Sunday, February 18, 2018

A Dow Rebound

Donald Trump said the stock markets were "making a big mistake" two weeks ago when the sudden downturn I mentioned in my previous post occurred. Well, this past week was a different story.  This bull market is showing historic resilience.  The Dow powered upward all five days last week in what was its best week since 2013.  Was Trump right?

In 2017, the Dow rose 5,000 points, a record!  Trump has mentioned 30,000 as a target for 2018.  So, perhaps the minor "snapback" of two weeks ago was an anomaly. Maybe we are never going to touch the 200-day moving average again (that's sarcasm). 

My last post mentioned that many of the technical indicators used when charting stocks were flashing "overbought," sending the Dow into correction territory.  The republican tax cut fed fuel to the already hot markets.  Initially, the concern was for the economy overheating - sending interest rates and inflation higher as well as driving up the debt.  In almost bi-polar fashion, this past week no cared about any of that.  It seems now that no one can agree on why the markets went down to begin with.  Apparently, a reinterpretation of bond yields partly explains the rise this past week.

Here is the chart reflecting the power of this bull market over the past week. 
The reversal of the alleged correction gave us the strongest week on the Dow since 2013.  The Dow returned to the 50-day moving average which might be a sign of strength.  But notice the red circle.  Those bars across the chart represent volume, the number of shares traded on a given day.  Volume went down as the market went up.  This is a reflection of buyer uncertainty and may suggest a still underlying weakness yet to reveal itself.
Despite an amazing week, my bet is still on a snapback to the 200-day moving average.  It simply defies the gravity of the markets for the Dow to go so long without touching or testing that level.  Still, instead of a snapback we might see something else.  Snapbacks are violent and sudden, moving straight up or down as quickly as possible.  We saw the "down" part in 1987, 2002, and in 2008.  But a less violent occurrence is a "range-bound" return to mean average, moving rather insignificantly up and down over a period of time necessary for the still rising 200-day MA to "arrive" at the level of the Dow.  Which will it be?

An old investing adage goes something like this: "The stock market always does what it is supposed to do, we just don't know when it will do it."  That certainly seems to apply here, even if this Bull continues to power upward.

It is noteworthy that while the Dow and the S&P 500 were up, the NASDAQ was down on Friday, though strongly up for the week.  The S&P had its strongest week in five years.  Gold was also up big for the past week, its best week since 2016, on inflation fears and a weak dollar.  Even though I have added some mutual funds over the past couple of years, I am still vested in gold.

This Frobes article from yesterday is the best overall analysis of the current situation I have read.  Meanwhile, the strength in the stock markets and in the economy as a whole seems to play right into Trump's luck.  This bull market started in 2009, it accelerated when Trump was elected.  But it has accelerated before.  The economy reached a hot 5% GDP in 2014 (something even Trump can't crow about yet) and the Dow had a great year.  The current strength of the U.S. economy is not a new thing.  We are living in a rare time of low unemployment, consumers are spending more.  Will the underlying strength of this to continue?  As I have posted before, no one knows for sure.

Sunday, February 11, 2018

Strength on the Verge of Weakness

Since the day after Election Day 2016 the Dow Industrial Average has not touched its 200-day Moving Average.  Technically, the Dow has been above this important average since late-June 2016 (the present bull market began in 2009 under President Obama) - that's roughly 19 months, over 570 days ago.  I have not been able to discover what the Dow’s current record is for days above the 200-day MA, but we must be close to it.  (The record of the S&P 500 is over 600 days and dates from the mid-1950's.) I have watched the stock markets for over 30 years now and I have never seen anything like this.  The previous longest streaks for the Dow are in the area of 300-350 days.  The strength of this Bull Market is highly unusual. 
Here is what the last six months of the Dow Industrial Average looks like in a technical chart.  The Dow has moved from under 22,000 to over 26,000 during this time frame.  Incredible resilience! The red candlesticks represent down days. The white represent up days.  The longer the candlestick the more volatile the trading for that day.  As you can see, the Dow has experienced a steady rise over this period of time and has only become volatile recently.  The blue line represents the 50-day Moving Average.  The red is the 200-day MA.  Notice how the distance between the red line and the Dow was widening in early 2018.  This is setting up a possible "snapback" scenario as the market wandered farther and farther from the mean average

The graph above the chart is the Relative Strength Index (RSI).  The shaded area of the RSI shows strong upward strength (overbought conditions),  You can see the strength has tapered off  in the past week or so.  Below the chart are graphs for the MACD which have been elevated over the past six months as well and are now trending negative.  Below that is a graph for the slow stochastics which is useful for short-term market measurements.  As rule, anything above "80" reflects a hot upward trend.  Anything below "20" is a strong downward trend.  Technically, neither the RSI nor the MACD nor the slow stochastics are in what could be termed "oversold" territory, suggesting the downward trend might continue.
To review the past several years since the Great Recession, it is useful to keep in mind this summary: "On October 9, 2007, the Dow closed at its pre-recession all-time high of 14,164.43. But fourth-quarter gross domestic product growth contracted 1 percent, announcing the start of the recession. (It was later re-estimated at a positive 2.9 percent.) The Dow started declining gradually. After the failure of Bear Stearns in April 2008 and a negative GDP report in Q2 2008, the Dow dropped to 11,000. Many analysts felt that this 20 percent decline was the market bottom.

"But it wasn’t the bottom. On Monday, September 15, 2008, Lehman Brothers declared bankruptcy. On Wednesday, panicky bankers withdrew $144 billion from money market funds, almost causing a collapse.


"On September 29, 2008, the Dow fell 770 points. That was its most significant single-day point drop ever. Investors were stunned that the U.S. House of Representatives rejected a $700 billion bailout bill to save failing banks. The Senate reintroduced the bailout as TARP on October 3. Nevertheless, the Dow plummeted 13 percent in October. By November 20, 2008, it fell to 7,552.29, a new low.


"That was still not the real market bottom. The Dow climbed to 9,034.69 on January 2, 2009, before screeching down to 6,594.44 on March 5, 2009.


