naked capitalism

ruetheday says:

I’m generally skeptical of these doomsday scenarios, and the possibility of an attack on Iran is quite remote. However, I was just telling a friend on Friday that it seems to me that the likelihood of a Black Monday/Black Tuesday event where the broad equity markets drop by more than 10% in a single day is increasing. Perhaps not next week, but sometime in the next month or so. Friday was a wake up call – the markets were starting to assume that the credit crisis was over, oil prices were about to slide back to more normal levels, and the economy was going to escape without being harmed by either.

etc says:

And for those who recommend that people hurt by the US recession retrain for higher-skill jobs within the US, good news if you’re thinking about becoming a lawyer or CFA.

Chinese people trained in US law are on the way to compete. China is opening a law school to provide education in US law, and applying to be accredited by the ABA, so that alumni can be admitted in the US to practice US law. The school is called Peking University School of Transnational Law. Cornell posted a news release that a prof was going to be the founding dean: http://www.news.cornell.edu/stories/May08/Lehman.Chinalaw.sl.html As noted in the news release, Hank Greenberg’s tax-exempt, Star Foundation will subsidize the school.

Asians trained as CFAs are also on the way to compete. The Economist reports that 175,000 people are sitting for the next round of CFA testing, and over 40% of the candidates are Asian.
http://www.economist.com/finance/displaystory.cfm?story_id=11511815

Oh, and by the way, over time the term CFA will become a generic name for a financial certification, despite the CFA code. People coopt convenient terminology, regardless of what the CFA Institute says.

Richard Kline says:

I have been following the ‘attack Iran’ scenario since 2003, closely. I do think that at one time the US manifestly intended to attack Iran; as late as mid-06 this was likely an operative plan. I do not believe that it is now: the US is ‘woofing’ on a colossal scale; or use the old formulation of Kissinger telling the Chinese that he could barely restrain Dick Nixon so the ChiComs had better come through with concessions—when the US had functionally already lost the Vietnam war, and the Chinese knew it. Just as the Iranianis know where we really stand. These are verbal ‘threats and motions’ to cow the Iranians to do nothing until the US locks in its colonial quasi-annexation of Iraq with a permanent status agreement in July, or tries to. There will be no attack on Iran. I do not think BTW that we will get that colonial sign-on, either, but Cheney and Georgie are just determined to make it so.

Anonymous says:

Saul Mofez is by no means the ‘likely future PM’. I am not sure he is even considered one of the major contenders. This poor statement is one of several he made last week, signaling the start of his campaign to head ‘Kadima’ (his party).

In Israel, this statement was taken to be just that – a pathetic way to raise some PR and to attract the right-wing voters. The Iranian threat is often used in this way. Tzipi Livni, a more prominent contender, made a subtler comment with the same political purpose a few weeks ago.

The global effect of such a second grade politician surprised everyone here.

Mikkel says:

“So how serious would the economic downturn be if Iran nukes Israel and a few US cities? “

I try to avoid commenting on stuff like this but it just drives me crazy.

Their missiles can barely reach Saudi Arabia. There is no way that the US is at risk from a missile attack.

They are supposedly making weapons on par with Hiroshima. Bad? Yes. But in a modern city you are talking about taking out < 2 sq miles and killing maybe 50,000 people. In order to have a major attack, they'd have to build up a ton of them which would take decades and even then not get close to wiping out Israel.

One nuclear sub from Israel or the US with its MIRVed warheads would be able to destroy most of Iran. So absolute worst case scenario, in 20 years Iran attacks Israel, kills 500,000-800,000 of them and then is destroyed instantly, while Israel still has the bulk of its people and infrastructure.

What about sneaking it aboard a ship or giving it to terrorists? Every country has a slightly different makeup for their weapons and it is extremely easy to detect where they came from. As such, any attack of that sort could be promised with retribution equal to a normal attack.

We’re not talking about the 1% Doctrine here, we’re talking about the 0.00001% Doctrine. The main reason Israel and the US don’t want Iran to have nuclear weapons is because then they would be very difficult to invade and as such could act with impunity regarding their terrorist support and geopolitical power maneuvers. That is the real danger from them having the bomb, and the battlefield is in Lebanon, Iraq, Gaza…

Dan Duncan says:

To Richard Kline.

I’m fascinated by your knowledge of the inner-workings of the Bush Administration and its military plans. Not only are you aware of “manifest intentions” to attack, but you have these plans pinned down to the Summer of 2006, no less.

So what are you thinking, did they plan this strike for 27 June at 22 hundred hours…or a morning strike on 2 July at O-100 hundred hours?

