Cinema Rasik

The Concept of Na-Pak or Im-Pure - The Real Problem of Pakistan

2010-03-13T12:50:00Z

We often use words or names without pausing to wonder the meaning behind the names. Perhaps, we are all Shakespearian in our "what's in a name" nonchalance.

But sometimes, a name carries tremendous meaning or baggage, especially when a name is given to a emotive issue. This baggage can last for decades as both the Pakistani Army and the Taleban demonstrated a week ago. According to media reports, the Pakistani Army began an image war by distributing pamphlets accusing the Taleban of receiving funding from Israel, India and Al-Qaida.

In response on Friday, March 5, the Taleban distributed pamphlets calling the Pakistani Army as a "Na-Pak" Army. This is not a simple media fight. There is no greater insult in Pak-i-Stan than being termed as 'Na-Pak". It is tantamount to a call of excommunication and banishment. That is not just theological reasoning on our part. It is the unfortunate history of the Pak-i-stani regime. A quick primer:

In 1947, Mr. Jinnah spearheaded a movement to create a breakaway regime for Muslims of united India. He succeeded. A large piece of land was broken out of India as a separate homeland for some of the Muslims of India.
What should this breakaway land be called? Mr. Jinnah could have called it Muslim-i-stan but that simply was not emotive enough. It was also not correct because a larger number of Muslims remained in India.
Mr. Jinnah could not use the standard nomenclature of the region such as Afghan-i-Stan, Tajik-i-Stan (Sanskrut word "sthan" or its Persian simplification "stan" means a place, abode or land) etc, because his new breakaway regime had 5 different ethnic groups.
So Jinnah, a non-religious man, called his breakaway regime with a highly charged & emotive name, Pak-i-Stan or the Land of the Pure.

By doing so, we think he essentially doomed his new regime.

Once a regime calls itself as the Land-of-the-Pure, they put upon themselves a sacred burden to keep purifying the land. Wikipedia describes purification as "the process of rendering something pure, i.e. clean of foreign elements and/or pollution". These foreign or polluting elements are termed as "Na-Pak" or simply Im-Pure.

This burden has been the bane of every Land-of-the-Pure regime since its creation. A regime that views itself as a Master Race may actually tolerate the existence of other races because the Master Race does need other races to serve them. But a Land-of-the-Pure cannot tolerate the existence of any Im-Pure elements at all. Because, by their very presence, they threaten the purity of the land. This simple concept explains the violent actions of the Pak-i-Stani regime since its establishment.

Soon after its creation, the regime turned on the Panjabi & Sindhi Hindu minority that had lived in the land for thousands of years. The Hindus in Pakistan were harassed, killed and banished for all practical purposes. This was the first act of Purification of the Land-of-the-Pure.
Then, the Pak-i-Stan regime turned its attention on Ahmadiya Muslims, the indigenous Muslim movement that was born in the region. This is tolerant, peaceful branch of Islam. Some mainstream Muslims do not consider Ahmadiyas as real Muslims. According to wikipedia, Ahmadiyas reside in 195 countries in the world as Muslims, except in Pak-i-Stan. Why? Because the Land-of-the-Pure has a Law that legally prohibits Ahmadiyas from claiming themselves as Muslims. This was another act of Purification of the Land-of-the-Pure.
Then the regime turned on Bengali Muslims, a different ethnic race that lived in East Pakistan, over 1000 miles to the east across the mass of North India. The western or Panjabi Pakistanis essentially treated the Bengali Muslims as inferior and tried to impose the western Urdu culture on Bengali Muslims. In response, the Bengali Muslims of East Pakistan rebelled and embraced their own culture that was derived from Sanskrut. Ironically, the Bengali of Muslim East Pakistan became more Sanskrutized than the Bengali of West Bengali state of India.
The response of the Panjabi Land-of-the-Pure regime was as violent and Nazi-like. The revolt by Bengalis ended up in the 1971 war between Pakistan & India. Pakistani lost that war and East Pakistan broke away to become Bangla-Desh. Now the Land-of-the-Pure regime became more racially pure.
Then, the Land-of-the-Pure regime turned on its Shia Muslim community. The Shias of Pak-i-Stan remain disenfranchised and suppressed.
Today, the Land-of-the-Pure is beset with a struggle by the Baloch people for autonomy in Balochistan, a geographically large province of Pak-i-stan, a province with oil and gas reserves. The Sindhis of Sindh, the business province, are increasingly restive.

But, the biggest fight of all is being waged between the Pashtun or the Pakhtoon community of Southern Afghanistan (called the North Western Frontier Province by Pakistani regime) and the Pakistani Panjabi army. The predominant group of the Pakhtoons is the Taleban.

This fight is not just regional or ethnic. It is increasingly a fight for the support of the poor people of Pak-i-Stan. The Pakistani Panjabi Army is run by wealthy, elite, non-religious Generals while the Taleban is run by common fighters, religious leaders or Talebs. This is why the Taleban issued the ultimate religious insult by accusing the Pakistani Army as being "Na-Pak".

The meaning is clear. A "Na-Pak" organization can have no standing whatsoever in a "Pak" land. The Taleban has essentially excommunicated the Pakistani Army by the Na-Pak description. Clearly this is a media declaration and one without any military repercussions. But it seems to us that, given the history of Pak-i-Stan, the Army cannot allow the "Na-Pak" label to gain credence and it might have to demonstrate its "Pak" status in some way.

This state of affairs should dishearten any one who desires peace and stability in Pakistan. A fight over who is more "Pak" is a regressive battle to the bottom. It is not the stuff that promotes inclusivity and without inclusivity there is not stability.

This fight over who is "Na-Pak" should be a wake-up call for people like David Ignatius of the Washington Post, his colleagues & sources who hope to exit a stable Af-Pak by 2011 and to so many wistful thinkers in India who keep expressing hopes for peace with the Land-of-the-Pure. The dreamer Indians seem particularly hapless because they simply don't get the basic fact that they are the ultimate "Na-Pak".

Jettisoning purity as a goal is a necessary condition for co-existence with impurity. In the same way, peace with India requires Pak-i-Stan to jettison its pursuit of the "Pak" goal. Discarding the "Pak" in its name will allow the regime to discard its horrible history of the past 60 odd years.

Unfortunately, we see no sign whatsoever that the pursuit of "Pak"-ness will be given up by the Pak-i-Stani Army or the Taleban. That is why we see absolutely no sign whatsoever that the region will see any stability or peace over the near future.

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Dr. Ashley Tellis Speaks to the House Committee on Foreign Affairs on LeT

2010-03-13T11:59:00Z

Editor's Note: This testimony was brought to our attention by the Editor-Coordinator of the US-India Friendship.net. This Blog is an excellent source for information about US-India relations.

Dr. Ashley Tellis is a senior associate at the Carnegie Endowment for International Peace, specializing in international security, defense, and Asian strategic issues. Previously, he served as senior adviser to the U.S. Ambassador in New Delhi and on the National Security Council staff as special assistant to the President and senior director for Strategic Planning and SouthWest Asia. Prior to his government service, Dr. Tellis was senior policy analyst at the RAND Corporation and professor of Policy Analysis at the RAND Graduate School. Dr. Tellis was also intimately involved in negotiating the civil nuclear agreement with India while on assignment to the U.S. Department of State.

