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  • CLINTON SIGNALS A SMART RETREAT FROM DEMOCRATISATION

    CLINTON SIGNALS A SMART RETREAT FROM DEMOCRATISATION

    By Gideon Rachman

    Published: February 5 2009 20:39 | Financial Times

    Taking questions from staff at the state department this week, Hillary Clinton highlighted the hard-headed approach she hopes to take to the US’s relations with the rest of the world, write Daniel Dombey and Demetri Sevastopulo. “When we talk about the three pillars of American foreign policy – defence, diplomacy, development – they’re not just words to the president and me,” the new secretary of state (below) declared, repeating a formula she has spelled out several times in the days since she took office.

    Singularly absent from her outline of the struts of US foreign policy is a fourth “D” – democracy promotion – a goal that served as one of the guiding themes of the Bush administration.

    The Obama administration has gone out of its way to signal a pragmatic, non-ideological approach. It is a modus operandi that stresses continuity with policy under George W. Bush in terms of the tools it uses while setting out arguably more “realistic” goals.

    “This team is very deliberate and what you’ll see is them taking a long look at what they’ve inherited to see what of that works,” says a US official. “They have learnt the lesson from the beginning of the Bush administration, which threw everything out that had to do with [former president Bill] Clinton.”

    Mrs Clinton’s “three D’s” mantra uses a vocabulary of the possible rather than charting grand objectives. It suggests that the US will continue to assert its military might while emphasising the kind of diplomatic outreach many US allies called for during Mr Bush’s presidency. The secretary of state also wants to use US aid to put pressure on countries such as Iraq, Afghanistan and Pakistan and to win control of assistance currently dispensed by the US military so that it can be more easily put to the service of political goals.

    In a phrase Mrs Clinton has borrowed from Joseph Nye, a Harvard professor, and Richard Armitage, a former Bush administration state department official, she labels such an alliance of “hard” and “soft” power as “smart power”. Her stance is bolstered by similar positions struck by President Barack Obama and Robert Gates, defence secretary – a veteran champion of “realism” in the long-running Washington debate with liberal interventionist “idealists”.

    Not for nothing did Mr Obama promise to work with authoritarian states in his inaugural address. While Mr Bush used his second inauguration to set out “the ultimate goal of ending tyranny in our world”, Mr Obama told undemocratic states that “we will extend a hand if you are willing to unclench your fist” – an offer he later explicitly addressed to Iran.

    Indeed, just days before taking office, the then president-elect took care to avoid Mr Bush’s emphasis on free elections. “Elections aren’t democracy, as we understand it,” Mr Obama told The Washington Post, stressing priorities such as freedom from arbitrary arrest and fighting corruption. “They are one facet of a liberal order.”

    Mr Obama’s emphasis on stabilising Afghanistan to reduce the threat of terrorism rather than on establishing a US-style “Jeffersonian democracy” follows this train of thought, as did his pre-election suggestion to General David Petraeus, then the commander of forces in Iraq, that the US should be content with a “messy, sloppy status quo” in that country.

    Ahead of Mr Obama’s expected approval of the deployment of 12,000 more soldiers to Afghanistan, Mr Gates has also suggested that the US scale back its ambitions, cautioning that any attempt to create “some sort of Central Asian Valhalla over there” would inevitably fail.

    Yet while the goals set out by the Obama administration may differ from – or sometimes be more pragmatic than – those endorsed by the Bush administration – the tools it employs are often the same. Last week Mr Gates signalled that the US would continue to launch missile strikes against suspected terrorists inside Pakistan. Less than three days after Mr Obama moved into the White House, the CIA carried out such a strike, an attack that almost certainly was approved by the new president.

    Other instruments established by Mr Bush and set to continue include the six-party talks on North Korea’s nuclear programme, which Mrs Clinton has labelled “essential”, and similar discussions on Iran. “Where continuity is appropriate, we are committed to doing that,” Mrs Clinton said, also instructing Todd Stern, her climate change envoy, to take part in both “United Nations negotiations and processes involving a smaller set of countries” – an apparent reference to Mr Bush’s controversial “major emitters” grouping.

    “From Iran to the plans for an early meeting with [Russian president Dmitry] Medvedev to recent statements on Afghanistan, there is a strong realist strain appearing, although whether that will hold sway at the end of the day remains to be seen,” says Cliff Kupchan, a Washington-based analyst and former Clinton administration official.

