Cheney ascendant

Oh, how conventional wisdom turns on a dime.  Weren't we reading just a few days ago how with his buddy Rummy out the door, and Poppy's boys coming in to clean up W's messes, that the veep's influence was on the wane, that his final two years would be a faint shadow of his first six?

Not so fast, if you read between the lines in the Financial Times:

Internal strife within the Baker commission, outright opposition from President George W. Bush and Tuesday's assassination of a cabinet member in Lebanon are complicating the prospect of U.S. overtures to Syria and Iran over Iraq, informed sources say.

A source who spoke recently to a leader of the Iraq Study Group said he complained bitterly about internal dissension and partisanship among members of the supposedly bipartisan group, and was worried about reaching consensus on the key issues…

Baker and Hamilton have made it clear they favor a U.S. dialogue with Iraq's neighbors, particularly Iran and Syria, as one way out of the Iraq crisis. This thinking reflects hopes that Iran could use its strong influence on Iraqi Shia and Syria its control over Iraq's most porous border to alleviate insurrection against the U.S. occupation and the fighting between Shia and Sunnis.

Some of the president's advisers, including incoming Defense Secretary Robert Gates and Director of National Intelligence John Negroponte, are said to be supportive of the idea of negotiations with the two countries, though a spokesman for Negroponte said recently the intelligence chief had raised, but not endorsed, the idea in recent meetings overseas. Vice President Dick Cheney is expected to oppose any such move.

(That "internal dissension" in the Baker Commission?  That's code for "Ed Meese.")

Amazing.  All these reporters and pundits who hang out at the same cocktail parties as the nation's power elite get it wrong in the weeks after the election, and a hack journalist far from our nation's power centers manages to fumble his way into some semblance of what's going on just by reading the inside pages (and the courageous Seymour Hersh — the one guy who can party with the Davos crowd and not let it go to his head).

Now if I could just figure out when the dollar is going to make its big move downward… 

Update:  Maybe the big move is finally underway; the dollar hit a 19-month low against the Euro today. 

The Daily Reckoning