Dr. Tellis gave his testimony to the U.S. House Committee on Foreign Affairs on March 11, 2010. The title of the testimony is Bad Company—Lashkar e-Tayyiba and the Growing Ambition of Islamist Militancy in Pakistan. The full text can be downloaded from the Carnegie Endowment site. Below are some excerpts from his testimony:

The Situation on the Ground in Pakistan:

It remains the spearhead of the Pakistani military’s campaign against India.
LeT remains primarily Pakistani in its composition, uses Pakistani territory as its main base of operation, and continues to be supported extensively by the Pakistani state, especially the Army and Inter-Services Intelligence (ISI).
LeT’s ambitions extend beyond India. The organization’s close ties with al-Qaeda in Pakistan and its support for the Afghan Taliban’s military operations pose a direct threat to U.S. citizens, soldiers, and interests.

U.S. Policy Recommendations:

Be candid about Pakistan’s role: The United States should stop pretending that LeT is an independent actor. Candid recognition that the organization receives protection and support from Pakistan would go a long way toward solving the problem.
Be prepared to take action if Pakistan is unable or unwilling: If Pakistan cannot or will not take decisive action against LeT, then the United States and its allies should be prepared to act in its place.

Dr. Tellis is an expert and his views are sound. Unfortunately, the U.S. policy towards Af-Pak has always been short-term in its outlook. Download and read his entire testimony.

His view that LeT is the spearhead of the Pakistani Military campaign against India was of particular interest to us. We have argued that, after its humiliating defeat in the 1999 Kargil war, the Pakistani Army decided to wage a covert war against India's civil society. We think this strategy has succeeded brilliantly and its pinnacle was the attack on Mumbai. We discussed this theme in detail in our article The Mumbai Attack - It Was Not Terrorism.

The US-India Friendship.net Blog is a good source of information and articles by experts. One article featured on this Blog attracted our interest. This Forbes.com article, written by a New Delhi based writer named Ashok Malik, is titled The Best American President India's Ever Had.

We have written our own articles about the vision of President George W. Bush and his accomplishments in Foreign Policy. This is a non-consensus view, to say the least. We have caught a lot of flak for this opinion from our friends who lean to the left, mainly because it is a fashionable view at the moment. Ironically, Indian-Americans tend to be more aggressive in claiming to be anti-Bush. Apparently, that is a prerequisite for invitation to Manhattan parties.

The Forbes.com article by Mr.Malik presents the view of real India about President Bush. A couple of excerpts are below:

In his speech in New Delhi, Bush seemed to see India exactly as Indians imagine it to be: "A vibrant, modern nation built on an ancient civilization"; "a force for stability and peace in one of the most strategically important regions in the world."
As more than one person in his audience observed, Bush was different from American/Western visitors who either talked down to Indians, sometimes inadvertently, or sought to clumsily second guess them. Bush did neither.

The message of President Bush to India was clear "Don't try and do things to win credits for a Security Council seat, just do what you think is right for your country. The rest will take care of itself."

Send your feedback to editor@macroviewpoints.com

Interesting Videoclips of the Week (March 7 - March 13)

2010-03-13T11:28:00Z

Editor's Note: In this series of articles, we include important or interesting videoclips with our comments. Our Web Software does not permit embedding of the clips into our articles. So we shall have to be content to include the links to the actual videoclips. We are very happy with the tremendous response from readers to this series of articles. We thank them sincerely and profusely.

This is an article that expresses our personal opinions about comments made on Television and in Print. It is NOT intended to provide any investment advice of any type whatsoever. No one should base any investing decisions or conclusions based on anything written in or inferred from this article. Investing is a serious matter and all investment decisions should only be taken after a detailed discussion with your investment advisor and should be subject to your objectives, suitability requirements and risk tolerances.

Breakout Extended

CNBC Fast Money technical analyst "Flash" Gordon informed viewers on Friday that this week was the 8th lightest volume week in 6 years, since August 2003. The other 7 weeks were either Thanksgiving or Christmas weeks. Low volume translates into an upmarket according to the Quant action theory we have laid out in these articles. That is what happened last week.

The real action was in financials, low quality financials. AIG, FNM, FRE had a good week but the star was Citibank. Whether it was buying back of short calls at $4 strike or real buying, it was a sight to see. Before it sold off on Friday afternoon, Citibank had added almost 20billion to its market cap in this one week. If the worst large financial had a great week, so did the best, Goldman Sachs. Talk about technicals and overhead resistance. As soon as it crossed $160 a week and half ago, the stock added quick 15 points and now sits at $175.

The Bond market was no slouch either. Investors rushed to buy whatever was offered. Greek Bonds, Russian Bonds, California Bonds, Agency Bonds - these were all snapped up at low spreads over Treasuries. The hunger for yield seems to the driving factor leading people like CNBC's Rick Santelli to wonder whether the glory days of 2006- 2007 were back. Even the 30-Year Treasury Auction was snapped up but that is a story for later sections.

Janet Yellen was named as the Vice-Chair of the Fed on Friday. Ms. Yellen is known as a "dove" and so promptly the dollar was sold and other currencies rallied. But curiously Gold did not.

Now we wait for the Fed statement next week.

Is Financial Journalism less "true journalism" than say News or Political Journalism?

Some time ago, we met a senior level individual at one of New York's well respected Journalism schools. As we walked down to the subway, we began talking about journalism. We mentioned that we watch CNBC a lot and her lips sort of curled up a bit. It became quickly evident to us that she did not consider Financial TV on journalistic par with News or Political TV.

She was a nice lady and we behaved politely keeping our disagreement to ourselves. Our own belief has been that financial anchors are smarter than news anchors or political anchors. After all, financial anchors cannot let their opinions run wild because their opinions have to match the action in the markets. But by the same token, we have wondered whether financial anchors have the edge that political anchors seem to have.

Here is a case in point. On Thursday morning, CNBC's Rick Santelli appeared on their Squawk on the Street show to talk about interest rates. In this short segment, Rick dropped the equivalent of a news scoop. He said that the spread between the 10-year Treasury yield & the 30-Year Treasury Yield had exceeded 1%. He said this is a big deal because he has only seen this 3 times in his 3 decades of watching the bond markets.

We stopped what we were doing and snapped to attention. But that was it. Rick did not elaborate and Erin Burnett, the anchor, virtually ignored Rick's statement. We were stunned. When your best guy observes something that he has only seen 3 times in his 30 years, even the most novice of journalists would take notice and ask Rick two basic questions:

what are the dates of the other 3 occasions &
did those occasions prove to be buying or selling opportunities?

Unfortunately Erin Burnett did neither. We do wonder whether Nora O'Donnell of MSNBC or Campbell Brown of CNN would have asked these questions.

We should not be too harsh towards Ms. Burnett. We have little doubt that most CNBC anchors would have ignored Rick's comment the same way she did. That is because we know that CNBC Anchors do not particularly care about what Rick says about the Bond market. They let Rick speak because he is popular but pay little attention to what he says. So Erin Burnett did what all her colleagues would have done.

If Erin Burnett made a mistake, we think her show's producer made a much bigger mistake. When your network's superstar makes such a terrific observation, the producer must throw up a chart of the yield spread and highlight the 3 occasions that Rick alluded to.

The Squawk on the Street producer did not do so and for that we need to throw a flag. Money managers and institutional traders have Bloomberg terminals and they can quickly display the chart of the 10-year-30-year yield spread. Individual investors cannot and they feel left out. That is not right, CNBC producer. You let your viewers down.

