Pakistan will have to move fast

The Indians naturally go to a heightened war-alert level, and I don't blame them one whit.

The links will be found, and when you have people within your country plot and launch an attack of this level against the crown jewel city of a great power . . . well, that's going to get you a very strong response unless you take care of it yourself--whatever the cost.

One assumes Obama's people are all over this, in conjunction with Bush. Bigger guns needs to be brought out that Rice, who's never accomplished anything.

Obama can easily end up inheriting a war that would complicate his first term immeasurably.

And it would be completely within our post-9/11 rule set.

Movies update

Recently in the home theater, Hitchcock's personal favorite, "Shadow of a Doubt." It is arguably his best constructed film, in my mind: tight, real menace in an otherwise bucolic setting, and brilliant acting from Joseph Cotton (in his prime) and Theresa Wright (with whom I fall in love every single time I watch her, she having starred in my favorite two WWII films ("The Best Years of Our Lives" and "Mrs. Minniver"--where you get Myrna Loy and Greer Garson, respectively, to boot--other thinking man's "hotties" from the 1940s).

The movie is definitely my wife's favorite Hitchcock.

As people who collect antiques, we also love the house in the movie.

Rewatched "Independence Day" with kids, then also "Hancock" (first time) where Justin Bateman did his usual stellar job, as did Will Smith and Charlize Theron. Loved the opening segments, and then got turned off by the mythical finish. But in rewatching "Hancock" over the weekend, it actually does work pretty well. What was off was the stupid superhero fight in the middle, which served no purpose whatsoever.

Then a weird karma kicks in: having watched Anne Hathaway repeatedly in "Get Smart," where she is sexy and cool beyond words and makes you realize she should have a very long and good career, we re-watch "Married to the Mob" (Demme directs, Byrne does the music) for the first time in years and I get to fall in love with Michelle Pfeiffer all over again, as I always do with that movie, plus indulge in Dean Stockwell's great turn (just after seeing him again in "Dune").

Having done that, Vonne and I go out to St. Elmo's for steaks yesterday and catch an art house presentation of "Rachel Gets Married," Demme's latest starring Anne Hathaway (and Demme's usual side cast of strange bit players, like Sister Carol East (the hairdresser in "Mob") and Paul Lazar (Tony's right hand who gets killed by burger "clown" Chris Isaak). Hathaway, to me, is simply stunning in this role of the rehab loser who,in the past, had accidentally committed a heinous act and now shows up to his sister's wedding. She should really get Oscar consideration for that role. Other bonuses in the film, which is shot very indy and carries a brutally heartfelt quality that actually forced me to look away at several sequences--not because they were hard to watch but because they were hard to bear in their agonizing quality: Bill Irwin, who's always a treat, and Debra Winger, who plays a very cold figure and does it well enough to also merit Oscar consideration. Plus you get "Madge" from "Mad Men" as the central character, who is hard to like in many ways, because my sympathies were with Hathaway's character.

Then I'm in the big tub last night soaking from all the recent workouts (gotta look good in Feb!) and catching up on papers, only to catch the Hathaway-hosted SNL rerun, which started with the hilarious veep debate parody.

Today, taking the boys to "Quantum Solace," which Kev has already "beaten" repeatedly in game form--natch.

Two gotta-sees on the radar: Danny Boyle's latest, "Slumdog Millionaire," which coincidentally focuses on Mumbai; and Mickey O'Rourke's wrestler movie, which should get him an Oscar nod.

Thomas P.M. Barnett, philosopher

Here is the official description of the book, sort of its vital statistics found on the back of the baseball card:

Product Details

ISBN: 9780399155376

Subtitle: America and the World After Bush

Author: Barnett, Thomas P. M.

Publisher: Putnam Adult

Subject: International Relations - General

Subject: World politics

Subject: Philosophy

Subject: Government - U.S. Government

Publication Date: February 2009

Binding: Hardcover

Language: His very own

Pages: 496

I was just taken aback by the "Philosophy" subject, because when I was reading Chapter 8 during the First Pass, I said to Warren over the phone, "It really feels like I'm philosophizing pretty intensely at the end of this book."

And I have to admit, I was surprised to say that.