On July 24, 2009, the Dow finally reversed course. It beat its January high, rising to 9,093.24 by close of day."


The Dow at the close on Friday was at 24, 190.90.  More than 300% up from its 2008 low.  An astonishing bull market.  The Dow essentially doubled under President Obama.  Under Trump it has enjoyed roughly a robust 31% gain in much shorter span of time.  Now, entering its 8th year, it is prudent to ask is it overheated?  The Dow closed at 26,616 on January 26, 2018.  In terms of Dow Theory, that number now becomes the resistance that must be matched or exceeded in order to confirm the bull market's continuation.  Unlike in 2008, we don't seem to have any major issues among financial institutions themselves at this point in time.  The "real world" of economics seems solid.  So, maybe the bull will continue to romp upward once this (actually healthy) correction is complete.


Donald Trump has repeatedly referred to the market's bullishness as a KPI for his economic policy.  Well, "policy" might be overstating it.  Trump really has no policy of any kind.  He wants to kick immigrants out.  He wants to build a wall.  He hates Europe, loves RussiaIsrael, and Saudi Arabia.  That's about it for the Trump idealism so far.  To be fair, however, the Bull Market he inherited loved him.  It loved him so much it rose in classic "irrational exuberance." But he was more of a cheerleader than a policy maker.  The recent massive tax cut, for example, was hammered out by the republicans in congress.  All Trump did was sign the final bill.


Which is ironic in a way.  Trump's party may have killed the very thing it was trying to drive onward and upward.  The economy was clicking right along when the republicans decided to "step on the gas" with the tax cut.  Trump wanted the economy to grow faster and much larger and tax cuts can (theoretically) add fuel to the fire.  Trouble is, the tax cut is an inflationary move.  Now the markets are skid-ish on inflation and downright terrified of the inevitable interest rate hikes associated with inflation.  Plus the tax cut will also add to the massive national debt of the country.  It all seems pretty pointless since things were zipping along just fine before the tax cut.


Now the stock markets have turned sour.  Trump is trying to distance himself from all those earlier statements in connection with the markets.  Suddenly they are no longer a KPI for his "policy," instead he is now all about "the fundamentals." Whatever.


The interesting thing for me currently is watching as the markets "snapback" again toward the 200-day MA.  It has been a very long time since the Dow touched the 200-day MA; too long actually.  This Bull Market was gathering too much steam.  It was becoming unnaturally parabolic like cryptocurrency.  Which is why the past week has been so violent.  Strong declines and surges intermingle like a great battle is being fought by the forces of economic equilibrium.  As Richard Russell used to proclaim (paraphrasing) "the further the market moves up or down away from the 200-day MA, the more violent the pullback to the mean."



This is how all the same technical indicators look in a two-year time frame.  The red circle denotes Election Day 2016.  You can clearly see how the Dow's momentum accelerated after that point in time.  You can also see the more variation in the various indicators, the RSI going wild after remaining range-bound in the months before the election, the MACD remaining high even before the election, and the slow stochastics recording short-term upward or downward strength.
So, now we are witnessing a snapback.  It will be interesting to see if it actually (finally) takes the Dow down to the 200-day MA or if it has already discounted higher interest rates, inflation, and the increased debt trajectory - all three at least partially related to the republican tax cut.  January 2018 was the Dow's best month since March 2016.  It was up on Friday in highly volatile trading.  Is the correction over? Let's watch and see what happens next.
The same chart and indicators going back to mid-March 2013.  Notice how the RSI remained pretty much in the middle of its scale, driving a healthy bull market upward throughout 2013-2014 under President Obama.  Volatility struck the Dow in the fall of 2015 and the early part of 2016 with two dips below the 200-day MA. Also notice how the Dow regularly touched the 200-day MA throughout this period.  This is typical market activity.  Nothing too extreme.  You can clearly see how out of whack things got looking at the MACD in the most recent weeks.  WAY above the norms.  The slow stochastics isn't that valuable at this scale, but it does provide a look at the "seismic" nature of that indicator.

Wednesday, January 31, 2018

(Part of) A Super Blue Blood Moon

Well, the Super Blue Blood Moon was not so "super" at my house this morning.  I was hoping for clear skies but there was haze overall and clouds along the western horizon for the Moonset.  So all I caught was this partial Moon before it went down and I had to leave for work.  I didn't get to see the "blood" Moon at all as that occurred after the Moon tracked further west.  It was cold and still and quiet; very peaceful in my front yard.  That's my personal experience of this event, which has not happened in these parts in over 150 years.  Sometimes you get to see the spectacular - and sometimes you just have to catch it on the reruns.

Sunday, January 28, 2018

Meditations on the Vietnam War: Rolling Thunder


As we have seen, America was militarily involved (via advisers, Green Berets, and air power) in South Vietnam (as well as, more covertly, in Laos) long before the Johnson Administration committed two Marine battalions to defend the air base at Da Nang in March 1965.  The greatest commitment of resources during this time took the form of various air strikes in support of the South Vietnamese government, which was on the brink of chaos due to the conflicting internal factions competing for power.

A large portion of the air offensive in southeast Asia took a cohesive operational form as President Johnson, Secretary of Defense McNamara, and their team formulated the idea of 'graduated pressure.'  In a nutshell, bombing was viewed as a means of communication.  America was "saying" to North Vietnam: "negotiate for peace or we will escalate the bombing of your country."  McNamara and others believed that bombing the North could be throttled up or down depending on how receptive the North was to opening peace talks.

This first comprehensive air strike operation directly against targets inside North Vietnam was called Rolling Thunder.  It was one of the most polarizing endeavors undertaken during the war – pitting military and civilian leadership in direct odds with one another over how the war should be conducted.  The civilians (largely academians and politicians) sought to bring the North to the negotiating table via limited bombing, fearing that all-out attack risked bringing China into the conflict.  The military wanted to immediately escalate the campaign and cripple the North’s ability to wage war, arguing that limited strikes would not affect northern support for attacks in the South.  The result was an absurd, on-again, off-again operation that everyone regretted.

