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Nouriel Roubini on Deteriorating Fundamentals and Friday’s Stock Plunge

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As much as I respect and am in agreement with Nouriel Roubini’s views, he often, no doubt unintentionally, comes off as unduly enthusiastic about the prospect of carnage.

His last offering goes through the litany of bad news that hit Friday: the rise in unemployment, the rise in oil (stoked in part by fear that Israel might attack Iran) and the precipitous stock market decline.

We’ve mentioned the failed attempts by the US to pass captured weapons in Iraq as Iranian (stunningly, the Iraqi government repudiated the move), that the US is planning air strikes on Iran for August (although Congressional threats to go public may quash that) and the Roubini’s report that Israel plans to attack Iran. The one bit of cheery news on that front is my sources with connections in Israel say that the Iraq war is seen there as a disaster, having destabilzed the region, and taking on Iran would make mattes worse. But the fact that such a move would be deeply unpopular doesn’t insure it won’t happen.

From RGE Monitor:

The US May employment report dashed the delusional hopes that the economic contraction would be mild or avoided altogether: apart from the headline figure – a drop of 49k jobs in May and five consecutive months of falling employment – the details were even uglier: unemployment rate up from 5% to 5.5%; falling employment also based on the household survey; falling temporary employment (a coincident rather lagging indicator of the job market; flat hours worked; falling employment in a broad range of industries; and a birth/death BLS estimate that overstates net job creation by new firms as it is still adding 217k in May alone that are likely to be drastically revised downward once the long delayed benchmark occur. So, an outright ugly job report.

Add to that oil prices going up $10 on Friday alone and $16 dollar in the last two trading days (+13%) and you get a double whammy: contracting economy via jobs and a stagflationary shock via oil prices.

Let us consider the consider the consequences of this double whammy…

First, it is no wonder that the stock market went into free fall….the combination of contracting output/demand and rising inflation is deadly for equity market.

The biggest puzzle is why oil prices keep on going higher and higher while the economy is clearly contracting and US oil demand is starting to fall. One simple explanation is the risk of a stagflationary supply side shock in the event of an Israeli attack on Iran’s nuclear facilities. This forum reported a week ago the views of Joschka Fischer – the former foreign minister of Germany – that such an Israeli strike is highly likely before the end of the Bush administration. Those allegations got reinforced this week by several additional factors: the Israeli deputy prime minister Shaul Mofaz (and likely future PM) stating categorically that “attacking Iran, in order to stop its nuclear plans, will be unavoidable”; the DEBKAfile report of June 3rd stating that “Limited US attack on Iranian Revolutionary Guards bases in sight”’; all these confirming the headline in the May 20th Jerusalem Post that “Bush intends to attack Iran before the end of its term”)….

But of course other forces are pushing oil prices are higher: a weakening dollar,…. speculative/investment demand for oil from new players that have discovered oil/energy and other commodities as a new asset class; the short-covering this week by hedge funds that had bet on a fall in oil prices; the rise in the fundamental demand for oil from Asia; a Morgan Stanley report that oil may soon rise above $150…..a worsening US recession would – in due time – lead to a fall in oil price as the fundamental demand would fall (via the US contraction and the growth recoupling of the rest of the world) thus triggering the unraveling of some of the speculative long position on oil.

But for now contracting employment and contracting aggregate demand (apart from Wal Mart and Costco who are benefitting from desperate US consumers buying the cheapest of all goods most of the other US retailers and chain stores are in deep trouble with contracting sales) together with rising oil and gasoline prices and rising inflation are signaling that the economy contraction will accelerate.

Over 18 ago this forum argued that three ugly bears – the worst housing recession in decades, a severe credit crunch and financial crisis, and sharply rising oil prices – will smash Goldilocks and lead to a severe recession. This economic contraction started on the weight of the first two bearish factors; but now with oil well above $130 the final thick nail on the coffin of the US economic expansion has been hammered. Sharply rising oil prices mostly swamped the effects of the recent tax rebate and while the rebate is temporary the effects of permanently higher oil prices – let alone further rising ones – are severe. So even without an actual military confrontation between the US/Israel and Iran we are headed towards a severe US recession and a significant global economic slowdown. An actual military confrontation would then lead for sure to a painful global recession.

