Russia on Iran/S-300 Missile Deal

In 2008, Russia denied a deal to sell S-300 missiles to Iran, a rogue state sanctioned by the U.N. Security Council for refusing to suspend uranium enrichment. A Russian arms-export monopoly denied knowledge of such a sale. Although a Russian foreign ministry spokesman said there was no S-300 missile sale and referred to Iran as “unstable” in 2008, Russia has refused to join us in calling for tougher sanctions against Iran and said, presumably with a straight face, that there’s no “military element” to Iran’s uranium enrichment.

Fast forward to 2010, and Russia has since come clean and confessed to the S-300 deal with the “unstable” Iran. Earlier this month, Iran accused Russia of stalling on delivering the weapons. According to Reuters, Russia’s Security Council denied this accusation.

Security Council deputy secretary Vladimir Nazarov said, “There is a signed contract…which we must implement, but deliveries have not started yet. This deal is not restricted by any international sanctions, because the talk is about deliveries of an exclusively defensive weapon.”

Is it possible Russia has no intention of delivering the weapons, and the arms sale agreement is Russia’s leverage against the U.S.?

The deputy secretary warned the U.S. and Israel not to preemptively strike Iran, “a neighbor of Iran.” Is Russia concerned about stopping Iran’s nuclear program or helping Iran maintain the program for its own interests? Russia is selling so-called defensive weapons to an unstable country that has Israel in its sights, and refuses to agree on stronger sanctions. After denying the deal to sell S-300s, Russia has gone on record and admitted the deal.

From where we’re sitting, Russia seems more interested in aiding Iran than containing Iran.

Eurozone Troubles May Impact Travelers For Years

The immediate problem: the entire country of Greece is about to go bankrupt. They've got overly generous pensions and benefits, they've displayed a seemingly petulant unwillingness to consider belt-tightening, and their government sector is veritably Italian in its efficiency and size. This is not the stuff that long-term economic health is made of.

The bigger problem: Greece is part of the Eurozone and, while its long been kind of funny to refer to them as the "honorary member," the other 15 countries who share the Euro aren't amused. The bankruptcy of any individual state would tank the shared currency, cascading across the continent in ways that are totally unpredictable (the upshot of a disaster which was never even a consideration when the Eurozone was formed). If it did happen, most of what we've thought about travel for the last decade—dollar vs. Euro, the long-term stability of the EU, frictionless travel across Europe, etc—would quickly have to be revised.

The alternative is for the rest of the Eurozone countries to bail out Athens, allowing them to service their sovereign debt and avoid default. But the bigger European countries - Germany in particular - don't see why they should have to suffer just because the Greek language doesn't have a translation for "fiscal responsibility." Some Germans are even calling for Greece to be kicked out the Eurozone altogether.

Is it going to happen? Tough to say. The Eurozone is a political as well as economic pact, and the symbolism of a Eurozone drift is something that political leaders want to avoid. That said, it's also an economic pact, requiring a certain level of discipline from each member, and the Greeks have not exactly been holding up their end of the bargain.

But back on the political point. The Eurozone isn't something you lightly abandon. There's a treaty and stuff. Throwing Greece under the bus would make people feel less than sanguine about Europe's future stability. Individual European nations are definitely suffering. But the whole point of having a single European entity is that European citizens weren't supposed to think in those terms any more. Plus kicking Greece out will take time, with the Euro bleeding every day they're still in the market. So yeah, there's going to be a bail out one way or another.

Regardless, this fracas is another reminder that we're just at the beginning of debt-driven global economic turmoil. There are trillions of dollars of bad debt hidden in various countries, threatening to very quickly disrupt and very jarringly change everything. The economic collapse or political breakup of the Eurozone is one possibility. A Chinese economic decline, with all that it portends for Asia and the US, is another. We're still climbing out of the hole here in the United States, and no one knows how long that's going to take.

All of which is a roundabout way of saying: traveling is going to change over the next half-decade in ways no one can predict, and in the meantime we'd advise against gambling on currency unless you're very, very brave.

Weekend Book Review: In Fed We Trust

It is only fitting that I am writing this book review on a Sunday. In Fed We Trust: Ben Bernanke’s War on the Great Panic starts off by telling about the importance of a few Sundays in 2008. In March, there was the Sunday when the Federal Reserve announced an unprecedented action to lend $30 billion to JPMorgan Chase to buy Bear Stearns. There was the Sunday in August when the Federal Reserve and the Treasury Department decided to seize Fannie Mae and Freddie Mac. Of course, there was the Sunday in September when they allowed Lehman Brothers to fail. There was the Sunday when Bank of America agreed to take over Merrill Lynch.

David Wessel tells a story about Ben Bernanke’s rule of the Federal Reserve deciding to do “whatever it takes” to protect the U.S. economy from the incredible economic threat of those Sundays. The story takes us through what it missed, what it did, what it didn’t do, what it got right and what it got wrong during the “Great Panic.”

During Alan Greenspan’s term as chairman of the Federal Reserve we mostly watched as he and the Board decided whether to raise interest rates or not. Most of the country thought that was the extent of what the Federal Reserve did. During Bernanke’s term we saw the incredible power of the Federal Reserve to create vast sums of money out of thin air.

