Friday, December 19, 2008

Dec 19/08 | What Goes Up Must Come Down: Oil Betrays Those it Empowered

Crude Oil Prices: Not quite a perfect Christmas tree

PMBComment: Oil has gone back to it's old boring pattern. Oil now trades, as it used to do, based on fundamental supply-demand drivers. Yesterday OPEC cut 2.2 million barrels of production and the market reached a 4-year low. Since there is no visible floor for demand in the mist of a global meltdown, there is little that can be done to arrest a price dive to the $30-$35 level, or below. The run from $50 to $147, which actually defied production increases, was supercharged by Hedge Funds with ample cash and easy access to credit. The ease of leverage in the oil futures markets acted as propellant to a wicked boom that made Petrostates feel all too powerful and act all too cocky. They essentially believed that oil at $200 was their right and something they were destined for even at the expense of the economies of their consuming clients. The stupidity and shortsightedness of this type of thinking matches nicely with the regulatory lapses of the capitalist world some of them claim to despise. While trumpeting the demise of the West, Iran, Venezuela, and, to some extent, Russia, are fast digging their own deep and frigid graves. No countries will be more hurt by their failure to understand the contradiction of their circumstances than these three increasingly inscrutable oil-dependent autocracies. 

It is safe to say that financial speculators (those who are still among us) are now out of the oil market and it will be physical barrel players - real oil companies, traditional commodity traders and refiners - who will call the shots with little room, or leverage, to over speculate. Trying to ascertain a floor for oil prices will be impossible in the coming months and the best OPEC can hope for is to buttress current "low" prices through some degree of - hard to achieve - collective discipline. In the medium term, and barring any terror bred disruption, prices above $50 are nonsensical. Solving massive fiscal shortfalls by wishing a return to lofty prices is not only wishful thinking but also irresponsible.

Now the key question is: What will nefarious and on-the-brink oil states like Venezuela and Iran do to reverse their awful predicament? There is no easy answer to this obvious quandary as dictators and charlatans are prone to error when hurting or cornered. But rest assured that far-fetched schemes must be cluttering their desks. 

In the case of Venezuela, it is going to be interesting to see how a "revolution" fueled and sustained solely by increasing oil revenue deals with this new disastrous reality. Hugo Chavez is once again trying to distract attention with yet another referendum that is proof of his undemocratic self ("Why should a good President ever have to leave office" he asks). Even if he were to "pull off" a triumph in his effort to change "just 11 words" in the Constitution, he will still have to manage to stay in power until the 2012 election to opt for another 6 year term. Having the right to another re-election does not in itself ensure it, unless the opposition is unable to present a soon-to-be-destitute nation with a clear picture of the culprit or a better option to him and his band of incompetent ruffians.

By not cutting his losses in time, Hugo Chavez will have no one to blame for the impending implosion of both a political "model" and hoodwinked nation. After 10 year in power he cannot unload on the past anymore - he is now effectively "the past" - and with Bush out of power, he can no longer shadow box with an unpopular US President who all but ignored him for years. So what will Hugo do in the days to come? Facing the prospect of ending like Noriega, Milosevic or Ceausescu - none a pretty ending - he is bound to make a number of very big mistakes, and then, a final fatal one. My bet is that he is at his most dangerous right now. Chavez might have been a tolerable fellow to some on the upswing, but he will be detestable for most in the fast occurring bust. 

The biggest risk for the future of Venezuela, and beyond, is that Hugo's foreign "friends", and his local accomplices, conclude that Chavez-the-revolutionary-martyr is a much better legacy than Chavez-the-exposed-incompetent-despot. If that calculation leads them to dispose of him before he is revealed as the coupster who wore no clothes - as the fraud he has always been, then we will all have to put up with Saint Hugo, the XXI century martyr of "the excluded". It is incumbent upon all that Lt. Colonel Chavez, and his self-proclaimed revolution, undergo the severe dressing down they sorely deserve. This man, and his corrupt revolution, should enter history in its darkest pages, those purposefully reserved for the wicked, the corrupt and the insolent. PMB  


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Saturday, December 13, 2008

Dec 13/08 | Bush and the Bloggers: To be continued?