I can’t wait to hear the details…

Also, did you become aware of these plans before the Summer of ‘06? I bet you did, didn’t you? Man, that must have been difficult to keep it to yourself!

I don’t mean to be nosy, or anything…but how did you become aware of this information? A clandestine meeting with a rogue CIA operative at the London Bridge beneath a half-moon?

Perhaps, you too, have “connections with sources”, just like Yves.

I can’t wait to tell my friends…about the state of Israel and our manifest intentions of attacking Iran back in the Summer of ‘06. Of course, they’ll ask me how I became such a bevy of information.

My answer:

“I read it on the internet. A blogger has a ’source with connections’ and a responder–he just knows. Don’t ask me how, he just does….”

Yves Smith says:

I gather my attempt at humor was misunderstood. If you look at the information my “source with connections” was conveying (and that person is a professional who travels regularly to Israel), it was popular mood, something which hardly requires high level or inside information.

aaron says:

So far as I can tell, the higher oil prices are mostly because traders realized that people will actually pay $140+ per barrel of oil. It’s hard to say why oil was so low before: perhaps because OPEC didn’t want people to shift towards alternative sources.

Also, didn’t we have a national oil stockpile at some point? Where did that go?

I think anonymous makes a good point that the rising gas prices will affect people in the country more, and also make transporting goods much more expensive. I wouldn’t be surprised if this led to structural shifts in the economy and also increased the pace of urbanization.

Francois says:

Dan Duncan,

I suggest you read Richard Kline post again.

And please, spare us the smugness and easy sarcasm. It doesn’t advance the discussion in any way, shape, or form.

There are plenty of msg boards which mission statement is “Vent your rage!!”

Naked Capitalism isn’t one of them

Mikkel says:

OK I feel obliged in case anyone is picky that technically one Ohio class isn’t “equivalent” to 6080 weapons because there is R^2 falloff in strength. So when talking about distance each warhead is capable of 5.6x greater area of impact, so total impact area is only equivalent to 1075 fission weapons. Sorry, but the people I know would actually care about that difference.

Anonymous says:

Dan Duncan

Come on. I’m sure if you try a little harder you can come up with more vociferous personal attack. Or at least a longer one

Please stop contaminating the blog with sarcastic diatribes like the one above. You are the one who comes off as engaging in inappropriate behavior, same as anyone else who launches into a personal attack rather than a calm discussion of the issues at hand.

Did you notice how polite the response was? Let that be your guide.

Yves Smith says:

FYI, this is the lead story on the BBC website right now: Iraqi PM assures Iran on security

dearieme says:

“Never in history has it happened that nuclear power plants …have been deliberately bombed.” True, but Chernobyl was subjected to its own steam explosion and carbon/uranium fire. The death and destruction were nowhere near the scale you are speaking of.

“If the USA or Israel deliberately bomb a fully fueled nuclear power plant … containment will be breached”: not at Chernobyl – the Socialist Economies dispensed with such trifles as a containment building.

Anonymous says:

Mikkel, I’m the anonymous that posted comment #2. You fail to see the real issue here. The government of Iran is not run by rational deterrable men. That’s the basic problem, and I note you did not address it.

Hence that government has no reason to care if the the source of the attack is easily detectable nor that Iran may be destroyed by retaliation.

The president of Iran is a member of a sect that was considered so extreme that Ayatolah Khomeini banned it. Supposedly he is widening Tehran’s streets to accommodate the return of the 12th Imam who will come back after the apocalypse. The government run media promises to destroy the US and Israel. No problem there right? Just crazy talk? Yeah.

Furthermore, you have no reason to assert that it will take Iran 20 years to build enough nukes to accomplish whatever insane plan they have unless you are in the loop of their weapons program. Are you?

Finally, I read once that the why Hiroshima was not rendered uninhabitable for a much longer time is because the bomb to fused to go off at about 15000 feet altitude and not on impact. Now since you seem to know a bit about nukes, is this true? And if so what happens if a nuke goes off, say in a container ship in the channel leading up to the US navy base at Norfolk? Will the destroyed ships remains stay there forever because it will be too radioactive to remove them or because the collapsed economy won’t be able to afford to the clean up costs?

Juan says:

Please folks, haven’t we been here before?

Has the existance of an Iranian nuclear weapons program been proven? What are the sources?

Or, as Juan Cole noted last year:

…there isn’t any solid evidence, and the Supreme Jurisprudent has given a fatwa against having or using nuclear weapons as illicit in Islamic law. You can’t acknowledge that Iran is a dictatorial theocracy and then turn around and say that his fatwa is irrelevant.