The absurdity of Rolling Thunder is a perfect reflection of the war itself.  The South Vietnamese government (largely through in-fighting and corruption) proved itself completely incompetent at establishing an effective alternative to the National Liberation Front (NLF).  Through family loyalties, bribes, and outright intimidation, the population in South Vietnam’s countryside was turning favorable to the NLF.  The U.S. increased its commitment of military and political advisers in an attempt to stabilize the situation.  The advisers and aircraft bases were attacked by the NLF.  General Westmoreland requested Marines to defend against possible retaliatory NLF attacks on the U.S. airbase at Da Nang, which played a large role in the early days of Rolling Thunder.  The NLF continued attacks throughout the country.  More U.S. troops were brought in.  Then it became imperative to escalate the bombing of North Vietnam, Laos, and South Vietnam in order to protect the lives of the troops.  This was a self-fulfilling prophecy.  Once our troops were in-country, more air power was needed to protect them.  Policy did not guide any of this.  Policy was a reaction to it, a mere by-product.

In The Elephant and the Tiger, Wilbur H. Morrison clearly takes the military’s point of view.  After a series of NLF attacks upon U.S. camps and bases throughout South Vietnam over the course of a few weeks in late-1964 and early 1965, the United States decided to retaliate directly against the North.  “For once President Johnson had the courage to accept the advice of his top counselors. United States Air Force and Navy aircraft were ordered to attack North Vietnam.

“A carrier strike was scheduled for February 6, 1965.  Rear Admiral E. C. Outlaw, who commanded Carrier Task Force 77 off North Vietnam’s coast, received the go-ahead for high-priority strikes.  He immediately ordered crews briefed and they were in their planes when another wire cancelled the strike.  No reason was given.

“Within an hour, another message arrived, advising him that he could not use the seventy-eight A-4 bombers, and that the force would have to be reduced.  Bombing load now had to be changed because the use of napalm was forbidden.  New targets were assigned for the following day.  Outlaw was furious because these targets were insignificant.  They included military barracks at Dong Hoi that Outlaw’s intelligence officers claimed contained no troops.” (Morrison, page 161)

The tight control of politicians in Washington infuriated the military planners of Rolling Thunder.  “In the weeks and months that followed, Outlaw grew more and more incensed about the directions he was receiving from Washington through CINCPAC.  He was particularly upset with the orders that he was given about how to run his task force.  At first, he had to telex his intentions a week ahead of the contemplated strike.  This time period was later stretched to a month.  When the war heated up, and quick response was mandatory, he was told to make his intentions once a week or twenty-four hours in advance under emergency conditions.  Even then the answer was usually no.  His instructions for approved strikes went far beyond the point of common sense.  Strike crews were ordered to come in from a central heading, regardless of ground defenses that normally determined such areas of attack, and where they could engage enemy aircraft.  McNamara gave specific orders that all enemy aircraft must be visually identified before they could be fired upon.  This almost precluded the use of air-to-air missiles because they were normally fired at distances beyond the identification point.  It was true that commercial aircraft flew in and out of the Hanoi-Haiphong area and that these aircraft must be protected.  Despite the war, civilian traffic operated just as if the nations were at peace.  The Sparrow missile was practically ruled out, despite its effectiveness, because it could not arm itself if it was fired too close to enemy aircraft.

“Outlaw became so upset with McNamara’s way of controlling his operations, never permitting him to operate with any degree of independence, that he protested to his friends at CINCPAC and among the Joint Chiefs that such regulations were jeopardizing his fliers.  He was told to shut up or he would be fired.” (Morrison, page 162)

In another absurdity of the war, McNamara did not want to bomb the North at all but the instability in the South and the continued pressure by the military to do something forced him to support (indeed, to lead) an action he did not believe in.  “With the situation in Vietnam growing more desperate in late February President Johnson, Secretary of State Rusk and McNamara approved a strategic offensive to be called Rolling Thunder, but only against targets below the 20th parallel.  Also, McNamara insisted that the size and frequency of the air offensive be decided in Washington, and that he personally must approve each target.  This was an unfortunate decision because after attacks were authorized later above the 20th the threat to American planes had multiplied and it became a perilous area for fliers.  Even by the summer of 1965 North Vietnam’s defenses above the 20th parallel had become formidable.   President Johnson placed even further restrictions by saying strikes against surface-to-air (SAM) missile targets could only be made if they were firing at American planes.  All other sites were off-limits.  McNamara was convinced that the air campaign would make little difference to United States operations in the South and that the risk of Chinese confrontations against American fliers was too great.” (Morrison, page 168)

“The Joint Chiefs continued to seek McNamara’s approval to attack some of North Vietnam’s more important targets, particularly those with a direct bearing on the fighting in the South.  Twelfth on the list of targets long recommended by them was the Paul Doumer railroad and highway bridge on the outskirts of Hanoi.  The 14th target was the Thanh Hoa railroad and highway bridge just north of the city of Thanh Hoa, seventy miles south of Hanoi.  They were both key links in North Vietnam’s transportation system, and were destined to become to of the most famous or infamous targets in North Vietnam depending upon which side you talked to.  Destruction of the southern railway system had long had the highest priority to reduce the flow of men and material to South Vietnam, South of the 20th parallel there were five other large bridges and a railroad yard at Vinh with 115 miles of usable rail lines.  The bridges, however, were the most vulnerable links in North Vietnam’s lines of communication.  The Joint Chiefs had repeatedly recommended attacks against the southern portion of this rail system to overwhelm its defenses in a single effort.  The Dang Phuong railroad and highway bridge and the Thanh Hoa bridge were recommended as first targets in order to trap the maximum quantity of rolling stock south of the 20th parallel where it could be destroyed in other attacks.

