The Mushroom Farm

We've Moved!

2011-09-15T17:42:00.001-07:00

New content for The Mushroom Farm can now be found at:

http://philmelnik.tumblr.com/

Main Stream Media Begs Government Bureaucrats "To Do Something"

2011-08-09T05:49:00.000-07:00

Last evening was a "travel night" for me. I was on my way to Nashville and had some downtime in Baltimore waiting for a connecting flight. CNN programing was playing on the various flat screens positioned in the waiting areas.Much of the coverage was devoted to the equity "market carnage" from earlier in the day.

It sure was an ugly day in the markets. What amazed me as I sat watching and listening to the talking heads was the constant call for the government, whether that be the White House, Congress or the Fed to "do something". Where did this faith in these authority figures come from. The fact of the matter is that these guys have no answers. We have been extremely fortunate in the US to be able to live well beyond our means over the past 20 years or so. That ability has come to an end and we are going to have to learn live with less. I know that is not a message that politicians want to deliver but it's the truth.

At the same time while we are looking at real unemployment of close to 20% (U6) it's amazing how a 10-15% pullback in equity prices brings out the cry of do something. If we can spend $ to support stock prices why can't we take the same approach to dealing with jobs?

The more things change....

2011-07-20T14:56:00.000-07:00

I’ve been engrossed with Robert Caro’s biography of LBJ. I’m almost finished with volume 1 and am finding it tough to put down. I was reminded of the old adage, “the more things change the more they stay the same” as I was reading last night with CNN News on in the background. The news shows are full of budget and deficit talk. Last night the big story was the new proposal by the Gang of 6. It’s political theater.

Getting back to Caro’s LBJ. I’m currently reading about Johnson’s lack of a legislative record during the course of his time serving in the House. Caro points out that while LBJ ran for his Congressional seat shouting , “Roosevelt, Roosevelt, Roosevelt any chance he had, and promised to be a backer of the New Deal, he was silent when it came to debate on almost every issue of the day. It wasn’t like there weren’t major issues being debated.

I was struck by what I came across on page 550. I have to admit I don't know much about this recession in '38 and need to do more research. According to the US Bureau of Labor statistics the US unemployment rate hit 19%, up from 14% in ’37. To quote Caro,

Most significant of all, 1938, the year in which the New Deal had to face its own recession, was the year of the great debate in Washington over whether to fight that recession with mammoth new spending programs , or whether a balanced budget—the balanced budget which the President himself so devoutly wished for--- was more important: an issue whose resolution was to affect the fundamentals of American life for years, if not decades to come.

Sound familiar?

Game Change

2011-07-05T11:42:00.000-07:00

I finally got around to reading Game Change, the book heralded as the inside story on the 2008 Presidential Campaign. The book benefited from a lot of buzz when it was released but I'm glad I waited a year plus to pick it up. We are right in the middle of the early stages of the next presidential campaign so the reading was timely as a look back. The book did illustrate how vacuous these campaigns are. There is no off-season in American politics now. The campaign and the associated media coverage is another form of entertainment. Another way to waste time between NFL games.

At the same, reading the book now and having two and a half years to look at Obama's body of work as President...something I wouldn't have been able to do had I read the book when it first came out solidified my view that our politicians really don't have much of a plan to deal with the numerous problems we face now.

It ends up, I'm even more cynical now after having read the book then I was before and that is saying something. I shouldn't be so naive but Game Change makes it obvious that the only thing serious about the presidential candidates is their "personal brand" and the public perception of that brand. The candidates, whether Obama, Hillary, McCain or John Edwards are bereft of any real solutions. It's all about the brand and all about them.

John Heilemann and Mark Halperin write a book in the Bob Woodward model. There are no footnotes, but the reader is privy to many closed door meetings and numerous anecdotes as to what a candidate was "thinking" at particular moments during the campaign. I have a problem with the integrity and accuracy of the information presented. For example there is a story recounted on page 17 of a 2004 Hillary Clinton conversation with a Reuters reporter at the NY State Fair... in Albany. The problem is that the NY State Fair is in Syracuse, there is no State Fair in Albany. It might seem like nit-picking, but how much can I trust the accuracy of closed-door dialogue and unaccredited sources when something I can check is just flat out wrong? It makes me wonder how much of the story is just a fictionalized account.

Reading Game Change didn't help this particular 2008 Obama voter be any more enthusiastic about supporting him this time around. Hope and Change are turning out to be nothing more than a neat advertising pitch.

Batty Bachmann and more pressing issues

2011-07-01T12:58:00.000-07:00

My friend Jane Hill sent me a note the other night sharing the latest Matt Taibbi Rolling Stone piece. This one was a thorough hatchet job on the new GOP contender Michelle Bachmann. While I agreed with Jane that it is disturbing that someone as vacuous as Bachmann has emerged as a contender to lead the nation, my belief is that this political posturing is just more of the same.It's a game that keeps us entertained while we wait for the NFL season. Meanwhile our attention is diverted from issues and stories that are more pressing.

Three examples for this week that haven't had quite the same media play:

1) Minnesota on the verge of shutdown--- ( I guess it's official they have had a state shutdown). $5 billion budget problem.

2) The city of Annapolis, the Maryland capital needing to borrow $10 million to pay its bills. I know they will be flush in the fall with tax receipts. We've heard that before. As a result they will be paying $150-200K for these borrowed funds.

3 The state of New Jersey borrowing $2 billion+ from JP Morgan for a bridge loan at 9% interest so they can pay their bills. That's the same JP Morgan the taxpayers have bailed out through the Fed and Treasury with o% money..... brilliant.

Michelle Bachmann could be the least of our problems right now.

A Video Product Brochure

2011-06-28T11:11:00.001-07:00

I spend a large % of my waking hours in the B2B digital world. While it's nice to see more and more companies embrace web video as a way to engage their customers I am amazed at how many still are slow to take that step. My production team, CNPG Media is top notch. The example shown here is what we call a Product Brochure video. Think of it as a printed brochure brought to life. I like it.

It's the debt Stupid!!!

2011-06-27T18:49:00.000-07:00

Came across this on Zero Hedge and it explains in a sentence or two why none of our government stimulus activity is showing any results at this point. You don't need a PHD in economics to understand. Hat tip to David Rosenberg and Zero Hedge

U.S. consumers have 30% more credit card and other revolving debt on their balance sheet than they did just a decade ago. While outstandings are down 6% from the peak, there is still considerable contractions to go before household debt levels revert to the mean relative to both income and assets.

Releasing Strategic Petroleum Reserves.... Why?

2011-06-23T14:42:00.000-07:00

I often lament the lack of leadership in both our government and corporate world. The story out today about us releasing oil out of the SPR for the summer driving season takes the cake. Another example of short term expediency instead of thoughtful planning and leadership. The SPR by name is supposed to be strategic. A little cheaper priced gas at the pump just doesn't fit the bill.It's just a cheap political stunt. Something I would expect from Chuck Schumer, not the President. So sad to see utter incompetence.

http://www.nytimes.com/2011/06/24/business/24oil.html?hpw

Latest GOP Poll #'s and Ron Paul

2011-05-26T11:51:00.001-07:00

It's interesting how little respect Dr. Ron Paul gets from the decision shaping main stream media.. and that includes FAUX News. The latest Gallup results are posted up top and the obvious standout is how weak a front runner Mitt Romney is. At the same time, pretenders like Pawlenty, Huntsman, Santorum get much more mention and ink than their #'s would warrant.

The reason I even bring it up is that Ron Paul has been a consistent voice for years against our ongoing wars and against ongoing government spending.The wisdom of those positions is becoming clearer by the day, but is still not a message our media leaders want conveyed.How else to explain it?

Does Santorum Mean "IDIOT"

2011-05-18T08:00:00.000-07:00

Rick Santorum has said a number of stupid things over the course of his public life, but this one just might top it all. It's amazing that this is what passes for "political leadership". This guy is running for President?

Former Sen. Rick Santorum said Tuesday that Sen. John McCain, who spent 5 1/2 years enduring brutal treatment at the hands of his North Vietnamese captors, doesn't know how effective waterboarding and other harsh interrogation techniques can be

http://news.yahoo.com/s/ap/us_bin_laden_torture_republicans

Bank America to Charge 29.99% On Credit Cards

2011-05-09T13:27:00.000-07:00

Let's look at the Big Picture. The US is a "consumer driven" economy. The consumer relies on credit to satisfy his/her fix. The economy continues to show lackluster growth that causes our friend at the Fed Ben Bernanke to keep "interest rates" low---almost 0 %. That near 0% is what our friends "the Banksters" pay to borrow money. You dear consumer if you need to carry a balance with an institution such as Bank America will be paying just about 30% annually on that balance.

Thank goodness the Fed is keeping rates low!

http://dailybail.com/home/bank-of-america-to-start-charging-30-on-credit-cards.html

March Madness: U.S. Gov’t Spent More Than Eight Times Its Monthly Revenue

2011-04-05T14:41:00.001-07:00

There is not much more to say about this. The headline tells it all. It will work until the day it doesn't. http://cnsnews.com/news/article/march-madness-feds-spent-more-eight-time

Yearly Interest Expense On The National Debt Is????

2011-04-03T17:37:00.001-07:00

As we head into a potential government shutdown this week and watch our political "leaders" flap their gums, it is worth putting some $'s behind the rhetoric. The current political argument has to do with the amount of "spending cuts" for this fiscal year. The Dems are pushing for $10 billion while the Repubs say they want about $50 billion.

So maybe we'll see a compromise after all the nonsense at around $30 billion. This battle will provide plenty of opportunity for media mavens to get plenty of air time. "Liberals" and " Conservatives" will be at each other's throats. The nonsense spewed by Matthews and Maddow on MSNBC will rival whatever the knuckleheads on FOX have to offer. It's great entertainment. We need something to replace March Madness.

Here's the thing , interest rates are outrageously low right now and in all probably will be heading northward sometime in the reasonable future. With almost zero interest rates, our interest expense this year is $400 billion. These idiot politicians are jerking our chains with "political arguments" about $20-$30 billion. An uptick in interest rates could add another $100 billion in interest expense easily... and that could be conservative estimate. So before we all get into the heated political back and forth just remember it's all theater. It's tantamount to the proverbial adjustment of the deck chairs on the Titanic. http://www.treasurydirect.gov/govt/reports/ir/ir_expense.htm

The Strange Case Of Charlie Engle:Imprisoned For Taking A Liar Loan

2011-03-26T07:25:00.000-07:00

A big tip of the hat to Joe Nocera from the NYTimes for bringing attention to the Charlie Engle story, In Prison For Taking a Liar Loan. It is scary to read about what government bureaucrats will do once they put a person in their cross-hairs. The Nocera article is a great read. Given Engle's past association in film with Matt Damon, I wouldn't be surprised to see this in motion picture form.

Long story short, Engle used "stated-income" loans to speculate on real-estate during the bubble period of 2006-2008. He ended up paying the price of foreclosure, yet on top of all that he ended up being prosecution by the Feds for mortgage fraud. He is now serving a 21 month sentence in a Federal Pen. If anything good can come out of this, perhaps Engle's fortitude and benevolence can serve as an inspiration to not only his fellow inmates, but also to us on the outside. His blog is worth a regular read and a bookmark.

Interactive ads beat print in study of readers

2011-03-09T14:09:00.000-08:00

For many in the sales and marketing community the pressure to produce more with less has been relentless. The need to demonstrate a return on marketing spend has become a necessity. Given these forces, this recently released study by Alex Wang, PhD commissioned by Adobe makes for a fascinating read .

You can read the Executive Summary here.

I have often presented the argument that interactive digital advertising offers a more captivating and engaging messaging vehicle than the traditional print approach but until I read this study I was operating more on intuition than anything else. Granted, the subjects in the study were at the oldest 32 years old, but if the intent of your marketing is to engage and involve your customers and prospects in your messaging the study offers food for thought .

In essence this study set out to answer a couple questions:
1) Can Interactive ads (ads that enable motion, sound, animation) in a digital magazine format generate stronger engagement, involvement and brand awareness than static ads in a print magazine.
2) Can higher interactivity generated by an Interactive ad generate stronger brand recall, engagement, message involvement, attitude, and purchase intention than a static print ad
3) What are the relations among interactivity, engagement, message involvement, attitude, and purchase intention

The Prodigal Son

2011-02-26T06:54:00.000-08:00

Last Sunday, which in the Orthodox Church calendar is two Sunday's preceding the beginning of Great Lent, the designated gospel reading came from Luke 15:11-32, the parable of the Prodigal Son. Sometimes these parables take on a vague familiarity in that we know the details of the story but somehow miss the essence of the message. This particular parable is a familiar one and tells of how the younger of two sons asks for his inheritance, leaves his father and wastes his inheritance on "prodigal living". As he hits rock bottom he decides to return to his father as a servant , for even his father's servants live better than he, in his current state. The story takes on a twist as the returning son is greeted by his father with celebration and a great feast. When the older son, who over the years had worked side by side with his father and stayed true, hears of this celebration he becomes angry, in that for all his loyalty he never was given a party or celebrated. The story ends with the father explaining to his older son the joy that he feels from the return of his "dead son".

What's the message we are to take from this? This parable, while a simple story, is multi-layered and offers several foci.It's interesting to note that the parable is read just as we are preparing to enter a period devoted to concentrated repentance and prayer, Great Lent. While we may not think that we are that Prodigal Son, evidence suggests that in so many ways we behave in exactly the same way as he does. We take our inheritance, God's adoption of us as his children and his call for us to inherit His Kingdom, and we "waste" it in pursuit of our own interests and the vanities of our worldly existence. Great Lent is an opportunity to come to our senses, just as the Prodigal Son did when he was in a foreign land, wasting away amongst the swine.

It is natural and easy upon a concentrated reading of this parable to go down many roads of contemplation. Sometimes it helps to keep things simple. In the verses just before this parable (Luke 15:1-10) Jesus shares two examples, the first a shepherd rejoicing over finding one lost sheep from his herd and the second of a woman rejoicing as she found a lost coin, to illustrate the joy in heaven over the repentance of a sinner.

As we enter Great Lent, let's pray that we might emulate that younger, prodigal son, who "came to himself",repented and returned to his father, that similarly there might be that "joy in the presence of the angels of God over one sinner who repents".

The Lord said this parable: "There was a man who had two sons; and the younger of them said to his father, 'Father, give me the share of the property that falls to me.' And he divided his living between them. Not many days later, the younger son gathered all he had and took his journey into a far country, and there he squandered his property in loose living. And when he had spent everything, a great famine arose in that country, and he began to be in want. So he went and joined himself to one of the citizens of that country, who sent him into his fields to feed swine. And he would gladly have fed on the pods that the swine ate; and no one gave him anything. But when he came to himself he said, 'How many of my father's hired servants have bread enough and to spare, but I perish here with hunger! I will arise and go to my father, and I will say to him, 'Father, I have sinned against heaven and before you; I am no longer worthy to be called your son; treat me as one of your hired servants.' And he arose and came to his father. But while he was yet at a distance, his father saw him and had compassion, and ran and embraced him and kissed him. And the son said to him, 'Father, I have sinned against heaven and before you; I am no longer worthy to be called your son.' But the father said to his servants, 'Bring quickly the best robe, and put it on him; and put a ring on his hand, and shoes on his feet; and bring the fatted calf and kill it, and let us eat and make merry; for this my son was dead, and is alive again; he was lost, and is found.' And they began to make merry. Now his elder son was in the field; and as he came and drew near to the house, he heard music and dancing. And he called one of the servants and asked what this meant. And he said to him, 'Your brother has come, and your father has killed the fatted calf, because he has received him safe and sound.' But he was angry and refused to go in. His father came out and entreated him, but he answered his father, 'Lo, these many years I have served you, and I never disobeyed your command; yet you never gave me a kid, that I might make merry with my friends. But when this son of yours came, who has devoured your living with harlots, you killed for him the fatted calf!' And he said to him, 'Son, you are always with me, and all that is mine is yours. It was fitting to make merry and be glad, for this your brother was dead, and is alive; he was lost, and is found.'"

U.S. Dance With Ruthless Dictators Coming To An Ugly End

2011-01-30T14:34:00.000-08:00

President Obama has to walk a thin line as protest in Egypt continues to grow. There are disturbing reports now that "agent provocateurs" are involved in looting activities, thus somehow justifying a "government"crackdown. When you get into bed with scum it can blow up in your face real easy and I think we are about to find out how ugly it can get. The Egyptian rioting has the potential to spread throughout the Arab World . We've supported anti-democratic Arab leaders for a long long time . As the voice of protest and freedom mobilizes on the streets of Cairo it doesn't help that the weapons used by government forces to crack down bear a "made in USA" imprint.

Obama promised "change we can believe in". Here's his chance. How about starting out by ceasing financial aid and support for anti-democratic, dictators... Hosni Mubarek for example. This might be wishful thinking on my part, but why can't we, the US, win the support of the "Arab Street" here and show ourselves to be a friend of freedom and self-determination?

Jeff Immelt The Job Creator

2011-01-21T13:07:00.001-08:00

President Obama has come to Upstate NY on this icy,snowy Friday to tout his focus on job growth. As part of this effort he appointed Jeff Immelt, GE CEO to be his chief outside economic advisor. This is somehow supposed to illustrate the Administration's job creation focus.

There's only one problem: Jeff Immelt hasn't created jobs, he has actuaaly been a job destroyer.

GE finished 2009 with 18,000 fewer US workers than it had at the end of 2008, and US headcount is down 31,000 since Immelt’s first full year in 2002. During his tenure, GE workers based in the US as a percentage of total employees has fallen to 44% from 52%.

MLK Remembered

2011-01-17T08:12:00.000-08:00

When Martin Luther King Jr. is remembered one of the first things that usually comes to mind is his "I Have A Dream Speech". I prefer to call attention to his April 1967 oration at the Riverside Church entitled: Beyond Vietnam: A Time To Break Silence.

This was a controversial yet powerful MLK presentation. What King was doing here was moving beyond the role of "civil rights leader" to a vocal role of opposing the US Government and its' prosecution of the war in Vietnam. This position certainly did not win King many friends in powerful places. Is it a coincidence that he was gunned down a year to the day of delivering this homily.

King wasn't perfect, but then again none of us are. In this Riverside Church speech he emerged as a moral leader and spokesman and demonstrated a courage is rare in any era.

Finally, as I try to delineate for you and for myself the road that leads from Montgomery to this place I would have offered all that was most valid if I simply said that I must be true to my conviction that I share with all men the calling to be a son of the living God. Beyond the calling of race or nation or creed is this vocation of sonship and brotherhood, and because I believe that the Father is deeply concerned especially for his suffering and helpless and outcast children, I come tonight to speak for them.

