Pakistan has a history of using terrorism as a policy tool against neighbors

Posted by Shyam Moondra

Although Pakistan has denied any involvement in the multiple acts of terror in Mumbai that led to the murder of over 180 innocent people, it has been widely reported that in the past Pakistan's Intelligence Services has used terrorism as a policy tool against India and Afghanistan. It's strongly believed that Pakistan's Intelligence Services played a role in recent terrorist act against India's embassy in Kabul and attack on India's Parliament Building in New Delhi. Given the logistical complexity of the Mumbai terrorist act, it's hard to believe that whoever planned and executed this senseless act of terror didn't get any support from someone in the Pakistani government.

It's to India's credit that in spite of many provocative acts of terrorism committed by organizations based in Pakistan and supported by Pakistani Intelligence Services, India has acted with tremendous restraint to keep the hope alive for possible eventual peace between the two countries.

Pakistan has received tens of billions of dollars from the U.S. in exchange for their cooperation against Al Qaeda and Taliban. However, many observers believe that while Pakistan pocketed the aid money, it has partnered with the U.S. only half-hearted. At times, they have appeared to play both sides, helping the U.S. against Al Qaeda while using terrorist organizations against India and Afghanistan. The U.S. policy has proven to be a failure because terrorists are gaining near the border of Pakistan and Afghanistan. Also, the U.S. policy of looking the other way every time Pakistan used terrorism against India and Afghanistan has only encouraged more terror acts against these countries.

President-elect Obama needs to do a comprehensive review of the U.S. policy towards Pakistan and take the following actions:

1. Suspend all financial and military aid to Pakistan. Any future aid should be tied to specific benchmarks with regard to their help in our war on terror. We should insist that they dismantle Intelligence Services organization that itself seems to be engaged in terrorism against India and Afghanistan. We should also insist that they shut down their religious school system that is a breeding place of future would-be terrorists.
2. Offer comprehensive assistance to India in counter-terrorism tactics and intelligence sharing, and better protecting their borders to prevent terrorist infiltrators. We should seek a closer strategic relationship with India, economically, militarily, and diplomatically.
3. Develop a strategic plan to seize Pakistan's nuclear bombs and nuclear capable missiles, and destroy their WMD labs. It's a matter of time that these weapons and technologies will fall in the wrong hands and used against us. We must be prepared with a plan to take control of Pakistan's WMD.
4. If Pakistan doesn't meet our demands, we should isolate Pakistan diplomatically and economically. We should restrict visas to Pakistani citizens and limit trade with Pakistan.

Our policy in the Indian-subcontinent has not been effective. We need a different approach.

Very impressive start by President-elect Obama

Posted by Shyam Moondra

The current economic crisis is a culmination of many mistakes made by the Bush administration and the Congress. Since it became evident that we have a credit crisis, the government officials such as President Bush, Secretary Paulson, FED Chairman Bernanke, and SEC Chairman Cox, have not provided credible leadership. Their unsteady management of the crisis led to fear and complete lack of confidence on the part of investors.

President-elect Obama seems to have understood that a lot of the current problems are psychological and that's why he is so keen in demonstrating that he is on the top of things. In recent days, Obama has held press conferences almost on a daily basis that has been very reassuring. He has said the right things, he has assembled a very impressive economic team, and the fact that he comes across as very focused have soothed the nerves of many investors. His strong leadership style and a show of determination that he can fix whatever problems our economy has have helped a great deal in stabilizing the financial markets.

Obama's multi-faceted approach in providing a big stimulus to the economy for immediate positive effects, weeding out wasteful government spending, and putting in place a plan for long-term recovery are right on the mark. Obama's intelligent and thoughtful approach in managing the crisis has inspired confidence and for the first time the people are becoming more hopeful about the future.

Based on Obama's performance to date, there is a reason to believe that he may indeed turn out to be one of the greatest presidents we have had.

God has a way of equalizing things

Posted by Shyam Moondra

The rich people, who benefited the most under the Bush tax policies, are the biggest losers in the current economic crisis. Most of these people have lost almost half of their wealth and still counting.

The CEOs, who abused the system with the help of corrupt Board of Directors and enriched themselves beyond belief, are now seeing their stock options melt away right under their noses. When the market cap of a company like Citigroup crashes from $200 billions to just $20 billions in less than a year, it can only be a curse. Who could have even imagined just a year ago that Bear Stearns and Lehman Brothers would be no more or GM and Ford, icons of American ingenuity, would burn to ashes?

The powerful hedge funds, intoxicated with their successes achieved mainly by manipulating stocks and making money at the expense of small investors, are now on their knees. Over 700 of them have already gone bankrupt and many more are on their way to demise for good.

Bush ordered the invasion of Iraq, against the wishes of most of the people around the world, simply because he felt that he could. As the leader of the world's only superpower, Bush felt invincible and somewhat intoxicated with power. After sacrificing the lives of thousands of people, American and Iraqi, and wasting over $700 billions, he finally had to concede that the mission was not accomplished after all.

