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Gatsby
Joined: 09 Feb 2007
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 Posted: Tue Oct 07, 2008 4:30 am Post subject: |
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Times up!
The total value of credit-default swaps is currently estimated to be $62 trillion.
Warren Buffet has called them "financial weapons of mass destruction."
Investment banks and insurance companies are big holders of these CDS's. AIG has $441 billion exposure to CDS's, also referred to as "derivatives." If AIG had failed, the fear was that it could have caused a domino effect series of failures in other banks with CDS's.
The CDS was invented by Blythe Masters in 1997, when she was a recent math whiz graduate of Cambridge University.
http://www.guardian.co.uk/business/2008/sep/20/wallstreet.banking
A CDS is a sort of hybrid between banking an insurance. It serves as insurance against default on credit, i.e., a loan. It promises to make good the loss to the insured, which was originally estimated to be a small risk back when the economy was booming. So investment banks did not feel they needed to keep large reserves on hand in case of multiple payouts.
But good times eventually come to an end, as Warren Buffet tried to warn the world about:
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Last Updated: Tuesday, 4 March, 2003, 13:32 GMT
Buffett warns on investment 'time bomb'
The rapidly growing trade in derivatives poses a "mega-catastrophic risk" for the economy and most shares are still "too expensive", legendary investor Warren Buffett has warned.
The world's second-richest man made the comments in his famous and plain-spoken "annual letter to shareholders", excerpts of which have been published by Fortune magazine.
The derivatives market has exploded in recent years, with investment banks selling billions of dollars worth of these investments to clients as a way to off-load or manage market risk.
But Mr Buffett argues that such highly complex financial instruments are time bombs and "financial weapons of mass destruction" that could harm not only their buyers and sellers, but the whole economic system. |
http://news.bbc.co.uk/2/hi/business/2817995.stm
I am not an expert on these things. I suspect few people fully understand them. But here is a general description of them, from the New York Times:
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Credit Default Swaps
Credit default swaps, which were invented by Wall Street in the late 1990's, are financial instruments that are intended to cover losses to banks and bondholders when a particular bond or security goes into default -- that is, when the stream of revenue behind the loan becomes insufficient to meet the payments that were promised.
In essence, it is a form of insurance. Its purpose is to make it easier for banks to issue complex debt securities by reducing the risk to purchasers, just like the way the insurance a movie producer takes out on a wayward star makes it easier to raise money for the star's next picture.
Here is a more detailed, but still simplified explanation of how they work, given by Michael Lewitt, a Florida money manager, in a New York Times Op-Ed piece on Sept. 16, 2008:
"Credit default swaps are a type of credit insurance contract in which one party pays another party to protect it from the risk of default on a particular debt instrument. If that debt instrument (a bond, a bank loan, a mortgage) defaults, the insurer compensates the insured for his loss.
"The insurer (which could be a bank, an investment bank or a hedge fund) is required to post collateral to support its payment obligation, but in the insane credit environment that preceded the credit crisis, this collateral deposit was generally too small.
"As a result, the credit default market is best described as an insurance market where many of the individual trades are undercapitalized."
The market for the credit default swaps has been enormous. Since 2000, it has ballooned from $900 billion to more than $45.5 trillion � roughly twice the size of the entire United States stock market. Also in sharp contrast to traditional insurance, the swaps are totally unregulated.
When the mortgage-backed securities that many swaps were supporting began to lose value in 2007, investors began to fear that the swaps, originally meant as a hedge against risk, could suddenly become huge liabilities.
The swaps' complexity and the lack of information in an unregulated market added to the market's anxiety. Bond insurers like MBNA and Ambac that had written large amounts of the swaps saw their shares plunge in late 2007.
Credit default swaps also played an integral role in the federal government's decision to bail out the American International Group, one of the world's largest insurers, in September 2008. The Federal Reserve concluded that if A.I.G. failed and defaulted on its swaps, throwing the liability for the insured securities onto the swaps' counterparties, the result could be a daisy chain of failures across the international financial system. |
http://topics.nytimes.com/top/reference/timestopics/subjects/c/credit_default_swaps/index.html?scp=1-spot&sq=credit%20default%20swaps&st=cse
The $62 trillion total is cited in several recent articles, including this one, with the cheerful title: "A Nuclear Winter?"
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A nuclear winter?
Sep 18th 2008
From The Economist print edition
The fallout from the bankruptcy of Lehman Brothers
WHEN Warren Buffett said that derivatives were �financial weapons of mass destruction�, this was just the kind of crisis the investment seer had in mind. Part of the reason investors are so nervous about the health of financial companies is that they do not know how exposed they are to the derivatives market. It is doubly troubling that the collapse of Lehman Brothers and the near-collapse of American International Group (AIG) came before such useful reforms as a central clearing house for derivatives were in place.
