Schaeffer's Open Letter to the Republican Traitors

Frank Schaeffer: Open Letter to the Republican Traitors (From a Former Republican)

You Republicans are the arsonists who burned down our national home. You combined the failed ideologies of the Religious Right, so-called free market deregulation and the Neoconservative love of war to light a fire that has consumed America. Now you have the nerve to criticize the "architect" America just hired -- President Obama -- to rebuild from the ashes. You do nothing constructive, just try to hinder the one person willing and able to fix the mess you created.

I used to be one of you. As recently as 2000 I worked to get Senator McCain elected in that year's primary. (McCain and Gen. Tommy Franks wrote glowing endorsements regarding my book about military service, AWOL.). I have a file of handwritten thank you notes from Presidents Ford, Reagan, Bush I and II. In the 1970s and early 80s I hung out with Jack Kemp and bought into his "supply side" myth and even wrote a book he endorsed pushing his ideas.) There's more, but take it from me; my parents (evangelical leaders Francis and Edith Schaeffer) and I were about as tight with -- and useful to -- the Republican Party as anyone. We played a big part creating the Religious Right.

In the mid 1980s I left the Religious Right, after I realized just how very anti-American they are, (the theme I explore in my book Crazy For God). They wanted America to fail in order to prove they were right about America's "moral decline." Soon after McCain lost in 2000 I re-registered as an independent in disgust with W. Bush. But I still respected many Republicans. Not today.

How can anyone who loves our country support the Republicans now? Barry Goldwater, William F. Buckley and Ronald Reagan defined the modern conservatism that used to be what the Republican Party I belonged to was about. Today no actual conservative can be a Republican. Reagan would despise today's wholly negative Republican Party. And can you picture the gentlemanly and always polite Ronald Reagan, endorsing a radio hate-jock slob who crudely mocked a man with Parkinson's and who now says he wants an American president to fail?!

With people like Limbaugh as the loudmouth image of the Republican Party -- you need no enemies. But something far more serious has happened than an image problem: the Republican Party has become the party of obstruction at just the time when all Americans should be pulling together for the good of our country. Instead, Republicans are today's fifth column sabotaging American renewal.

President Obama has been in office barely 45 days and the Republican Party has the nerve to blame him for the economic and military cataclysm he inherited. I say economic and military cataclysm because without the needless war in Iraq you all backed we would not be in the economic mess we're in today. If that money had been spent here at home on renovating our infrastructure, taking us toward a green economy, putting our health-care system in order we'd be a very different situation.

As the father of a Marine who served in George W. Bush's misbegotten wars let me say this: if President Obama's strategy to repair our economy, infrastructure and healthcare fails that will put our troops at far greater risk because the world will become a far more dangerous place. So for all you flag-waving Republicans who are trying to undermine the President at home -- if you succeed more of our troops will be killed abroad.

When your new leader Rush Limbaugh calls for President Obama to fail he's calling for more flag-draped coffins. Limbaugh is the new "Hanoi Jane."

For the party that created our crises of misbegotten war, mismanaged economy, the lack of regulation of our banking industry, handing our country to rich crooks... to obstruct the one person who is trying to repair the damage is obscene.

Just imagine where America would be today if the 14 to 20 million voters -- "the rube base" who slavishly follow the likes of Limbaugh -- had not voted as a block year after year thus empowering the Republican fiasco. We would have a regulated banking industry and would have avoided our current financial crisis; some 4000 of our killed military men and women would be alive; over to 35,000 wounded Americans would be whole; we would have been leaders in the environmental movement; we would be in the middle of a green technology boom fueling a huge expansion of our economy and stopping our dependence on foreign oil, and our health-care system would be reformed.

After Obama was elected, you Republican leaders had a unique last chance to send a patriotic message of unity to the world -- and to all Americans. You could have backed our president's economic recovery plan. Since we all know that half of our problem is one of lost confidence and perception, nothing would have done more to calm the markets and project resolve and confidence than if you had been big enough to take Obama's offered hand and had work with him -- even if you disagreed ideologically. You had the chance to put our country first. You utterly failed to rise to the occasion.

The worsening economic situation is your fault and your fault alone. The Republicans created this mess through 8 years of backing the worst president in our history and now, because you put partisan ideology ahead of the good of our country, you have blown your last chance to redeem yourselves. You deserve the banishment to the political wilderness that awaits all traitors.

The GOP: Party of Nihilists

The GOP Has Become a Party of Nihilists
By Joe Klein Thursday, Aug. 20, 2009

...There have been times when Democrats have run demagogic scare campaigns on issues like Social Security and Medicare. There are more than a few Democrats who believe, in practice, that government should be run for the benefit of government employees' unions. There are Democrats who are so solicitous of civil liberties that they would undermine legitimate covert intelligence collection. There are others who mistrust the use of military power under almost any circumstances. But these are policy differences, matters of substance. The most liberal members of the Democratic caucus — Senator Russ Feingold in the Senate, Representative Dennis Kucinich in the House, to name two — are honorable public servants who make their arguments based on facts. Hyperbole and distortion certainly exist on the left, but they are a minor chord in the Democratic Party. They don't retail outright lies.
It is a very different story among Republicans. ..There are conservatives — Senator Lamar Alexander, Representative Mike Pence, among many others — who make their arguments based on facts. But they have been overwhelmed by nihilists and hypocrites more interested in destroying the opposition and gaining power than in the public weal. The philosophically supple party that existed as recently as George H.W. Bush's presidency has been obliterated. The party's putative intellectuals — people like the Weekly Standard's William Kristol — are prosaic tacticians who make precious few substantive arguments but oppose health-care reform mostly because passage would help Barack Obama's political prospects...A striking example of the prevailing cravenness was Senator Johnny Isakson of Georgia, who has authored end-of-life counseling provisions and told the Washington Post that comparing such counseling to euthanasia was nuts — but then quickly retreated when he realized that he had sided with the reality-based community against his Rush Limbaugh-led party...And when Palin floated the "death panel" canard, the number of prominent Republicans who rose up to call her out could be counted on one hand...
Until recently, the Republican Party contained a strong moderate wing. It was a Republican, the lawyer Joseph Welch, who delivered the coup de grâce to Senator McCarthy when he said, "Have you no sense of decency, sir, at long last?" Where is the Republican who would dare say that to Rush Limbaugh, who has compared the President of the United States to Adolf Hitler? ...This may tell us something about the actual state of play on health care: the nutters are a tiny minority; the Republicans are curling themselves into a tight, white, extremist bubble — but there may be enough of them raising dust to render creative public policy impossible.

http://www.time.com/time/nation/article/0,8599,1917525-2,00.html

...


"The era of procrastination, of half-measures, of soothing and baffling expedients, of delays, is coming to a close. In its place, we are entering a period of consequences." - Winston Churchill, The Gathering Storm

Crazy for the Loonie—and Canada --Jubak

Thursday, August 06, 2009
Crazy for the Loonie—and Canada
 

The world’s greatest currency?

Not the yen, or the euro, or the renminbi. Sure as shootin' not the US dollar or the British pound.

Yep, it's the loonie, Canada's dollar with the ghostly-voiced diving bird on it. And not just at the moment, either. This is the currency I most want to own for the next decade.

Right now, all the currencies of global commodity producers are rallying. The Australian and New Zealand dollars, the Norwegian krone, and the Canadian loonie all hit 11-month highs against the greenback this week.

The belief that China has gone on a sustainable commodity-buying spree to support its economic recovery has caused commodity prices to soar—and so too have the stock markets and currencies of countries that have commodity-based economies.

At Wednesday’s close, the iShares MSCI Canada Index (NYSEArca: EWC) ETF was up 80% from its March 9th low (the Standard & Poor's 500 index rose 48% during that period), while the Canadian dollar has gained 21% against the US dollar. (EWC traded above $24 late Thursday—Editor.)

I'd put the loonie and Canadian stocks ahead of currencies and stocks of other commodity-based countries because Canada's commodity basket is the most diversified in the world. (Well, Brazil will give Canada a run for the money if the South Atlantic oil discoveries pan out.) Canada has Norway's oil, Australia's mines and farms, and New Zealand's timber and farms all in one package.