Given a massive destruction of the wealth of rich and powerful, who gained unfairly in recent years, one has to wonder if there is a supreme power behind all this.

Amidst the ruins lies a beacon of hope, President-elect Obama, who correctly envisioned a change in direction that would favor the middle-class, the people who were left behind. The fact that Obama, a black man, won the election against all odds can only be God's doing. It seems like God is finally on the side of the good people.

Lack of confidence in government officials causing turmoil in financial markets

Posted by Shyam Moondra

The losses of 5% or more in stock markets have become a sort of routine daily event. This economic crisis is man-made and the people around the world are paying an unimaginable price. They are losing their jobs, homes, and retirement savings. The first time in a long time, we now have reports of hunger among the American children.

The leaders in the government, including President Bush, Speaker Pelosi, Senate leader Reid, many of the committee chairmen in the Senate and the House, Treasury Secretary Paulson, Federal Reserve Chairman Bernanke, and SEC Chairman Cox, failed the country beyond belief. They failed to properly regulate risky "innovative" financial products that turned out to be "toxic." They failed to recognize the scope and consequences of the sub-prime mess. Once it became evident that the world was headed towards credit meltdown, these officials failed to respond effectively. They kept trying different things at enormous cost to the tax payers at a time when we are up to our ears in terms of the national debt. It was very unsettling to hear Paulson announce that he was discarding the idea of buying-up the "toxic" securities from financial institutions, the idea that he fought for and for which he secured the Congressional nod only days prior. All of this unsteady management of the crisis led to the loss of their credibility, which in turn led to investors' lack of confidence in the financial markets. While stock markets were plummeting, SEC was eliminating the "up-tick" rule for short selling and permitting naked short selling that only exacerbated the slide of the markets. Lack of leadership and mismanagement by Cox should be viewed as criminally negligent.

At the moment, the key problem is one of leadership and lack of credibility. All of the present government officials are tainted. The day it is announced that Pelosi, Reid, Bernanke, Cox, and some of the Congressional committee chairmen are being replaced (other incompetent and failed officials, Bush and Paulson, are leaving soon), the stock markets will go through the roof. The American people desperately want these power-hungry government officials to think hard about what's in the country's best interest. If they step aside and let a brand new leadership team at all levels led by President-elect Obama address the crisis, the confidence of the people will be restored and it will go a long way to restore the normalcy in the markets.

Is stock market bottoming out?

Posted by Shyam Moondra

There were several instances when it looked like the stock market had bottomed out but then came more bad news and the market headed lower again. However, the behavior of the market in recent days suggests that DJ may have already hit the bottom at 7,773 on October 10, 2008.

It seems that the market is being hit repetitively by the same old bad news, leaving the valuation at a level as if we are headed to the 1930's era depression. The recession has come fast and furious but it's unlikely that it will last long for the following reasons:

1. In a concerted effort, the governments of major economic powers have been reducing interest rates to the levels not seen for decades, pumping liquidity into the markets at an unprecedented rate, and increasing expenditures via stimulus packages that will eventually revitalize the global economies.
2. The credit crisis is easing, as is evident from the inter-bank Libor rate that has come down to the levels not seen since 2005.
3. The latest housing data suggests that the housing market may be stabilizing. Recent positive actions by several major lenders will reduce the number of home foreclosures, which will help revitalize the housing market.
4. In general, the corporate balance sheets are very strong with unprecedented levels of cash. This explains why corporate bankruptcies are far fewer than seen during the past recessions.
5. The corporations were quick to adjust their inventories when the credit crisis first became evident. The current extremely low inventory level suggests that the industrial production may be ready to bounce, which will boost the employment.
6. The current stock valuations seem ridiculously low when compared with the valuations at the bottom of the past severe recessions.
7. The collapse of the prices of oil and other commodities is a welcome news for the consumers. The lower commodity prices will dampen inflationary expectations that will free the FED to reduce interest rates even more. Low inflation and low interest rates are generally good for the equity markets.
8. The incoming Obama administration is poised to cut taxes for the middle-class and small businesses, aid the ailing auto industry, and invest in alternative fuel research and development and infrastructure projects. These initiatives will boost employment and consumer confidence.

The current stock market is being driven more by fear rather than the economic reality. In this kind of market, as Warren Buffet said, investors need to be greedy.

Pelosi, Reid, Frank should resign and Bernanke and Cox must be replaced

Posted by Shyam Moondra

Given the credit market turmoil and the stock market crash that led to people losing their jobs, homes, and half of their retirement savings, it's imperative that people who were in a position to prevent this catastrophe step aside to bolster the confidence of the people in the government. As President-elect Obama assembles his new administration, it's important that we have new leaders in the Senate and House as well as new committee chairmen.