A bankruptcy the size of Lehman�s has three potential impacts on the $62 trillion credit-default swaps (CDS) market, where investors buy insurance against corporate default. All of them would have been multiplied many times had AIG failed too. The insurer has $441 billion in exposure to credit derivatives. A lot of this was provided to banks, which would have taken a hit to their capital had AIG failed. Small wonder the Federal Reserve had to intervene.
The first impact concerns contracts on the debt of Lehman itself. As a �credit event�, the bankruptcy will trigger settlement of contracts, under rules drawn up by the International Swaps and Derivatives Association (ISDA). Those who sold insurance against Lehman going bust will lose a lot. But Lehman had looked risky for some time, so investors should have had the chance to limit their exposure.
The second effect relates to deals where Lehman was a counterparty, ie, a buyer or seller of a swaps contract. For example, an investor or bank may have bought a swap as insurance against an AIG default, with Lehman on the other side of the deal. That protection could conceivably be worthless if Lehman fails to pay up. Until the Friday before its bankruptcy, Lehman would have posted collateral, which the counterparty can claim. After that day, the buyer will have been exposed to price movements before it could unwind the contract.
The third effect will be on the collateralised-debt obligation (CDO) market, which caused so many problems last year. So-called synthetic CDOs comprise a bunch of credit-default swaps; a Lehman default may cause big losses for holders of the riskier tranches.... |
http://www.economist.com/finance/displayStory.cfm?source=hptextfeature&story_id=12274112
Sounds pretty serious, doesn't it?
It's not surprising that some have referred to to mortgage crisis as just the tip of the iceberg, and the $700 billion bailout as a "pebble tossed into a churning sea."
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October 7, 2008
Global Fears of a Recession Grow Stronger
By MARK LANDLER
WASHINGTON � When the White House brought out its $700 billion rescue plan two weeks ago, its sheer size was meant to soothe the global financial system, restoring trust and confidence. Three days after the plan was approved, it looks like a pebble tossed into a churning sea.
The crisis that began as a made-in-America subprime lending problem and radiated across the world is now circling back home, where it pummeled stock and credit markets on Monday.
While the Bush administration�s bailout package offers help to foreign banks, it seems to have done little to reassure investors, particularly in Europe, where banks are failing and countries are racing to stave off panicky withdrawals after first playing down the depth of the crisis.
Far from being the cure for the world�s ills, economists said, the rescue plan might end up being a stopgap for the United States alone. With Europe showing few signs of developing a coordinated response to the crisis, there is very little on the horizon to calm rattled investors.
The vertiginous drop in stock markets on both sides of the Atlantic on Monday reflected not only those fears, experts said, but also a growing belief that the crisis could tip the world into a global recession.... |
http://www.nytimes.com/2008/10/07/business/worldbusiness/07global.html?_r=1&hp=&adxnnl=1&oref=slogin&adxnnlx=1223378177-qWjqFQwrOaWXFMyZPlMF8A&pagewanted=all
If the fears of a CDS meltdown are not baseless, we may be lucky if all we get is a global recession. Actually, there may be an even bigger problem than CDS's, according to "The Economist":
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Insiders say the biggest exposure may be in the interest-rate swaps market, which is many times larger than those for credit derivatives. In a typical interest-rate swap, one party agrees to exchange a fixed-rate obligation with another that has a floating, or variable, rate exposure. Depending on whether floating rates rise or fall, one will end up owing money to the other. Again, those banks that dealt with Lehman should have been fine until Friday, when the bank was still posting collateral. But not afterwards.
Although there are ISDA rules to cover such events, the sheer size of Lehman in the market (its gross derivatives positions will be hundreds of billions of dollars) makes this default a severe test. There will inevitably be legal disputes as well. The good news is that the swaps markets did not utterly seize up after it went bust on September 15th. But the reaction may be a delayed one. Mr Buffett�s WMD could leave behind a cloud of toxicity.
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http://www.economist.com/finance/displayStory.cfm?source=hptextfeature&story_id=12274112
If all this makes you very nervous, you are not alone.
7:58 AM, 23 Feb 2008
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Alan Kohler
Credit default swap vertigo
I got vertigo reading a New York Times article the other day. The room started spinning and I had to grip the desk, before pouring an emergency cup of tea.
