DiscussionDIVAS

Monday morning you look so fine

Tuesday, well, not so good...

 

By Tuesday of this week Iraqi Prime Minister Nouri al-Maliki, was down and out with President Bush, who expressed “a certain level of frustration” over al-Maliki’s ability to run the country.

 

But by Wednesday, al-Maliki was back in favor as Bush backpedaled on Tuesday’s comments, calling al-Maliki “a good guy, a good man with a difficult job, and I support him.”

 

But wait! By Thursday, al-Maliki’s government was again under pressure, as an important new government report concluded that “Iraqi political leaders remain unable to govern effectively.”

 

Written by spies

The report itself – an update to the National Intelligence Estimate – is particularly damning, an assessment put together by top analysts at 16 different U.S. spy agencies.

In short, it says that Iraq’s ability to govern itself will likely worsen over the next six to 12 months, that Iraqi security forces won’t be able to stand on their own without help, and that sectarian differences and violence are still quite high. Read the full report.

 

One relatively positive point in the report that the Bush administration will be sure to highlight: that Iraq’s security will likely “improve modestly” thanks to efforts by coalition forces—evidence to them that the “troop surge” is working. (See previous WeeklyDIVA on the troop surge.)

 

The big picture

Of course the much anticipated big, big report will come in mid-September, when the top military guy in Iraq, Gen. David Petraeus and the U.S. Ambassador to Iraq Ryan Crocker will give Congress and Bush a status report on the troop surge.

In the meantime, in the wake of this most recent report, you’ll likely see more calls for al-Maliki to step down and to bring home the troops. One leading republican, Senator John Warner of Virginia, just issued a call to pull them out by Christmas.

...Friday I got travelin' on my mind

We're taking a quick end-of-summer break, back on September 14 with everything you need to feel smarter in five minutes or less! Enjoy the last days of summer... see you soon.

Big swings, big losses

We know it’s August—the month for vacations and a much-needed brain break. But the market meltdown is too tough to ignore. Briefly, here’s what’s happening…

Since hitting an all-time record high in July, the Dow Jones Industrial Average Index lost over 1,100 points and gave up most of its gains for the year. Wild point swings up and down just minutes before the close added to the drama of the declines.

Blame it on “subprime”
Much of the turmoil has stemmed from fears of losses in the home-loan market, or more specifically, the subprime mortgage market. Subprime refers to a group or “class” of borrowers with bad credit histories, which makes them risky loan candidates because they may not be able to repay the loan on time.

Over the last several years, when the housing market was booming, loaning to this group became very popular. Many bought homes without having to put any money down or with adjustable rate mortgages, meaning the cost of borrowing money would eventually “adjust” or "reset"—in most cases, upward.

Why are bad loans impacting the market?
Interest rates are rising and mortgage payments are “resetting” upward. Many of the folks who took out loans are having trouble making the higher payments. Thus, the banks or lending firms likely aren’t being repaid.

To make matters worse, companies that make loans don’t wait to be paid back. They combine thousands of loans they’ve made together into one security and sell that (think of it loosely like a bond) to another company, which assumes the risk of the loan. The companies that bought those securities now are the ones who won’t be repaid, meaning they are holding a losing asset. And that’s what has Wall Street unnerved.

Big picture
On Friday the Federal Reserve cut interest rates, hoping to alleviate some pressure on the markets, and the Dow jumped 300 points in the first few minutes of trade. But the subprime issue is likely to linger for some time as more loans default. Some in Congress are calling for better regulation of mortgage lending practices, though President Bush has said he doesn’t see a need for it. Stay tuned, this wild ride may not be over.

So small, so yellow … so powerful

We pop them, we grill them, we butter them. We mix them in salsa, in salads, soups. We drink syrupy substances derived from them in colas, even dry them for decorative purposes, and yes, fuel our cars with bi-products of them. We’re talking kernels, that is—CORN.

 

Once just that old staple crop many gave little thought to, the one we thank the Native Americans for introducing to the Pilgrims, corn is now HOT.

It’s so hot that in the last year, prices for the commodity (measured in bushels) have jumped almost 50 percent, which apparently caused the price of tortillas in Mexico to spike 400% earlier this year. Even popcorn makers are feeling the heat.

What’s behind the hotness?

In a nutshell, ETHANOL—an environmentally friendlier fuel made from corn (or sugar or even grass) that many see as a fuel of the future. Even President Bush called for more focus on ethanol and other renewable energy sources in his State of the Union speech back in January.

