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Wall Street Weekly | 09/26/2009 12:00 am

Summing the Summits: More Splendid Speeches, by Liz Peek

Bears, Bulls, Chickens and Pigs: wOw’s Wall Street Weekly with Liz Peek (Week of 9/21) 

Editor’s Note: Liz Peek is a financial columnist and the author of wOw’s SHEconomics.

Is Libya’s Muammar Gaddafi looking more and more like Clarabell or is it just my imagination? And seriously, after 40 years at Libya’s helm, shouldn’t he have risen above the rank of Colonel?

The fact that these thoughts are uppermost after reviewing the goings-on at the United Nations this week says it all. Though President Obama appears to have wrested from President Medvedev a vague commitment to consider toughening sanctions on Iran (presumably in exchange for torching our proposed missile defense system) and extracted from China possible support for a nuclear weapons ban, not much of substance emerged from the weeklong gridlock imposed on midtown Manhattan. Now the party moves to Pittsburgh, where the G-20 has first turned its attentions to not-so-shocking claims that Iran has been illegally enriching uranium. Beyond setting a deadline for Iran to come clean about its activities, the G-20 leaders will push to rebalance the engines of growth, insisting that the U.S. consumer cannot support the advances of the rest of the globe.

This is diplomatic code for the U.S. reining in our spendthrift consumers and China doing all it can to stimulate domestic spending. That the Chinese have even participated in such conversations is considered astonishing by some, given the nation’s history of going it alone. Before rushing to embrace Beijing’s newfound clubbiness, we should consider that nearly everything China does is in its self-interest. Starting with the extraordinary success of last year’s Olympics, and bolstered by its impressive economic performance during the financial crisis, China’s confidence is in full bloom. They are ready to climb the global podium.

One symptom of China’s emerging self-importance is that tweaking the West has become a national pastime. As the country approaches its 60th anniversary on October 1, the Communist Party has continued its tradition of honoring "model workers." While in the past these individuals have typically been oilfield workers or latrine cleaners, the Financial Times reports that this year the country is praising bankers – of all people – sending them out to tour the country and extolling their efforts to "maintain growth, protect people’s livelihoods (and) maintain stability." What more mischievous way to contrast China’s continued growth with the West’s banking meltdown?

More importantly, next week the country will put on a military review that will draw global attention to the massive 20-year investment China has made in its weapons stash and in its armed forces. Among other new toys on display will be an upgraded intercontinental nuclear missile capable of reaching Washington. After decades of hosting a military long on bodies and short on guns, the Chinese now boast a 21st-century army of 2.3 million.

Competition with China that originally emanated from corporate boardrooms is, in other words, spreading. Because China holds over $800 billion in U.S. government debt, a figure that continues to grow, the country expects and indeed has a seat at our financial table. What does it mean for Americans?

Our indebtedness to China means that we are not in a position to bully Beijing to revalue the yuan, though early on the Obama administration talked tough on this issue, which in turn limits our ability to export to China and to other countries. It also means that Americans will not be alone in pressing the administration to rein in government deficits. The Chinese will have to balance its continuing need for export demand with its concern over depreciating dollar-based assets. The bottom line is that our complicated symbiotic relationship with the Chinese is yet another factor arguing for slower growth in the U.S. going forward.

276 Reader Comments (so far…) Sign In or Register to comment

Maggie W

Whew! I feel dizzy.  This article is all over the map.  Is Liz trying for a solid foot hold somewhere?  There is Gaddafi, Iran, G-20, China, health care, the stock market, Cash for Clunkers… a grab bag of random "this and that". 

I’ll go with Iran.  The current administration is right to put the squeeze on Iran for many reasons.  There is much continued unrest in Iran, and there doesn’t seem to be much that government can do except arrest half the country.  Dmitry Medvedev stepped up by agreeing to sanctions.  If Iran has to face even more sanctions, more internal unrest will surely follow. It doesn’t take much to get the protesters in the streets . This is not what Iran wants the world to see.  Of course, China will not cooperate with sanctions.  Beijing is heavily reliant on Iranian oil imports.