It was a piece about credit default swaps, and how it will be the next subprime-type debacle. The CDS market is getting the wobbles, it seems. |
http://www.businessspectator.com.au/bs.nsf/Article/Credit-default-swap-vertigo-C3S5W?OpenDocument
The piece he is referring to is apparently this one:
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February 17, 2008
Arcane Market Is Next to Face Big Credit Test
By GRETCHEN MORGENSON
Few Americans have heard of credit default swaps, arcane financial instruments invented by Wall Street about a decade ago. But if the economy keeps slowing, credit default swaps, like subprime mortgages, may become a household term.
Credit default swaps form a large but obscure market that will be put to its first big test as a looming economic downturn strains companies� finances. Like a homeowner�s policy that insures against a flood or fire, these instruments are intended to cover losses to banks and bondholders when companies fail to pay their debts.
The market for these securities is enormous. Since 2000, it has ballooned from $900 billion to more than $45.5 trillion � roughly twice the size of the entire United States stock market.
No one knows how troubled the credit swaps market is, because, like the now-distressed market for subprime mortgage securities, it is unregulated. But because swaps have proliferated so rapidly, experts say that a hiccup in this market could set off a chain reaction of losses at financial institutions, making it even harder for borrowers to get loans that grease economic activity.
It is entirely possible that this market can withstand a big jump in corporate defaults, if it comes. But an inkling of trouble emerged in a recent report from the Office of the Comptroller of the Currency, a federal banking regulator. It warned that a significant increase in trading in swaps during the third quarter of last year �put a strain on processing systems� used by banks to handle these trades and make sure they match up.
And last week, the American International Group said that it had incorrectly valued some of the swaps it had written and that sharp declines in some of these instruments had translated to $3.6 billion more in losses than the company had previously estimated. Its stock dropped 12 percent on the news but edged up in the days after.... |
http://www.nytimes.com/2008/02/17/business/17swap.html?sq=credit%20default%20swaps&st=cse&scp=2&pagewanted=all
Note the date of the article, and the explicit warnings, including in the title. AIG was cited as having experienced what at the time presumably would have been considered a massive loss: $3.6 billion -- but now relative chickenfeed.
This is outrageous. The federal government had obvious warning signs at least eight months before their announcement of an impending meltdown. They could have asked for action months ago, in a way that could have allowed Congress to consider the alternatives responsibly.
It is a financial echo of Hurricane Katrina. Despite the obvious warning signs, we were not prepared for either catastrophe. And there have been others of this general sort during the Bush administration.
Clearly, Gretchen Morgenson deserves credit for getting the story right, and doing her part.
Here is an interview with her by Terry Gross on Fresh Air, where she explains the situation far better than I can:
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Fresh Air from WHYY, September 23, 2008 � With financial markets in flux and a massive government rescue package in the works, financial reporter and New York Times columnist Gretchen Morgenson looks into what's involved in the nearly $700 billion deal.
One central concern: The way troubled banks' assets get valued when the federal government buys them. "Depending on how [the bailout program] is operated, and how the assets are valued before taxpayers are forced to buy them, it could bloat our final bill for this mess while benefiting the very institutions that got us into it," Morgenson wrote in a recent column.
Morgenson talks to Terry Gross about strategies the government might employ to value the assets taxpayers are buying from endangered institutions � and how regulators might earn back some of the trust they've lost in recent weeks. |
http://www.npr.org/templates/story/story.php?storyId=94928783
Watching CNN last night as the NYSE tanked, I saw fear that I have never seen before on reporters' faces. It was not just the fear of a bad day on Wall Street. It was in part the fear of a global recession. But I suspect they know something of the bigger picture. The real danger is indeed a global economic meltdown that could make the Great Depression look like a bad hair day. I hope we never find out if this is true, as we all do. But lately wishful thinking hasn't worked too well.
Good luck, and good night. |
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huffdaddy
Joined: 25 Nov 2005
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| Posted: Tue Oct 07, 2008 5:03 am Post subject: |
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You're still screwing up the quotes. Get in straight man! Sheesh.
| Joo Rip Gwa Rhhee wrote: |
Carter didn't know what he was doing and the US suffered. |
Carter suffered from having previous failed US policies coming back to nail him. Who is to blame for the current failed Afghan state? Bush or the man who created it in the first place? If Carter's to blame than so is Bush. I've seen no indication that he knows what he's been doing over the last 7.5 years.
BTW - who negotiated with the Iranians to keep the hostages in capitivity a little longer? And who sold arms to the Iranians for slush money?
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| I think you talked about the Soviets not being a threat. Anyway Reagan had the right idea about Russia , not Carter |
It's a lot easier to contain Russia when they're not making a mint off of oil sales. And that was not due to anything Carter did. |
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Joo Rip Gwa Rhhee
Joined: 25 May 2003
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| Posted: Tue Oct 07, 2008 5:39 am Post subject: |
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[quote="huffdaddy"]
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Carter suffered from having previous failed US policies coming back to nail him. Who is to blame for the current failed Afghan state? Bush or the man who created it in the first place? If Carter's to blame than so is Bush. I've seen no indication that he knows what he's been doing over the last 7.5 years. |
no carter undermined the Shah reversing what the US had been doing.