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41 comments

  1. ruetheday

    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.

  2. Anonymous

    So how serious would the economic downturn be if Iran nukes Israel and a few US cities? I’m sorry for doubting the general tone here that attacking Iran is just koo-koo-crazy but Iran frequently threatens to destroy Israel and the US in the native Farsi language press. Now maybe I’m crazy too but that seems a little worrisome to me. So why isn’t it for you?

  3. etc

    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.

  4. Dan Duncan

    “….my sources with connections in Israel….”

    So now you’re William Safire?

    Puh–leeze…

    “my sources with connections in Israel”

    Let me guess:

    Your “source” is your dentist.

    He’s married to a Jewish woman.

    She has an uncle, who sells picture frames in suburb outside of Tel Aviv….

    Next time you get a cleaning, please ask your dentist to ask his wife to ask her uncle if he thinks the Israeli Commandos will strike the burgeoning uranium enrichment facility outside of Mashhad in the NW or perhaps the
    IED factory in the heart of the industrial center of Kermanshah, which, of course, lies to the SE of Tehran?

    Until then, I remain….

    On pins and needles.

  5. Richard Kline

    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.

  6. Anonymous

    “…he often, no doubt unintentionally, comes off as unduly enthusiastic about the prospect of carnage.”

    Personally, I detect hints of satisfaction rather than enthusiasm. And it’s not hard to see why he might feel satisfaction. Anyone who clearly understands the current underlying dynamics in place and knows a serious recession is inevitable might start to question their own sanity when so many others remain “delusional” so long. If you’ve already come to terms with a dark reality, then prolonging an illusion could be more painful then having the negatives unfold — under the assumption that they must do so before a return to healthy & sustainable economy and markets is feasible… (Roubini is a believer in a ‘U’ not ‘L’ shaped recession, so he would naturally want to see us reach the other side of the ‘U’).

  7. Anonymous

    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.

  8. Anonymous

    Israel and the United States can sabre rattle all they want, but their influence, as this article illustrates, is definitely in decline….

    http://axisoflogic.com/artman/publish/article_26973.shtml

    I also remember reading somewhere in the past couple of days that a Chinese official stated that an attack on Iran would be considered the equivalent of an attack on China.

    I suppose that anything is possible considering that we have an idelogically-driven president with an IQ of 75 and an Israeli government dominated by a cabal of right-wing zealots, but the consequences to the United States of an attack on Iran would be beyond comprehension.

  9. Mikkel

    “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…

  10. Anonymous

    Re: “unduly enthusiastic about the prospect of carnage”.

    I think he just is trying to prepare people and wake up people to the great and increasing possibility of a depression-like winter.

    I live in a rural area that is about 90 minutes from a major hub, and I seriously am now VERY worried that as fuel rockets higher, we will see fewer groceries delivered to our area maybe as early as XMAS 08.

    There will be a point when distribution will make less sense in a hyperinflation environment. I just think that wages are frozen, house prices are just starting to come down and may fall another 30%, cost of living matters are obviously rising, debt is increasing, unemployment is increasing and it is VERY ugly now — and thus when this environment gains momentum, how will some truck driver be able to make a profit to take on the risk of delivering food?

    Think about that — The Risk Of Delivering Food! The risk of growing food, the risk of relying on someone else to bring you food at a cheap price.

    We are screwed and we have the most corrupt political machine ever in place today with an inept senate, congress and puppet dictator — who I fully expect will have a third term, due to national security concerns! Even if we do get a new figure head puppet in position, this is simply a matter of thousands of corporate backed lobby groups usurping control over America the wasteland!

    Plant a garden, buy a bike, get energy saving appliances including low watt bulbs and plan ahead to insulate your homes and plan ahead on food, because people will be starving this winter!

  11. Dan Duncan

    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….”

  12. Mikkel

    I’d just like to add that if there is an attack on Iran, the spike in oil and food prices would most likely kill more people globally than a single nuke attack. The recent UN report about worldwide food supplies was extremely grim and we’re really at a tipping point.

  13. Yves Smith

    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.

  14. Please Take Friggn Note!

    Gas pumps run dry as drivers strike
    Taxis off roads today over pay hike

    http://www.ekathimerini.com/4dcgi/_w_articles_politics_100002_12/05/2008_96455

    Strikes in the transport sector have picked up as drivers seek steep hikes in state-regulated charges to offset cost increases arising from soaring gasoline prices.