Let us be clear. Rick Santelli is NOT to be blamed. The man made a great call. That is what he does. He is to be congratulated. It is the Squawk on the Street team that failed both Santelli and us viewers.

Did Rick make an actionable call?

We remember Rick Santelli making a similar call in 2002 and that call proved to be a real winner. Such track record is one reason why we always listen to any trading point Rick makes. So we managed to get hold of the chart of this spread by using our contacts (us blogger journalists have contacts too, CNBC!).

The histogram at the bottom of the chart shows the yield spread between the 30-Year Treasury and the 10-Year Treasury.  A cursory glance at this chart suggests that when the yield spread exceeds 100 basis points or 1%, that proves to be the local maximum. In other words, the 30-Year Treasury has proved to be good buy at these spread levels.

So it seemed to us that Rick Santelli had made a terrific call. But did that call pan out in the 30-Year Treasury Auction that was to take place about two & half hours after his call?

Guess what? The 30-Year Treasury Auction was a strong auction. Listen to Rick describe the auction to Erin Burnett at 2:38 pm on Thursday. The 30-Year Treasury rallied after the auction and rallied again on Friday. So Rick was right. Kudos to you, Mr. Santelli.

Rosenberg & Santelli (&  Cramer) on the same side?

This week we read that David Rosenberg of Gluskin Sheff had expressed worries about the mad rush by investors to buy yield without concern about the underlying credit. He also expressed the view that current conditions remind him of the post July 2007 period.

We also saw Rick Santelli express similar sentiments, albeit in more colorful form on Thursday & Friday. In response to a question from Dennis Kneale, Rick said ( at minute 06:00 of the clip) " the credit markets are moving along just terrific, just like they did in 03,04,05, & 06. I actually think it is a sentiment indicator". At this point Michelle Caruso Cabrera laughed leading Rick to admonish "I wouldn't laugh". Then he added, "a sentiment indicator that things are going to get ugly again, I think you can hedge and wedge for so long and you can interpret Green shoots for so long............what did smart people do before the mortgages melted down, they moved into long term fixed....they don't want to be hostage to short term funding, they don't want to be held hostage to another commercial paper seizing up......."

Rick made a similar point on Friday afternoon in response to a question by Trish Regan about investor appetite for risk or even crazed risk "yeah, it might be March but the demand for Turkeys is higher now than it was in November...you throw something out there, ...they issued some paper today that was the tightest to Treasuries in the history of their issuance, Russian Bonds that expire in 2030 trading very close to US rates, pretty much you could look at it as a great sign or flashing red, we are doing it all over again...".

What if Rosenberg and Santelli are right? Those 30-Year US Treasuries could prove to be just what the Doctor ordered.

Jim Cramer also expressed caution about both the credit markets and the stock markets this week. On Thursday, he told Erin Burnett that he would not be a buyer of California Munis at this time (see clip 3 below) and then, on Friday, he called this market overextended, the most he has ever seen. He added that if the market gets hammered because of the Fed then it would be a buying opportunity.

The Resurrection of Steve Cortez on CNBC Fast Money

Steve Cortez of Veracruz LLC is a smart, contrarian investor. Recently he recommended financial stocks and especially Goldman Sachs to Fast Money Viewers. This trade worked very well. This week, on Wednesday, he told viewers that he had closed these trades in Goldman and a financial ETF. Good trade, Mr. Cortez.

We like Mr. Cortez because he is a self-described contrarian investor. In September 2009, he was bullish on the U.S. Dollar, bullish on U.S. Treasuries and disliked Commodities. He was early or wrong. Then in December 2009, he reiterated these trades. This time he was right.

Mr. Cortez was absent from CNBC Fast Money between these two appearances in September & December 2009.  Anchor Melissa Lee was on vacation when Mr. Cortez was invited in September & December 2009. So we assumed Ms. Lee did not like Mr. Cortez for some reason. So we asked in our December 24-31 videoclips article, Will Steve Cortez be banned again until Melissa Lee goes on her next vacation?

Then a few weeks ago, Melissa Lee invited Steve Cortez and now he seems to be a regular guest on Fast Money. We wondered what had changed to put Mr. Cortez in Ms. Lee's good graces?

This week we think we got the answer. On Wednesday, March 10, Steve Cortez told Fast Money Viewers to "Sell Treasuries until your fingers hurts from pressing the mouse to sell more". Then we recalled that the first time Steve Cortez was invited by Melissa Lee in 2010 was when he changed his stance on Treasuries from bullish to bearish. Mr. Cortez was not invited in January when he was bullish on US Treasuries and now that he is strongly bearish on US Treasuries, he has been resurrected.

If simple viewers like us can see this pattern, can't every smart strategist or guru see it? Is this a lesson they learn if they desire an invitation from Fast Money? Is this how a de facto "censorship" of bullish comments about US Treasuries works on Fast Money? We wonder.

Does CNBC Need Men?

We have always believed that the visual fields like Television are ruled by women. CNBC's Joe Kernen has often complained that his viewers like Becky Quick more than they like him. Mark Haines has voiced the same feeling by saying that viewers would rather look at Erin Burnett than him.

In this context, the pair of Erin Burnett & Melissa Lee should be a much higher draw than Mark Haines & Simon Hobbs. But that is why they put on a show, to crudely paraphrase Boomer Berman (Swami of ESPN) .

When Erin Burnett was on vacation, CNBC asked Simon Hobbs (ex-CNBC London) to co-anchor the Squawk on the Street show with Mark Haines. This pair of middle aged men showed instant chemistry. They joked about each other's way of speaking English, made other insulting comments about each other and laughed at each other's jokes. Yes, these two really hit it off. They did not miss Erin Burnett at all. Mark Haines hardly mentioned Erin Burnett in her absence besides the required "Erin is on vacation" disclaimer.

On this Friday, when Mark Haines was off, Melissa Lee joined Erin Burnett as the guest co-anchor. These are two terrific anchors, pleasant, witty, lively and they claim to be friends. But the chemistry was just not there. They seem to have nothing vibrant or interesting to discuss with each other. So Erin kept speaking about Mark Haines, about how he likes small donuts and how he does not drink Orange Juice. And Melissa asked how Mark gets his Vitamin C?

We could not believe our ears. Even when he was not there, Mark was there in spirit because these two women anchors needed him as a foil.

So it struck us. CNBC's women anchors need men anchors to shine. Before we get pelted, look at the evidence. Erin Burnett plays off Mark Haines in the morning and Jim Cramer in the afternoon. Melissa Lee plays off 3-4 men in every show, even though, as Erin Burnett observed, Guy Adami is the special foil for Melissa.

The other Melissa on CNBC plays a similar role with Larry Kudlow. Her colleague Trish Regan has also begun to play this role. What would Melissa Francis & Trish Regan do on the show without Larry Kudlow? On Friday, Melissa Francis played the same game with Dennis Kneale by playfully saying she cannot imagine Dennis clipping coupons. Michelle Caruso Cabrera, the other anchor, could not stop laughing.

So here it is. We cannot think of a CNBC women anchor pair that can put on a show like the Mark & Simon show. But Haines & Hobbs are not unique. Carl Quintannia & Joe Kernen can carry a show themselves. The Faber-Kernen pair used to be a big draw. In its old days, the CNBC franchise show had three men in a squawk box.

In contrast, we cannot think of single pair of CNBC women anchors who can liven up a show without the presence of a male anchor. We can think of a combination that could play like ABC's View. But that can't happen because CNBC does not like disagreements or arguments between their anchors, especially women anchors.