This I believe to be the privilege and the burden of all of us who deem ourselves bound by allegiances and loyalties which are broader and deeper than nationalism and which go beyond our nation's self-defined goals and positions. We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy, for no document from human hands can make these humans any less our brothers.

And as I ponder the madness of Vietnam and search within myself for ways to understand and respond to compassion my mind goes constantly to the people of that peninsula. I speak now not of the soldiers of each side, not of the junta in Saigon, but simply of the people who have been living under the curse of war for almost three continuous decades now. I think of them too because it is clear to me that there will be no meaningful solution there until some attempt is made to know them and hear their broken cries.

Ike's Farewell Speech --50 Years On

2011-01-15T06:42:00.000-08:00

January 17, 1961 President Dwight Eisenhower delivered a valedictory most famous for his warning of encroaching power by the military industrial complex. Jeremy Grantham, in this re-examination of Ike's speech focuses on another aspect that we all really should contemplate.

"As we peer into society's future, we – you and I, and our government – must avoid the impulse to live only for today, plundering for, for our own ease and convenience, the precious resources of tomorrow. We cannot mortgage the material assets of our grandchildren without asking the loss also of their political and spiritual heritage. We want democracy to survive for all generations to come, not to become the insolvent phantom of tomorrow."

We as a society are entering a demographic nightmare that will surely strain the safety nets of our social fabric. I am talking about the aging and retirement of the baby boom generation. At a time when we need to harness our financial savings we as a society are eating our seed corn. As we ask the next generation to take care of us in our twilight years ,we , my generation needs a sobering self examination. What are we doing to help this next generation in this task. For example as Grantham states,"leaving them with no national debt and an impeccably up to date infrastructure".

The sad answer is : not much.

Laissez- Faire Conservatism vs. The Progressive Tradition

2010-12-15T11:07:00.000-08:00

David Leonhardt writes a fascinating piece in today's Times, detailing the many year philosophical battle waged between American conservatives and American progressives. In this particular example he uses the health care debate as his centerpiece.

I appreciate how important laissez-faire has been in America's development, but I'm amazed at that camps utter opposition to any "big picture change". Social Security, overtime, integration, civil rights-- all bad according to my right-wing friends. Ronald Reagan led the charge against Medicare. It's kind of funny now looking back at his arguements againt the program--- oh my "socialized medicine." We are going to have trouble paying for many of these "progressive" ideas as we move on, but that is a totally different conversation.

The federal income tax, a senator from New York said a century ago, might mean the end of “our distinctively American experiment of individual freedom.” Social Security was actually a plan “to Sovietize America,” a previous head of the Chamber of Commerce said in 1935. The minimum wage and mandated overtime pay were steps “in the direction of Communism, Bolshevism, fascism and Nazism,” the National Association of Manufacturers charged in 1938.

After Brown v. Board of Education outlawed school segregation in 1954, 101 members of Congress signed a statement calling the ruling an instance of “naked judicial power” that would sow “chaos and confusion” and diminish American greatness. A decade later, The Wall Street Journal editorial board described civil rights marchers as “asking for trouble” and civil rights laws as being on “the outer edge of constitutionality, if not more.”

US Budget #'s for November--Can't Make It Up

2010-12-10T12:37:00.000-08:00

This is an eye-opener. The Treasury released the budget deficit numbers for the month of November. On the income side of the ledger we had an inflow of $148 billion. Here is the amazing part: we spent $ 299 billion. I keep on saying that this madness can't continue forever. We shall see.

Read more at ZEROHEDGE

American Citizen or American Consumer: Who Are We?

2010-11-26T16:33:00.000-08:00

The news reports today on "Black Friday" are proclaiming a return of the American consumer. This article featured prominently in the NYTimes paints the picture:

Malls across the country reported overflowing parking lots, and stores reported lines out their doors, as Americans seemed — finally — to be spending again. ...

There seemed to be a resurgence in spending on discretionary items, a bright spot for an economy where nonessential spending has been weak.

I hear a line repeated often since the horrors of 9/11. "They hate us for our way of life". What does that mean?More and more it seems to me that "our way of life" is an endless quest for "things". We define economic progress by measuring nonessential spending.

When I was a kid and a member of the Boy Scouts, there were two merit badges that stood out above all others: Citizenship in the Community and Citizenship of the Nation. What we learned as we studied to fulfill the requirements for these badges were the responsibilities that come with being a member of the local community as well as the responsibilities of being an American. It was a proud day for me when I earned those two badges. Maybe this is a slight exaggeration but it sure seems like the only responsibility for citizens/consumers today is to spend, spend, spend.

If we could only grow our way out of this economic mess

2010-11-17T09:09:00.000-08:00

One of the most frustrating sideshows of the economic meltdown is the simplistic, pedestrian coverage and analysis offered by our media leaders. Take for example this article in today's NYTimes. The focus of the piece as stated in the title is that economic growth and an economic environment that cultivates growth can be a big help in our effort to cut our deficits:

If the economy grew one half of a percentage point faster than forecast each year over the next two decades — no easy feat, to be fair — the country would have to do roughly 40 to 50 percent less deficit-cutting than it now appears, based on my reading of budget data from the economists Alan Auerbach and William Gale.

The article goes on to talk about how economic growth was instrumental in the surprising turn in the '90's from deficit to surplus. The article lacks any in-depth analysis of how or why this economic growth in the 90's came about. The boom of the '90's was brought about in large part because of the Internet build out and cheap abundant credit.The Internet boom started out legitimately but degenerated in many ways into a glorified ponzi scheme.

I believe what we saw in those years was a continuation of Alan Greenspan's easy money policies that began after the '87 stock market crash and continued throughout the '90's.It was one crisis after the next: Latin America, Russia, the LTMC fiasco, the Asian tigers. One excuse after the next to simulate. Remember "irrational exhuberance'?

Post 9-11 we went through the same scenario, this time it was housing that was the bubble of choice. All through this cycle we as a society have delayed making responsible financial decisions. Instead we have spent $ we don't have, run up the credit card to a point where we are at our limit and instead of bracing for tough, difficult choices our media elite offer a bromide: we can grow our way out of trouble. Good luck. It's not going to happen.

Karl Denninger does a great job of laying out the math of our current situation in many of his posts. It's time for us as a nation to understand reality, rather than continually wishing upon a star. As Yogi Berra once said, "It's getting late early here".

Election Day 2010--What Does It mean?

2010-11-01T08:56:00.001-07:00

Tomorrow, November 2 is Election Day in the USA. Take your pick of bad news: unemployment, mortgage mess, ongoing war , tax increases, it looks like we will see the public embrace the "throw the bums out" approach in the voting booth. That probably isn't all together bad because there sure are a lot bums up on Capitol Hill and we really do need fresh blood and fresh ideas. What bothers me is that I just don't see any fresh ideas on the horizon.

The chart at the top of this post deserves a close look. The pundits have frequently offered the opinion that Obama is anti-business and that his business antipathy is a major factor behind our "jobless recovery". The truth is though private sector job growth has been plunging over the past 10 years to become non-existent. As far as jobs are concerned, the only real growth since 2000 has come through government jobs. Sure, that is no recipe for real sustainable growth, but the point is this economic environment wasn't hatched overnight. In some ways it is amazing that it has taken this long for Joe Q Public to get "mad as hell". I guess that is the magic of stimulus scams, pull-forward demand programs and various bubbles stoked by Greenspan/Bernanke and cronies . Yes, the public is pissed now and there will be a new roster come Wednesday morning.

What does this new crew think they are going to do? Let's see how serious Americans are about adopting an austerity program. My gut tells me, not very.

A Cool Tool Inside Google Analytics

2010-09-16T08:07:00.000-07:00

Through numerous conversations over the past couple years I have come to the realization that there are different levels of sophistication in the sales and marketing community when it comes to Google Analytics. This recent blog post by James Constable explains what he calls a "hidden gem" within Google Analytics. Instead of relying on number tables to try to analyze the effectiveness of your campaigns, you can create easy to analyze charts to tell the story. It's true, a picture is worth a thousand words. Constable uses print screens to walk you through the process. His post is a great read for anyone using Google and Google Analytics.

As long as we are on the subject of web analytics, 7 Ways Web Analytics Can Improve Your Marketing is worth a quick read as well.

Analyzing YouTube Video Stats

2010-08-20T13:14:00.000-07:00

CJ Bruce offers a comprehensive overview of the YouTube analytical tool, YouTube Insight.One of the neat things he points out is that you can gather a tremendous amount of intelligence about your own video performance BUT you also have the capability of looking at the stats of any other YouTube video-- including those of your competition.

Online Video 53 Times More Likely Than Text For First Page Google Ranking

2010-08-19T08:05:00.000-07:00

That is what Forrester Research recently found and that is one of the reasons I bring up video in every conversation I have with clients and prospects. Many in the Online space believe that over the next 3 to 5 years video will be more pervasive than text. One of the other major reasons marketers are embracing Online video is that there is not another weapon in the marketing arsenal that cuts across all aspects of the customer life cycle. Video can be used at each and every stage. It helps generate awareness and interest in the early stages. It can be used in promotions and as an influencer in the purchasing stage and finally it can be used to maintain customer loyalty. In addition to all of the above video is the single best medium to engage and delight our target audience--the scientific/analytical world. It is fully measurable and a great way to generate sales leads.

Immediate E-Mail Follow Up--It's Imperative !

2010-08-18T13:29:00.000-07:00

Marketing-guru and author Sally Hogshead likes to say that humans have the attention span of a goldfish---9 seconds. With that lack of attention span in mind,what is the optimum time for e-mail follow up in the lead cultivation process. How about immediately! One way to measure prospect engagement is to look at the click-through rate of a specific e-mail.Given how hard it is to generate " good-leads" it is amazing how just a little delay in our response to these leads can effect what happens next.

This recent blog post by Mike Volpe of Hubspot documents the decline in click through rates for an e-mail lead-nurturing campaign over multiple days after a website lead conversion. In other words, each and every day delayed in follow-up could result in 3 times less of a CTR compared to immediate follow up. These numbers really bring out the importance of staying on top of the lead nurturing process. Tardy follow up can be deadly.

I think there is one other lesson to be gleamed from the stats. If roughly 7%, at best, of our leads are engaging with our nurturing messaging is it really possible to have too many good qualified sales leads? One of the messages I get is that we all need more leads.

Crooks,Clowns, Cronies and Con Men--A Portrait of our Federal, State, and Local Political Leadership

2010-08-09T19:24:00.000-07:00

I had some time this past weekend to catch up on my current events reading. It might appear from the title of this post that I am being unfair to those in the political class. I am sure we all know some hard working, decent people who have given their professional lives to politics and government, but on balance I think we are stuck with a bunch of sad sacks, political party be damned. I would even go a step further and add business leaders to the 4-C moniker. Over the past several years I have witnessed some pathetic examples of business leadership. It sure is sad, but we truly are reaping what has been sown.The articles highlighted below are just things that popped over the past couple days. A potpourri of craziness.

Exhibit 1-- Denver School System raped by bankers: Superintendent gains promotion to the US Senate.

There are multiple issues in this story. How did the Denver School System get in a situation whereby they were staring at a $400 million unfunded liability. The School Board's solution was to enter into a derivative "swaps" agreement with JP Morgan. The end results of their financial efforts: they still face a $400 million shortfall and still owe another $400 million because of the Morgan deal blew up in their face. The best part though is the guy that orchestrated the deal, the Superintendent of Schools at the time, Michael Bennet was eventually appointed to fill a vacant US Senate seat. He has the full support of the Obama Administration as he faces his constituents in a Democratic primary today. His explanation for the fiasco, "Nobody could have seen the financial crisis coming". Right

Exhibit 2--Matt Tiabbi skewers the players and pawns of both parties in the fiasco that is FinReg. I think it might have been Karl Denniger who pointed out that the Glass-Steagall Act was 40 pages and we would have been better off just reenacting it rather than wasting time with the new 2000 or so page piece of garbage that we are now stuck with.As Taibbi so skillfully points out, you would have to be worse than naive to believe that the cast of characters in DC are working for "we the people". The plutocracy is getting taken care of across the board. I knew Mitch McConnell was in the tank, but shame on Chris Dodd, Barney Frank, Blanche Lincoln and a host of others.

Exhibit 3 -- This story boggles the mind. How about an August surprise where the Obama Administration orders Freddie and Fannie to forgive the mortgage debt on "underwater mortgages"--loans where more is owed than the home is worth. I don't even have a comment to offer on this one.

I'll leave the issue of massive unfunded pension liabilities out of this rant. That's for another day. Something to ponder, given all the problems we face at the municipal, state,and federal level plus $3 trillion ( yes TRILLION) of unfunded liabilities staring us in the face, why would anyone put their neck on the line and seek an elected position in government. I hate to be cynical, but even those who flat out suck seem to do well financially once they do their government "service". It's the new fast track to wealth in our economic system.

The Sad State of Our Political Affairs

2010-07-23T20:50:00.000-07:00

There is not much to say. I fired up my computer and was confronted with this story about Charlie Rangel's Ethics Committee problems. ( my home page is the NyTimes) There isn't any commentary necessary. It's another sad example of a "Public Servant" who really isn't a public servant--- shame on me, I always respected Charlie.

I thought I'd take a quick peak at Mish's site to see what I missed in the economic world. It was Opening Day at Saratoga after all. Right after reading about Rangel I come across this about the political operatives in Bell, Ca. and all I can offer is that it is almost impossible to have any faith in our current structure. I am open to any suggestions. Maybe it's possible to label these two stories as "bad apple outliers" but I fear that that is wishful thinking.I quoted the Psalms last post, why not Ecclesiastes this time:

For with much wisdom comes much sorrow; the more knowledge, the more grief."

I might not put Hemingway in the same category as Scripture, but this line sums it up just as well:

"Was there ever a people whose leaders were as truly their enemies as this one?" - Ernest Hemingway, For Whom the BELL Tolls, Ch. 13

Paul Krugman's Latest-- A Misplaced Faith in the System?

2010-07-12T07:02:00.000-07:00

Paul Krugman has a Nobel Prize for Economics and I don't. The argument could be made that he knows a hell of a lot more about economic issues than I do but after his Op-ED piece today lambasting the FED and Ben Bernanke I am wondering whether Professor Krugman and his economist brethren have an overblown faith in the economic system and in the powers of Central Bankers and policy makers to effect the economic system.

Krugman's article criticized Bernanke and the FED for not going the extra mile in combating the problems in the economy. Krugman believes and he points out that Bernanke also clings to this belief that the FED does have extra tools at its' disposal to fight the deflationary spiral the economy is facing. For example.

" It can buy longer-term government debt. It can buy private-sector
debt. It can try to move expectations by announcing that it will keep short-term rates low for a long time. It can raise its long-run inflation target, to help convince the private sector that borrowing is a good idea and hoarding cash a mistake.
Nobody knows how well any one of these actions would work. The
point, however, is that there are things the Fed could and should be doing, but isn’t. Why not? "

I stopped "officially" studying Econ after my sophomore year at Colgate. A semester of Macro and trying to get my head around the Edgeword Box Diagram drove me over the edge. Economics is called the "dismal science" but labeling it a science is inaccurate and an attempt by those who practice it to elevate the intellectual importance of their craft.

It really isn't rocket science. Our economy went through a multi-year process whereby all we did was stimulate it. We went from .com boom to post 9-11 zero % financing to house flipping, to house as ATM consumption. We stimulated ourselves to "pull-forward" demand for probably the next decade. I don't know what these prize winning economists don't get about that. We are in a spot where there is nothing left to stimulate. A substantial % of US homeowners owe more on their home than it is worth. We have a debt hang-over on a personal level, a local government level, a state government level and the Federal government level yet somehow good Professor Krugman is looking to convince us that borrowing more is the answer to our problems.

Krugman and his crew worship at the altar of a false god. For whatever reason they have "faith" in the wisdom of policy and policy-makers. As he stated in today's column:

Like other economists, myself included, Mr. Bernanke was deeply disturbed by
Japan’s stubborn, seemingly incurable deflation, which in turn was “associated
with years of painfully slow growth, rising joblessness, and apparently
intractable financial problems.” This sort of thing wasn’t supposed to
happen to an advanced nation with sophisticated policy makers.

King David had something to say about this many years ago. Krugman's misplaced faith reminded me of it--Psalm 146:3-4. We might all be better off keeping the giant slayers' words in mind as we continue to listen to prescriptions offered by our monetary princes.

Put not your trust in
princes,

nor in the son
of man,
in whom there is no help.
4
His breath goeth
forth,

he returneth to his
earth;
in that very day his thoughts perish.

Tom Friedman is Freakin Annoying

2010-06-12T19:21:00.000-07:00

Tom Friedman gets paid big bucks to pontificate to us on the pages of the NYTimes. I'll never forget how James Howard Kunstler described a Friedman piece on alternative energy--something to the effect of "he's blowing green smoke out his ass", well as far as I'm concerned he's doing it again. In his Sunday column, Freidman takes the opportunity to opine on the BP oil spill and how this is our opportunity to change as really we are all responsible for the predicament we find ourselves in. ( Just a digression on the BP spill but what's up with the live cam shots on the CNN, CNBC etc. of oil seeping out in real-time? What's the point?)

At face value maybe Friedman has a point but his recipe is laughable. I'll let him spell it out:

"We have to use this window of opportunity to insulate ourselves as much as possible against all the bad things we cannot control and get serious about fixing the problems that we can control. We need to make our whole country more sustainable. So let’s pass an energy-climate bill that really reduces our dependence on Middle East oil. Let’s pass a financial regulatory reform bill that really reduces the odds of another banking crisis. Let’s get our fiscal house in order, as the economy recovers. And let’s pass an immigration bill that will enable us to attract the world’s top talent and remain the world’s leader in innovation. "

Friedman is a creature of the establishment. In his world some kind of legislation is going to get us moving to solve our problems. He doesn't get it, we are so far beyond that at this point that his cries ring hollow. Day after day hard working Americans have less and less reason to believe that the professional politicians who sit in various legislatures have any answers for the multitude of problems we as a society face. Think of kidding, take a look at what my own state legislature is proposing. They are going to borrow from the state pension fund to lend to that same pension fund. Yeah Tom, legislation is the answer to our problems.