No reason to do it , and nothing good came of it.
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BTW - who negotiated with the Iranians to keep the hostages in capitivity a little longer? And who sold arms to the Iranians for slush money |
?
You are right , but that is nothing like allowing Khomeni to come to power.
Besides those weapon were used against Saddam.
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It's a lot easier to contain Russia when they're not making a mint off of oil sales. And that was not due to anything Carter did. |
Oil prices were high when Reagan took office. But the Soviets were ok in the 60's when oil prices were low. Pressure wasn't enough .
Low oil wasn't enough either , but the combination busted them |
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huffdaddy
Joined: 25 Nov 2005
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| Posted: Tue Oct 07, 2008 6:22 am Post subject: |
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| Joo Rip Gwa Rhhee wrote: |
You are right , but that is nothing like allowing Khomeni to come to power.
Besides those weapon were used against Saddam. |
So, allowing Khomeni to come to power and attack Iraq - bad
Selling arms to Khomeni to attack Iraq - good
That's some impressive justification. I guess objectivity has never been your strong point.
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| Oil prices were high when Reagan took office. But the Soviets were ok in the 60's when oil prices were low. Pressure wasn't enough . |
By the mid-80s oil prices fell. The Soviets couldn't maintain their empire for long after that. True, Reagan goaded them into the spending war. But it's questionable whether or not the US will eventually fall victim to that same build up. But the US was in no position to engage in a spending war during the late-70s. Carter's hands were tied. |
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Joo Rip Gwa Rhhee
Joined: 25 May 2003
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| Posted: Tue Oct 07, 2008 2:49 pm Post subject: |
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="huffdaddy"][
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| So, allowing Khomeni to come to power and attack Iraq - bad |
Allowing Khomeni to come to power = bad
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| Selling arms to Khomeni to attack Iraq - good |
It was bad but it woudl have been good if the US could have gotten Khomenis ' Iran and Saddam's Iraq to destroy each other.
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| That's some impressive justification. I guess objectivity has never been your strong point. |
My views are close to those of Thomas Friedman or Bill Clinton more or less . You are a lot more liberal / left wing.
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| By the mid-80s oil prices fell. The Soviets couldn't maintain their empire for long after that. True, Reagan goaded them into the spending war. But it's questionable whether or not the US will eventually fall victim to that same build up. But the US was in no position to engage in a spending war during the late-70s. Carter's hands were tied. |
Yes the US could have engaged in the same kind of efforts that Reagan didin the 1970s. Carter just didn't get it.
Reagan only increased US defense spending by 1 or 2% of GDP. From about 4or 5% to about 6% of GDP. The Soviets spent a lot more than that.
By the way the US isn't spending anymore on the military (as a % of GDP) than it did in the 80's.
http://www.truthandpolitics.org/military-relative-size-graph.php?meas=GDP
http://blog.heritage.org/wp-content/uploads/2008/04/fed-rev-spend-2008-boc-s7-d.gif |
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huffdaddy
Joined: 25 Nov 2005
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| Posted: Tue Oct 07, 2008 4:08 pm Post subject: |
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| Joo Rip Gwa Rhhee wrote: |
="huffdaddy"][
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| So, allowing Khomeni to come to power and attack Iraq - bad |
Allowing Khomeni to come to power = bad |
You continue to believe that Khomeni was the cause of the problem and not a symptom. That is a mistake.
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| Selling arms to Khomeni to attack Iraq - good |
It was bad but it woudl have been good if the US could have gotten Khomenis ' Iran and Saddam's Iraq to destroy each other. |
[/quote]
See, it would have been good to let Khomeni take power if he would have taken out Saddam.
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| That's some impressive justification. I guess objectivity has never been your strong point. |
My views are close to those of Thomas Friedman or Bill Clinton more or less . You are a lot more liberal / left wing. |
That doesn't make you an objective judge. Or at least not an effective one. Not when your understanding of history is severely lacking.
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Reagan only increased US defense spending by 1 or 2% of GDP. From about 4or 5% to about 6% of GDP. The Soviets spent a lot more than that. |
US GDP rose quite a bit during the 80s. Reagan increased defense spending substantialy. Carter is the 70s was in no position to increase spending. The Soviets went bankrupt spending so much. Its' a path the US just might be on as well. |
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Joo Rip Gwa Rhhee
Joined: 25 May 2003
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| Posted: Tue Oct 07, 2008 4:24 pm Post subject: |
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[quote="huffdaddy"]
| Joo Rip Gwa Rhhee wrote: |
="huffdaddy"][
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| So, allowing Khomeni to come to power and attack Iraq - bad |
Allowing Khomeni to come to power = bad |
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| You continue to believe that Khomeni was the cause of the problem and not a symptom. That is a mistake. |
He is the cause. No leader , no government could have been worse.
all US strategic problems in the gulf and in the mideast are now directly connected to Khomeni coming to power.
