Kilroy Was Here
July 18, 2004
The Rise of Pre-emption
"Pre-emption is dead," cries convetional wisdom. "The one good thing that's come out of the failures of intelligence, planning, and nation building in Iraq is our leadership will no longer look to lone adventurism to futher the cause of democracy."
If only this were so. Unfortunately, the seeds of the Bush doctrine are already taking root in the minds of Americans, and, paradoxically, the arguments against the Iraq fiasco provide some of the most potent sustenance for this new doctrine.
The left has provided two main critiques of Bush's Iraq strategy: incompetence and deception.
The Incompetence Maneuver stresses that the Bush administration did not spend enough time planning the post-war occupation and did not have the intelligence infrastructure necessary to accurately assess the threat from Iraq.
While the Deception Offensive claims that the Bush administration willfully mislead the American people by pressuring our intelligence agencies to modify intelligence, and that the Bush administration hid its true agenda for invading Iraq under dubious claims of Weapons of Mass Destruction.
Unfortunately, neither of these two arguments put a stake in the heart of the so-called Bush Doctrine of Pre-emption. In fact, these arguments provide cover for some future neo-conservative administration to resurrect pre-emption, with the “We’ve Got It Right This Time” gambit.
Since the two main critiques are Critiques of Execution, rather than Critiques on Moral Grounds, or Critiques of Impossibility, future administrations (or even this administration) can claim to have learned the lessons of Iraq, point to supposed improvements in intelligence or better planning, and before we know it, we are off again on another wild ride. This time, it could be Iran or Syria, or North Korea.
Those against the Bush Doctrine need to attack it from moral grounds and from the grounds of impossibility. Moral grounds would include that pre-emption is against our character as Americans, that we cannot justify militaristic empire and all the restrictions to liberty that implies for security. As Ben Franklin was reported to have said, “He who sacrifices liberty for security shall have neither liberty nor security.”
Similarly, we need to begin to make arguments on whether pre-emptive nation building is even possible. With the rise in efficacy of asymmetric warfare, can any nation, no matter how powerful, occupy another country and enforce a new friendly regime. My own personal guess is that it might be possible, but that asymmetric warfare makes the risks of an unfriendly unstable regime are so great and the potential of a friendly, stable regime so small that this particular strategy is never a good one.
We who have opposed this war need to begin to elevate our arguments away from refuting the Bush Doctrine in execution and towards the refutation of the Bush Doctrine in principle.
July 14, 2004
IEM NEWS FLASH: Market sees increase likelihood of Republican gains in House
**** FLASH FLASH FLASH FLASH FLASH FLASH FLASH FLASH FLASH *******
The RH.gain contract has seen a 1 day increase of $0.058, an 18% gain over yestday's closing price of $0.32. KTS is currently investigating possible news that might contribute to the large 1 day gain.
**** FLASH FLASH FLASH FLASH FLASH FLASH FLASH FLASH FLASH *******
July 13, 2004
IEM Market Update
The Kilroy Trading Service Weekly Market Update on the Iowa Electronic Market
- Amount invested: $500
- Current portfolio: $484
- Percentage gain/loss: -3.2%
Current values at last trade.
Presidential Winner Take All Market (PWTA)
- Bush - $0.51 (KTS Shares: 0)
- Kerry - $0.485 (KTS Shares: 137)
We here at the Kilroy Trading Service (KTS) believe that Kerry is undervalued at this point and our analysts mark Kerry as a BUY rating. Kerry is polling very well in both battleground and the so-called "blue" states. Democrats are supporting Kerry in higher percentages than Republican's are supporting Bush.
For similar reasons, we mark Bush as a HOLD. While Bush might be slightly overvalued at this time, history has supported incumbants, and, with the string of bad news, any positive news at all is likely to help the Bush effots.
Overall, the market has traded the Bush-Kerry bundle at 0.995 cents. There are 13,704 shares outstanding of Bush and Kerry.