Mikkel says:

rn: “On Monday[10], August 6, 1945, the nuclear weapon Little Boy was dropped on Hiroshima by the crew of the American B-29 bomber Enola Gay, directly killing an estimated 80,000 people. By the end of the year, injury and radiation brought total casualties to 90,000-140,000.”

To be fair my number was talking about initial deaths and not over the course of a year because I was talking primarily about if Iran could wipe out Israel in one fell swoop. However, if you actually read the book Hiroshima then you would know that the city’s residential areas were primarily made out of wood and this was a huge contribution to the devastation and was what killed most of the people initially (like most of Japan, the firestorms were what got a lot of people. I’m not sure why more attention isn’t paid to all the firebombing that killed far more than the nukes. )

Moreover, they had absolutely no knowledge of radiation poisoning and stayed in the contaminated area for an extremely long time, including eating and drinking contaminated food and water. The absolute horror of Hiroshima was this particular time period as those survivors were left at the outskirts of the city.

An attack in city with modern building codes that is prepared with large foodstocks and had adequate fallout shelters would have far fewer deaths than Hiroshima.

anon #2: The President of Iran is not in control of the military or foreign policy, so really his desires are inconsequential and as you pointed out the Ayatollahs are extremely pissed at him.

Moreover, if he was completely crazy his crazy idea would be to wipe Israel off the map, not do a little damage to them and get obliterated before finishing it. So even assuming he cannot be deterred by the thought of destruction, he wouldn’t want to one shot it.

It is known exactly how their program would theoretically work (I say theoretically because of course there is no concrete proof they have a weapons program). It’s known how many uranium purifying gas diffusion cylinders they are trying to get running, the available amount of uranium ore and the operational capacity of their nuclear plants that would potentially be used as breeder reactors in case they decided to go to plutonium weapons. Unless they have completely hidden operations or have broken the laws of physics, there is no way that they can produce enough fissile material for more than a bomb or two a year. This is what the intelligence reports all agree to as well.

There are plans for Iran to build more capacity contracted out through Russia and that would up them to four or five a year. Last I heard Russia was starting to balk because of the IAEA concerns.

Mikkel says:

Anyone interested in calculating the effects of detonation at varying heights, etc.

Here you go

Anonymous says:

mikkel,
I’m anon #2 again. Thanks for the info. I sure hope I’m a crazy fool and you’re not hopelessly naive.

Anon#3 says:

You guys going nuclear when the conventional physics was ignored. You have a problem.

Calculation is easy, and data is available in Wikipedia.

S=v0t+1/2at^2
since v0=0
and a=g=32.17ft/s2

t=sqrt(2S/g)

s1=1368ft
s2=1362ft
s7=610ft

In vacuum:
t1=9.2s
t2=9.2s
t7=6.2s

Real-time:
t1=10s
t2=10s
t7=7s

Nick says:

I, for one, don’t think we need to be all that worried about Iran developing and possessing nuclear weapons. They are on the other side of the world, their missiles don’t have the range to hit us, we’d detect their intention to harm us or Israel long before the actual attack took place, and it’s just not worth worrying about.

In fact, I recall a similar case with a splinter group in the middle east, I think they called themselves Al-keda or something? They were doing the same stuff, threatening to kill people and whatnot, and we just ignored them because they’re on the other side of the world, their weapons don’t have the range to hit us, and they’re just not too much of a threat. Sure, Iran is a country, with a more modern military and vastly more resources, but I don’t see why the same strategy of ignoring them wouldn’t work out just as well with Iran as it did with those other arabs.

Even if we don’t use the “ignore them” plan, I don’t think attacking them is the answer; direct diplomacy is the civilized way to resolve disputes between nations. Look how successful we were getting North Korea to stop developing nuclear weapons by giving them billions a year after our diplomatic negotiations. If not for strong diplomacy, India and Pakistan also might have developed nukes. Concessions and appeasement are our best options; they rarely fail to alter nations’ courses of action. Yes, friends, diplomacy can work here as well as it has always worked in the past; there’s really never a need for military action.

As you can see, clearly we don’t need to worry about Iran. Distance, diplomacy, and unflappable ignorance will keep us safe!

