From the AP

 "The military surge into Iraq that began more than 18 months ago has ended. But 150,000 U.S. troops remain, as many as 15,000 more than before the buildup began.

In recent days, the 3rd Infantry Division's 2nd Brigade, the last of the five additional combat brigades sent in by President Bush last year, left the country.

Its departure marks the end of what the Pentagon calls the "surge." And it starts the 45-day evaluation period that Gen. David Petraeus, the top U.S. commander in Iraq, told Congress he would need to assess the security situation and determine how many more troops he could send home."

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Since 1990, the U.S. government, through the Pentagon’s arms export program, has arranged for the delivery of more than $39.6 billion in  foreign military sales to Saudi Arabia, and an additional $394 million worth of arms were delivered to the Saudi regime through the State Department’s direct commercial sales program during that same period.  This has been part of the deal we've struck with Saudi Arabia to keep cheap sweet crude flowing to the US.  In return we've armed them to the teeth.

One can certainly debate the logic of such a move but for now let's assume that this was at one time in our national security interest to do so.  Such interests are being threatened by the emergence of Russia as a serious economic player in the Middle East.  Russia has already be a strategic trading partner with Iran for years.  They have shared military and energy interests across the board, even going so as far as to make passenger jets together.  Up until this point, the dividing line as been that Saudi Arabia was (ostensibly) our ally and Iran was Russia's.  The deck has been shuffled again, to the US' strategic disadvantage.

Reuters UK is reporting that, "Saudi Arabia has offered to award major arms contracts to Russia in return for Moscow curtailing cooperation with Iran, Russia's Kommersant newspaper reported on Tuesday, citing unidentified diplomatic sources.

The Kremlin declined to comment immediately on the report, as did Saudi Arabia's embassy in Moscow.

Saudi Prince Bandar bin Sultan met Russian President Dmitry Medvedev and Prime Minister Vladimir Putin in Moscow for talks on Monday that focused on widening bilateral cooperation.

Kommersant said Saudi Foreign Minister Prince Saud al-Faisal suggested Russia curtail its cooperation with Iran at a meeting in Moscow this February. The proposal was made to the Kremlin in the name of King Abdullah.

"The Kingdom's leadership advised Moscow to phase out cooperation with Tehran and in return promised attractive contracts with Saudi Arabia," said the paper, one of Russia's most respected dailies.

"In essence, Russia was offered to become a major partner in the Middle East.""

Saudi Arabia is interested in Russian tanks and helicopters, which would be a fairly significant loss to US manufacturers.  However, the US may still be in the game yet with 

"Overseas sales of the U.S. Army's core missile defense system appear set to boom, spurred by tensions surrounding Iran, North Korea and other regional disputes.

Poland, Taiwan, Kuwait, Turkey, South Korea, Saudi Arabia and Qatar are among countries that could spin off billions of dollars in related revenue over the next five years, according to Raytheon Co (RTN.N: Quote, Profile, Research, Stock Buzz), the army's primary contractor for the Patriot air and missile defence system.

Raytheon Chief Executive Bill Swanson said in April that sales could be in the "big billions" by 2013 or 2014 for what the company calls the world's premier system of its kind."

The lesson here is as more countries big and small enter the marketplace, no US industry is safe from competition.  The sooner CEO's figure this out and adapt, the less likely we are to be completely surprised and thus suffer significant loss in our market share as we are currently are.

 

 

 

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Today we talked about McCain and Obama's economic plans and what the actual economists think. We discussed the problem of cockfighting in New Mexico, Child Prostitution on Craigs List and Child Athletes getting Adult injuries. Also, listen to us live every Sunday Morning at 10:00 AM on PC Live.

Rest in Peace

I want to believe this is true, I really do.  The only way we'll know is if people try this method and find that it does in fact work or it's just a nice myth.

For more on this topic visit the website at http://www.runyourcarwithwater.com/?hop=holteboo17

This is the end, the end my friend, the end...

Predictions were made a while back that the print newspaper industry would eventually become a thing of the past for a variety of reasons.  Everything is a business and the trend is that once certain advances are made in technology or competition offers a better product, you either evolve or you become extinct.  The news industry itself has evolved but in doing so, it's left the granddaddy of all media, the print newspaper, in the dust.

Much like my discussion of entertainment media such as movies and music, physicality has given way to the formless digital.  As the above video indicates, the print newspaper industry cannot compete with it's digital competition.

If we're being honest, this is both good and bad.

For one and the probably the most obvious reason why this is bad is that the loss of an entire medium means a significant loss in jobs.  As much fun as it is to pick on print journalists (for their shameless promotion of bias, lazy work and all around elitist attitude) , lost jobs are lost jobs.  This is never a good thing in the short run and if those folks can't be repositioned into other meaningful work then they are yet another group that becomes a strain on our already faltering economy.  Some will inevitably become teachers but they face rather stiff competition from those people who are already pursuing an education career.  Some may be able to write books and live comfortably off their royalties, adding speaking tours and book signings to their repertoire.  Others may be able to stick it out a little longer in smaller papers that will soon die off as well.  Still others may make the transition to some digital news format or become one of the never ending stream of cable news talking heads.  But the rest may have to start all new careers.  Either way, the economy usually convulses when an entire industry goes belly-up.

