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Tom Au, CFA
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In the early 1990s, during the middle of a secular bull market, I began work on "A Modern Approach To Graham and Dodd Investing," that was not particularly suited for the decade of the 1990s, but was ideally suited for the following "Lost Decade" of the 2000s.
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  • China, the U.S. and Iran's Nuclear Proliferation 17 comments
    Apr 11, 2010 3:37 PM
    "Missiles that can fire north can also fire south." So felt a bunch of Latin American countries that joined the U.S. in resolving the Cuban missile crisis in 1962.

    Missiles that can fire west can also fire east. This is the way China should feel about the prospect of Iranian nuclear missiles. In an uncharacteristic burst of short sightedness, they don't.

    "The enemy of my enemy is my friend." That's the way China seems to feel in taking Iran's side in the nuclear weapons issue. For now, China and Iran have a common enemy, the U.S.

    But the fact of the matter is, Iran is a lot closer to CHINA than to the United States. Meaning that the country will have missiles that can hit China LONG before it can develop missiles with a sufficient range to traverse the Mediterranean AND the Atlantic Ocean to threaten New York.

    Right now, China wants to be Iran's "friend," because of the latter's oil. But China is a net CONSUMER of oil, just like the United States. Meaning that their longer term interests are closer to ours (a weak Iran) than Iran's.

    Iran could easily become China's enemy someday. (It stands between China and its new interests in Africa, for instance.) If it were not for "ideology," it's the U.S. that should be Iran's friend, against China, for just this reason.

    And Kublai Khan's "China" (Mongolians, actually), did try to, and succeeded in conquering  modern day Iran in the 13th century, en route to the Mediterranean. Iran should fear the same about a country that overran large parts of India in 1962.

    Some countries don't seem to know where their interests lie.
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Comments (15)
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  • Eliezer Baram
    , contributor
    Comments (14) | Send Message
    China is probably, like Russia, supporting Iran to weaken U.S. power in the middle east thus weakening U.S. power over oil in the middle east. This is a mutual China-Russian interest, especially for China as it's a economy will need more and more oil in the future, and oil production might be near it's peak already or soon.


    I think the U.S. Unfortunately has decided a nuclear Iran is bearable. but a nuclear Iran will be a nightmare for the U.S. Iran is already a very strong nation and very hostile to the U.S. and the west
    From a factual point what we see and hear a lot about in Israel is-
    1. Iran controls Syria and it's young "president" which is today almost an Iranian puppet
    2. Iran controls Lebanon via Hizballah, with the support of Syria
    3. Iran controls Gaza via Hamas
    4. Iran is influencing religious and ethnic groups in Iraq
    5. Iran is supporting lightly the Taliban via weapons shipments


    Also when U.S. troops will completely withdraw from Iraq it is very likely we will see direct military intervention from Iran in Iraq, but even occupation of some parts of it. and a nuclear Iran will always have it's nuclear abilities to counter western military intervention threats
    12 Apr 2010, 10:53 PM Reply Like
  • Tom Au, CFA
    , contributor
    Comments (6783) | Send Message
    Author’s reply » Sure, the U.S. is worried about a nuclear Iran because of oil. But after the U.S. leaves, neither side will have much interest in the other.


    On the other hand, both Russia and China have long-term, CONTINUING interests in not seeing Iran get stronger. Because IRAN's sphere of influence overlaps both of THEIRS.


    It would be like the Second Balkan War (of 1913). After the Balkan countries drove the Turks out of Europe, they started fighting among themselves.
    13 Apr 2010, 09:41 AM Reply Like
  • Eliezer Baram
    , contributor
    Comments (14) | Send Message
    I see your point, it's a likely scenario long term that Iran will turn back on Russia and China eventually, and they will be much much more vulnerable to it than the U.S. because of their relatively near geographic distance
    But I don't think the U.S. will be able to completely leave anytime soon the middle east due to it's oil resources. If the U.S. was not depended on middle east oil that would be great for the U.S., but as long as U.S. needs middle eastern oil U.S. military forces are probably going to have to stay in the middle east to ensure the U.S. is able to buy oil from the middle east, so the U.S. will also stay in the middle east as a military factor vulnerable to a nuclear Iran


    Also most of europe is already in Iran's missile range (the distant parts of china are about the same distance as the middle of europe), so part of the west is already in Iran's sphere. It may be that Iran will develop missile capability to the U.S., if they are able to launch a satellite into space which they did sometime ago they are not that far from that point
    13 Apr 2010, 11:00 AM Reply Like
  • Eliezer Baram
    , contributor
    Comments (14) | Send Message

    13 Apr 2010, 01:52 PM Reply Like
  • Tom Au, CFA
    , contributor
    Comments (6783) | Send Message
    Author’s reply » No wonder China doesn't feel threatened by those missiles. But Russia, clearly, is.