Top 5 Social Media Tips for C-Suite Execs

2010-05-12T11:02:00.000-07:00

As I read this educational post on Mashable this morning I couldn't help but think back to a dinner conversation I had with my client and friend Walter a couple weeks ago when we were both in NYC for a Trade Show. Walter is in the pump business, double diaphragm pumps to be specific. He brought along a colleague from his office, Eric, who handles the social media responsibilities for the organization. It was fascinating listening to these two 30 somethings talk about where they saw things going on the social media front and how important it was going to be for their business. Now keep in mind .Walter is not in the most glamorous of businesses --in fact his business is rather old school when it comes to embracing digital marketing, let alone Twitter, Facebook, blogs etc. One of the things Walter said really stuck with me as he talked about how ubiquitous social media will be in our sales and marketing lives over the next couple years. He said, "Remember 15 years ago, almost nobody used e-mail. When e-mail first came out, all I heard was why do we need it."

No question the younger crowd is totally engrossed in the digital world. As the Mashable post points out, for upper level management in today's business world social media is an unpracticed art. That is going to change, I think pretty quickly. The business environment is changing in dramatic fashion and these changes are coming at us warp speed. Those in the executive suite who don't adapt to this changing world will find themselves ex-management in the not too distant future.

Top 5 Social Media Tips by Jennifer Van Grove

Go where the people are
Invest in people
Be a subject matter expert
Make it personal
Don't neglect internal social media

Where Are We In The Housing Correction?

2010-05-11T13:59:00.000-07:00

If you believe what T2 Partners has to say in this recent report the sane approach might be to continue to rent for the time being ---if you have that option. I realize it is human nature to always look for the silver lining and that we have suffered through almost two years of housing price devastation, but a study of the chart at the top of this post surely indicates more pain coming as ALT-A Option ARMS are re-set later this year and into next.

A couple amazing stats for the above mentioned T2-- Whitney Tilson research piece:

14%+ of all mortgages on 1-4 family homes were delinquent or in foreclosure in Q4 2009

Of homeowners who haven't made a payment in a FULL YEAR- 23% haven't been foreclosed upon

If home prices were to drop another 10%, the percentage of underwater homeowners would increase by 50%+

HELOC delinquencies are soaring

I still believe a double-dip recession is in the works. Be careful out there.

Tough Times At My Old Kentucky Home

2010-04-29T12:55:00.000-07:00

This Saturday is Derby Day. No question the Kentucky Derby is a cornerstone in the pantheon of American sports events. Even though I am a big horse racing fan, I haven’t been paying attention to the economics of the sport and as a result this Joe Drape article in the Times surprised me. It shouldn't have. When the financial history of this era is written it will rival any of the classic mania’s of yesteryear. Take your pick of asset, art, dot-com, vacation house ---the Drape story talks about 6 figure breeding rights that are now worth something in the order of 10k. What were we thinking I guess we weren’t and that was the problem. When it’s all said and done we are not any different than the Dutch in the 1600’s willing to bid up tulip bulbs to astronomical price levels.

Debt Hangover

2010-03-31T13:39:00.000-07:00

Spring is here in the Northeast and along with green shoots in the ground there is continued talk in the financial media about green shoots in the economy. There will be conflicting bits of data reported, but no matter what anyone tells you to the contrary, there is no way we can experience any meaningful recovery as long as we continue to have the debt overhang in our system. The chart at the top of the post is a staple in articles written by Denninger, Mauldin, Mish and Jesse among others. It really deserves a second and a third look.

It's real simple, most of the reported growth we experienced going back to the early '80's was the result of adding leverage to the system. The thing is, we have to service that debt with interest payments and ultimately pay back the principal. How are we going to have future growth with that mountain in front of us? Many people I read believe that default is inevitable, whether that be through inflating the currency or outright default. The math just doesn't work.

The pathetic state of many of our individual states is finally being brought to light by the mainstream press. If California, New York and others end up getting a bail out the debt line will only get bigger. Is it possible? I guess we'll find out.

Saint Patrick's Day

2010-03-17T07:17:00.000-07:00

I'm trying to figure out how a holiday commemorating the patron saint of Ireland has become a day filled with alcoholic intake. Maybe this is another example of the ongoing Hallmarking of all aspects of American life. One of the ironies is that Ireland has now begun to copy the bacchanalic aspects of the feast. Twenty-thirty years ago Saint Patrick's Day in Ireland looked like this:

In fact, all the pubs closed on St. Patrick's Day in Ireland. Families attended church and later went for a walk or worked in the garden.
The holiday was exactly that, says Carmel McCaffrey: a holy day.
"When I was a child in Ireland, the pubs didn’t even open. It was a holy day. We went to church," the Irish scholar and former Johns Hopkins professor said in a phone interview from Maryland. "We'd usually just meet up with friends and have a meal. There were no drinks."

That's not what you'll hear in Dublin today, as the holiday to remember the British missionary to the Druids switches focus from religion to revelry.

A couple interesting tid-bits, the story behind the story. March 17 is believed to be the date of Patrick's death. He lived in the fourth and fifth century and was born of Roman parents who lived in Roman- Britain. It's interesting how little is really known about him. Much of the writings about his life, and the legends that developed came from the 7th century and later.

It's hard to believe what his "day" has become. I'm not passing judgement one way or another. Just amazed.

And We Laugh at the Greeks

2010-03-12T08:52:00.000-08:00

I realize it is easy to snicker at the sham that is the Greek economy. This NYTIMES article illustrates the folly of their system--- 580 government identified job categories that merit early retirement + government pension at age 50 for women and 55 for men. It's hard to believe. Before we laugh too much at the Greeks maybe we should take a closer look at what is going on in our own country because it seems to me that we are moving down a parallel path.

The US February budget numbers came out the other day and there is no polite way to describe the mess we face. It's almost surreal that we are only able to fund a third of our expenditures ( we are borrowing the rest). What blows my mind is the fact that we as a national economy are coming off of a 30 year cycle of relative prosperity, yet we face huge unfunded entitlement obligations in the not too distant future with no money in the piggy bank and an unfathomable credit card bill. And I repeat, this is after several decades of prosperity. I couldn't do a better job of describing the February budget debacle than Karl Denninger of The Market Ticker does ( highlights below). If and when we lose the abiltiy to borrow cheaply it will not be pretty.

50% of the federal budget right now goes to entitlements.
This last month we posted a record $220.9 billion budget deficit. We took in $107 billion but spent $328 billion.
Isn't that special. We only funded 32% of expenditures?
Remember - entitlements were half of that $328 billion.
So let's see if we can do the math here.
Entitlements were about $164 billion last month in spending. The rest was, of course, the rest.
But we only took in $107 billion.
So even if we eliminated all entitlement spending we still did not have enough money to cover the rest.
Yeah.
If you want to know why the market is floating higher it's for the same reason you feel all giddy and special when you strike out on the town with your shiny plastic. You have magic cards!
It doesn't matter if you have a job, it doesn't matter if you have any money in the bank, so long as you have magic cards.
For how long does the United States continue to have magic cards?

New Michael Lewis Book -- The Big Short

2010-03-03T09:17:00.000-08:00

I love reading Michael Lewis. Lewis has the uncanny ability to capture uniqueness in the characters he writes about and in the process keeps the reader totally engrossed in the quest of his real-life protagonists. It doesn't matter if we are talking about a major league baseball general manager ( Money Ball), an inner-city black high school football player trying to fit in with his adopted white southern suburban family ( The Blind Side) or an Internet mogul looking for his next billion dollar score ( The New New Thing) Lewis's subjects are fascinating to follow.

I read an excerpt last night from the new Lewis book The Big Short I think he has another winner on his hands. Lewis has focused on one Michael Bury in his latest. Bury is a guy we've never heard of until now but boy is his story interesting. Picture a total loner, a guy that by the age of 29 really could say that he had no close friends.A guy that walked away from his medical profession to start a hedge fund ( at the time he had a negative net worth of roughly $100K) What Bury did have though was the desire and interest to fastidiously study hundreds of mortgage securities in the early years of the new century. He became convinced that the housing market was ready for a major tumble and his quest became finding a way for his hedge fund to profit from what he perceived to be an upcoming financial debacle.Others such as John Paulson have been chronicled as having been big winners in the mortgage meltdown, yet Bury was really the first one to identify the opportunity and until now has largely operated off the radar screen.The hoops he had to jump through to be successful were monumental. Many of the episodes chronicled go in the, " you just can't make this up" category. I am really looking forward to the book release as I found the excerpt to be " can't put it down" stuff.

Why It Might Be A Good Idea To Turn Off Cable News

2010-02-21T12:04:00.000-08:00

Ever since the Clinton impeachment saga of the late '90's, cable TV airways have offered a full menu of issue oriented news shows. What might have originally seemed like an effective vehicle for the audience to learn about complex issues of the day has instead turned into a cacophonous orgy of propaganda . Sebastian Jones exposed the insidiousness of the entire enterprise in this expose in the March 1 issue of The Nation.

Jones explains how many of the so called expert analysts brought on to address issues are really nothing more than paid mouthpieces for various corporate interests. The networks just don't bother to tell us the audience who exactly is buttering the proverbial bread for the guest experts.He goes on to point out that both sides of the ideological aisle are equal opportunity propagandists. In the end we the public lose. All too often that's been the outcome on numerous issues of the day. Jones nails it in the last paragraph of his piece:

Jay Rosen, a media critic and journalism professor at New York University, has a different take. "More disclosure is good--I'm certainly in favor of that--but why are these people on at all?" asks Rosen. "They have views and can manufacture opinions around any event at any time."
Rosen echoes something Brown mentioned to me. Watching cable news cover the 2008 election with more analysts crammed at one table than ever before--as if to ask, "How many people can we put on the set at one time?"--Brown said he was "amazed how little they had to offer." He went on, "We live in a time where there are no shortages of opinions and an incredible deficit of facts."

A CEO Who Gets It

2010-02-02T08:35:00.000-08:00

The New York Times Sunday Business section usually runs a column entitled, Corner Office. It is basically a discussion with a top business executive and the subject matter deals with the challenges of leading and managing. I especially liked this past weeks edition. The interview was with Mark Pincus, the founder and chief executive of Zynga,a provider of online social games.

The entire column can be read here. Three things stood out for me in the interview:

1) What Pincus looks for in a hire:

I keep my eye out for someone who has achieved a lot, so they’ve been
a great athlete or on a great team, but then something didn’t go quite right, and they’re still very hungry and want to be C.E.O. of something. I like to bet on people, especially those who have taken risks and failed in some way, because they have more real-world experience. And they’re humble. I also like to hire people into one position below where they ought to be, because only a certain kind of person will do that — somebody who is pretty humble and somebody who’s very confident.

2) What he looks for in leaders

This is another thing I really, really value: being a true meritocracy. The only way people will have the trust to give their all to their job is if they
feel like their contribution is recognized and valued. And if they see somebody else higher above them just because of a good résumé, or they see somebody else promoted who they don’t think deserves it, you’re done.
My approach is that you have to earn the respect of people you work with. And so, if you come in and you start bossing people around and they don’t want to work with you, they won’t. In our company, if you want to switch teams, you can. In hiring, it’s also a sign of a great manager when you tell me that there’s all these people
who want to come with you, or when you join us and we find other people are all sending us their résumés because you’re here.

3) How he manages

John Doerr [the venture capitalist] sold me on this idea of O.K.R.’s, which stands for objectives and key results. It was developed at Intel and used at Google, and the idea is that the whole company and every group has one objective and three measurable key results, and if you achieve two of the three, you achieve your overall objective, and if you achieve all three, you’ve really killed it.

We put the whole company on that, so everyone knows their O.K.R.’s. And that is a good, simple organizing principle that keeps people focused on the three things that matter — not the 10.

Then I ask everybody to write down on Sunday night or Monday morning what are your three priorities for the week, and then on Friday see how you did against them. It’s the only way people can stay focused and not burn out. And if I look at your road map and you have 10 priorities for you and your team, you probably don’t know which of the three matter, and probably none of the 10 are right.

I can look at everyone’s piece of paper, and their road map shows every item you were going to do and your predicted results and actual results, and then the results are in red if you missed them, yellow if they’re close and green if you passed them. I think road maps are a great principle just for managing your life. It keeps everybody focused, and it lets me know what trains are on or off the tracks.

If Ben Bernanke Were an NFL Head Coach

2010-01-31T14:55:00.000-08:00

At the end of every NFL season the pink slips come quickly. I think it was Jerry Glanville who once said that NFL stands for "not for long". That is especially true if you are a head coach with modest results. In the NFL modest results could mean winning as often as losing. A simple .500 record. This past week the US Senate offered a verdict on Ben Bernake's tenure as Chairman of the Federal Reserve and in my opinion their decision was the equivalent of bringing back a coach with multiple 5-11 and 4-12 seasons in his resume.

Am I being too harsh on Helicopter Ben the bubble blower? The video above, courtesy of my friends at The Daily Bail demonstrates Bernanke's fecklessness. It might be unfair not to assign equal blame to Ben's mentor and partner in money printing, Alan Greenspan, but Greenspan is off on the big money speech circuit now. Why anyone would be interested in what Greenspan has to say is another matter.

Prior to his stint at the Fed, Ben's claim to fame was that as a Princeton professor he was viewed by many academics as one of THE experts on the Great Depression. Think about it. The world's largest economy is in the hands of a guy who has no practical business experience.He has read a lot of books though. It's like making self-proclaimed NFL draft expert Mel Kiper Jr. head coach of your favorite franchise.

Two issues surrounding the Bernanke confirmation still perplex me. Why is Obama and fellow Dems defending and pushing forward the appointment ? The Republicans have largely abandoned support for Bernanke, yet he and his predecessor Greenspan are and were Republican administration appointees. Why take the heat for the other guys poor pick?

Why do we have this fairy tale belief that the Fed can somehow manage a multi-trillion dollar economy. Wasn't one of the great fallacies of the Soviet system this idea that you could somehow centrally plan a national economy. It's so easy for us to see the error of the Soviet's on this, yet we insist on believing that we can somehow do similar central coordinating via the Fed.Is it any wonder we have witnessed multiple bubbles and an almost total destruction of dollar purchasing power over the almost 100 years of the Fed's existence.

If these Fed Chiefs are going to "get credit" for saving the system, they need to be held accountable for setting the stage for the system to need saving in the first place. Being accountable does not mean a contract extension. I am very disappointed with the US Senate and the current Administration on this one. If Bernanke were my head coach he'd be looking for a new job.

Martha Coakley.... Good Riddance

2010-01-16T17:42:00.000-08:00

I see the President is making a trip tomorrow to campaign for the Democratic Senate candidate in Massachusetts, Martha Coakley. This Senate race epitomizes everything wrong with our current system. Watch what goes on the next couple days. It will be political March Madness. The wackos on the left ( the DailyKos crew) and the wackos on the right ( the Hannityites) will be out in full force making this political race a major event for all of us.

This election is being portrayed as a referendum on Obama's first year in office --- and maybe it is, but really, if Obama is unable to push his agenda through the Congress, sans a Democrat in MA. and with a mere 59 votes in the Senate something is wrong. (I'm saying this as a supporter of universal health care-- I am not opposed to the agenda in principle).

Maybe I'm naive as I do expect the people who ask for the honor of representing "the people" to be true leaders in every sense of the word. With that being said, a big thanks to the Daily Bail for posting the recent Dorothy Rabinowitz article in the Wall Street Journal revisiting the Amirault case and Martha Coakley's role in that case.

This case was one of several sensational cases in the mid 80's of wild child molestation charges that bordered on the absurd:

The accusations against the Amiraults might well rank as the most astounding ever to be credited in an American courtroom, but for the fact that roughly the same charges were brought by eager prosecutors chasing a similar headline—making cases all across the country in the 1980s. Those which the Amiraults' prosecutors brought had nevertheless, unforgettable features: so much testimony, so madly preposterous, and so solemnly put forth by the state. The testimony had been extracted from children, cajoled and led by tireless interrogators.
Gerald, it was alleged, had plunged a wide-blade butcher knife into the rectum of a 4-year-old boy, which he then had trouble removing. When a teacher in the school saw him in action with the knife, she asked him what he was doing, and then told him not to do it again, a child said. On this testimony, Gerald was convicted of a rape which had, miraculously, left no mark or other injury. Violet had tied a boy to a tree in front of the school one bright afternoon, in full view of everyone, and had assaulted him anally with a stick, and then with "a magic wand." She would be convicted of these charges.
Other than such testimony, the prosecutors had no shred of physical or other proof that could remotely pass as evidence of abuse. But they did have the power of their challenge to jurors: Convict the Amiraults to make sure the battle against child abuse went forward. Convict, so as not to reject the children who had bravely come forward with charges.

Martha Coakley had a chance to show true leadership when she became Middlesex County DA in '99. Obama agenda or not, I just don't see why she should be rewarded with a promotion given role in this pathetic mess. That is not to say that her opponent, Scott Brown is offering anything of substance either. It's part of the reason we are in the sad state we are in. Rabinowitz says it well as she concludes her piece:

What does this say about her candidacy? (Ms. Coakley declined to be interviewed.) If the current attorney general of Massachusetts actually believes, as no serious citizen does, the preposterous charges that caused the Amiraults to be thrown into prison—the butcher knife rape with no blood, the public tree-tying episode, the mutilated squirrel and the rest—that is powerful testimony to the mind and capacities of this aspirant to a Senate seat. It is little short of wonderful to hear now of Ms. Coakley's concern for the rights of terror suspects at Guantanamo—her urgent call for the protection of the right to the presumption of innocence.

Betting Against China

2010-01-07T13:35:00.000-08:00

Very interesting article in the NYTimes today detailing crack short-seller Jim Chanos and his growing unease with the Chinese economy. At this point I don't have a particular take on this issue but I think it makes sense to be aware of the Chanos concern. He has gone against the crowd before in a big way (Enron) and profited big-time. At the same time Jimmy Rogers' comment is also worth noting:

I find it interesting that people who couldn't spell China 10 years ago are now experts on China,” said Jim Rogers, who co-founded the Quantum Fund with George Soros and now lives in Singapore. “China is not in a bubble.”
Colleagues acknowledge that Mr. Chanos began studying China’s economy in earnest only last summer and sent out e-mail messages seeking expert opinion.

The bottom line is that we are still in very difficult economic waters. It wouldn't take much to tip us back into the financial danger zone. If the Chinese run into economic problems in the near term all bets are off for the rest of us. The situation deserves monitoring.

Fish Where The Fish Are

2010-01-05T14:01:00.000-08:00

The maxim, " Fish where the fish are," is as relevant to markets and investing as it is for selling or fishing. Thanks to Jesse at his Amercain Cafe for the chart above. It's been popular in some forums to label the yellow metal's move over the past several years " a bubble". I don't know about that but what I do know is that gold is in a Bull Market.From my experience bull markets tend to have quite a lifespan. Think about the lastgreat equity bull market we experienced. It began in 1982 and had a run to 2000 ---- almost 18 years.

