Tales from the Trail

Jamie Dimon managed to turn a multibillion-dollar trading loss into a winning moment.

The CEO of JPMorgan came sailing into the Senate office building this morning with a smile, and gave a pitch-perfect performance in explaining how a small group of traders in its London office screwed up a hedging strategy so badly that they lost at least $2 billion.

Dimon was apologetic, but not groveling. He stood his ground, but was not combative. He gave the impression he was an open book, but managed to give precious few details about how much the trading loss has grown.

He came off as so in-control that senators asked HIM for advice about how Washington should police Wall Street.

Investors gave Dimon rave reviews, sending the shares up 1.5 percent while the overall bank stock index closed down for the day.

U.S. Republican presidential candidate Newt Gingrich bows his head in prayer before speaking at First Redeemer Church while on a campaign tour in Cumming, Georgia, February 26, 2012. REUTERS/Tami Chappell

Earth calling Newt: When the biggest news of your presidential campaign is the penguin biting your hand at the zoo, it’s probably time to pack it in.

Even though Newt Gingrich’s odds of winning the Republican nomination were about as long as those of realizing his dream for a moon colony, the 68-year-old seemed to enjoy himself to the end. “I never got the sense that he was quote-unquote down,” said adviser Charlie Gerow. “I got the sense on a couple of occasions that he was tired. Really tired.” And really in debt. His campaign spent $4.3 million more than it brought in.

Allies lie.

Those words of wisdom came from outgoing Defense Secretary Robert Gates at a congressional hearing. “I would say based on 27 years in CIA and 4 1/2 years in this job — most governments lie to each other. That’s the way business gets done,” Gates said.

“And sometimes they send people to spy on us and they’re our close allies,” he said.

Gates was responding to questions about how the United States can trust and support governments like Pakistan and Afghanistan where the relationship is laced with duplicity.

Who knew what when about where?

That is the persistent question about Pakistan after al Qaeda leader Osama bin Laden was found practically in the backyard of the country’s military and its capital.

Top U.S. defense officials tried to calm the fury today by saying they had no evidence that anyone in the senior Pakistani leadership had knowledge of bin Laden’s location.

“I have seen no evidence at all that the senior leadership knew. In fact, I’ve seen some evidence to the contrary,” Defense Secretary Robert Gates said.

In all the words said over at the White House today about the Afghanistan review, one name was not mentioned — Osama bin Laden.

The al Qaeda leader, who former President George W. Bush once declared wanted dead or alive, has eluded a manhunt and grown nearly 10 years older since the Sept. 11 attacks.

Bin Laden was last heard in an audio message aired on Al Jazeera television on Oct. 27 railing against France, and his freedom remains a symbol of how difficult it will be to declare victory against al Qaeda.

On a day when the most powerful people in Washington were discussing Afghanistan and Pakistan, there was one man who might be excused for looking a little shell-shocked.

Frank Ruggiero, who stepped in as acting Special Representative for Afghanistan and Pakistan (SRAP) following the sudden death of his boss Richard Holbrooke on Monday, had little time to prepare for his first big outing as President Barack Obama’s  pointman for the biggest foreign policy headache facing the administration.

Ruggiero spoke to the press after Obama, Secretary of State Hillary Clinton and Defense Secretary Robert Gates formally unveiled  their official review of the year-old Afghan strategy, which said enough progress was being made to begin withdrawing U.S. troops in July despite fragile and uneven gains against the Taliban insurgents.

The United States and India are, to borrow the phrase of a recent paper by the Center for a New American Security, “natural allies.” The world’s two biggest democracies, with proud traditions of free speech, separation of religion and state, and racial and ethnic diversity, have much in common, and Indians tend to have more favorable views of the United States than most Europeans.

Ties had deepened first under President Bill Clinton and then improved significantly under President George W. Bush, but progress seemed to have stalled in the first two years of the Obama administration. So it was heartening for Indiaphiles to see President Barack Obama finally putting some weight behind the relationship on his trip there, with an array of business deals and an endorsement of India’s bid for a permanent seat on the United Nations Security Council.

Obama is right in seeing relations between the two countries as one of the defining partnerships of the 21st century, and there will be real power in their alliance where they can find common ground. But the relationship will not always be an easy one. Not only do they see countries like Iran, Myanmar and Pakistan in very different ways, they have often found themselves in opposite corners on trade and climate change. India also has a long tradition of non-interference, a byproduct of its anathema to internationalizing its own conflict in Kashmir. The CNAS paper also noted that in the past year, Indian and U.S. votes matched in the U.N. General Assembly just 30 percent of the time.

As President Barack Obama begins his visit to India, his erstwhile rival John McCain is voicing hope that Washington and New Delhi will tighten up their military cooperation in the face of China’s “troubling” assertiveness.

McCain, the 2008 Republican presidential candidate and the ranking Republican on the Senate Armed Services Committee, told a think-tank audience in Washington on Friday that the two huge democracies were natural allies in the quest to temper China’s ambitions.

“While India and the United States each continue to encourage a peaceful rise for China, we must recognize that one of the greatest factors for shaping this outcome and making it more likely is a robust U.S.-India strategic partnership,” McCain said.

We travel the Karakoram Highway from China to Pakistan on today’s edition of Washington Extra.  Driving the agenda for Reuters today is news that the United States could be heading for another trade row with China, after it announced plans to toughen rules against what it sees as unfair trade practices. A number of the proposals are likely to irk Beijing and could provoke retaliation.

It is all part of the Democrats’ “Make it in America” agenda to save manufacturing jobs at home. Critics will no doubt see it as more evidence that President Barack Obama is a closet protectionist. Others argue that this is a shrewd move from the administration to head off still more damaging moves from Congress.

Over at the IMF, Pakistan’s finance minister is in town seeking more help to salvage his country’s economy in the face of the devastating floods. The mood so far seems hopeful. Abdul Hafeez Shaikh said Pakistan wanted to keep pursuing an $11 billion IMF loan program and demonstrate its resolve to take tough economic decisions, dismissing reports that it might abandon the program. The IMF, for its part, is already urging donors to give grants, not loans, for rebuilding projects, to avoid adding to Pakistan’s heavy debt burden.

In many ways the documents released by WikiLeaks last night merely underscored the bleak assessment of the Afghan war which General Stanley McChrystal issued last August.

At the time McChrystal warned the overall situation was “deteriorating”, complained of “under-resourcing” and called for not just more resources but a “fundamentally new approach” from NATO forces if failure were to be avoided.

McChrystal, who had access to a whole lot more information than WikiLeaks, said the Taliban were aided by “elements of some intelligence agencies” — meaning the Pakistanis — something US officials have been saying for years. He talked of a popular “crisis of confidence” with the government of Afghanistan and warned that the steady stream of civilian casualties had to be stemmed.