Pakistan

This headline on Yahoo News leaped out at me this morning :

Bhutto assassination dashes hopes of democratic change.

This overview epitomizes for me everything that is wrong with the way that our main-stream media presents "news" to the American masses. I don't want to throw dirt on Benazir Bhutto's freshly dug grave, but the last poll numbers I saw before she was murdered showed her with 31% support . She may very well have won a 3-way race, but let's not kid ourselves and make her something she wasn't. In fact this LA Times piece penned by her niece a month ago presents Aunt Benazir in a harsh light. A sample or two:

Perhaps the most bizarre part of this circus has been the hijacking of the democratic cause by my aunt, the twice-disgraced former prime minister, Benazir Bhutto. While she was hashing out a deal to share power with Gen. Pervez Musharraf last month, she repeatedly insisted that without her, democracy in Pakistan would be a lost cause. Now that the situation has changed, she's saying that she wants Musharraf to step down and that she'd like to make a deal with his opponents -- but still, she says, she's the savior of democracy.


It is widely believed that Ms. Bhutto lost both her governments on grounds of massive corruption. She and her husband, a man who came to be known in Pakistan as "Mr. 10%," have been accused of stealing more than $1 billion from Pakistan's treasury. She is appealing a money-laundering conviction by the Swiss courts involving about $11 million. Corruption cases in Britain and Spain are ongoing.

It seems to me that we Americans want to believe in a singular "great leader" to guide some of the countries we've become entangled with into societies that mimics ours. The problem is that the world is not quite as simple as we'd like it to be. This idea that we expect our leaders and government to keep us safe in an inherently unsafe world is childish at best and is leading us into more longer-term problems.

Front Page Sunday NY Times

I woke up to this article above the fold, right hand side of the paper:

Oil-Rich Nations Use More Energy, Cutting Exports

The first paragraph lays it out pretty well:


The economies of many big oil-exporting countries are growing so fast that their need for energy within their borders is crimping how much they can sell abroad, adding new strains to the global oil market.

I realize this is not the kind of thing that we in our everyone be happy, celebrity and sports crazed society want to contemplate, but we better start. The Vice-President might believe that our way of life is non-negotiable, but without cheap, abundant crude I see the need for a lot of negotiation.

You can't make it any clearer than Amy Myers Jaffe does:

"It is a very serious threat that a lot of major exporters that we count on today for international oil supply are no longer going to be net exporters any more in 5 to 10 years,” said Amy Myers Jaffe, an oil analyst at Rice University.

We in the US are in the process of getting hit with a massive devastating one-two punch and the masses don't even see it coming. Our consumer-centric debt ridden system is trying to get up from a shot to the chin called a credit crunch and will soon have to absorb a left hook in the form of much much higher energy costs, combined with less supply. For a nation that imports 60% or so of its' crude-oil needs I'd say we have some thinking to do.

They Don't Ring A Bell

I was reminded of the adage, "They don't ring a bell at the top of a bull market," as I browsed through old e-mails and found the article below I'd saved from August 2005. It struck me at the time as perverse and contrary to every financial tenet I held. That's the reason I saved it, I wanted it as a kind of time capsule. The article is worth a read, especially now that we have everyone form the Bush Administration to Hillary Clinton offering schemes to "help" poor borrowers.


Home Equity at Risk

"Mortgages used to be something people strove to pay off. Now they've become income tools, but risky ones, some financial analysts say.

As they happily watch their houses swell in value, Americans are changing their attitudes toward mortgage debt. Increasingly, a home is no longer a nest egg whose equity should never be touched, but a seemingly magical ATM enabling the owner to live it up or just live.

We would have been a little early, but this sure was a sign to either take money off the table, maybe to pay off some of that mortgage debt or even look at potential shorts in financial lenders.

Herb Greenberg's Blog has an excellent post from Mortgage veteran Mark Hanson that should scare us to death. A few highlights:

The bailout we are hearing about for sub-prime borrowers will be the first of many. Sub-prime only represents about 25% of the problem loans out there. What about the second mortgages sitting behind the sub-prime first, for instance? Most have seconds. Why aren’t they bailing those out too? Those rates have risen dramatically over the past few years as the Prime jumped from 4% to 8.25% recently. seconds are primarily based upon the prime rate. One can argue that many sub-prime first mortgages on their own were not a problem for the borrowers but the added burden of the second put on the property many times after-the-fact was too much for the borrower. .....


The ’second mortgage implosion’, ‘Pay-Option implosion’ and ‘Hybrid Intermediate-term ARM implosion’ are all happening simultaneously and about to heat up drastically. Second mortgage liens were done by nearly every large bank in the nation and really heated up in 2005, as first mortgage rates started rising and nobody could benefit from refinancing. This was a way to keep the mortgage money flowing. Second mortgages to 100% of the homes value with no income or asset documentation were among the best sellers at CITI, Wells, WAMU, Chase, National City and Countrywide. We now know these are worthless especially since values have indeed dropped and those who maxed out their liens with a 100% purchase or refi of a second now owe much more than their property is worth...

I find it impossible to see a happy ending to all this. It's why I am long gold and why I believe Jim Sinclair keeps on saying,"This is it"!

Another really scary aspect to all this is that "our leaders" didn't see any of this happening and they have no clue as to what's coming. Please, get your financial house in order.