'Mullen quoted out of context on NWA operation'

A handout picture shows US Chairman of Joint Chiefs of Staff Admiral Mike Mullen (L) talking with Pakistan's Army Cheif General Ashfaq Kayani during their meeting in Rawalpindi on December 16, 2009. PHOTO: EPA

ISLAMABAD:?Chief of Army Staff General Ashfaq Kayani said the statement made by US Chairman of the Joint Chiefs of Staff Committee, Admiral Mike Mullen regarding the United States is losing patience with the army’s reluctance to take action in North Waziristan, had been published out of context.

Speaking to the media during the lunch hosted for Chinese Prime Minister Wen Jiabao at the Prime Minister House on Saturday, he said that the decision to launch an operation in North Waziristan can only be made by the government and political leaders, and the army can only launch it after their approval.

Pakistan has long been under?pressure by the US to launch a military offensive in North Waziristan. The Foreign Office however has denied being under US pressure to launch an offensive in the northwestern region which the US calls a ‘hub of militant activity’, saying that the operation will be launched only if it is in?Pakistan’s ‘interest’.

Last month,?The Express Tribune reported that the government had?authorised Chief of the Army Staff General Ashfaq Parvez Kayani to take a final decision on when and how to launch a military operation in the North Waziristan tribal region.

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Muharram processions underway amid tight security

Police officials stand guard at MA Jinnah road during a Muharram procession. PHOTO: PPI

Tight security arrangements were put in place throughout various cities and towns in the country ahead of Muharram processions which began today (Thursday) and will continue tomorrow (Friday).

The procession routes in Karachi have been sealed by containers and bomb disposal squad?and sniffer dogs are continuously sweeping the area. More than 5,000 police and 4,000 Rangers?personnel have been deployed across the city to protect the procession, Express 24/7 reported. According to an earlier report in The Express Tribune, a security official had said 6,000 Rangers personnel would be deployed across the whole of Sindh. The city of Karachi is distributed into three zones, where the Rangers personnel will be on duty. The main processions will be monitored in the Command and Control Room through CCTV cameras while smaller processions will also be provided security by the Rangers.

In Lahore, 600 Rangers have been put on guard for processions till Muharram 10th. Some 20,000 Punjab policemen have been deployed in Lahore. Superintendent of Police (Security) Faisal Rana had earlier briefed that the route of the main procession in Lahore had been cleared and surrounded by barbed wire barricades, and 27 cameras would be installed in Mochi Gate, where the main mourning procession will begin. Pillion riding has also been banned in Lahore for two days and helicopters are monitoring sensitive locations.

The Muharram procession in Karachi will?start from Nishtar Park, pass through its traditional route which?includes Numaish Chorangi and?reach Imam Bargah Ali Raza where Zuhr prayers will be offered. Later the procession will pass through MA Jinnah Road, Bolton Market, Bombay Bazar and?end?at the Imam Bargah Hussainia Kharadar.

Similar processions will be taken out in other towns and cities of Pakistan.

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Coalition intact: Govt safe as MQM stays – for now

Marathon MQM meeting decides to give PPP 10 days to distance itself from home minister’s comments; MQM delegation to meet PM on Sunday.

KARACHI:?Though apprehensions would have been calmed by the presence of the MQM’s ministers during a federal cabinet meeting earlier in the day, Wednesday evening’s emergency meeting of the PPP’s largest coalition partner in terms of seats would have had a few pulses racing in the top offices of the country.

The situation, however, was controlled – at least for now – by a hectic effort by the Pakistan Peoples Party’s leadership to assuage the MQM – which included an assurance that the president had had a word with Sindh minister Zulfikar Mirza. Though staying put for now, the situation will be “reassessed” by the MQM post-Ashura.

The Muttahida Qaumi Movement (MQM) held a marathon meeting of its Rabita Committees in London and Karachi that was meant to discuss “all possible options” available to the party in the wake of the latest verbal attack launched on them by Sindh Minister Zulfikar Mirza. Mirza, aside from blaming Karachi’s business community of supporting ‘terrorist elements’, had on Monday also accused the MQM of spearheading target killings in the city.

The MQM’s meeting on Wednesday therefore had some fearing a pullout from the PPP-led coalition – a move that would have ended the coalition’s official numerical majority in the Parliament. ‘Official’, because the PPP has apparently secured the ?support of the PML-Q’s 50-plus seats.

However, the worst-case scenario never materialised. The MQM’s Raza Haider, who is the Sindh IT minister, holding a press conference after the marathon meeting announced that the MQM respected differences of opinion, and would not play the part of destabiliser for the government – particularly during the sensitive period of Muharram.