“The Joint Chiefs submitted a four-phase program to McNamara March 27, 1965….They proposed a twelve-week program to isolate North Vietnam from all external sources of supply, and then further attacks to destroy her internal military and industrial capacity.  In the first phase – to last three weeks, all the lines of communication south of the 20th parallel would be attacked starting with a strike against the Thanh Hoa bridge.  In the second phase to last six weeks all rail and highway links to China, including the destruction of the Paul Doumer bridge, would be bombed.  The third phase, scheduled for two weeks, recommended air attacks against all port facilities, the mining of the seaward approaches during the ninth week and the destruction of ammunition and supply dumps during the 10th week.  In the final phase, previous targets would be restruck as necessary during a two-week period as well as attacks against industrial targets outside populated areas.” (Morrison, pp. 168-169)

“McNamara approved attacks against the southern rail lines in March but he withheld approval of other targets for the time being.  The Paul Doumer and Thanh Hoa bridges were not attacked until after they became well defended and perilous to American fliers.” (Morrison, page 170)

Morrison gives a fairly decent, albeit slanted, account of how Rolling Thunder began.  He fails to point out the broader nature of the Johnson administration’s political thinking, however.  It was hoped that even restrained air strikes would help bolster the government in the South.  That perspective is considered by Robert D. Schulzinger in A Time for War, a narrative that is more sympathetic to the political aspects of the war and thus emphasizes the politician/civilian perspective, though critically so. The hoped for effect of stabilizing the government South Vietnam was ultimately not achieved by bombing alone.  Therefore, more ground troops were ordered in.

“When the Johnson administration embarked on the Rolling Thunder bombing of North Vietnam in February 1965, planners expected that the bombing campaign would buy time for the government of the South.  Planners hoped that a revitalized South Vietnamese government might take more initiative.

“By June 1965, Johnson’s principal military advisers concluded that Rolling Thunder alone would not stabilize the military situation in the South.  By the end of July Johnson decided on an additional forty-four battalions of troops for South Vietnam, and the role of the bombing of the North changed.  Now bombing was to combine political initiatives designed to bring North Vietnam to the bargaining table with the physical destruction of the North’s ability to fight the war.

“For the remainder of 1965 Rolling Thunder attacks averaged about 750 sorties per week.  For the entire year U.S. bombers and fighters flew about 55,000 sorties over the North.  About half of these were attacks, and the rest reconnaissance or rescue missions.  These missions over the North represented about 30 percent of the total amount of U.S. air actions in Southeast Asia.  In late July 1965 McNamara argued that air raids would put ‘a ceiling on the size of the war that the enemy can wage.’” (Schulzinger, page 202)

Rolling Thunder soon led to a major clash of ideas about the Vietnam War between the civilian and the military leadership. “As the bombing of the North continued in the years after the decision to Americanize the war, the campaign followed rubrics McNamara had laid down.  McNamara and Johnson kept off limits targets such as bridges, port facilities, power plants, and munitions factories in the Hanoi-Haiphong area.  They wanted to make the North Vietnamese constantly worry that the United States might in the future attack the most industrially advanced areas of the North.  Initially Johnson fully supported McNamara’s program of gradual escalation and political incentives.  Later, however, McNamara’s commitment to this political program of bombing brought him into conflict with the Joint Chiefs of Staff, Congress, and Johnson.

“The Joint Chiefs and their supporters in Congress disputed McNamara’s belief that the best use of air power was to stop the flow of supplies to the South.  Hawkish critics of McNamara’s policy believed that the United States should follow a more punitive policy to force the North Vietnamese to yield.  Critics pointed to a CIA report which stated that ‘almost 80 percent of North Vietnam’s limited modern industrial economy, 75 percent of the nation’s population, and the most lucrative military supply and lines of communications targets have been effectively insulated from air attack.’” (Schulzinger, page 203)

McNamara, who always had reservations about the bombing campaign, felt that pausing the campaign would send a message to the North that the door was open for negotiations. “The United States paused in its bombing of the North and reduced the amount of Arc Light bombing for the South for thirty-seven days from December 24, 1965 to January 31, 1966.  Some of Johnson’s advisers believed that a pause might encourage the North to explore negotiations on terms acceptable to the Americans.  They realized that no movement toward peace talks would take place while the bombing went forward.  One group reviewing the bombing policy concluded in the fall of 1965 that ‘it would be difficult for any government, but especially an oriental one, to agree to negotiate while under sustained bombing attack.’” (Schulzinger, page 203)

“…the President decided to follow McNamara’s efforts to allow the North a face-saving method of opening negotiations.  Not that Johnson fully believed that the North wanted to negotiate; even before the pause, Hanoi condemned the idea as a trick.  Lodge, Westmoreland, and Admiral U.S. Grant Sharp, commander of U.S. forces in the Pacific, all opposed the bombing halt as providing the North and the Vietcong an opportunity to resupply their forces, Rusk also doubted whether the bombing halt would work, on the grounds that ‘a pause should be undertaken only when and if the chances were significantly greater than they now appear that Hanoi would respond by reciprocal actions.’” (Schulzinger, page 204)

Largely forgotten today is the fact the American people overwhelmingly supported the war effort in 1965-1966, even to the point of escalation.  “The Johnson administration considered generating public support a central factor in deciding how long to extend the bombing pause.  During the pause, the Harris poll found that 73 percent of the public favored a new effort for a cease-fire, 59 percent supported the bombing pause, and a similar proportion, 61 percent, favored increasing the bombing if negotiations did not take place soon.  As they had done when starting the bombing campaign, Johnson and McNamara calibrated the political and military advantages of the bombing pause.” (Schulzinger, page 204)

But the North was not getting the message.  The initial bombing and pause only emboldened their resolve.  “…North Vietnam would be willing only to negotiate the modes by which the United States withdrew its troops from Vietnam.  The political future of Vietnam should be decided by the Vietnamese. Hanoi refused publicly to acknowledge the pause as a concession from the United States which required a response.  Hanoi’s diplomats told the Americans through intermediaries that the United States ‘has no right to bomb or strafe North Vietnam and the DRV regards such actions as an act of war against its sovereign government.’  The United States realized that this formulation was a recipe for the collapse of the South Vietnamese government.  The United States’ conditions were just as unacceptable to the North, Washington made it clear through its various intermediaries that it demanded ‘reciprocal reductions in hostilities’ by the North in order to continue the bombing pause.