And Canada is better positioned in the interest rate cycle. High domestic interest rates—as long as they're not so high that they signal some major economic dysfunction—make a currency stronger. Canada's loonie is strong even though the Bank of Canada has set its target interest rates at just 0.25%, exactly where they are in the US.

That means there will be plenty of support for the loonie when the Bank of Canada—no sooner than the middle of 2010, it has said—starts raising rates again.

lso, the bank has repeatedly pledged to keep its hands off the currency unless its outlook on growth and inflation materially changes.

But finally, I prefer the loonie to the rest of the world's currencies—and certainly to the US dollar—because Canada’s accumulated national debt has been falling, not climbing, for most of the last decade.

After hitting a high near 80% of the country's GDP in 1995-2000, Canada's accumulated national government deficit has dropped pretty much every year until it stood at just 30% of GDP in 2008. In comparison, the US ended 2008 with an accumulated federal debt of about 70% of GDP, and it’s projected to head higher.


...all aboard!

a bouquet of ironies here-- EPA suppresses GW skeptic

EPA May Have Suppressed Report Skeptical Of Global Warming - Political Hotsheet - CBS News

The Environmental Protection Agency may have suppressed an internal report that was skeptical of claims about global warming, including whether carbon dioxide must be strictly regulated by the federal government, according to a series of newly disclosed e-mail messages.

Less than two weeks before the agency formally submitted its pro-regulation recommendation to the White House, an EPA center director quashed a 98-page report that warned against making hasty "decisions based on a scientific hypothesis that does not appear to explain most of the available data."

The EPA official, Al McGartland, said in an e-mail message to a staff researcher on March 17: "The administrator and the administration has decided to move forward... and your comments do not help the legal or policy case for this decision."

The e-mail correspondence raises questions about political interference in what was supposed to be a independent review process inside a federal agency -- and echoes criticisms of the EPA under the Bush administration, which was accused of suppressing a pro-climate change document.

Alan Carlin, the primary author of the 98-page EPA report, told CBSNews.com in a telephone interview on Friday that his boss, McGartland, was being pressured himself. "It was his view that he either lost his job or he got me working on something else," Carlin said. "That was obviously coming from higher levels."

E-mail messages released this week show that Carlin was ordered not to "have any direct communication" with anyone outside his small group at EPA on the topic of climate change, and was informed that his report would not be shared with the agency group working on the topic.

"I was told for probably the first time in I don't know how many years exactly what I was to work on," said Carlin, a 38-year veteran of the EPA. "And it was not to work on climate change." One e-mail orders him to update a grants database instead.

For its part, the EPA sent CBSNews.com an e-mailed statement saying: "Claims that this individual’s opinions were not considered or studied are entirely false. This Administration and this EPA Administrator are fully committed to openness, transparency and science-based decision making. These principles were reflected throughout the development of the proposed endangerment finding, a process in which a broad array of voices were heard and an inter-agency review was conducted."

Carlin has an undergraduate degree in physics from CalTech and a PhD in economics from MIT. His Web site lists papers about the environment and public policy dating back to 1964, spanning topics from pollution control to environmentally-responsible energy pricing.

After reviewing the scientific literature that the EPA is relying on, Carlin said, he concluded that it was at least three years out of date and did not reflect the latest research. "My personal view is that there is not currently any reason to regulate (carbon dioxide)," he said. "There may be in the future. But global temperatures are roughly where they were in the mid-20th century. They're not going up, and if anything they're going down."

Carlin's report listed a number of recent developments he said the EPA did not consider, including that global temperatures have declined for 11 years; that new research predicts Atlantic hurricanes will be unaffected; that there's "little evidence" that Greenland is shedding ice at expected levels; and that solar radiation has the largest single effect on the earth's temperature.

If there is a need for the government to lower planetary temperatures, Carlin believes, other mechanisms would be cheaper and more effective than regulation of carbon dioxide. One paper he wrote says managing sea level rise or reducing solar radiation reaching the earth would be more cost-effective alternatives.

The EPA's possible suppression of Carlin's report, which lists the EPA's John Davidson as a co-author, could endanger any carbon dioxide regulations if they are eventually challenged in court.

"The big question is: there is this general rule that when an agency puts something out for public evidence and comment, it's supposed to have the evidence supporting it and the evidence the other way," said Sam Kazman, general counsel of the Competitive Enterprise Institute, a non-partisan think tank in Washington, D.C. that has been skeptical of new laws or regulations relating to global warming.

Kazman's group obtained the documents -- both CEI and Carlin say he was not the source -- and released the e-mails on Tuesday and the report on Friday. As a result of the disclosure, CEI has asked the EPA to re-open the comment period on the greenhouse gas regulatory proceeding, which ended on Tuesday.

The EPA also said in its statement: "The individual in question is not a scientist and was not part of the working group dealing with this issue. Nevertheless the document he submitted was reviewed by his peers and agency scientists, and information from that report was submitted by his manager to those responsible for developing the proposed endangerment finding. In fact, some ideas from that document are included and addressed in the endangerment finding."

That appears to conflict with an e-mail from McGartland in March, who said to Carlin, the report's primary author: "I decided not to forward your comments... I can see only one impact of your comments given where we are in the process, and that would be a very negative impact on our office." He also wrote to Carlin: "Please do not have any direct communication with anyone outside of (our group) on endangerment. There should be no meetings, e-mails, written statements, phone calls, etc."

One reason why the process might have been highly charged politically is the unusual speed of the regulatory process. Lisa Jackson, the new EPA administrator, had said that she wanted her agency to reach a decision about regulating carbon dioxide under the Clean Air Act by April 2 -- the second anniversary of a related U.S. Supreme Court decision.

"All this goes back to a decision at a higher level that this was very urgent to get out, if possible yesterday," Carlin said. "In the case of an ordinary regulation, these things normally take a year or two. In this case, it was a few weeks to get it out for public comment." (Carlin said that he and other EPA staff members asked to respond to a draft only had four and a half days to do so.)

In the last few days, Republicans have begun to raise questions about the report and e-mail messages, but it was insufficient to derail the so-called cap and trade bill from being approved by the U.S. House of Representatives.

Rep. Joe Barton, the senior Republican on the Energy and Commerce committee, invoked Carlin's report in a floor speech during the debate on Friday. "The science is not there to back it up," Barton said. "An EPA report that has been suppressed... raises grave doubts about the endangerment finding. If you don't have an endangerment finding, you don't need this bill. We don't need this bill. And for some reason, the EPA saw fit not to include that in its decision." (The endangerment finding is the EPA's decision that carbon dioxide endangers the public health and welfare.)

"I'm sure it was very inconvenient for the EPA to consider a study that contradicted the findings it wanted to reach," Rep. James Sensenbrenner, the senior Republican on the House Select Committee on Energy Independence and Global Warming, said in a statement. "But the EPA is supposed to reach its findings based on evidence, not on political goals. The repression of this important study casts doubts on EPA's finding, and frankly, on other analysis EPA has conducted on climate issues."

The revelations could prove embarrassing to Jackson, the EPA administrator, who said in January: "I will ensure EPA’s efforts to address the environmental crises of today are rooted in three fundamental values: science-based policies and programs, adherence to the rule of law, and overwhelming transparency." Similarly, Mr. Obama claimed that "the days of science taking a back seat to ideology are over... To undermine scientific integrity is to undermine our democracy. It is contrary to our way of life."

"All this talk from the president and (EPA administrator) Lisa Jackson about integrity, transparency, and increased EPA protection for whistleblowers -- you've got a bouquet of ironies here," said Kazman, the CEI attorney.

Larry Kudlow is a moron

 

Sometimes, when I fail to hit mute on my TV, I am blasted by the brainless rantings of CNBC’s Larry Kudlow, whose zeal for tax cuts rivals his earlier addiction to cocaine and alcohol. He believes that returning high-income tax rates to those during the 90’s boom will lead to the destruction of mankind. If rich people are so motivated by tax rates, then why do so many live in NYC and California? Even Kudlow lived in NYC until he was fired from his Wall St. job and went to a drug treatment center in ‘95. NY has a fairly high state tax that is 6.85% max and NYC adds ~3.5% max. There’s also a fairly high property tax and sales tax. Why haven’t the rich left NYC a long time ago? Financial companies can now move anywhere because the markets are mostly electronic. People could commute from upstate NY, CT or NJ to avoid some NYC tax. Some do, but many remain. More importanly, why did Kudlow live in NYC rather than commute from a lower tax area? The boat outside my house takes me to Wall St. in 10 minutes.