There was a soft ultimatum. He said that the MQM would give the PPP 10 days to distance itself from the accusations of the Sindh home minister. The expansive time period also indicated a relaxation in the situation. MQM spokesman, Sindh Youth Affairs Minister Faisal Subzwari, however, says that the party will reassess its options after Muharram.

Yet, the buildup to the Wed-nes-day meeting was frantic.

High level contacts were made by the PPP in regards to the situation to assuage the MQM.

First, Sindh Chief Minister Qaim Ali Shah called on Sindh Governor Ishratul Ebad at the Governor House. During the meeting the difference between the two parties was discussed, according to an official statement. Another official contact was made by the president’s crisis man, Interior Minister Rehman Malik, who called the MQM’s central office in London.

However, most tellingly, quarters privy to the situation also informed The Express Tribune that Federal Information Minister Qamar Zaman Kaira actually assured the top leadership of the MQM that President Asif Ali Zardari had a stern word with the Sindh home minister over his statements regarding the MQM.

Leaders of the MQM will also meet Prime Minister Yousaf Raza Gilani on Sunday (December 19) to discuss the issue.

For all the hype, the MQM-PPP coalition stays intact – for now.

Published in The Express Tribune, December 16^th, 2010.

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Money Creation Betrays Fed Insanity

Stocks respond positively to QE2 but for how long?

It’s the Ides of December, if December has ides. Some months do. Some don’t.? Yesterday, we drove up to Frederick, Md. It is the site of the encounter, fictional,? between Stonewall Jackson and an old woman. More on that, below.

Those of us who are condemned to follow such things found out that the Fed is standing pat this week. You can imagine how that stirred our blood. We had barely slept before Tuesday, wondering what the Fed would do. We had worn out the carpet, pacing back and forth. And now we discover that the Fed will do nothing!

The “recovery” is too weak to raise rates, said the Fed, and the economy may need more stimulus, it added; so it will stick with its plan to buy $600 billion worth of U..S government debt and maybe even a little more.

You’ll remember that the Fed purchases were supposed to drive down long-term interest rates so that mortgage borrowing and capital investment increased. But instead of falling, long-term rates went up.

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On the surface of it, you might think the Fed chief would lower his head…and admit that his quantitative easing plan is a colossal failure. Since March ’09, he has committed an amount equal to more than an entire year’s output of the U.S. economy to his QE initiatives. With so much of the nation’s treasure lost, you’d think he’d offer to slit his wrists or at least resign, but that would just go to show that you’ve never studied modern macroeconomics. If you spent a few more years in school, maybe you too could begin to see that up is really down and black is actually white. The Fed’s actions will quadruple the U.S monetary base. Is it any wonder investors are getting suspicious of U.S. dollar-denominated paper?

In theory, the Fed’s purchases of Treasury debt are absurd. In practice, they have backfired. So, the Fed will do more of them. Makes sense, right?

The U.S. bond market could be signaling that it is headed the way of Greece, Ireland, and Lehman Bros. Who wants an IOU from someone who can’t pay it back? Once the selling begins, it is hard to stop. Interest rates go up, increasing the cost of financing for the debtor. Pretty soon, he can no longer fund his on-going expenses or make the payments on his debt. He is forced into bankruptcy.

Meanwhile, the latest numbers from Robert Shiller tell us that the US stock market is 33% overvalued. Our guess is that stocks will go down much more than that number implies. Markets tend to overshoot in both directions.

The latest news from China tells us that the Middle Kingdom could blow up at any time. Nearly half the GDP is spent on capital improvements (usually things that involve concrete and steel). It’s breathtaking to see it, but there’s no way you can make that many capital investment decisions without making some colossal blunders.

From Europe comes a bleak and foreboding assessment: European banks have five times as much government debt as they did 3 years ago and even U.S. banks have nearly $350 billion worth of debt from Europe’s wave-washed periphery. Investors are selling off Spanish bonds; another chapter in the debt crisis could be at hand.? Dear reader, you are faced with a grave and dangerous situation. In front of you is the Valley of Death for investors.

America’s stock market could crash at any moment. Its bonds are slipping. Its homes are sinking. China could collapse into a heap. Europe could come unglued. Trade could fall off a cliff. Interest rates could rise everywhere. Another great depression could be coming soon.

CEOs are optimistic, says one report. Investors are overwhelmingly bullish, says another. And your captains are telling you to “charge ahead!”

Our advice: Take cover!

No Admitting Defeat: Fed to Fight Failure With More Stimulus by Bill Bonner originally appeared in the Daily Reckoning.

