Links Happy New Year!

Wishing you all the best in 2009!

Israel stifles free press covering Gaza McClatchy

If Gaza falls . . .Sara Roy, London Review of Books (hat tip reader Marshall)

Multiple tiny earthquakes rattle Yellowstone. Could the big one be far behind? Scientific American

China Q3 non-cash payments fall for first time, in line with economic slowdown People’s Daily Online

Downgrades And Downfall Washington Post. Part 3 of a series on AIG

Speculator Sport Heather Timmons, The Big Money

GMAC: 0% Financing for Subprime FICO Scores The Big Picture

Treasury May Provide Funds for Any Company Deemed Crucial to Auto Industry Bloomberg

The Wave of the Future? Michael Panzner

The euro’s bitter-sweet triumph at 10 Ambrose Evans-Pritchard

As Trade Slows, China Rethinks Its Growth Strategy New York Times. The story also indicates that financing (more accurately, lack thereof) is playing a role:

“Trade finance is collapsing,” said Victor K. Fung, the chairman of the Li & Fung Group, the giant supply chain management company that connects factories in China with retailers in the United States and Europe. “We’ve got orders we can’t ship right now.”

Antidote du jour:

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  1. Anonymous

    Reading the “China rethinks its Growth Strategy” gives me a sense of the dimensions of the trade bubble. Right up there with supply side economics, derivative “risk transfer, the asset bubble economics, is the trade bubble.

    Now as the trade bubble begins to collapse under its own unsustainable weight, we have the bubble economics profession ramping up their rantings about protectionism. They remind me of the deregulation crowd, probably because the are one and the same.

    Just like housing, the trade bubble should never have been allowed to expand, unchecked, as it has. Beyond a certain point, there is no way to deflate the bubble without enormous collateral damage.

    How can we look at the same picture of carnage in the domestic, and now the world, economies as a result of misguided trade management and see only roses. Heckuva job, Brownie.

  2. Anonymous

    “since Israel seized the area from Egypt in the 1967 war.”

    Israel has been conducting an imperialist land grab for the past 50 years. The justification for the Israeli policy in Gaza is weak.

    Like many westerners, I have a knee jerk distrust of the Arab world and a warm and fuzzy sense toward Israel as a natural ally in a region of utter darkness. The information I recieve about the cruelty and insanity of the Arab world has done little to change my mind.

    How much of what I see is propaganda ? I don’t know. The press blackout reminds me that the message may not be accurate.

    For now, I may continue blocking the image that sometimes creeps into my consciousness of the similarity between the Nazi SS in the Warsaw Ghetto and Israel in Gaza. For how long, time will tell. The Bernie Madoff affair might remind me to check what my friends are really up to.

  3. Anonymous

    The Wave of the Future? Michael Panzner


    As Trade Slows, China Rethinks Its Growth Strategy New York Times

    Link to the same thing. Was going to read the Panzer article, but the link is wrong.

  4. artichoke

    Re: Panzner article

    Stephen thanks for the link.

    It’s a plain bailout of GM, hopefully Chrysler too. The Japanese and German car co’s have been receiving implicit government support for many years. It’s time we fought back.

    We need these companies. Perhaps this will give them an advantage, finally, over the Japanese competitors.

    I’m as annoyed as anyone over the “job bank”, which should go, but it’s not nearly as bad as banks paying bonuses with TARP money, which just happened. And it’s banks, not car companies, that have crashed the world economy.

    Keep things in proportion. Car companies are an important industrial and national security asset. We must save them. Starve the banks, which are receiving much more help and mainly just pouring it down the rat-hole of their CDS contracts, not the car companies.

  5. lineup32

    “There was no difference between the run up in the price of oil, homes, the stock market or any other commodities,” Wallace said in an e-mail”

    Credit rationing has brought down the price of oil and quickly. The financial media narrative stories that are pumped out to support various speculative commodity runs have a similiar end: poooooooooof!

  6. Douglas

    I have been reading your site for a few months now. I don’t recall your ever linking to any articles about the Israeli solidier kidnapped and held by Hamas, or any of the Israeli’ls killed by the thousands of missiles fired in the past into Israeli cities. Nor have you linked to articles on the murdeer/persecution of Christians (as well as less observant muslims) by Hamas. Or the honor killings. Or the forced “wives”. etc. etc. But now you link at least 2 articles hypercritical (and I would argue rather innacurate) of Israel. First, I would like some balance, please. Don’t you care when Muslims slaughter other Muslims, or Christians. Second, I thought this was a financial/economic blog. We can all go to other sites for the politics.

