Cyreenik Says
More hot news this month: This time it is about reaching an agreement with Iran on delaying their nuclear ambitions for ten years.
This 18 Jul 15 Economist article, Hiyatollah! The nuclear deal with Iran is better than the alternatives—war or no deal at all, takes the optimistic view.
From the article, "With or without an agreement, the world is stuck with an Iran that continues to run a big nuclear programme and remains slippery and dangerous. The real test of the deal is whether it is better than the alternatives. It is."
Conversely, this 16 Jul 15 WSJ editorial, Obama’s False Iran Choice There was a better alternative to his deal. He never pursued it., is an example of the feelings of those disappointed with the outcome of the negotiations.
From the article, "The debate is raging over President Obama’s nuclear deal with Iran, and Mr. Obama held a rare press conference Wednesday to say that “99% of the world community” agrees with him. Then why bother with a press conference? Mr. Obama made other claims we’ll address in coming days, but for today it’s worth rebutting his assertion that “none” of his critics “have presented to me or the American people a better alternative.”"
My opinion: What those taking the "disappointed view" are not considering is the value of the ten year delay. This is huge. The world will be a very different place in ten years, and it is quite likely this whole nuclear issue will have become nearly irrelevant.
Consider how different things are from what we had in 2005:
o "W." could still see light at the end of the Iraq tunnel
o "Arab Spring" was a season
o Syria was a haven
o Crimea was part of the Ukraine
Much will be the same in 2025, but much will be different. In ten years we will be dealing with this nuclear issue in a very different light. For example: drones and other remotely controlled fighting tools are going to be even more advanced. This means that while nuclear bombs will still be instinctively terrifying, they will be even more obsolete as real-world war-making tools.
That said, what does need to be kept high on the radar is the "trust, but verify" stipulations. Betrayal is a comfortable activity in Middle East cultures, including Iran. Plus, Iran has a strong cultural feeling that outsiders covertly control its leadership's choices. This makes betrayal around something such as this nuclear issue an even easier activity.
New twists and turns this week in the negotiating, new scary surprises. Now the mania in Greece is turning to fear, and there is panic growing.
This 12 Jul 15 WSJ article, Greek Debt Crisis: In Athens, Jubilation Gives Way to Dismay and Confusion Tsipras supporters struggle to understand how new deal on table is tougher than the one they rejected by Matina Stevis and Georgi Kantchev, talks about how the Greeks are feeling about the weekend's twisting and turning negotiations.
From the article, "A week ago, Greeks partied in the streets after voting to resoundingly reject terms of a new European bailout. On Sunday, those same streets were filled with a dazed and confused populace struggling to understand how they were now faced with swallowing a deal even tougher than the one they had just snubbed."
There still has to be some kind of deal negotiated, but the tactics of Tsipras and his supporters have backfired. Instead of the referendum getting them more, it is getting them less. This is a scary and surprising result, and it has now mixed with the hangover that has come with the End of World partying instinct that this whole referendum business brought to Greece over the last couple weeks.
Now we get to see what Blunders will come from reacting to this surprise.
It now seems that the exit of Greece from the Eurozone (Grexit) is going to happen. This is a world-shaking event, but unlike the Chinese stock market crash, mentioned next, this one is no surprise -- it has been a possibility for years and steadily become more possible all through 2015. The difference between how the Grexit is being handled and how the Chinese stock market decline is being handled is a good example of the difference surprise makes.
The party is over (for now) in China's mainland stock markets. The big question now is how much this is going to scare people, and cause Blunders.
For much of 2015 the two mainland markets, Shanghai and Shenzhen, have been rising at a torrid pace. (the Hong Kong stock market acts differently from these two) This was making the news in articles I was reading in the Wall Street Journal and The Economist. Those articles were writing about worries and warnings of a bubble.
During the month of June these two markets have been crashing at an even faster pace -- the bubble worries have become realities. China is experiencing a fast and ferocious stock market crash, and the government is now intervening to see if it can soften the fall.
But this is not a repeat of 1929 or 2007. These mainland markets are small compared to other stock markets around the world, and they are financially isolated from them. In fact, part of the fuel for the earlier rise was due to optimism that the government was taking steps that would make them less isolated.
This crash may not be as big, but it is just as scary for those who invested, which makes this is a scary, unexpected, real-time event. This means Blunders surrounding it are likely.
This 3 Jul 15 Economist article, Untameable market A bad week for China's stockmarkets could be felt for years to come, talks about some of the consequences that could fall out from this.
From the article, "The biggest risk, though impossible to quantify, is that the rout will undermine China’s enthusiasm for financial reform. From deregulating interest rates to opening new industries to private companies, the government has vowed to slacken its grip on the economy. But having seen how hard it is to guide the invisible hand, its willingness to let the market play a “decisive role” in the economy, as top leaders pledged in 2013, may diminish. If so, the reverberations of a fearsome fortnight for China’s stockmarket will be felt for years to come."
This 7 Jul 15 WSJ article, Beijing’s Response to Stock Selloff Reveals Deep Insecurity All-out push to force up markets comes amid new law to combat ‘dangers’ by Andrew Browne, talks about how the response to the fall is spreading to other areas of Chinese society.
From the article, "In that sense, the unprecedented rescue moves, including a multibillion-dollar fund set up by Chinese brokerages at the government’s behest to buy blue chips, is a preview of what’s to come following the passage last week of a national-security law that massively expands the definition of threats to the state to cover almost every aspect of domestic life, including “financial risk,” as well as international affairs. The law explicitly states that economic security is the foundation of national security."
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