9-Oct-10 News -- Nobel Peace Prize awarded to China dissident - 9-Oct-2010 - Generational Dynamics

Two terrorists exploded suicide bombs on thursday at a Sufi shrine in Pakistan during a special religious ceremony. Of the hundreds in attendance, nine were killed and dozens were injured. Dawn

Dow Industrials cross 11000 after disastrous jobs report

An online correspondent wrote to me recently saying that Wall Street was bcoming "really bonkers relative to reality," just like 2007. I wrote back that it would be hard to see why Wall Street was more bonkers now than it was, say, a year ago.

However, after Friday, I can see what he means. The jobs report was disastrously bad, worse than people had expected. This is particularly true when you remember that economists have been promising a "V-shaped recovery" every month for the last two years. Apparently economists are too dumb to learn, but that shouldn't surprise anyone.

The economy lost 95,000 jobs in September, according to Bloomberg. To celebrate, the stock market celebrated by pushing the DJIA above 11,000.

How could this happen? The financial pundits talked about it all day on tv. The disastrous job report meant that the Fed will be pressured to do another $500 billion to $1 trillion in quantitative easing.

This is exactly what was happening in 2007, prior to the beginning of the financial crisis in August. Bad news was always good news, because bad news meant that the Fed would lower interest rates (the Fed funds rate) by an extra 1/4% or 1/2%, and that would stimulate the economy.

Wow!! Just think, that's all that the Fed had to do then. Just lower the interest rate by 1/2%!! But now, interest rates have been effectively 0% for a couple of years,

Now it's hardly worth getting out of bed in the morning unless the Fed or the Administration is throwing a few hundred billion dollars out there.

I heard one economist on tv on Friday say that the economy will be a little slow for a month or two, but then there'll be "an acceleration of job growth and economic growth."

From the point of view of Generational Dynamics, nothing has changed since I started discussing this in 2002: The stock market has been in a bubble since 1995, and is still overpriced today by a factor of almost 200%, so by the Law of Mean Reversion, there will be a stock market crash to a range below Dow 3000. (See "Updating the 'real value' of the stock market.")

Mideast peace talks may or may not have ended, after Arab League meeting

The Arab League met on Friday to discuss whether to recommend ending the peace talks between Palestinians and Israelis, after Israel refused to extend its moratorium on building West Bank settlements when the moratorium expired on September 26.

Palestinian president Mahmoud Abbas had said that he'd let the Arab League decide whether to continue the peace talks. He also said that he would make a historic announcement at the Arab League meeting. I speculated that this might mean that he planned to announce his resignation as Palestinian president, since he's said in recent interviews that he's getting too old to "continue to lead."

However, there seems to be nothing but confusion resulting from Friday's meeting. The Jerusalem Post says that some Arab leaders want the talks to end, while others want to give the U.S. a month to work out a compromise about the settlements, while others say that the direct peace talks should end, but indirect peace talks (using the U.S. as intermediaries) should continue.

However, a Reuters report says that the Arab League leaders want the direct peace talks to continue, and that there was no recommendation to go back to indirect talks.

"The Arab follow-up committee will convene another meeting in the coming weeks to study the alternatives and the ideas that were presented by the president," said an Arab League spokesman.

As I've been saying since 2003, Generational Dynamics predicts that Jews and Arabs will be re-fighting the genocidal war that they fought in 1948, following the partitioning of Palestine and the creation of the state of Israel, and so no peace talk has any talk of succeeding.

In this case, I actually thought that they probably find some formula for temporarily resolving the settlement issue, say by agreeing that only a few settlements will be built, and only in certain restricted areas. But apparently even that limited compromise is impossible. Abbas has repeatedly said that the peace talks cannot continue unless the settlement moratorium is extended, and Israeli prime minister Benjamin Netanyahu has asked Abbas to continue the peace talks, even though the settlement moratorium will not be extended.

I think it's pretty clear to everyone that the peace talks are going to fail, but nobody wants to be the "bad guy" who says it. The Obama administration, which has bet a great deal of credibility on the talks, will try to do anything to grease the wheels; Abbas, the Arab League and Netanyahu are just posturing so that they'll be in a position to blame the other side when the peace talks finally collapse.

Everybody's afraid of the consequences if the peace talks collapse. There have been three Mideast wars in the last five years -- Israelis vs Hizbollah in Lebanon in 2006, Palestinian Fatah vs Hamas in Gaza in 2008, and Israelis vs Hamas in Gaza in January, 2009. If the current peace talks collapse in acrimony, most people expect another war, with unpredictable consequences.