“Moreover, public opinion wanted an immediate and positive response from the North to unconditional negotiations.  Failing that, a majority of the public favored increasing the bombing.” (Schulzinger, page 206)  Once again, in late-1965 the vast majority of Americans supported sending in ground troops, but wanted the war prosecuted with intensified force, they wanted an early victory.  That majority would dwindle over the next two years, however, as it became obvious no clear victory was in sight.
  
“Without bombing, officials believed the war would last longer and U.S. casualties would be higher.  Without bombing they thought that the South Vietnamese authorities would lose heart.  Convinced that the end of bombing would make matters worse, officials took the next erroneous step to believing that more bombing would help end the war on U.S. terms.  During the first six months of 1966 Johnson mulled proposals to increase the air war to include attacks on the petroleum supplies of the North.  The CIA and the Joint Chiefs of Staff recommended heavier attacks against targets designed to break ‘the will of the regime.’  By April McNamara agreed that attacks on the petroleum storage facilities would ‘create a substantial added burden’ on North Vietnam which might lead eventually to negotiations.  Not that officials favored immediate negotiations in the late spring of 1966.  The fighting among South Vietnam’s generals made it difficult for Saigon to contemplate participation in talks with the NLF.  Maxwell Taylor, now special military adviser to the President, warned against stopping bombing as a precondition to talks.  Taylor advised using bombing as a ‘blue chip’ once negotiations began.  Lodge agreed that ‘the bombing must not be stopped without a quid pro quo.’  Lodge did not even believe that negotiations would hasten the end of the war.  He insisted that there be ‘an incentive for the enemy to come to prompt settlement.  Without such an incentive the talks could drag on indefinitely.” (Schulzinger, pp. 207-208)

“In June 1966 Johnson decided to strike the petroleum depots in North Vietnam.  Approval of action against the POL facilities was ready at the beginning of June, but the President deferred because Chester Ronning, the Canadian ambassador to the United States, visited Hanoi to explore the North’s willingness to open talks with the United States….The Canadian discovered no change in North Vietnam’s position that the United States must take its troops out of South Vietnam, drop support for the government of President Thieu, and recognize the NLF before opening negotiations….U.S. planes struck simultaneously at oil storage facilities in Hanoi and Haiphong.  The oil tank farm in Hanoi was completely destroyed, and the depot at Haiphong was 80 percent destroyed.  In July McNamara, following Johnson’s instructions to complete the ‘strangulation’ of North Vietnam’s POL facilities, authorized attacks against the POL depots throughout the North.” (Schulzinger, page 208)

“Eventually the attacks on POL failed to curtail the infiltration into the South.  An air force commander in Saigon characterized the first attack as ‘ the most important strike of the War.’ By the end of the summer, however, the air force planes had destroyed most of the large POL facilities.  Faced with diminishing returns from bombing the petroleum facilities, commanders of Rolling Thunder ordered a return to ‘attrition of men and supplies.’” (Schulzinger, page 209)

Politically speaking, the bombing campaign actually assisted the North, bringing closer ties with the Soviet Union and China, something McNamara always feared.  “Ho Chi Minh also used the attacks on the POL facilities to bolster his requests to China and the Soviet Union to provide additional financial and military aid.  Forty-seven non-governmental scientists employed by the Institute for Defense Analysis estimated that approximately $86 million worth of damage had been done to North Vietnam since the beginning of Rolling Thunder in February 1965.  The Soviet Union and China supplied approximately $250-$400 million in economic and military aid in 1965, they provided more in 1966.  From 1965 until 1969 about 320,0o0 Chinese troops were sent to North Vietnam.  In 1967, the peak year, 170,000 Chinese troops were present.  They operated antiaircraft facilities, maintained roads, bridges, and rail lines, and built factories.  The Chinese forces freed Vietnamese men to go south to the fighting, and their presence also deterred the United States from additional air attacks near the Chinese border.” (Schulzinger, page 210)

Harry Summers. Jr. offers another military perspective on the bombing in his excellent Historical Atlas of the Vietnam War.  “Instead of a coordinated air campaign, as in World War II, which would destroy the enemy’s ability to wage war and break their will to resist, air operations over the North were designed as a diplomatic ‘slow squeeze’ signaling device.  As Defense Secretary Robert S. McNamara said on February 3, 1966, ‘U.S. objectives are not to destroy of overthrow the Communist government of North Vietnam.  They are limited to the destruction of the insurrection and aggression directed by North Vietnam against the political institutions of South Vietnam.'

“Throughout Rolling Thunder, seven bombing halts were imposed, all intended to signal the U.S. willingness to negotiate.  But in each case North Vietnam used the halts to rebuild air defenses and increase the flow of arms and equipment to the war in the South.  The ‘signal’ that the U.S. was unwittingly sending out was that it was not serious about waging war.” (Summers, page 96)

“From 1965 to 1968, at a cost of 922 aircraft lost to enemy action, the Navy and Air Force flew 304,000 fighter bomber and 2,380 B-52 bomber sorties over North Vietnam and dropped 643,000 tons of bombs – more than the 537,000 tons dropped in the entire Pacific theater in World War II and the 454,000 tons dropped during the Korean War.  But it was all for naught.  ‘Rolling Thunder must go down in the history of aerial warfare as the most ambitious, wasteful, and ineffective campaign ever mounted,’ said former CIA analyst Raphael Iungerich.  ‘While damage was done to many targets in the North, no lasting objective was achieved.  Hanoi emerged as the winner of Rolling Thunder.’” (Summers, page 96) 