Kudlow’s addictive personality and meager education in economics made him susceptible to Arthur Laffer’s simplistic view of the world. And his pompous and pseudo-intellectual manner probably makes him popular on the right-wing cocktail party circuit. Indeed, his conversion to Catholicism is yet another example of his need to belong to a cult. My only hope is that someday Steve Liesman will strangle Kudlow live on-the-air.

Larry Kudlow is a moron « Handwaving

the stimulus gloves are off

 

In a recent issue of Grant's Interest Rate Observer, Jim Grant charted the stimulus money (both monetary policy and government spending) as a percentage of gross domestic product for this downturn, compared with the previous 13 recessions.

In those earlier recessions, if you added all the percentages, the cumulative monetary stimuli constituted about 6 percentage points, while thus far in this recession, the stimuli have clocked in at 18%. Add in the 11.9% (of GDP) supplied by the government and you get 29.9% for the combined stimuli. That's compared with a total of 39.3 percentage points for the prior 13 recessions combined.

It's also already 4 times the New Deal's percentage of GDP!

Yes, I'd say the gloves are off. By the time the dust settles, you may not recognize the economic landscape.

http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/thank-uncle-sam-for-the-rally.aspx

"GOP: like Trekkies, but paranoid."

BILL MAHER: "It's been a week now, and I still don't know what those "tea bag" protests were about. I saw signs protesting abortion, illegal immigrants, the bank bailout and that gay guy who's going to win "American Idol." But it wasn't tax day that made them crazy; it was election day. Because that's when Republicans became what they fear most: a minority.

The conservative base is absolutely apoplectic because, because ... well, nobody knows.

They're mad as hell, and they're not going to take it anymore. Even though they're not quite sure what "it" is. But they know they're fed up with "it," and that "it" has got to stop.

Here are the big issues for normal people: the war, the economy, the environment, mending fences with our enemies and allies, and the rule of law.

And here's the list of Republican obsessions since President Obama took office: that his birth certificate is supposedly fake, he uses a teleprompter too much, he bowed to a Saudi guy, Europeans like him, he gives inappropriate gifts, his wife shamelessly flaunts her upper arms, and he shook hands with Hugo Chavez and slipped him the nuclear launch codes.

Do these sound like the concerns of a healthy, vibrant political party?

It's sad what's happened to the Republicans. They used to be the party of the big tent; now they're the party of the sideshow attraction, a socially awkward group of mostly white people who speak a language only they understand. Like Trekkies, but paranoid.... "

http://www.alternet.org/story/138354/bill_maher%3A_the_gop_is_acting_like_a_guy_who_got_dumped/

http://sfbay.craigslist.org/forums/?ID=123096601

Bottom? What bottom?

April 15, 2009
© 2009 Decision Economics, Inc. All rights reserved. Reproduction in whole or in part without the written permission of the copyright owner is prohibited.
Page 1 of 1
Industrial Production: No hint of a turn
March industrial production drops a more-than-generally-expected 1.5% (Consensus: -0.9%; Decision Economics: -
1.5%), from a minimally revised February level.
Within the total, manufacturing output dropped 1.7%, mining activity ell 3.2%, and utility output rose 1.8%. The
auto industry was a minimal factor in the manufacturing decline, with factory output excluding motor vehicles and
parts dropping 1.9%, across virtually all industries.
Thus, there was no hint that the process of inventory liquidation is drawing to a close. When it does, production
can be expected to bounce back up to meet the pace of sales--at whatever depressed level that may be. The turn will
not be pre-announced, and might happen at any time--but the strong downward momentum of output, and the
still very uncertain trend of final sales, suggest that the moment is not too near.
Ongoing big output declines expand industrial slack capacity (with the manufacturing utilization rate falling 1.1
points), and can lead to further employment cuts. Those trends generally argue for an increasing downward pull
on goods prices--which may, already, be in outright decline.




https://public.fidelityresearch.com/wsod-lehman/nationalfinancial/resources/server/pdf.asp?feedId=99&docTag=US_Economic_Indicators&versionTag=2fcb0592e7f2b5ea93a0c2b76247b7c2&reportName=US%2520Economic%2520Indicator%2520Insights%2520%2526%2520Analyses&doc

Head fake from financials?

Goldman Sachs (GS) And The Secret Of Bank Earnings - 24/7 Wall Street

Goldman’s results were unexpectedly good. The company said it earned $1.81 billion, or $3.39 a share, in the first quarter as improved trading revenue outweighed asset write-downs, handily beating the $1.64 estimate of 16 analysts surveyed by Bloomberg.

While Goldman’s earnings were good, what was better was that the company said it would raise $5 billion and use that and capital on hand to pay back the $10 billion of TARP funds it got from the federal government. The “payback” is the key sign that the Goldman results are the real deal. Wells Fargo did not offer the government a check. It said it hoped to, someday. That is almost certainly a sign that the bank can’t make the payment now or it needs to keep the cash it has for estimated losses in future quarters.

Goldman set a tone for bank earnings which probably won’t be matched this earnings season. By paying the TARP funds it said that it did not have to worry about the next few quarters. It is not concerned that losses from toxic assets, consumer credit, commercial lending, or leveraged buy-outs will be a problem later this year. Goldman implied that its earnings won’t be undermined by the troubles that may affect other financial firms as the economy continues to stumble and bank loans of almost every sort default with increasing frequency.

None of the other banks are going to be able to pull off what Goldman did.

Lincoln Worship Redux

recounting of the story of Lincoln's leadership, his remarkable ability to persevere through adversity, to use his common sense and uncommon intelligence to chart a road to victory, amazes still, and reminds us yet again of our extraordinary good fortune as a nation to have had that man in that office at that moment. We are reminded, too, of the seeming hopelessness of the task that Lincoln faced as he took office in 1861. He was so loathed he had not even been on the ballot in ten southern states; the secession of seven states took place before he was even inaugurated. By the time nine months of his presidency had elapsed, northern forces had been ignominiously defeated only miles from the Capitol; efforts to liberate Unionist Tennessee had failed; no military commander seemed to have any plan for effective movement against the enemy; and northern popular opinion was impatient for either military success or political compromise. "The bottom is out of the tub," Lincoln proclaimed in despair. "What shall I do?"

In the face of such odds, he managed to create an army, win a war, and save a nation--setting the stage as commander-in-chief for Union military triumph but also, as national strategist and policy maker, tying war aims to larger purposes--creating the new birth of freedom of which he spoke, and which we are still realizing today. Perhaps this is why, in the season of his two-hundredth birthday, this remarkable president continues to mean so much to us. Abraham Lincoln is, quite simply, the greatest argument against despair in dark times that our history provides."  -- Drew Gilpin Faust is president of Harvard University and the author most recently of This Republic of Suffering: Death and the American Civil War

... yes, but -- No matter the purity of his motives, he was stll the co-architect of unimaginable suffering that haunted the nation for a century. I do wonder if he'd known in '61 the depth of horror in store in the next 4 years, would he still have accepted the challenge? No one worshiping at his altar ever seems to raise the question.

My patience is wearing thin.

As one who dared to hope Obama really meant change from the unmitigated disaster of the last 8 years, he and Pelosi and Geithner have been singularly disappointing. The housing collapse was the catalyst for the economic collapse; until house prices stop dropping there can be no sustained recovery, yet nobody in position of authority seems capable of addressing this central fact head on.

Getting banks to lend would certainly be helpful but it can't really happen in a sustained fashion until the recession finds a bottom, and that means housing prices stabilize. Ditto for business hiring. Ditto for creating work for the jobless in the interim....


I want to believe but it requires a leap of more faith than I have left. I take some comfort that it's driving the RW nuts but the pricetag of this schadenfreude I can't afford. It reeks of Old Politics.