Perhaps, Maureen Dowd does not need Men. But CNBC certainly seems to.

Featured Videoclips

The California Bond Issue was a major story of the week. So the pole position goes to videoclips about California Muni Bonds. CNBC devoted Thursday to the topic of Municipal Bonds. This is rare and much needed for individual investors.

1. Bill Lockyer, California's Treasurer on CNBC on Thursday, March 11
2. Frank Troise of Soho Asset Management on CNBC on Thursday, March 11
3. Jim Cramer with Erin Burnett on Thursday, March 11
4. Robert Doll of BlackRock & David Rosenberg of Gluskin Sheff on Bloomberg on Wednesday, March 10
5. John Roque of WJB Capital on CNBC Thursday, March 11
6. Ajay Kapur of Mirae Asset Securities on CNBC on Tuesday, March 9

1. California's Cash Crunch - Bill Lockyer, California State Treasurer with CNBC's Melissa Francis & Jane Wells - Thursday, March 11

This is an excellent interview. Mr. Lockyer does a very good job of answering critics who compare California's finances with the finances of Greece.

2. California Budget Crisis: Helping & Profiting - Frank Troise of Soho Asset Management with CNBC's David Faber - Thursday, March 11

We had not heard of Mr. Troise or of Soho Asset Management. But now we have and we are impressed. This was a candid and smart analysis of California and its bonds. Mr. Troise says that the bond issue was a great hit with individual investors because of the 10% pre-tax yield. Then he adds that the same bond will probably yield 12-13% during an "emotional default" this fall. What does he mean? Watch the clip.

3. Stop Trading! Listen to Cramer - CNBC's Jim Cramer with CNBC's Erin Burnett - Thursday, Mar 11

Jim Cramer speaks his mind on the California Bond issue. He thinks California Bonds face a big headline risk around June 30, the end of the fiscal year :

you can buy these better in the secondary market because what will happen is June 30, you are going to see, like hold it, may be they can't meet their budget deadline..these bonds will all go down in price, yield will widen and that's your chance to buy Cal munis, not now!

4. Doll, Rosenberg Interview on U.S. Economy - Robert Doll of BlackRock & David Rosenberg with Bloomberg's Margaret Brennan - Wednesday, March 10

This is a terrific interview. Bob Doll & David Rosenberg share and debate their opposing views. Watch this clip.

5. Beware of a Double Dip - John Roque of WJB Capital on CNBC Fast Money - Thursday, May 11

John Roque is a well-known technical analyst. In this clip, Mr. Roque argues that a double dip is unlikely and he sees a rise to 1200-1225 on the S&P 500. One of his indicators is the slope of the moving averages. Right now, the moving averages are upward sloping and Mr. Roque remains bullish. Watch this clip.

Then watch Mr. Roque's clip Chartology; Is the Party Over? on March 29, 2009, the day the S&P fell 3.5% and broke below 800. At that time, Mr. Roque described the rally from the lows of 666 on S&P as a "failing rally" because the moving averages were still sloping downwards and said that all rallies within the context of downward sloping moving averages are suspect.

This indicates how one indicator can provide a wrong signal at times. This also suggests that Fast Money anchor Melissa Lee should do her homework before speaking with an expert guest. She could have done what we did, simply searched for "Roque" on the CNBC videos page. Then she could have heard the comments of Mr. Roque on March 29, 2009. That would have enabled her to ask more penetrating questions to John Roque about his indicators and methodology.

Are we making a fair point, Ms. Lee?

6. One Year Later - Ajay Kapur of Mirae Asset Management with CNBC's Erin Burnett - Tuesday, March 9

Mirae Asset Management is one of the largest emerging market managers in the world, according to the CNBC promo. Mr. Kapur has been a consistent bull on emerging markets for the past few years. In this interview, he strikes a different tone. His comments begin at minute 03:37 of this clip.

Erin Burnett asks whether Americans now have a bit too much money in emerging markets. Mr. Kapur concurs and says that "Americans have about 8% of their own domestic market value in emerging markets and that is actually enough. You probably want to have 30% of your money overseas, probably 1/3rd in Europe, 1/3rd in Japan and 1/3rd in Emerging and you are already there. Whereas emerging market investors have very little money invested in Europe and the US and that's the new trend. Emerging Market investors, the Korean housewives, the Indian housewives, the Brazilian dentists will put money in US & Europe.".

He goes on to add that the Dollar is undervalued and "some of the world's best brands, which happen to be US & Western Europe, are now trading at pretty compelling valuations vs. their emerging market counterparts". As an example, Mr. Kapur compares the valuations of Mahindra & Mahindra and Toyota. He points out that Mahindra & Mahindra is trading at 3-4 times price-to-book while Toyota is now trading at price-to-book of 1. He adds "normally, when such a great global brand gets into trouble, like say Johnson & Johnson with Tylenol, those are buying opportunities and not selling opportunities." Mr. Kapur also says that "global brands have a free cash flow margin of about 6%, twice that of emerging markets."

This is a good interview. Erin Burnett lets Ajay Kapur speak and asks good questions. As Indian-Americans, we also wish to thank Erin Burnett for correctly pronouncing Ajay. Very few CNBC Anchors take the effort to do so.

Finally, Mr. Kapur, what about your "Korean Wives, Indian Wives & Brazilian Dentists" characterization? Don't Korean and Indian women work? Or is dentistry a Brazilian monopoly? Just kidding!

Send your feedback to editor@macroviewpoints.com

This Blog's 10 Most Popular Articles

2010-03-13T11:10:00Z

Below is the complete list of this Blog's 10 Most Popular Articles (in terms of viewer hits) as of Friday, March 12, 2010.

1. "The Karna-Arjun Battle in The Maha-Bharat - Beyond Adjectives" - September 20, 2008

2. "Jeffrey Sonnenfeld Of Yale & Erin Burnett Of CNBC - Read The China-India Article in Foreign Affairs"- February 28, 2009

3. "India & Greece - A long, deep and ancient relationship" - May 31, 2008

4. "Mo Force is On Board the Deflation Wagon - Time for Mr. Bernanke to Cut Interest Rates" - October 4, 2008

5. "CNBC's Fast Money - Practice What Your Anchor Dylan Ratigan Preaches" - February 21, 2009

6. "First Snoop Dogg, Now Sylvestor Stallone - Everyone Is Getting Aboard The Bolly-Holly Train" - February 7, 2009

7. "Will The Obama Administration Occupy Pashtunistan Or All Of Pakistan?"- April 25, 2009

8. "Iraq & Tibet - Strategic Will of The American and Chinese People" - July 26, 2008

9. "Flagrant Foul on Mark Haines and Erin Burnett - Their Conversation about India's regard for "sacred cows" - May 16, 2008

10. "Shabana Azmi on "Indian Democracy is unfair to Muslims" - Our views and the Relevance to America" - August 23, 2008

A breakdown of the Top 10 list by topic is as below:

India Related - 4 Articles
Geo-Strategy - 3 Articles
CNBC Related - 3 Articles

Send your comments to editor@macroviewpoints.com

Tendulkar the Terrific - Thanks Wall Street Journal

2010-03-06T13:08:00Z

Sachin Tendulkar, already the greatest batsman ever, did something absolutely amazing on Wednesday, February 24. He scored a double century in a One Day International match against South Africa.