UN sanctions at present prohibit export of nuclear material and technology.  It also allows the inspection of cargo suspected of carrying prohibited goods.  The US, Britain, France, and now Russia support intensification with new sanctions unless Iran can cease uranium enrichment or show good cause for such.  So far, I’maDinnerJacket has no comment.  That will change Oct 1.

As for China’s 2.3 million man army, I wonder if China is finally doing a better job of feeding and clothing them. A hungry army is not very efficient, especially one that is 20 years behind the US in military technology.

By Maggie W on 09/25/2009 12:52 pm
Mel Berg
I’m with you Maggie, a virtual potpourri of information to digest. I agree with what you have posted, and just want to add, Gaddafi looking like Clarabel, is Liz Peek now competing with John Stewart?
By Mel Berg on 09/25/2009 1:04 pm
F P
Clarabell?  roflmao —nice one Mel.
By F P on 09/25/2009 1:44 pm
Liz Peek
Ha! Maggie- you are very discerning. The truth is, I have read so much about Obama’s speeches at the UN meetings and the G-20 that my head is spinning. There are so many things going on it’s tough to focus. That is, there are the normal fluctuating events triggering ups and downs in the markets. There are the numerous initiatives that the administration is promoting domestically and on top of that there are all these international efforts, some of which collide with our own efforts to overhaul financial regulations etc. I apologize for wandering - and will attempt to distill everything more intelligently next week. The good news for me is that you’re paying attention! Best - Liz  PS- Chinese aren’t as far behind militarily as you might think. According to numerous sources they have been spending way more over the past ten years than reported- they are now, for instance, manufacturing their own fighter jets. It is interesteing to me that they want to show off their hardware.
By Liz Peek on 09/25/2009 2:37 pm
Tara Jane Davis
Liz Peek - Another very interesting article. I am at a loss for words as to the President’s speech. I believe that something is obviously wrong when President Obama is scolding our allies like Israel while the vicious dictators like Moammar Gadhafi are singing the praises of Obama. And, he does look like a clown. Something is absurdly wrong when the President states the single greatest threat to the world is not terrorism or profileration of nuclear arms, but global warming. And something is horribly wrong when all the President’s initiatives, to date, have caused many in this country to have fear, doubt, insecurity, hopelessness and despair about the future of this country, but he has brought peace and happiness to our enemies. Keep up the good articles. Such good food for thought, and I don’t care how much you wander. Just promise you will always find your way here on Fridays.
By Tara Jane Davis on 09/25/2009 3:02 pm
Liz Peek
Thank you so much Tara Jane- I agree with you 100%. I think I’m trying not to go overboard and be critical of everything the president does, because we so need him to be successful- there is so much at stake right now. But I agree with your critique totally. Hope to hear from you again- Best - Lzi
By Liz Peek on 09/25/2009 3:05 pm
phyllis Doyle Pepe
So what you are saying,Liz,   is that global warming or more explicitly, the environmental crisis is not crucial to our planet and not as  as important as other issues facing all countries. Is that your message? Since you agree totally with Tara Jane’s post?
By phyllis Doyle Pepe on 09/25/2009 4:14 pm
Lauren Sinclair

I certainly hope that is what she means. Global warming is a manufactured crisis designed to make a few enormously wealthy. This planet is going through a natural cycle and there isn’t anything that we can do about it.

But that won’t stop a few from scamming the rest into giving their money, their power and their freedoms up for the "cause".

Just why don’t you figure that those other countries aren’t in a big hurry? They know better and they aren’t going to do a thing until they can share in the wealth. So, they will just wait until Obama railroads the most powerful Nation on earth into a global governance.

Then they will play.

Hint: there is no global warming crisis

By Lauren Sinclair on 09/25/2009 10:54 pm
Mary Quite-Contrary

Lauren Sinclair, thank you for the excellent post!!!

