| Three More GM Recalls Today: When Will It End? Posted: 27 Jun 2014 07:10 PM PDT In a seemingly unending series of recalls, GM announce three more recalls today. This set involves pickup trucks, SUVs, Corvettes, and police cars. With every announcement, I wonder "Is this the last?" But here we go again. The Wall Street Journal reports GM Discloses Yet Another Recall. General Motors Co. disclosed three new recalls on Friday covering more than 473,600 vehicles, including some of its latest Corvette sports cars, amid stepped up safety reviews.
The nation's largest auto maker recalled 466,940 full-size pickup trucks and sport-utility vehicles to recalibrate software in the transfer case which may electronically switch to neutral without input from the driver. GM said it is not aware of any crashes or injuries related to the problem. The recall covers certain model years of the Chevrolet Silverado, GMC Sierra and SUVs including the Chevrolet Tahoe.
n a second recall, GM said its dealers will inspect, and replace if needed, the windshield wiper module assembly in about 4,800 of the 2013 and 2014 model year Chevrolet Caprice police cars and 2014 Chevrolet SS sport sedans. If the motor gear teeth become stripped, the wipers may not operate. GM said it isn't aware of any crashes or injuries related to this issue.
Lastly, dealers will replace the two rear shock absorbers in 1,939 of the 2014 model year Chevrolet Corvettes in the U.S. due to the potential cracking. GM said it is not aware of any crashes or injuries related to the problem. 20 Million Recalls and CountingGM's recall total has now reached 20 million. Clearly GM wants to get every conceivable bit of bad news regarding recalls out of the way. Thus, I suspect the end of recalls is near. Auto Bad News Over?Is all the auto-related bad news out of the way? Not quite. Here are a few of my recent comments on autos from Consumer Spending Weaker Than Expected, Autos Still Holding Up; What About Housing? Durable Goods and Autos
- Purchases of durable goods increased 1.0 percent, in contrast to a decrease of 0.9 percent in April.
- Purchases of motor vehicles and parts accounted for more than half of the [durable goods] increase in May, and more than accounted for the decrease in April.
- Purchases of nondurable goods decreased 0.3 percent in May, compared with a decrease of 0.1 percent in April.
- Purchases of services decreased 0.2 percent, compared with a decrease of 0.1 percent.
Services down two months in a row as are nondurable goods.
Was the weather bad in April and May too?
What little strength left in the economy is related to autos. Auto sales bounced back after a decline in April. How long can this last? Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
| Another Ghost Town in China, This Time a Replica of Manhattan Posted: 27 Jun 2014 12:55 PM PDT Malinvestment in China proceeds at a staggering pace. Technically, this growth adds to GDP, but eventually it will be written off. Ghost cities, ghost malls, and empty train stations in China have been in the news for years. The world's largest mall is unoccupied and entire cities sit vacant. We can now add another ghost city to the list, a big one. Bloomberg reports China Builds Its Own Manhattan -- Except It's a Ghost Town. China's project to build a replica Manhattan is taking shape against a backdrop of vacant office towers and unfinished hotels, underscoring the risks to a slowing economy from the nation's unprecedented investment boom.
The skyscraper-filled skyline of the Conch Bay district in the northern port city of Tianjin has none of a metropolis's bustle up close, with dirt-covered glass doors and construction on some edifices halted. The area's failure to attract tenants since the first building was finished in 2010 bodes ill across the Hai River for the separate Yujiapu development, which is modeled on New York's Manhattan and remains in progress.
The deserted area underscores the challenge facing China's leaders in dealing with the fallout from a record credit-fueled investment spree while sustaining growth and jobs in the world's second-biggest economy. A Tianjin local-government financing vehicle connected to the developments said revenue fell 68 percent in 2013 to an amount that's less than one-third of debt due this year.
"There will have to be a reckoning," said Stephen Green, head of Greater China research at Standard Chartered Plc in Hong Kong. Sales of bonds by local-government vehicles to repay bank loans are just "buying time," he said. "The people will pay" for it through bank bailouts, recapitalization with public money or inflation.
Conch Bay showed few signs of life during a June 19 visit by Bloomberg reporters. Work on Glorious Oriental, a two-tower residential and office complex, had stopped, and at the north end of Conch Bay, the main building of the Country Garden Phoenix Hotel, billed as Asia's largest hotel, was a deserted shell with no signs of any work under way.
Calls to Glorious Oriental's Beijing and Tianjin offices went unanswered.
