Monday, May 5, 2008

Turkish Schools in Pakistan, a moderate approach


Today's article "Turkish Schools in Pakistan offer a milder form of Islam" from yesterdays IHT, discusses the growing enrollment of Pakistani students in Turkish educational institutions that strike a careful balance between academic and religious studies

These schools offer a desirable alternative to the poorly funded public school system and the religious institutions or Madrasas as they are known. (With the latter becoming increasingly notorious for pushing radical Islamic agenda's from Saudi funded Wahhabi charitable organizations) The Turkish alternative seeks a balance between the deeply spiritual traditions muslim states, and the technical training needed to advance one's education and find gainful employment.

While considered a European state, Turkey culturally straddles the European and Asian divide. As the historical seat of the Ottoman Empire, which ruled over much of the middle east for centuries until the early 20th century, Turks are well aware of their spiritual roots and the influence of Islam as a political ideology yet they remain a secular state seeking membership to the European Union. Can their message of moderation reach the masses in Pakistan where hard line Islamic ideals have entrenched themselves among some of the most vulnerable of the nation's youth?

J


Turkish schools in Pakistan offer a milder form of Islam


Sabrina Tavernise
Sunday, May 4, 2008





KARACHI Pakistan: Praying in Pakistan has not been easy for Mesut Kacmaz, a moderate Muslim teacher from Turkey. He tried the mosque near his house, but it had Israeli and Danish flags painted on the floor for worshippers to step on. People from the mosque near his work warned him never to return wearing a tie. Pakistanis everywhere assume he is not Muslim because he has no beard. "Kill, fight, shoot," Kacmaz said. "This is a misinterpretation of Islam."

But that view is common in Pakistan, a frontier land for the future of Islam, where schools, nourished by Saudi and American money dating to the 1980s, have spread Islamic radicalism through the poorest parts of society. With a literacy rate of just 50 percent and a public school system near collapse, the country is particularly vulnerable.

Kacmaz (pronounced KATCH-maz) is part of a group of Turkish educators who have come to this battleground with an entirely different vision of Islam. Theirs is moderate and flexible, comfortably coexisting with the West while remaining distinct from it. Like Muslim Peace Corps volunteers, they promote this approach in schools, which are now established in more than 80 countries, Muslim and Christian.

Their efforts are important in Pakistan, a nuclear power whose stability - and whose vulnerability to fundamentalism - have become main preoccupations of U.S. foreign policy. Its tribal areas have become a refuge for the Taliban and Al Qaeda, and the battle against fundamentalism rests squarely on young people and the education they get.

At present, that education is extremely weak. The poorest Pakistanis cannot afford to send their children to public schools, which are free but require fees for books and uniforms. Some choose to send their children to madrasas, or religious schools, which, like aid organizations, offer free food and clothing, and many are boarding schools. Many simply teach, but some have radical agendas. At the same time, a growing middle class is rejecting public schools, which are chaotic and poorly financed, and choosing from a new array of private schools.

The Turkish schools, which have expanded to seven cities in Pakistan since the first one opened a decade ago, cannot transform the country on their own. But they offer an alternative approach that could help reduce the influence of Islamic extremists. They prescribe a strong Western curriculum, with courses taught in English and subjects ranging from math and science to English literature and Shakespeare.

They do not teach religion beyond the one class in Islamic studies that is required by the state. Unlike British-style private schools, however, they encourage Islam in their dormitories, where teachers set examples in lifestyle and prayer. "Whatever the West has of science, let our kids have it," said Erkam Aytav, a Turk who works in the new schools. "But let our kids have their religion as well."
That approach appeals to parents in Pakistan, who want their children to be capable of competing with the West without losing their identities to it.

Allahdad Niazi, a retired professor of Urdu in Quetta, a frontier town near the Afghan border, took his son out of an elite military school because it was too authoritarian and did not sufficiently encourage Islam. Instead, he enrolled him in the Turkish school, called PakTurk.
"Private schools can't make our sons good Muslims," Niazi said, sitting on the floor in a Quetta house. "Religious schools can't give them modern education. PakTurk does both." The model is the brainchild of a Turkish Islamic scholar, Fethullah Gulen. A preacher with millions of followers in Turkey, Gulen, 69, comes from a tradition of Sufism, an introspective, mystical strain of Islam. He has lived in exile in the United States since 2000, after getting into trouble with secular Turkish officials.