Global (or glow bull) warming is junk science.  We are now (proven by temperature records) in a naturally occuring cycle of global cooling…due to the inactivity of the sun.  NO sunspots are currently present; and that is reflected in the cylclical down turn in earth’s temperatures.  High sun spot activity increases the earth’s temp.  This simple pattern has been noted for over 160 years…but…

 It can’t be ‘controlled’ or politicized; taxed; or changed.  It is what it is…but there is, of course, no research grant money, or seed money for ‘green shoot’ start ups, or ‘we know best’ factor.   The global warming junk science alarmists will go down in history as the modern ‘flat earthers.’

By Mary Quite-Contrary on 09/25/2009 11:49 pm
Maggie W

The Artic pack ice has diminished to the point that shipping companies are now opening up new routes through the dangerous and formidable seas north of Siberia.  Pacific Gas and Electric canceled its membership in the US Chamber of Commerce in protest over " the attempts to diminish or distort the reality of climate change".

This is not about apocalyptic warnings.  It is what is occurring now. It’s also about the tremendous economic factor in shipping,for starters, as witnessed with PGE.   

Hint: Those who live and thrive in denial may be hard to grasp the concept. 

By Maggie W on 09/26/2009 10:18 am
Leigh Hart

Maggie, If global warming was not a myth it would not have been necessary to change the terminology would it? Why would you need to call global warming "climate change" if warming was actually the issue? Pay attention to the last quote in the following. It is the reason for the global warming, climate change hype and verified by no other than the former Green Jobs czar.

