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March 23

Can't sleep, even after 2 Happy Days reruns. Might as well start early and go to the gym.

From Bloomberg TV

Futures down. Dow -20, NAS -6.25, SP500 -2.5.

Even if I'm modestly short, I'm not happy about the drop - or maybe it's the news.

Syria - 4 killed in protests near mosque. (Bloomberg). Gov MAY have dismissed local governor responsible (NASDAQ:BBC). (Misdirection?)
Arguments of moral authority aside, and whether or not the US should or shouldn't be involved, and whatever Obama have said in 2008 - this isn't good.

Libya - Ghadaffi still attacking. Rebels disorganized. No fly zone enforced, hitting land targets. Hillary says those close to Ghadaffi are looking for way out, endgame via back channels despite what he says ("Victory is mine"). Debate within NATO for what should ultimately be done. USA letting the kids fight it out. Still seems like USA doing heavy lifting with Tomahawks, 212 sorties vs 124 by coalition (BBC). Here's another summary: www.bbc.co.uk/news/world-africa-12806112

Rumsfeld - is tweeting? Palin's running mate? :) Says, "There's a reason Gadhafi isn't contemplating using a nuclear/radiological weapon today: He saw what happened to Saddam." Sounds like trying to defend Iraq decision. Not really relevant to anything going on but he has a book to sell. (Ouch :) )

Canada - right wing Harper government destabilizing, partly over F-35 contract. Ran on fiscal responsibilty and accountability after dethroning long time "Liberal" gov. Lib's were actually better at fiscal balances - credit to "all-star" finance minister Paul Martin? Though he couldn't hold power as PM from his popular predecessor Chretien any better than Gordon Brown after Blair. Lib's still feeling heat after Quebec separatist payoff scandal 10(?) years later - Harper feeling some heat from lack of accountability of last few years though he doesn't care. Still no credible opposition to Canadian Tories (Conservative party).
"Only 4 per cent of respondents cited deficits and debt as their top concern, compared with 29 per cent who believe health care should be the top national priority. Eighteen per cent cited jobs and the economy as the top concern. Education and the environment also trumped deficits and debts as key priorities." www.theglobeandmail.com/news/politics/ca.../
(Although, it is in much better fiscal shape than us, after large surpluses with the Lib's, no need for bailouts like here except GM, and no Iraq war to pay for though they have exhausted themselves in Afghanistan.)

Portugal - minority government ready to vote against additional cuts, may require 'bailout'. I really don't understand all of the implications, but from the air time sounds like there could be some 'restructuring' - though not sure if Ireland restructured in the end after all of their stuff. Thought the Irish taxpayers are paying off the bondholders (for the bank's sins) - and will probably take a few decades. Maybe that's why Portugal may have a new prime minister soon - they're worried about being signed up to an Irish deal. What do I know?

In the few minutes it took me to write this, futures have dropped further.

Britain - debating further fuel tariff cuts. Shows that there is a (anti-?)Keynesian effect - reducing the austerity (by removing planned tariffs) might help growth. Cameron trying to steer through maze of UK angst over Iraq pains but now in Libya, fiscal / economic nightmare. Still maintaining AAA rating. Likes to make himself feel better by looking over the neighbor's fence (Ireland). Able to maintain pace of public service austerity (post-secondary ed., BBC cuts - though health and primary ed mainly spared). Amazing in another coalition gov (like Canada, Portugal... oops? have they been upset yet? It's 5am).

Saudi Arabia - local elections announced for April 23. But not for women (BBC).

Japan - I'm sure there's something going on there. "Lights are on at the reactors". Triumph! There's still the currency black swan to take us down. And rebuilding how many other reactors they have - hope they can start buying diesel gen's soon while those go offline. That won't help GDP. I can't imagine the rebuilding / cleanup effort required.

Seems like a structural shift happening?:

I don't have a view on what is 'proper'. Seems to me like Obama/Hillary are doing their best to NOT be a pre-emptive leader (like GW was) - and instead trying to let the allies, arab league and the UN security council set the mandate in Libya (plausible deniability).

Could this lead to military reduction and result in budget tightening? What effects of less military spending on the US economy? SoCal / Orange County hurt by Bill Clinton cuts I believe - but nation had surplus those years as well.

Seems the theme in Libya - UK, Italy, Qatar, Denmark (supported USA in Iraq), France, Canada, Spain, Belgium (not in Iraq). Curiously, since 02/03 Iraq, governments in France/Canada have gone hawkish (Sarkozy, Harper). Not sure on others.

5:30 am - US futures all back to about 0. Maybe I can close my shorts :)