Don't get me wrong, I love digital news.  I simply adore the fact that I can Google just about any topic and find articles on it in my underpants at 6:00 AM before I go to work.  Three years ago when I first started blogging, Iran Mania (a source for Iranian news in English) was bookmarked into my browser, so I am not bemoaning the inevitable eclipse of print news by digital news.  Access to all the world's news is obviously a good thing.  God willing when Generation Y grows up and cuts back on the social networking in favor of paying attention to what is happening in the world, having a seemingly infinite source of news at your fingertips will have a net effect of making our society that much smarter and more well-informed (crosses fingers).

Of course the other problem with print news eventually going down in flames is that traditionally it has been print journalists that have done the most intensive investigative reporting.  All of the really big stories (many of which become books) started as expensive and time consuming investigative journalism pieces.  They were funded once upon a time by print newspapers.  When that well dries up, who or what entity will absorb the cost of sending an investigator out for possibly months, if not years, on end to track down a complex story.  The question that remains unanswered is what becomes of this necessary branch of journalism?  Will it fall to the TV news networks?  If so, won't that particular content be somewhat adulterated given how TV tends to dumb ideas down for mass consumption and the all-powerful nightly ratings.  I mean, Bill O'Reilly only has so much time to report he can't do it all : )

Bloggers do the journalism world some good but unless you are independently wealthy or you happen to have some piece of information unknown to all else, we citizen journalists are all standing on the shoulders of actual professional journalists and as such cannot replicate Bill Gertz.

Again, I'm all for changes in the news and especially competition therein.  But we should all not simply stand quietly while the print media burns in a pyre without asking how this affects the way in which valuable solid news is made known to us.

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http://clipsyndicate.com/publish/video/638846?wpid=1904

This would seem to make dealing with Iran difficult wouldn't it?

A recent article from the AP Hi-Tech stated that, "A Lehman Brothers analyst downgraded the entertainment industry Monday and slashed forecasts for its five major companies, saying digital downloads of movies and TV shows posed a huge threat to profits from DVD sales that the companies rely on.

The stocks of The Walt Disney Co., News Corp. (NWS), CBS Corp. (CBS), Time Warner Inc. (TWX) and Viacom Inc. (VIAB) fell slightly more than the market by close, with CBS falling the most, by 4.7 percent, or 87 cents, to $17.73.

"Shifts from physical to digital will disrupt the marginal economics of the TV and movie businesses, just as it did for music," analyst Anthony DiClemente said during a conference call.

DiClemente argued that the average profit the companies see from new DVDs, including higher-priced Blu-ray discs, is $10.59. Selling the same movie through Apple Inc. (AAPL)'s iTunes online music and video store nets them $9.29, 12 percent less, he said.

Online movie rental services offered by iTunes and Netflix, with profits ranging from $1.81 to $2.44 per movie rented, will further hurt the industry as more young people choose to rent digital copies, he said.

"Owning a collection of movies in this new digital world is really just not that cool for young adults in the target demographic that we look to for the future of the business," DiClemente said."

I feel no sympathy for the movie industry.  After Napster and it's subsequent effect on the music industry, all media should have known this was coming down the pike and prepared for it.  Much like the auto industry, when you fail to see the future and adapt, typically you are left in the past of fond remembrances.

For Generations X and Y whom have grown up on computers and now the internet, finding ways to employ your computer as a multi-media tool is as easy as working a calculator.  Even the most ludite amongst us can figure out Itunes.  Though I usually root for any American company to succeed, I cannot abide by the entire movie industry not understanding it's consumer base enough to adapt it's profit margin in the wake of a consumer culture less likely to make physical purchases.

Had the movie and the record industries really understood their consumer base, they should have seen these market trends even years before downloading media became a mainstream option.  For years, if folks had access to a "bootleg" outlet rather than paying full price, the consumer typically went for the "bootleg".  NOTHING HAS CHANGED about our collective behavior.  We all still want a bargain and convenience.  The internet and the ability to download digital media has brought the bootlegger into our home and we're all mostly happier for it.

But the really fascinating trend is that last quoted line in the article, "Owning a collection of movies in this new digital world is really just not that cool for young adults in the target demographic that we look to for the future of the business."  That's certainly a mouthful.  My friends and co-workers have all been lamenting collections of stuff as of late.  My once 1,000+ plus strong collection CD's used to be a source of great pride; now it's another piece of furniture collecting dust that I don't even look at seeing as I haven't bought a physical CD in a dogs age.  With Services like MP3 Fiesta selling albums at 10 cents a piece, I don't even go into record stores anymore.

The same goes for movies.  I sold my collection of DVD's years ago in lieu of joining Netflix and blockbuster online.  By today's consumer standards, even that activity is a bit quaint as others download the movies directly to their computers in some fashion or another.