Presidenital Vote Share Market (VS)
- Bush - $0.511 (KTS Shares: 0)
- Kerry - $0.482 (KTS Shares: 110)
KTS has Bush as a SELL at this point in time. In the last election, Bush won 47.87% of the vote. With Bush polling worse among rural voters, and with a good chance of a lower Republican turnout, Bush is valued too highly.
KTS has Kerry as a HOLD at this price. As long as Nader is in the mix, it is difficult to see how Kerry can beat Gore's 48.38% in 2000. However, if Nader continues to have trouble getting on the ballot, we may raise our guidance on Kerry to a BUY.
Overall, the market has the Kerry-Bush bundle trading at $0.993. There are 11,376 shares outstanding in the VTS market.
Senate Control Market
- Republican > 51 seats (RS.gain): $0.389 (KTS Shares: 33)
- Republican = 51 seats (RS.hold): $0.180 (KTS Shares: 66)
- Republican < 51 seats (RS.lose): $0.420 (KTS Shares: 127)
KTS has RS.gain as a SELL. With our analysts' views on the presidential election, we foresee a negative coattail effect on the Senate as a whole.
KTS has RS.hold as a HOLD. Currently, we believe that this contract is fairly valued.
KTS has RS.lose as a BUY. If the Kerry-Edwards ticket remains strong and the Democratic base more energized, we foresee a greater chance of a Senate pickup here.
Also note, since Senate races are all statewide races, we forsee Senate races to be more competitive than House races. With most House districts gerrymandered in favor of the incumbant, House races will be harder to contest.
Overall, the market has the entire Senate bundle trading at 0.989. There are currently 771 bundles outstanding in the market.
House Control Market
- Republican > 228 seats (RH.gain): $0.32 (KTS Shares: 1)
- 228 > Republican seats >217 (RH.hold) : $0.498 (KTS Shares: 110)
- Republican < 217 (RH.lose): $0.175 (KTS Shares 135)
Our analysts are currently revising the opinions on the House Control market. We need to take into account the effect of the Texas redistricting in the current House race. We anticipate to have beter analysis on next week's report.
Overall, the market is trading the entire House bundle at $0.993. There are currently 524 bundles outstanding in this market.
Congress Control Market
- Republican House - Republican Senate (RH_RS): $0.515 (KTS Shares: 0)
- Republican House - Democratic Senate (RH_NS): $0.327 (KTS Shares: 100)
- Democratic House - Republican Senate (NH_RS): $0.055 (KTS Shares: 125)
- Democratic House - Democratic Senate (NH_NS): $0.111 (KTS Shares: 50)
The RH_RS is currently rated as a SELL by our analysts. In analyzing the underlying Senate and House Control markets, we believe that this contract is severely overvalued. Our current target on this contract is $0.465 a share.
The RH_NS contract is currently rated as HOLD. We feel that this contract is slightly undervalued, but, due to the thinly traded nature of the contract, we cannot give this a BUY rating.
The NH_RS contract is currently rated as a BUY. Again, we believe that the market as a whole has failed to see the relationship between the underlying House and Sentate markets and as a result has undervalued this contract severely. In our minds, with RS.gain and the RS.hold contracts in the Senate control market currently trading at a combined $0.569, we do not see how the NH_RS contract can be priced LOWER than the NH_NS market. Our current forecast for this contract is at $0.10 per share.
The NH_NS market in contrast is rated as a SELL. We believe that the current underlying markets do not justify this lofty rating. Our forecasted price at this time is $0.074.
Overall the market is trading the entire Congress bundle at $1.008. There are currently 786 bundles outstanding in this market.
These opinions are for entertainment purposes only and should not be construed as advice for how to invest your money.
July 02, 2004
Entering the Market
I've just sent in my application to the Iowa Electronic Market. Time to put my money where my mouth is on the presidential election and the congressional election. I'll try and keep my current market positions updated here.
Also, I challenge anyone else out there who reads this blog to enter this market. Let's see how well that high-faluting political analysis works in the REAL world!