29-Aug-10 News -- Hamas issues warning about Mideast peace talks - 29-Aug-2010 - Generational Dynamics

On Saturday, Hamas leader Khalil al-Hayya has called for an uprising against the planned Mideast peace talks between Israel and the Palestinian Authority, scheduled to begin on September 3 in Washington. He said the talks were an excuse for the Palestinian government to allow Israel "to wipe out the Palestinian issue, continue Judaizing (sic) Jerusalem, continue building settlements, and erase the Palestinian right of return."

The Ynet news quotes him as directing a monologue at Israel: "Abbas and his negotiating team do not represent Palestine, Jerusalem, the refugees, or al-Aqsa, and we will not recognize any agreement signed by the Zionist enemy. Hamas continues to grow stronger and prepare for the final battle until your banishment from Palestine. Your existence is on its way to disappearing."

Hamas is the Palestinian terrorist group that gained control of the Gaza strip from Fatah and the Palestinian Authority in a war in 2008.

Fatah is in control of the West Bank, and represents the "old guard" in Palestinian politics, with leaders who survived the genocidal crisis war between Arabs and Jews that following the partitioning of Palestine and the creation of the state of israel in 1948. This group, like survivors of crisis wars in general, tends to be moderate and compromising in policies, and dedicated to preventing a new crisis war like the previous one.

Hamas was formed in the early 1980s by post-war generations, and they tend to be more radical and much less willing to compromise. In fact, the average age of the entire population of Gaza is 16, meaning that Gaza is a place which is run by children with guns and missiles.

An analysis on Saturday by the Arab News defends Hamas and blames the United States:

"Yet there is a poison pill built into these negotiations: The exclusion of Hamas. The refusal of Israel and the United States to deal with them any time even when they were freely elected to form a government in January 2006 has been injustice from the start. An artificial cleavage between them and the Palestinian Authority, under Fatah leadership, has since created an intra-Palestinian alienation that could be more difficult to heal than that between them and the Israelis themselves. Hamas is portrayed consistently as an enemy determined to destroy the State of Israel, but this is untrue. Their ambition is a Palestinians state within “the 1967 borders,” and they have become the bulwark against real extremism. Those who have actually talked with them know that they are ready to be a very positive force for making peace if they are once approached with respect. But if Americans and Israelis continue to exclude them, no option is left to them but to reject out of hand any agreement made without them, if indeed it were possible to make any such agreement. That would kill it instantly and the whole effort would be wasted.

Such an outcome is altogether unnecessary. It is clear enough that the Americans would lose the Israeli participation instantly if they were to extend a welcome to Hamas at this point. But they could establish communication with the Hamas leadership, most likely through Track II mediation, and could stop the sabotaging of their governance. They could make evident to the Palestinian participants in the process their realization that the Palestinians can accomplish nothing while disunited."

This is an interesting opinion, but it's totally at variance with the generational analysis: These are kids with guns and missiles, and they have no intention of listening to any old farts in the Palestinian Authority or Israel.

The other side of the 'Baby Boom': Collapse of birth rates

We talk a lot about Boomers on this web site. The reason that they're called boomers is that there was a "baby boom" at the end of World War II, when millions of couples that had postponed having children suddenly decided to so.

Now we're seeing the other end of the baby boom. As the financial crisis worsens, and as anxiety increases about war and terrorism, couples are once again deciding to postpone having babies.

According to the latest CDC Report, the birth rate has fallen for two years in a row:

This is the lowest level in at least a century. The Associated Press quotes the demographer who wrote the report as saying, "It's a good-sized decline for one year. Every month is showing a decline from the year before."

After the Clash of Civilizations world war ends, we can once again expect a new "baby boom."

Home prices expected to fall after disastrous GDP report

"And since the real estate mega-bubble burst three years ago, the government has tried even more tricks to get people to sign home purchase contracts.

Now, a grim reality has set in: Despite the still-rich basket of tax breaks for residential property owners, and the lowest mortgage rates in a generation, the pool of willing or able buyers is dwindling.

Well, there is one ['fair' answer here]: Leave housing to market forces, let prices fall until buyers are motivated to come in, and hope that the economy can stand one final cathartic wave to clear the excesses of the bubble."

This is all wishful thinking, of course. Real estate prices are positioned to fall precipitously, and the idea that the government will "let" them fall is fantasy. They're going to fall whether the government wants to or not.

The resignation that house prices are going to fall follows from the latest set of dismal economic figures.

Both existing home sales and new home sales have fallen far deeper and faster than analysts had expected, as we've been reporting all week.

