global trade talks continue to be stuck around the Western farm subsidies and the West dumping subsidized agricultural products onto global markets suppressing prices and destroying producers in the third world. A significant part of the developing world led by Brazil is more preoccupied with the fact that the prices are low rather than they are too high. It's technically possible that while ethanol is ravaging food markets, in other commodities such as cotton, Western subsidies are harming third world producers. But this does not discredit ethanol as such. Far from this, it points out to a structural problem for which ethanol may be the only ready solution around. The billions spent on subsidizing farmers growing cotton and other stuff can be used to encourage those very farmers to move to biofuels. Such a move would basically get two rabbits with one bullet - on one hand the biofuel production can be expanded, on the other the subsidies eliminated and global trade talks unlocked. At any rate it's important to bear in mind that the third world is not necessarily benefited by low prices. Many third world countries are major producers of various agricultural stuff or want to be one. It's not in their interests to have super cheap agricultural products being continuously dumped on their markets by the first world.

The correct resolution of the ethanol vs food debate is vital as it may remove a major hurdle on the way to ethanol's wider adoption. Ethanol should not be considered in isolation from the rest of the market. It should be actively promoted as a tool to effect a major structural reform of American agriculture. Farm subsidies should go just as it was demanded by the block of developing nations led by Brazil during all last rounds of global trade talks. In fact, they should not be abolished, but rather redirected to those farmers who want to switch to biofuels. The mandatory blend should be expanded to absorb all those farmers ready to adopt ethanol. How much ethanol can be added to the market in this way is hard to know. But I would bet that the current volume can be easily doubled and tripled.

Finally, the real advantage of having a big biofuels market has nothing to do with corn or whatever based ethanol as such. Ethanol may be not particularly energy efficient, and not even environmentally friendly, but this is not the point at all. The point is that it's much easier to create a market for a certain technology to allow it to mature itself in the wild rather than to try to mature this technology in a laboratory and then to create a market for it. Ethanol is a viable solution that can easily take over from 1/4 to 1/3 of the US autofuel market. The next generation cellullosic ethanol is expected to hit the market in the first half of the next decade. It will allow some producers to triple their production per acre. But possible breakthroughs don't start and neither end with cellullosic ethanol.

Algae is generally held to be the most promising field for research as it may allow to ramp up production per acre by dozens of times. But even regular ethanol is far from having said its last word. Roughly about 25-30% of corn mass can be converted to ethanol by the current non cellullosic methods. But it's theoretically possible to play with the corn's genetic code to expand this part to 50-60% of the plant's total mass. This would create a very different ethanol economics and genetic surgery is perfectly capable of such miracles these days. In short what really counts here is the existence of a big biofuels market as such, big enough to stimulate big companies to move in and invest into research in search for better methods of production and biofuels with superior characteristics to the regular ethanol. Such a market created, all the US has to do is to wait for this market to mature. Of course subsidies and support from the regulators are welcomed but they are not strictly necessary if the regulators just take care to reserve a big share of the autofuel market for biofuels.

It remains to be seen what steps the regulators take to move the market beyond the 10% barrier. I am no big fan of subsidies and cheap energy concepts and would prefer specially crafted taxes on any single day. One such a tax can be a special tax on blends that fail to mix biofuels in a proportion required by law. Say the mandatory blend is 15% and a gas station sells a 10% blend to consumers without flex engines. Such a tax would target the missing 5%. Owners of cars equipped with flex engines would use a 15% blend and thus save themselves the biofuels tax. This would create an incentive for the public to switch to flex engines while at the same time encouraging everybody with or without flex engines to use as much biofuel as their cars can handle.

A properly implemented biofuels market can work wonders for the US economy and even more for its standing in the world (I may say a few words about this in my next post, though some people may already know what I am going to say). Having a big ethanol market is good for the US and it's good for the rest of us. But for this market to become possible the regulators will have first to bring down the blending wall.


May 9, 2008

Making sense in Mississippi

The NYT about cotton growers of Mississippi switching to corn...

By CLIFFORD KRAUSS
Published: May 5, 2009

Farmers working land that has bloomed a dazzling snowy white every September since before the Civil War are switching to corn and soybeans. As gleaming silver corn silos go up on farm after farm, cotton gins are laying off workers or shutting down.

“We’re closer than we’ve ever been to looking like Iowa,” said Danny Hargett, a veteran farmer who has decided for the first time not to grow any cotton this year on his 3,000 acres of fertile, well-irrigated land. “It was extremely hard for me to make this decision, but the economics have made it almost impossible to make cotton a profitable crop.”

Source: The New York Times

Some readers may start getting hopeful on reading this thinking that the US energy/agriculture policies have finally acquired a semblance of common sense - farm subsidies to cotton growers and others were reduced or discontinued and the ethanol mandate expanded resolving the long standing trade dispute with Brazil and the rest of the third world and reducing US dependence on foreign oil at the same time. Well, the actual reason is more prosaic.

The most immediate cause of King Cotton’s decline is that people around the world are buying less clothing and home furnishings. Global cotton production and consumption are dropping, and the Agriculture Department expects the nation’s exports to fall by $1.2 billion this year.

Regardless whether the current debate over expanding the ethanol mandate succeeds to move it beyond the 10% limit, it's amazing that even when the life itself is pushing the US policy makers into taking such a sensible and logical step, they still can't do it. Making sense plainly does not come easy to some people.

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