But I think the four subjects are dead-on: definitely covers world politics and international relations, and clearly focused on how the US government runs in terms of grand strategy. I don't suppose there's an entire subject header on grand strategy, but if there is, then I was wrongly denied, because the book really is cast on that level throughout--hence the bleeding into philosophy as the book wraps up.

Note: no "military strategy." Thus, I escape that ghetto, a primary goal for me professionally in this book, because I've never considered myself one and was always uncomfortably surprised when readers chose to pigeon-hole me in that category. Wasn't what I was trained to do, wasn't what I dreamed of doing as a kid, not really in my nature even as my work took me there. Don't have any problem with the field or moniker. Just never felt like it fit me.

I was talking to my wife about the book, telling her I really thought it was the best thing I've ever done, and she kept saying how relieved she was, given the intense amount of angst she witnessed over the last 12 months.

I guess this book really was the proving ground for me in a big way, because PNM came right out of the brief and cannibalized a lifetime's work and BFA did some of that but mostly spoke in response to the big response that PNM received.

So after dumping all that, the question became, was there anything left for me to say?

And what I find interesting, given the public persona, was how, when given the chance and the challenge (primarily from Neil Nyren), I went back to my basics of alternative global futures (which, in Drucker terms, is my sweet spot of skills): first the diagnosis (seven deadly sins), then the cure (12-step program), then the massive back story to reveal the biases (the American trajectory), and then the Roshomon-style (one can almost see the grid chart I must build for the brief) exploration of the recalibration, where the repetition is both purposeful and harmonic: time and time again in the text I'm offering answers that hearken back to the history, reflect one of the 12 steps, and correct one of the seven sins. By the time I hit the last chapter, it's like the song where all the themes have been woven together and you get this big finish.

When I made that description to Mark, and we abandoned the futuristic end-projection (where my son delivers my eulogy in the year 2099, which was really fun to write and oddly hilarious in its own way--not sure where that ever ends up), then the notion of a "coda" made perfect sense: the crescendo having passed, you resurrect the main theme in a subdued presentation and end the beast on a long, slow, drawn-out-but-quiet note.

When I read the beast now, I am stunned at its evolution. I really am. You realize what a tug of war it was with Mark and Neil and the material and my tendency to come up with out-there ideas, and it's really surprising that it works in the end. I imagine directing movies must feel somewhat like this: you head into it with all these plans and ideas and then exit on the far side with God-only-knows-what, but if you're lucky, then there it is.

It's weird and sad, but when you come to moments like this, you say to yourself, "Now I can die and still be remembered for something." You pass the Roy Batty test from "Blade Runner." You've done and seen terrible and amazing things, but when you die, you realize that they'll all be lost to time, like "tears in the rain."

Actor Rutger Hauer, by the way, ad-libbed the speech. It's one of the most beautiful bits of acting I've ever seen, making the entire movie (which was controversial in its edit and narration--the latter forced by the studio) work.

Anyway, you realize that some of your stuff will remain.

Column 130

Strategic advantage of Obama's blank slate

As far as grand strategy goes, Barack Obama comes to the presidency totally unburdened by his past, as this is truly his first act in international political theater. Plus he's unusually credentialed as a presumed agent of future change -- his biracial background alone. In ideological terms, he's a relatively free agent.

That's a huge plus in his asset column as he follows the highly ideological Bush-Cheney administration, because he encounters a world of labeled players, most of whom are eager to come in from whatever "cold" standing vis-a-vis the United States that their current designation implies. That doesn't mean these regimes necessarily seek our affinity but merely the cessation of our efforts to isolate them from globalization's networks.

Read on at KnoxNews.
Read on at Scripps Howard.

Looks like Gates is staying

ARTICLE: Gates Said To Be Near A Deal to Keep Post, By Michael D. Shear and Ann Scott Tyson, Washington Post, November 26, 2008; Page A01

Very exciting to hear!

Tricky for Gates because all his subordinates will be swapped out, but between him and Clinton, I can tell you that the defnse industry is reassured greatly.

Bankers, you have nothing to gain but your chains!

BRIEFING: "A short history of modern finance: Link by link; The crash has been blamed on cheap money, Asian savings and greedy bankers. For many people, deregulation is the prime suspect," The Economist, 18 October 2008.

A good rendition of the argument that says we're at the end of an extended period of deregulation that has logically run its course.