One of the key takeaways from the book is that is very difficult “to get the politics, the policy and market reaction all right at the any one point in time.” That was a quote from former Secretary of the Treasury Henry Paulson shortly after leaving office.

The book is sometimes short on its depiction of events. The one that stuck out the most was the short description of the Merrill Lynch discussion by Bank of America’s Ken Lewis and Joe Price. The New York Attorney General tells a more interesting tale in his indictment of the Bank of America executives.

But of the book provides terrific insight into the events of the Great Panic. (That’s the term the Wessel uses.) During the full-court press of forcing the largest banks to take TARP money, it’s Merrill Lunch’s Thain that asks how taking the TARP money would affect government controls on executive compensation. As we later find out, Thain became one of the poster boys for the banks’ failures with executive compensation.

In the end, as we all know, mistakes were made. The Federal Reserve did not always get the politics, policy and market reaction right.

But what if Bernanke had not been a student of the Great Depression? What if he had not taken bold steps? I think the economy and the country would be much worse off.

Why Is Amare Stoundemire Preventing Himself From Being Dealt To Cleveland?

After speculation over the past two weeks that the Cleveland Cavaliers have shown major interest in Amare Stoudemire, could the biggest road-block be Stoudemire, himself?

It’s looking that way.

The original plan coming from Cleveland (rumored, anyways), is that adding either Stoudemire or Washington’s Antawn Jamison would give them another athletic body inside to help the aging Shaquille O’Neal make it through the playoffs.

The Cavaliers were widely rumored to be hot on Jamison, then talks of interest in Indiana’s Troy Murphy arose, and now the latest piece of gossip is a deal that would bring Stoudemire to Cleveland, and send Zydrunas Ilgauskas, J.J. Hickson, and and another player (likely Wally Szscerbiak) to Phoenix.

However, Stoudemire has apparently put the nix on such a trade (for now, at least), and for two very good reasons.

1. Success With Shaq

Stoudemire discovered first-hand what it’s like to play with Shaq as a teammate, and unless you’re a star shooting guard, it doesn’t do much for your stats or your fame.

Playing with Shaq and sharing the inside, as well as the stage with O’Neal and James, isn’t something that appeals to Stoudemire, even if doing so brings the real possibility at an NBA Championship. That, and there’s the slight chance that Stoudemire feels his own team could win it this year (although unlikely).

2. His Contract

Stoudemire is looking for something along the lines of a three-year, $60 million-dollar extension, and by allowing himself to go to Cleveland, he knows that’s not likely to happen for him, at least not right away.

And because of the uncertainty of his contract status, Stoudemire has more than enough reason to say no to it.

Playing with Shaq inside would kill his numbers and probably lessen his minutes, and even if it didn’t, he still has to share the stage and ball with LeBron James.

Stoudemire wants the money, and he wants to win, but he also wants to be “the guy”
for the team he’s playing for.

It’s far from being worked out, and with less than three full days remaining, the Cavaliers may have to cut their losses and aim for either Jamison or Murphy, after all.
Posted By Kevin Roberts

Clinton says Iranian military supplanting government

The Washington Times reports that US Secretary of State Hillary Rodham Clinton said Monday that Iran is becoming a military dictatorship, a new US accusation in the midst of rising tensions with Iran over its nuclear ambitions and crackdown on anti-government protesters. Speaking to Arab students at Carnegie Mellon University's Doha campus, Mrs. Clinton said Iran's Revolutionary Guard Corps appears to have gained so much power that it effectively is supplanting the government.

Spokesman: Unruly passenger took a swing at Romney

BOSTON — A spokesman for Mitt Romney says the former Republican presidential candidate was threatened by an unruly airline passenger on a flight out of Vancouver.

Spokesman Eric Fehrnstrom (FERN'-strum) says Romney and his wife were on an Air Canada flight to Los Angeles on Monday when Romney asked the passenger sitting in front of his wife, Ann, to raise his seat back before take off.

Fehrnstrom says the passenger then became enraged and took a swing at Romney. He says the former Massachusetts governor did not retaliate, but let the airline crew respond.

The plane returned to the gate, the passenger was removed and the flight took off a short time later.

The Romneys had been in British Columbia since Friday to watch the opening of the Olympic Winter Games.

Kerry: Taliban arrest due to US-Pakistan effort

WASHINGTON — Sen. John Kerry says the capture of the Taliban's top military commander is proof of a "stronger cooperative effort" between the United States and Pakistan.

The chairman of the Senate Foreign Relations Committee says the arrest of Mullah Abdul Ghani Baradar is a signal that Pakistan will pursue militants "who engage in violent extremist acts" against its people.

Baradar was arrested 10 days ago in a joint CIA-Pakistani operation in Pakistan, according to Pakistani and U.S. officials who spoke on condition of anonymity because they were not authorized to release such sensitive information.

Kerry, a Massachusetts Democrat, is in Islamabad for a meeting with Pakistani President Asif Ali Zardari. He told CBS' "The Early Show" on Tuesday that Pakistan's government now knows that "this fight is their fight."