    Motorists in Athens queued up on Saturday for up to 2 kilometers at service stations selling their last remaining supplies.

    Gas stations in other parts of the country had started closing down at the end of last week.

  15. aaron

    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.

  16. Anonymous

    ☺☺Mikkel said…

    “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”

    From what I understand about nuclear fallout, the scenario you imagine is incredibly naive.

    A nuclear attack of the magnitude you postulate would leave the entire middle east region, including Israel, uninhabitable.

    For more detail…

    http://en.wikipedia.org/wiki/Nuclear_fallout

  17. Francois

    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

  18. Mikkel

    Um, just like Hiroshima and Nagasaki are uninhabitable?

    From the wikipedia page you linked:
    “Fallout radiation decays exponentially relatively quickly with time. Most areas become fairly safe for travel and decontamination after three to five weeks.”

    I did not know this until a few years ago and was blown away by the reality. The primary consequence of nuclear fallout from these types of weapons is the severe soil and water contamination and huge cleanup costs associated with them (as well as huge long term health burdens of courses). However, they definitely do not leave areas uninhabitable, just a mess that takes a while to clean up.

    I hate to sound cavalier about it, but when talking about 15 kT bombs, 10 of them is still only 150kT.

    By contrast, one warhead in a trident missile is 475kt and there are 8 of them in one missile. One submarine has 24 Tridents.

    The total destructive capacity of one Ohio class sub is therefore 91,200 kt or equivalent to 6080 plutonium/uranium based weapons. At full capacity Iran could make perhaps two or three a year.

    Nuclear doomsday scenarios are just not realistic when talking about fission-based weapons and all the genuine fear about nuclear war comes primarily into play when talking about fusion weapons. There is absolutely no discussion that Iran is even close to capable of producing one of those.

    Quite frankly, I am astounded that a ton of people that are otherwise highly knowledgeable aren’t aware of these basic facts.

  19. Mikkel

    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.

  20. Anonymous

    I’m sorry, Mikkel, but what you are spouting is just blathering nonsense.

    Never in history has it happened that nuclear power plants and nuclear enrichment facilities have been deliberately bombed. Such facilities, everywhere in the world, operate under severe safety conditions because the release of radioactive materials is deadly, immediately and also long after exposure. If the USA or Israel deliberately bomb a fully fueled nuclear power plant or nuclear fuel enrichment facilities, containment will be breached; radioactive elements will be released into the environment. Iran’s Bushehr nuclear reactor has 82 tons of enriched uranium (U235) now loaded into it, according to Israeli and Chinese news reports. The plant is scheduled to become operational this summer, producing electricity. The Natanz enrichment facility is operating a full capacity, enriching uranium for use in reactors according to IAEA reports. There will be horrific deaths for families in the surrounding vicinity. The Union of Concerned Scientists has estimated 3 million deaths would result in 3 weeks from bombing the nuclear enrichment facilities near Esfahan, and the contamination would cover Afghanistan, Pakistan, all the way to India.

    http://www.ucsusa.org/global_security/nuclear_weapons/the-robust-nuclear-earth-penetrator-rnep.html

    The Persian Gulf nations of Saudi Arabia, Kuwait, Iraq, and Iran have more than half the world’s known oil reserves. The 1981 study by Fetter and Tsipis in Scientific American on “Catastrophic Releases of Radioactivity” estimated that bombing a nuclear reactor would cause 8600 square miles around the reactor to be uninhabitable, depending on which way the wind blows. Bombing the Bushehr reactor will mean half of the world’s oil is instantly inaccessible. Bombing Iran means that Americans will not be driving cars any where, any more, for a long, long time. The American Way of Life will be finished. An economic collapse unimagined by Americans will follow. Mechanized farming and food transport will be finished. Famine is a possibility. Food riots are a certainty, in the land of plenty, with the fuel gauge on empty.

    The nations of the world cannot rely on the USA and its Israeli advisors to be rational about bombing reactors. It is insane to say, “All options are on the table”, and it is a crime against humanity. The USA and Israel are preparing the public to accept such insanity by announcing that they successfully bombed a Syrian nuclear reactor, with no ill effects. Israel has also recently released video of its 1981 bombing of the Osiraq nuclear reactor in Iraq. See, it’s easy. Nothing bad happens. But those were both construction sites, not loaded reactors full of tons of enriched uranium.