Phillip B. Davidson's Vietnam at War offers another pro-military point of view basically stating that, while ineffective to begin with, when Rolling Thunder finally lost much of its political constraints in 1967 it was actually a success.  “By 1966 it became obvious that Rolling Thunder had failed to achieve its goals.  The North Vietnamese were still supporting the insurgency in the South, and the support was as strong as ever.  The fact that Rolling Thunder had been widened, however reluctantly, by the president made this disappointment all the more bitter to Johnson and McNamara.  By mid-1965, the northern limit of the attack area was extended….The target list was expanded from barracks, depots, and radar sites to bridges, airfields, and power plants.  The number of sorties per week increased from 200 in early 1965 to around 900.  Still the bombing campaign failed.  It continued to be frustrated by the concept of ‘gradualism’ and by its failure to hurt the North Vietnamese.  The targets painful to Hanoi lay in northern Vietnam, and they were off-limits.  In late 1965 and early 1966, Johnson and McNamara continued their piecemeal expansion of the program, despite efforts by Admiral Sharp and the Joint Chiefs of Staff to escalate the operation.  Although the target list expanded from 94 to 236 by the end of 1965, Washington still selected the targets.

“Into this unpromising situation stepped McNamara and his civilian assistants, particularly Assistant Secretary of Defense for International Security Affairs John McNaughton.  In November 1965 they introduced the concept of a bombing pause.” (Davidson, pp. 387-388)

“…the concept of the bombing pause of December 1965 – January 1966 looks, to use Admiral Sharp’s words, like ‘…a retreat from reality.’  The pause, the brainchild of McNamara and McNaughton, sought to put military pressure on Hanoi by relieving the pressure already being applied,  In the convoluted thinking of the Pentagon civilians, ‘less’ had somehow become ‘more.’ The idea was to send Ho a message that Rolling Thunder was going to get tough.  If so, the message to Hanoi got thoroughly garbled.  Well into the pause, the administration attempted to use it as a negotiation lure, but this failed, too.

“McNamara and McNaughton were intelligent and patriotic men and must have had their reasons for selling the president on the pause.  The foundation of the pause concept rested on both men’s antagonism to Rolling Thunder.  Both considered the political price too high.  In the United States, antiwar cries had begun to increase in volume and heat.  Abroad, the United States was portrayed as a bully.  Beyond that, the calculations of the two ‘Mc’s’ were overshadowed by the perceived threat of Chinese intervention if the bombing struck lucrative North Vietnamese targets.  The two men did not want to refine Rolling Thunder, or intensify it, they wanted to kill it.

“McNamara had another reason for his antipathy to Rolling Thunder.  His system analysts, the ‘whiz kids,’ had convinced him that the program was not cost-effective.  Nothing could chill McNamara’s enthusiasm for a project as fast as the condemnation, ‘not cost effective.’  The cost effectiveness approach to selecting various strategical weapons and forces lay at the heart of McNamara’s concept of national defense planning, and in late 1965 and in 1966, the system’s analysts were telling McNamara that Rolling Thunder was financially a losing proposition.  During 1965, they pointed out that their estimate of the damage inflicted on North Vietnam amounted to $70 million, but that it had cost the United States $400 million in inflict that damage.  In 1966, the damage and cost figures went from damages of $94 million to a cost to the United States of $1,247 million.  Of course, one major cause of the cost ineffectiveness was the target selection system – presided over McNamara and Johnson.”  (Davidson, pp. 388 – 389)

“The fate of Rolling Thunder was settled in August 1967 as a result of the pressure exercised by Senator Stennis’ hawkish Preparedness Subcommittee of the Senate Armed Service Committee.  Beginning on 9 August, the subcommittee heard from a full spectrum of witnesses, ranging from Admiral Sharp, who urged an increase in bombing pressure, to Secretary McNamara, who argued that the limited objectives and the restrained nature of the present air campaign against North Vietnam be maintained.  In its report on 31 August, the subcommittee came down solidly on the side of the military and against McNamara.  It criticized the restraints which the civilians had placed on the bombing program; it castigated the doctrine of ‘gradualism,’ and it censured the civilians for consistently overriding the unanimous advice of the military.  The subcommittee recommended that the United States ‘…apply the force that is required to see the job through,’ and concluded that ‘It is high time, we believe, to allow the military voice to be heard in connection with the tactical details of military operations.’

“For McNamara this was a stinging defeat.  The day followed the release of the subcommittee report, President Johnson called an unscheduled press conference to deny that policy differences existed between the military and civilian advisers.  It was obvious, however, that this was an attempt to conceal vast and vituperative differences within the administration, at least, about the air strategy against North Vietnam.  McNamara had lost the fight and with it the president’s confidence.  Over the following weeks, the president approved fifty-two of the fifty-seven bombing targets which McNamara had previously declared off-limits.  While his final humiliation would be delayed, McNamara’s resignation (or dismissal) was now assured, and through it Rolling Thunder would at last get a chance to prove itself.” (Davidson, pp. 464 – 467)

“The escalation of Rolling Thunder at the end of September began the final phase of the war in 1967.  Almost all of the ‘painful’ targets many near Hanoi and Haiphong, were released by the president for attack.  Airfields around Hanoi were struck and the key port of Cam Pha was attacked.  The Doumer Bridge, over which passed war material from China, had been repaired after being damaged by the raid of 11 August.  An additional attack on 25 October dropped two spans into the river.  Again, the North Vietnamese (and Chinese) repaired it, and again on 14 and 18 December, United States aircraft severely damaged the bridge.  This time it would not be repaired until mid-April 1968.  Other critical bridges near Haiphong and the roads south were struck.