That's not to say that there aren't some hair-raising corrections in the interim but as Jesse Livermore was reported to say, " I made my money by sitting not by thinking ". ( In other words he sat with his positions and let his profits run rather than trading in and out --provided we are in a bull market of course).

The point here is that we are in the fourth or fifth inning of a nine inning gold bull and the major fireworks are still to come . Stay long, stay strong the numbers to come will be breath-taking.

A Christmas Reflection

2009-12-25T10:14:00.001-08:00

Christmas Day has visited us again.It is interesting that Christmas, the day that commemorates the birth of Jesus Christ, has joined that select two or three Holidays in the course of the year ( Thanksgiving and New Years are two others that come to mind) where retail life comes to a virtual standstill ---except for the NBA and the ubiquitous Chines restaurant. Christmas is as secular a Holiday as we have in modern day America. This Holiday, embraced by almost all, is of recent vintage however.

Christmas wasn't institutionalized as a Church Feast until the mid 4th Century. Even then, the major Feast celebrated was the Feast of the Epiphany ---the Baptism of Jesus by John the Baptist--- commemorated on January 6. The celebration of Christmas was banned by the British Parliament in 1647 and even though the celebration was restored by Charles II in 1660, the Presbyterian Church of Scotland continued to discourage celebrating the Feast. This antipathy carried over to the British colonies in the New World. The celebration of Christmas was actually banned in Boston from 1659-1681. The venerable George Washington led his troops in an attack on the Hessian troops at the Battle of Trenton 1777. These historical tid-bits add to my amusement at some of the current arguments about whether we are taking Christ out of Christmas in our modern world.

One of the most common images of the Nativity is the manger scene, the "babe in swaddling clothes". While this imagery is accurate, I believe that too much of a focus on " the baby Jesus" almost softens the awesomeness of this Feast.

We Christians believe, that this Jesus, born in Bethlehem is the Son of God, the Word of God, through whom all of creation was made. How awesome is that!!! John, in his Gospel says it this way:

John.1
[1] In the beginning was the Word, and the Word was with God, and the Word was God.
[2] The same was in the beginning with God.
[3] All things were made by him; and without him was not any thing made that was made.
[4] In him was life; and the life was the light of men.

This same Jesus we so sentimentally think of as the "babe in the manger" was with God the Father before the Creation of the world. This Word of God spoke with Abraham, Isaac and Jacob in the Book of Genesis. Gave the Law to Moses and spoke with David as well as the Prophets. The mere thought of the Word of God taking on flesh and becoming like us is incomprehensible, ineffable, inconceivable. It's almost too much to take in . As presents our opened and greetings of the season are exchanged the "big picture" of the Feast is worth a quiet reflection.

Taxes--history says they are going up.

2009-12-15T13:47:00.000-08:00

Wow! I came across the chart above on Jim Sinclair's site. It's hard to believe that we went from a 25% marginal tax rate in 1930 to 79% in 1940. That was all done smack in the face of the Great Depression. It sure looks like we could be looking at a repeat of history and from where I sit that would not be a good thing. Given the poor state of the American household balance sheet, a tax increase like the one above would decimate what is left of our consumer economy. It's a conundrum our leaders wish they could avoid if at all possible. Kick the can down the road, that is the politicians way.

Take a look at the tax rate for the war years 1941-45 --- a jump up to 94%. Can you imagine a 94% tax rate? That is the definition of shared sacrifice. While I am not a fan of higher tax rates, I believe that if we as a country decide that war is necessary we should also be prepared to pay for it. 90% + tax rates might put a damper on some of the banging war drums.

Paper Money

2009-12-09T07:30:00.001-08:00

I stumbled across an interesting article while browsing on Jim Sinclair's site last night. The article is entitled :

GOLD IS NOT GOING UP-- PAPER MONEY IS GOING DOWN by Egon von Greyerz

Here's a snippet that really needs to be read more than once:

The chart above shows how the purchasing power of the dollar has declined in real money – gold – in the last 10 years. And if we take the period from 1909 to 2009 it shows the total destruction of paper money. In 1909, $1,000
bought 50 ounces of gold. Today it buys 0.83 ounces. This means that in the last 100 years the dollar has declined by 98.3% against gold. So in real money terms
the dollar is now only worth 1.7% of what it was worth a
century ago. Thus, the US government (as well as most other governments) has totally destroyed the value of real money by issuing unlimited amounts of paper money and in the next
few years they will also kill off the remaining 1.7% of value to make the paper dollar reach its intrinsic value of zero.
This silent devaluation of our wealth is a brutal , almost hidden tax that the masses continue to be oblivious to.

Postscript To California Dreaming

2009-11-22T20:10:00.000-08:00

How about this from the Times:

Even as Treasury officials are racing to lock in today’s low rates by exchanging short-term borrowings for long-term bonds, the government faces a payment shock similar to those that sent legions of overstretched homeowners into default on their mortgages.

With the national debt now topping $12 trillion, the White House estimates that the government’s tab for servicing the debt will exceed $700 billion a year in 2019, up from $202 billion this year, even if annual budget deficits shrink drastically. Other forecasters say the figure could be much higher.

In concrete terms, an additional $500 billion a year in interest expense would total more than the combined federal budgets this year for education, energy, homeland security and the wars in Iraq and Afghanistan.

The potential for rapidly escalating interest payouts is just one of the wrenching challenges facing the United States after decades of living beyond its means.

Let's say the forecasters get it right for once. Think about $700 billion just in INTEREST expense. It's almost unfathomable. I know the political pundits will heap a lot of blame on the current Administration and while I have my problems with the direction this Administration has gone so far--this financial catastrophe didn't just happen. It's been years in the making.

California Dreaming

2009-11-20T07:59:00.000-08:00

There is a simple reality that we as a society are having a tough time grasping. It doesn't matter, Federal, State, County or Municipal: our collective governments are all spending far more money than they have available and even if they don't want to acknowledge it, are all essentially bankrupt.

It's with that background that the following stories out of California this week have me incredulous. We have students at UCLA protesting upcoming tuition hikes ( I wonder how a 32% increase gets figured in the CPI) but at the same time the state of California is trying to get a handle on a $21 billion budget deficit. It doesn't get any better on a municipal level as San Francisco is staring square at a budgetary disaster or so says Steve Kawa, Mayor Gavin Newsom's chief of staff.

" I don't even know if I have words to describe how bad this is,".......

Next year's budget deficit is likely to top $400 million, Kawa said. That forecast could get even worse with federal stimulus money coming to an end next year and the state likely to help balance its own budget woes by cutting money sent to cities and counties.
"It may be the perfect financial storm," Kawa said. "It's going to be incredibly difficult to find a way to balance next year's budget without some severe impacts."

It gets even better. Check out this story in today's NYTIMES, With F.H.A. Help, Easy Loans in Expensive Areas :

SAN FRANCISCO — In January, Mike Rowland was so broke that he had to raid his retirement savings to move here from Boston.
A week ago, he and a couple of buddies bought a two-unit apartment building for nearly a million dollars. They had only a little cash to bring to the table but, with the federal government insuring the transaction, a large down payment was not necessary.

Great. It doesn't take a genius to figure out how this will end. Speculators praying for a real-state uptick on the back of the taxpayer. I think more pain in on the way.

Trade Shows in the Second City

2009-11-17T09:05:00.000-08:00

When I started this blog one of my intents was to focus on the B2B world. As time has gone by my posts have tended towards economics/politics. Here's a brief return to original intent.

As an amateur student of business and markets a daily read of Mike Shedlock’s blog (Mish) has not only helped keep me out of investment problems in this tough environment but his writing has also generated money making ideas for me as well. In one of his posts over the weekend he addressed a situation that is dear to all of our hearts---some of the outrageous costs associated with Trade Shows. Worth a read by everyone who has to deal with this kind of stuff.

http://globaleconomicanalysis.blogspot.com/2009/11/conventions-say-good-riddance-to.html

http://www.wbbm780.com/High-costs-drive-major-trade-show-out-of-Chicago/5660124

It was a painful decision for the Chicago-based trade association, whose first trip here for its annual convention impressed its members, until they got the electricians' bills."Our costs were about $200,000 more," said Lieber. "So it went from $40,000 to $240,000 for the electrical work alone…….

The city got the word Wednesday that the huge medical convention wouldn't return. They're also sweating out a decision by an even bigger show.The International Plastics Showcase has been in Chicago since 1971, but now a spokesman says: "We are looking at other options."

Seventh Inning Stretch

2009-11-12T14:16:00.001-08:00

This past World Series battle between the Yankees and Phillies was an entertaining match up as far as baseball goes. Because I just don't have the patience to sit and watch a complete baseball game I'm a couple years removed from the pomp that accompanies a Major League baseball game.

What is the deal with the 7th inning stretch? I remember going to Memorial Stadium in Baltimore back in the '80's and being serenaded to "Thank God I'm a Country Boy" by John Denver as the game moved into the bottom of the seventh inning. It was fun and light-hearted.

What a different scenario now. As the Yankees left the field at the end of the top of the seventh inning the PA announcer asked all"to rise, take off your hat, and join in the singing of God Bless America." It was presented as a spiritual event. I guess there is nothing inherently wrong, but it reminds me of an experience I had while visiting the Soviet Union during the summer of '81. One evening our group attended a performance by the Moscow Circus and smack in the middle of the program was a PA announcement followed by a group of soldiers goose-stepping into the circus ring carrying various flags and banners to commemorate the heroes of the Great War ( which had been fought 35 years before). We as a group of Americans were struck with how out of place and strange the demonstration seemed. I got the same feeling last week as I watched this quasi-religious ceremony between innings. God Bless America was a song the Flyers used to dust off before must win playoff games as a good luck charm. If they really needed the game they would bring Kate Smith in to sing the song live. We've gone from that to an almost Leni Riefenstahl moment.

Very strange.

No Fever LIke Gold Fever!!!!

2009-10-07T06:19:00.001-07:00

So, the yellow metal hit a new all-time nominal high in $US terms--over $1040 an ounce. All in all there really wasn't much hoopla in the MSM and for a long-term gold bull like myself, that is good news. I don't know whether this breakout is the result of future inflation fears, the alleged secret meetings of the Gulf States to create an alternative reserve currency to the dollar or just a further decline in confidence in "paper", but what I do know is that this action does not bode well for our economy and I would go so far as to say our society. Jim Sinclair, Mr Gold offers his assessment,
"The reason why I suggest that today’s market should scare you, and not be a cause for high five because of the implication of the event.

Hyper-inflation has always been a currency event, not an economic event. The currency event has always been, for whatever reason it occurred, a loss of confidence phenomenon. Clearly confidence in the US dollar and its management is slipping. Historically when this currency event comes about the transition is extremely fast.

We have been doing a countdown to the beginning of the end, or that process acceleration. The are 33 days to go.

Gold is then off to $1224, $1650 and then on to Alf’s numbers."

I have heard a few commercials on various radio stations advertising gold coins, but for the most part I'm hearing more stories about people selling their gold for cash now instead of actually going long. I know it's not scientific but it's enough to keep me long for the time being. I believe the yellow metal has a long way to go on the upside.

Not Change--More of the same

2009-08-23T18:30:00.000-07:00

I was an early and vocal supporter of Barrack Obama's Presidential run ( to be exact I had two candidates, one in each Party--Obama on the Dem side and Ron Paul on the Repub side). I have also been a vocal critic of many of George W Bush's policies. One particular practice I find particularly odious is the so-called Signing Statement, whereby the President essentially says that he doesn't plan on adhering to the very law he is in the process of signing.

I found this recent article in the NYTimes disturbing.

President Obama has issued signing statements claiming the authority to bypass dozens of provisions of bills enacted into law since he took office, provoking mounting criticism by lawmakers from both parties.

President George W. Bush, citing expansive theories about his constitutional powers, set off a national debate in 2006 over the propriety of signing statements — instructions to executive officials about how to interpret and put in place new laws — after he used them to assert that he could authorize officials to bypass laws like a torture ban and oversight provisions of the USA Patriot Act.

I believe these Signing Statements were wrong when Bush did them and I believe they are equally wrong now that Obama does them. What has happened to the US Constitution?

GE -The Emporor Has No Clothes

2009-08-04T20:13:00.000-07:00

The alleged magic of jack Welch looks now to be a lot of smoke and mirrors with the news out today that the company settled for $50 million with the SEC over accounting fraud in 2002 and 2003. The stories of quarter end shenanigans to "make a number" at Welch's GE are legendary. Typical of the way things work, now Jack's on the golf course and at big dollar corporate events while others are left to deal with the problems and soiled reputation that remains. This paragraph from the Financial Times report tells it all:

But the settlement reinforces the notion that GE’s focus on “making the numbers” every quarter – and investors’ penchant for rewarding the company for doing so – was a bull market phenomenon that was unsustainable over the long term

In my business world, I still see way too much emphasis on "making numbers" in the short-run rather than focusing on building long-term sustainability -- I hope this GE experience is a lesson to corporate America. It doesn't work in the long-run. The" make the numbers" mentality is another example of the delusional world we find ourselves circa 2009 America. Fast buck, no money down, bailout nation short cuts aren't going to get the job done and are likely to end in disappointment and disgrace.

Cultural Icons?

2009-07-05T19:06:00.000-07:00

It's been tough not to notice the non-stop media barrage of all things Michael Jackson. Back on June 27, the day both Jackson and Farrah Fawcett passed, George Ure over at Urban Survival penned a thoughtful paragraph or two on the meaning of cultural icons. He used the Wikipedia definition of the term Cultural Icon and then followed with this gem:

Not many folks turn off the infostream long enough ponder a bit about the important role of the archetypes and icons, how they form and frame us, let alone study how they work down at the preconscious and subconscious levels forming and co creating the physical world we share in 'waking' hours perhaps better described as social sleep.
Still, if you've forgotten Socrates "Allegory of the Cave" the Wiki entry on archetypes of this sort (here) is about the best short-form description of how those little buggers work.

I hadn't revisited the Cave Allegory since my freshman year at Colgate when Plato's Republic was in the syllabus for one of our Core requirements -- Philosophy and Religion. It's amazing what you don't see and perceive as an 18 year-old college student. It's funny how I can sat that 30+ years later. The Cave Allegory and The Republic are worth revisiting.

The Jacko circus is just another example of how we've lost it as a society. Reality is a tough foe. We need to wake up soon .Bob Herbert said pretty much the same thing in his NYTimes column yesterday. I think it's one of his best efforts I've read. See what you think:

Meeting Michael Jackson in the mid-1980s was one of the creepier experiences of my life. I was an editor at The Daily News and had to present him with an award in a large room with just a handful of onlookers and a photographer at Madison Square Garden.

I wasn’t put off by the fact that Jackson, then in his mid-20s, couldn’t make small talk. Lots of people have trouble with that. There was something about his overall behavior that weirded me out. He seemed, even then, to be a person who was trying with all of his being to step outside of reality and leave it behind.

Emmanuel Lewis, the child star of the hit TV series “Webster,” was with Jackson that evening. The undersized Lewis was probably 13 at the time, but he looked much younger, maybe 7 or 8.

Jackson seemed to relate only to Lewis. He made faces at the tiny boy and giggled as Lewis hopped around and climbed over furniture, much to Jackson’s delight. I remember thinking as I left the Garden that Jackson had treated Lewis almost as a pet.

I’ve never heard any suggestion of anything improper about the relationship between Jackson and Lewis. But what I wish I had thought more about in those long-ago days of Michael-mania was the era of extreme immaturity and grotesque irresponsibility that was already well under way in America. The craziness played out on a shockingly broad front and Jackson’s life, among many others, would prove to be a shining and ultimately tragic example.

Ronald Reagan was president, making promises he couldn't keep about taxes and deficits and allowing the readings of a West Coast astrologer to shape his public schedule. The movie “Wall Street” would soon appear, accurately reflecting the nation’s wholesale acceptance of unrestrained greed and other excesses of the rich and powerful.

In neighborhoods through much of black America, crack was taking a fearful toll. Young criminals were arming themselves with ever more powerful weapons, and prison garb was used to set fashion trends.

Motown was the label that gave us the Jackson 5. But when Michael and his brothers released their first album in 1969, the label had already reached its creative peak and most of the best work — the stunning originality of the Miracles, the Marvelettes, Mary Wells, Martha and the Vandellas, the Supremes, the Temptations, and others — had been done. Hip-hop would soon appear, and then the violence and misogyny of gangsta rap.

All kinds of restraints were coming off. It was almost as if the adults had gone into hiding. The deregulation that we were told would be great for the economy was being applied to the culture as a whole. Women could be treated as sex objects again as misogyny, hardly limited to hip-hop, went mainstream. (Have you looked at network television lately, or listened to the radio?) Astonishing numbers of men abandoned their children with impunity. Most of the nation seemed fine with the idea of going to war without a draft and without raising taxes.

In many ways we descended as a society into a fantasyland, trying to leave the limits and consequences and obligations of the real world behind. Politicians stopped talking about the poor. We built up staggering amounts of debt and called it an economic boom. We shipped jobs overseas by the millions without ever thinking seriously about how to replace them. We let New Orleans drown.

Jackson was the perfect star for the era, the embodiment of fantasy gone wild. He tried to carve himself up into another person, but, of course, there was the same Michael Jackson underneath — talented but psychologically disabled to the point where he was a danger to himself and others.

Reality is unforgiving. There is no escape. Behind the Jackson facade was the horror of child abuse. Court records and reams of well-documented media accounts contain a stream of serious allegations of child sex abuse and other inappropriate behavior with very young boys. Jackson, a multimillionaire megastar, was excused as an eccentric. Small children were delivered into his company, to spend the night in his bed, often by their parents.

One case of alleged pedophilia against Jackson, the details of which would make your hair stand on end, was settled for a reported $25 million. He beat another case in court.

The Michael-mania that has erupted since Jackson’s death — not just an appreciation of his music, but a giddy celebration of his life — is yet another spasm of the culture opting for fantasy over reality. We don’t want to look under the rock that was Jackson’s real life.

As with so many other things, we don’t want to know.

Fast Times On the Jersey Shore?

2009-06-11T17:54:00.000-07:00

My wife and I enjoyed a beautiful getaway weekend last week. First we journeyed down to Long Island for the annual John Charos/Patty Costello Belmont bash. On Sunday afternoon we headed to Spring Lake NJ for the evening. While I was living in Hoboken in the '90's Spring Lake was one of my favorite summer spots. It's the opposite of what most people think of when they think Jersey Shore. Spring Lake is elegant, classy, clean and if you can afford it, a great place to bring your family.