We cannot even comprehend this feat. Double centuries are a rare phenomenon even in Test Cricket which take 5 days to complete a match. One day Cricket was invented to speed up the game by restricting each side to 50 overs or 300 balls bowled. In such a short game, it seemed inconceivable for any one player to ever score 200 runs.

This unbelievable feat was performed by Sachin Tendulkar last week and it was put in perspective by Richard Lord in the Wall Street Journal. We recommend this Tendulkar the Terrific article to every Cricket fan. A few excerpts are below:

Born on April 24, 1973, Sachin Ramesh Tendulkar made his international cricket debut just 16 and a half years later. Since then he's broken most of the international game's batting records: most Test match runs (13,447), most One Day International runs (17,598, a frightening 4,170 ahead of the next contender), most Test scores of 100 runs or more (47), and the same in One Day Internationals (46).
But his latest achievement was particularly special. Try, for a moment, to think of another sportsman a couple of months short of his 37th birthday, at the very top of his particular game for more than two decades, who still has the ability and, more to the point, the hunger to take that game to heights previously unscaled not just by himself, but by anyone. Then try to digest the fact that, of his 93 international 100s, 10 have come in the past year.

(Photo: WSJ)

Then Richard Lord talks about Sachin, the man and the obvious comparison with another athlete who dominated his game, Tiger Woods.

There's his integrity—no off-field dalliances, match-fixing allegations or doping indiscretions for this sporting titan. Then there's his incredible humility; in an era of brash, trash-talking sportsmen-with-attitude, he's never been heard to utter a single boastful word, nor one denigrating an opponent. His celebration upon reaching the latest landmark was typical: a raised bat, a glance to the heavens, a smile of quiet satisfaction.
From a purely sporting perspective, he's cricket's Tiger Woods. Even before his recent off-course indiscretions, however, what Mr. Woods got was admiration and respect; what Mr. Tendulkar gets is love.
Mr. Tendulkar is a beacon of stability in a sport, in a country and in a world that are changing at a pace many find unsettling. He's an unbroken link to values of hard work, humility and reliability, and for that reason a lot of people find him uniquely reassuring.

Too truly understand the greatness of Sachin's feat, listen to what Virender Sehwag, the dominating opening batsman, said " I would like to watch this 200 run innings of Sachin at least 100 times". Readers might recall that Wisden had honored Sehwag as its Leading Cricketer in the World for 2008.

We concur with Sehwag. We hope to get a DVD of Sachin's immortal innings. So we can watch this double century of Sachin's whenever we need some divine inspiration.

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An "Anti-Defamation" Petition to Penguin Books USA & Penguin Books India from the Global Indian Diaspora

2010-03-06T12:47:00Z

On January 23, 2010 we wrote an article about a review by one Pankaj Mishra of a book by Wendy Doniger titled Hindus: An Alternative History". A reader of this Blog had brought these to our attention.

We were appalled by the book, its NYT review and, above all, by what we considered to be sheer journalistic misconduct of the New York Times Editorial Board in approving this review. We expressed our opinion and the journey of thought that led to our opinion in our article Cultural & Religious Defamation Tacitly Accepted By New York Times Editors?- Our Perspectives.

Then a reader informed us that this book had been chosen by the National Book Critics Circle for their "centerpiece" award for 2009. According to the NBCC website, this is a group of 600 plus book critics all across America. This we felt was a perfect opportunity for Tom Friedman, the veteran New York Times opinionator, to put his own views into practice in his home town. So, on January 30, 2010, we wrote an article titled Tom Friedman, Will You Practice What You Preach? As far as we know, Mr. Friedman has done nothing. We are not surprised because it is easy to write about religious defamation in Middle Eastern Countries while it might be a trifle embarrassing to admit the same problem within one's own journalistic brotherhood.

We understand from our readers that there has been an outpouring of letters and emails to the Board of NBCC from Hindu organizations in America & India expressing their outrage about the Doniger book and the decision of NBCC to consider this book for its centerpiece award.

This outrage seems to have galvanized the Indian community. Now this community has begun a petition to Penguin USA & Penguin India to withdraw the book by Doniger. The home page of this petition is at http://www.petitiononline.com/dharma10/petition.html

Section A of the Petition begins with the following self-explanatory paragraph:

"The following are a just a SMALL SAMPLING of examples of the factual errors that run rampant through this disgusting book. By due diligence that is badly overdue from your editors, you can either find for yourself, or we will be glad to direct you to, scholarly references so that you can verify these errors yourself and withdraw this obscenity. "

Section B provides some examples of "Derogatory, Defamatory & Offensive Statements" from the Doniger book. Again, the first paragraph of this section is self-explanatory:

"Clumsily written, each chapter is a shocking and appalling series of anecdotes which denigrate, distort and misrepresent Hinduism and the history of India and Hindus. Doniger uses selective quotations from obscure and non-original, peripheral and ignorant references with a bizarre emphasis on sexuality and eroticism. Cited below are only a handful of quotes along with our understanding and interpretation, with references from Hindu scripture."

The Petition concludes with the following:

As concerned readers, we ask PENGUIN GROUP to:

1. WITHDRAW all the copies of this book immediately from the worldwide bookshops/markets/Universities/Libraries and refrain from printing any other edition.

2. APOLOGIZE for having published this book “The Hindus: An Alternative History”. This book seriously and grossly misrepresents the Hindu reality as known to the vast numbers of Hindus and to scholars of Hindu tradition. PENGUIN must apologize for failure to observe proper pre-publication scrutiny and scholarly review.

Sincerely,

We respectfully request readers to review the petition and, if they concur, to sign the petition at http://www.petitiononline.com/dharma10/petition.html

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Apology for Offensive Cartoons from a Danish Newspaper - A Lesson for Indians Worldwide?

2010-03-06T12:11:00Z

Most readers would recall that a few years ago Danish Newspapers published cartoons that were deemed offensive by Muslims around the world. The publication of these cartoons was met with violent demonstrations in many Muslim countries. The Danish newspapers and their brother Newspapers in Europe maintained that the publication was protected under freedom of expression while the religious Muslims felt the cartoons were deeply defamatory to their religious beliefs. For the most part, the American print media were restrained in their coverage and, as we recall, did not publish the cartoons.

Last week we saw a short comment in the New York Times titled Denmark:Cartoon Apology. This week, on March 4, Business Wire carried an article about the "first success" achieved in getting Danish newspapers to apologize.

Both these articles state that on February 26, 2010, the Danish Newspaper Politiken published its apology and the draft of the settlement that has been apparently reached between Politiken and the Law Firm that represented an International Organization of Muslims with over 95,000 members in 8 countries including Australia.

Left to right: Mr. Jacob C. Jorgensen, Mr. Faisal Yamani, Mr. Philipp Plog & Mr. Alexei Panich (Photo: Business Wire)

The Business Wire article quotes Mr. Faisal Ahmed Zaki Yamani, the Executive Partner of the lead Law Firm, as saying "In our view, all religious icons of all religions..........all deserve respect and protection from ridicule and defamation".

We concur. While we hold the principles of freedom of speech very dear and sacrosanct, we pointed out in our January 30 article on Academic Freedom that even in America, Freedom of Speech has not been viewed as absolute sanction or license. All major voices in American Media were unanimous in this view of freedom of speech in the immediate aftermath of September 11 attacks. In fact, as we recall, a humorist was fired from a TV network at that time for expressing views that were complimentary of Al Qaeda.

We are surprised by the legal victory of the Ahmed Zaki Yamani firm. We confess to being pleased to a certain extent because we do feel that the Danish Newspapers crossed a red line.

