Introducing five for thought. It’s the first of what will be many bi-weekly blogs that chronicle five important world events. In the italic I present the news, and below I analyze the situation. Topics are limitless and range from business, to political economy, to death, pop culture, and beyond. Suggestions are always welcome… Enjoy!
MADRID, SPAIN – In the latest episode of the euro zone financial crisis, Spain’s Prime Minister Mariano Rajoy confessed that Spain is having some serious issues tapping the bond markets. This blatant transparency shocked investors. In response, Spain has called for a direct injection of capital into Spanish banks, even though that’s not legal at the moment.
Just the latest and biggest domino to fall so far in euro zone’s demise, Spain’s bond market can be compared reasonably to radioactive waste: TOXIC IF HANDLED. So much, that investors are scrambling last second to buy sovereign bonds in Germany and (gasp) America: the perceived safe bets. So what does that mean? Either investors expect years of market sluggishness and deflation, or are terrified of the disaster looming if no solution is brought about. Whatever the case, become familiar with the name Angela Merkel, Germany’s Chancellor and de facto head of the E.U. After this Sunday’s presidential elections in Greece (in which they’ll elect to either keep or abandon the euro) the pinnacle of this entire disaster will be reached no later than the June 28th European summit. Merkel, who’s persisted with advocating austerity measures across Europe, will have to come to terms with reality soon enough. The innevitable choice, which she has yet to make clear to her populace, is either to bail out the economies who failed to reform successfully like Germany did years ago, or let the euro crumble to dust.
WASHINGTON, D.C. – Jamie Dimon, Chief Executive of JPMorgan Chase, was heard by the Senate Banking Committee this past Wednesday in response to his company’s reckless derivative investments, estimated between $2 billion and $5 billion. On one hand Mr. Dimon claims the losses were legitimate hedges intended to back potential losses. On the other hand, not made of wood, the investments could just as easily be proprietary (speculative, arbitrary) trades intended for profit – trades the Volcker Rule, one of the Dodd-Frank regulations, forbid.
Derivatives? Reckless investing? Billions of dollars in losses? It sounds all too familiar, right? Maybe a little too familiar. So much, the scene on capital hill this past Wednesday became just about laughable for spectators. That in itself was no surprise; it’s been long speculated (and proven) that bankers like Dimon are in bed with many of the same Senators who failed to put him on blast. And judging by the questions they probed (several of which prompted for fiscal advice, of all things, from the man who just lost billions for his company), not much has changed. Not a single Banking Committee member asked Mr. Dimon about him and his pals’ most recent effort to win an exemption from the Dodd-Frank rules, which would pretty much just give way for loopholes in derivative regulation.
CAIRO, EGYPT – A panel of judges appointed by Egypt’s ousted president, Hosni Mubarak, ruled this past Thursday that the popularly elected parliament would be dissolved. Hopes of Egypt’s first legitimately elected president are now hanging on by a thread, if it hasn’t already been cut.
In times of revolution it is always the country’s military that most significantly weighs down the direction the nation moves in. In Tunisia and Libya’s case the military sided with the uprising and so the uprising prevailed. In Syria and Bahrain’s case the military sides with the government and so the government continues its dominance. In Egypt’s case, the trend continued – but it’s a unique situation. It’s a country, the Arab world’s largest, that’s been a military autocracy for about as long as it’s been independent. Mubarak, an air force captain himself, ruled for almost thirty years and led a force whose economic ties are just as tightly woven as its political ones. A year post-Mubarak, things are moving in a reminiscent direction in Egypt. Mubarak may not be at the helm, but his cronies are everywhere. If Ahmed Shafik, Mubarak’s last prime minister, wins the coming parliament-less elections, don’t expect democratic roots in Egypt… this decade or the next.
HAMA, SYRIA – Calls for western intervention continue to be heard from Syria, as at least 78 were presumed massacred in Hama on June 6th. That same week, the rebel Free Syrian Army was said to have killed at least 100 government soldiers – a clear statement that the ceasefire called for by the UN and Arab league is not being adhered to.
What began as a prospective domino in the Arab Spring has turned into an absolute civil war between Syria’s Sunni and Alawites. The Sunni’s, which make up more than 80 percent of the country’s populace, sit on the dirty side of the fence while President Bashar al-Assad’s Alawite’s hold onto power. It’s becoming a question of not only when, but how will the Obama administration and its allies respond. Mitt Romney’s advocated for arming Syria’s opposition, but that’s an opposed approach (remember how that went in Afghanistan?). John McCain has put forward the idea of a Libya-styled air strikes, but what good has that proved to do for Libya? The liberal approach seems to be advocating “safe zones” or “buffer zones” along the Turkish border that allow Sunni’s a respite from the life of persecution. But without intervention can that bring about much of a solution? At this point, intervention is just about a given. Its only a matter of when.
LOS ANGELES, USA – Ray Bradbury, most notably author of Fahrenheit 451, died on June 5, 2012, age 91.
I’m not going to indulge in a total literary tribute to Mr. Bradbury, or site his biographical notables. I simply want to thank him – a man presumed by some to be the father of modern science fiction writing – for Fahrenheit 451. I’m not going to act like I’ve read any of his more obscure work. I haven’t. It’s just an amazing story. The characterizations he provides are crystal clear. His scene structure is arbitrary, but in the most pleasantly surprising way. Events are dramatic, and eerie. But within all of that context – robotic dogs and talking televisions and societal taboos – he created a dystopia of meaning that allows the reader to feel accomplished once finished. Like an entire plethora of thoughts were just given birth to. I respect and appreciate any writer who can find a way to create a story just that elaborate and meaningful. And for that, I don’t pray for him, or hope he rests in peace, or plan on visiting his grave any time soon. I simply thank him. As a writer that’s as genuine as it gets.
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Pierce Arrow Editorials Editor