If what I witnessed on our drive down the main drag of Ocean Ave is any indication, we have much more pain to go on the real estate front and the economy in general. Ocean Ave is the main street in Spring Lake, running directly parallel to and right next to the beach. It's the home of a couple beautiful hotels and homes as you can see pictured above. ( The house in the picture is on the market for $4.9 million).What was stunning to me was the number of homes for sale within the mile to mile and a half drive. Let's face it, your not going to be putting up an ocean front piece of property for sale in this environment, unless you absolutely have to. Evidently there are a number of people that must have to. There must have been 10-15 houses for sale---just on Ocean Ave. I sense blood in the water. When you combine that with stories out of the Hamptons like this one in Vanity Fair, it's obvious that the well to do are in for some pain. Remember the trickle down theory espoused by the Reagan crowd in the early '80's? Cut taxes at the top of the income scale and wealth will trickle down to the masses---I have a feeling economic pain will trickle down at a much greater rate to Joe 6 pack as this all plays out.

If you do visit the Jersey Shore this summer and you like seafood, make sure to stop at Spikes in Point Pleasant. Spikes is a BYOB, hole in the wall, with no atmosphere, no reservations but fabulous fresh fish. Check it out! If Spikes is too crowded then head over to Red's Lobster Pot

The End Of US $ Hegemony?

2009-05-25T18:45:00.000-07:00

While we all busy with BBQ's over this beautiful Memorial Day Weekend there is a huge story that is not getting any of our collective attention that deserves mention . Only time will tell where this goes and this Bloomberg story contends that any talk of Brazil and China abandoning the US$ as invoice currency is "idle-talk".

Let' see how this develops. If these two countries were to move in the direction of replacing the US$ it would have profound implications for America. I'll leave it to gold-guru Jim Sinclair to explain : ( in this case he is quoting Alf Field's analysis)

Dear CIGAs,
I bring to you the following with the specific permission of Alf Fields.
I have suggested to you often in the past that once the price of gold reaches into its maximum potential it will not repeat the fall of the 1980s.
I foresee gold re-entering the system in a new and unique form that does not include convertibility. It will not be tied to interest rates as it once was in its previous form.
I have written to you various times about the Federal Reserve Gold Certificate ratio, modernized and revitalized, which now may well be associated with an SDR form of an International Central Bank. The tie between the ratio and gold would be a measure of international liquidity considered zero or 100 on the day of adoption.

The following is Alf’s statement yesterday, with his permission to post:

“Gold cannot decline from its highs as it will be incorporated into the national and international monetary systems at that time.” –Alf Fields, May 20, 2009

Now do you have any questions why Fund Wizard Paulson just got long a few billion dollars worth of Gold ETFs and a few major gold producers?
Finally a major event has taken place that is a US dollar milestone.
The financing and extremely important event is the arrangement between China and Brazil displaces the dollar as China becomes the major trading partner with Brazil. Since then the Rial has been celebrating and the dollar has been depressed.
This is a once in approximately a century replacement of a trading currency that has always meant a dethronement of the deposed and coronation of a new currency king.
The last time this happened was when the US dollar supplanted the British Pound as the major trading currency and entity with Brazil 79 years ago.
It took the Brits 300 years to supplant the Portuguese Escudo with the British Pound.
Only twice has this occurred in 379 years. This is obscure to most but not to Mr. Paulson the hedge wizard. Obscure to most, but not to our gang at JSMineset.
The dollar died in Rio and that means everywhere.\
The dollar is in for a very cold winter.
There is one thing that is absolutely certain and that is Gold is now headed to at least $1650 and in all probability much higher. This is happening NOW!
What more do you need to know?

Thou shalt not covet !

2009-05-17T17:32:00.000-07:00

Again I have to give a tip of the hat to my friend Bruce Bergwall. He's helped motivate me to try to stay true to a year long biblical reading project---so far it's all systems go and we are on schedule through 5 and a half months. This particular reading program has us skipping around in a 7 day cycle. For example one day we read the prophets, another history, another the Gospel etc. What sparked this post was the fact that recently the assigned reading included the 10 Commandments story from the Book of Exodus. Exodus 20 to be exact. The Commandment that really made me pause was the very last one:( Exodus 20:17)

17Thou shalt not covet thy neighbour's house, thou shalt not covet thy neighbour's wife, nor his manservant, nor his maidservant, nor his ox, nor his ass, nor any thing that is thy neighbour's

Biblical language is interesting in that even though we know the gist of what is being spoken, many times the words used in the translation don't jive with common usage. We rarely ever use the term covet. I decided to look it up. Here's Merriam-Webster:

Main Entry:
cov·et
Pronunciation:
\ˈkə-vət\
Function:
verb
Etymology:
Middle English coveiten, from Anglo-French coveiter, from Vulgar Latin *cupidietare, from Latin cupiditat-, cupiditas desire, from cupidus desirous, from cupere to desire
Date:
14th century

transitive verb 1 : to wish for earnestly 2 : to desire (what belongs to another) inordinately or culpably intransitive verb : to feel inordinate desire for what belongs to another

So the 10th Commandment is telling us to essentially not desire any material good that belongs to our neighbors. That sure puts a lid on the "keeping up with the Jones's" philosophy that has been such a central tenant in American life the past 50 years or so.

I find it a little funny that given all the difficult issues we face as a society we still read from time to time about efforts to post the 10 Commandments in various government buildings, schools etc. The reason i find it funny is that the way I read Exodus 20:17, our entire consumer society is based on coveting whatever is thy neighbor's. That's what keeps us going as American consumers,

Why are we so intent on trying to shove the Commandments down peoples throats? What's the point? Unless we are all ready to acknowledge how far short of the mark we all fall it seems to me to be an exercise in hypocrisy.

I'll use Matthew Chapter 7 to illustrate my point:

1Judge not, that ye be not judged.
2For with what judgment ye judge, ye shall be judged: and with what measure ye mete, it shall be measured to you again.
3And why beholdest thou the mote that is in thy brother's eye, but considerest not the beam that is in thine own eye?
4Or how wilt thou say to thy brother, Let me pull out the mote out of thine eye; and, behold, a beam is in thine own eye?
5Thou hypocrite, first cast out the beam out of thine own eye; and then shalt thou see clearly to cast out the mote out of thy brother's eye.

Instead of worrying about whether we can post the Commandments in front of society's collective face, maybe we should worry about the "beam in our own eyes" and work on fixing that. If we do that we will taken a small step towards a better society.

Timmy G

2009-03-30T18:00:00.000-07:00

I was driving around yesterday early afternoon and happened to listen to a radio rebroadcast of Meet The Press. The guest was our esteemed Treasury Secretary Timothy Geithner. One good thing about MTP is that the guests do get to answer questions without constant interruption. One frustrating aspect is that we have to rely on the good sense of the moderator to ask follow up questions. In this particular case David Gregory wasn't up for the job.

As I listened I heard Geithner defend his and the Obama Administration's approach to "solving" our economic crisis and their efforts to get the "economy going again". Just once I wish Gregory would have asked what was meant by getting the economy going. I've said this many times and I'll say it again. What passed for economic growth from late 2001 to 2006 was a debt driven mirage. That's why I would have liked to have heard Geithner have to explain his thought process a little more. The housing gold rush and the subsequent refi deluge were the forces behind the consumer society that was America circa 2005, 2006 and 2007. The thing is, even with all of that debt driven consumption all we ended up doing was spending borrowed dollars on stuff manufactured elsewhere ( for the most part). Even if we are able to revive the consumer over the next quarter or two what would the consumer spend on and how would it benefit American manufacturers even if this spending came to fruition? The fact that the average American has seen his housing stock decline precipitously and at the same time has seen his retirement portfolio decline anywhere from 30-60% over the past year is a double whammy I don't think there will be any short-term recovery from.

Talk of "getting the economy going again " is absurd at this point with massive stimulus and more debt is absurd.Maybe Tim G and his boss mean well but as far as I can see the only beneficiaries of all this will be the bankers at Goldman and Morgan as well as the other vermin who feed off of Washington pork.

Wounded Knee

2009-01-19T13:34:00.000-08:00

Speaking of the NPR segment, The Writer's Almanac, the December 29 edition caught my attention and I intended to post it a couple weeks ago but never got around to. It was the story of the massacre at Wounded Knee. I knew next to nothing about this sad episode in American History, but after reading this blurb I think I need to learn more:

The Writer's Almanac--December 29, 2008

Today is the anniversary of the massacre at Wounded Knee, which took place in South Dakota in 1890. Twenty-two years earlier, the local tribes had signed a treaty with the United States government that guaranteed them the rights to the land around the Black Hills, which was sacred land.
But in the 1870s, gold was discovered in the Black Hills, and the treaty was broken. People from the Sioux tribe were forced onto a reservation, with a promise of more food and supplies, which never came. Then in 1889, a prophet named Wovoka, from the Paiute tribe in Nevada, had a vision of a ceremony that would renew the earth, return the buffalo, and cause the white men to disappear. This ceremony was called the Ghost Dance. The Ghost Dance scared the white Indian Agents, and they moved in to arrest Chief Sitting Bull, who was killed in the attempt.
The next leader they focused on was Sitting Bull's half-brother, Chief Big Foot. He was leading his people to the Pine Ridge reservation, seeking safety there. But it was winter, 40 degrees below zero, and he contracted pneumonia.
Big Foot was sick, he was flying a white flag, and he was one of the leaders who had actually renounced the Ghost Dance. But the Army didn't make distinctions. They intercepted Big Foot's band and ordered them into the camp on the banks of the Wounded Knee Creek.
The next morning, federal soldiers began confiscating their weapons, and a scuffle broke out between a soldier and an Indian. The federal soldiers opened fire, killing almost 300 men, women, and children, including Big Foot.
One of the survivors was the famous medicine man Black Elk, who told his story to John Neihardt in Black Elk Speaks (1932).

Happiness

2009-01-19T12:08:00.000-08:00

Many mornings on my drive in to work I catch a 3-4 minute segment on NPR called The Writer's Almanac. The piece is narrated by Garrison Keillor and is an overview of daily birthdays and events of importance to the literary world. Today's piece was a thought provoker. It ends up that today is the birthday of a novelist named Julian Barnes. I'd never heard of him. Keillor usually provides a three or four sentence snapshot of the artist along with a quote. Here's what Julian Barnes had to say:

"The secret of happiness is to be happy already."

GENESIS-- 2009

2009-01-01T13:40:00.000-08:00

I'm not one for New Year's resolutions. Too often our best intentions are dashed by our weaknesses. I do like to establish new disciplines around calendar milestones--- birthdays, Labor Day, New Years etc. By new disciplines I mean things like new routines, new workouts, reading regiments or new work campaigns. I have to thank my colleague and friend Bruce Bergwall for the inspiration to start a new regime at the beginning of '08. It was a daily Bible reading regiment, the intent being to read the entire Bible over the course of the year. The adage that " the road to hell is paved with good intentions" was applicable in this case as the discipline stalled out a month or two in. As I approached the end of December, I thought that that effort might be worthwhile to revive. One of the problems last year is that we got a little bit of a late start --thus we were trying to play catch-up right from the start. The other problem was human weakness.

That's one of the reasons I like to try to periodically implement these new routines. Even recognizing slothful tendencies you never know what is going to stick and when a seed will sprout. This year I've even try to get an early start on the Bible reading. We'll see what happens.

The really interesting thing is that there always seems to be a new discovery even in the most familiar reading . Take the story in Genesis where Adam and Eve have just been reprimanded by God for disobedience in the Garden of Eden. Check out these verses: ( Genesis 3: 17-20)

17 And to Adam he said, "Because you have listened to the voice of your wife, and have eaten of the tree of which I commanded you, 'You shall not eat of it,' cursed is the ground because of you; in toil you shall eat of it all the days of your life; 18 thorns and thistles it shall bring forth to you; and you shall eat the plants of the field. 19 In the sweat of your face you shall eat bread till you return to the ground, for out of it you were taken; you are dust, and to dust you shall return." 20 The man called his wife's name Eve, because she was the mother of all living.

Verses 19 and 20 seem incongruent. In verse 19 Adam is being told he will return to dust and right in the very next line, verse 20 we have a complete change of pace. I'm certainly not a Biblical scholar but doesn't it seem here like a patchwork of stories and with this particular verse we are transitioning to another voice or author.

A tale of Christmas Future

2008-12-25T19:35:00.000-08:00

As I sat listening to the homily this morning at Christmas Liturgy the image of the Nativity scene in Bethlehem played out in my mind. I couldn't help but contrast this image of a quiet peace amongst the shepherd's fields with the consumer mentality that so dominates our existence today.

Jesus said " No one can serve two masters, for either he will hate the one and love the other; or else he will be devoted to one and despise the other. You can not serve both God and Mammon." Matthew 6:24

(Mammon is a term that was used to describe riches, avarice, and worldly gain in Biblical literature. It was personified as a false god in the New Testament. The term is often used to refer to excessive materialism or greed as a negative influence.)

Mammon is what our society is all about. It's no accident that we are often referred to collectively as "consumers". I always like to say that we in America are intent on proving Jesus wrong. We think we can serve two masters. Well, we will at least try. Mammon has held a special place in our market driven economy, but I believe we are entering the end days of this consumer oriented existence.Just the thought of being a consumer is disgusting --it makes me think of a parasite. I forget the exact number, but I think something like 70% of our economy is based on the consumer. In simple terms we consume and no longer produce. Unfortunately for the most part we've been consuming things we don't make or need, with money we don't have. We think we have credit. All it really is though is debt and debt has made our world go round.

What a great gig. Some poor foreigner works his butt off for a pittance while we sit back and consume and consume. Here's the real deal : You can't borrow your way to prosperity. We are finding out that a bill does come due and does need to be paid. No additional TARP plans or stimulus packages are going to change the situation. Retail sales are down big-time, car sales are in the toilet, stock prices and real-estate values have fallen off a cliff. We're not as rich as we thought we were and the ramifications are going to be monumental.

The next several Christmas's might see a premium on such things as family, fellowship, friends and simple food. In the end, maybe something good will come out of all of this. We've been serving Mammon way too long.

Father closed the Christmas homily with a quote for Isaac the Syrian on the Incarnation. I'll have to do more reading of Isaac. My favorite along these lines is from Athanasius "God became man so that man might become a god."

If we ponder that line the only conclusion is that the Incarnation was one awesome Christmas gift and awesome might be a vast understatement.

Boston Tea Party

2008-12-16T18:16:00.000-08:00

Today, December 16 is the anniversary of the Boston Tea Party. The strange thing about the Tea Party is that it more often than not, associated with the concept of " no taxation without representation". But as in many situations, the truth is not quite that simple. This Wikipedia entry provides a little background on this event from 1773:

http://en.wikipedia.org/wiki/Boston_Tea_Party

Hancock organized a boycott of tea from China sold by the politically well-connected British East India Company, whose sales in the colonies then fell from 320,000 pounds to 520 pounds. By 1773, the company had large debts, huge stocks of tea in its warehouses and no prospect of selling it because smugglers, such as Hancock, were importing tea from the Netherlands without paying import taxes. In response to this the British government passed the Tea Act, which allowed the East India Company to sell tea to the colonies directly and without "payment of any customs or duties whatsoever" in Britain, instead paying the much lower American duty. This tax break allowed the East India Company to sell tea for half the old price and cheaper than the price of tea in England, enabling them to undercut the prices offered by the colonial merchants and smugglers.[citation needed]
Many American colonists, particularly the wealthy smugglers, resented this favored treatment of a major company, which employed lobbyists and wielded great influence in Parliament. Protests resulted in both Philadelphia and New York, but it was those in Boston that made their mark in history. Still reeling from the Hutchinson letters, Bostonians suspected the selective removal of the Tea Tax was simply another attempt by the British parliament to squash American freedom. Samuel Adams, wealthy smugglers, and others who had profited from the smuggled tea called for agents and consignees of the East India Company tea to abandon their positions; consignees who hesitated were terrorized through attacks on their warehouses and even their homes.[1]

So it was actually a removal of a tax that angered the colonists-- not a tax increase. You can't make that up. I wonder if Sam Adams and his boys would be considered "terrorists" in today's world?

Gospel According To Luke

2008-11-23T15:58:00.000-08:00

Over the past couple Sunday's the Gospel readings at Liturgy have come from the Book of Luke and have been chock full of content. Last week was the familiar story of The Good Samaritan ( Luke 10:25-37).This well-known parable will get it's own post shortly.

Today's reading was from Luke 12: 16-21.

16And he spake a parable unto them, saying, The ground of a certain rich man brought forth plentifully:
17And he thought within himself, saying, What shall I do, because I have no room where to bestow my fruits?
18And he said, This will I do: I will pull down my barns, and build greater; and there will I bestow all my fruits and my goods.
19And I will say to my soul, Soul, thou hast much goods laid up for many years; take thine ease, eat, drink, and be merry.
20But God said unto him, Thou fool, this night thy soul shall be required of thee: then whose shall those things be, which thou hast provided?
21So is he that layeth up treasure for himself, and is not rich toward God

What I find fascinating about this passage is that it is so universal in it's application. In this particular parable we are dealing with a rich man who is enjoying the fruits of his labor and is doing nothing "wrong'' per se. He's not a bad man-- at least as far as we can tell. In fact he is being prudent in that he is building bigger storage facilities for his goods. I think the message here is that he is totally focused on his worldly existence and is busy making plans for his future, yet his life is about to end that very night and he is woefully unprepared for that. When I think about it this story in a nutshell is about all of us. In some cases we are making business plans. In other situations we are making Thanksgiving and Christmas plans.We are all about planning our future and we spend a lot of time involved in this planning. There is nothing inherently wrong with any of that kind of stuff. It's just that the emphasis is totally misplaced and that emphasis --the eat, drink and be merry and the storing up of our earthly goods is what so preoccupies much of our existence in present day America. We are the rich man in the story, we just don't want to admit it.

It's also interesting to look at the 3 verses preceding this parable for some context:

13And one of the company said unto him, Master, speak to my brother, that he divide the inheritance with me.
14And he said unto him, Man, who made me a judge or a divider over you?
15And he said unto them, Take heed, and beware of covetousness: for a man's life consisteth not in the abundance of the things which he possesseth

I believe the wisdom proclaimed in verse 15 will become more and more evident as we work our way through the economic mess we find ourselves in. Maybe some good will come out of our travails after all.

Citi--DOA

2008-11-22T19:16:00.000-08:00

This morning there are numerous stories documenting the mounting problems at Citigoup .Here's an example from the paper of record Shares Falling, Citigroup Talks to Government .

