Inhalt:

The rights women have regained since the Taliban were driven from
power in 2001 should also not be negotiable, he said.

"We should civilize the Taliban so Afghanistan is not 'Talibanized'
again, otherwise we'll have to leave the country," said the Danish
foreign minister.

Within 5 to 10 years, the only "realistic" way to unite
[Afghanistan] is for it to be "governed by an acceptable dictator",
the cable said, adding that "we should think of preparing our
public opinion" for such an outcome.

Seine Truppen hätten den radikalislamischen Taliban für das
Jahr 2008 zwar „den Stachel gezogen“, sagte Brigadegeneral
Carleton-Smith. Es sei aber „unrealistisch“, dass die
internationalen Truppen das Land von den Rebellen befreien
könnten. Es gehe vielmehr darum, „den Aufstand auf ein
kontrollierbares Maß zu reduzieren, das keine strategische Bedrohung
darstellt und von der afghanischen Armee beherrscht werden kann“.
[...]
Zuvor hatte eine Äußerung von Sir Sherard Cowper-Coles, dem
britischen Botschafter in Kabul, Aufsehen erregt. Die französische
Satire- und Enthüllungszeitung „Le Canard Enchainé“ hatte am
Donnerstag aus einem geheimen Memo zitiert, in dem Cowper-Coles sich
pessimistisch über die Situation in Afghanistan gab. Dem Bericht
zufolge bezeichnete Cowper-Coles die Strategie der Amerikaner als
„zum Scheitern verurteilt“. Die beste Lösung sei, in dem Land
einen „akzeptablen Diktator“ einzusetzen.
[...]
Nato-Vertreter und Diplomaten haben sich wiederholt für
Verhandlungen mit den Extremisten ausgesprochen und betont, dass
die Taliban alleine mit militärischen Mitteln nicht in den Griff zu
bekommen seien. Am Freitag wies ein hochrangiger Taliban-Kommandeur
jedoch eine Versöhnung mit der afghanischen Regierung, die er als
Marionetten-Regierung bezeichnete, zurück. Die Gewalt in dem Land
hat mittlerweile den höchsten Stand erreicht seit dem Sturz der
Taliban-Regierung durch US-geführte Truppen 2001.

Then: Defended exchange rates over-aggressively
Now: Floating exchange rates could lead to trade panic
Then: Allowed monetary supply to shrink dramatically
Now: Monetary expansion and budget deficits lead to currency collapses
Then: States did not go bankrupt
Now: States could go bankrupt, leading to hyperinflation
Then: Subprime loans existed, but market were simpler
Now: Deeper and more complex markets with connective tissue everywhere
Then: Emanated from two countries: US and Germany
Now: Coming from everywhere, i.e., with worst real estate bubbles in Moscow and Middle east
Then: Minimal over-leveraging of major financial institutions
Now: Massive over-leverage of major financial institutions
Then: Global trade was frozen in wave of protectionism
Now: Global trade freezing in credit contraction
Then: Relatively slow advance and loose coupling
Now: Fast advance and tight coupling via trade and global media

* Chevron’s petroleum production dropped 5.7 per cent (lowest
since Q1 2005)
* Exxon production drops 8 per cent to 3.6m barrels per day
* Shell’s Q3 crude and natural-gas output falls 6.6 per cent to
below 3 million barrels of oil equivalent a day for the first time
in more than a decade
* BP’s oil and gas production rises slightly in the quarter compared
to a year earlier, to 3.664 million barrels

* Chevron says declining prices may force producers to trim drilling
budgets or delay some wells,
* ExxonMobil seeks to drive down costs in spite of record $13bn
profit
* Shell holds back on oil sands investment
* BP may be ahead of the game but future is unclear

Over at eFinancialCareers, a Web site that covers Wall Streeters,
Jon Jacobs protested that curbs on bonuses would turn bankers into
government bureaucrats, incapable of thinking profitably:

* A further issue of £4.3bn of short-term convertibles, paying 9.75
per cent until they convert (sometime before next June) at a 25 per
cent discount to Thursday’s close.

* Assuming full conversion, the Middle Eastern investors will have
31.2 per cent of the British bank.

The sale shows the credit markets are slowly opening, but the high
yield of 15 per cent that the casino operator had to pay and the
quick drop in the price of the bonds in trading on Friday highlight
the tough conditions that now exist for junk bonds. October is set
to be the worst month ever for the asset class.

CHICAGO PMI 37.8 Oct vs 48.0 consensus, 56.7 Sep
New Orders 32.5 Oct vs 53.9 Sep
Production 30.9 Oct vs 71.4 Sep
Employment 41.5 Oct vs 49.1 Sep
Inventories 56.5 Oct vs 37.7 Sep
Prices Paid 53.7 Oct vs 80.7 Sep

Military Keynesianism? I'll let others speculate; I just think
it's interesting.

At least for Russia. And probably for a host of emerging economies.

Russia’s reserves fell by over $30 billion during the third week of
October — tumbling from $515.7b on October 17 to $484.7b on October
24. Roughly $15 billion of the fall reflects the fall in the dollar
value of Russia’s euros and pounds. But about $15 billion reflects
Russian intervention in the currency market, as well as the drain on
Russia’s reserves associated with the loans Russia’s government
is making to Russian banks and firms seeking foreign exchange to
repay their foreign currency debts.

A $15 billion weekly outflow is rather large.

$15 billion is as much as the IMF committed to lend Russia back in
1998. And the IMF actually only disbursed a third of that total.

But that $500-million design is currently little more than a
half-completed hole in the ground - the most glittering symbol of the
troubled times that have humbled real estate development in Vancouver,
a city that spent the last half-decade treating new condos like an
evergreen money tree.

The third graph shows home improvement investment as a percent of GDP.

Home improvement is at 1.21% of GDP, off the high of 1.3% in Q4 2005 -
but still well above the average of the last 50 years of 1.07%. Maybe
lenders are boosting home improvement spending fixing up all those
damaged REOs!

This would seem to suggest there is significant downside risk to
home improvement spending over the next couple of years.

Now think how bad things will be if the S&P drops to 600. Go one
step further and think about what might happen if the US heads into
an economic slump similar to Japan.

"I'm going to stop paying so they'll modify the loan," Ms. Puerto
said this week. "Otherwise they won't help me."

The Federal Deposit Insurance Corp and the U.S. Treasury Department
were hammering out the foreclosure prevention program, which
could provide guarantees for up to 3 million at-risk mortgages,
the source said.

The bank’s policy board voted to lower the overnight lending rate
between banks by 0.2 percentage points, to 0.3 percent, reducing
borrowing costs to try to rekindle growth in Asia’s largest economy.

The exports, scheduled to begin in December, represent a significant
chunk of Toyota’s production of behemoth vehicles. The company
plans to export about 15,000 Sequoia SUVs, or about 45% of the 33,000
vehicles made at its Indiana plant before it shuts down to re-tool
in September.

Toyota also hopes to unload some Tundra pickup trucks. The company
would like to cut its 100-day or so inventory to 30 or 40 days.