    While the debate between realists and idealists that rocked the Bush administration continues, Mr Kupchan observes that now “the portions of meat and vegetables are different”.

    Copyright The Financial Times Limited 2009

  • USA: 15 Companies That Might Not Survive 2009

    USA: 15 Companies That Might Not Survive 2009

    Rick Newman
    Friday February 6, 2009, 11:53 am EST

    With consumers shutting their wallets and corporate revenues plunging, the business landscape may start to resemble a graveyard in 2009. Household names like Circuit City and Linens ‘n Things have already perished. And chances are, those bankruptcies were just an early warning sign of a much broader epidemic.

    Moody’s Investors Service, for instance, predicts that the default rate on corporate bonds – which foretells bankruptcies – will be three times higher in 2009 than in 2008, and 15 times higher than in 2007. That could equate to 25 significant bankruptcies per month.

    We examined ratings from Moody’s and data from other sources to develop a short list of potential victims that ought to be familiar to most consumers. Many of these firms are in industries directly hit by the slowdown in consumer spending, such as retail, automotive, housing and entertainment.

    But there are other common threads. Most of these firms have limited cash for a rainy day, and a lot of debt, with large interest payments due over the next year. In ordinary times, it might not be so hard to refinance loans, or get new ones, to help keep the cash flowing. But in an acute credit crunch it’s a different story, and at companies where sales are down and going lower, skittish lenders may refuse to grant any more credit. It’s a terrible time to be cash-poor.

    [See how Wall Street continues to doom itself.]

    That’s why Moody’s assigns most of these firms its lowest rating for short-term liquidity. And all the firms on this list have long-term debt that Moody’s rates Caa or lower, which means the borrower is considered at least a “very high” credit risk.

    Once a company defaults on its debt, or fails to make a payment, the next step is usually a Chapter 11 bankruptcy filing. Some firms continue to operate while in Chapter 11, retaining many of their employees. Those firms often shed debt, restructure, and emerge from bankruptcy as healthier companies.

    But it takes fresh financing to do that, and with money scarce, more bankrupt firms than usual are likely to liquidate – like Circuit City. That’s why corporate failures are likely to be a major drag on the economy in 2009: In a liquidation, the entire workforce often gets axed, with little or no severance. That will only add to unemployment, which could hit 9 or even 10 percent by the end of the year.

    [Want to land a plum job without paying taxes? Here’s how.]

    It’s possible that none of the firms on this list will liquidate, or even declare Chapter 11. Some may come up with unexpected revenue or creative financing that helps avert bankruptcy, while others could be purchased in whole or in part by creditors or other investors. But one way or another, the following 15 firms will probably look a lot different a year from now than they do today:

    Rite Aid. (Ticker symbol: RAD; about 100,000 employees; 1-year stock-price decline: 92%). This drugstore chain tried to boost its performance by acquiring competitors Brooks and Eckerd in 2007. But there have been some nasty side effects, like a huge debt load that makes it the most leveraged drugstore chain in the U.S., according to Zacks Equity Research. That big retail investment came just as megadiscounter Wal-Mart was starting to sell prescription drugs, and consumers were starting to cut bank on spending. Management has twice lowered its outlook for 2009. Prognosis: Mounting losses, with no turnaround in sight.

    Claire’s Stores. (Privately owned; about 18,000 employees.) Leon Black’s once-renowned private-equity firm, the Apollo Group, paid $3.1 billion for this trendy teen-focused accessory store in 2007, when buyout funds were bulging. But cash flow has been negative for much of the past year and analysts believe Claire’s is close to defaulting on its debt. A horrible retail outlook for 2009 offers no relief, suggesting Claire’s could follow Linens ‘n Things – another Apollo purchase – and declare Chapter 11, possibly shuttering all of its 3,000-plus stores.

    [See 5 pieces missing from Obama’s stimulus plan.]