So the mighty Citi is in trouble and company top dogs are "entered into talks with federal officials about how to stabilize the struggling financial giant. "

Screw Citigroup , Sandy Weill and Chuck Prince!

I did my Saturday Post Office run and pulled an official looking document with a Citi logo on the envelope out of my PO Box ( I do have a Citi MasterCard). Amazing! This is what the letter from Citi said:

1) We are changing how we calculate your variable APR for purchases:
We are increasing your variable APR for purchases . Your purchase APR will equal the
US Prime Rate plus 8.99% with a minimum APR of 14.99%. As of October 1,2008 this purchase APR is 14.99%.
2) We are changing how we calculate your variable APR for cash advances:
We are increasing you variable APR for cash advances. Your cash advance
APR will equal
the US Prime Rate plus 16.99% with a minimum APR of 21.99%. As of October 1,2008 this cash advance APR is 21.99%.

Number 3 had something to do with what they call a Default APR. I'm not sure that that is but this was the bottom line.

The default APR equals the greater of 1) the Prime Rate plus up to 23.99% or 2) up to 29.99%

If I understand this properly they can charge me almost 30% for the right to borrow money from them. There is a word in the English language called usury. Some consider it a sin. It's good to know that our government is considering helping Citi get out of their financial mess. I think they should just die.

Citigroup RIP!!!

Election Day

2008-11-04T13:37:00.000-08:00

I woke up this morning and with great excitement drove with my wife over to the local firehouse to cast my ballot. The act of voting , especially in a Presidential Election always gives me a special feeling---almost one of reverential awe. When I think of the joyful faces of the Iraqi's a few years ago after they voted for the first time and I often ponder how much we take for granted in our own country.

There is no mystery as far as my vote. Obama! I think we are looking at an Electoral Landslide tonight, but even with that, I really wonder if our new President has any idea what he is about to encounter. We as a nation have spent ourselves silly. We are in the early stages of what could be an ugly recession and have very little ammunition to fight it with. Things could get ugly quickly. My vote for Obama had very little to do with policy ---I guess his opposition to the Iraq War would be one stance in particular. Taxes are probably going to go up, and who really wants to pay more taxes? It's pathetic that the current campaign dialogue has focused on taxes, yet almost nothing has been said about our prodigal ways. Who do we expect is going to pay the bill for all of our spending?

I said back in April of '07 that I was betting Obama on the come and my support was based more on hope than anything else. Well, hope is grossly underrated as a human emotion and something we've not had much of--at least in the political sense over much of my adult life.

As far as hope is concerned, this short essay from yesterday's CS Monitor is worth a read. It was written by a 55 year old white conservative Southerner who was dragged by his wife out to canvass for Obama. Here's a tid-bit:

I don't see either of the candidates as having all the answers.
I've learned that this election is about the heart of America. It's about the young people who are losing hope and the old people who have been forgotten. It's about those who have worked all their lives and never fully realized the promise of America, but see that promise for their grandchildren in Barack Obama. The poor see a chance, when they often have few. I saw hope in the eyes and faces in those doorways.

Georgia on my Mind

2008-10-08T18:44:00.000-07:00

Came across this article in the NYTimes the other day. The gist of the piece can be gleaned from this passage:

But Lincoln A. Mitchell, a Georgia expert at Columbia University, contended that Mr. Saakashvili now presided over a “semiauthoritarian” state, while saying that it was the most democratic of the former Soviet states in the region.
“The reality is that the Saakashvili government is the fourth one-party state that Georgia has had during the last 20 years, going back to the Soviet period,” he said. “And nowhere has this been more apparent than in the restrictions on media freedom.”

What bothers me in this case is the lack of follow up by many of our traditional "News" outlets. Maybe we Americans are an incurious sort, but we have actually had Presidential and Vice-Presidential candidates allude to the possibility of US military support for Georgia , in the event of further conflict with Russia. The possibility of bringing Georgia into NATO is dangled by candidates from both parties. Do we really need to add another semi-authoritarian regime into our satellite system?

I'm wondering if US interest in Georgia is another example of Realpolitik. Are we really helping push for a new democratic state or are we simply developing another client for weapons sales and another piece for an ongoing geopolitical chess game. As I said in The Bear is Back it's a whole new game now in the US-Russian rivalry and I'm not entirely sure we still have the upper hand.

LIBOR

2008-09-30T18:45:00.000-07:00

Ran across this post today on Lew Rockwell.com. The Rockwell site is a pretty hard-core libertarian site. I contend there is much wisdom there to be acquired. This post on LIBOR is deep but it's worth a read and a bookmark. I guarantee we'll be hearing more about LIBOR as our credit woes grow.

What’s in a Number? Donald MacKenzie on the Importance of Libor

No to Paulsen-Bush Bailout!!!

2008-09-23T19:45:00.000-07:00

Thanks to Mike Morgan for posting this Bloomberg story written by Mark Pittman almost a year a go. I can't go along with this bailout. I know, I know we are facing Financial Armageddon--or so says Hank. Read it and weep.

Paulson's Focus on `Excesses' Shows Goldman Gorged
By Mark Pittman
Nov. 5, 2007 (Bloomberg) -- Treasury Secretary Henry Paulson says the U.S. is examining the subprime mortgage crisis to ensure that ``yesterday's excesses'' aren't repeated. He could be talking about himself and his former firm, Goldman Sachs Group Inc.

Paulson, 61, doesn't mention that Goldman still has on the market some $13 billion of almost $37 billion in bonds backed by subprime loans or second mortgages that it created while he was chief executive officer. Those bonds have an average delinquency rate of almost 22 percent, higher than the average of other subprime bonds from the period, according to data compiled by Bloomberg.

Goldman, the most profitable investment bank, was one of 14 primary dealers of U.S. Treasuries who contributed to a three- year binge as $1 trillion of subprime mortgages were packaged and sold to investors. The value of Goldman's outstanding subprime bonds trails Lehman Brothers Holdings Inc.'s $33 billion, out of $106.8 billion created during Paulson's years at Goldman, and Morgan Stanley's $28.8 billion, out of $82.5 billion.

``He should admit to having been involved in creating the problem that we have now,'' said Representative Brad Miller, a North Carolina Democrat, who introduced a bill Oct. 22 to make firms packaging subprime mortgages liable for bad loans in some circumstances.

The subprime crisis developed earlier this year when falling home prices triggered defaults by homeowners who wouldn't have normally qualified for a mortgage. Many were unable or unwilling to make adjustable-rate payments that were due to rise. Home foreclosures doubled in the third quarter from a year earlier to 635,159, RealtyTrac reported Nov. 1.

Largely Contained
Starting in March, Paulson said the damage was ``largely contained'' and was no risk to the larger economy. When other credit markets began to be affected, he and others began pushing for solutions.`

`I can't help but notice that when middle-class homeowners were losing their homes to foreclosure, he was pretty nonchalant about it,'' Miller said of Paulson. ``But when Wall Street CEOs start seeing trouble in their absurdly complicated financial instruments built on the mortgages of middle-class homeowners, he feels their pain.

''Paulson declined to comment through spokeswoman Michele Davis, who said, ``he can't talk about Goldman business.'' Spokesman Michael DuVally of New York-based Goldman declined to say how much subprime mortgages contributed to the investment bank's profits, or Paulson's compensation, during his tenure from May 1999 through June 2006.

Goldman paid Paulson $38.5 million for 2005, and he received an $18.7 million bonus for the first half of last year.

Bet Against Subprime

While competitors reported losses from their subprime portfolios in recent months, Goldman said Sept. 20 that it profited from the market's decline by using derivatives to bet that mortgage securities would continue to fall.

Paulson's involvement in the subprime crisis ``points out that there needs to be complete accountability up and down the system,'' said Allen Fishbein, the director of credit and housing policy at the Consumer Federation of America in Washington. ``Goldman wasn't alone. All the brokerages did this.

''Goldman ranks 10th among 118 issuers, based on the amount of subprime loans still on the market. Bonds with a face value of $484.6 billion remain from those created in the years Paulson ran Goldman.

Countrywide

Market leader Countrywide Financial Corp. has $40.7 billion in subprime bonds still on the market, or 8.4 percent of the total. GMAC LLC's Residential Capital LLC has $34.4 billion. Lehman's $33.1 billion leads Wall Street firms. The amounts tally the securities issued, not what remains on the banks' books.

Calabasas, California-based Countrywide, the nation's biggest home lender; ResCap, the Minneapolis-based home lending arm of General Motors Corp.'s finance subsidiary; and Goldman were among those competing to create pools of mortgages consisting mostly of subprime loans, made to borrowers with poor credit records or high debt.

Goldman has more subprime debt outstanding than Credit Suisse, which has almost $10 billion; Citigroup Inc., with $6.8 billion; or JPMorgan Chase & Co., with $7.8 billion.

Losses on holdings of subprime securities have already claimed the jobs of two chief executive officers. Citigroup yesterday accepted the resignation of CEO Charles Prince after saying its holdings of subprime securities may cause writedowns of as much as $11 billion. Merrill Lynch CEO Stan O'Neal left last week amid writedowns of more than $8 billion.

House Bill

The data on subprime bonds, compiled by Bloomberg from reports by debt servicing companies, don't include all of the mortgage bond offerings managed by any of the firms. That's because all of them handle offerings by bond issuers outside of Wall Street, including Irvine, California-based New Century Financial Corp., a subprime lender now in bankruptcy.

The House bill Miller introduced is backed by Representative Barney Frank, the Massachusetts Democrat who is chairman of the Financial Services Committee. One provision would make firms that package and sell subprime mortgages liable for damages if loans violate certain minimum standards, including ensuring a borrower's reasonable ability to repay.

Paulson criticized the liability idea in an Oct. 16 speech at Georgetown University in Washington.``We need to ensure yesterday's excesses are not repeated tomorrow,'' Paulson said. Penalizing Wall Street for packaging mortgage loans ``is not the answer to the problem,'' he said.

Potential Paralysis

The House measure would ``potentially paralyze securitization,'' which, Paulson said, has been ``extremely valuable in extending the availability of credit to millions of homeowners nationwide and lowering the cost of financing.

''In New Delhi on Oct. 30, Paulson repeated his pledge to find what went wrong in the financial system. ``We need to shed light on it and make the policy adjustments so this doesn't happen again,'' he said.

When the subprime mortgage issue exploded as an economic and political issue this year, Federal Reserve Board Chairman Ben S. Bernanke was the federal government's point man. He was called before Congress to defend regulators' failure to prevent lending abuses.

Paulson's public role increased in the past month as the credit crunch spread to the commercial paper markets and off- balance-sheet structured investment vehicles, known as SIVs. He urged major lenders in a Sept. 12 meeting in Washington to help subprime borrowers keep their homes.

Saving SIVs

Paulson and Robert Steel, a former Goldman Sachs vice chairman who is the Treasury's undersecretary for domestic finance, helped persuade Citigroup and other banks to set up an $80 billion partnership to buy assets from any SIVs that couldn't refinance their debt.

Goldman under Paulson created 58 mortgage pools branded under the acronym of GSAMP, which originally stood for Goldman Sachs Alternative Mortgage Products, starting in July 2002. The value of the loans at risk of default is almost 50 percent for one Goldman pool, according to Bloomberg data, which includes pools identified as containing home equity financings as well as subprime mortgages.

The average delinquency rate for subprime bonds sold from May 1999 through June 2006 is 19.3 percent as of yesterday, according to data compiled by Bloomberg. Among the top 20 issuers that have more than $5 billion outstanding, Goldman's GSAMP ranks ninth with 21.7 percent for delinquencies of 60 days or more, foreclosures or real estate that has been taken away from borrowers.

Higher Delinquencies

That rate is higher than for JPMorgan, with 20.8, and Citigroup, with 19.9 percent, according to data compiled by Bloomberg through October. Goldman's delinquency rate is lower than the 26.2 percent for bonds in Deutsche Bank AG's ACE trust, as well as 25.1 percent for Barclays Capital's SABR and 23.8 percent for Merrill Lynch's MLMI.

One of Goldman's bonds, GSAMP 2006-HE2 B2, is valued at 47 cents on the dollar, to yield 14.5 percent, according to Merrill Lynch. The pool, which was sold March 1, 2006, already has a delinquency rate of 16.4 percent. The bond was cut five levels from investment-grade Baa2 to a junk rating of B1 on Oct. 11 by Moody's Investors Service.To contact the reporter on this story: Mark Pittman in New York at mpittman@bloomberg.net.

Guns and Butter Part 2

2008-09-19T06:03:00.000-07:00

Guns and Butter was a term often used to describe the policies of LBJ in the 60's whereby massive Government spending was implemented along with massive military spending needed to fight the Vietnam War. The end result was inflation,stagflation and 20% interest rates over the next decade or so. Given the announcement last night of the Fed's stepping in to buy toxic mortgages I think we are on our way to a '70's repeat. The U.S. is already the world's biggest debtor nation and over the past 7 days or so we've added probably another $300-$1trillion in additional unfunded obligations. Remarkable. I have no ideas where the markets are headed longer term but I am glad a have a reasonably decent position in gold and gold related holdings.

George W-Our First MBA President

2008-09-17T18:45:00.000-07:00

What irony, I couldn't help thinking today as I watched the DJIA get slammed another 400+ points ( closed below 10,700) and Gold scream $80+ to the upside, that George W Bush and Dick Cheney, the MBA (Harvard) President and the CEO Vice-President (Halliburton) were presiding over the utter destruction of our private market system. Let' s see ,over the past week we've seen the Fed's step into the Freddie/Fannie mess to the tune of $100-200 billion. Last night it was AIG for $85 billion .Let's not forget Bear Stearns a couple months ago. On top of all that, Lehman Bros., a company that survived the Civil War and the Great Depression got toe-tagged. What a record of economic stewardship for W!

Saint Paul said, " For the wages of sin is death" (Romans 6:23). To me the wages of the Bush ownership society is fascism. Think that is too outrageous? This statement is usually attributed to Mussolini ( in all fairness there is some debate about the accuracy of the attribution)

"Fascism should more properly be called corporatism because it is the merger of state and corporate power."

Even so, the direction we are now headed seems to have some echo from the '30's as Thomas J. DiLorenzo points out in this essay ( written back in '94)

So- called corporatism was adopted in Italy and Germany during the 1930s and was held up as a "model" by quite a few intellectuals and policy makers in the United States and Europe. A version of economic fascism was in fact adopted in the United States in the 1930s and survives to this day. In the United States these policies were not called "fascism" but "planned capitalism." The word fascism may no longer be politically acceptable, but its synonym "industrial policy" is as popular as ever.

1-20-09 can't come soon enough!

She Must Be Wonderwoman

2008-09-01T18:59:00.000-07:00

I was wondering how long it was going to take before the media started their own vetting process of Gov. Sarah Palin. I really can't believe John McCain made this decision. I used to think he was a capable leader. I hope I am not too harsh in considering Sarah Palin laughably unprepared to be Vice-President of the United States. It's not worth even debating. What I've wondered from the first little bit I heard about her is, "what kind of strange person is this". She just gave birth to a down syndrome baby. The baby is 5 months old. She preaches the value of life and family values and is now going to leave this child at 5 months of age and run for Vice-President. Pathetic.

How He Will Improve Our Lives?

2008-08-18T06:59:00.000-07:00

So , Obama is getting a little heat for a lack of "specifics" in his hope message . That is certainly a legitimate and fair criticism. What stood out for however me in reading the NYTimes piece was the comment made by the Governor of Tennessee, Phil Bredesen,

"Instead of giving big speeches at big stadiums, he needs to give straight-up 10-word answers to people at Wal-Mart about how he would improve their lives.”

special emphasis on the last thought--how he would improve their lives. Politicians are so unbelievable in their arrogance. Instead of worrying about improving my life for me, why not spend a couple minutes and think about ways to stop screwing up our lives. How about figuring out ways to deal with the multi-trillion dollar unfunded liabilities we face in the not too distant future?All these guys know how to do is promote themselves, their careers and spend our money-- please Governor Bredesen don't worry about "improving my live"--I'll focus on that.

On a serious note, it is exactly this expectation that some guy is going to come into office and be able to somehow magically change the world and make everything better. With those kind of expectations going in is it any wonder that we become so disappointed with those we choose to lead us?

The Bear is Back

2008-08-13T19:21:00.000-07:00

In this case it's not the market I'm talking about. Russia is the subject and there is no doubt that they are back as a regional power and there is not much the US can do about it. George Friedman's Stratfor piece explores the ramifications of the Russia- Georgia conflict from multiple angles.

One of the first questions is how, given the massive quick Russian response to the Georgian invasion of S. Ossetia ( obviously the Russians had been prepared for this offensive for some time) could the US allow it's closest ally in the region to walk into such a trap? Was it a failure of intelligence or a misreading of Russian attitude and will? Either way-- not good. I thought Condi Rice was a Soviet expert. Maybe she is just another academic with no real world experience.

The end result is that Russia has shown the world that they are the boss in their neighborhood and that other former Soviet Republic states might now realize that the while the US is bogged down in battles in the Middle East we have nothing much to offer them other than empty words--- the old gum flapping routine. Forget about ant-missile defense sysems or additions to NATO. What I don't understand is this need for the US to continue to try to expand NATO. It would seem to be like spitting into Russia's face.

As of today Putin is stronger domestically and the Russians have reasserted their leadership of the region. Our European " friends" must wonder where their bread is buttered.They need Russia a hell of a lot more right now than they need the US ( energy supply) . How does this all play into what's coming soon -- the conflict with Iran. All in all another mess. W's inane comment about looking into Putin's eyes just speaks to his utter incompetence on the world stage. 1/20/09 can't come soon enough.

South of the Border--One More Time

2008-07-30T18:35:00.000-07:00

Another update to two previous posts on Mexican Oil production, Revisit South of the Border and South of the Border. This is the latest out of Pemex, Mexico's Pemex says yr-end oil output to miss goal.For those in the "glass half-full school" chew on this:

"Mexico is the world's No. 6 producer and No. 10 exporter of crude oil, according to the U.S. Energy Information Administration, but declining crude output and exports are threatening the country's position as a top U.S. supplier."

I know CNBC's Larry Kudlow and many others would simply say, "drill,drill,drill ", but seriously is there any plan to make replace that supply--and please Senator Schumer, tapping the Strategic Reserve is not a plan right now.