  21. Anonymous

    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.

  22. Anonymous

    And there’s more evidence, Mikkel.

    Reactors and enrichment facilities are built of extra strong concrete, often with multiple layers of containment domes, often built underground. Bombing such facilities will require powerful explosives, earth penetrator war heads, maybe nuclear warheads. The explosions will blow the contamination high into the atmosphere. Where will it go is a question that is difficult to predict.

    During the January 1991 Gulf War, many oil wells in Kuwait were set afire. According to the US State Department, “black rains were reported in Turkey, and black snow fell in the foothills of the Himalaya Mountains”. The radioactive plumes from bombing Iran’s nuclear facilities would reach the same destinations, in the same weather conditions. But the radioactive plume might go north, into Europe. During the March 2003 invasion of Iraq by the USA, UK, Australia, and others, armour piercing shells and bombs tipped with depleted uranium (U238) were used. It took 9 days for uranium particles from these weapons in Iraq to reach England, where air sample filters showed a 300% increase in uranium particles attributable to the war. The weather patterns at the time that carried the particles to England passed over central Turkey, the Ukraine, Austria, Poland, Germany, Sweden, and Denmark, to England, then over Norway and Finland to the Arctic. This was reported by The Times, summarizing a study in European Biology and Bioelectromagnetics.

    http://www.timesonline.co.uk/tol/news/uk/article732523.ece

  23. Mikkel

    “I’m sorry, Mikkel, but what you are spouting is just blathering nonsense.”

    Er what? I was talking about individual fission-nuclear bombs. I am strongly against bombing the plants. You are 100% correct that disasters/bombing nuclear power plants are potentially far worse than a nuclear attack for the exact reason you described: the amount of radioactive material is so much larger.

    I was responding to everyone that thinks that if Iran builds a few bombs that they can suddenly take out whole countries. The massive amounts of nuclear material needed to create those bombs is much more dangerous if something bad happens.

    I’ll take your word that there is 82 tons of loaded uranium, which is 1500x more than the supercritical mass for pure uranium. That is a lot different more.

  24. dearieme

    “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.

  25. Mikkel

    dearieme: True, but ultimately Chernobyl was a partial breach and not full blown meltdown. Still “nearly thirty to forty times more fallout was released than had been by the atomic bombings of Hiroshima and Nagasaki.”

    I don’t know enough to speculate about what would happen if a plant was bombed directly while operating to cause a full meltdown.

  26. Anonymous

    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?

  27. Rootless Cosmopolitan

    Yves,

    as for the alleged plans of the White House to attack Iran in August. The spokespeople of both senators, Feinstein and Lugar, who allegedly were secretly briefed by the White House about these plans according to the Asian Times Online story to which you set a link rejected the story as false:

    http://rawstory.com/news/2008/Senators_say_report_of_planned_US_0528.html

    I assume you missed this piece of the story. Thus, don’t talk about these alleged plans to attack Iran in August as if they were a fact, please. It’s just a rumor.

  28. Juan

    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.

  29. RN

    Mikkel said -

    “But in a modern city you are talking about taking out < 2 sq miles and killing maybe 50,000 people."

    You moron. The Hiroshima bomb killed 140,000.

  30. Mikkel

    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.

  31. Mikkel

    Oh also anon #2 about your question: A nuke is designed to go off at that altitude in order to achieve maximum blast radius damage. If it was detonated upon impact with the ground then it would create a lot more fallout but less localized damage. So you are correct that if your main goal was inflicting long term environmental damage then you would want it to detonate very close to the ground.

    I don’t know much about how fallout spreads so I can’t say how much more fallout stays local instead of getting blasted into the atmosphere and spread across the globe. Also, even though I’ve read the typical blast zones and the reason why it detonates where it does, I’m not sure exactly how much it decreases when it is closer to the ground. If you’re really curious I can ask my former roommate who probably knows, as he has studied all these things.

