Glimmers of Hope?

Now that he’s got the puppy ensconced in the whitehouse, US President Barack Obama is walking the delicate tightrope of attempting to inspire confidence in the US economy while still warning of tough times ahead.

Yesterday, he announced that there was a “glimmer of hope” on the horizon for the American economy but warned that the nation was “by no means out of the woods just yet”.

In a 45-minute speech delivered yesterday at Georgetown University in Washington, Mr Obama said that his $787 billion (£529 billion) stimulus package, housing proposals, car industry bail-outs and bank capitalisation plan had started to “generate signs of economic progress” by saving jobs and beginning to free up the frozen credit market.

Rejecting criticism that he has been spending with “reckless abandon”, Mr Obama said: “History has shown repeatedly that when nations do not take early and aggressive action to get credit flowing again, they have crises that last years and years instead of months and months – years of low growth, years of low job creation, years of low investment, all of which cost these nations far more than a course of bold, upfront action.”

He also rebuked critics who said his refusal to nationalise banks was another example of Washington “coddling Wall Street”.

The President pointed to schools and police departments cancelling redundancies, clean energy companies and construction firms re-hiring workers and homeowners re-financing at lower interest rates.

However, he went on to temper the optimism by warning that more unemployment and home repossessions would come over the next 12 months.

US stocks were hit yesterday by an unexpected drop in retail sales, leading the Dow Jones industrial average down 137.63, or 1.7 per cent, to 7,920.18.

However, Goldman Sachs posted higher-than-expected first quarter profits, and pledged to raise $5 billion (£3.36 billion) to repay government bailout money.

Mr Obama said: “There is no doubt that times are still tough. By no means are we out of the woods just yet. But from where we stand, for the very first time, we are beginning to see glimmers of hope. And beyond that, way off in the distance, we can see a vision of America’s future that is far different than our troubled economic past.”

Invoking the Sermon on the Mount, comparing the American economic system to the parable of the man who built his house on a pile of sand, Mr Obama said: “It is that house upon the rock. Proud, sturdy, and unwavering in the face of the greatest storm.”

Ben Bernanke, chairman of the US Federal Reserve, also also offered a “fundamentally optimistic” assessment yesterday, using a speech in Atlanta to highlight recent data on home sales and consumer spending as “tentative signs that the sharp decline in economic activity may be slowing.

He said: “A levelling out of economic activity is the first step toward recovery.”

Locally, views are still mixed as to whether the Australian economy is on the road to recovery or will experience tougher times ahead. Certainly we are beginning to see our own “glimmers of hope” in our own share market, however this is tempered by the spectre of increasing unemployment.

Perhaps one of the most positive news bites for the Australian economy is that China’s stimulus package of some $808 billion (Australian) appears to be delivering better than expected results.

Last month, China’s industrial output growth jumped 8.3 per cent, up from the 3.8 per cent rise of the first two months, as domestic demand continued to improve, Chinese Premier Wen Jiabao said.

He described the figures as “better than expected”, according to an interview published in the China Securities Journal.

But he warned that the international financial crisis “has not yet hit the bottom”.

Financial analysts in China, however, are increasingly confident that the country’s slowing economy has bottomed.

“We believe the trough of sequential growth is already behind us, and China is heading into the initial stage of a recovery in the first quarter of 2009,” said Goldman Sachs Guo Hua analysts Helen Qiao and Yu Song. “In our view, China has already come out of the long winter featuring the sharpest and most severe growth slowdown in the past 30 years.

“Green shoots of strong domestic credit expansion, together with higher-than-expected fixed asset investment (FAI) growth are signalling the arrival of a spring season with rising upside risks to domestic demand growth.”

While I have maintained that no one can accurately predict what will happen tomorrow, next week or next month, it appears, that just possibly, the market has finally bottomed and we might just be beginning to witness the seeds of recovery.

The downside is that these “glimmers of hope” may take months if not years to be reflected in a broader resurgence in the Australian economy.

Change for Karzai

In only three says of his presidency BHO has ordered the shutting of Gitmo, has declared that the US will no longer torture, has overturned Bush’s banning of money going to international groups that use abortion as part of their work and has come out with a strong speech on Gaza and Israel. And it looks like the changes will continue.