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Renters Can Score Great Deals If They’re Smart, Here’s How

Good deals are to be had

During the past couple of years, we saw landlords at the ready to make concessions of every kind as they battled high vacancy rates in the worst economic downturn since the Great Depression. Today, things are changing. We are seeing more markets rebound with decreases in vacancy rates and increases in effective rents making it tougher to find a great deal, especially in areas where demand outweighs supply.

Getting what you need and want from an apartment negotiation can be tricky business. With that in mind, here are my best tips to help you land a great deal on your next apartment.

1.) The best way to start a lease negotiation for a new apartment or a renewal negotiation is to do some research. Gathering information is a critical first step that will inform you about what’s going on in your neighborhood’s rental market.? This is as easy as going online to an internet listing site like Rent.com (an eBay company) to compare rental prices, availability and amenities of different properties. By collecting information specific to your local market you will get a better idea of what is considered to be a fair rental price, make informed choices about what’s important to you, understand the trade-offs you may need to make and ultimately minimize the stress of rental negotiations.

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2.) The key to any successful negotiation is to know what’s really important to you and what you’re willing to pay in order to get just that. In addition to really understanding your budget for an apartment, you must be able to clearly communicate your interests to the property owner.? Start by making a list of what you like and don’t like about your current living situation and what you are really looking for in your next home. If you’re feeling cost-conscious these days, take the time to really break down your ‘must-haves’ from your ‘nice-to-haves’. ?In a rental market where inventory is tight and you’re on a strict budget, you may find that there is less room for negotiation around your ‘nice-to-haves’.? However, if you’re looking in a market where there is more rental supply than demand, you might have more opportunity to negotiate some of those extras that you want.Be open and share your list of ‘must-haves’ and ‘nice-to-haves’ with prospective landlords so that they can help you find the right apartment at the right price. There is always a chance the landlord may have other rentals available if the one you are looking at isn’t a good fit, especially if the building or neighborhood it’s in has a lot of vacant apartments. If the landlord knows what you are looking for and what’s most important to you they just might lead you to something you might not otherwise have considered.

• Landlords are often times trying to lease a specific type of rental unit, so it can be beneficial to stay open to new ideas and living situations that you haven’t previously considered. For example, with the economy driving a good deal of shared living situations, your potential landlord might be willing to make a better deal on a one-bedroom versus a two-bedroom unit. If you are trying to negotiate lower rent or other perks be flexible while remembering your priorities. Offering to sign for a longer lease term such as 15-18 months versus 12 months is a good tactic to negotiate with as this helps the landlord to secure tenancy, reduce the costs associated with turning the apartment if you move out and filling your vacancy.?A longer lease gives landlords some security and peace of mind, so consider offering this if it will grant you a lower monthly rental price.
• Make sure that you represent yourself well.? Being a good neighbor and tenant can make all the difference. Being polite and professional is the best way to develop a relationship with a prospective landlord and to create a successful rental negotiation for both sides. Never bluff or strong arm a landlord in a negotiation as this could?backfire and?create tension, or worse, leave you homeless if you are negotiating a renewal.

My last piece of advice for negotiating a cost-effective lease is to take your time and really look around at all of the options. Renters who dedicate a longer period of time to search for and visit rental properties are more likely to find just what they are looking for – and at a price that works with their budget. Taking more time to search allowed you to be able to compare more properties and gather more information to inform your rental negotiation.

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Government Inflation Numbers Are Bogus

Sir Alan is not absolved from helping stir inflationary demons

Consumer prices rose 0.1% in November and less than a percent over the past year. If you strip out food and energy, which government number crunchers do, because those prices are allegedly “volatile,” you still get a 0.1% increase.

That’s the “core” CPI, and that’s what the monetary mandarins at the Federal Reserve care about when drafting plans to buy Treasuries, control interest rates, goose employment numbers, order pizza, drink wine, play Xbox 360 or any of the myriad other things they do during their FOMC meetings.

As a group, they can’t be pleased with the number. Over the last year, despite trillions of dollars in government stimulus and quantitative easing, core CPI has risen a scant 0.8% – far below the Fed’s “sweet spot” of 1.6-2.0%.

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Whom are we kidding? Even the “headline” figure, the one including food and energy, is suspect. Our friends at Casey Research put out this chart a couple months ago. The column in the far right – CPI-U – is actually lower now than it was then, all those other columns notwithstanding:

How does the government pull this off? We ask constant readers to indulge our newer ones as we revisit three of the most common tools the statisticians use…

• Substitution. If steak becomes more expensive, and you buy hamburger instead, then the Bureau of Labor Statistics reasons your cost of beef has stayed the same – no inflation!