The Nobel Peace Prize awarded to China dissident

Anyone who's seen the Broadway play "Man of La Mancha," or who has read the original 1605 book "Don Quixote" by Miguel de Cervantes, knows what the phrase "tilting at windmills" means. It refers to an act of lunacy where the hero gets on his horse and ventures forth to attack a windmill, thinking that it's an evil giant. The story is supposed to make you feel good, because it shows how even attacking a windmill "keeps hope alive."

So tilting at windmills is the thought that came to my mind on Friday when I heard the announcement that the Norwegians were awarding the Nobel Peace Prize to a Chinese dissident, Liu Xiabao.

Now, there's no doubt that Liu is a hero by Western standards. He stood up to the Beijing government in the realm of human rights, and was sent to jail for 11 years as a result. And all the European human rights groups feel might proud of themselves for this, according to the LA Times.

According to one China analyst, Kerry Brown of Chatan House, "The hard-liners in China will see this as just a Western conspiracy, and in the short term it will probably make things worse for dissidents. But in the long term it is hugely damaging for the Chinese political elite, who seem to want international legitimization."

This opinion is barely consistent with reality. This award could only infuriate the Chinese -- in the short run and the long run.

If you want to get an idea of what the Chinese REALLY think of the award, here's an extract from an opinion column in China's Global Times. What I found most fascinating about this opinion column is its statements about the collapse of the Soviet Union:

"Friday the 2010 Nobel Peace Prize was awarded to Liu Xiaobo, an incarcerated Chinese criminal.

The Nobel committee once again displayed its arrogance and prejudice against a country that has made the most remarkable economic and social progress in the past three decades.

The Nobel Prize has been generally perceived as a prestigious award in China, but many Chinese feel the peace prize is loaded with Western ideology.

Last century the prize was awarded several times to pro-West advocates in the former Soviet Union, including Mikhail Gorbachev, whose efforts directly led to the disintegration of the Soviet Union. The Western preference of the Nobel committee did not disappear with the end of the Cold War.

The committee continues to deny China's development by making paranoid choices.

In 1989, the Dalai Lama, a separatist, won the prize. Liu Xiaobo, the new winner, wants to copy Western political systems in China.

There are many different perspectives to view these two people, but neither of the two are among those who made constructive contributions to China's peace and growth in recent decades.

Other Chinese dissidents, such as Rebiya Kadeer and Hu Jia, were reportedly on the shortlist for the peace prize this year, which naturally generates animosity among many Chinese against the award.

They have reason to question whether the Nobel Peace Prize has been degraded to a political tool that serves an anti-China purpose. It seems that instead of peace and unity in China, the Nobel committee would like to see the country split by an ideological rift, or better yet, collapse like the Soviet Union. ...

Obviously, the Nobel Peace Prize this year is meant to irritate China, but it will not succeed. On the contrary, the committee disgraced itself.

The award however makes it clearer that it is difficult for China to win applause from the West during China's development, and China needs to be more determined and confident in choosing its own development path, which is different from Western approach.

The Nobel committee made an unwise choice, but it and the political force it represents cannot dictate China's future growth.

China's success story speaks louder than the Nobel Peace Prize."

There are several fascinating aspects to the opinion, which illustrates a great deal about the differences between China's view of the world and the West's:

So the Nobel prize committee and the Europeans have found a way to make themselves feel good. They can write congratulatory messages to one another about how clever they were to have embarrassed the Chinese by giving the award to a Chinese dissident.

If they had done no harm, then we could say that they were simply tilting at windmills. But unfortunately they did do harm - they increased the xenophobia between the Chinese and the West.

By the way, in my opinion the winner of the Nobel Peace Prize should have been Bill Gates, who has amassed a fortune at Microsoft and is looking for ways to spend it that really WILL bring peace.

Generational Dynamics Web Log for 9-Oct-2010
9-Oct-10 News -- Nobel Peace Prize awarded to China dissident

Terrorists bomb Sufi shrine in Karachi, Pakistan

Dow Industrials cross 11000 after disastrous jobs report

Mideast peace talks may or may not have ended, after Arab League meeting

The Nobel Peace Prize awarded to China dissident

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Generational Dynamics Web Log for 9-Oct-2010 9-Oct-10 News -- Nobel Peace Prize awarded to China dissident

Terrorists bomb Sufi shrine in Karachi, Pakistan

Dow Industrials cross 11000 after disastrous jobs report

Mideast peace talks may or may not have ended, after Arab League meeting

The Nobel Peace Prize awarded to China dissident

Web Log Pages

Generational Dynamics Web Log for 9-Oct-2010
9-Oct-10 News -- Nobel Peace Prize awarded to China dissident