Wang Wei, a 34-year-old Tianjin resident, was driving through the area to check out property prices, finding them six times higher than what he'd be willing to pay. "I've seen a lot of reports about the area, but apparently it's not a place fit for home -- at least for now," said Wang. "No shops, no schools, no hospitals and no neighbors." Empty
Buildings stand in the Conch Bay district of Tianjin, China. Photographer: Steve Engle/BloombergStories like this show why it is extremely unlikely China will pass the US any time soon. Chinese growth is enormously exaggerated, malinvestment abounds, prices are absurd, and shadow bank operations that funds these developments will eventually implode. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
| Divided Iraq Inevitable; Isis Targets Baghdad Green Zone; Obama's Inane Weapons Proposal Posted: 27 Jun 2014 11:45 AM PDT A breakup of Iraq is now inevitable, even as the US and Iran are ideologically aligned in preventing that outcome. And while the US is still worried about potential problems a separate Kurdistan may cause, Turkey is Ready to Accept Kurdish State in Historic Shift. "In the past an independent Kurdish state was a reason for war [for Turkey] but no one has the right to say this now," Huseyin Celik, spokesman for the ruling AK party, told the Financial Times.
"In Turkey, even the word 'Kurdistan' makes people nervous, but their name is Kurdistan," he added. "If Iraq is divided and it is inevitable, they are our brothers . . . Unfortunately, the situation in Iraq is not good and it looks like it is going to be divided."
This week, Avigdor Lieberman, Israel's foreign minister, also told John Kerry, the US secretary of state, that the creation of an independent Kurdish state was a foregone conclusion.
In strongly worded comments for a Nato member, Mr Celik blamed not just Nouri al-Maliki, the Iraqi prime minister, for Iraq's growing fragmentation, but also the US: "They didn't bring peace, stability, unity, they just left chaos, widows, orphans. They created a Shia bloc to the south of our country." Mr. Celik's observation is correct but insufficient. At a cost of trillions of dollars to the US and even more to Iraq, the illegal and unwarranted US attack left Iraq in ruins and laid the grounds for an Isis uprising. Isis Targets Baghdad Green Zone Please consider City on Edge as Baghdad Residents Await Isis AttackIsis, which along with allied Sunni armed groups seized Mosul and other cities this month, has made clear it is aiming to take Baghdad. An eerie calm has settled on the city. There have been few bombings or assassinations in the last two weeks convincing many that Isis is planning something big, perhaps to coincide with the start of the holy month of Ramadan next week.
"They will try to suffocate Baghdad economically," says Hisham Hashemi, a researcher and author of the forthcoming book, The World of Daish. "Isis considers the centre of Baghdad as a site for mischievous acts, where they intend to carry out bombings and killings." How Big is Isis?The US state department estimates Isis is about 3,000 strong. Other report put the number as high as 10,000. Regardless of size, Sophisticated Tactics Key to Isis Strength. "They [Isis] are going against a supposedly professional military force with a speed and ferocity that has the Iraqis taking to their heels," says Patrick Skinner, a former counter-terrorism officer at the Central Intelligence Agency and now analyst at the Soufan Group. "The Iraqi Security Forces [ISF] are mind-crushingly inept."
Of immediate concern is the seizure by the jihadis of a range of high-grade military equipment. A force once lightly armed with an arsenal of shoulder-held missile launchers and anti-aircraft guns mounted on pick-up trucks, Isis is now far more comprehensively kitted out, thanks to its raids on the depots of the Iraqi army's second motorised division.
Identifying exactly what the jihadi group has in its armoury is complicated because it has been wildly embellishing its capabilities for effect on social media. But even a conservative list – corroborated by intelligence and military officials – is worrying enough. It includes unknown quantities of M114 Humvees, other armoured personnel carriers and Stinger missiles, as well as a huge cache of explosives and small arms and an unspecified number of M198 155m howitzer artillery pieces with a conventional range of 22km.
In July 2012, Isis – then still known as al-Qaeda in Iraq – began the first of two intensive insurgency campaigns that paved the way for its current fight.
"These were intelligent campaigns in design: well-resourced, prepared, executed and adapted," says Jessica Lewis, a veteran US army intelligence officer who served in Iraq and is now research director at the Institute for the Study of War. "These are not things I might associate with a terrorist organisation. These are things I associate with an army."