    For now, the threat to western Europe holds the U.S. hostage. But in the 21st century, I see western Europe moving into the "Chinese" orbit--and America finding a new set of allies.
    13 Apr 2010, 02:35 PM Reply Like
  • Eliezer Baram
    , contributor
    Comments (14) | Send Message
    Well I hope that won't happen. I don't buy the "Chinese" 21st century, they have too many problems such as no democracy no free speech and over 50% of the land occupied by minorities seeking independence (Tibet, Inner Mongolia, and the Muslim area in the north-west)


    I think this is down playing america's power too much. The 21st century will be no less american than the 20st. However the U.S. not striking Iran already / allowing Israel to do so is a mistake
    13 Apr 2010, 04:53 PM Reply Like
  • Retired User
    , contributor
    Comments (1803) | Send Message
    I don't see this at all. China imports oil from Iran. Both countries are insular, preoccupied with internal control. Russia has good relations with both of them.
    19 Apr 2010, 04:56 PM Reply Like
  • Retired User
    , contributor
    Comments (1803) | Send Message
    Now, I'm completely baffled by your remarks. Western Europe in the (financial or strategic) orbit of China??
    19 Apr 2010, 05:00 PM Reply Like
  • Tom Au, CFA
    , contributor
    Comments (6783) | Send Message
    Author’s reply » I see the renewal of American power and an "American" 21st century, in a strange, roundabout way.


    I see America retrenching by concentrating its efforts closer to home, first Latin America, then Africa, and finally the Middle East. Abandoning many "traditional" interests in Europe and Asia (maybe not Japan).


    Paradoxically, it is this retrenchment that would lead to a revival of American power. "Reculer pour mieux sauter" as the French would say.


    China would be the second, and western Europe would be the third of the great powers, and counterally to preserve the balance of power. That's the point.


    Russia would end up as our ally.


    Basically it would be an alliance of the "crowded nations" (western Europe and China, which have large populations relative to their land masses), versus the "landed nations" (North and South America, the African countries, and Russia).
    19 Apr 2010, 05:25 PM Reply Like
  • Eliezer Baram
    , contributor
    Comments (14) | Send Message
    Anyone here who reads the map correctly understands the U.S. is on its way to loose the middle east to Russia and China with their Iranian allies..
    U.S. Allies - Israel, Egypt, Palestinian Authority in the west bank (this is a different nation from the Hamas in Gaza), Jordan, and the Saudi related countries - are all except Israel and Egypt very weak countries militarly and will not be able to stop a nuclear Iran backed by Russia and China to do whatever it wants in the middle east
    12 Apr 2010, 11:03 PM Reply Like
  • Retired User
    , contributor
    Comments (1803) | Send Message
    To do what exactly? Destroy itself by attacking a neighbor? - I don't think so. Egypt and the Gulf emirates fear their own religious zealots and idle young men more than anything else. On a smaller scale, we have similar social problems in US, France, Britain, and Germany.


    You think Iran is a threat to vital US oil supplies. Arguably, so is Venezeula.
    19 Apr 2010, 05:14 PM Reply Like
  • Eliezer Baram
    , contributor
    Comments (14) | Send Message
    Why destroy itself? of course I don't think they will use their nuclear weapons immediately or for any time soon, but they will have them as a counter response to any significant military intervention of the west. This will insure their exterme religious rygime self preservation - especially due to the growin inner civil unrest of the local oppositions, and this will allow them - via conventional military strength - to increase their influence in the middle east, especially over oil exporting nations, while using the nuclear weapons as counter to western superior conventional military force


    For example if you remember the Iraqi invasion to Kuwait and the first desert storm operation in 1991... what if Iraq had nuclear missiles capable of hitting Europe? Would the West lead by the U.S. be so light on the trigger and force them out of kuwait so easily? I doubt it


    I am not familiar so much with the situation in South America, and from my impression, on a relative basis (relative to Iran that is) Venezuala seems a much more rational country than Iran - if they had considerable conventional power backed by nuclear weapons like Iran is reaching they may definility sabotage U.S. oil supply from that region or raise oil prices to very high price
    19 Apr 2010, 05:45 PM Reply Like
  • WS1835
    , contributor
    Comments (239) | Send Message
    An honest reading of recent foreign policy moves by the Obama administration conveys the certainty that the USA is shedding its superpower status at breakneck speed. Obama's policy very clearly results in the establishment of regional powers as a replacement for worldwide American influence.