Gulen's idea, Aytav said, is that "without science, religion turns to radicalism, and without religion, science is blind and brings the world to danger." The schools are putting into practice a Turkish Sufi philosophy that took its most modern form during the last century, after Mustafa Kemal Ataturk, Turkey's founder, crushed the Islamic caliphate in the 1920's. Islamic thinkers responded by trying to bring Western science into the faith they were trying to defend. In the 1950's, while Arab Islamic intellectuals like Sayyid Qutb were firmly rejecting the West, Turkish thinkers like Said Nursi were seeking ways to coexist with it.

In Karachi, a sprawling city that has had its own struggles with radicalism - the American reporter Daniel Pearl was killed here, and the city's famed Binori madrasa is said to have sheltered Osama bin Laden - the two approaches compete daily. The Turkish school is in a poor neighborhood in the south of the city where residents are mostly Pashtun, a strongly tribal ethnic group whose poorer fringes have been among the most susceptible to radicalism. Kacmaz, who became principal 10 months ago, ran into trouble almost as soon as he began. The locals were suspicious of the Turkish staffers, who, with their ties and clean-shaven faces, looked like math teachers from Middle America.

"They asked me several times, 'Are they Muslim? Do they pray? Are they drinking at night?' " said Ali Showkat, a Pakistani who is a vice principal of the school. When he found goats napping by piles of rubbish near the school's entrance, Kacmaz asked a local religious leader to help get people to stop throwing their trash near the school - to no avail. Exasperated, he hung an Islamic saying on the outer wall of the school: "Cleanliness is half of faith." When he prayed at a mosque, two young men followed him out and told him not to return wearing a tie because it was un-Islamic. "I said, 'Show me a verse in the Koran where it was forbidden,' " Kacmaz said. The two men were wearing glasses, and he told them that, scripturally, there was no difference between a tie and glasses.

"Behind their words there was no Hadith," he said, referring to Islam's codified oral traditions, "only misunderstanding."


Sebnem Arsu contributed reporting from Karachi and Quetta in Pakistan, and from Istanbul.

Sunday, May 4, 2008

Louise Yamada on gold and commodities

Louise Yamada on CNBC discussing the long term commodity bull cycle can be found here. Well worth the listen for this heavy weight in Technical Analysis.

Louise was on CNBC on March 10th, 2008 discussing gold. Ive posted this just to give you an example of her analysis at a time when gold was peaking. Her core thesis remains that commodities are in a long term bull market while the US Dollar is continuing on a broad down trend.

J

State tax revenue drops first time since 2002

Money News is reporting the first drop in sales tax revenue in 6 years. With American states running budgetary shortfalls, looking to cut back spending and reduce entitlement programs while their federal counterparts continue to accelerate budgetary deficits, who or what will continue to prop up the US consumer-led economy?

J


U.S. Sees First Sales Tax Revenue Drop in 6 Yrs.

MoneyNews
Friday, May 2, 2008

WASHINGTON -- U.S. consumers are cutting back on spending, driving the first nation-wide decline in sales tax revenues in six years, according to a report released Thursday. From January to March, sales tax revenue fell in 21 states from the same quarter last year, according to the Nelson A. Rockefeller Institute of Government.

Forty-five states rely on sales taxes as a major revenue source and by Thursday, 36 had reported on collections for the past quarter. "The sales tax declines suggest that consumption, retail sales and the income needed to support spending are slowing considerably," the report said. The institute researches state and local governments for the State University of New York.

Sales tax revenue dropped 0.1 percent for the nation as a whole, according to the report, the first decline since the first quarter of 2002. The government Wednesday said that consumer spending grew last quarter at the weakest rate since 2001.

Sales tax collections dropped the most in the Southeast, falling 3.8 percent. The Rocky Mountain region, which includes states such as Colorado and Idaho, had an average decline of 1.8 percent. Collections rose the most in the Mid-Atlantic region, up 2.4 percent. The institute said Maryland registered the largest gain, up 8.9 percent. The state had boosted its tax rate to 6 percent from 5 percent.

After Maryland, Texas had the biggest rise, at 6.7 percent. The largest revenue drop was in South Carolina, but it was due to a new law eliminating sales taxes on unprepared food. The second largest decline was 7.0 percent in Virginia, followed closely by Florida.

Most states have laws requiring them to balance their budgets this year, and drops in major revenue sources could force them to cut programs and other spending. According to the National Conference of State Legislatures, sales taxes provided a third of state tax collections in 2004, with individual income taxes making up nearly another third.