"The era of procrastination, of half-measures, of soothing and baffling expedients, of delays, is coming to a close. In its place, we are entering a period of consequences." - Winston Churchill, The Gathering Storm

Key Trends for '09: Inflation & Food

plus solvency. That's critical...

"The hot trends for 2009 are:

* Inflation. Gold has started to move up. The U.S. dollar has started to move down. Overseas investors are cutting back on their purchases of dollar-denominated debt. And the faithful news consumer can see the beginnings of a tidal wave of articles and editorials worrying about the inevitability of inflation now that the Federal Reserve has decided to pay overtime to the crew that prints paper money.

* Food. Yes, food commodity stocks collapsed in 2008. And, yes, prices for food commodities went into a retreat that turned into a rout; the prices of major grains are down 50% from their 2008 peaks. But don't count on food getting cheaper still in 2009. All the signs point the other way. The United Nations' Food and Agriculture Organization has warned that because of the global credit crunch, many farmers lack capital to buy seed and fertilizer for the 2009-10 growing season. That's likely to show up in commodity prices, via the futures market, by mid-2009.

* Stability. Companies able to deliver solid revenue and earnings at or maybe even a little above expectations are rare as hens' teeth at this stage of the recession. Companies with those kinds of results are also in a position to use the current global slowdown to attack weaker competitors, buy market share and aggressively develop new products. That's a combination investors particularly prize in the current uncertainty.

I'd give those three trends green lights right now. "

http://articles.moneycentral.msn.com/Investing/JubaksJournal/10-key-trends-for-investors-in-09.aspx?page=all

I just wish I knew a good way to short treasuries.

...


"The era of procrastination, of half-measures, of soothing and baffling expedients, of delays, is coming to a close. In its place, we are entering a period of consequences." - Winston Churchill, The Gathering Storm

You want a bailout? Here's my offer

clipped from sfbay.craigslist.org [sfo] Politics World (context) You want a bailout? Here's my offer < RuffJustice > 2008-11-21 08:04:47 If you need a taxpayer bailout, you issue us redeemable convertible preferred shares at the common price paying 1% + the 10-yr T-note rate, redeemable / convertible for 1/5 of a common share at 5x the current share price. The maximum that can be issued is of the number of common shares outstanding. Until the preferred is redeemed: 1. The dividend paid to common and preferred stockholders must be reduced by the percentage of preferred shares issued to us divided by common shares outstanding, and 2. Executive compensation decisions will be turned over to the National Executive Compensation Board chaired by the SEC. Don't count on a bonus. 3. If you miss a payment on our dividend, the Treasury Secretary will appoint a new CEO and board to manage the company. Don't count on a golden parachute. reply

The Gaza 2 Step

1. Kill some Israeli kids
2. Party

clipped from www.humanevents.com On the evening of March 6 in Jerusalem, a heavily armed Palestinian terrorist from nearby east Jerusalem entered the Mercaz Harav yeshiva and opened fire on the unarmed teenage students studying there. Eight died, and 11 were badly wounded before another student and an off-duty soldier shot the terrorist. The atrocity ignited wild celebrations in Gaza. If you thought that the celebrations were anomalous, you might want to know about recent findings just published by the Palestinian Center for Policy and Survey Research, an independent polling organization based on the West Bank. According to its polls, 84 percent of Palestinians approved of this attack. Moreover, 64 percent approve of Hamas randomly firing rockets and mortars from Gaza into Israeli communities, and 75 percent favor ending negotiations between their leaders and the Israeli government. ...so it goes.

Meanwhile, back at the train wreck

formerly known as The Economy, the evidence of the tipping point receding in the rear view mirror continues to mount ...

"The Empire State Manufacturing Index fell to -25.4 (DE: -28.5, Consensus: -26.0) in November from -24.6 in October. The result is the lowest in the Index's brief history (it began in 2001). New orders fell sharply for the second straight month, with the index falling to -22.2 from -20.5. Shipments also fell again, dropping to -13.9 from -8.9 in October. As a result of orders falling more sharply than shipments, unfilled orders fell as well, with the index reading -24.1 from last month's -12.2. This was the 8th straight month of falling unfilled orders.

The story of this report however, was the deterioration of the employment index, which fell to -28.9 from -3.7 last month. The reading was the worst since December 2001.

The average employee workweek also dropped, with the index falling to -25.3 from -9.8. Meanwhile, expectations for employment six months from now turned negative, hitting -4.2 from 1.1 in October. Only once in the history of the series (September 2001) did the expected employment index turn negative. In 2001 however, that result was almost certainly September 11th related, as the expected index read 15.5 in August, and rebounded to 8.0 in October. This time around, it likely reflects a sharp deterioration in the economic outlook."

... In other words, it's not just getting worse, it's getting worse faster and faster. This means it's going to get REALLY BAD before it even starts to get bad more slowly. YOU'VE BEEN WARNED.

...


"The era of procrastination, of half-measures, of soothing and baffling expedients, of delays, is coming to a close. In its place, we are entering a period of consequences." - Winston Churchill, The Gathering Storm

You could almost hear the global sigh of relief

CNN 2008-11-05

The Times of London said Obama had revitalized U.S. politics. In Germany, Der Spiegel called Obama's rise "astonishing," while the Times of India called Obama an "advocate of strong partnership with India."

Al Jazeera said Obama had "surfed to power on a wave of voter discontent generated by the failures of President George Bush and the Republican Party" and added that he faces "unique challenges." It continued that his country was "sick of war."

Actually, the whole world pronounced itself sick of what it perceived to be Bush's multipronged military approach. From the start, President Obama will have to tackle the campaign pledge that defined his candidacy: bringing U.S. troops home from Iraq and ending the war there.
At the same time, he has to tackle a Rubik's Cube of America's overstretched and fatigued forces, to figure out how to redeploy more to wrest victory from the jaws of defeat in Afghanistan.
And next door in Pakistan, he must devise a strategy to rescue a failing state, bolster democracy and simultaneously crack down on al Qaeda and Taliban militants there.

And what about Iran? Many believe that's Foreign Policy Challenge Number 1A, if not Number 1, because of Iran's nuclear program.

Iran officially reacted to Obama's victory with cautious optimism, praising the end of what it termed "Bush's defeated policies." It added that Obama "can play an important role in future relations between the U.S. and Asia and the Middle East."

Here in America, many former secretaries of state and other officials also believe in playing that role. They say an Obama administration should explore the possibility of engaging with Iran and even restoring diplomatic relations as a way to help solve challenges such as Iran's nuclear program and its role in regional power politics in Iraq, Afghanistan and the Middle East peace process.

Obama can ride the wave of warm welcome from European and other global allies, but he is already being encouraged to restore an era of cooperation and compromise after the unilateral approach of the Bush administration.
reply...


"The era of procrastination, of half-measures, of soothing and baffling expedients, of delays, is coming to a close. In its place, we are entering a period of consequences." - Winston Churchill, The Gathering Storm

Why you must NEVER trust a "conservative"

in one simple table...

http://www.skymachines.com/US-National-Debt-Per-Capita-Percent-of-GDP-and-by-Presidental-Term.htm

...Goddammit, pod people stole my party!...


"The era of procrastination, of half-measures, of soothing and baffling expedients, of delays, is coming to a close. In its place, we are entering a period of consequences." - Winston Churchill, The Gathering Storm

White Privilege: a rant

For those who still can't grasp the concept of white privilege,
or who are constantly looking for some easy-to-understand
examples of it, perhaps this list will help.

White privilege is when you can get pregnant at seventeen like Bristol
Palin and everyone is quick to insist that your life and that of your
family is a personal matter, and that no one has a right to judge you or
your parents, because "every family has challenges," even as black and
Latino families with similar "challenges" are regularly typified as
irresponsible, pathological and arbiters of social decay.

White privilege is when you can call yourself a "fuckin' redneck,"
like Bristol Palin's boyfriend does, and talk about how if anyone messes
with you, you'll "kick their fuckin' ass," and talk about how you like
to "shoot shit" for fun, and still be viewed as a responsible,
all-American boy (and a great son-in-law to be) rather than a thug.

White privilege is when you can attend four different colleges in six
years like Sarah Palin did (one of which you basically failed out of,
then returned to after making up some coursework at a community
college), and no one questions your intelligence or commitment to
achievement, whereas a person of color who did this would be viewed as
unfit for college, and probably someone who only got in the first
place because of affirmative action.