• Hedonics. If the 2011 model of a car costs more than the 2010 model, but it also comes with more standard equipment, the BLS reasons you’re still getting the same value for your money – no inflation!

• Geometric weighting. Nothing fancy here: If the price of something goes up, the BLS simply makes it count for less in the CPI relative to everything else. If the price comes down, it counts for more. Voila!

These changes started with the last round of Social Security “reform” under the auspices of Alan Greenspan in the early ’80s. The idea was that if CPI were lower, Uncle Sam could pay out less in Social Security benefits.

You can see the end result over time maintained by our friend John Williams of Shadow Government Statistics. Mr. Williams calculates economic numbers the way they did back in the Carter era. The “official” CPI number is in red. The shadow stat is in blue:

In the meantime, the Federal Reserve statement issued after yesterday’s meeting amounted to, “steady as she goes” on the ill-fated QE2. The Fed, looking at current “official” CPI numbers, sees “deflation”…

And so the plan to goose the system with $875 billion in Treasury purchases that started last month will continue to at least double the official rate from whence it sat while they were kibitzing over bagels before the meeting began yesterday morning.

Sooner or later, reality is going to catch up to the gamed statistics. Indeed, “an inflationary outbreak is very likely,” says Chris Mayer, editor of Mayer’s Special Situations.

History is on our side.

“The dollar has done nothing more reliably than lose its value over time,” Chris points out. “I think the future will be no different. People who worry about deflation – that, somehow, the dollars in our pocket will actually buy more in the years ahead, not less – will not only be wrong. They will be broke.

“Writer Jason Zweig points out that ‘Since 1960, 69% of the world’s market-oriented economies have suffered at least one year in which inflation ran at an annualized rate of 25% or more. On average, those inflationary periods destroyed 53% of an investor’s purchasing power.’

“That is why I believe that being prepared for inflation is the most important investment decision we have to face in the coming decade. If you aren’t prepared, then the consequence is a mean hit to your wealth.”

Why You Shouldn’t Trust the Core CPI Numbers by Addison Wiggin originally appeared in the Daily Reckoning.

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Saving face: K-P reverses dubious land lease

Khyber-Pakhtunkhwa Chief Minister Ameer Haider Khan Hoti cancelled the allotment of 170 acres of land worth Rs5 billion on Wednesday. PHOTO: FILE

ISLAMABAD:?In a dramatic move, Khyber-Pakhtunkhwa Chief Minister Ameer Haider Hoti cancelled the allotment of 170 acres of land worth Rs5 billion on Wednesday, after The Express Tribune broke the news of the well-documented scam.

In a desperate bid to pre-empt any legal action from the Supreme Court of Pakistan against those top guns who were direct beneficiaries of the land lease, the chief executive of the province beat a hasty retreat.

The Canola Research Station of the Pakistan Oilseed Development Board (PODB) established on 400 kanals of government land in Mardan worth Rs1.6 billion was proposed to be allotted to chief executive officer PALBTIZ, Sarhad Chamber of Commerce, Peshawar.

Inside sources within the provincial government claimed the decision to cancel land allotment was taken after warnings by “sane elements” within the power corridors. If the allotment of 170 acres of land to a front man (Javed Iqbal of Rawalpindi) of an ANP leader was not cancelled, there was a strong possibility that Chief Justice Iftikhar Muhammad Chaudhry might take a suo motu notice of the scam, the provincial government was advised.

It was feared that the Supreme Court’s action might land none other than the chief executive of the province, Hoti, in big trouble because he had approved the illegal allotment of a palm olive research station’s 170 acres of developed land to one of his party loyalists at throwaway prices, breaking all rules of transparency.

The announcement to cancel questionable land allotment ?was made by the information minister Mian Iftikhar Hussain during a televised interview with Express TV. He initially denied the story run by The Express Tribune, calling it a “pack of lies”. But, in the same breath, the information minister claimed that for the sake of “transparency”, the provincial government had decided to cancel allotment of land to an unknown individual and hold a public auction of the property to fetch more money.

However, the minister did not respond to the question as to why a public auction was not held in the past before the allotment was made. Despite persistent attempts, the minister did not disclose the identity of Javed Iabal who was initially allotted the land for a period of five years.

The Express Tribune had reported that chief minister Ameer Haider Khan Hoti had quietly allotted public land worth Rs5 billion to a front man of his party leader in Mardan after forcibly taking the possession from the Pakistan Oilseed Development Board with the help of local police.

Published in The Express Tribune, December 16^th, 2010.

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