First off, it notes that "the idea that the markets have ever been completely unregulated is a myth," pointing out the SEC example--something I see as being necessary on a Core-wide level.

But the piece notes that, over the past three decades, "each step on the long deregulatory road seemed wise at the time and was usually the answer to some flaw in the system," like Nixon being smart enough to take us off the gold standard in 1971. Then Reagan and Thatcher effectively abolish controls on financial flows, now made possible by the floating currencies, allowing insurance companies and pension funds to move money across borders--fueling globalization.

Then on to the so-called Big Bang of 1986 that allowed foreign brokerage firms into the market in Britain, following a step New York had made 11 years earlier. All those transactions reduced brokerage margins, forcing investment banks to cooperate more with commercial banks, who had the money, thus triggering the end to Glass-Steagall, the Depression-era law that had separated them. Commercial banks muscle into the underwriting of securities business, and investment banks responded by bulking up hugely.

Then we see the rise of complex instruments, like options and swaps, leading to the rise of the quants which arbitraged price differences between markets, with currency swaps leading to interest swaps to . . . finally, credit-default swaps, all featuring small initial positions with huge exposure, so regulators fall behind in the shell game. Derivatives cause occasional but big hiccups across the 1990s, but Greenspan supported them (Age of Turbulence:

Being able to profit from the loan transaction but transfer credit risk is a boon to banks and other financial intermediaries which, in order to make an adequate rate of return on equity, have to heavily leverage their balance sheets by accepting deposit obligations and/or incurring debt. A market vehicle for transferring risk away from these highly leveraged loan originators can be critical for economic stability, especially in a global environment.

True enough, it seems in retrospect, but a bit naïve given the lack of intermarket controls and transparency: high-trust, sophisticated markets selling their complex instruments to lower-trust, less sophisticated markets, and the shell game kicks into high gear in terms of uninformed risk-taking.

Securitization, or the bundling of loans, "is another child of the 1970s," like so much of our modern, globalized world. It began in U.S. mortgage markets as part of our never-ending and very good pursuit of maximally widespread home-ownership--part and parcel of our economic system.

But the system gets too cute for itself. Collateralized debt obligations (CDOs) bundle together the resulting bonds and then slice then horizontally according to the risk tolerance of the buyers.

But the big danger is that commercial banks used securitization to access new sources of lending in markets, making our banks far bigger bettors on the market's health.

The Basel accord was supposed to fix this by making banks hold more capital against such contingencies.

All this good stuff led to many more homeowners in America, but that naturally drove up prices, and that unrealized wealth was then turned into additional debt (the second mortgages--an incredibly common sin to which I confess).

But the train kept rolling with America's implicit Marshall Plan spend-to-fund-globalization strategy across the 1990s, aided by technological advances and India's and China's emergence.

Then it all comes falling down, starting in spurts in 2007 but for real over the past few months.

The verdict from the Economist:

Amid the crisis of 2008, it is easy to forget that liberalization had good consequences as well: by making it easier for households and businesses to get credit, deregulation contributed to economic growth. Deregulation may not have been the main cause of the rise in living standards over the past 30 years, but it helped more than it harmed. Will the new, regulated world be as benign?

Indeed.

African free trade: About time!

ARTICLE: African free trade zone is agreed, BBC, 22 October 2008

Good to see for all the reasons cited up front: helps outsider access better, helps intra-continental trade, and created better bargaining position with outside world.

(Thanks: David Blair)

On the motives in Mumbai

It couldn't get much clearer: the terrorists wanted to sever India's growing globalization ties in general and specifically those with the West. While India is no stranger to such terror (indeed, it can claim to have endured more experience in this regard than any other great power over the last quarter-century, with no other even coming close), these attacks seem to signal a new era for the nation: like a China, India becomes increasingly targeted for its role in embracing and spreading globalization. Thus its need to have a globally conscious and responsible military--meaning an end to the strategic myopia over Jammu & Kashmir.

If the upshot of these attacks is that India makes such a decision to recast its grand strategic vision so as to make it more commensurate with its expanding global economic presence, then this System Perturbation will have served its historic purpose--just not in the way its perpetrators imagined.

In that sense, the cruel realist in me says the timing could not have been better--on many levels.