Perhaps we feel so because we witness the persistent and pernicious defamation of Indian Religion & Culture in the European-American Media. This has spread to English language media in India that are funded by capital from European-American TV & Media networks. In contrast to Danish Newspapers which only drew cartoons, nude paintings of sacred Indian icons and religious figures have been supported and acclaimed by European-American funded TV networks in India. Anchors at TV networks in America, Europe or India see nothing wrong and fear no retribution from making horribly insensitive or defamatory comments about Indian religion.

On this Blog, we have drawn* attention to so-called "scholarly" books published by American Universities that contain disgustingly defamatory content about Indian Religion & Culture. We have drawn* attention to mainstream organizations that actually consider giving awards to such work deemed defamatory and erroneous by Hindu Religious and Scholarly bodies.

These "scholarly books" and their affirmation by American Universities & Newsmedia have created a deep sense of outrage among Indians in India and in the Global Indian Diaspora. So far, this outrage has been contained due to the essentially peaceful, tolerant nature of Indian Society. So far, the most common expression we hear is the traditional Hindi proverb "Hathi to chal raha hai, Kutte bhunke to bhunke" or "The elephant walks serenely without paying any attention to the barking of mongrels (at him) ".

But we have begun to see a new awareness among the Global Indian Diaspora, an awareness that argues for immediate and articulate response. After all, mongrels can carry rabies or other diseases and venomous bites from such mongrels may only be ignored at peril.

So, we wonder whether the legal victory of the Ahmed Zaki Yamani Law Firm provides any lessons to the global Indian Diaspora?

* Our prior articles are:

Tom Friedman, Will You Practice What You Preach?

Cultural & Religious Defamation Tacitly Accepted By New York Times Editors?- Our Perspectives

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Interesting Videoclips of the Week ( March 1 - March 6)

2010-03-06T11:13:00Z

What a wonderful week this was for equity investors! In fact, since the V-bottom on Friday, February 5, the stock market has moved up in a grinding, low-volume manner. That was also the story this week with most NYSE-based stock traders bemoaning the lack of volume. For 3 days, the stock market approached 1121 and then backed away giving confidence to bears. Then, on Friday, the S&P 500 took comfort from a non-terrible jobs number to cross 1121, 1125 and even 1132. If technicians are correct in their charts, there may not be much resistance until 1200.

The market action was the type we have written about, the 2006-2007 type grinding action that sucks volatility out of the markets, the precise type of action that results from liquidity-providing quantitative trading strategies. In 2007, this action continued to drive the markets higher and higher until July 2007. As a result, the Quant positions kept getting larger and larger until the bad news began making an impact on volatility. Then in August 2007, volatility spiked on some bad news and Quants were essentially blown up in those 2 infamous days of August 2007.

Will 2007-type action continue in 2010? So far, the parallels seem to hold.

Goodbye Greece

The Greece situation essentially stopped impacting the US stock markets in mid-February. This is eerily similar to the way the stock markets greeted the first outbreak of the subprime crisis in February 2007. Now, as then, the stock markets assumed that these crisis were contained and that they would not cause any problems for corporate earnings or global growth. The contagion factor was considered unrealistic and ignored because the initial problems were confined to about 2% of their sectors.

As we all know, in 2007 the contagion from subprime kept spreading into other sectors like leveraged loans. The economy kept getting weaker under the complacent or somnambulant rally of the stock market until we all woke up and the stock market started throwing up.

Will we see a repeat of this phenomenon in 2010 if or when the Dubai-Greece issues prove to be the tip of the contagion? Will we see a repeat in the other members of the PIIGS circle? Or will we see something come up in China?

Hello Again China

This week began with the CLSA Asia-USA conference in San Francisco. Christopher Wood, the well regarded seer of CLSA, gave the consensus view that Asian economies will win because of fiscal strength and smart management. Mr. Wood prophesied that USA will suffer a currency armageddon in about 5 years. Mr. Wood did state that in the short run the European crisis will feed dollar strength against the Euro but that the end game of the crisis will be in the USA. To hedge against this risk, Mr. Wood advised investors to own gold bullion, gold stocks and Asian & Emerging Markets equities (see clip 1 below). This was also the advise of Marc Faber who asked viewers to buy some Gold every month forever.

The case of Mr. Wood and his cohorts rests entirely on China. As he said "If China blew up, it would be very negative for all of Asia and all of Emerging Markets. My view is China is not going to blow up, but grow between 8 & 9% this year, this is incremental tightening and incremental weakness and it presents a great buying opportunity"

For another view on China, see the comments by Professor Victor Shih of Northwestern University in the Bloomberg article China’s Hidden Debt Risks 2012 Crisis . In this article, Prof. Shih argues that China's hidden borrowing would push China's government debt to 96% of GDP next year. If true, this would translate into a much weaker Fiscal situation for China than what Christopher Wood believes.

Last week, we had the pleasure of meeting some European investors, the type that invest with the best and brightest of hedge funds. Uniformly, they articulated the various fears about China but professed complete confidence in the ability of the Chinese leaders to manage these problems without damage to financial markets. Yet, none one of these investors showed much confidence in the ability of American leaders to manage the US debt situation.

That, folks, is the quasi-religious tenet of global stock markets today. The resilience of equity markets is based on this supreme confidence in Chinese leaders. If this confidence wavers, the action in the global stock markets will feel like an earthquake.

Rising Geo-Political Tensions and Defense Expenditures

As any casual reader of this Blog can observe, geopolitical analysis is one of our favorite pastimes. We have described at length the rise in military tensions between China & India and the consequent rapid rise in military spending by India.

This week we came across a similar article about China's northern border, with that darling of frontier markets, Vietnam. We were surprised to read that Vietnam was Russia's best customer for its arms exports in 2009. The article discusses an emerging military relationship between Vietnam and Russia to counter the increasingly ominous shadow of China. Vietnam is currently embroiled in a dispute with China about oil exploration around Spratly islands.

On this topic, we learned last month that Japan has taken its territorial dispute with China about waters of China Straits to the International maritime agency. Japan, Vietnam and India - this could possibly feed Chinese fears of encirclement with uncertain consequences.

All this probably has nothing to do with the rise of Asian markets in 2010, but these are developments that at some point will reduce multiples. Add these to what we believe are increasingly tenuous fiscal situations in China, Vietnam, South East Asia, India and you might begin to believe that USA might be an island of relative fiscal safety after all. Take that, Mr. Wood.

Treasuries - Parallels to 2007?

We remind readers of our comments of February 20 when we discussed the parallels of the December 2006-June 2007 sell off in Treasuries (with short term rallies in January & February). So far, the parallels seem to be working. Treasuries ended the month of February with a rally. March has begun the way February began, with a sell off.

As we have noted before, the months of April & June have been pivotal for the Treasury market since 2003.

In 2003 & 2005, the Treasuries rallied furiously from April to June. The peak of Treasury prices and lows of treasury yields were reached in June. The months of June to November saw a steep sell off in Treasuries in 2003 and 2005.
But the action in 2004 & 2006-2009 was just the opposite. Treasuries sold off from April to mid-June in these years to create great buying opportunities in June. Then the Treasury market mounted huge rallies from June to November.

For some reason, fundamentals or valuation do not seem to matter for the price action from April to June. The risk tolerance of investors and their conviction in global growth as well as US inflation expectations seem to be the main factors.