White privilege is when you can claim that being mayor of a town smaller
than most medium-sized colleges, and then governor of a state with about
the same number of people as the lower fifth of the island of Manhattan,
makes you ready to potentially be president, and people don't all piss
on themselves with laughter, while being a black U.S. Senator, two-term
state Senator, and constitutional law scholar, means you're "untested."

White privilege is being able to say that you support the words "under
God" in the pledge of allegiance because "if it was good enough for the
founding fathers, it's good enough for me," and not be immediately
disqualified from holding office--since, after all, the pledge was
written in the late 1800s and the "under God" part wasn't added until
the 1950s--while believing that reading accused criminals and terrorists
their rights (because, ya know, the Constitution, which you used to
teach at a prestigious law school requires it), is a dangerous and silly
idea only supported by mushy liberals.

White privilege is being able to be a gun enthusiast and not make people
immediately scared of you. White privilege is being able to have a
husband who was a member of an extremist political party that wants your
state to secede from the Union, and whose motto was "Alaska first," and
no one questions your patriotism or that of your family, while if you're
black and your spouse merely fails to come to a 9/11 memorial so she can
be home with her kids on the first day of school, people immediately
think she's being disrespectful.

White privilege is being able to make fun of community organizers and
the work they do--like, among other things, fight for the right of women
to vote, or for civil rights, or the 8-hour workday, or an end to child
labor--and people think you're being pithy and tough, but if you merely
question the experience of a small town mayor and 18-month governor with
no foreign policy expertise beyond a class she took in college--you're
somehow being mean, or even sexist.

White privilege is being able to convince white women who don't even
agree with you on any substantive issue to vote for you and your running
mate anyway, because all of a sudden your presence on the ticket has
inspired confidence in these same white women, and made them give your
party a "second look."

White privilege is being able to fire people who didn't support your
political campaigns and not be accused of abusing your power or being a
typical politician who engages in favoritism, while being black and
merely knowing some folks from the old-line political machines in
Chicago means you must be corrupt.

White privilege is being able to attend churches over the years whose
pastors say that people who voted for John Kerry or merely criticize
George W. Bush are going to hell, and that the U.S. is an explicitly
Christian nation and the job of Christians is to bring Christian
theological principles into government, and who bring in speakers who
say the conflict in the Middle East is God's punishment on Jews for
rejecting Jesus, and everyone can still think you're just a good
church-going Christian, but if you're black and friends with a black
pastor who has noted (as have Colin Powell and the U.S. Department of
Defense) that terrorist attacks are often the result of U.S. foreign
policy and who talks about the history of racism and its effect on black
people, you're an extremist who probably hates America.

White privilege is not knowing what the Bush Doctrine is when asked by a
reporter, and then people get angry at the reporter for asking you such
a "trick question," while being black and merely refusing to give
one-word answers to the queries of Bill O'Reilly means you're dodging
the question, or trying to seem overly intellectual and nuanced.

White privilege is being able to claim your experience as a POW has
anything at all to do with your fitness for president, while being black
and experiencing racism is, as Sarah Palin has referred to it, a "light"
burden.

And finally, white privilege is the only thing that could possibly allow
someone to become president when he has voted with George W.
Bush 90 percent of the time, even as unemployment is skyrocketing,
people are losing their homes, inflation is rising, and the U.S. is
increasingly isolated from world opinion, just because white voters
aren't sure about that whole "change" thing. Ya know, it's just too
vague and ill-defined, unlike, say, four more years of the same, which
is very concrete and certain.

White privilege is, in short, the problem.

...


"The era of procrastination, of half-measures, of soothing and baffling expedients, of delays, is coming to a close. In its place, we are entering a period of consequences." - Winston Churchill, The Gathering Storm

Market Outlook "Worst Ever"

PIMCO 3Q08 Market Outlook

07/01/2008
http://www.allianzinvestors.com/commentary/frm_PIMCO_mkt07012008.jsp
PIMCO Secular Economic Outlook for 2008 - Market Outlook for 3rd Quarter

PIMCO believes that secular economic, social and political trends exert the most powerful and sustained influences on bond markets. They define “secular” as the next three to five years. PIMCO's secular outlook guides the way they structure portfolios in terms of duration, yield curve positioning, sector exposure, credit quality and other risk measures. The following are the views and findings from the PIMCO Secular Outlook:

Emerging Economies to Lead Global Growth - Global growth will remain robust despite a cyclical downturn in the U.S. and other developed economies. Growth will be driven to a greater extent by emerging markets that are in the midst of a breakout development phase. The global economy is evolving into a multi-polar growth world where countries such as China emphasize more balanced development paths that include enhanced consumption, market-based systems and more flexible exchange rates.
Upward Trend in Inflation - Inflation pressures will spring from several sources. These include: the spillover of global demand into commodities; gradually rising wages as well as policy shifts toward greater employment and social spending in developing economies; and loose U.S. monetary policy that tends to export inflation, especially to emerging economies that align their currencies with the U.S. dollar.
Lower Corporate Profits - Profits are likely to decline from current high levels, both overall and relative to labor, as low wages in emerging markets rise. In addition, as the financial sector works its way through the subprime crisis it will have to raise more capital, reduce leverage and tighten lending standards. While such measures will promote stability over the long run, they will have a depressing effect on profitability over the next several years for financial companies and the corporate sector overall.
Realignment of the Global Financial System - In developed economies, regulatory changes and balance sheet management will drive realignment. Now that the Federal Reserve has opened its discount window to investment banks, these institutions are likely to face greater capital requirements and oversight. The financial sector in the developed world will be driven toward a business model with lower leverage and lower risk. Realignment will take a different form in emerging markets. Local capital markets in emerging economies will continue to develop as consumers and businesses demand a wider range of financial services. The influence of sovereign wealth funds will grow as they diversify risk profiles of their portfolios.


PIMCO Cyclical Economic Outlook

While the Secular Outlook is the foundation for the PIMCO portfolio strategies, they refine this outlook to account for expected developments over a cyclical, or 6- to 12-month time frame. Major aspects of PIMCO's cyclical view are:

Fed Unlikely to Tighten in Near Term – The financial system is highly sensitive to shifts in monetary and fiscal policy amid constrained balance sheet liquidity and asset write-downs that continue to erode banks’ capital. There is also growing evidence that fallout from the subprime debacle has now spread to the U.S. regional banking sector. In this environment, the Fed is unlikely to have the latitude to raise short-term interest rates over the next several months despite growing inflation pressure.
Heightened Volatility for Investment Strategies - PIMCO expects that the vulnerability of the global financial system to policy mistakes will make risk exposures in investment portfolios more volatile. On the positive side, however, this volatility is also likely to create more opportunities for astute investors to add value.


Investment Implications of Secular and Cyclical Outlook

The following is a summary of broad investment themes that flow from the PIMCO Secular Outlook, as well as descriptions of how PIMCO expects to express these themes.

Limit Interest Rate Risk - PIMCO will look to reduce exposure to interest rates in the U.S. and elsewhere in the world, especially on the longer end of yield curves. Longer maturity rates are vulnerable to inflation risk and, in the case of the U.S., the need to finance higher expected fiscal deficits and attract investors already heavily exposed to Treasuries. In the U.S., PIMCO will target duration below the benchmark. With the U.S. yield curve likely to remain steep, they plan to retain our focus on relatively short maturities, a strategy that offers the potential for gains as bonds “roll down,” or mature along the steep yield curve over time.

Outside the U.S., PIMCO plans to retain exposure to the front end of the U.K. yield curve, though at reduced levels. The Bank of England faces the same constraints with respect to raising rates as does the Fed, which means that U.K. short rates are unlikely to rise as much as markets expect.

Seek Out High-quality Assets With Attractive Yields - Debt reduction and balance sheet realignment, and the resulting dearth of liquidity, have contributed to a dramatic widening in risk premiums across a variety of fixed-income assets. PIMCO will be discriminating as it pursues these opportunities. They believe that the best risk-adjusted returns will be found in the senior part of the economy’s capital structure. These securities include top quality corporates, municipals, mortgages and other asset-backed bonds where valuations have cheapened less for reasons of credit weakness than because of system-wide liquidity constraints.

