BRITAIN

BRITAIN

The Guardian, London, Sept. 17: The departure of General David Petraeus from Iraq yesterday was accompanied by little of the triumphalism that marked previous attempts by the Bush administration to claim that a corner had been turned in this bitter war. Gen Petraeus’s departing words were not sotto voce — they rarely are — but his assessment of the Iraq he leaves was cautious and sober.

Gen. Petraeus can claim three achievements for his third and final tour. He recognised the significance of the Sunni al-Sahwa, the so-called Awakening movement, which developed autonomously and before the surge swung into action. The U.S. general saw that it could be used productively. His policy of creating outposts of U.S. troops reduced sectarian tension. And finally he recognised that there could be no military victory in Iraq. All that could be achieved was to prepare the ground for a political solution.

Inherent contradictions

But this has yet to be done, and there are inherent contradictions in a policy predicated on improving the state capacity of Nouri al-Maliki’s government. The first is that government’s manifest concern with al-Sahwa, which the U.S. funds. ... The second is that the greater Mr al-Maliki’s executive power becomes, the more he may be tempted to forge his own course, irrespective of U.S. pleas to include the Sunni tribal leaders. This conflict is far from over.

ISRAEL

The Jerusalem Post, Sept. 15: Henry, Emanuel and Mayer Lehman formed Lehman Brothers in 1850, in Alabama, to trade in commodities, mostly cotton. Eight years later, having shifted to investment banking, they opened a New York office.

Fast forward a century and a half: Lehman Brothers (no member of the actual family has headed the company since the 1950s) announced yesterday that it was filing for bankruptcy protection. Its fate and that of the global economy seem intertwined.

The drama began at 6 p.m. Sept. 12, when U.S. Treasury Secretary Henry Paulson and Fed Chairman Ben Bernake met with key bankers and decided that the United States government would not bail out Lehman, America’s fourth-largest bank — it would not, to be precise, provide prospective buyers of the bank with loan guarantees.

The U.S. government was telling Lehman: You and others in the subprime market took greater risks than you should have, and profited from them.

Solid ground

The good news is that most U.S. banks are on solid ground. So we won’t be seeing 1920s-like scenes of bankers selling apples on Wall Street.

But there’s no doubt that Americans are in for a bumpy ride. For the situation to improve, housing prices must be stabilized to reflect their true value.

CHINA

China Daily News, Hong Kong, Sept. 17: Besides being disastrous for the United States, the U.S. subprime mortgage crisis has also adversely affected China’s economy. However, it also presents an opportunity for Americans to gain a more sober understanding of China.

American financial institutions sold the subprime mortgages through mortgage-backed securities (MBO) and collateralized debt obligations (CDO) to their European, Japanese, Canadian, Chinese and Indian counterparts. The confirmed losses worldwide have reached $395.8 billion, while estimated losses stand at about $995 billion.

In the past few years the Congress has passed many bills trying to force China to raise the exchange rate of its currency against the U.S. dollar. Some lawmakers have alleged that the renminbi’s low exchange rate caused the U.S. economic imbalance.

Now we know the real cause. Where were all the financial experts when the U.S. economy deteriorated to its current state? Shouldn’t U.S. economic regulators be held responsible for this mess, too?

If the US wants to convince the world that the current economic downturn was caused by some “unintended missteps” now is the perfect time to take the responsibility for the subprime fiasco. There just might be something good coming out of this economic calamity if the US proves it is as responsible as it claims to be.

RUSSIA

The Moscow Times, Sept. 15: There was a jovial atmosphere last Saturday night in the “Stop Russia” bar in Tbilisi after Russian troops started to pull back from their checkpoints deep in Georgian territory.

The ominous mood that had gripped the city seems to have lightened in recent days, particularly since the huge “Stop Russia” demonstrations a couple of weeks ago, which according to official estimates brought more than a million people onto the streets.

But reminders of the war are hard to ignore — particularly the thousands of internal refugees who fled the fighting and took refuge in empty state buildings and hastily constructed tent camps. Ironically, some of them have occupied a dilapidated block, which used to be the Russian military command center for the Caucasus. Once this building housed some of Moscow’s spooks, but now its inhabitants are dining on emergency-aid packages supplied by Washington.

This is a real tragedy, which has only compounded the last one. Georgia is still struggling to deal with tens of thousands more people who were displaced by the civil wars here in the early 1990s. Many of them still live in suspended animation in temporary accommodation, sustained by dreams of eventually going home. For 15 years, they’ve been a visible symbol of Georgia’s lost territories and a physical embodiment of the desire to win them back. But now those breakaway regions, Abkhazia and South Ossetia, are effectively Russian protectorates, and their chances of returning seem bleaker than ever.