News flash: Obama's cabinet not arch-liberal

POST: Blinkers. Eyes. Obama, By Andrew Sullivan, The Daily Dish, 26 Nov 2008

Amen. After all the fear-mongering about Obama from the right, they're now hard-pressed to continue in their criticism based on his actual appointments and actions to date. So we get McCain's wisdom without all the tactical foolishness and rhetorical blustering.

Garsh!!!!

Revealing charts on losses in the financial crisis

FINANCE AND ECONOMICS: "Global finance: Lifelines; A special section on the crisis looks at prospects for the global economy, individual countries and markets. It begins with the tricky job of saving the financial system," The Economist, 11 October 2008.

FINANCE AND ECONOMICS: "Fiscal implications: Deep pockets; State backstops work best if banks are small and borrow at home," The Economist, 11 October 2008.

FINANCE AND ECONOMICS: "The world economy: Bad, or worse; At best, the world economy is on the brink of recession," The Economist, 11 October 2008.

SPECIAL REPORT: "When fortune frowned: A special report on the world economy," by Zanny Minton, The Economist, 11 October 2008.

The first article ("Lifelines") puts the subprime in perspective, as in the world's financial crises, as we move deeper into this globalization era, grow in dimension and thus impact.

So the U.S. S&L crisis rings in at about a quarter-trillion, but it spreads over an entire decade (1986-1995), while Japan's never-ending backing crisis (the entire frickin' 90s!) goes almost $800b. The rapid-fire Asian flu (98-99) goes about $400 billion, but it's so concentrated. The subprime weighs in at only $600 billion bank losses. The difference is the additional 800 billion estimated in non-bank losses, something the other banking crises didn't have, because the debt instruments weren't farmed out to non-bank entities like the credit-default swaps were--and therein lies the real danger, according to most.

So yeah, a global SEC does seem called for, given the general level of chicanery (a Wall Street constant, especially expected in an a frontier-integrating age) and how it was peddled across markets to power the current contagion dynamic.

The "Deep pockets" article shows debt and deposits as a percent of GDP, and the gist here is that public and bank debt outpaces deposits for most established Old Core economies, with Britain and Switzerland looking healthiest and the US totals looking relatively small by comparison because only commercial bank data is cited.

Point: the over-leveraging is hardly an America-unique sin.

The "Bad, or worse" chart shows how emerging economies, advanced economies and the world as a whole move in total synchronization, indicating there is no Old Core-New Core "decoupling," something many experts were predicting for months and which I observed in this blog many times with real delight, hoping to see the solution dynamic in that rise of the New Core.

But alas, we've got a ways to go, it would seem, before China's domestic market will occupy it's own great counterweight space.

Moving on to the special report, one chart shows how much oil has fallen, but that--in relative terms, food prices still remain high relative to the recent past.

Another shows another non-decoupling dynamic: Old Core and New Core and world inflation rates rise and fall in almost exact synchronicity, with the Old Core registering around 4% now, the world clocking in at about 6%, and New Core economies at about 8%.

A truly scary slide titled, "Globalisation reigns," show total foreign assets and liabilities as % of GDP. New Core and Gap economies come in at about 200%, but that's nada compared to the Old Core at about 450%, reflecting how much more intertwined with globalization are they in financial terms.

Here's an unexpected one: household debt as a % of disposable income. German at 100%, the US at about 130%, and Britain (go figure) at about 175%.

Here's a truly perspective-providing chart entitled "Been there, done that": the proportion of countries suffering a banking crisis (based on a total of--get this!--251 banking panics since 1800). What you see on the chart is nothing until about 1810, then spikes to as high as 5% through 1830. 1840 until 1860 you see spikes (like regular heartbeats) in the 2-3% range. 1860 to 1880, back up to 5%, and then down to the lower rate for the rest of the century, with one big exception around 1890, when it jumps to 15%. Back to 5% around turn of the century, then big spikes through 1940 in the 15% range, save for the Great Depression, which jacks it up to about 22%.

Then it all subsides in bifurcated post-WWII era, with barely a heartbeat to notice until the late 1970s, and then it gets very different as globalization kicks in: a rising series of spikes that grows to just over 10% in the mid-1990s (one assumes it reflects the Asian Flu, Russia's default, the LTCM debacle, etc.).