    Chrysler. (Privately owned; about 55,000 employees). It’s never a good sign when management insists the company is not going out of business, which is what CEO Bob Nardelli has been doing lately. Of the three Detroit automakers, Chrysler is the most endangered, with a product portfolio that’s overreliant on gas-guzzling trucks and SUVs and almost totally devoid of compelling small cars. A recent deal with Fiat seems dubious, since the Italian automaker doesn’t have to pony up any money, and Chrysler desperately needs cash. The company is quickly burning through $4 billion in government bailout money, and with car sales down 40 percent from recent peaks, Chrysler may be the weakling that can’t cut it in tough times.

    Dollar Thrifty Automotive Group. (DTG; about 7,000 employees; stock down 95%). This car-rental company is a small player compared to Enterprise, Hertz, and Avis Budget. It’s also more reliant on leisure travelers, and therefore more susceptible to a downturn as consumers cut spending. Dollar Thrifty is also closely tied to Chrysler, which supplies 80 percent of its fleet. Moody’s predicts that if Chrysler declares Chapter 11, Dollar Thrifty would suffer deeply as well.

    Realogy Corp. (Privately owned; about 13,000 employees). It’s the biggest real-estate brokerage firm in the country, but that’s a bad thing when there are double-digit declines in both sales and prices, as there were in 2009. Realogy, which includes the Coldwell Banker, ERA, and Sotheby’s franchises, also carries a high debt load, dating to its purchase by the Apollo Group in 2007 – the very moment when the housing market was starting to invert from a soaring ride into a sickening nosedive. Realogy has been trying to refinance much of its debt, prompting lawsuits. One deal was denied by a judge in December, reducing the firm’s already tight wiggle room.

    [See why “Wall Street talent” is an oxymoron.]

    Station Casinos. (Privately owned, about 14,000 employees). Las Vegas has already been creamed by a biblical real-estate bust, and now it may face the loss of its home-grown gambling joints, too. Station – which runs 15 casinos off the strip that cater to locals – recently failed to make a key interest payment, which is often one of the last steps before a Chapter 11 filing. For once, the house seems likely to lose.

    Loehmann’s Capital Corp. (Privately owned; about 1,500 employees). This clothing chain has the right formula for lean times, offering women’s clothing at discount prices. But the consumer pullback is hitting just about every retailer, and Loehmann’s has a lot less cash to ride out a drought than competitors like Nordstrom Rack and TJ Maxx. If Loehmann’s doesn’t get additional financing in 2009 – a dicey proposition, given skyrocketing unemployment and plunging spending – the chain could run out of cash.

    Sbarro. (Privately owned; about 5,500 employees). It’s not the pizza that’s the problem. Many of this chain’s 1,100 storefronts are in malls, which is a double whammy: Traffic is down, since consumers have put away their wallets. Sbarro can’t really boost revenue by adding a breakfast or late-night menu, like other chains have done. And competitors like Domino’s and Pizza Hut have less debt and stronger cash flow, which could intensify pressure on Sbarro as key debt payments come due in 2009.

    Six Flags. (SIX; about 30,000 employees; stock down 84%). This theme-park operator has been losing money for several years, and selling off properties to try to pay down debt and get back into the black. But the ride may end prematurely. Moody’s expects cash flow to be negative in 2009, and if consumers aren’t spending during the peak summer season, that could imperil the company’s ability to pay debts coming due later this year and in 2010.

    Blockbuster. (BBI; about 60,000 employees; stock down 57%). The video-rental chain has burned cash while trying to figure out how to maximize fees without alienating customers. Its operating income has started to improve just as consumers are cutting back, even on movies. Video stores in general are under pressure as they compete with cable and Internet operators offering the same titles. A key test of Blockbuster’s viability will come when two credit lines expire in August. One possible outcome, according to Valueline, is that investors take the company private and then go public again when market conditions are better.

    Krispy Kreme. (KKD; about 4,000 employees; stock down 50%). The donuts might be good, but Krispy Kreme overestimated Americans’ appetite – and that’s saying something. This chain overexpanded during the donut heyday of the 1990s – taking on a lot of debt – and now requires high volumes to meet expenses and interest payments. The company has cut costs and closed underperforming stores, but still hasn’t earned an operating profit in three years. And now that consumers are cutting back on everything, such improvements may fail to offset top-line declines, leading Krispy Kreme to seek some kind of relief from lenders over the next year.