For example, PIMCO plans to retain an overweight to mortgage-backed bonds, especially those arranged by the major mortgage agencies, to capture yield premiums well above historical averages. Municipal bonds trading at yields above Treasuries are another high quality opportunity.

Look for Value in Financials - Realignment of the financial sector could create compelling opportunities for investors. Regulators will look to remove risks of institutional failure from the banking system. The cost of this regulatory reaction will be a lower return on capital that will likely tilt relative value in the direction of bondholders and away from stocks of financial companies. While PIMCO plans to retain an overall underweight to the corporate sector, they will continue to emphasize select, high-grade corporates where the credit crisis has produced attractive valuations, including bonds of banking and finance companies. Some of these financial institutions may well be too big to fail, thus putting them under the “umbrella” of the Fed.
Position for Renewed U.S. Dollar Weakness – The U.S. dollar’s decline is not over, but the currencies that carry the brunt of the appreciation versus the dollar will change. The gainers will no longer be dominated by countries with floating currencies, such as the euro, pound and yen. PIMCO plans to take modest positions that benefit when these currencies lose value versus the U.S. dollar. They will emphasize currencies of emerging market countries (such as China and elsewhere in Asia) with relatively inflexible currency regimes that will be forced to let their currencies rise against the U.S. dollar to combat inflation.


...


"The era of procrastination, of half-measures, of soothing and baffling expedients, of delays, is coming to a close. In its place, we are entering a period of consequences." - Winston Churchill, The Gathering Storm

CRAMERAMA

Get more business news from CNBC!

Check the Stock Market Quotes on CNBC.com.

More Fecal Matter Approaching the Rotational Air Circulation Device

End of an Era
By ALAN ABELSON

Prepare for meaner slumps and less exuberant recoveries. The jobs report tells only half the bad news.

WHAT CAN YOU SAY ABOUT JUNE? IN A FAMILY MAGAZINE, THAT IS. Except good riddance.

It was, as Dubya might put it, a heck of a month. But that doesn't quite convey how very distinctive and how awfully bloody it was. Great for ghouls, vampires and short sellers. Bad for just about anyone else with a pulse who happened to own as much as one solitary share of stock.

Of course, if you had invested your dough in a nice little oil well somewhere you probably feel like a million bucks and your net worth must feel even better. Or, if you were one of those dastardly speculators who, sneering all the while at the world's hungry millions, took a flier on wheat, while steering clear of zinc, June was a positively lovely month.

But if you're the diehard equity type, as so many of us innocents are, you suffered the agonies of poor old Job. For the sad truth is, to find an equal to how bad June's stock market was. you need to go all the way back to 1930, when the fall-out from the Great Crash was wrenchingly evident and the bodies were still hitting the pavement on Wall Street.

If it's any consolation, the elite billionaires as well as we poor investment peasants have been roughed up by this year's cruel and vicious market. We can offer you that solace, thanks to the efforts of crack researcher Teresa Vozzo, who secured the data from an interesting Website dubbed GuruFocus.com

As its fairly repellent name may give you a hint, GuruFocus tracks the stock picking performance of 55 mostly famous (and usually rich) investors including the likes of Warren Buffett, George Soros, Dave Williams, Glenn Greenberg, Carl Icahn, Ron Baron, David Dreman, Edward Lampert, Bill Miller, Marty Whitman and Seth Klarman. We know a number of these fine gents and even like a few of them.

According to GuruFocus, in the first half of this year, only four of the 55 bought stocks that collectively scored a gain. This lucky quartet was headed by T. Boone Pickens, the oil maven, whose stock purchases in the first half of the year were up a nifty 23%; Ken Heebner, whose equity buys averaged a 14.5% rise; Steve Mandel, who enjoyed a 10.1% average gain on the shares he bought in the opening six months, and David Winters, who posted a 3.8% appreciation.

The worst losers were Marty Whitman, whose first-half picks were down 43.9%; Mohnish Pabrai, whose buys were down an average of 41.9%; and Bill Miller, whose purchases, on average, lost 38.5%. No need, we hazard, to pass the collection plate.

THE BANK FOR INTERNATIONAL SETTLEMENTS -- BIS, for short, and blessedly less of a mouthful than the official moniker -- has been around four score years and thus seen it all: panics and booms, recession, depression and bountiful prosperity, inflation, disinflation and that particularly ugly hybrid, stagflation. The bank, in the not unlikely case its existence has eluded your ken, is the central banks' central bank, a kind of global nanny keeping an eye cocked on the world's banking system and trying, regrettably not always with success, to persuade its charges to act with some semblance of prudence and reason.

For an institution coping with no fewer than 55 central banks, it somehow has contrived to retain its sanity and, perhaps even more surprisingly, its equilibrium. Indeed, for the most part, it manages to eschew those endearing qualities that conspire to make "smart banker" an oxymoron. Unlike so many vaguely official entities with "international" in their title, the BIS renders its analyses and opinions as guided by facts on the ground rather than revelations from on high.

We're grateful to our friends, Philippa Dunne and Doug Henwood at the Liscio Report, whose latest commentary on the economy prompted this little riff on the BIS. Like the diligent scholars they are, they plowed through the 260 pages of the bank's annual report and distilled some of the salient material it contains. Less scholarly and for sure less diligent, we, in turn, are distilling their distillate.

The BIS, incidentally, is based in Basel (forgive us our alliterations), which, we suppose, doesn't surprise you, for where else would the central bank of the world's central banks be based but in Switzerland? More to the point, its Swiss locale provides a suitably neutral perch from which to survey the global economic and financial scenes. What we found gratifying is that so much of the BIS' view of the way things are and what lies ahead of us is very much akin to what we've been scribbling here for months on end (vanity, thank heavens, is not a mortal sin). Its take on inflation, for example, seems quite on the money. It doesn't much hold with the notion, so firmly held in Wall Street and Washington, that the concoction known as "core" inflation, which eliminates such insignificant stuff as the cost of food and energy, is the proper measure of inflation. Instead, the bank is convinced that in the U.S. and the Eurozone, headline inflation -- which, of course, much to the chagrin of the no-inflation claque, includes prices of food and energy -- has become a much better predictor of inflation.

As to whether the economy is done in by a violent flare-up of inflation in a redux of the 1970s or by the insufferable weight of debt aggravated by the brutal credit crunch, the BIS ventures with admirable impartiality that those on both sides of the argument might in the fullness of time be proved right. Which pretty much echoes our feeling that the current surge of inflation will worsen ponderably and be followed by a painful period of deflation. The bank warns that resorting to "gimmicks and palliatives" to support asset prices and stymie an impulse among consumers to save will only make things worse.

The BIS lays the blame for the current financial mess we find ourselves in squarely on the vast buildup of debt over the years that has instilled in various global economies a dangerous tendency, fed by easy credit, to magnify booms and busts. From here on, in other words, you might as well kiss those comparatively mild recessions and moderate expansions that we've recently had goodbye.

As Philippa and Doug sum up the message in the BIS annual, it increasingly looks "like the evermore freewheeling financial environment that we've taken for granted for the last 25 years is behind us." Or, as the Bank declaims "has run its course."

In sum, better buckle your seat belt; the ride ahead stacks up as pretty darn bumpy.

ANOTHER MONTH, ANOTHER PUNK EMPLOYMENT REPORT.

We're always razzing the poor old consensus for its bum forecasts, often so very much off the mark, of monthly employment numbers. So we figure it's only fair to be nice for a change and commend the consensus for being smack on target. And we'll even refrain from pointing out that once in a very great while, the guy or gal with a blindfold on does pin the tail on the donkey.

Anyway, the going estimate on the Street for June was a loss of 60,000 or so jobs and, by golly, the actual number was 62,000. All you members of the consensus, stand, please, and take a bow (it may be a long time before you get a chance to do it again).

The unemployment rate, meanwhile, which had taken a huge jump in May, the biggest, in fact, in 22 years, held steady at 5.5%. Revisions to April and May swelled the earlier reported totals of pink slips by a combined 52,000.