Anonymous says:

Re: Anon 6:50

I’m well aware of Iran’s history. It had a democratic government, overthrown by the United States in favor of the friendlier Shah. The Shah’s regime was corrupt and oppressive, killing and torturing Iranians. When the revolution came the Iranians first tried a return to the old democracy, with political parties of every stripe including moderates, theocrats and communists. Then a large group of students stormed the US embassy. The Iranian government didn’t know in advance, it was still squabbling over the whos and whys of ruling the country. However, unlike an earlier storming that lasted just a few hours, this embassy occupation dragged on and on. The students supported Khomeini, feeding the theocrats classified American information that discredited the moderates and united the country behind the Grand Ayatollah. It was therefore from Khomeini’s point of view a completely rational political move to prolong the hostage crisis. Afterwards only the far left remained and they were soon crushed. The United States in turn never takes humiliation kindly and has ever since waged a propaganda war against Iran. A war of words that occassionally heats up into a shooting match. Anything can be ascribed to Iranians, they are after all irrational and unpredictable, people who sacrifice babies to Allah.

One of the ways the US got back at Iran was through Saddam in the Iran-Iraq war. After the war bogged down Saddam resorted to increasingly desperate measures to break the stalemate, provoking an Iranian tit-for-tat. So when the Iraqi air force began attacking Iranian harbors and the ships using those harbors, the Iranians retaliated in the same manner. Except Iraq’s sole harbor was so close to the front that Iraqi goods had to go through Kuwait. Naturally the United States thundered against attacks on international shipping, never mind that many of the ships carried oil from (and weapons to) Iraq. Enter the US Navy, which used any pretext to attack Iranian warships (justified through mendacious propaganda). Even when the Iraqi air force deliberately attacked a USN frigate Reagan still put the ultimate blame on Iran. When a civilian airliner was shot down by a bungling USN skipper guess who got a medal instead of a court martial?

Let’s move on to Lebanon after Israel invaded in response to PLO attacks. In the occupied south of Lebanon lived a bunch of peaceful Shiites that had so far avoided the worst of the civil war. Unfortunately the Israeli occupiers behaved in the same heavy manner against these Shiites as they had against Palestinians on the West Bank. This provoked the Shiite locals into creating the resistance movement called Hezbollah, which sought aid from not just Syria but also the Grand Ayatollah. Khomeini unsurprisingly saw it as his duty to help fellow Shiites. Hezbollah’s amateurs took heavy losses but they became better and more professional. They also started the abomination of suicide bombings. The Israeli security agency Shin Bet was hit first, a suicide bomber destroying their HQ in Lebanon. Later the US together with a few western allies got involved as peace enforcers. Except they weren’t enforcing the peace impartially, they would only shoot Muslims. Not only was it politically impossible to stand up to the aggressive Israelis, but the west also preferred to have the Christian government remain in power. Is it really unpredictable and irrational of Hezbollah to attack a third party that under the mantle of peace so blatantly takes sides in a war? Their method was horrifying but effective as the western powers soon left Lebanon. And so the war rolled on until Israel too was defeated and left. More anger at Iran, more tar to brush them with.

Then came the 90s and for the whole decade the Iranians irrationally and unpredictably twiddled their thumbs, doing nothing much. Oh yeah, allegedly their proxies Hezbollah bombed the Khobar Towers, but recently Clinton’s Defence Secretary at the time, William Perry, said it was probably Al Qaida. In hindsight it’s strange that Hezbollah would be blamed. It’s the only time they would have struck outside Lebanon and Israel. Why once? Why there? Why at that time? If it was Al Qaida on the other hand, then it was merely the first shot. At the time Al Qaida was so new it barely registered on the anti-terrorism radar. So they were overlooked despite Bin Laden saying American bases in Saudi Arabia sully Mecca and Medina, giving that as one of the major reasons for the creation of Al Qaida. It’s telling that the Saudis denied FBI access to the suspects early in the investigation. Knowing Saudi interrogation methods it’s a given they were tortured, quite likely made to say anything that suited the authorities. The last thing the interrogators would have wanted the FBI to hear was that a Saudi war hero, Lawrence of Afghanistan, was behind it. It would take some time before the Saudis ponied up and admitted Al Qaida was operating in their country.

The 90s ended and the Twin Towers were attacked. The Iranians offered talks with no preconditions, along with military support in Afghanistan. The rational and predictable George Bush hemms and hawws for three weeks before giving his response with the Axis of Evil speech. He then launches a successful propaganda effort to justify invading Iraq.

Well, once in Iraq things start looking like Lebanon. Rather than take the blame for a poorly planned and incredibly badly executed administration of occupied Iraq, Bush the Decider decides to deflect attention by blaming the Iranians for meddling in Iraq. Except there’s no smoking gun showing Iranian material aid to insurgents in Iraq. This is another case of people believing anything as long as you talk loud and long enough about it. Not long ago there was a link on this site to an article in Asia Times detailing how the Bush administration has had to backtrack on the issue. I believe you missed that one.