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| See, it would have been good to let Khomeni take power if he would have taken out Saddam. |
only if he had also destroyed his own government in the process.
]
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That doesn't make you an objective judge. Or at least not an effective one. Not when your understanding of history is severely lacking. |
Sorry it is not my view which is lacking.
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| US GDP rose quite a bit during the 80s. Reagan increased defense spending substantialy. Carter is the 70s was in no position to increase spending. The Soviets went bankrupt spending so much. Its' a path the US just might be on as well. |
when Reagan came to power the US was in a severe recession. He decided to stand up to the Russians right away.
anyway Jimmy Cater undermined the Shah and he allowed Khomeni to come to power.
Of all the problems in the world why did Carter pressure the Shah to let the radicals out of jail and not crack down on them?
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Instead, Jimmy Carter, upon becoming President in 1977, turned on the Shah by launching a deliberate and inexplicable public campaign to undermine his regime. The Carter policy of undermining our ally, the Shah, seemed to work in tandem with that of the Soviet Union. The end result was the establishment of a revolutionary Jihadist regime headed up by the Ayatollah Ruhollah Khomeini. The Iranian revolution, besides enthroning one of the world's most oppressive regimes, helped to build the terror network that challenges the free world today.
At the time, a senior Iranian diplomat in Washington observed, "President Carter betrayed the Shah and helped create the vacuum that will soon be filled by Soviet-trained agents and religious fanatics who hate America." Under the guise of promoting" human rights," Carter immediately started making demands on the Shah while blackmailing him with the threat that if the demands were not immediately met, vital military aid and training would be withheld.
Carter pressured the Shah to release "political prisoners" including known terrorists and to put an end to military tribunals. The newly released terrorists would then be tried under civil as opposed to military jurisdiction, which meant that the trials could be used as platforms for propaganda against the government. This is one of the reasons why civil trials would be unwise today for many of the Guantanamo detainees. Liberal leaning media commentators at the time seemed to work hand in glove with Carter as the Shah, previously portrayed as a forward thinking and fashionable leader, suddenly was transformed by the pundits into a monster.
Carter pressured Iran to allow for "free assembly" which, under the circumstances, set the stage for anti-government rallies. Constitutional rights are the norm in the United States but no so in the Middle East as the introduction of rights ought to have been approached with caution and an eye toward consequences. The predictable results were an escalation of opposition to the Shah as Islamic fundamentalists, egged on by the Soviets, used the opportunity to foment revolution. |
http://www.freerepublic.com/focus/f-news/1763504/posts
Why did he refuse to sell rubber bullets and water cannons?
And why did he have a UN ambassador who called Khomeni a saint?
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| The tendency toward wishful thinking continued even after the revolution in February 1979. Whereas Tehran increasingly viewed the U.S. through the darkly hued optic of its paranoid phantasms and loudly demonized America as its Enemy No. 1, Washington plugged its ears and looked back through rose-colored glasses. The American Representative to the UN, Andrew Young, described Khomeini as �some kind of saint,� while National Security Advisor Zbigniew Brzezinski was favorably disposed toward him, since he seemed to Brzezinski to represented an effective barrier against Soviet influence. �We can get along with Khomeini!� was the motto in that summer of 1979. Businesspeople were encouraged to invest in Iran. Members of Congress were subtly discouraged from making critical comments. Critical journalists who refused to follow the line were denigrated. The following episode, as described by Michael Ledeen and William Lewis, is illustrative of the atmosphere |
http://www.hoover.org/publications/policyreview/4884331.html
Cause liberal democrats are clueless when it comes to national security. |
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huffdaddy
Joined: 25 Nov 2005
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| Posted: Tue Oct 07, 2008 6:02 pm Post subject: |
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| Joo Rip Gwa Rhhee wrote: |
He is the cause. No leader , no government could have been worse.
all US strategic problems in the gulf and in the mideast are now directly connected to Khomeni coming to power. |
History precedes your own lifetime. You might want to study it sometime. |
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bacasper
Joined: 26 Mar 2007
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| Posted: Tue Oct 07, 2008 6:10 pm Post subject: |
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| Gatsby wrote: |
If the fears of a CDS meltdown are not baseless, we may be lucky if all we get is a global recession. Actually, there may be an even bigger problem than CDS's, according to "The Economist":
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| Insiders say the biggest exposure may be in the interest-rate swaps market, which is many times larger than those for credit derivatives. |
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I guess that was what Dennis Kucinich was referring to on the House floor when he mentioned the half a quadrillion dollars in exposure we face.