Then, on Friday, the Commerce Department issued a report on the Gross Domestic Product for Q2 that was disastrous. According to the report (PDF), the growth rate has been falling for three quarters in a row:

The US economy was officially in a recession starting in 2008. It officially ended in Q3 2009, as can be seen by the above table. Then in Q4 the GDP growth rate was 5%, because of the effects of the stimulus and bailout programs, and much higher than analysts had expected.

Analysts were overwhelming predicting and promising a "V-shaped recovery," expected the GDP growth rate to remain at the 4-5% level each quarter.

Instead, it fell to 3.7% in Q1 of this year, and the new report is at 1.6% for Q2.

Fed Chairman Ben Bernanke seemed to be surprised by the report in a speech he gave on Friday, using words like "unexpected slowing," "disappointing," and "sharp deterioration."

What's worrying analysts is not so much the individual number as the spiraling downward trend. Whereas a few weeks ago most analysts were predicting continuous growth -- with some predicting "spectacular" growth -- I don't believe I've heard anyone in the last couple of days who expected the growth rate to be higher than 1.6% in Q3, and many expect it to turn negative, leading to a so-called "double-dip recession."

From the point of view of Generational Dynamics, there is one event that still MUST occur - a spectacular stock market crash and financial crisis that will be remembered for decades, like the one that occurred on October 28, 1929. The stock market is still overpriced by a factor of close to 200%, as it has been since 1995, and I discussed in "Updating the 'real value' of the stock market."

It's impossible to predict when this event will occur, or what will trigger it, but things have been getting very menacing since May. (See "7-Jun-10 News -- Globally, May was a month of ominous events.") Q3 earnings will start coming out on October 1, and if they turn out to be disappointing, then we may be in for an "October surprise."

Additional links

An estimated 500,000 people in the anti-incumbent "Tea Party" movement gathered on the National Mall on Saturday to hear Glenn Beck give an inspirational speech in the spirit of Martin Luther King's "I have a dream" speech at the same site, exactly 47 years ago. Sarah Palin also spoke. Not surprisingly, the NY Times coverage was incredibly snarky, but Politico and LA Times provided decent coverage.

Paul Krugman, who used to be an economist, but has turned into a hard left political columnist, was true to his new career by saying that the Democrats had to change economic policy because they need to be reelected in November. He says that "this isn’t a recovery, in any sense that matters. And policy makers should be doing everything they can to change that fact. ... Yet policy makers are in denial" by "sugar-coating economic reality," and saying that everything is ok when it isn't. NY Times

Iraq's Prime Minister Nuri al-Maliki has put the country on the highest state of alert, after the "Islamic State of Iraq" (al-Qaeda in Iraq) took credit for the recent wave of suicide bombings in cities across the entire country. CNN

The U.S. is planning to sell massive amounts of military jet fuel to the Israelis. Speculation is that either it's for an Israeli attack on Iran, or that it will provide necessary stockpiles to Israeli in case Iran shuts down the Strait of Hormuz, cutting off Israel's supply of fuel. Debka

China used to take a neutral stance on whether the various portions of Kashmir and Jammu are part of Pakistan or India. But recent policy changes indicate that China is increasingly siding with the Pakistanis against India. At the same time, Pakistan has been aiding China in quelling the revolt of the Uighurs in China's Xinjiang province. These changes are consistent with the Generational Dynamics expectation that Pakistan and China will be allied in the Clash of Civilizations world war. Eurasia Review.

It was recently reported that Pakistan's Inter-Services Intelligence (ISI) agency has decided, for the first time, that Islamist militants were now a greater threat to Pakistan's security than India. However, a security official has clarified this decision. "These are two mutually exclusive threats. The magnitude, the type, is quite different. One is an internal threat which is insidious, difficult to quantify. It is a clear and present danger. This is a very serious threat. The other is a conventional threat. What has India done, politically and militarily, for this threat to have been reduced?" He added that the threat from India has, if anything, increased. Reuters

Fierce fighting is continuing in Somalia between government forces and the al-Qaeda linked al-Shabab terrorist group. Dozens have been killed in the capital Mogadishu, and it's feared that the government is close to defeat. Eurasia Review

Generational Dynamics Web Log for 29-Aug-2010
29-Aug-10 News -- Hamas issues warning about Mideast peace talks

Hamas seeks to benefit from expected failure of Mideast peace talks

The other side of the 'Baby Boom': Collapse of birth rates

Home prices expected to fall after disastrous GDP report

Additional links

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Generational Dynamics Web Log for 29-Aug-2010 29-Aug-10 News -- Hamas issues warning about Mideast peace talks

Hamas seeks to benefit from expected failure of Mideast peace talks

The other side of the 'Baby Boom': Collapse of birth rates

Home prices expected to fall after disastrous GDP report

Additional links

Web Log Pages

Generational Dynamics Web Log for 29-Aug-2010
29-Aug-10 News -- Hamas issues warning about Mideast peace talks