The private sector lost 91,000 jobs, with, as you might expect, construction and manufacturing the heaviest hit. The good news was on the skimpy side: The biggest gains in hiring were by municipalities and states, and given the increasing financial pinch afflicting city halls and statehouses just about everywhere, that old reliable geyser looks due to dry up in a hurry.

Just for the record, governments of every stripe chipped in 29,000 to the job total. There were some 30,000 fewer temps working at the end of June than at its start, which tells you more about the economy than you'd like to hear. It's also a bit of an evil harbinger for employment.

That insightful pair, Philippa Dunne and Doug Henwood, cited above, are invariably spot-on when it comes to parsing the monthly job numbers and we've passed along their conclusions, many a time and oft. Our only reservation, and a modest one, has been, kindly souls that they are, they were too forgiving of the Bureau of Labor Statistics' birth/death model, which seeks to capture the jobs added and subtracted by, well, the birth and death of new firms. The device invariably strikes us as a fire alarm that works swell -- except when there's a fire. And in the overwhelming majority of months, it perhaps conveniently serves to bloat the total of jobs added.

As it happens, we now have reason to forgive Philippa and Doug for being forgiving. Here's what they say in Friday's review of the latest jobs report: "Although we usually shy away from pointing to mischief coming from the birth/death model, this seems to be one of those moments when we should overcome our shyness: It added 177,000 to June employment."

Duly noting that the birth/death calculation is made without seasonal adjustment, they nonetheless observe that save for it, private employment would have been down a formidable 268,000 or so. Other absurdities: The birth/death model miraculously added 29,000 to rapidly vanishing construction employment, 22,000 to professional business and professional services and -- get this -- a whopping 86,000 to leisure and hospitality.

They comment dryly: "Given the weakness of the economy and the crunchiness of credit, we doubt there are enough start-ups around to match these imputations." Exactly.

http://online.barrons.com/article/SB121512484846628107.html?mod=googlenews_barrons&page=2&page=sp#
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"The era of procrastination, of half-measures, of soothing and baffling expedients, of delays, is coming to a close. In its place, we are entering a period of consequences." - Winston Churchill, The Gathering Storm

End of an Era

The era of unlimited abundance is ending. Instead of delusioning on windmills and solar power destined to provide only a few percent of our needs for the next 300 years, the world must go immediately to nuclear energy. Instead of going on and on about Chernobyl and Three Mile Island, the truth is that France has gone nearly 80% nuclear since the 1970s, and it's never had an accident. And the choice is not between nuclear and solar, it's between nuclear and all of us shivering in the dark.

Nuclear at least would give the planet enough energy for everybody for the next few centuries. And by then, we might have practical nuclear fusion that would emulate the power of the sun, and just pray some lunatic at that point doesn't use it to destroy the whole planet.

The Pacific Ocean is like a huge lake with a circular current around it, and it's recently been discovered that there's a huge collection of plastic garbage in its centre, twice the size of the United States; everything from old toothbrushes to nets that trap the remaining fish.

Personally, I'll say good riddance to oil so that the air can be clean again, and I can once again see the beauty of the planet in the distance, instead of hazy smog. As my father said, "If you abuse yourself, you'll go blind." And I said, "Hey, Dad, I'm over here."

...


"The era of procrastination, of half-measures, of soothing and baffling expedients, of delays, is coming to a close. In its place, we are entering a period of consequences." - Winston Churchill, The Gathering Storm

Profiting from the dollar's decline

Commentary: If the dollar continues to fall, don't invest in dollars
By Bill Donoghue, MarketWatch
Last Update: 12:01 AM ET Jun 2, 2008

SEATTLE (MarketWatch) -- Federal Reserve Chairman Ben Bernanke painted himself and the American economy into a corner. Treasury Secretary Henry Paulson is promising help -- but not until after he is likely out of office. At least the paint will be dry by then and Bernanke and Paulson can go home in peace (or disgrace).

There are two factors strongly affecting the value of the dollar; the trend of interest rates, which directly affects the value of the dollar, and the depressing state of our economy. Rates are not likely to fall far any time soon (they're more likely to rise with inflation) and a long painful recession is in the works.


Bernanke's policy to ease financial markets by lowering the ultrashort overnight rates he can set (the discount rate where banks borrow from "the lender of last resort" -- a crowded line this summer -- and the Fed funds rate where mostly country banks lend their excess reserves on deposit at the Federal Reserve to regional and financial center banks who make the largest commercial business and real estate loans) has been slow to stimulate the American economy.

It also undermined the value of the U.S. dollar and made investing in foreign stocks "safer," as non-U.S. dollar-denominated securities offer an added extra currency cushion. That attracts rational security-cautious investors and denies capital to American borrowers trying to reestablish market leadership.

Profit directly from a weakening dollar index

To profit directly from a weakened dollar on a day when the U.S. dollar index (DXY: news) falls 1%, the inverse Falling Dollar U.S. ProFunds (FDPIX: news) should rise 1% and the leveraged Rydex Weakening Dollar 2X strategy fund (RYWBX: news) earns 2%. In a rising dollar day the funds lose 1% and 2%, respectively. These funds can be disturbingly volatile but if you feel the dollar is likely to continue weakening, these are excellent choices.

There is also the PowerShares U.S. Dollar Bearish ETF (UDN: news) that tracks the Deutsche Bank Short U.S. Dollar Index Futures Index. They beat both ProFunds and Rydex to the exchange-traded funds market as their rising dollar index ETFs are still in registration.

Profit from investing in currency funds

CurrencyShares are ETFs distributed by Rydex. They offer eight currency choices; the Australian Dollar (FXA: news), the British Pound Sterling (FXB: news), the Canadian Dollar (FXE: news), the Euro (FXE: news), Japanese Yen (FXY: news), the Mexican Peso (FXM: news), the Swedish Krona (FXS: news) and the Swiss Franc (FXS: news).

Currently, the Australian dollar and euro, along with our neighbors to the north, the Canadian "loonie," and our neighbors to the south, the Mexican peso, represent the best profit opportunities -- although you might choose to build a portfolio of all four. Remember, that will require four times the trading costs as these are ETFs, though using discount brokers like E-Trade or TD Ameritrade should keep your trading costs to $7 to $10 dollars per ETF.

Profit from investing in foreign currency-denominated bank accounts

If you wish a wider choice of currencies, you could open certificates of deposit or money market deposit accounts at Everbank.com and reduce your trading costs to exchanges within 1% of the institutional exchange rates; a low cost you probably couldn't get at most banks or brokers.

Profit from investing in foreign stock funds

Of course, the best way to take advantage of a falling dollar is to invest in foreign-currency denominated stocks where your return is a combination of strong local stock opportunities and currency profits. Brazil (EWZ: news) and Canada (EWC: news) are excellent choices. Brazil has become the "OPEC of sugar ethanol" (we blew it on less efficient corn ethanol), is energy independent and has just found new oil reserves off its coast. Canada is the U.S.' largest supplier of oil (from oil shale) and their currency last year was so strong that simply opening a checking account in Vancouver or Toronto would have bought you 23% more dollars by year end without earning any interest.

Profiting from the falling U.S. dollar is easy; Profiting in the U.S. is hard

Which U.S. sectors will be the hottest (to buy long) or the coldest (to sell short) is always a hard choice, but with a dollar this weak and interest rates so low and a Fed that seems impotent to fight back, makes being a dollar bear an easy bet.

Even if they are successful, it will take a long time to know they succeeded -- and even then, the best investments are likely to be across the border anyway.

Bill Donoghue is editor of The Proactive Fund Investor, a weekly newsletter published by MarketWatch, and chairman of W. E. Donoghue & Co. in Norwood, Mass. donoghue.com

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"The era of procrastination, of half-measures, of soothing and baffling expedients, of delays, is coming to a close. In its place, we are entering a period of consequences." - Winston Churchill, The Gathering Storm

"Greed Kills" Investing Strategy

Albert Meyer, a former accounting professor from South Africa now based in Plano, Texas, brings a healthy dose of skepticism to stock analysis. He picks companies for the fund by starting with two basic rules.