    Obama's intent appears to be to simply withdraw from most foreign zones, and let the locals have at it. Missile defense for eastern europe was killed and a onesided strategic arms treaty signed to make Russia happy. North Korea has been left to the care of China while the White House shuns the Dali Lama. Japan and South Korea have been left out in the cold versus China's expansion. We snub Israel and its prime minister while funding the PLO and crawling to the Iranians on bended knee. We have abandoned the UK regarding the Falklands and failed to support Columbia while at the same time shaking hands with Chavez and developing a defense pact with Brazil. We have even managed to alienate both India and Pakistan at the same time. No small feat there. And Obama's personal diplomacy is on the verge of alienating the very same government (Karzai, et al) that our troops are fighting to secure.


    The end result is the same in each case. American prestige and strategic strength is sacrificed. American regional allies are left unsupported. American regional adversaries are unchecked and/or encouraged. I just wonder where we draw the line. We don't even seem willing to handle our own southern border as Mexico implodes.
    13 Apr 2010, 06:46 PM Reply Like
  • Eliezer Baram
    , contributor
    Comments (14) | Send Message
    I agree completely, and this is felt very strongly and is very real already.
    I would add that the end result is not just strengthening regional adversaries (such as Iran) but global adversaries to the U.S. Mainly Russia and China. Russia is definitely taking advantage of this situation already in several regions-
    1. A Russian driven military revolution in Madagascar last month
    2. "Red' (communists) protests in Thailand trying to overthrown the government there
    3. Recent Polish airplane with all top leaders harshly opposing russia crashes accidentally in russian territory - I doubt it's accidental
    4. Ukraine opposition pro-russian leader winning over the pro-american leader in february elections
    5. Russia threatening nuclear attack on Israel if Israel attacks Iran
    6. Turkey becoming very anti-american and anti-israeli due to correct reading of middle east new situation - a weak america, strong russia-china-iran
    13 Apr 2010, 09:10 PM Reply Like
  • Andrew Butter
    , contributor
    Comments (1653) | Send Message
    Not quite sure what America's "Superpower" status did for it except enrich manufacturer's of ""defense" systems.


    Korea was a draw - Vietnam ended up in a route - so did Beirut and Somalia - oh yes...there were victories against Granada and Panama.


    Iraq was hardly a resounding success and Afghanistan is still a mess.


    In the old days wars cost a lot of casualties - now they cost a lot of money.


    Can America afford to be a superpower?


    How about building bridges (or at least repairing them), instead of bombs?
    19 Apr 2010, 04:42 PM Reply Like
  • Andrew Butter
    , contributor
    Comments (1653) | Send Message
    Nuclear weapons are obsolete and irrelevant.


    They are a defensive weapon, they are not offensive.


    No one in their right mind would launch a nuclear attack against anyone who had unclear weapons (that could be traced back to them).


    The justification for the deployment of the only two nuclear weapons ever used in combat, was defensive..."if we don't do this we will lose XXXX troops closing out the war the other guys started".


    The current discussion about nuclear weapons is like the discussions about the Maginot Line in France in 1930.


    War means something else now, it is fought differently.


    America's greatest threats now are:


    1: Rising oil prices.
    2: (linked) Economic Stagnation.


    Blasting Iran back to the stone age might feel good - but it won't solve (1) or (2). In fact it will exacerbate them.
    19 Apr 2010, 04:51 PM Reply Like
  • the wave
    , contributor
    Comments (33) | Send Message
    The more I look recently at the issue of Iran’s nuclear proliferation the more I find that a cohort of companies is involved in the Iranian strategic supply. Last May proofs were unearthed that Sumitomo Metals has now for several years sold through China and also through Malaysia key products important for the Iranian nuclear program. Additionally, links there are doubts about links between Sumitomo Metals and Vallourec S.A. of France.


    Iranians are looking for secured suppliers of seamless steel pipes and it seems that Sumitomo Metals is one of them. Two other suppliers of such products could be Sandvik AB, Sweden and Valinox Nucléaire in France. These last companies have historically been suppliers to Iranian energy programs and there are speculations that they are under close European Union scrutiny regarding Iranian nuclear program. Seamless steel pipes are used in oil and gas production and drilling applications as well as in nuclear power plants and related nuclear applications.
    Typically, an Iranian entity secures the supplies through proxy companies, which are based in Asia; speculations point such proxies as China and Malaysia.
    14 Jun 2010, 01:29 PM Reply Like
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