Since the housing market bubble burst and the credit crisis gripped the country, many states have cut spending. For fiscal year 2009, 23 states and Puerto Rico are projecting budget shortfalls, according to the conference.

Saturday, May 3, 2008

Updated TA on the HUI index

Here is my updated chart of the HUI index for May 3rd, 2008. Im expecting some consolidation around the current levels with a drop of about 15-20% more from here should gold fall towards $800-$780 level. At the moment Ive started to build a position and will add more if the index can close above the 200 MA for a few days on strong volume.


Feedback and comments are always welcome.

J

Friday, May 2, 2008

Nouriel Roubini on CNBC

This interview by Nouriel Roubini on CNBC Europe discusses the implications and his outlook for further cuts by the Federal Reserve. I follow Dr. Boubini's viewpoints closely on his blog archive at the RGE Monitor site.

Nouriel has long been bearish on the US economy, His August 23rd, 2006 article:

The Biggest Slump in US Housing in the Last 40 Years"…or 53 Years?

His core thesis was summarized in 3 points:

I have also argued before that the effects of housing on US economic growth and the role of housing in tipping the US economy into a recession in early 2007 are more significant than the role that the tech sector bust in 2000 played in tipping the economy into a recession in 2001. There are three reasons:

  1. The direct effect of the fall in residential investment in aggregate demand will be as high as the effects of the fall in real investment in the 2000-2001episode. Then, real investment fell by about 2% of GDP. This time around the fall in residential investment alone – let alone the role other components of real investment, such as software and equipment, that are already falling in Q2 – will be as large as residential investment could fall from the peak of about 6.2% of GDP (the highest level since the 1950s) to as low as 4% of GDP at the bottom in 2007.
  2. The wealth effect of the tech bust was limited to the elite of folks who had stocks in the NASDAQ. The wealth effect of now falling housing prices – yes median prices are starting to fall at the national level - affects every home-owning household: the value of residential real estate has also increased to 48.5% of household wealth in 2006 from from 38.7% in 1996. Also, the link between housing wealth rising, increased home equity withdrawal (HEW) and consumption of durable and non durables is very significant (see RGE’s Christian Menegatti brief on this), much more than the effect of the tech bubbles of the 1990s. Last year, out of the $800 billion of HEW at least $150 or possibly $200 billion was spent on consumption and another good $100 billion plus went into residential investment (i.e. house capital improvements/expansions). It is enough for house price to flatten – as they already did recently – let alone start falling - as they are doing now since they are beginning to fall in major markets – for the wealth effect to disappear, the HEW dribble to low levels and for consumption to sharply fall. Note that this year there will be large increases in the borrowing costs for $1 trillion of ARM’s while this figure for 2007 will be $1.8 trillion. Thus, debt servicing costs for millions of homeowners will sharply increase this year and next.
  3. The employment effects of housing are serious; up to 30% of the employment growth in the last three years was due directly and indirectly to housing. The direct effects are job lost in construction, building materials, real estate brokers and sales agents, and employees of the mortgage finance industry. The indirect effects imply that the role of housing is even larger than 30%. The housing boom led to a boom in consumer durables spending on home appliances and furniture. Indeed, in Q2 real consumption of such goods was already negative: as you have less new home built and purchased and less old homes refurbished and expanded, you get less purchases of home appliances and furniture. There are also other indirect effects of the housing bust on employment, even on the purchases of motor vehicles. Indeed, the current auto sector slump is not unrelated to the housing slump. As the Financial Times put recently, the sharp fall in the sales of Ford's pick-up trucks is related to the housing slump as such truck are widely purchased by real estate contractors. And indeed in Q2 real consumer durables (that include both cars, home appliances and furniture all related to housing) already fell, consistent with the view that we have now have a glut in the stock of consumer durables (durables consumption has a investment-like nature to it as such goods last for a long time). Thus, as housing sector slumps, the job and income and wage losses in housing will percolate throughout the economy.

Today's job numbers are being given a positive spin by the buy-side media pundits becuase the numbers werent as bad as expected. When job losses fuel a market rally because the economy, while bad, isnt as bad as a mythic group of economists fortold, I worry. Mish's blog outlines why the jobs report and the current rally in equities is no more than an April fools joke a month late.


J

Thursday, May 1, 2008

Jr. Golds Relative to Bullion

Below is a chart of the ratio between the Venture Exchange (CDNX) and the price of gold (GLD). The CDNX is considered a proxy for Jr. Mining shares, and its movement the past 2 years illistrates why the miners, especially the Jr. miners have grossly underperformed against the price of gold.
A consolidation out of a nasty downtrend may be in the works. Its perhaps too early to tell but Im watching this ratio closely. When the Jr. miners regain some strength, it could be a signal that the ratio is about to turn in favour of the miners over the metal.