  7. Anonymous

    Cherry picked from the Huffington and Washington Posts’ News Stories:

    Palestinians death toll has risen to 345 killed and over 1,600 wounded in the on-going Israeli warplanes intensified airstrikes on Monday evening.

    five Israelis have been killed since the Gaza offensive began Saturday,

    After Israel completed its unilateral withdrawal from Gaza last September, ending a 38-year presence, Palestinians expected an explosion of commerce and opportunity in this sandy strip, which is about twice the size of Washington with almost three times the population.

    But after the election in January of a parliament dominated by Hamas, the radical Islamic movement that refuses to recognize Israel’s right to exist, international donors led by the United States cut off aid to the Palestinian Authority. Israel stopped transferring the tax revenue it collects for the Palestinians, and the Palestinian Authority’s monthly income dropped from $150 million to $20 million or less, according to the United Nations.

  8. Anonymous

    Douglas, the first story was about how Israel has shut down all media access to Gaza. As noted, it is difficult to separate this kind of behavior from those of your typical tin-pot dictatorship.

    The second is about how Israel has effectively blockaded Gaza since early November, and the dire social and economic consequences.

    What kind of “balance” can exist for these acts? For example, when the media reports about how North Korea does not tolerate a free press, do we also get sob-stories from Pyongyang re: the difficulties of ruling a boot-to-the-neck dictatorship? The Israeli case isn’t as extreme as this of course — rocket attacks are indeed intolerable — but it seems pretty clear to almost anyone with a brain that Israel can achieve it’s goals of protecting its citizens from rocket fire, shutting down Hamas’ missile production and launch apparatus without media, economic and humanitarian blockades.

  9. Anonymous

    Douglas said – “I thought this was a financial/economic blog. We can all go to other sites for the politics.”

    Douglas did you notice the spike in the price of oil when Israel unleashed its overpowering and way out of proportion murderous attacks in the killing fields of Gaza? And did you notice that the trade in the tunnels to Egypt where Palestinians have to crawl like rats for their daily supplies to feed themselves and their children has been accelerated? And did you notice the drop in the dollar?

    All life, including finance, is politics Douglas, and deception is the strongest political force on the planet.

    Churchill and Truman knew that well.

    i on the ball patriot

  10. macndub

    Anonymous 2.07, I would think that the Gazprom cutoff of Ukraine would have more impact on oil prices than the Gaza situation. But who knows?

    When Ukraine is cut off, the Ukrainians just take gas intended for Europe. (If you were cold, wouldn’t you?) So it’s really Russia curtailing gas supplies to Europe. The upper bound for incremental oil demand to replace lost Russian gas might be about 200,000 bbl/d, if all of the Russian curtailment translates into oil demand (though it won’t).

  11. Anonymous

    Douglas is part of the Israel PR machine that locates any negative news item and attacks the source. Always the same logic, repeat and repeat the sad part its paid for by American tax dollars!

  12. Anonymous

    Sara Roy of London Review of Books hit the nail on the head with this article. A thorough and thoughtful analysis of a horrible situation.

  13. Anonymous

    Gazprom vs Ukraine. Siphoning off Russian gas destined for Western Europe has been going on since long before the end of communism. Ukrainians have a sense of entitlement that can be summed up in the saying “What is mine is mine and what is yours is mine also”. The whole swath of countries bordering Russia from the Black Sea to the Baltic are dysfunctional. Add the Czechs to that.

  14. Anonymous

    “Anonymous 2.07, I would think that the Gazprom cutoff of Ukraine would have more impact on oil prices than the Gaza situation. But who knows?”

    This is definitely the case. I trade oil and it skyrocketed into the close yesterday right after the news broke about Gazprom.

    As for the supposed trade bubble,

    “Tariffs will become popular, regardless of the fact that virtually everyone knows they are dangerous and wrong, because they are a consequence of an increasingly negative psychology involving fear, envy and a misguided attempt at self-defense.”
    -Robert Prechter, 2006

  15. donna

    5 Isrealis to hundreds of innocent Palestinians. Yet the Israelis are ever the “victims” of these attacks.

    Perhaps it is time for them to ask themselves why.

  16. cian

    ” I don’t recall your ever linking to any articles about the Israeli solidier kidnapped and held by Hamas”

    That would be the Israeli soldier who was taken prisoner while on active duty shelling the Gaza strip? It says something about the ludicrous bias in favour of Israel that this is meant as a serious argument.

  17. Yves Smith

    Sincere apologies for the bad links, probably the consequence of too much New Year’s Eve bubbly. Thanks Stephen for the providing the correct links. Fixing the post now.