Green Myths On Global Warming — Debunked

1  MYTH  Planet earth is currently undergoing global warming  FACT  Accurate and representative temperature measurements from satellites and balloons show that the planet has cooled significantly in the last two or three years, losing in only 18 months 15% of the claimed warming which took over 100 years to appear — that warming was only one degree fahrenheit (half of one degree Celsius) anyway, and part of this is a systematic error from groundstation readings which are inflated due to the ‘urban heat island effect’ i.e. local heat retention due to urban sprawl, not global warming…and it is these, ‘false high’ ground readings which are then programmed into the disreputable climate models, which live up to the GIGO acronym — garbage in, garbage out.
2  MYTH  Even slight temperature rises are disastrous, ice caps will melt, people will die  FACT  In the UK, every mild winter saves 20,000 cold-related deaths, and scaled up over northern Europe mild winters save hundreds of thousands of lives each year, also parts of ice caps are melting yet other parts are thickening but this isn’t reported as much (home experiment: put some water in a jug or bowl, add a layer of ice cubes and mark the level — wait until the ice has melted and look again, the level will have fallen). Data from ice core samples shows that in the past, temperatures have risen by ten times the current rise, and fallen again, in the space of a human lifetime.
3  MYTH  Carbon Dioxide levels in our atmosphere at the moment are unprecedented (high).  FACT  Atmospheric carbon dioxide levels, currently only 350 parts per million have been over 18 times higher in the past at a time when cars, factories and power stations did not exist — levels rise and fall without mankind’s help.
4  MYTH  Mankind is pumping out carbon dioxide at a prodigious rate.  FACT  96.5% of all carbon dioxide emissions are from natural sources, mankind is responsible for only 3.5%, with 0.6% coming from fuel to move vehicles, and about 1% from fuel to heat buildings. Yet vehicle fuel (petrol) is taxed at 300% while fuel to heat buildings is taxed at 5% even though buildings emit nearly twice as much carbon dioxide!
5  MYTH  Carbon dioxide changes in the atmosphere cause temperature changes on the earth.  FACT  A report in the journal ‘Science’ in January of this year showed using information from ice cores with high time resolution that since the last ice age, every time when the temperature and carbon dioxide levels have shifted, the carbon dioxide change happened AFTER the temperature change, so that man-made global warming theory has put effect before cause — this shows that reducing carbon dioxide emissions is a futile King Canute exercise! What’s more, both water vapour and methane are far more powerful greenhouse gases than carbon dioxide but they are ignored.
6  MYTH  Reducing car use will cut carbon dioxide levels and save the planet  FACT  The planet does not need saving, but taking this on anyway, removing every car from every road in every country overnight would NOT produce any change in the carbon dioxide level of the atmosphere, as can be seen using the numbers from Fact 4, and in any case it is pointless trying to alter climate by changing carbon dioxide levels as the cause and effect is the other way round — it is changes in the activity of the Sun that cause temperature changes on earth, with any temperature rise causing carbon dioxide to de-gas from the oceans.
7  MYTH  The recent wet weather and flooding was caused by mankind through ‘global warming’  FACT  Extreme weather correlates with the cycle of solar activity, not carbon dioxide emissions or political elections, the recent heavy rainfall in winter and spring is a perfect example of this — it occurred at solar maximum at a time when solar maxima are very intense — this pattern may well repeat every 11 years until about 2045.
8  MYTH  The climate change levy, petrol duty, CO2 car tax and workplace parking charges are justifiable environmental taxes.  FACT  As carbon dioxide emissions from cars and factories does not have any measurable impact on climate, these taxes are ‘just another tax’ on enterprise and mobility, and have no real green credentials.
9  MYTH  Scientists on the Inter-governmental Panel on Climate Change (IPCC) issue reports that say ‘global warming’ is real and that we must do something now.  FACT  Scientists draft reports for the IPCC, but the IPCC are bureaucrats appointed by governments, in fact many scientists who contribute to the reports disagree with the ’spin’ that the IPCC and media put on their findings.
The latest report suggests that the next 100 years might see a temperature change of 6 Celsius yet a Lead Author for the IPCC (Dr John Christy UAH/NASA) has pointed out that the scenarios with the fastest warming rates were added to the report at a late stage, at the request of a few governments — in other words the scientists were told what to do by politicians.
10  MYTH  There are only a tiny handful of maverick scientists who dispute that man-made global warming theory is true.  FACT  There are nearly 18,000 signatures from scientists worldwide on a petition called The Oregon Petition which says that there is no evidence for man-made global warming theory nor for any impact from mankind’s activities on climate.
Many scientists believe that the Kyoto agreement is a total waste of time and one of the biggest political scams ever perpetrated on the public … as H L Mencken said “the fundamental aim of practical politics is to keep the populace alarmed, and hence clamorous to be led to safety, by menacing it with an endless series of hobgoblins, all of them imaginary” … the desire to save the world usually fronts a desire to rule it.
By Leigh Hart on 09/26/2009 10:52 am
Maggie W
Leigh, the problem is nothing is conclusive. You are quoting scientists who debunk it. I can pull up scientists and climatologists who offer their counter proof that it is alive and well, and I find them to be sensible. You do not, and so it goes. I stated what I read about shipping corporations, and I find that alarming. The polar bears seem to be having a increasingly rapid demise that is odd. It’s unlikely they are involved in gang wars or committing suicide. As well, I doubt that is a scam on their part.
By Maggie W on 09/26/2009 2:03 pm
Lauren Sinclair

Thank you for that post. Nothing more to add there. That about sums it up, in a nuts shell so to speak.

Excelllent.

And I would like to end with, "so there!"

By Lauren Sinclair on 09/26/2009 5:27 pm
phyllis Doyle Pepe

This looooong piece by the former Green Czar? No name? I don’t know any credible scientist who debunks global warming which is just a term being used for climate change because not all areas on the planet will warm, but their yearly temperature will change as we have already seen. The controversy is whether this change is attributed to man. Back in the 19th century the romantic poets were outraged by what they saw happening to their environment because of the industrial revolution. Wouldn’t it make sense that man has had an impact on our planet? 

H L Mencken would not have meant those words to debunk global warming but to debunk the likes of the Glenn Becks, the Limbaughs, the death panelists, the birthers, the Nazi/communist/socialist/ screamers, the Joes-plumber and Wilson––especially, Wilson––if Mencken were alive today he’d have so much meat on his plate, he’d be full for months––maybe years. Here’s something else ole Henry said:

"No one in this world, so far as I know…has ever lost money by underestimating the intelligence of the great masses of the plain people." 

By phyllis Doyle Pepe on 09/26/2009 6:04 pm