Does that much money even exist? |
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Joo Rip Gwa Rhhee
Joined: 25 May 2003
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| Posted: Tue Oct 07, 2008 6:30 pm Post subject: |
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| huffdaddy wrote: |
| Joo Rip Gwa Rhhee wrote: |
He is the cause. No leader , no government could have been worse.
all US strategic problems in the gulf and in the mideast are now directly connected to Khomeni coming to power. |
History precedes your own lifetime. You might want to study it sometime. |
Khomeni coming to power was a huge loss to the US. Maybe on par with Lenin coming to power in Russia in 1917.
Khomeni coming to power marked a change. There are time when events are when a period starts.
Carter messed up , he failed and the US still has to deal with the consequences of his failure.
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| William Miller, chief of staff on the Democrat-controlled Senate Intelligence Committee, said America had nothing to fear from Khomeini since he would be a progressive force for human rights. U.S. Ambassador William Sullivan even compared Khomeini to Mahatma Gandhi, and Andrew Young termed the ayatollah a �twentieth century saint.� |
http://townhall.com/Columnists/DineshDSouza/2007/01/29/giving_radical_islam_its_start
good job Jimmy
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huffdaddy
Joined: 25 Nov 2005
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| Posted: Tue Oct 07, 2008 6:50 pm Post subject: |
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| Joo Rip Gwa Rhhee wrote: |
| huffdaddy wrote: |
| Joo Rip Gwa Rhhee wrote: |
He is the cause. No leader , no government could have been worse.
all US strategic problems in the gulf and in the mideast are now directly connected to Khomeni coming to power. |
History precedes your own lifetime. You might want to study it sometime. |
Khomeni coming to power was a huge loss to the US. Maybe on par with Lenin coming to power in Russia in 1917. |
Oh the naivity, Joo.
Hyperbole. Sheesh, haven't you ever heard of Hitler? Tito? Mussolini? Bush?
And how many people criticize Wilson for "allowing" Lenin to come to power? Laying the blame on Carter ignores the problems that begat Khomeni.
The US not only allowed, but supported the rises to power of the likes of Saddam, Castro, and bin Laden. |
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Joo Rip Gwa Rhhee
Joined: 25 May 2003
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| Posted: Tue Oct 07, 2008 7:24 pm Post subject: |
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| huffdaddy wrote: |
| Joo Rip Gwa Rhhee wrote: |
| huffdaddy wrote: |
| Joo Rip Gwa Rhhee wrote: |
He is the cause. No leader , no government could have been worse.
all US strategic problems in the gulf and in the mideast are now directly connected to Khomeni coming to power. |
History precedes your own lifetime. You might want to study it sometime. |
Khomeni coming to power was a huge loss to the US. Maybe on par with Lenin coming to power in Russia in 1917. |
Oh the naivity, Joo.
Hyperbole. Sheesh, haven't you ever heard of Hitler? Tito? Mussolini? Bush?
And how many people criticize Wilson for "allowing" Lenin to come to power? Laying the blame on Carter ignores the problems that begat Khomeni.
The US not only allowed, but supported the rises to power of the likes of Saddam, Castro, and bin Laden. |
But Cater undermined the Shah. With all the problems in the world why go after the Shah?
The strategic problems the US today are the cause Khomeni came to power. That there were problems in Iran doesn't excuse Carter undermining the Shah -> period.
And Iran is base cause of most of the l strategic problems in the mideast .
No Khomeni
No Iran / Iraq war
No Invasion of Kuwait.
No gulf war I &II
No troops in Saudi Arabia
http://townhall.com/Columnists/DineshDSouza/2007/01/29/giving_radical_islam_its_start
Even Democrats knew that Carter didn't know what he was doing.
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| The Carter administration�s role in assisting with the downfall of the Shah is one of America�s great foreign policy disasters of the twentieth century. In trying to get rid of the bad guy, Carter got the worse guy. His failure, as former Democratic senator Daniel Patrick Moynihan once said, was the result of being �unable to distinguish between America�s friends and enemies.� Carter does not deserve sole discredit for these actions. This intellectual framework that shaped Carter�s misguided strategy was supplied by the political left. |
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| ever heard of Hitler? Tito? Mussolini? Bush? |
Anyone who catgorizes in that way ought to be writing for counterpunch.
PS writing for counterpunch is NOT something to be proud of.