  18. Jmd

    Agree that the link to the Sarah Roy article was misplaced here. The Gazans need to take a hard look in the mirror when asking why women and children are being attacked. And comparing what is happening in Gaza to what happened in the Warsaw ghetto is revisionism at its finest. If this site is leaning in a pro-Palestinian direction, I will go elsewhere, along with many, many other jaded readers; I find it distasteful to see Hamas-justification on an economic website and the effect on oil prices has been negligible at best. And I am not an ADL-Israeli-Kadima-Knesset spambot but rather a young, clear-thinking, RC, female attorney.

  19. Anonymous

    Jmd “If this site is leaning in a pro-Palestinian direction, I will go elsewhere, along with many, many other jaded readers; “

    Ms. Smith links to two articles critical of Israel for locking the media and humanitarian aid out of Gaza … and all of a sudden we have a website “leaning in a pro Palestinian direction”?

    Not only that, but I don’t even see a “Hamas justification” here. As for the price of oil, a few seconds at google brings up a blizzard of hits:

    10% is “negligible”?

    Despite the claim the author of these statements is a “young, clear-thinking, RC, female attorney”, I can only conclude that Jmd is reading another website.

  20. Anonymous

    Hey Zionist guys, you are wasting your time chasing every last human who fails to incessantly kiss Israel’s ass. The US, by all indications, is still an abject satellite of Israel, and the opinion of mere American citizens, however visible and trusted, make no difference. The real threat is that fiscal ruin will render Israel’s American goons unable to help crush Palestine. What happens when we can no longer stake you for the giant fighter-bombers you need to protect against pathetic fizzy bottle rockets and whatever little rocks are left in Gaza?


  21. Douglas

    I was surprised at the vitriol my first post has unleashed. Interesting, nobody actually addressed the issues I raised. There is slaughter and persecution all over the world, every day. Seems you Europeans (based on the comments) don’t seem to mind much of it, other then when Israel does it. Certainly nobody remarked on any of the other tragedies whether large (probably more people died in sudan this week then gaza) or small (the daily slaughter of homosexuals, journalists, etc in most mideastern countries). To the extent that the Israeli strikes are effecting the price of oil, there are many thoughtful articles on this topic; however, they were not linked or mentioned.
    As far as freedom of the press, obviously Israel has the only free press in that region. Most if not all countries place some restrictions during a war – dropping a bomb on a bbc reporter is not Israel’s goal. Finally, a brief look at websites for major newspapers, etc. clearly indicates that they have reporters in Gaza, some I am not sure what is the cause of the hysteria. Here is one example from the NY Times: Israel Pursues Diplomacy But Presses Attacks: Reporting by Taghreed El-Khodary from Gaza.
    I am not going to respond to any more comments (or actually read them for that matter, as I will get my economic news elsewhere), I have a good life to lead.

  22. Anonymous

    See that, step out of line and Mister Sniffy McSniffington will single-handedly destroy the blogosphere. He’s gonna cancel his subscription or something.

  23. Anonymous


    Thanks for the postings and Happy New Year! Step on any toes you want…even if they try to stupidly bite back.

  24. Anonymous

    Can I rant here?

    I have recently found that Wells Fargo Bank in Washington State – and maybe beyond – is systematically and drastically reducing their credit limits across the board for credit card holders. My credit limit was recently reduced 75% (from $13,400 to $3,500) although my credit score is 724 and I have never been late on any payment in the past decade. I do not even carry a balance on this card, and I was a Wells Fargo customer since 2004.

    So why does this bother me? Well because my government recently gave WFC $25 billion in government funds to increase credit to Main Street. When I went to close my accounts yesterday, I found that this is being systematically done across the board to all small business accounts of Wells Fargo. The manager at WFC told me of horror stories how a businessman checking out of a hotel found that his credit had too been drastically reduced and while paying for his bill the card was declined, the drastic reduction unbeknownst to him. Or a person with a $6,000 balance had their credit reduced to $250 and were consequently over their credit limit. I work with two other business owners here in Washington state that received the same for letter and subsequent reduction of credit.

    Is this what the trillion dollar bailout was intended for? I personally work with many small business owners that rely upon credit cards, as banks have basically eliminated working lines of credit unless they are secured with hard assets (such as one’s home). Since credit cards are much more profitable for banks than other forms of credit, they basically have encouraged business to rely upon credit card to fund daily activities. And now these banks (at least Wells Fargo) are pulling the rug out from small businesses. Main Street, by all accounts, is {expletive}.