All of which raises questions about just how big Isis is. US intelligence officials posit a central fighting force of 3,000. Military and intelligence analysts put the minimum size of Isis's larger force at 7,000 to 10,000.
"They are not spreading themselves too thinly," says Ms Lewis. "They have matched personnel to their objectives carefully."
As to what those objectives are, Isis's attack pattern now seems to point squarely in one direction.
"Isis has uncommitted forces proximate to Baghdad," says Ms Lewis. "They always meant to establish control. They always meant to break the state. They want Baghdad." And specifically, she adds, the government-protected Green Zone. Awkward Allies The Financial Time highlights something I commented on several days ago: Iraq Makes Awkward Allies of US Enemies. Barack Obama has called for the removal of Bashar al-Assad for nearly three years over his brutal suppression of domestic dissent and on Thursday proposed $500m in funding for moderate rebels fighting his regime. Washington directly blames Syria for fomenting the rise of Isis, which is rooted in al-Qaeda-linked jihadi groups that received sustenance from Damascus for years. Some have also accused the regime in Tehran, Mr Assad's primary patron, of enabling Isis' rise. Curiously, US support for alleged "moderate rebels" constitutes direct support for Isis who also wants to overthrow Assad. And as a result " Mr Obama finds himself inadvertently allied with Mr Assad, who under pressure from Iraq has belatedly begun to use the air power that he has mostly directed against Syrian civilians and moderate rebel groups against Isis." Tangled MessI spoke about the " tangled mess" in Absurdities, Blatant Lies, Chutzpah, Political Expediency, Odd Couples. Absurd and Conflicting Realities
- The US wants to overthrow Syrian president Bashar al-Assad.
- US ally, Saudi Arabia, also wants to overthrow the Syrian president.
- The rebels fighting Assad are primarily Al Qaeda and Isis. Thus the US is in alignment with Al Qaeda and Isis.
- The US and Iran want Isis out of Iraq.
- The US refuses help from Iran out of fear of making Iran and Iraq allies.
- Iran supports Syrian president Bashar al-Assad.
- Saudi Arabia is ruled by Sunnis.
- Isis consists primarily of extreme Sunnis.
- Iran is ruled by Shias.
- The US overthrew Saddam Hussein, a secular ruler whose party was dominated by Sunnis.
- The US helped install Nouri al-Maliki, who is a Shia, even though the US is at severe odds with Iran.
- Maliki is politically aligned with Iran.
- Under Maliki's regime, extreme Sunnis got fed up with political oppression, giving rise to Isis.
- Maliki accuses Saudi Arabia of sponsoring Isis and genocide.
- According to The Guardian, Lina Khatib of the Carnegie Foundation says "There is Saudi money flowing into Isis but it is not from the Saudi state. Maliki is trying to shift blame from himself and is echoing Iranian propaganda.".
It is impossible to untangle that mess.
Moreover, arms given to Syrian rebels eventually make their way into the hands of Isis and Iraq.
Nonetheless, many Republicans and some democrats accused Obama of not providing enough assistance to Syrian rebels, most of which are Al Qaeda or Isis connected. Obama Proposes $500 Million Aid for Syrian RebelsYesterday, the Wall Street Journal reported Obama Proposes $500 Million to Aid Syrian Rebels. The White House on Thursday proposed a major program to train and arm moderate Syrian rebels, in a significant expansion of the U.S. role in a civil war that officials fear is bleeding into Iraq and across the region.
The Obama administration requested $500 million—a larger amount than expected—to aid the Syrian opposition, reflecting growing U.S. alarm at the expanding strength of Islamist forces in Syria, who in recent weeks have asserted control of large parts of neighboring Iraq and now pose threats to U.S. allies in the region.
Coming on the heels of a decision to send 300 military advisers to Iraq, the Syrian rebel training elevates the U.S. role in the Middle East. Inane ProposalPresident Obama now sides with John McCain and Dick Cheney in wanting to send arms to Syrian " moderate" rebels (as if we can correctly determine who is moderate and who isn't). Even if we could make such a determination, the likelihood weapons eventually end up somewhere else is overwhelming. Assad is fighting Isis (a far bigger threat than Assad), yet we are hell-bent on removing Assad. If Assad falls, it will be to Isis or Al Qaeda. The stupidity of this setup is staggering. I repeat what I said on Tuesday in Kerry's New Definition of "Intervention"Contrary to Obama administration beliefs, the splitting up of Iraq is likely the best outcome now. The sooner this all happens the better.Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
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