Speaking of fundamentals, the Wall Street Journal informs us in its article BlackRock Plays It Safe: Treasurys that the brilliant firm has moved its Treasuries position to Neutral from last year's Underweight position. At the same time, the article states that BlackRock has "meaningfully" reduced its overweight positions in other fixed-income assets, such as corporate bonds and mortgage-backed securities. This is exactly what Curtis Arledge, BlackRock's Fixed Income CIO, told CNBC Fast Money viewers on February 19 (see clip 1 of our videoclips article of February 20).

On the other hand, we note that, based on this week's CFTC data, small speculators now hold their largest long position in 10-Year Treasuries. Small Speculators have not proved to be particularly savvy in trading and this statistic worries us.

So what happens to Treasuries from April to June this year? We will know in a month or two.

US Economy

We are increasingly troubled by the turn in the economic data we see. House prices have turned weaker and so have some leading economic indicators like the ECRI indicator. Readers might recall that the ECRI indicator was the first one to show a rapid rise last summer. That was when every financial network featured the experts from ECRI to trumpet the signal from their leading indicator.

We do not have access to ECRI or its research. So we tend to depend on other authors to comment on the ECRI indicators. Based on the comments of these authors, we understand that the yearly growth in the ECRI leading indicator hit a new low this week.

The US Monetary Policy Forum has created a new Financial Conditions Index ("FCI"). This FCI also suggests a greater drag on the economy going forward. This is a brand new index that was created by experts and presented to the Fed during the last week of February.

If these indicators are as good as their creators argue, then the much awaited dip in the second half of 2010 might indeed materialize.

At least, so argued Richard Fisher of the Federal Reserve in an CNBC interview this week (see clip 5 below).

Featured Videoclips

Sometimes we get asked why we focus on CNBC videoclips. We have the longest experience in watching CNBC and so we can, we feel, comment better about the behavior of CNBC Anchors. Secondly, CNBC does get its first choice of guests given its lead network status. But the CNBC website is also a critical reason for our focus. CNBC posts virtually every segment of CNBC TV on its website. This helps us when we are traveling overseas and we cannot watch CNBC live. For example, we cannot watch CNBC Fast Money when in Europe. So we tend to watch the show the next day via clips on the CNBC website. How we wish Bloomberg & Fox Business follow this practice?

We feature the following clips this week:

Christopher Wood of CLSA on Monday, March 1
Barton Biggs of Traxis Partners on Monday, March 1
Jing Ulrich of JP Morgan on Wednesday, March 3
Thomas Hoenig of Kansas City Fed on Tuesday, March 2
Richard Fisher of Dallas Fed on Tuesday, March 2
Jersey Shore Cast with Jay Leno on Wednesday, March 3
Monica Hesse on Washington Post on Tuesday, March 2

1. Greed & Fear - Christopher Wood of CLSA on CNBC Power Lunch - Monday, March 1

We have discussed some of the comments of Mr. Wood in our overview section Hello Again China. But his coup de grace is below:

"My view is there is an inevitable end game as a result of all this massive spending of taxpayer money in the western world & Japan to bail out bankrupt banking systems, my view unfortunately is that the end game will be a systemic government debt crisis in the western world...it will probably happen in Europe and I think it will climax in the US and I am expecting on a five year view the collapse of the US dollar paper standard"

This is the sort of stuff that makes people like Mr. Wood well-regarded in the investor world. Our simple question is why does not all of this apply to China? It is a reasonably well documented and supported view that Chinese Banks are loaded with bad debts and nearly bankrupt based on a apples-to-apples comparison with US banks. China has spent taxpayer money even more massively than America to support its own banks. In addition, China is in a much weaker position than America in terms of its dependence on other nations and for its resource lifeline.

So why doesn't Mr. Wood predict a systemic debt crisis in China as Mr. James Chanos does?

The first answer is that Chinese leaders are smart and intelligent while the American leaders are not. As Nassim Taleb said so eloquently in Davos that every human being should short US Treasuries as long as Bernanke & Summers are in office (see clip 5 of our February 1- February 6 videoclips article).
The second answer is that China is not a democracy. So they presumably can do what they like to solve their problems without sharing the nature of their solutions with any one. America is a democracy and it needs popular support as well as Congressional approval. Our own simplistic view is that this chaotic system prevents America from making a huge mistake. We do think that the all powerful Chinese leadership could quite possibly make a gigantic mistake as most dictators have ended up doing.

We are willing to make a wager with Chris Wood. We will look at this issue in 5 years. Our bet is that the American financial system & the American Dollar will be in a better shape than the Chinese financial system & the Chinese Remnimbi in March 2015.

Will Mr. Wood take this bet?

2. Biggs' Big Picture - Barton Biggs with CNBC's Mark Haines - Monday, March 1

Barton Biggs, Managing Partner of Hedge Fund Traxis Partners, was the Global Strategist at Morgan Stanley for many years. Mr. Biggs is an interesting and entertaining speaker. He is also an astute investor. Mr. Biggs was at the CLSA conference and offered his views on China as well as the need to own farmland & gun. We are not kidding.

What is happening today is sort of a spontaneous combustion in a compost heap, there are a lot of bad things in the compost heap but there are some good things too..
No it (China) is not a massive bubble; it is the real thing and eventually China may well be a massive bubble but that could be years away from now and for the time being the situation in China looks very healthy, yes, they are tapping on the brakes as they should be doing and doing some incremental tightening but the economy is basically is so healthy that domestic demand is picking up so strongly that there are gonna do the forecasts of the experts here somewhere between 11% and 8-9% real growth this year
somebody that has a significant amount of wealth in the world today, a good way to hedge against bad things happening is to own some farmland and a gun, yeah

Yeah, indeed.

3. China Fears Unfounded? Jing Ulrich with Maria Bartiromo - Wednesday, March 3

Ms. Ulrich is the chair of Chinese Equities for JP Morgan. Her views are traditional consensus views about China & its markets.

4. Hoenig: Man at Center of Rate Debate - Thomas Hoenig with CNBC's Steve Liesman - Tuesday, March 2

Mr. Thomas Hoenig is the President of the Kansas City Fed. He is currently the most hawkish member of the Fed. A summary of his views can be found at Fed Should Raise Interest Rates Sooner Than Later: Hoenig on cnbc.com. A couple of his quotes are below:

"I think we shouldn't be guaranteeing the markets a zero rate for an extended period. I think the crisis of a year ago has passed. We're in recovery,"

Hoenig emphasized that although he's worried about the nation's high unemployment rate, failing to raise rates due to this problem will only invite future excesses. That's because raising the interest rate to 1 percent isn't creating a tight policy — it's removing a substantial easing policy, he said.

5. Dallas Fed President Speaks - Dallas Federal Reserve President on Squawk Box - Wednesday, March 3

A summary of Mr. Fisher's comments can be found at Banking Giants Should Be Broken Up: Fed's Fisher on cnbc.com.

6. Jersey Shore Cast on The Tonight Show with Jay Leno - Wednesday, March 3

This videoclip is about investing, it really is in a way. So just check it out, will you? Many thanks to CNBC Power Lunch for bringing this clip to our attention.

7. Save a City: Tax Tattoos - Monica Hesse, Washington Post Style Editor on CNBC Power Lunch - Tuesday, March 2

Monica Hesse and the Power Lunch crew discuss a proposed bill in Minnesota that seeks to levy taxes on tattoos, body piercings, manicures and facials. Monica Hesse is a rarity, a print journalist who comes across as funny, witty and charming on TV. This is a fun clip to watch. Thanks PowerLunch.