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Obama’s proposed CIA Director

US president elect Obama has now nominated Leon Panetta for the position of CIA Director. Last year, Panetta wrote this in the Washington Monthly.

Fear is blinding, hateful, and vengeful. It makes the end justify the means. And why not? If torture can stop the next terrorist attack, the next suicide bomber, then what’s wrong with a little waterboarding or electric shock?

The simple answer is the rule of law. Continue reading


Hopefully the incoming US president will follow through on his commitment to shut one of the most shameful acts by the outgoing administration. In recent days Obama has confirmed his intention to close the Guantanamo Bay prison where not only have people (including minors) been detained without trial, the accusations of administration condoned, and even encouraged, torture continue to grow.

The website American Torture has links to many reports that details the abuse that occurred at the prison, including Physicians for Human Rights and Human Rights First and the University of California, Berkeley’s Human Rights Center. Some of the details are very disturbing and I hope that those who condoned the abuses are held to account. And in my mind this means Bush, Cheney, Rumsfeld and Gonzales. 

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World Waiting for Obama

This article from Guardian correspondents around the globe has been picked up by Melbourne’s Age newspaper as Change they want. Some of the comments include:

From Kabul

“I think we have almost reached the point of no return. There are no good solutions left,” said Ali Padsha, 19, who was raised in America. “The longer foreign forces stay, the more problems will be created. When we [Afghans] see foreign forces in our country, it makes us crazy, it always has.

“The new Taliban are smarter than before and not as hardcore. They know what to do to keep the people happy.”

From Paris

“We don’t lynch Americans in the street,” said Charlotte Lepri, a US specialist at the French thinktank, Institute for Research in Integrated Strategies (IRIS). “But there are certain associations with Bush. Now there is a turnaround and real enthusiasm for a black candidate who represents France’s ideal of the American dream.”

From Gaza

Like many Gazans, Mohammed Telbani, the factory’s general manager, says he has little interest in the election. “Presidents have changed but no one did anything for us,” he said, waving his hand dismissively. He doubts that a new president will have the power or the will to reverse decades of US policy in the Middle East which he, like most here, sees as decisively pro-Israeli. “Without pressure on Israel there won’t be any solution to the problem,” he said.

The world holds its breath as America decides

For more views from outside the United States please visit Voices without Votes, where bloggers from around the globe analyse the US election.

Kevin Rennie

Obama’s lead beyond the Bradley effect

A couple of US election sites which are worth a visit:

A hard look at reality, and what you should do is from Sam Wang at the Princeton Election Consortium:

By the standards of Presidential elections since 1992, Barack Obama is far ahead. For most of this season he has been running about 50 EV ahead of where John Kerry ran at the same point in 2004, which ended in a near-tie. Currently the gap is even larger – it’s nearing Clinton v. Dole proportions. In the face of a down economy and abysmal approval ratings for the Bush Administration, a lead of this size by a Democrat is essentially insurmountable.

This is why John McCain’s tactics have become increasingly savage – it’s his last stand.

…In short, the wind is at Barack Obama’s back. I currently expect a final outcome of Obama 318-364 EV, McCain 174-220 EV.

He dismisses the Bradley effect, where polling overstates black candidates popularity, as no longer relevant. He claims that it only ever represented 2-3% anyway.

The Reuters/C-SPAN/Zogby Poll has Obama 49%,to McCain’s 43%. It’s daily telephone tracking poll:

The rolling telephone tracking poll, including a sample of 1,206 likely voters collected over the previous three 24-hour periods spanning four calendar days – approximately 400 per 24-hour period from Oct. 8-11, 2008 – shows Obama’s lead growing from the 3.8 percentage points he enjoyed yesterday.

Obama’s lead in the polls is now beyond the usual margins of error. A 2% Bradley effect would have him slightly in front of McCain. Even a surge on Wall Street like the one happening today in Australia is unlikely to save McCain’s campaign.

Time to have a bet on Barack and look for a bargain or two on the stock exchange?

Kevin Rennie
Original post at Labor View from Bayside