And then it drops to almost zero--a distinct plunge across the last years of the century right to now.

Of course, the 2008 situation will be a huge spike. How big? IMF studies say the Anglo-Saxon economies suffer the most in these panics, because the lending tends to exaggerate the cycles. Hence the damage to our modern, matured model of economic management.

Two charts underscore the argument of way too much speculation on commodities in the past few years, as all that extra money chased more exotic futures instruments: 1) the notional amounts outstanding of over-the-counter commodity derivatives grew from about $1T in 04 to almost $9T last year; and 2) the turnover of exchange-traded commodity contracts (flipping, essentially) grew from a long-term historical norm of about 100m (not sure what 100m means here--is it the actual number?) to over 400m, suggesting that people were trading these contracts like crazy.

Chart I liked was developing countries forex reserves: jumping from $1T in 1999 to $5.5T in 08. To me, this was the implicit Marshall Plan-like transfer of funds to emerging markets, accomplished by the Old Core's--but especially America's--super-consumption.

That will be ending now, so if some experts call that Bretton-Woods II, then we now head to BW-III.

Isn't this so much more fun--okay, maybe logical--than discussing which "world war" we're in?

Interesting add says FDI into Japan increases 5-fold since 1999, to $15B. Nice sign.

Excellent sense of proportions here: Assets under management, 2013 forecast: mutual funds at about $58T, pension funds at almost $50T, insurance assets at about $35T, Asian sovereign funds at about $8T, petrodollars (Mideast and Russian SWFs) at a bit less, maybe $7T, and those dastardly hedge funds at maybe $2T.

So maybe the hedge funds and SWFs won't be running the world too soon.

All in all, that's the coolest collection of charts I've ever seen in a special report.

Scary business in Mumbai

Reminds us that India has long suffered these sorts of attacks, but these clearly target foreigners (UK& US).

I stayed at the Taj years back. Very nice place.

Hard to see how you harden for this level of attacks.

We have to see how this unfolds, but I would expect a strong Indian response.

The crisis arrives in the East and is acknowledged more publicly

A CRISIS IN FINANCE: "Asian Banks, Once Thought Safe From Crisis, Are Now Hurting," by Bettina Wassener, New York Times, 19 November 2008.

ARTICLE: "Putin Vows to Avoid a Replay Of Past Economic Collapses," by Clifford J. Levy, New York Times, 21 November 2008.

Strong growth and a lack of exposure to the credit-default swaps were hoped to be enough, but there are no "independent" financial centers in the Core, so there is no zero-sum winning or losing here. There is only the collective need for demand to be stimulated.

Note how, now, Putin's strong words and hectoring are reduced to merely promising his people that Russia won't suffer the same bankruptcy and international humiliation of 1991 and then 1997-98--meaning his core accomplishment is now being put at risk.

That's why the hysterical crowd on Georgia over here were wasting their breath--the correction was preordained. Adding insult to that financial injury would have accomplished little but useless enmity that simply complicated the negotiations to come over more important matters.

The grand strategist picks his battles carefully, and remembers that the clock is always on his side if he's smart enough to keep adding friends and reducing his enemies load.

Kristof not drinking the Kool-Aid on Misha the Aggrieved

OP-ED: "Obama, Misha And the Bear," by Nicholas D. Kristof, New York Times, 20 November 2008.

Yes, we are all impressed with the brilliance that is Misha, so smart was he to start that war just as the Olympics kicked off, getting his country's ass kicked while he survived on nightly cellphone pep talks from bud John McCain. Even Obama agreed with John that the West should continue the effort to bring Georgia into NATO.

But not so fast, says Nick, calling it "an awful idea."

Why? "Georgia isn't quite the shining beacon of democracy that Americans sometimes believe."

As for who started what?

The most likely explanation is that Misha, tired of continuous Russian provocations and emboldened by American support, saw a chance to recover territories that Russians were nibbling on. That was spectacularly reckless, and as Human Rights Watch and Amnesty International have documented, the Georgian Army (along with Russia's) fired cluster bombs that harmed civilians.

"It was possible to avoid this war," said Nino Burjanadze, a former close ally of Misha who last month formed an opposition party to challenge him. "Because of miscalculation, my country was involved in a war that it was clear it would lose."

Exactly.