Scary Stuff

2008-06-22T17:38:00.001-07:00

The stickiness of gas prices above $4/gallon and the proximity of the July4 holiday and peak driving season has sparked a plethora of nonsense from the usual suspects. The clowns in Washington are advocating a policy of drill,drill drill, offering that as a way to gain energy independence. After all, there is so much untapped oil right here in the USA. Combine that lunacy with the usual media blowhards that are hammering "speculators" and the Saudi's and pretty soon it's easy to miss an important story. I found the EIA Net Export #'s inside of a post by Westexas, on TheOildrum.com. Take a look. ( click on chart for sharper image)

Here's the deal. What we are seeing is a net decline in exports over the past couple years. I'm sure the circumstances are different in each particular country, ranging from more domestic use ( maybe Iran and Venezuela) to depletion ala Norway and Mexico. It's interesting that Russia is at the top of the list as far as net positive goes. I see a big comeback for the Russian bear. What is not getting factored into any mainstream conversation is that this decline in net exports might not be a one off event. There is a school of thought that says that as many of these export countries see more and more oil revenue, their societies will grow economically and they will end up using more and more of their crude oil production domestically. If that ends up being the case we here in the US are really up the creek.

The Long Emergency-- American Style

2008-06-09T19:37:00.001-07:00

In his book The Long Emergency, James Howard Kunstler paints a picture of what he sees as our societal future post peak-oil. One of his themes is the potential unravelling of the social structure as the have-nots are priced out the gasoline market and now truly face a future on the economic fringes. He believes mob violence is a possibility.

It's funny but because Kunstler offers this vision he is sometimes criticized as an alarmist and a wacko. Well, it was with interest that I read this story this morning in the NY Times Rural U.S. Takes Worst Hit as Gas Tops $4 Average :

"Here in the Mississippi Delta, some farm workers are borrowing money from their bosses so they can fill their tanks and get to work. Some are switching jobs for shorter commutes.
People are giving up meat so they can buy fuel. Gasoline theft is rising. And drivers are running out of gas more often, leaving their cars by the side of the road until they can scrape together gas money.
The disparity between rural America and the rest of the country is a matter of simple home economics. Nationwide, Americans are now spending about 4 percent of their take-home income on gasoline. By contrast, in some counties in the Mississippi Delta, that figure has surpassed 13 percent.
As a result, gasoline expenses are rivaling what families spend on food and housing."

I don't want to be unsympathetic to the economic pain being felt right now, but this is happening at $4 a gallon. What's the story at $5 or $6?

What More Can You Say?

2008-05-29T20:23:00.002-07:00

The constant chatter about Iran and a potential war there has not abated much over the past month or so. I stumbled across this today while browsing Juan Cole's site. It leaves me speechless. Here's a takeaway:
( Thanks to Jason Lepold for great work on this)

During a trip to the Middle East in March 1996, Vice President Dick Cheney told a group of mostly U.S. businessmen that Congress should ease sanctions in Iran and Libya to foster better relationships, a statement that, in hindsight, is completely hypocritical considering the Bush administration’s foreign policy.
“Let me make a generalized statement about a trend I see in the U.S. Congress that I find disturbing, that applies not only with respect to the Iranian situation but a number of others as well,” Cheney said. “I think we Americans sometimes make mistakes . . . There seems to be an assumption that somehow we know what’s best for everybody else and that we are going to use our economic clout to get everybody else to live the way we would like.”
Cheney was the chief executive of Halliburton Corporation at the time he uttered those words. It was Cheney who directed Halliburton toward aggressive business dealings with Iran—in violation of U.S. law—in the mid-1990s, which continued through 2005 and is the reason Iran has the capability to enrich weapons-grade uranium.
It was Halliburton’s secret sale of centrifuges to Iran that helped get the uranium enrichment program off the ground, according to a three-year investigation that includes interviews conducted with more than a dozen current and former Halliburton employees.

Peak Oil-- Are We There Yet?

2008-05-20T19:17:00.000-07:00

I have to give props to the inimitable James Howard Kunstler who pretty much hit it out of the ball park in his weekly column this week. Classic Kunstler:

What makes matters truly eerie is that the "bubble" in suburban houses has occurred at exactly the moment in history when the chief enabling resource for suburban life -- oil -- has entered its scarcity stage. The logical conclusion of all this is not what the American public wants to hear: we have become a much poorer society and are now faced with the unavoidable task of making major changes in how we live. All the three-card-monte moves at the highest level of finance lately amount to an effort to avoid the unavoidable, acknowledging our losses. Certainly the political fallout of all this will be awesome. But it's not about politics, really. It's about the entire society's inability to form a workable new consensus of reality.

Fellow Colgate alum Kevin Phillips has a new book "Bad Money: Reckless Finance, Failed Politics & the Crisis of American Capitalism , detailing the various scams the "Powers that Be" have laid on us --oh going back at least to the Kennedy years. It's a sad tale. The Government Numbers racket is the term I believe is used to describe the "Powers That Be" that lead us in America.

On top of all that T. Boone Pickens was on CNBC this am. He pretty much simplifies it all-- the world produces 85 million barrels of oil a day and currently needs 87. Prices are going higher. Worth watching

Appeasement, Diplomacy and 4G Warfare

2008-05-17T19:35:00.000-07:00

It's happening again. With W's speech to the Israeli Knesset this week, the mouthpieces on the right are loudly attacking Obama as naive and willing to surrender to our mortal enemies and give up on the war on terrorism (whatever that is). John McCain is predicting victory in Iraq by 2013 if he is elected President. I just wish that someone could explain what victory in Iraq is exactly. What is our objective in Iraq--- and I'm not looking for the answer to be a one word response: Victory.

William Lind pens an interesting article about the delusions held by those in power when it comes to Iraq and "progress in our objectives". As Lind points out, this conflict is a Fourth Generation War:

"One of the most common signs that America's leadership is clueless about Fourth Generation war is the language they use. Fourth Generation war has few if any defining moments. Nor does it have "turning points," another common Bushism. In his testimony to Congress, U.S. Gen. David Petraeus revealed the limits on his own grasp of 4GW when he said, "We've got to continue. We have our teeth into the jugular, and we need to keep it (sic) there."Opponents in 4GW have no jugular. 4GW is war of the capillaries. What U.S. forces have their teeth into in Iraq is a jellyfish."

The hackneyed response by those who support the war in condemning war opponents as surrendering to our mortal enemies is just another political expedient smokescreen that avoids any serious discussion of the issue at hand. I believe the effectiveness of this approach is over. This will become more and more evident as we move into the fall campaign. The American people signed up for "Stay the Course" a couple years ago-- and I think they are finally beginning to look at what is really behind the curtain. One clue, it's certainly no wizard.

A Conversation

2008-04-28T09:02:00.000-07:00

Back in my senior year at Colgate I took a Senior level seminar, Philosophy and Faith. Much of the material was centered on Liberation Theology, Feminist Theology and other such theologies. I have to admit, for someone coming from the Orthodox Christian tradition the content was tough for me to embrace. To this day, I believe that the focus of these theologies stray from the"seek ye first the Kingdom" guidance we are given in Matthew. That being said however, my viewpoint was formed growing up white in what would have to described as a "privileged" upbringing. In A Jeremiad for the Reverend Jeremiah I commented on the great disservice rendered to the public by our Media, when discourse is limited to 20-30 second sound bites that lack context and are continually repeated to provoke emotional responses from the audience.

Compare the handling of the Rev Jeremiah Wright story by our major news organizations with the way Bill Moyers conducted his interview with the Reverend last week. I have had several people comment to me recently about how upset they are by the Wright issue and how this somehow reflects poorly on Barrack Obama. It's pretty obvious that there is so much more to Reverend Wright than can be gathered in those 20 second sound -bites. Watch and listen to the interview.

Here's the other sad thing--- the almost total literary and biblical ignorance of the population. I wonder how many people are even vaguely familiar with what Wright is referring to. Here's a little help:

Psalm 137 (Greek Numbering 136)

By the rivers of Babylon we sat and wept when we remembered Zion.
2 There on the poplars we hung our harps,
3 for there our captors asked us for songs, our tormentors demanded songs of joy; they said, "Sing us one of the songs of Zion!"
4 How can we sing the songs of the LORD while in a foreign land?
5 If I forget you, Jerusalem, may my right hand forget its skill.
6 May my tongue cling to the roof of my mouth if I do not remember you, if I do not consider Jerusalem my highest joy.
7 Remember, LORD, what the Edomites did on the day Jerusalem fell. "Tear it down," they cried, "tear it down to its foundations!"
8 Daughter Babylon, doomed to destruction, happy are those who repay you according to what you have done to us.
9 Happy are those who seize your infants and dash them against the rocks.

The Heart of the Matter

2008-04-20T19:08:00.001-07:00

Once again I have to point to Juan Cole. In one simple paragraph he points out the futility of the matter. I'm willing to bet that 99% of American's wouldn't be able tell who is affiliated with whom in Iraq. Who exactly are we fighting there? Who is our enemy? Is it Alqaeda or the Mahdi army? The sad answer is that we just don't know.So we will continue to spill blood and treasury for what exactly? I'm still looking for an answer.

Sunday, April 20, 2008

McCain, the Retired Military "Analysts" and the Myth of al-Qaeda in Iraq
I am quoted in this NYT piece today on John McCain's allegations that the US is fighting "al-Qaeda" in Iraq and that there is a danger of "al-Qaeda" taking over the country if the US leaves.Those allegations don't make any sense. McCain contradicts himself because he sometimes warns that the Shiites or Iran will take over Iraq. He doesn't seem to realize that the US presided over the ascension to power in Iraq of pro-Iranian Shiite parties like Nuri al-Maliki's Islamic Mission Party and Abdul Aziz al-Hakim's Islamic Supreme Council of Iraq. So which is it? There is a danger that pro-Iranian Shiites will take over (which is anyway what we have engineered) or that al-Qaeda will? It is not as if they can coexist. Since the Shiites are 60 percent and by now well armed and trained, and since the Sunni Arabs are only 17 percent of the population and since only about 1 percent of them perhaps supports Salafi radicalism--how can the latter hope to take over?Even if McCain only means, as his campaign manager tried to suggest, that "al-Qaeda" could take over the Sunni Arab areas of Iraq, that doesn't make any sense either (McCain has actually alleged that al-Qaeda would take over the whole country.) The Salafi radicals have lost in al-Anbar Province. Diyala Province, one of the other three predominantly Sunni areas, is ruled by pro-Iranian Shiites. That leaves Salahuddin and Ninevah Provinces. Among the major military forces in Ninevah is the Kurdish Peshmerga, some of them integrated e.g. into the Mosul police force. Hint: The Kurds don't like "al-Qaeda", i.e. Salafi radicalism. Jalal Talabani is a socialist.

Suicide Bombings

2008-04-18T19:13:00.000-07:00

This Robin Wright piece is courtesy of Juan Cole:

Robin Wright at WaPo writes that "Suicide bombers conducted 658 attacks around the world last year, including 542 in US-occupied Afghanistan and Iraq . . ."
deeper in the article is this bit of information:

" Of 1,840 incidents in the past 25 years, more than 86 percent have occurred since 2001, and the highest annual numbers have occurred in the past four years. The sources who provided the data to The Washington Post asked that they not be identified because of the sensitivity of the tallies.
The data show more than 920 suicide bombings in Iraq and more than 260 in Afghanistan, including some that killed scores of U.S. troops. All occurred after the U.S. invasions of Afghanistan in 2001 and Iraq in 2003.
The exact number of U.S. casualties from the bombs in Iraq is classified "because it might show the effectiveness of the enemy's weapon," said Maj. Brad Leighton, a U.S. spokesman in Iraq. "They won't even give the number to me."
More than 3,420 Americans have died in at least 10 major suicide bombing incidents, beginning with the embassy bombing in Beirut, which killed 63 people, including 17 Americans, and injured more than 100. The bombing of the U.S. Marine barracks in Beirut six months later killed 241 and still ranks as the largest loss of American military life in a single incident since the Battle of Iwo Jima in World War II.

We don't hear much of anything about any of this amongst all talk of "keeping us safe." Tell me, why are we in Iraq, I forgot.

Revisit South of the Border

2008-04-11T18:11:00.000-07:00

A follow up to my March 9 post concerning Pemex and the Mexicamn energy situation courtesy of Dan Denning of the Daily Reckoning.

Pemex better start exploring for more oil in the Gulf of Mexico or its going to pump out all its reserves in less than ten years. Mexican President Felipe Calderon went on national television last night in Mexico and told his countrymen (in Spanish, we presume), "We have to act now because we're running out of time and out of oil."........

The trouble is that Mexico's government has been using the state oil company, Pemex, like a cash machine that never runs out. Pemex contributes 40% of the total tax revenues of Mexico's Federal Government. It's a resource of the people, for the people, and by geology. But you cannot print oil on a printing press. There is no such thing as "just in time" energy resources.

A Jeremiad for the Reverend Jeremiah

2008-04-06T19:41:00.000-07:00

By now we've all seen the 20-30 second loops of the Reverend Jeremiah Wright delivering pointed words in what could be termed "fire and brimstone" homilies. How dare he. We've seen these 30 second pieces played over and over and over again. I don't know Reverend Wright and to be honest I haven't heard or read the complete text of any of the sermons being highlighted. I don't know the context of these homilies. Frankly I just can't get all that worked up about this.

Some say that the Reverend was damning America.How could he and how could Obama just sit there.and not leave the church. Has anyone read the Book of Isaiah or Jeremiah anytime in the recent past. It might be a good idea. It's probably where the word jeremiad came from and that is exactly what the Reverend was delivering:

jer·e·mi·ad : a prolonged lamentation or complaint; also : a cautionary or angry harangue

A search on You Tube for "Jeremiah Wright" gives 1600+ results sorted by relevancy. It's amazing that on the first page not one of the first 20 results provides an unfiltered, unedited video of Wright's homiletics. My point here is not to necessarily defend Wright but simply to put this "issue" into a little context. I have follow up post coming related to Martin Luther King Jr. Imagine the press coverage that he would have today if he ended up delivering the sermon he was working on for upcoming Sunday the week he died. It was entitled, "Why America May Go to Hell"

Iran

2008-03-30T18:01:00.000-07:00

I've been meaning to post on this for a week or so bit got sidetracked by some business travel. There is plenty of buzz out that the Bush Administration is itching to press an attack on Iran before their term ends. This talk has picked up considerably since Admiral Fallon stepped down form his post as head of Centcom earlier this month.

The question needs to be continually asked--- WHY??? What annoys the hell out of me is the constant drumbeat of propaganda constantly spewed over the airwaves (TV and Radio) as well as the print media. Look I'm no fan of the midget Ahmadinejad-- but the American people need to have a fuller explanation of the rhetoric. How many times will Sean Hannity spout, " Ahmadinejad says he wants to wipe Israel off the map" ? As Paul Harvey used to say-here's the rest of the story.

Juan Cole does a great job everyday providing a Western audience insight into daily events in the greater Middle-East. It helps that he speaks the language.

"Israel must be wiped off the map," although some experts disputed the translation

Juan Cole: "Ahmadinejad made an analogy to Khomeini's determination and success in getting rid of the Shah's government, which Khomeini had said "must go" (az bain bayad berad). Then Ahmadinejad defined Zionism not as an Arabi-Israeli national struggle but as a Western plot to divide the world of Islam with Israel as the pivot of this plan.
"The phrase he then used as I read it is "The Imam said that this regime occupying Jerusalem (een rezhim-e ishghalgar-e qods) must [vanish from] the page of time (bayad az safheh-ye ruzgar mahv shavad)."
"Ahmadinejad was not making a threat, he was quoting a saying of Khomeini and urging that pro-Palestinian activists in Iran not give up hope-- that the occupation of Jerusalem was no more a continued inevitability than had been the hegemony of the Shah's government.
"Whatever this quotation from a decades-old speech of Khomeini may have meant, Ahmadinejad did not say that 'Israel must be wiped off the map' with the implication that phrase has of Nazi-style extermination of a people. He said that the occupation regime over Jerusalem must be erased from the page of time.
Leading the misinformation campaign, as it did on Iraq, was the New York Times. Jonathan Steele: "The New York Times, which was one of the first papers to misquote Mahmoud Ahmadinejad, came out on Sunday with a defensive piece attempting to justify its reporter's original "wiped off the map" translation.
The mis-translation originated with the Middle East Media Research Institute (MEMRI), located in Washington. MEMRI was founded in 1998 by Yigal Carmon along with Dr. Meyrav Wurmser. Carmon was a colonel in the IDF Intelligence from 1968-88, Acting head and adviser on Arab affairs, Civil Administration in Judea and Samaria, 1977-1982 and counterterrorism adviser to prime ministers Yitzhak Shamir and Yitzhak Rabin 1988-93.

Saddam & Al Qaida--- No Links

2008-03-12T19:32:00.000-07:00

I know we've all been engrossed in the Elliot Spitzer disgrace(especially us living in the Albany area) but it seems like the recent Pentagon-sponsored report would generate more press coverage than it's currently getting . We're looking at 4000 dead Americans, 30,000 or so wounded, who knows how many dead Iraqi's, a couple million displaced and billions and billions of dollars just flushed down a toilet over the past couple years.Why? The Old Maid Geraldine Ferraro is getting more press right now than this story.

Exhaustive review finds no link between Saddam and al Qaida
By Warren P. Strobel McClatchy Newspapers
Posted on Monday, March 10, 2008

WASHINGTON — An exhaustive review of more than 600,000 Iraqi documents that were captured after the 2003 U.S. invasion has found no evidence that Saddam Hussein's regime had any operational links with Osama bin Laden's al Qaida terrorist network.
The Pentagon-sponsored study, scheduled for release later this week, did confirm that Saddam's regime provided some support to other terrorist groups, particularly in the Middle East, U.S. officials told McClatchy. However, his security services were directed primarily against Iraqi exiles, Shiite Muslims, Kurds and others he considered enemies of his regime...

We really need to have a national discussion and we need to have it soon. It probably won't happen in this election cycle,but we need to talk about --- the role of the American military be in the world today. Right now the the road to economic destruction for the US is assured with a continuation of the current course . We've been in Iraq for five years now and Senator McCain talks of a multi-generational commitment still. Afghanistan is getting worse by the month. Our debt-laden economy is on the rocks and crude oil is hitting $110 a barrel--Matt Simmons talks about $378 oil ( if prices stay sticky in the $100 range get ready for close to $5 gallon soon).

What are we doing?

It's sad to watch this--I feel like I'm watching a slow-motion car -wreck. The masses are still oblivious.

South of the Border

2008-03-09T18:24:00.000-07:00

Just got back from a glorious week in Cabo San Lucas. It was one of those weeks spent on the beach with very little contact with the outside world. I guess I missed quite a week in the financial markets. We'll now see how closely coupled Wall Street and Main Street are.