With the advent of the Amazon Kindle portable reading machine, I'm sure those younger than I will be quick to dump physical books in favor of digital ones (this will certainly make my girlfriend happy as our apartment is starting to look like an abandoned library).

Those who amass large collections of physical stuff will most likely pass on with the Baby Boomer generation and certainly after Generation X kicks the bucket I suspect all media consumers will be close to 100% digitals as the tools for such an endeavor become cheaper and the knowledge of how it's done becomes more widely spread.  This is a warning too all media companies, shun physicality of your product or you too will end up in the antique store of life.

I’ll be the first one to admit when things are going bad in this economy and I hold no punches nor do I have any sacred cows.  In the free-market of criticism, everyone is fair game.  You’ve heard me skewer the car companies and the oil companies as well as any number of other global enterprises when I believe they are doing bad things or are contributing to an inevitable bubble bursting.

Now with the news that Starbucks’ recently returned chief executive officer, Howard Schultz, has announced that the company was applying the brakes on the Starbucks express growth strategy and closing 600 of its 16,000 stores worldwide, one would think that I’d be quick to jump on the bandwagon proclaiming that this is yet another example how of economy is tanking.

On NPR’s Weekend Edition Saturday, July 5, 2008 it was stated that, “Starbucks’ retail woes may indicate a larger slump in the retail sector. The coffee chain announced this week that it’s closing about 600 stores, but it’s not the only chain slimming down to meet hard economic times.

Retail consultant Howard Davidowitz says consumers are going to get so scared they will start saving and that fear will also lead them to spend less.”

There are a slew of these sorts of reports going around blaming the closure of 600 stores on what looks to be a looming recession.  However, a deeper look into these stories shows that coffee drinking isn’t slowing down nor are people backing away from the “coffee shop culture” that Starbucks commoditized and was successful with.

So what exactly is going on here?

Lewis Black once quipped that, “if you walk to the end of the block (The corner of South Shepherd and West Gray in Houston, TX), there sits a Starbucks. And directly across the street — in the exact same building as that Starbucks — there is… another Starbucks. There is a Starbucks across the street from a Starbucks! And ladies and gentlemen, THAT is the end of the universe.”

When he originally told this joke I thought he meant the ones in Northridge, CA that I discovered eight years ago.  Alas, no, there are many locations across the US that feature a Starbucks across the street from a Starbucks.  In fact, developers recently added on an entire wing to our local mall here in a popular suburban location outside of the city of Tampa, FL that features an Apple Store, Torrid, Books-a-Million and a some other mid – to high end stores, and of course a Starbucks.  However, there was already a Starbucks at the other end of the mall.  That makes 2 in the same building folks.

The problem with Starbucks is not necessarily joblessness or a looming recession.  I get people all of the time in my office with no pot to pee in and no job but they are usually sporting anything from overpriced coffee drinks to overly sugared energy drinks; trust me when I tell you, in America, even the poor somehow get their caffeine drinks from somewhere and it ain’t their own home.

The problem is that there are limits to growth and if you flood the market with your product eventually the market becomes to saturated to sustain it.  There is a fine line between convenience and over saturation and Starbucks blew past it probably about 600 stores ago, if not more.  Even if the economy and the US dollar were sound and things were looking good, I doubt Starbucks could have avoided this fate.  Aside from there being way too many too close together, like in the same mall or across the street from one another, Starbucks the product has lost its luster and novelty in the eyes of the consumer.

Along side of reports that the economy has hit Starbucks hard are even more stories about dissatisfied customers.  Apparently when you pay for a $4 dollar cup-a-Joe, you are not just paying for the drink but for the experience as well.  People want to drink their beverage kibitz about how hard it is to live with ones parents or complain about how George W. Bush is a Nazi, or whatever is you people babble on about.  The point is that, many of the new Starbucks stores are not made for lounging.  They are coffee stands; come in, order, get out!  Well you can get that and better coffee for cheap at 7-11 or Dunkin Donuts.  Unless you make a superior product (which they don’t) there has to be some other facets of the product that will make people spend the extra money, whether it’s value, experience or even culture cache.  However, once you’ve lost some or all of those variables your product is merely overpriced and you lose sales.  That’s the story with Starbucks so far.

So let’s have no more of this rubbish about how what happened with Starbucks is a sign of a failing economy.  All this really is, is a sign that Starbucks expansion plan makes no logical economic sense and a correction is long overdue.

I started blogging after GW was re-elected in 2004.  I attempted to be a moderating voice in a cacophony of shrill voices from both sides of the aisle.  Along the way my political interests gave way interests in business and foreign affairs.  From about late 2004 until probably mid to late 2005 I kept a pretty popular blog.  However, personal events in my life kept me from my daily scribblings and eventually I just gave it up altogether.  Now my life has changed for the better and I'm feeling the itch to write again.  No longer am I writing under the name, Progressive Conservatism, I am merely Mark Radulich: Political Shrink.

There will be more added tomorrow but in the meantime, if you'd like to check out my radio show you can listen to it here