PMBComment: Interesting and fair article by Jackson Diehl who has been a meticulous follower of abuse around the world and a consistent supporter of those who risk much to challenge the crazed and the mighty. In the case of Venezuela, Diehl has always been open to listen to all sides and with that perspective has always erred on the side of individuals and basic liberties, and has never once been swayed by the words of the Bolivarian charlatans that have ruined a country that was needing repair. In this article Diehl describes a fascinating session he attended with his colleague Fred Hiatt. The host George W. Bush. One Venezuelan blogger, my respected friend Miguel Octavio, was invited to this session with the lame duck president. His take on the same meeting can be read in his very smart blog The Devil's Excrement

President Bush could have done a great deal more to support freedom fighters around the world, but in comparison to the Lulas, Mbekis, Bachelets, Zapateros, Foxes, Calderones, Insulzas and Uribes of the world, he did an amazing amount and that should not only be credited but also continued. PMB

The Washington Post

The Door That Bush Kept Open 

By Jackson Diehl
Friday, December 12, 2008; A27

By now it's commonplace for pundits like me to point out that President Bush has come nowhere close to fulfilling the promise of his second inaugural address, which was that he would commit his government to the spread of freedom and the defense of democratic dissidents around the world. The State Department long ago squelched the president's initial attempts to act on those soaring words in places such as Egypt and Azerbaijan; even worse, many Democrats have reacted to Bush's fecklessness by concluding that the incoming Obama administration should preemptively swear off any attempt to pressure the autocrats of the Islamic world, or powers such as Russia and China, for democratic change.

There is, however, one important way in which the president has been faithful to his cause -- and one practice he has pioneered that ought to outlast him. Throughout the past several years, Bush has gone out of his way to meet personally with advocates for democratic change around the world -- especially those under pressure from their governments. He has invited them to the White House and has looked for them in their own countries. Last year, in Prague, he even attended a conference of dissidents from all over the world. While many of those who have gotten his attention come from countries with regimes that are hostile to the United States, such as Belarus and Burma, Bush hasn't shrunk from meeting people from nominally friendly countries, for example, Egypt and China, even at the cost of infuriating their governments.

On Wednesday, in honor of the 60th Human Rights Day, Bush did it one more time, inviting dissident bloggers from China, Burma, Iran, Cuba, Belarus, Egypt and Venezuela to the White House's Roosevelt Room (the last two attended via videoconference). For an hour, the president listened as the bloggers described how they attempt to circumvent state censorship to disseminate news and organize pressure for change on the Internet. His purpose, he said, was "to honor, herald and highlight the brave souls who are on the front lines -- and that's you."

Xiao Qiang, author of the China blog Rock-n-Go (http://rockngo.org), responded by describing the courageous stand taken this week by 300 Chinese intellectuals who signed a manifesto in favor of democratic freedoms and human rights called "Charter 08" -- a document that Chinese bloggers are doing their best to circulate. He pointed out that despite official controls on the Internet, there are now more Chinese bloggers than American bloggers.

Arash Sigarchi, an Iranian who was imprisoned and then exiled for his work and now operates from Northern Virginia (http://sigarchi.net/blog/), said he had asked three dozen bloggers inside Iran what message should be delivered to the U.S. president. The nearly unanimous answer: Please prevent U.S. and Chinese companies from selling Internet-filtering software to our government. ("What are the companies' names?" Bush demanded. "We'll find out their names.")

Mahmoud Saber of Egypt reminded Bush of the seven Egyptian bloggers who have been arrested and jailed by the government of Hosni Mubarak; he said the hope of Egypt's "Facebook generation" is that the next U.S. president "not support autocratic rulers in the Middle East."

Bush's personal attention hasn't always helped the dissidents. As Saber reminded the president this week, Saad Eddin Ibrahim of Egypt has been unable to return to his home in Cairo ever since he shook Bush's hand at that Prague meeting; if he does, a regime-concocted jail sentence awaits. Ayman Nour, who was sprung from a Cairo prison in 2005 by Bush's pressure and then ran for president against Mubarak, has been back in jail for three years -- a symbol of one vindictive autocrat's victory over the "freedom agenda."

For the most part, however, the attention of the American president is precious to dissidents. It gains them enormous attention in their own countries and injects their liberal ideas into arenas from which they are usually excluded. Though some may be thrown in jail on their return from the White House, they also gain a de facto immunity from torture or assassination -- otherwise a high risk in countries such as Belarus and Burma.

Bush, a practitioner of policy-by-personal-connection both for good and for ill, would clearly like to see the next president similarly commit himself. That's probably why he invited me and my colleague Fred Hiatt to Wednesday's meeting: After directing a jibe at us for our criticism of his freedom agenda failures, he said he hoped his successor would come under no less pressure to support democratic dissidents. He's right: On this at least, Barack Obama should follow Bush's example.


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