“These attacks were part of a sustained program to impede traffic into Vietnam from China, to isolate Hanoi from it port of Haiphong, and to separate the Hanoi/Haiphong area from logistic bases to the south.  The plan succeeded.  By October, as the interdiction program cut Haiphong off from its distribution center, 200,000 tons of supplies from the Soviet Union had piled up on the docks of Haiphong. The fragmentation of the North Vietnamese logistic system was aggravated by the attacks on vehicles carrying supplies and on the road and railroads being used.  Admiral Sharp reported that 5,587 trucks, 2,511 railroad vehicles, and 11,763 ships or boats were destroyed or damaged in 1967.  While Russia and China could replace the vehicles considerable delay and dislocation resulted from the destruction of rolling stock and transportation systems.  To the attacks on North Vietnam’s logistic system, for the first time in 1967 the United States added coordinated assaults on the war-making potential of North Vietnam.  The strikes made in late 1967 against the power-generating capacity reduced it to 15 percent of its original capability.  The Thai Nguyen steel plant and the cement plant at Haiphong were almost totally wrecked, and the bulk of North Vietnam’s fixed petroleum storage capacity was destroyed.” (Davidson, pp. 466 – 467)

“Now that Rolling Thunder had been upgraded, what had it accomplished?  There is no clear-cut answer, even now, for it would seem that ‘accomplishment,’ like beauty, is in the eye of the beholder.  The civilians maintained their position that the air attacks were designed to achieve limited objectives, and that more positive results could not be expected.  Their views were reinforced another Jason study which, like its predecessor, categorically (and predictably) condemned the bombing as ineffective.  In rebuttal, the military cited its statistics and arguments showing Rolling Thunder’s achievements in impeding North Vietnam’s prosecution of the war.  The president, who was the decisive audience of one, supported – probably halfheartedly and considerable misgivings – the military and his National Security Adviser Walt Rostow, an avowed ‘hawk’ and a bombing enthusiast.  Their optimistic reports convinced Johnson that progress was being made in the air war over North Vietnam.

“This rosy view of the effectiveness of Rolling Thunder has recently been confirmed by the memoirs of John Colvin, who was consul-general at the British Mission in Hanoi in 1966 and 1967.  He states that the United States had won the air war in the fall of 1967 when its air attacks had shut off the flow of supplies into and through North Vietnam.  Colvin maintains that by the fall of 1967, North Vietnam, ‘…was no longer capable of maintaining itself as an economic unit nor of mounting aggressive war against its neighbor.’  Colvin believes that the key to the fall success of Rolling Thunder was its consistency.  The assaults allowed the North Vietnamese no time to repair facilities, and their capacity of waging a major war had been broken by continually cutting rail lines from China and from Haiphong to Hanoi and by attacks on lesser port.” (Davidson, page 467)

In his book, Morrison is blunt regarding Colvin’s controversial assessment, stating that Colvin: “…said long after the war that by September 1967, the Americans had won the war, and then renounced the victory by ending the bombing.  In his opinion, Colvin said prompt use of air power against North Vietnam’s industrial northeast would have won the war in 1965 and would have spared both sides the agonizingly higher costs of gradualism advocated by McNamara.” (page 320)

Be that as it may, Davidson and Morrison both overstate the actual and potential strategic effectiveness of Rolling Thunder.  The fact is that even after its escalation in 1967 enough men and war material reached the South to launch a shockingly powerful nationwide counteroffensive in early 1968, the turning point in the war.  The bulk of those troops and supplies arrived during the time that Rolling Thunder hammered the North in more disciplined manner.  Most of the Chinese aid traveled through Laos and then down the Ho Chi Minh Trail, the subject of a future post. 

On this long road of twisted logic, one thing led to another not out of a carefully conceived policy, but rather out of tit-for-tat, cause and effect.  Instead of American strategy leading the war, it was the war that led our strategy - yet another example of this war's absurdity.  Our policy was completely reactionary with no specific objectives other than to kill the NLF, destroy its support infrastructure in the North, and start peace negotiations.  The apparent assumption was that if we kill enough of them and create havoc across North Vietnam then they would seek a negotiated peace.  

This assumption and the operations surrounding it was not based upon any actual understanding of the situation by American military or civilian decision-makers. We simply assumed that we were "speaking" a language that the North understood (we weren't) and that enough destruction in the North would bring about stability in the South (it didn't).  Yet, there were no lessons learned here.  Rolling Thunder would continue well into 1968 and give way to other massive bombing operations (Linebacker, among others).  And U.S. soldiers were committed to a war where policy was merely a reaction to circumstances; where goals were simply a response to developments; and where guidance utterly failed to lead.

Tuesday, January 2, 2018

Supermoon Set


I snapped these shots of the Full Moon setting this morning just before I left for work.  I have seen many Moonsets through the years here.  I blogged about one on Thanksgiving Day 2015.  It was a bone chilling 12 degrees as I stood on my front porch facing west.  The cold weather will be with us all week.  It is part of a huge Arctic Blast that is hammering much of the U.S. today.  This was a Supermoon, glorious to behold.  January 31 will bring us a Blue Moon, Blood Moon combination, the first one of those in 150 years.  Incredibly, it will be the second Supermoon of January 2018.  Will this year be as extraordinary as this lunar cycle? 

Sunday, December 31, 2017

Loose Ends 2017

I have not had the time nor the energy to blog as much these past couple of years.  Professional and family life demands more of me these days.  I worked more on my Nietzsche blog than I have in recent years.  So that took a bit of my blogging time and energy.  Here (in no particular order) is my annual rundown of various odds and ends that I didn't blog about from the past year.

I went to the movie theater twice in 2017.  You can read my review of Blade Runner 2049 here.  The other film I saw, Christopher Nolan's Dunkirk, was not exactly a disappointment but it wasn't one of Nolan's stronger films either.  Long-time readers know that Nolan is my favorite contemporary director and the film had several innovative and interesting qualities, particularly in its interweaving of three different narrative time scales and its use of sound effects.  But I wouldn't give it higher than a 7 on my scale.  I just didn't feel inspired to write about it even though it was a decent effort.

I read several new books throughout the year, mostly philosophy and military history.  The one work of fiction I tackled was a novel that has been on my list for years - Truman Capote's In Cold Blood.  I enjoyed this novel so much.  Capote's style is impeccable, the narrative is gripping and the ending is heartrendingly nostalgic.  It is a power story, expertly woven in glorious prose  - a classic that I highly recommend, regardless of what type of reading you normally gravitate toward. 