I call upon Nancy Pelosi, Harry Reid, Barney Frank and other committee chairman to take moral responsibility for the major government failure to protect the people and step aside so that we have new leaders and a new beginning.

FED Chairman Bernanke should also be replaced. He unnecessarily increased interest rates, at a time when inflation was not a problem, which precipitated housing foreclosures. He continued to insist that sub-prime was not a problem. He waited too long to address the problem once it became clear that it had the potential to become a major crisis.

SEC Chairman Cox and his key people should be fired. He allowed hedge funds and investment banks to manipulate the markets and failed to enforce the laws. He eliminated the "up-tick" rule for short selling and naked selling became wide spread under his chairmanship that made it easier for hedge funds to manipulate the markets and make money at the expense of small investors. Cox did not serve his country well and he must be removed immediately.

The road ahead for President-elect Obama

Posted by Shyam Moondra

Barack Obama's election as President is not only historic but it instantly restores America's image as a beacon of democracy, freedom, and ideals. President-elect Obama ran an exceptionally competent campaign, he showed tremendous perseverance, calmness and steadiness on the long campaign trail, and he used the power of his words to inspire the country and the rest of the world.

It's interesting to note that while it took America 232 years to reach to the point of electing a minority as the President, India, that became independent only 61 years ago, has elected a Moslem as the President (Abdul Kalam), a woman as the Prime Minister (Indira Gandhi), and a Sikh, another minority in Hindu-dominated country, as the current Prime Minister (Man Mohan Singh).

President George Bush blundered by invading Iraq, mismanaged economy, and left our relations with the allies in ruins. Now President-elect Obama has the task of not just repairing the craters and pot-holes that Bush created in our road to peace and prosperity, but creating brand new pathways to better life for all the citizens of the world.

Since economic issues played a major role in Obama's victory, that's where the focus would have to be. Obama's first task would be to select a first-rate economic team that should include former FED Chairman Paul Volcker as his WH Economic Advisor. Obama must appoint a brilliant Treasury Secretary and replace FED Chairman Bernanke and SEC Chairman Cox, both of whom failed to recognize the brewing sub-prime credit problems early on (how many times Bernanke appeared before the Congress and proclaimed it was not a serious problem?) and stock market manipulation, and act in a timely manner to prevent the economic meltdown. The first step in winning the confidence of the people is to install a brand new economic team. Reducing taxes for the middle-class (and not renewing Bush tax cuts for the super rich) should be a top priority.

The second priority would be to end the Iraq war and increase the troop deployment in Afghanistan. Obama must also get tough with Afghanistani President Karzai to stop the drug trade and redouble the efforts of reconstruction of the war raged country. We also need to redefine our relations with Pakistan; we should suspend military aid unless it's specifically tied to the war on terror.

On the broader issue of the Pentagon, Obama needs to retain Defense Secretary Gates, who is doing a good job, and appoint Sen. Chuck Hagel as the deputy Defense Secretary with one mission - transform the Pentagon. The Pentagon is a wasteland of tax dollars (remember $100 hammers and $300 toilet seats ordered by the Pentagon?). We need to start from scratch and build a new defense organization with adequate controls to prevent waste and fraud involving large amounts of tax dollars and no-bid contracts. I like to joke that the best way to transform the Defense Department is to move it out of the sprawling Pentagon and into a smaller building, which will force the DoD to do away with wasteful bureaucracy.

I would also like to see Colin Powell brought back as the Secretary of State. Powell is not a right-wing ideologue, but a skilled conciliator, and that's exactly what we need to repair our tattered relations with our allies and initiate vigorous diplomacy to deal with our adversaries. Powell is supremely qualified to play this role.

I think the EPA and Energy Departments should be combined into one Department and Al Gore be appointed as its head and charged with the task of putting energy independence and global warming on the same track and creating millions of new jobs related to renewable energy sources. Al Gore made a name for himself talking about the issues, so it seems appropriate that he be given a chance to now walk-the-talk and prove to the world that he deserved all the Nobels, Oscars, and Emmys he won.

The time has finally come to tackle the health care problem. Sen. Hillary Clinton should play a major role, whether as a cabinet Secretary or in some other capacity, to get this done as quickly as possible. Let's once and for all create that Health Security Card, that President Bill Clinton flashed during his first State of the Union message to the Congress.

Our economy is in a dire condition. We need a stimulus package. We should initiate a major infrastructure improvement program, which will create millions of new jobs and give a boost to the sagging construction industry.

The current economic meltdown is partly because of the lack of Congressional oversight that led to inadequate regulation of the sub-prime market. I think Speaker Nancy Pelosi and Senate Majority Leader Harry Reid, along with some of the Congressional Committee Chairmen, should step aside. Because of their failures, people lost their jobs, homes, and half of their retirement savings. It's the American way to hold the people, who were in a position to prevent this catastrophe, accountable.