    How can this practice by Wells Fargo be allowed? This is appalling. At least they can shore up their balance sheet and continue to benefit their investors and management through my $25 billion tax dollar subsidization. This is probably going on with other banks, although I personally have not experienced this with my other banking relationships (ie, Chase, BoA, USBank or Discover).

    Here is a bit more of a rant on my blog:

    Does anyone know about this? Does anyone care?

    Thanks for letting me vent. Happy New Year everyone.

  25. Anonymous

    A large number of journalists died in Iraq. With the Gaza being rather more compact, it would be quite a risk for Israel to approve of journalists going in. The residents will have to take some pictures or write a blog or something. The horror. In the meantime, they can cover the missiles that have been landing in Israel since long before Israel responded. Those missiles have quite an impact on house prices there.

  26. Jmd

    This site has been getting a lot of press lately…see this week’s New York Social Diary…it would be a shame to see it slide into irrelevancy for many readers with gratuitous or one-sided posts like the one on Israel above in the manner of many, many other blogs into irrelevancy.

    Keep up the coverage of human rights violations, but please don’t cherry-pick them. I think I’ve read about a dozen on Guantanamo, for example, but few on Zimbabwe, where the people now suffering really have not engaged in anything near provocative behavior. Get Jimmy Carter on the case immediately! Oh right…he is.

  27. Yves Smith

    Anon of 8:39 PM,

    I suggest you watch your assumptions. They reveal considerable bias. My maternal grandmother’s maiden name was Stenberg.

  28. Glen

    Couple more links for Yves et al;

    “China’s manufacturing sector close to recession: survey” The CLSA China Purchasing Managers Index, a gauge of nationwide manufacturing activity, rose to 41.2 in December from 40.9 in November, CLSA Asia-Pacific Markets said today.

    A slight rise but nothing to cheer about.,28124,24864970-5017997,00.html

    And this clanger; “Share blame for global financial crisis: Citigroup” Speaking in an interview with BBC Radio 4’s Today program, of which he was the New Year’s Day guest editor, Sir Win said: “My view is that they (bankers) are partly to blame. There are people who feel remorse about this – there’s no doubt about it. Do they all? I don’t know.”

    Hmmm, first Paulson now Bischoff. Is this a case of synchronised blame shifting? Looks like a big bank is about to go down but who?,28124,24864807-20501,00.html

  29. YK

    The selection of articles on Gaza is clearly anti-Israel. Our lovely author starts to emit some foul odor.

  30. Anonymous

    YK and others,

    You guys need to get over yourselves. The latest moves by Israel do not seem to be pro-security at all, in fact the only purpose I can fathom is to box Obama in. And Israel is not tantamount to Judiaism. A lot of liberal Jews in Israel and here question openly whether the attacks will do Israel any good. They appear have lost sight of the bigger game.

    This raises FAR more fundamental questions than Yves’ two tame links:

    Anyone who tries to stifle debate or engages in ad hominem attacks general does not have much of a case (or is too lazy to make it). And I must say, objectively, that the people going after Yves on this one have made no substantive case, merely tried to slur her to get her to shut up. I find that offensive.

  31. Anonymous

    The “If Gaza Falls…” article ends with a nonsequitur that calls its author’s credibility and good faith into question: “If Gaza falls, the West Bank will be next.” But no one seriously believes that fighting is about to break out between Israel and Fatah. In fact, Fatah is quietly cheering the elimination of Hamas targets. They still remember Fatah loyalists being thrown alive off the roofs of tall buildings by Hamas thugs.

    And what does “falls” mean, anyway? It has a military connotation of the permanent taking and annexation of territory, which no one seriously believes to be the Israeli goal in Gaza.

    If Israel prevents trade between Gaza and Egypt then they are routinely accused of blockading and strangling Gaza. Bizarrely, however, the author attacks Israel for not completely preventing such trade, accusing them of nefariously trying “to foist Gaza onto Egypt”. Allowing Gaza contacts and trade with its Arab neighbor would be a bad thing? Is it too much to ask this author to make up her mind?

    The rest of the article amounts to this epiphany: war sucks for civilians. But even Egypt has lost all patience with Hamas and has told them to just stop launching the stupid rockets already.

  32. Anonymous

    Rage on, Zionist spammers. The world won’t end when you take your nonexistent contributions elsewhere. What is going to end is Israel, just as soon as the USA goes BK. Unless you’re expecting China to suddenly start giving them money instead.

  33. Anonymous

    The case of Israel is confounding, on one hand they used means that in todays terms would be quantified as terrorist to secure their nation, from an established people/nation based on biblical text.