Last edited by Joo Rip Gwa Rhhee on Tue Oct 07, 2008 7:36 pm; edited 1 time in total |
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huffdaddy
Joined: 25 Nov 2005
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| Posted: Tue Oct 07, 2008 7:35 pm Post subject: |
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| Joo Rip Gwa Rhhee wrote: |
The strategic problems the US today are the causeKhomeni came to power. |
I'm not sure if I chalk this up to naivity or just trying to slander Carter. Either way, it's patently wrong. Khomeni was a symptom of the problem, not the problem itself.
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| ever heard of Hitler? Tito? Mussolini? Bush? |
Anyone who catgorizes in that way ought to be writing for counterpunch. |
You think Khomeni was worse than Hitler? Mao? Castro? Ho Chi Minh? Saddam? You've really got a vendetta against him, don't you? |
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Joo Rip Gwa Rhhee
Joined: 25 May 2003
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| Posted: Tue Oct 07, 2008 7:39 pm Post subject: |
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[quote="huffdaddy"]
| Joo Rip Gwa Rhhee wrote: |
The strategic problems the US today are the causeKhomeni came to power. |
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| I'm not sure if I chalk this up to naivity or just trying to slander Carter. Either way, it's patently wrong. Khomeni was a symptom of the problem, not the problem itself. |
He is the problem cause no leader in Iran could have been worse.
and Carter helped bring the down fall of the Shah
Khomeni
No Iran / Iraq war
No Invasion of Kuwait.
No gulf war I &II
No troops in Saudi Arabia
No Hizzbolah
The consequences of Khomeni coming to power.
[
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| You think Khomeni was worse than Hitler? Mao? Castro? Ho Chi Minh? Saddam? You've really got a vendetta against him, don't you? |
He was probably more oppressive than Castro or Ho Chi Minh.
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Khomeini fatwa 'led to killing of 30,000 in Iran'
By Christina Lamb, Diplomatic Correspondent
Last Updated: 3:55PM BST 19 Jun 2001
CHILDREN as young as 13 were hanged from cranes, six at a time, in a barbaric two-month purge of Iran's prisons on the direct orders of Ayatollah Khomeini, according to a new book by his former deputy.
More than 30,000 political prisoners were executed in the 1988 massacre - a far larger number than previously suspected. Secret documents smuggled out of Iran reveal that, because of the large numbers of necks to be broken, prisoners were loaded onto forklift trucks in groups of six and hanged from cranes in half-hourly intervals.
Gruesome details are contained in the memoirs of Grand Ayatollah Hossein-Ali Montazeri, The Memoirs of Grand Ayatollah Hossein Ali Montazeri, one of the founders of the Islamic regime. He was once considered Khomeini's anointed successor, but was deposed for his outspokenness, and is now under house arrest in the holy city of Qom. |
http://www.telegraph.co.uk/news/worldnews/middleeast/iran/1321090/Khomeini-fatwa-'led-to-killing-of-30,000-in-Iran'.html
Some "saint " he turned out to be. Just like Ghandi - NOT
Anyway liberal democrats don't understand national security, in fact they are not even really interested in the subject.
Remember Carter's UN Ambassador said Khomeni would be a saint and Carter's choice for US US ambassador to Iran said that Khomeni would be like Ghandi.
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| U.S. Ambassador William Sullivan even compared Khomeini to Mahatma Gandhi, and Andrew Young termed the ayatollah a �twentieth century saint |
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Giving radical Islam its start
Dinesh D'Souza
Monday, January 29, 2007
Recently Jimmy Carter was on television, denouncing President Bush�s policies in Iraq. I find this highly ironic, because Jimmy Carter and his liberal advisers helped the Ayatollah Khomeini to come to power in Iran a quarter of a century ago. Thus they gave radical Islam control of its first major state. How this happened is worth recalling, because from Carter�s failure there�s a valuable lesson to be learned in Iraq.
Islamic radicals have been around since the 1920s, but for decades they were outsiders even in the Muslim countries. One of their leading theoreticians, Sayyid Qutb, argued that radical Muslims could not just promulgate theories and have meetings; they must seek to realize the Islamic state �in a concrete form.� What was needed, he wrote, was �to initiate the movement of Islamic revival in some Muslim country.� Once the radicals controlled a state, he suggested, they could then use it as a beachhead for launching the takeover of other Muslim countries.
In 1979, Qutb�s goal was achieved when the Ayatollah Khomeini seized power in Iran. The importance of the Khomeini revolution is that it demonstrated the viability of the Islamic theocracy in the modern age. And to this day post-Khomeini Iran provides a viable model of what the Islamic radicals hope to achieve throughout the Muslim world.