    Landry’s Restaurants. (LNY; about 17,000 employees; stock down 66%). This restaurant chain, which operates Chart House, Rainforest Café, and other eateries, needs $400 million in new financing to finalize a buyout deal dating to last June. If lenders come through, the company should have enough cash to ride out the recession. But at least two banks have already balked, leading to downgrades of the company’s debt and the prospect of a cash-flow crunch.

    Sirius Satellite Radio. (SIRI – parent company; about 1,000 employees; stock down 96%). The music rocks, but satellite radio has yet to be profitable, and huge contracts for performers like Howard Stern are looking unsustainable. Sirius is one of two satellite-radio services owned by parent company Sirius XM, which was formed when Sirius and XM merged last year. So far, the merger hasn’t generated the savings needed to make the company profitable, and Moody’s thinks there’s a “high likelihood” that Sirius will fail to repay or refinance its debt in 2009. One outcome could be a takeover, at distressed prices, by other firms active in the satellite business.

    Trump Entertainment Resorts Holdings. (TRMP; about 9,500 employees; stock down 94%). The casino company made famous by The Donald has received several extensions on interest payments, while it tries to sell at least one of its Atlantic City properties and pay down a stack of debt. But with casino buyers scarce, competition circling, and gamblers nursing their losses from the recession, Trump Entertainment may face long odds of skirting bankruptcy.

    BearingPoint. (BGPT; about 16,000 employees; stock down 21%). This Virginia-based consulting firm, spun out of KPMG in 2001, is struggling to solve its own operating problems. The firm has consistently lost money, revenue has been falling, and management stopped issuing earnings guidance in 2008. Stable government contracts generate about 30 percent of the firm’s business, but the firm may sell other divisions to help pay off debt. With a key interest payment due in April, management needs to hustle – or devise its own exit strategy.

    – With Carol Hook, Danielle Burton and Stephanie Salmon

  • Greater Israel

    Greater Israel

    By Wayne Madsen
    Online Journal Contributing Writer

    Jan 30, 2009, 00:20

    WMR) — Israeli expansionists, their intentions to take full control of the West Bank and the Gaza Strip and permanently keep the Golan Heights of Syria and expand into southern Lebanon already well known, also have their eyes on parts of Iraq considered part of a biblical “Greater Israel.”

    Israel reportedly has plans to relocate thousands of Kurdish Jews from Israel, including expatriates from Kurdish Iran, to the Iraqi cities of Mosul and Nineveh under the guise of religious pilgrimages to ancient Jewish religious shrines. According to Kurdish sources, the Israelis are secretly working with the Kurdistan Regional Government (KRG) to carry out the integration of Kurdish and other Jews into areas of Iraq under control of the KRG.

    Kurdish, Iraqi Sunni Muslims, and Turkmen have noted that Kurdish Israelis began to buy land in Iraqi Kurdistan, after the U.S. invasion in 2003, that is considered historical Jewish “property.”

    The Israelis are particularly interested in the shrine of the Jewish prophet Nahum in al Qush, the prophet Jonah in Mosul, and the tomb of the prophet Daniel in Kirkuk. Israelis are also trying to claim Jewish “properties” outside of the Kurdish region, including the shrine of Ezekiel in the village of al-Kifl in Babel Province near Najaf and the tomb of Ezra in al-Uzayr in Misan Province, near Basra, both in southern Iraq’s Shi’a-dominated territory. Israeli expansionists consider these shrines and tombs as much a part of “Greater Israel” as Jerusalem and the West Bank, which they call “Judea and Samaria.”

    Kurdish and Iraqi sources report that Israel’s Mossad is working hand-in-hand with Israeli companies and “tourists” to stake a claim to the Jewish “properties” of Israel in Iraq. The Mossad has already been heavily involved in training the Kurdish Pesha Merga military forces.

    Reportedly assisting the Israelis are foreign mercenaries paid for by U.S. Christian evangelical circles that support the concept of “Christian Zionism.”

    Iraqi nationalists charge that the Israeli expansion into Iraq is supported by both major Kurdish factions, including the Patriotic Union of Kurdistan headed by Iraq’s nominal President Jalal Talabani. Talabani’s son, Qubad Talabani, serves as the KRG’s representative in Washington, where he lives with his wife Sherri Kraham, who is Jewish.

    Also supporting the Israeli land acquisition activities is the Kurdistan Democratic Party, headed by Massoud Barzani, the president of the KRG. One of Barzani’s five sons, Binjirfan Barzani, is reportedly heavily involved with the Israelis.