The majority of ethanol made in the United States is made from corn. Already there are over 100 ethanol plants in the U.S., and 70 new ones are expected to come online this year. With ethanol producers looking for corn to make their product in addition to everyone who wants and uses corn, demand is soaring, supply is tight, and prices are skyrocketing.

The increased demand in turn is spurring a demand for land to grow more corn, pushing farmland prices to record highs.

The Big Picture

Corn will again be front and center this fall as Congress seeks to pass a new, five-year farm bill. Just how much the government subsidizes corn growers and four other main crops that have been subsidized in the U.S. since the Great Depression (rice, soybeans, wheat and rice) will be a hot point in the debate. Some believe the subsidies should be reduced, particularly for corn and soybeans, which constitute a large portion of highly processed foods, one culprit of obesity, and also for environmental reasons. Stay tuned.

Back to the ranch

It’s August so it must be time for Congress—and the President—to get out of Dodge, or in this case, D.C.

On Monday, Congress plans to recess for about a month, to a) take a break and b) go home to be amongst their people—their constituents. They’ve been doing this regularly for a couple hundred years. It used to be out of necessity—it was simply too hot to work in Washington. In 1970 it became law.

Beyond time off
While it is a chance to regroup, it is also a chance to stall movement on various bills or refine strategies. And it’s an opportunity for the president to make moves without congressional blessing. In 2005, President Bush named John Bolton U.N. ambassador after a protracted nomination failed to get confirmation before the August recess.

What’s happening now
While nothing like that is expected to happen this year, there will be unfinished business left on the table: Iraq policy (when and if to set a time table for troop withdrawal) and the farm bill (allocates subsidies to U.S. farmers), among others. Congress was able to push through an ethics and lobbyist bill (an attempt to make lawmakers more transparent about any personal agendas in legislation, and perks such as private plane use, etc.) before breaking.
 
The big picture
Come on! Everyone needs a break. Even the Iraqi Congress is taking the month off. And of course Bush will be vacationing at his Texas ranch. But U.S. lawmakers may not get much of a break this year as they go home to constituents disgruntled about the war. Even Moveon.org plans a well-funded anti-war “ambush” on some Congressmen around the country, ensuring little rest for those who don’t support troop withdrawal. But with no one in Washington, kinda makes you wonder who will be running the ship.

Get your election groove on

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The 2008 presidential election may be (gasp) 15 months away, but there’s no dearth of election-related news as a crowded field of candidates on both the left and right maneuver for their party’s nomination. And while there are a slew of names and issues to keep straight, for now, let’s focus on the basics.

Your voice may be heard sooner!
For decades, the famed Iowa caucuses and New Hampshire primary have served as the first and most important primary events—where results help make or break presidential candidates. But their influence may be tested in January, when for the first time, three other states have bumped up their primaries to steal a bit of the thunder. Nevada will hold its caucus between Iowa and New Hampshire, and South Carolina and Florida will quickly follow.

But the big show comes February 5, or the new “Super Tuesday,” when a whopping 20+ states will host primaries much earlier than usual—including major players like California (usually in June), New Jersey (usually in June) and Illinois (usually in March). It’s an expensive prospect and logistical nightmare for the candidates, who will have to select where to focus time and money for the best results.

Why the change?
In the past, numerous candidates, even President Harry S. Truman, have dropped out after poor performance in Iowa or New Hampshire. This means bigger states with later primaries have ultimately had less influence on the final nominees. By moving the primaries earlier, many states are attempting to give their constituents more of a say in the nomination process.

What’s a caucus anyway?
Caucuses are different because they don’t operate like a regular election. Candidates are chosen essentially by a show of hands taken at small, in-person meetings. Though the process is different, the outcome of a more formal primary election and a caucus is the same—a candidate wins.

It’ll be September before we know the final players
After the primaries and caucuses, candidates are officially nominated at party conventions. The ’08 convention season will kick off in late August with the Democratic National Convention in Denver, Colo. History dictates the party that does not hold the White House hold its convention first. The Republican National Convention will follow in early September in Minneapolis, Minn.

The big picture
It is a long way to go until the election itself, but don’t despair! This promises to be a fantastic contest with a greater mix of gender and race in the candidate pool than ever before. Will this drive more female voters to the polls? Will we see more African-American voters? More Hispanics? In addition to the war, immigration, alternative energy, the environment and healthcare are all hot topics sure to be front and center.