Neil Young put out his 38th and 39th studio albums this year.  I reviewed The Visitor recently.   He released Hitchhiker earlier in the year - a previously unreleased album of songs that mostly appear on other albums by Neil.  Recorded back in 1976, this album has run through the rumor-mill among fans of Neil literally for decades.  It features a couple of previously unreleased songs that I have (in other versions) in my rather large bootleg Neil collection.  It is noteworthy that most of these songs were written as they were performed in the studio, literally all in a single day, which is rather incredible.  Otherwise, however, Hitchhiker turns out to be little more than glorified "demo" tape of Neil on solo guitar.  Even though I can appreciate the record as a document of Neil's famous spontaneous creativity, I still didn't care to purchase an acoustical recording of songs that are much more fleshed-out on other albums I own.

The Atlanta Braves sucked in 2017.  I endured a long season of steady disappointments and the prospects for 2018 don't really seem that bright at the moment, though there is some young talent to root for.  Nevertheless, I followed the team in dedicated fashion, mostly on the radio, but I never got around to seeing a game at their new stadium even though it is located much closer to my house than was Turner Field.  Maybe next year.

Our Destin vacation was wonderful and relaxing but was cut a day short by Hurricane Irma.  Jennifer and I made a wide swing through Alabama on the way home to avoid the horrific traffic jams in Atlanta.  It felt strange to leave the beauty of the Florida panhandle only to rush home to be in the path of the storm.  Irma literally petered out on my doorstep with minimal wind and rain.  We didn't even lose power, which was a surprise.  It was basically a nonevent for me but it gave us all something to worry about (not that we needed more to worry about in 2017, things were bad enough).

I watched more television (well, a lot of it was streaming on my iPad) in 2017 than I have in many years.  Although I have previously only mentioned it in passing, I am a Game of Thrones fan.  I found the seventh season to be very entertaining.  I also rummaged through Netflix and watched all 62 episodes of Breaking Bad for the first time.  It is a rather bleak story, spiced with occasional humor in earlier episodes, superbly acted, beautifully shot, and very well written.  The thing that surprised me the most about Breaking Bad was how much its style reminded me of what is probably my all-time favorite TV series, The X-Files.  With good reason since Vince Gilligan created the show and was previously involved with The X-Files.  The influence of the older series is unmistakable even though the narrative for the two shows is very different.  

Breaking Bad was an excellent series but, frankly, I didn't find it to be "the greatest TV show ever" like several of my friends have mentioned through the years.  It is an interesting story filled with complex characters; clearly superior TV but I wasn't blown away by it.

Watching it influenced me to start re-watching The X-Files, however.  I am finishing up season three as of this post.   This is probably my third or fourth time through the series, but I last watched it over a decade ago.  The dynamics between David Duchovny and Gillian Anderson on-screen, along with the (mostly) great writing (the series suffers in seasons 8 and 9) and high production qualities make it well-worth repeat viewings.  Sure, it's a show about alien abductions and the paranormal, but it is also about the development of the complex relationship between Mulder and Scully and the science fiction elements all serve as metaphors for modernity: abuse of power, fate versus free will, the importance of faith (or at least belief) today, the nature of evil, the interplay between friendship and attraction, etc.

Also in the mix were two very different shows, Westworld and Deadwood.   I streamed both of these via HBO through my Sling TV subscription.  I only made it through the first five episodes of Westworld before I realized, despite the work of great actors like Anthony Hopkins and Ed Harris, I was simply indifferent to any of the mysteries that show tried to create; boring and mostly cliche.  Deadwood, on the other hand, was recommended by a friend and I was not disappointed.  The early days of the wild west is not the type of setting I usually go for.  But this show was humorous, dramatic, surprising, and an extremely well acted period piece.  Season 3 got a bit muddled but, overall, the whole series was highly entertaining.  The show became even more interesting to me when I discovered that it was all based on what happened historically - the settlement and most of the main characters are based upon real people and events.

I'm not sure why I watched so much TV in 2017.  I will carry on with The X-Files and am excited that Season 11 will air on January 3.  But, I have no other plans to allow the "glass teat" to get its clutches around my mind in 2018.  You never know though, right?

I got a new iPad a couple of weeks ago.  Once again, Apple amazes me with how easily it is to transfer your entire app environment seamlessly over from an old iPad to a new one.  I wish things were that easy with my PC upgrades.  All my apps are faster with greater functionality and far higher resolution.  Wonderful stuff.

My primary iPad usage continues to be my tinkering with Flipboard.  Since my last Loose Ends post my little digital publishing empire has grown to 40 magazines with 3,o85 followers as of this post.  This blog and my Flipboard are as far as I wade into "social media."  I still have no desire to open a Facebook account.  I suppose if I were more active in social media, however, I might get more followers.  But I am happy where I am.

Notice Magazine and Notice: Art remain my most popular Flipboard ventures.  Although Notice Magazine is designed as "quick news," featuring articles rotated in and out over any given 3-day period, there is a section at the end of Notice Magazine where I keep a small "permanent" collection of articles I deem of special importance.  You might want to check them out:

From NPR - President Obama's eulogy on the tragic Charleston shootings.  He sings "Amazing Grace" at the end.

From The Daily Beast - "Antiracism, Our Flawed New Religion"

From The New York Times - Roy Scranton's excellent article "We're Doomed, Now What?"

From The Huffington Post - "Dog Butt Looks Like Jesus Christ in a Robe"

From  Buzzfeed - "26 Pictures That Will Give You Perspective on What Really Matters"

From Business Insider - "This map shows the US really has 11 separate 'nations' with entirely different cultures"

From Gizmodo - "Half of Our Planet's Wildlife is Gone.  Here's Why."

From ThyBlackMan.com - "Stop Erasing History"

From The Atlantic - "Mass Shootings in the United States: 'This Is Who We Are'"

From The Huffington Post - "This Charlottesville Documentary is Required Viewing for Americans in 2017"

From Seeking Alpha - "You're Just Not Prepared for What's Coming"

Happy New Year!  Here's for a much better 2018!