    The Israelis and their Christian Zionist supporters enter Iraq not through Baghdad but through Turkey. In order to depopulate residents of lands the Israelis claim, Mossad operatives and Christian Zionist mercenaries are staging terrorist attacks against Chaldean Christians, particularly in Nineveh, Irbil, al-Hamdaniya, Bartalah, Talasqaf, Batnayah, Bashiqah, Elkosheven, Uqrah, and Mosul.

    These attacks by the Israelis and their allies are usually reported as being the responsibility of “Al Qaeda” and other Islamic “jihadists.”

    The ultimate aim of the Israelis is to depopulate the Christian population in and around Mosul and claim the land as biblical Jewish land that is part of “Greater Israel.” The Israeli/Christian Zionist operation is a replay of the depopulation of the Palestinians in the British mandate of Palestine after World War II.

    In June 2003, a delegation of Israelis visited Mosul and said that it was Israel’s intentions, with the assistance of Barzani, to establish Israeli control of the shrine of Jonah in Mosul and the shrine of Nahum in the Mosul plains. The Israelis said Israeli and Iranian Jewish pilgrims would travel via Turkey to the area of Mosul and take over lands where Iraqi Christians lived.

    Previously published in the Wayne Madsen Report.

    Copyright © 2008 WayneMadenReport.com

    Wayne Madsen is a Washington, DC-based investigative journalist and nationally-distributed columnist. He is the editor and publisher of the Wayne Madsen Report (subscription required).

    Copyright © 1998-2007 Online Journal

    Source:  Online Journal, Jan 30, 2009

  • Temper tantrums

    Temper tantrums

    Temper tantrums

    Feb 5th 2009 | ANKARA
    From The Economist print edition

    A dramatic Davos walkout raises new questions about Recep Tayyip Erdogan

    WAS it premeditated? Or did Turkey’s prime minister, Recep Tayyip Erdogan, lose control? Mr Erdogan’s walkout from a debate with Israel’s president, Shimon Peres, in Davos has made him the most talked about Turkish leader since Kemal Ataturk. His audience of financiers and policy wonks was stunned. But Muslims worldwide cheered as Mr Erdogan scolded Mr Peres over Israel’s war in Gaza. “When it comes to killing, you know very well how to kill. I know well how you hit and kill children on beaches,” thundered a crimson-faced Mr Erdogan.

    The incident has led to new debate over Turkey’s strategic alliance with Israel, whether an increasingly erratic Mr Erdogan is fit to lead Turkey at all and, if so, in what direction: east or west? There is no question of Turkey walking away from NATO or the European Union, or scrapping military ties with Israel and America. Mr Erdogan’s critics say his outburst was a ploy to please voters. If so, it worked: his approval ratings have shot up. Polls suggest that 80% of Turks support Mr Erdogan’s actions. His mildly Islamist Justice and Development party will reap dividends in municipal elections on March 29th.

    Mr Erdogan’s defiance has also helped to assuage his people’s long-running feelings of humiliation and inferiority, which date back as far as the Ottoman defeat in the first world war. Many insist that Mr Erdogan’s reaction was spontaneous and utterly sincere. Turkey has assumed “moral leadership” based on Western values, opined Cengiz Candar, a liberal commentator. Mindful of the public mood, Turkey’s secular opposition leader, Deniz Baykal, grudgingly declared that his rival had done the right thing.

    Not everybody agrees, however. Mr Erdogan’s behaviour makes it less likely that Turkey can successfully mediate between Israel and Syria. His call to Barack Obama to “redefine” what terrorist means has been seen as an appeal to remove the label from Hamas. Although European and American reaction has been muted, in private officials are unhappy. “What [the Davos spat] does leave in Europe is the feeling that Mr Erdogan is unpredictable,” says a European diplomat. Mr Obama is highly unlikely now to pay Turkey an early visit.