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The Hoagland Opinion - An Intelligent, Insightful & Must-Read Article

2010-02-20T14:16:00Z

Jim Hoagland, a contributing editor to the Washington Post, wrote an article this week titled As Obama bets on Asia, regional players hedge. Mr. Hoagland is a respected columnist with deep contacts. He is an intelligent man and he tries to be analytical as well as dispassionate. So we read what Jim Hoagland writes.

This article by Mr. Hoagland is a must read in our opinion. We provide a few excerpts below:

Asia forms the crossroads of success or failure for Barack Obama's grandest foreign policy designs. This impression has crystallized over a year in which the president has shown himself indifferent to Europe, sentimental and somewhat conflicted about Africa, perplexed by the Middle East and largely oblivious to Latin America.

Obama's choices about China, India, Japan and Pakistan loom at least as large as the urgent challenges of wars in Afghanistan and Iraq. Asia's giants, India and China, present differing and opposed models of international cooperation.

Romanced by the Bush administration to balance China's inexorable rise in military and economic power, India finds itself out of sync with the Obama administration on some key issues. There is no open conflict. But neither is there the air of excitement and innovation about the U.S. relationship that I found on my last trip here 18 months ago.

Obama's emphasis on setting an initial date for withdrawal from Afghanistan in his Dec. 1 policy speech, even as he sent additional U.S. troops, stirred doubt here about U.S. strategic patience. So have the frequent U.S. military visits to and overblown praise for Pakistan's army leadership, despite credible evidence of high-level Pakistani involvement in cross-border terrorism directed at India.
India has recently moved troops away from the Pakistan frontier while increasing deployments into border areas that China is claiming in pugnacious and offensive rhetoric. In a break with its past opposition to foreign bases in the region, India has secured military transit and stationing rights at an airbase in Tajikistan. And Singh's government lavishly welcomed Japan's new prime minister, Yukio Hatoyama, on a recent three-day visit that included publicity about plans for joint military maneuvers in the Indian Ocean.
These are clear signs of Indian hedging: seeking allies for worst-case scenarios while accommodating China on economic matters. The Obama administration's failure to reaffirm clearly that India's rise is in U.S. strategic interests has contributed to this hedging. That is a mistake the president should quickly correct, in the interests of his own vision of a new world order centered on the Pacific and Indian oceans.

There are other more clear cut signs of hedging. One such sign was discussed in detail in our article President Bush Proposes & President Obama Disposes? India-Russia Sign a Landmark Nuclear Deal.

The reality is that President George Bush had the vision to build a long-term strategic partnership between America & India. President Obama does not think in these terms. His focus in inwards. His instincts are short term and tactical in nature.

The other reality is that President Obama thinks that the world has expectations of his Presidency and his dream is to fulfill these expectations by ridding the world of nuclear weapons and by implementing a strict climate control regime. This is a Nehruvian approach and that is why we asked in July 2009 Is President Obama America's Jawaharlal Nehru? In contrast, like President Reagan, President Bush simply wanted to ensure America's global predominance in the 21st century.

Today's India is getting closer to President Reagan's approach while President Obama is steering America towards the Nehru approach. This simple reality is the underlying reason for the current disquiet in America-India relations.

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Last Week in Af-Pak - A Beginning of The End Game or KSM Redux?

2010-02-20T13:15:00Z

This past week in Afghanistan-Pakistan was a momentous one. It began with the arrest of Mullah Abdul Ghani Baradar, the Taleban military commander believed to be the deputy to Mullah Omar. Such a man would know just about everything there is to know about the senior Taleban leadership. Mullah Baradar was arrested in the southern city of Karachi. This shows how deeply the Taleban have penetrated into Pakistan. It is also rumored that the Taleban money is in Karachi Banks. So Baradar's capture could lead to seizure of Taleban's monies.

Within days of this arrest, two other senior Taleban leaders were arrested inside Pakistan. These were Taleban's shadow governors for two northern Afghan provinces; Mullah Abdul Salam of Kunduz and Mullah Mir Mohammed of Baghlan. According to the New York Times, these two arrests were apparently unrelated to Mullah Baradar's capture.

(A New York Times picture)

Then on Friday, February 19, Pakistan announced that the Mohammed Haqqani was killed by a missile. Mohammed Haqqani was the younger brother of Sirajuddin Haqqani, the top military commander of Taleban in North Waziristan. The New York Times reports that Sirajuddin was actually the target of the attack. The Haqqani network was blamed for the suicide bombing attack against the CIA in which senior CIA operatives were killed.

By any analysis, this was a successful week for the American military operation in the Af-Pak region. The question is whether this is a short term tactical victory or a the beginning of a long term turn in the war against the Taleban.

Why do we ask? Because this string of successes reminds us of another string of intelligence successes a few years ago. At that time, the arrest of Khalid Sheikh Mohammed ("KSM") was considered to be a crippling blow to the Al-Qaeda -Taleban network. KSM was the military planner of the 9/11 attack on New York. He was reputed to be the number 3 in the Al Qaeda hierarchy with close ties to Osama Bin laden and Al-Jawahiri, the number 2 in Al Qaeda. KSM's arrest yielded an intelligence treasure and did a great deal of tactical damage to the Al Qaeda-Taleban network.

But we know today that the arrest of KSM and a few other senior terrorists did little to hurt the Taleban in the long term. The Taleban grew from strength to strength from 2002 to 2009. This resurgence of Taleban prompted President Obama to commit to the current Afghan "surge". During the past several years, it became obvious that elements of the Pakistani military-intelligence establishment were actually helping the Taleban rebuild. Whenever America put on a high degree of pressure on Pakistan, this establishment responded by publicly helping in the arrest of "senior" terrorists. This was in keeping with the public posture of Pakistan as America's most critical ally in the War On Terror. It became obvious later that many of these arrests were in fact sacrificial lambs and behind the facade of these arrests, Pakistan continued to help the Taleban to get stronger.

This is why we raise the question whether this week's actions are in effect KSM redux and simply a tactical accommodation to American pressure. We do not think so, because we dare say "this time it is different".

The difference this time is that the end game has begun for the post-America control of Afghanistan. Such control is an absolute strategic necessity for the Pakistani Army, the Most Important Player (MIP) in the Af-Pak game. Such control requires the Pakistani Army to exercise serious operational authority over the Afghani Taleban network resident in Pakistan. Those who oppose Pakistan will be arrested and possibly shopped to America if they refuse to cooperate with the MIP.

This may be why Pakistan has refused to handover Mullah Baradar and the other Taleban leaders to the United States. On February 19, Pakistan's interior minister Rahman Malik said that Pakistani authorities were still questioning these Taleban leaders to determine whether they had violated Pakistani law. He added that if they have not done anything wrong, they will go back to the country of origin or Afghanistan and not to United States.

This is not how a critical ally in the War on Terror behaves. So we ask whether a deal is being negotiated. Will the arrested Taleban leaders strike a deal with the Pakistani Army and agree to do its bidding inside Afghanistan? Or will the American Military agree to give the Pakistani Army what it desires inside Afghanistan in exchange for these prisoners & their intelligence?

This is the Af-Pak region and nothing is as it seems. As Daniel Markey, senior fellow for South Asia at the Council on Foreign Relations told the New York Times “The United States side is pretty worried about seeing a deal emerge that suits everyone other than us,”

We concur.

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