This chart shows a number of "fakeouts", hence why I believe this is just a seedling of a possible breakout. Notice the parallel downtrend line that has been broken to the upside with the RSI-7 confirming increased strength. The 50 MA has turned from down to flat and the ratio is above the 50 hoping to breach the 200 MA in the next few weeks.


Comments or feedback are welcome as always.



J


Prime Minister's Office seeking to vet all communications

Following up on yesterday's post: Freedom of Speech in Canada I found this article in today's Toronto Star. The Prime Minister's Office (PMO) is the nerve centre of the Canadian Government. Attempts by the Conservative government have consistently revolved around command and control of what information is released to the press and public.

Auditor General Sheila Fraser has long been an outspoken advocate of increased accountability within the government at both the fiscal and policy level. Attempts made to broach the Auditor General's Independence , an agency that exists specifically to maintain integrity within government spending practices are disturbing at best.
J


Auditor balks at vetting by PMO


http://www.thestar.ca/

TOM HANSON/THE CANADIAN PRESS


Prime Minister Stephen Harper chats with a member of his Tory caucus after their meeting in Ottawa on April 30, 2008, which was also Harper's 49th birthday. Independent watchdog will not abide by rule to run public statements by officials, Fraser says


OTTAWA–Ottawa's financial watchdog says she won't go along with draft government rules that she says would undermine the independence of officers of Parliament like herself.

Auditor-General Sheila Fraser found allies yesterday who condemned the Conservative proposal, which could mean that Parliament's officers must vet their public statements through a wing of the Prime Minister's Office, as an unprecedented attack on the independence of the officers, who are supposed to work at arm's length.

The draft proposal would lump in Fraser, along with other officers of Parliament such as the head of Elections Canada, and the privacy, information and ethics commissioners with all other government departments and demand they get high-level approval before speaking out.

"It's absolutely unacceptable and it's an attack on the independence of officers of Parliament," NDP MP David Christopherson (Hamilton Centre) said yesterday. "This will be resolved. It's just a matter of how much dust do we have to kick up and how far do we have to drag the Prime Minister kicking and screaming to acknowledge that there are people in this country that he doesn't control."

Fraser said yesterday that the independent officers have been inadvertently ensnarled in a policy aimed at government bureaucrats and was optimistic that a resolution would be found. But the outspoken auditor also made clear she wouldn't co-operate anyway with the proposed edict. "I do not believe there is any kind of ... ill will towards officers of Parliament," she said in an interview.

"When they issue these policies, to be quite frank, they don't consider officers of Parliament. We're six relatively small agencies," Fraser said.

The draft communications plan would demand that communications "products" be vetted by the Privy Council Office, which is the bureaucratic wing of the Prime Minister's Office, and other high-level government officials. "I truly believe that the government itself recognizes that would be inappropriate," Fraser said. Fraser revealed the existence of the proposed policy Tuesday when she appeared before the Commons public accounts committee to discuss her office's operations.

"Recently, for example, there's a draft communication policy going around that would have all communication strategies, all communications, everything, go through Privy Council Office," Fraser told MPs. "Well, I can tell you there is no way that my press releases about my report are going to go to Privy Council Office or our communications strategies are going to be vetted by Privy Council Office."

Fraser and the other officers have struck a working group to get clarification on this and other federal policies on issues like audits, travel and advertising they say infringes on their independence. But it's the proposed communications plan that has provoked concern among the agencies.


"We don't want this to apply to us," said Robin Cantin, spokesperson for the commissioner of official languages, Graham Fraser. "Our concerns stand." Treasury Board officials claim it's a misunderstanding as they try to "simplify" the government's communications policies. And they insist that the statutory independence of these agencies would trump any new guidelines.


"I can assure you that we respect the independence of the officers of Parliament and this government would not do anything inconsistent with the independent role of those officers," Treasury Board President Vic Toews told the Commons yesterday.


In March, he sent a letter to officers of Parliament saying that he accepts that not all Treasury Board policies can be applied to the independent agencies. He said disputes would be handled on a "case-by-case" basis. His spokesperson, Mike Storeshaw, said that the new communications policy "will respect and maintain the independence of agents of Parliament like the (auditor-general), as they always have."

The department refused to release a copy of the draft communications plan.