    Mr Erdogan’s temper tantrums are not new. But they used to be reserved for his critics at home. The Davos affair, says another foreign diplomat, is further evidence of “Mr Erdogan’s conviction that the West needs Turkey more than Turkey needs it.” It is of a piece with Mr Erdogan’s threat to back out of the much-touted Nabucco pipeline to carry gas from the Caspian Sea to Europe via Turkey. In Brussels recently Mr Erdogan said that, if there were no progress on the energy chapter of Turkey’s EU accession talks then “we would of course review our position”. Meanwhile, Turkey sided with Saudi Arabia and the Vatican in opposing a UN statement suggested by the EU to call for the global decriminalisation of homosexuality.

    Mr Erdogan’s supporters argue that EU foot-dragging on Turkey’s membership bid explains why Turkey is now seeking new friends in the Middle East and beyond. Its growing regional clout is another reason why the EU should embrace Turkey. But the reverse is also true. It is because it is the sole Muslim country that is at once secular, democratic and allied with the West that Turkey commands such respect in the rest of the world. Growing numbers of Arab investors have flocked to Turkey, “because we see it as part of Europe, not the Middle East,” says an Arab banker in Istanbul.

    To retain its allure, Turkey will need to swallow its pride and make further concessions on Cyprus. The EU may suspend membership talks altogether unless Turkey meets a December 2009 deadline to open its ports to Greek-Cypriots. The hope is that Egemen Bagis, who was chosen as Turkey’s official EU negotiator in January, will remind Mr Erdogan that, at least in these talks, it is Turkey that is the supplicant not the other way round.

    Source:  Economist, Feb 5th 2009

  • Would ‘Washington Post’ writer David Ignatius put his arm on President Obama during a debate?

    Would ‘Washington Post’ writer David Ignatius put his arm on President Obama during a debate?

    Phil Weiss

    […]

    And yes, while Ignatius has been forward-thinking/realist since, he can be justly scored, I think, for putting his hand on the Turkish Prime Minister to stop the debate so everyone could go to dinner the other night at Davos. It’s easy to say this in retrospect, but there was no sense on Ignatius’s part of the Moment. Ignatius should have extended the time to let both men finish their points, Peres and Erdogan. Let the stomachs grumble. As it is, he appeared to dis the P.M.–and as we see, appearance is everything in these matters–and failed to recognize that when you give a stage to a man defending the slaughter of 450 children, the placement of the salad fork should not be the highest concern, a structural problem with the Establishment, in my humble opinion.

    […]

    …and I'm to blame?

    Source: www.philipweiss.org

  • MPs join Gaza protest against BBC

    MPs join Gaza protest against BBC

    By Mark Hookham
    Political Editor

    Fabian Hamilton, MP

    THREE Leeds MPs have added their voices to the mounting criticism of the BBC for its refusal to televise an appeal for victims of the humanitarian disaster in Gaza.

    John Battle (Leeds West, Lab), Fabian Hamilton (Leeds North East, Lab) and Greg Mulholland (Leeds North West, Lib Dem) have joined more than 100 other MPs in signing a parliamentary motion urging the corporation to reverse its decision.

    The Disasters Emergency Committee’s two-minute Gaza Crisis Appeal was screened on Monday by ITV, Channel 4 and Five.

    However, BBC bosses have insisted that airing the film would threaten its impartiality and that the corporation should not give the impression it was “backing one side” over the other.

    Protests

    The decision has sparked more than 15,500 complaints and protests at BBC Broadcasting House.

    Mr Battle, a former junior minister, has also raised the issue with ministers at a Commons international development select committee.

    Relatives of his sister’s husband live in Gaza and have given him first hand reports of the intense suffering caused by the bombing.

    Fabian Hamilton, a member of Labour Friends of Israel, said: “To a child who has lost his parents and whose house is a pile of rubble it doesn’t matter whether it was Israelis or an earthquake. That child needs aid and our help. We have a duty to relieve that suffering.”

    Greg Mulholland said he thought the BBC’s reasoning was “utterly flawed.”

    A RALLY is to be staged outside the BBC’s regional HQ in Leeds to protest at the corporation’s refusal to broadcast a charity appeal for funds to help the people of Gaza.

    The rally takes place this evening from 5pm to 7pm outside BBC Broadcasting Centre in St Peter’s Square, near Leeds bus station.

    The BBC has refused to broadcast the appeal by the Disasters Emergency Committee which includes charities such as Christian Aid and Oxfam.

    It says to do so might lead to accusations of “bias.”

    Source: Yorkshire Evening Post, 28 January 2009