One thing for sure, Cabo is still experiencing huge growth. Developments were going up everywhere. Granted Cabo is a playground for the rather well to do ( and I guess that now includes the Spring-breakers) but to me there are some clouds gathering on the distant horizon . Ponder this tid-bit I came across in the 10 page mini-newspaper that was dropped off at our door in the mornings there.

Pemex profits decline, product imports increase

That's a headline that screamed at me as I drank my morning coffee. WOW--$105 a barrel crude oil and the Mexican National Oil Company lost a billion and a half dollars last year. When I asked some of the locals about the story they all assumed I was mistaken. No way my story was true--- remember Pemex is the major source of revenue for the Mexican Government and a tremendous amount of social spending is tied to this oil revenue. I have a suspicion that we will be hearing more about this in the not too distant future and I'm betting that the news South of the Border will not be good.

Pemex profits decline, product imports increase
Eric WatkinsSenior Correspondent
LOS ANGELES, Mar. 6 -- Petroleos Mexicanos saw a decline in profits during 2007, reporting a decrease of some 16.13 billion pesos ($1.51 billion) after posting a net profit of $4.26 billion in 2006, according to media reports.
El Financiero, citing company figures, said Pemex posted the loss even though its total sales increased 2.9% over 2006 and hit an all-time high of $110 billion in 2007.
Pemex explained the loss as due primarily to purchases of imports such as gasoline, natural gas, LPG, and petrochemicals—all of which came to $16.97 billion.
Pemex also paid $63.15 billion in taxes to the federal government, up 11.8% from its 2006 tax total. Before taxes, the company posted profits of $61.63 billion.
In its 2007 financial report, Pemex said imports of oil products increased to 494,000 b/d from 431,000 b/d. The main import was gasoline, with the amount rising to 307,700 b/d in 2007 from 204,700 b/d in 2006.
These imports were up because fuel demand was higher and domestic production lower. Production averaged 1.511 million b/d in 2007, a decline of 34,000 b/d from 2006.
By contrast, natural gas imports averaged 397 bcfd, down 12% from 2006, mainly as a result of higher domestic gas production—up 13.1% over 2006 at 6.058 bcfd on average.
The country's oil production in 2007, however, dropped 5.3% from 2006, to 3.082 million b/d, due to the decline of Cantarell, to deferred output because of Hurricane Dean, and to several bouts of cold weather during the year.
Exports of oil averaged 1.686 million b/d in 2007, down 5.9% from 2006. The value of oil and condensate exports hit $44.39 billion, as the average price of the Mexican mix on the international market was $61.60/bbl.
El Financiero, quoting Pemex, said the drop in production was partially offset by an increase in the extraction of superlight oil from the Tabasco "Activo Litoral" and record output from Ku-Maloob-Zaap field.
Pemex also attributed higher output from the Lankahuasa, Burgos, and Veracruz projects, and gas extraction from the Marine light crude and Ixtal-Manik projects in the Southwest Marine region and higher output from wells in the Northeast Marine region.

tip o my hat

2008-02-19T21:30:00.000-08:00

I have to tip my hat to Black Swan on the Mish Comment board. For the uninitiated Mish brings it hard as far as economic issues go, and is worth a read every day. Mish believes we are heading into economic deflation. Trust me on this one nobody ( except Ron Paul) left in the Presidential race can offer any kind of opinion or analysis on this argument. It really is beyond their ability to analyze the situation. In truth, this is a tough issue, even for those in the game --- are we headed for inflation ala Weimar? How about a revisit of the 70's stagflation ? Or are we looking at a debt driven deflation? Honestly -- I don't know. I continue to be long gold and gold related shares. Please ---get out of debt. As Jim Sinclair say--"protect yourself--this is it"

Here is Black Swan's post unedited:

The cold war was a game of chicken to see who would go over the cliff first, while carrying with them the weight of military spending. Thanks to Ronald Reagan and the Muhajadin, the US won, right? After all, the US spends almost as much on defense as the rest of the world combined. We're still playing, but we can't find any country stupid enough to play against us. Are we still winning? This Bushco economic strategy doesn't seem to be working all that well for America in this era of world trade. Our record account deficit illustrates how successful this country has been at producing what the rest of the world wants in trade. The only thing we've been adroit at exporting lately, has been our debt. I'm guessing foreign banks have probably had enough of our financially engineered instruments. After all, multibillion dollar write-downs can be embarrassing. We could sell more of our infrastructure to pay our debt, but it's too late to sell the White House, because the Saudi Arabians already own it.
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Surge Nonsense

2008-02-17T15:39:00.000-08:00

As we get into the meat of the political campaign season I bet we are going to be hearing more and more about THE SURGE. My Republican friends like to push the idea that "the surge is working". This is an argument that really does need exploration and not just in the superficial way that many of these issues are dicsussed.

I found a couple interesting pieces this weekend on Juan Cole's blog. This article by Patrick Cockburn is exactly what I'm talking about when I say we need to get beyond the superficial. A few highlights:

To judge from the talk in Washington, the 'surge' that put 30,000 more US troops on the ground in Iraq has succeeded in bringing stability to a nation still riven by ethnic, religious and tribal conflict. Life, the Pentagon boasts, is returning to normal. But the truth is a very different story.

In contrast to the spurious turning-points of the past, the most recent political changes in Iraq, which had led to the fall in American and Iraqi casualties, are quite real. But they differ significantly from the way in which they are portrayed in the outside world, and have less to do with al-Qa'ida and the US than the continuing struggle for power between Sunni and Shia in Iraq.
From the fall of Saddam Hussein in 2003 to the summer of 2006, the five million-strong Sunni community had battled the US and the Shia-Kurdish Iraqi government. Then, quite suddenly, last year many of the Sunni rebel groups switched sides and allied themselves with the Americans, formed the "al-Sahwa" or "Awakening" movement and declared war on al-Qa'ida.

"The problem in Iraq is that the agenda is driven not by what is really happening, but by the perception in America of what is happening," Ahmad Chalabi, veteran of the opposition to Saddam and one of the most astute observers of the Iraqi scene, told me. A problem is that US politicians and commentators assume far greater American control of events in Iraq than is the case. The US is the most powerful player there, but it is by no means the only one.

While I'm on the subject of Baghdad, I don't think any of us can really comprehend the situation. Wow!!!

Pakistan

2007-12-28T07:14:00.000-08:00

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

2007-12-09T18:20:00.000-08:00

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

2007-12-08T10:02:00.000-08:00

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.

Rich Uncle Pennybags

2007-10-24T20:32:00.000-07:00

Amongst the news items of the day was this gem, home sales hitting 8 year lows. Congress is talking about potential bail-outs for the poor mortgage holders who are facing escalating payments soon as their rates are reset. Foreclosures are escalating to unhealthy levels. I think I have to credit Jim Grant of The Grant's Interest Rate Observer for this observation. I think I might have come across it in one of his writings from year ago, but I'm not sure. One of the things that might have kept us out of this mess, both borrower and lender was a remembrance of the basic tenets of the old Parker Brothers Monopoly game.

Take a few minutes and pull out the old Monopoly board and the stack of property deeds. The two most valuable properties on the board, Park Place and Boardwalk sell for $350 and $400 respectively. Here's the lesson however. Let's say you want to mortgage these properties. On each Monopoly deed a Mortgage Value was printed. The Mortgage Value for Boardwalk is $200 and for Park Place $175. No negative-am, 90-100% loan to value here. Real-estate was traditionally understood to be an illiquid, risky asset and banks were hesitant to lend against it. That's why even the most prized Monopoly properties would only get you a 50 % loan to value.

Borrowers and lenders would both be much better off today if they had only adhered to these same principles. The game dates back to the early 1900's. It's true, there really is nothing new under the sun--- we should have paid attention.

Murder in Baghdad?

2007-10-03T06:03:00.000-07:00

Every now and then I come across an article that is so disturbing that I want to make sure I don't forget it. That happened this morning as I browsed the NY Times. This piece by James Glanz and Allison Rubin made me sick. Imagine if this sort of thing happened on an American street in a major urban center.

From Errand to Fatal Shot to Hail of Fire to 17 Deaths
By JAMES GLANZ and ALISSA J. RUBIN
Published: October 3, 2007

BAGHDAD, Oct. 2 — It started out as a family errand: Ahmed Haithem Ahmed was driving his mother, Mohassin, to pick up his father from the hospital where he worked as a pathologist. As they approached Nisour Square at midday on Sept. 16, they did not know that a bomb had gone off nearby or that a convoy of four armored vehicles carrying Blackwater guards armed with automatic rifles was approaching.
Moments later a bullet tore through Mr. Ahmed’s head, he slumped, and the car rolled forward. Then Blackwater guards responded with a barrage of gunfire and explosive weapons, leaving 17 dead and 24 wounded — a higher toll than previously thought, according to Iraqi investigators.
Interviews with 12 Iraqi witnesses, several Iraqi investigators and an American official familiar with an American investigation of the shootings offer new insights into the gravity of the episode in Nisour Square. And they are difficult to square with the explanation offered initially by Blackwater officials that their guards were responding proportionately to an attack on the streets around the square.

The new details include these:
¶A deadly cascade of events began when a single bullet apparently fired by a Blackwater guard killed an Iraqi man whose weight probably remained on the accelerator and propelled the car forward as the passenger, the man’s mother, clutched him and screamed.
¶The car continued to roll toward the convoy, which responded with an intense barrage of gunfire in several directions, striking Iraqis who were desperately trying to flee.
¶Minutes after that shooting stopped, a Blackwater convoy — possibly the same one — moved north from the square and opened fire on another line of traffic a few hundred yards away, in a previously unreported separate shooting, investigators and several witnesses say.

But questions emerge from accounts of the earliest moments of the shooting in Nisour Square.

The car in which the first people were killed did not begin to closely approach the Blackwater convoy until the Iraqi driver had been shot in the head and lost control of his vehicle. Not one witness heard or saw any gunfire coming from Iraqis around the square. And following a short initial burst of bullets, the Blackwater guards unleashed an overwhelming barrage of gunfire even as Iraqis were turning their cars around and attempting to flee.

As the gunfire continued, at least one of the Blackwater guards began screaming, “No! No! No!” and gesturing to his colleagues to stop shooting, according to an Iraqi lawyer who was stuck in traffic and was shot in the back as he tried to flee. The account of the struggle among the Blackwater guards corroborates preliminary findings of the American investigation.
Still, while the series of events pieced together by the Iraqis may be correct, important elements could still be missing from that account, according to the American official familiar with the continuing American investigation into the shootings.

Among the questions still to be answered, the official said, is whether at any time nearby Iraqi security forces began firing, possibly leading the Blackwater convoy to believe it was under attack and therefore justified in returning fire. It is also possible that as the car kept rolling toward the intersection, the Blackwater guards believed it posed a threat and intensified their shooting.

Blackwater has said that its guards were fired upon and responded appropriately.
Witnesses close to the places where most of the Iraqi civilians were killed directly facing the Blackwater convoy on the southern rim of the square all give a relatively consistent picture of how events began and unfolded.

The Blackwater convoy was in the square to control traffic for a second convoy that was approaching from the south. The second convoy was bringing diplomats who had been evacuated from a meeting after a bomb went off near the compound where the meeting was taking place. That convoy had not arrived at the square by the time the shooting started.
The events in the square began with a short burst of bullets that witnesses described as unprovoked. A traffic policeman standing at the edge of the square, Sarhan Thiab, saw that a young man in a car had been hit. In the line of traffic, that car was the third vehicle from the intersection where the convoy had positioned itself.

“We tried to help him,” Mr. Thiab said. “I saw the left side of his head was destroyed and his mother was crying out: ‘My son, my son. Help me, help me.’”

Another traffic policeman rushed to the driver’s side to try to get her son out of the car, but the car was still rolling forward because her son had lost control, according to a taxi driver close by who gave his name as Abu Mariam (“father of Mariam”).

Then Blackwater guards opened fire with a barrage of bullets, according to the police and numerous witnesses. Mr. Ahmed’s father later counted 40 bullet holes in the car. His mother, Mohassin Kadhim, appears to have been shot to death as she cradled her son in her arms. Moments later the car caught fire after the Blackwater guards fired a type of grenade into the vehicle.

The taxi driver was a few feet ahead of Mrs. Kadhim’s car when he heard the first gunshots. He was aware of cars behind him trying to back out of the street or turn around and drive away from the square. He tried frantically to turn his car, but ran into the curb.

Unable to escape, he pulled himself over to the passenger side, which was the one not facing the square, opened the door and crawled out, flattening his body to the ground.
“The dust from the street was coming in my mouth and as I pulled myself out of the area, my left leg was shot by a bullet,” he said.

Accounts in the initial days after the event described Mrs. Kadhim as holding a baby in her arms. It now appears that those accounts were based on assumptions that the charred remains of Mrs. Kadhim’s son were mistaken for an infant.
By then cars were struggling to get out of the line of fire, and many people were abandoning their vehicles altogether. The scene turned hellish.
“The shooting started like rain; everyone escaped his car,” said Fareed Walid Hassan, a truck driver who hauls goods in his Hyundai minibus.
He saw a woman dragging her child. “He was around 10 or 11,” he said. “He was dead. She was pulling him by one hand to get him away. She hoped that he was still alive.”
As the shooting started in earnest Jabber Salman, a lawyer on his way to the Ministry of Justice for a noon meeting, described people crying and shouting. “Some people were trying to escape by crawling,” he said. “Some people were killed in front of me.”
As Mr. Salman tried to drive away from the shooting, bullets came one after another through his rear windshield, hitting his neck, shoulders, left forearm and lower back. “I thought, ‘I’m sorry they are going to kill me and I can do nothing.’”

Iraqi investigators believe that during the shooting Blackwater helicopters flew overhead and fired into the cars from above. They say that at least one the car roofs had bullets through them. Blackwater has denied that its helicopters discharged any weapons.
Minutes after the first shootings, a Blackwater convoy arrived at the other side of the square, where civilian traffic was also backed up, and shot into cars, according to an Iraqi official who is a member of the investigation committee set up by the Iraqi government.
“I found three people from that incident in Khadimiya hospital,” the Iraqi official said. “One died and two were injured. Why is the private security shooting again in this area?”
Two weeks after the events that claimed the life of Mrs. Kadhim and her son, her husband, Haithem Ahmed, her daughter Mariam and her younger son, Haider, are still bewildered.

“My son was very gentle, very clever,” Mr. Ahmed said, looking down at the floor of the police investigation center where he had come to give more details at the request of Iraqi investigators. “He was easy to be around. He planned to be a surgeon.”

“She is a beautiful woman,” he said of his wife, speaking as if she were still alive.
Then he looked at a picture of his son, captured on a memorial video made by a friend and stored on Haider’s cellphone camera. Seeming to forget there was anyone else in the room, he spoke to the video image.
“I am waiting to meet you in paradise,” he said.

Qais Mizher contributed reporting

Here we go again!

2007-09-26T18:13:00.000-07:00

Over the last few days our media has gone out of its collective way to throw sticks and stones at the visiting Iranian President Ahmadinejad . A couple examples: the NY Daily News leading with the headline "The Evil Has Landed" or FOX News' Greg Gutfeld referring to him as " the foul-smelling fruitbat Ahmadinejad ".

I'm no fan of Ahmadinejad- the guy is a clown, but let's face it Iran is no threat to the US.When was the last time Iran invaded another country? What we are watching is a rerun of the buildup to our Iraqi action. Remember how Saddam was another Hitler? Please!

In any analysis of US/Iranian relations and actions,it might be helpful to revisit Mohammed Mossadegh and the SAVAK . I'm willing to bet that 99.9% of Americans have any idea as to what I'm referring to.

Hats off to Juan Cole for his analysis of this pathetic comedy:

"The media has focused on debating whether he should be allowed to speak at Columbia University on Monday, or whether his request to visit Ground Zero, the site of the Sept. 11 attack in lower Manhattan, should have been honored. His request was rejected, even though Iran expressed sympathy with the United States in the aftermath of those attacks and Iranians held candlelight vigils for the victims. Iran felt that it and other Shiite populations had also suffered at the hands of al-Qaida, and that there might now be an opportunity for a new opening to the United States.
Instead, the U.S. State Department denounced Ahmadinejad as himself little more than a terrorist. Critics have also cited his statements about the Holocaust or his hopes that the Israeli state will collapse. He has been depicted as a Hitler figure intent on killing Israeli Jews, even though he is not commander in chief of the Iranian armed forces, has never invaded any other country, denies he is an anti-Semite, has never called for any Israeli civilians to be killed, and allows Iran's 20,000 Jews to have representation in Parliament. . .
The real reason his visit is controversial is that the American right has decided the United States needs to go to war against Iran. Ahmadinejad is therefore being configured as an enemy head of state"

I know I'm getting more and more cynical with each passing day, but I have to wonder if this has anything to do with the renewed Iran war chatter," Iran gets over 70pc oil income in non-US currencies "

Does anyone have a clue?

2007-05-06T17:42:00.000-07:00

"We are continuing this policy in bleeding America to the point of bankruptcy." Osama Bin laden October 2004

"I would argue that the most serious threat to the United States is not someone hiding in a cave in Afghanistan or Pakistan but our own fiscal irresponsibility."-David Walker, Comptroller General of the United States [March 2007]

"We are entering an era in which we know nothing much, where we have a brand-new set of rules...One of these new rules, in my opinion, is that there will be in the very near future nothing like business as usual. In my opinion, nothing is usual from now on for any of the countries involved. And the lower you are in the pile, the worse it is going to get."- Dr. Ali Samsam Bakhtiari Whiskey & Gunpowder May 2007

So, we have had "debates" for both the Democratic and Republican Presidential candidates. Think of the things we have learned. Democrats continue to cling to a belief in an omnipotent federal government--- witness the discussion about what the federal government could have done to prevent the massacre at Virginia Tech. It also appears that all the Dems support some sort of federal health care plan and an increase in taxes on the "rich". On the other hand the Republicans all promised to lower taxes once in office, but seemed to have a little disagreement about evolution, if you can believe that.

The three statements at the top of this post reflect "big-picture" issues and problems America will be confronted with over the next several years. You might think that in three hours of political dialogue someone might offer a plan to address these issues--- but guess what? These topics never came up--not once. These issues are all connected and unfortunately they won't be disappearing anytime soon.

Here's an amazing fact. Last year marked the first time ever that U.S. imports of African crude oil surpassed shipments of oil from the Middle East. The trend is continuing in 2007; so far, three African countries (Nigeria, Angola, Algeria) account for 26% of crude oil imports, while three Middle Eastern countries (Saudi Arabia, Iraq, Kuwait) account for just 23%. Thanks to Doug Casey at 321 energy.com for that nugget.