Khomeini also popularized the idea of America as a �great Satan.� Before Khomeini, no Muslim head of state had said this about America. Khomeini was also the first Muslim leader in the modern era to advocate violence as a religious duty and to give special place to martyrdom. Since Khomeini, Islamic radicalism has continued to attract aspiring martyrs ready to confront the Great Satan. In this sense, the seeds of 9/11 were sown a quarter of a century ago when Khomeini came to power.
Khomeini�s ascent to power was aided by the policies of Jimmy Carter and his allies on the political left. Carter was elected president in 1976 by stressing his support for human rights. From the time he took office, the left contrasted Carter�s rights doctrine with the Shah�s practices. The left denounced the Shah as a vicious and corrupt dictator, highlighting and in some cases magnifying his misdeeds. Left-leaning officials such as Secretary of State Cyrus Vance, UN envoy Andrew Young, and State Department human rights officer Patricia Derian pressed Carter to sever America�s longstanding alliance with the Shah. Eventually Carter came to agree with his liberal advisers that he could not in good conscience support the Shah.
When the Shah moved to arrest mullahs who called for his overthrow, leftists in America and Europe denounced these actions. Former diplomat George Ball called on the U.S. government to curtail the Shah�s exercise of power. Acceding to this pressure, Carter called for the release of political prisoners and warned the Shah not to use force against the demonstrators in the streets.
When the Shah petitioned the Carter administration to purchase tear gas and riot control gear, the human rights office in the State Department held up the request. Some, like State Department official Henry Precht, urged the U.S. to prepare the way for the shah to make a �graceful exit� from power. William Miller, chief of staff on the Democrat-controlled Senate Intelligence Committee, said America had nothing to fear from Khomeini since he would be a progressive force for human rights. U.S. Ambassador William Sullivan even compared Khomeini to Mahatma Gandhi, and Andrew Young termed the ayatollah a �twentieth century saint.�
As the resistance gained momentum and the Shah�s position weakened, he looked to the United States government to help him. Carter aide Gary Sick reports that the Shah discovered many enemies, and few friends, in the Carter administration. Increasingly paranoid, the Shah pleaded with the United States to help him stay in power. Carter refused. Deprived of his last hope, with the Persian rug pulled out from under him, the Shah decided to abdicate. The Carter administration encouraged him to do so, and the cultural left celebrated his departure. The result, of course, was Khomeini.
The Carter administration�s role in assisting with the downfall of the Shah is one of America�s great foreign policy disasters of the twentieth century. In trying to get rid of the bad guy, Carter got the worse guy. His failure, as former Democratic senator Daniel Patrick Moynihan once said, was the result of being �unable to distinguish between America�s friends and enemies.� Carter does not deserve sole discredit for these actions. This intellectual framework that shaped Carter�s misguided strategy was supplied by the political left.
By aiding the Shah�s ouster and with Khomeini�s consolidation of power, the left collaborated in giving radical Islam its greatest victory in the modern era. Incredibly this same cast of characters who lost Iran wants to block Bush�s policies in Iraq. In doing so they are playing with fire. The radical Muslims who already control Iran are trying to bring a second major state, Iraq, into their orbit. Then, they have said, they will target Egypt and Saudi Arabia.
Yes, Iraq maybe a mess but in trying to get out of a bad situation, we don�t want to create a worse situation. Insurgency and sectarian strife is dangerous, but Iraq in the hands of Iranian fanatics or Al Qaeda fanatics is far more dangerous. America doesn�t need more foolish advice from Jimmy Carter. What it needs from him is an apology. |
The US is still suffering cause of what Jimmy Carter allowed to happen.
But that is what happens when liberal democrats are in charge. |
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huffdaddy
Joined: 25 Nov 2005
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| Posted: Tue Oct 07, 2008 7:59 pm Post subject: |
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| Joo Rip Gwa Rhhee wrote: |
He is the problem cause no leader in Iran could have been worse. |
Sure thing Joo. He was the evilest man alive. It had nothing to do with the hatred built up over the years do to Western meddling. Keep saying it enough and maybe you'll believe it.
Pinning the blame on Carter is just playing the blame game and ignoring years of history that led up to Khomeni's rise. History that those who are blaming Carter are destined to repeat.
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| You think Khomeni was worse than Hitler? Mao? Castro? Ho Chi Minh? Saddam? You've really got a vendetta against him, don't you? |
He was probably more oppressive than Castro or Ho Chi Minh. |
The Kims?
Saying that Khomeni has been the second worst leader of the 20th century is quite the stretch, even for you.
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The US is still suffering cause of what Jimmy Carter allowed to happen.
But that is what happens when liberal democrats are in charge. |
Blame game. Learn some history. |
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