Here's the real advice from Nick:

Note to Mr. Obama: It would be a nightmare to have our troops tethered through NATO to Misha. In any case, Georgia doesn't obviously qualify for NATO membership since it doesn't control its full territory, while the talk about NATO pushes all the wrong Russian nationalist buttons.

Even better advice:

"NATO is not Georgia's future," said Amy Denman, executive director of the American Chamber of Commerce in Georgia. "Georgia's future is economic growth. If they can continue the economic growth cycle they're on, they're safe."

Kristof ends by saying we need to reconsider missile defense in Europe.

Smart man.

The New Core creates the new energy rules?

ARTICLE: "Thais Lead Drive to Natural-Gas Cars: Subsidies, Volatility of Oil Prices Spur Move Even as a Campaign Starts in U.S. to Get Americans to Switch," by Patrick Barta, Wall Street Journal, 21 October 2008.

Tycoons and environmentalists combine to try and talk Americans into switching to natural gas cars. Success is unlimited--outside of Utah.

But in many developing countries, the switch is already on, driven by the volatile price of gasoline, the accessibility of natural gas, hefty consumer subsidies and concern about the environment.

Thailand, SE Asian emerging market is a prime case: 40k n.g. cars and trucks bought in the last six months. Predictions of a rough tripling of the n.g. fleet by 2012, to 330k.

They are hot seller. One local prof pays less than $2k to have her Nissan sedan converted. She now fills her tank for $3.

Here's the leadership of the New Core: Pakistan, Brazil and Argentina each have more than 1.5m such vehicles. India is closing in on a million, and China is promoting the cars heavily in cities.

T. Boone is excited.

Honda has n.g. Civics for sale here, but few buyers for now.

Thailand has oil, but has even more natural gas.

When we did our energy futures game with Cantor Fitzgerald in 2000, one thing I remember hearing from many experts is that we have no idea how much gas is out there, because we don't really look for it, instead just finding "associated gas" as we search for oil.

So maybe T. Boone is barking down the right hole.

Tell me otherwise.

The over-under on the Green Revolution

ENERGY: "A Warming Trend For Solar Homes: Tax breaks and savings from cheap energy are giving a boost to sun-powered housing," by Adam Aston, BusinessWeek, 3 November 2008.

AUTOS: "Why Tesla Has to Downshift: A retrenchment could cost the Silicon Valley maker of electric cars its first-mover advantage," by David Welch, BusinessWeek, 3 November 2008.

The first article explores how the subprime can possibly create a wedge for new energy-saving technologies to be squeezed into all manner of housing. Very optimistic.

Second piece is Thomas Friedman's nightmare unfolding.

Those idiot kids will be the death of us!

ARTICLE: "The 'Trophy Kids' Go To Work," adapted from The Trophy Kids Grow Up by Ron Alsop, Wall Street Journal, 21 October 2008.

A classic, the-Millennials-are-such-self-esteem-freaks analysis.

As always, I tend to be more sanguine.

No love in Philly

Flew in Monday morn early for Enterra board meeting at historic old Union League building downtown. Took the train from airport to City Hall and walked the rest.

Meetings went 12 hours in total, but a very nice dinner at end. 2008 was very good to Enterra, as Development-in-a-Box‚Ñ¢ really took off.

I gave all board members advance proof copies of Great Powers, marking the section on DiB.

Got to my room around 2200, after following game on phone. As soon as Saints drove for second-half-opening TD, I pulled out my Second Pass copy of the book, downloaded the Final Pass PDF sent that afternoon and began the laborious process of checking all the corrections submitted last time.

Three and a half hours later, I was done. Couldn't find a single mistake until 284, where two words were reversed in order. Then I found another: Enterra listed as a "technology consulting" firm instead of a "technology/consulting" firm (meaning we do have the former and additionally consult and don't just consult on technology).

Third was a missing comma in Acknowledgements that made two names run together.

Fourth and fifth were my mistakes: capping "Frontier" in "frontier integration" entry in glossary and same mistake with "grand strategy."

Final mistake was new: a header in the endnotes that should have been sentence-case and italicized but was title-capped and additionally bolded.

There were about six or so call-out sentences in the endnotes that--despite ellipses--still ran more than one line. We had asked all to be cut down to fit on one line, but that was with placeholder page designations that were all "00." Problem was when you started adding real number beyond 100 and that extra space threw the call out sentence into a second line (usually just a word).