    In my mind this is religions ugly side as pointed out in many of the above posts, many more killings going on world wide in its name. I disengage from beliefs of all kind when people are getting killed to justify its action.

    I feel Yves comment though, my step-grandfather was a German Jew and married a German Lutheran, one of their daughters was in Job’s daughters, on top of that my grandparents, Mothers side are Baptist. So side’s don’t really matter to me, just the actions/reasons for deadly force.

    Cut out the religion and find out why its really going on water, fertile land, militarily strategic area, placate radical section of population or redirect its fury for political benefit, etc.


  34. Anonymous

    There are no sacred cows on this site. Why should Israel be one?

    The bullying is wearing very thin.

  35. Anonymous

    Thank you for the link to the Sara Roy piece. Devastating.

    As always on this issue one has to turn to the non-US media for any kind of objectivity. Ha’aretz certainly offers a more balanced and nuanced picture than the NYT. Similarly, compare the editorial stance of the FT to the WSJ.

    The pro-Israel orthodoxy imposed on the US MSM is suffocating. Unfortunately, it seems to be having its desired effect: widespread ignorance among the American populace about the ugly realities of the never-ending Occupation.

  36. john bougearel

    The situation in Israel bears close watching by the financial community.

    Israeli Prime Minister Ehud Olmert told ministers `This will be a long, difficult and painful operation.”

    That will likely require us to re-supply them. If we re-supply them, the OPEC nations will happily oblige us with another oil embargo. And presto, crude oil futures have the potential of spiking back to roughly $75 faster than a New York minute. Oh, and if this does lead to an oil embargo, we would do well to remember the Dow plunged 20% in 6 weeks back in October 1973.

    The powers that be may even encourage such a military engagement simply to obtain higher oil prices! In fact, they would be willing to sacrifice lives to get the price of oil back up. The specter of sacrificial lambs to goose oil prices does not sit well with me either, but I don’t believe oil-producing countries will care one iota.

  37. Richard Smith


    The reason no-one addressed your issues is that you made two points that cancelled each other out.

    You can’t have “balance” at the same time as reduced political content, can you?

    Which one do you actually want?

  38. Richard Smith


    You may indeed be a young, RC, female attorney but I’m afraid you are a tidge optimistic about the clarity of your thinking.

    Strip the ad-hominem arguments out of your comments and there is precious little left. Ad-hominem arguments are utterly irrelevant to determining the validity or otherwise of Sara Rey’s strictures.

    If you need to catch up on why that is (to be honest, I’m surprised it wasn’t covered in your law course), I recommend the Wikipedia entry on ‘Ad hominem’, which is just a few clicks away.

    You rather patronisingly admonish Yves not to decline into irrelevancy, which, given the contentlessness of your own comments, is splendidly rich.

    Are you in fact not an attorney at all, but a comedian with a flair for situational irony?

  39. Zeke

    Given that Hamas is and always has been opposed to the existence of Israel why should anyone expect Israel to do ANYTHING to make life nice for them?

    Last I checked Gaza was a part of Egypt at some point in the recent past. (Before one of the Arab instigated wars which they lost, as usual.)

    Why isn’t Egypt responsible for providing heating oil, tea cups via their common border? Why does Israel have any responsibility to help Hamasistan in any way? Did we provide food to Germany in the midst of WW2? Did we send machines part to North Korean during that conflict?

    One would think that the smart people running Hamas and their international enablers would have figured out A LONG TIME AGO that to supply one state that is at war with another through the latter is a losing tactical position.

    Gaza should be annexed back into Egypt. The Palestinians should all be given Egyptian citizenship and Gaza normalized as just another city in Egypt, a much smaller one. It is clearly not a going concern as is.

    Where else in the world has the UN created a refugee/terrorist/pseudo-state like this. Absurd.

  40. Anonymous


    A few missing facts in your presentation.

    All the major actors, including the US and Israel (admittedly after US pressure, but they were officially on board) supported democratic elections for Gaza. It was not UN imposed.

    Hamas was elected. Why? Reports at the time found that the big reason was the locals were sick of Fatah. It was seen as irredeemably corrupt. Hamas, by contrast, was perceived to be good at delivering social services. So the more aggressive position against Israel was NOT the main reason for electing Hamas (at least for most).

    Hamas security forces also do not equal the Gaza population. Conflating the two is not helpful to discussion or to Israel in the long term. As with Lebanon, they will win the battle and lose the war.

  41. Anonymous

    China will resort to tariff and trade policies to facilitate export of labor-intensive and core technology-supported industries,” Li Yizhong, the minister of industry and information technology, said at a conference on Dec. 19.

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