  32. Anonymous

    “The government of Iran is not run by rational deterrable men. That’s the basic problem, and I note you did not address it.”
    You act like it’s a fact when it’s nothing more than propaganda of the “demonize your enemy” flavor. You might think you know the facts but reveal your ignorance when holding up president Ahmadinejad as a bogeyman. Iran is a theocracy ruled by the Supreme Leader of Iran, Ayatollah Ali Khameini. He is the Commander-in-Chief, not Ahmadinejad. But as a bogeyman Khameini leaves something to be desired, as he has famously issued a fatwa against the production and use of nuclear weapons.

  33. Anonymous

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

  34. Anonymous

    anon of 12:04,
    I don’t know if you are aware of this but once upon a time Iran was a US ally until that government was overthrown by the founders of the present regime. That government proceeded to occupy the US embassy (which I’m sure violates international law) taking hostages and holding them for a considerable length of time. One the hostage takers is said by a former hostage to be the current president of Iran, btw. The new regime proceeded to orchestrate the marine barracks bombing in 1983, engage in a brief shooting war with the USN in the late 1980s (until the USN shot back), bombed the Khobar barracks housing US troops, and more recently supply IEDs, training, money and even special forces troops to assist the insurgents in Iraq.

    In short, Iran has been making war against the US (and Israel, but that’s their problem) for as long as they have existed and to the best of their abilities.This has continued under both Democrat and GOP presidents with both GOP and Democrat control of congress. And now they seek to vastly expand those abilities by building nuclear weapons.

    In other words the issues the US has with Iran aren’t an invention of the hated neocons and chimpybushitler. Face reality.

    Bluntly, your touchingly naive defense of the Iranian regime and belief that a fatwa issued by Khamenei (not Khameini) counts for anything is moronic. He can easily issue a new fatwa any time he wants for any purpose or reason he wants.

    You’re the ignorant fool, not me. Good luck with that.

    anon #2

  35. Anon#3

    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

  36. m

    There seems to be two common misconceptions repeating throughout the comment section of this thread, as well as from the OP:

    1) Everyone seems to assume Iran will remain a rational actor once they obtain nuclear weapons. This assumption is based on ignorance, hubris and solopsism – projecting history (the Soviets were rational actors!) and pacifism (everyone just wants to live in peace and prosperity!). Shiite Twelvers – of which Ahmadinejad and Khomenei are fervent believers – hold that the Hidden Imam (a 5 year old who disappeared) will return only after nuclear destruction. While other religions hold this messianic belief, none except Twelvers are required to help bring about the end of days for the Messiah’s return. Iran has remained a rational actor so far because they lack the requisite tools to bring about the end of days. Please do some research into this.

    2) Everyone is also assuming, on top of Iran remaining a rational state actor, that they will nuke Israel themselves. I don’t know why this narrow, short sighted and ignorant view continues to propogate. Most likely, Iran will have one of its proxies – most likely Hezbollah or Hamas – launch the actual weapon. Who will Israel retaliate against? (I also, by the way, don’t buy the argument that the U.S. will nuke Iran for Israel’s sake, especially if Hussein Obama becomes president.)

  37. Nick

    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!

  38. Anonymous

    Gee, you are the one who is remarkably ignorant. Did Al-Quaeda attack the US, or anyone, with nukes? Yet that’s what you suggest.

    If you want to worry, there are over 100 nuclear weapons that went unaccounted for when the Soviet Union collapsed, You don’t need to go to the trouble of developing the capability to build a nuke, you can buy it on the secondary market. And it’s the US’s slavish loyalty to Israel, its continued persecution of Palestinians (the kill ratio is somewhere between 5:1 and 7:1 in favor of Israel, depending on what source you read, and they are living in a ghetto. It would be funny if it weren’t so damaging to both sides and the world at large) that has the Muslim world upset. If any party is at risk here, it is Israel, not the US.

    Unless we make Israel give up its nukes, tell me why we can demand that Iran not have nuclear reactors (Iran still maintains they are not developing weapons, and the evidence is far from conclusive, despite US complaints). In fact, I’m amazed none of these weapons has surfaced, but you kinda need to be able to launch them, and that takes some skill. The last time North Korea tried to scare the world, it launches a test missile which promptly fell into the China Sea, demonstrating that they are a long way from prime time.

    North Korea’s game is extortion and frankly, they don’t appear to have been very effective at that.

  39. Anonymous

    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.

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