In both PNM and BFA, this was the norm, but I had really sought to eliminate these 2-line call-outs here, and succeeded in virtually all cases.

Coincidentally, I see Bradd Hayes and he turns over 200-plus slides generated from Great Powers, which was perfect timing.

Still, I think I'll read Last Pass PDF one more time before looking at slides.

Got something to pen for Esquire this week (Feb issue). My "How to Become a Grand Strategist" was slipped from the Jan issue to this one.

Glad to be staying home this Turkey Day.

The new look review on Afghanistan, corresponding to Iraq's new look review on America

THE WORLD: "A New Approach to Afghanistan: Obama is looking at a regional strategy that would include Iran," by Karen DeYoung, Washington Post National Weekly Edition, 17-23 November 2008.

NEWS ANALYSIS: "In Baghdad, Debating Post-U.S. Outlook: Concerns that a government will retain power," by Campbell Robertson and Stephen Farrell, New York Times, 21 November 2008.

So Obama's review (and one would assume Petraeus is political enough that CENTCOM's ongoing review won't get too far away from this logic, as should Mullen's own rethink in the Joint Staff) looks to draw Iran in on Afghanistan and encourage Kabul to keep talking to the Taliban, while upping the effort on AQ in the FATA. The upshot? We'll get a whole lot more realistic on what nation-building should aspire to in Afghanistan.

Meanwhile, Baghdad's many factions contemplate life beyond a controlling U.S. military presence. It won't be pretty. It just needs to remain decently stable.

Inside the parliament, the fear logically surfaces that the Maliki government will become a pawn of the Shiia majority.

So don't be surprised if the Sunni and Kurds have their own particular set of desires vis-a-vis the U.S. military presence once the all-important "combat troops" are removed come 2011.

I see trip-wire troops being left behind for many years--if we're smart enough to say yes and the Sunni and Kurds are smart enough to ask.

The best Phase IV competition out there; Who's sizing your SysAdmin force?

ARTICLE: "To Fuel Quest, Hezbollah Harnesses Youth Piety," by Robert F. Worth, New York Times, 21 November 2008.

The vehicle model is totally recognizable: the Boy Scouts.

Go back and see when the Scouts were started in the U.S. and why: leaders feared American boys were losing essential skill sets that would later prove usable in subsequent military experience.

Actually, that's the same reason why the NRA was started (shooting skills).

Hezbollah wants to guarantee its feeder lines, but don't kid yourself, they're also trying to stem any loss of skills as young people turn to Western-style pursuits that don't add up sufficiently in their struggle's equation.

It is a very comprehensive effort, including a network of schools, summer camps, field trips, charity work--all very Boy Scout-ish. Plus, there's big efforts to recruit and train up girls too.

Point: the bearded warrior who makes up Hezbollah's core, which is not that large, is not the prototypical recruit. Their goal with a lot of this recruiting is to go after professionals who have other options.

Does the House of Saud finally stand up as a grown-up?

MIDDLE EAST AND AFRICA: "Saudi Arabia: Can it make peace in the wider region? Saudi Arabia has had mixed success in its diplomacy, but it has raised its profile and should keep on trying," The Economist, 11 October 2008.

MIDDLE EAST AND AFRICA: "Saudi Arabia: The struggle against al-Qaeda; The rulers of the Arab world's most conservative monarchy are taking the war to al-Qaeda--and may be succeeding," The Economist, 25 October 2008.

First one is an article of encouragement--as implied by the subtitle--from the mag to the House of Saud.

The second article is really fascinating: about the aggressive rehabilitation of radicals using a comprehensive mix of behavior modification techniques, with the biggie being shamed by imams.

Plus, some Mafia-like mega-trials that reminds me of Italy a while back.

Very encouraging stuff. Military officers will routinely express, off the record, their profound disgust with the House of Saud and Saudi society in general, basically saying there is a tendency to treat ordinary people like dirt. Most will tell you the Saudis don't have a chance at long-term survival.

Other experts on the family say that underestimates its deep reach in society and its staying power.

I'm sure the latter will be right until they are suddenly wrong. The question will then be, What does that "wrong" look like?