Morning Must Reads

One approach being considered by the Obama administration in regard to Iran is to drop U.S. objections to the regime’s continuing effort to enrich uranium in an effort to build up national pride and trust for foreign powers sufficiently.

American and Euro diplomats floated the idea to writer David Sanger about the new approach to the Iranian nuke program. The Bush administration had been adamant that no talks could take place with Iran as long as the country was moving ahead with its efforts. The Obama team is suggesting that starting the dialogue is the most important thing. U.N. officials, after comparing Dick Cheney to Darth Vader, agree.

“Now, he contended, Mr. Obama has little choice but to accept the reality that Iran has “built 5,500 centrifuges,” nearly enough to make two weapons’ worth of uranium each year. “You have to design an approach that is sensitive to Iran’s pride,” said [U.N. nuclear inspector Mohamed] ElBaradei, who has long argued in favor of allowing Iran to continue with a small, face-saving capacity to enrich nuclear fuel, under strict inspection.

By contrast, in warning against a more flexible American approach, a senior Israeli with access to the intelligence on Iran said during a recent visit to Washington that Mr. Obama had only until the fall or the end of the year to “completely end” the production of uranium in Iran. The official made it clear that after that point, Israel might revive its efforts to take out the Natanz plant by force.

 

Wall Street Journal — Bank Vet Pegged to Run Bailout

Writer Deborah Solomon reports that the Obama administration has finally found someone willing to run the Troubled Asset Recovery Program tasked with pumping $700 billion into financial markets to deal with bad debt.

But in tapping former Merrill Lynch executive and current Fannie Mae head Herb Allison for the post, the administration now has to find a new bailout-oriented boss to run the struggling mortgage giant. Freddie Mc, by the way, also needs a new leader.

“The Obama administration has had difficulty finding executives willing to serve as directors and executives of companies in the government’s embrace, in part because of intense scrutiny of companies receiving government aid.

[Treasury Secretary] Tim Geithner has been searching for months for someone to run TARP. Various candidates either have not made it through the vetting process or have pulled out of consideration. Last month, the leading candidate, hedge-fund manager Frank Brosens, withdrew for personal reasons.”

 

Bloomberg — Goldman Sachs Plans to Raise $5 Billion to Repay U.S.

Writer Christine Harper shows that one benefit of the class warfare in Washington is that companies that took bailout money are now trying to give it back in order to avoid having Barney Frank become the de facto head of their compensation committees.

Goldman announced a surprise profit of $1.81 billion for the first quarter and plans to pay back half of the $10 billion in taxpayer funds pumped into the company. Goldman stock rose by 50 percent on the news, helping salvage what began as a very bad day on Wall Street. Forecasters predict more losses ahead as the financial sector continues to struggle. But the showing from Goldman on Monday stunned everyone.

What has allowed Goldman to succeed? The failure of its competitors.

“The loss of competitors including Lehman Brothers Holdings Inc. and Bear Stearns Cos. meant Goldman Sachs attracted more trading business, said [senior portfolio manager at Huntington Asset Advisors Peter Sorrentino].

‘A lot has to do with the fact that they really narrowed the playing field,’ he said. ‘All that business has to be flowing through to someone.’”

Ford Motor Company could not be reached for comment.

 

 

Wall Street Journal – Pakistani Peace Deal Gives New Clout to Taliban Rebels

 

Pakistan’s beleaguered president Asif Ali Zardari has given up control of part of his country to the Taliban in an effort to appease the Islamist group and prevent the toppling of his own government.

The new American policy for the region demands a tough line on the Taliban from Zardari, but as writers Zahid Hussain and Matthew Rosenberg explain, the billionaire widower of  Benazir Bhutto is in no position to resist the push. The Taliban is rapidly gaining power in his country and Zardari has little hope of rooting Islamists out of his own military, a step necessary before cracking down on the Talibanis.

In the Swat Valley, in which the Taliban will now be the acknowledged rulers, one gets a picture of what may lie ahead for the rest of the country.

“Until the fighting began nearly two years ago in the valley, it was a popular weekend getaway for well-heeled Pakistanis, known for its alpine ridges, fruit orchards and trout-filled streams. With the Taliban now imposing its harsh version of Islamic law, floggings and even executions are fast becoming commonplace. Residents said many young men are joining the militants to ensure the safety of their families, who they hope will be left in peace if one of their own is fighting the government.

“We are all frightened by this brutality. No one can dare to challenge them,” said Fazle Rabbi, who owns a cloth shop in Mingora, Swat’s main town. The shop sits on a square that has become known among residents as “Slaughter Square” because the Taliban have begun using it to dump bodies after executions.”

 

Washington Post — U.S. Appears Set To Boycott U.N. Session on Racism

 

The U.N. summit on race relations in Durbin South Africa was expected to be part of the Obama administration’s re-engagement with the I nternational community. Bt the U.S., which hasn’t been a party to the effort since Bush administration walked out over racist attacks on Israel in 2001, is still likely out of the mix.

The Obama administration to so far staying out of the international grievance session due to start Monday. The move has won plaudits from Israel and from conservatives who say the event is nothing America should be involved with at all. But, as writer Michael Fletcher observes, the move comes after high hopes in Africa.

“The United Nations has been working on next week’s conference for the past three years, mostly without input from the United States. After Obama took office, he sent a delegation to Geneva, raising hopes that his administration would become a full partner in the effort. Hopes were lifted further when Obama had the United States rejoin the U.N. Human Rights Council.

But after sending the delegation to a preliminary meeting in Geneva, the administration declared the meeting’s document unfocused, hostile to Israel and essentially not salvageable. After that, the document was heavily edited. Its original length was cut by half and specific mentions of Israel and the need to pay reparations for slavery were deleted.”