First, Meyer rejects companies where stock-option grants represent more than 5% of the shares outstanding. He says that because of shortcomings in rules on how to account for options, the true cost to shareholders doesn't come through in reported financial numbers. Overly generous grants are so widespread that this rule eliminates more than 75% of the stocks in the Russell 3000 index ($RHK.X), according to Paul Hodgson of The Corporate Library, which tracks grants as part of its corporate-governance rating system.


Next, Meyer avoids companies where execs get too much pay. There's no strict cutoff. But he's unlikely ever to hold a company where the boss makes more than $5 million a year. That's about half of the $9.9 million in average compensation that CEOs at S&P 500 companies made in 2007, according to The Corporate Library.

From there, Meyer looks for qualities such as pristine financials, strong cash flow, good profit margins and reasonable dividends in businesses surrounded by some kind of protective moat. He's also a value investor who favors stocks that look cheap.
First-rate results
But wait a second. Whenever I focus this column on companies with highly paid CEOs, I'm told that these pay levels are necessary to attract the top talent. Doesn't Meyer run the risk of winding up with companies run by a bunch of second-rate leaders?

"It's a total scam to say, 'If we don't pay these salaries, we won't draw the talent,'" Meyer says. "That's not what I find. The companies we own pay modest salaries, and they do extremely well. They are not suffering because of a lack of high salaries."
Video on MSN Money
Say on pay © MedioImages
Aflac shareholders win 'say on pay'
The company's shareholders have become the first investors to have an official say on executive compensation.

Meyer's track record bears this out. Investments for managed accounts at his Bastiat Capital -- where he also shuns companies with greedy execs -- were up 43.4% from April 30, 2006, through the end of April this year. The S&P 500 was up 5.72% in the same time frame.

http://articles.moneycentral.msn.com/Investing/CompanyFocus/MakeABuckByShunningFatCats.aspx?page=2
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"The era of procrastination, of half-measures, of soothing and baffling expedients, of delays, is coming to a close. In its place, we are entering a period of consequences." - Winston Churchill, The Gathering Storm

Four Mega-Dangers International Financial Markets Face

By Dennis J. Snower
01 May 2008 at 10:06 AM GMT-04:00


BOSTON (voxEU.org) -- Day after day new, alarming news emerges from the world’s financial markets, and day after day the public is surprised by how bad it is. But instead of wringing our hands, let’s ask ourselves an important, unconventional question: What is more surprising: that financial markets have turned from bad to worse, or that we continue to be surprised by each successive piece of adverse news?

I suggest that our repeated surprise should be more surprising. This issue is important, because if we were better at recognising the financial risks we face, we could do more to avoid them. If banks, investment houses, and American homeowners had done a better job in recognising the risks in the subprime mortgage market, we could have spared ourselves the current crisis.




Why does the public repeatedly underestimate the repercussions of the present financial crisis? The answer is simple: most of us are short-sighted; we can’t imagine a future that is radically different from the present. In particular, most of us don’t understand that economic events often unfold gradually due to the operation of important lagged adjustment processes embedded in the economy. The public, the media and politicians would do well to give them close attention. Lagged adjustment processes. After the Titanic’s hull was punctured, it took hours for its hull to fill with water; thus the passengers couldn’t imagine that it would sink.

In my judgment, there are currently four major dangers facing the world economy, and all of them are currently obscured by the fact they play themselves out slowly.

Four dangers

The first danger we have witnessed since August 2007: The subprime mortgage crisis gave rise to a liquidity crisis in the international banking system, due to uncertainty about who holds the losses. This is leading to reduced lending to firms and households. But that is not the end of the story, because the reduced lending will lead to reduced consumption and investment. With a lag, reduced sales of goods and services will reduce stock market valuations. And, with another lag, the lower stock market prices will – in the absence of any favourable fortuitous events – intensify the banks’ liquidity crisis.

The second danger lies in the dynamics of U.S. house prices. As more and more U.S. households find themselves unable to repay their mortgages, foreclosures are on the rise, more houses are put on the market, the price of houses falls further – with further lags – this leads to more foreclosures and declines in housing wealth. This dynamic process plays itself out only gradually, as households face progressively more stringent credit conditions and house sales gradually lead to lower house prices.

The third danger results from the interaction between wealth, spending and employment. As U.S. households’ wealth – in the housing market and the stock market – falls, their consumption is beginning to fall and will continue to do so, again with a lag. This decline in consumption is leading to a decline in profits, of which more is on the way, which in turn will lead to a decline in investment. The combined decline in consumption and investment spending will eventually lead to a decline in employment, as firms begin to recognise that their labour is insufficiently utilised. The decline in employment, in turn, means a drop in labour income, which, with a lag, leads to a further drop in consumption.

And that leaves the fourth (and possibly the nastiest) of the dangers, one that concerns the latitude for monetary policy intervention. As the Fed reduces interest rates to combat the crisis, the dollar is falling. This is leading to higher import prices and oil prices in the United States, putting upward pressure on inflation. The greater this inflationary pressure – which is currently in excess of 4 percent – the more difficult it will be for the Fed to reduce interest rates in the future, without running a serious risk of inflaming inflationary expectations and starting a wage-price spiral. U.S. firms and households will gradually recognise this dilemma and the bleak prospect of little future interest rate relief will further dampen consumption and investment spending.

Eventually, of course, the decline in spending will lead to a decline in inflation, but this will only happen with a lag. The longer the lag turns out to be, the longer the period over which the U.S. economy will endure stagflation, that is, a cruel combination of rising prices and falling aggregate demand. Much hinges on how persistent U.S. inflation is. More persistent inflation will inevitably give rise to higher inflationary expectations, leading gradually to higher inflation, and so on. It took central banks over a decade, in the 1980s and early 1990s, to get inflationary expectations under control, and the fruits of this battle are now in danger of being lost.

Global implications

The international financial crisis and the decline in the U.S. economy will inevitably have an adverse effect on the growth of the world economy. Europe and the emerging markets of Latin America and the Far East cannot fill the gap that the U.S. economy leaves. There exists no economic mechanism whereby a drop in the U.S. aggregate demand will be matched by a correspondingly large increase in aggregate demand elsewhere. Germany and other European economies highly exposed to the vagaries of international trade will certainly feel the pinch.

In the longer run, the prospects for the world economy look much brighter. Eventually U.S. house prices will stabilise, rising exports will help the U.S. economy recover, the fall in world demand for goods and services will reduce the price of raw materials, U.S. households will learn the importance of saving, and global imbalances will correct themselves. These rosy prospects lie in the mists of the future. Meanwhile, however, we are well advised to stay focused on the four dangers."

http://www.resourceinvestor.com/pebble.asp?relid=42413

... let's just say the housing bubble affected the overall economy on the way up; it is sure to do so on the way down.
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"The era of procrastination, of half-measures, of soothing and baffling expedients, of delays, is coming to a close. In its place, we are entering a period of consequences." - Winston Churchill, The Gathering Storm

Social Security Inconvenient Truths

When Social Security (FICA) was introduced it was promised:

* Participation in the program would be completely voluntary.

* Participants would only have to pay 1% of the first $1,400 of their annual incomes into the program.

* The money the participants elected to put into the program would be deductible from their income for tax purposes each year.

* The money the participants put into the independent trust fund rather than into the general operating fund, would be used only to fund Social Security, and no other government program.

* Payments to the retirees would never be taxed as income.

The millions who have paid into FICA for years and are now receiving a Social Security check every month -- and who then find they are getting taxed on 85% of the money they gave to the federal government to save for them -- may be interested in the following:

* Social Security money has been removed from the trust fund and put it into the general fund so that Congress could spend it.

* The income tax deduction for Social Securitjavascript:void(0)
Save Nowy withholding has been eliminated.

* Social Security annuities are now taxed.

Now contrast this with the fact that Congress passed a 100% retirement benefit for members who have served at least one term.

http://articles.moneycentral.msn.com/Investing/StrategyLab/Rnd17/P1/HighIQjournal20080524.aspx

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"The era of procrastination, of half-measures, of soothing and baffling expedients, of delays, is coming to a close. In its place, we are entering a period of consequences." - Winston Churchill, The Gathering Storm

Good luck with that zero carbon footprint, bubba

Carbon Output Must Near Zero To Avert Danger, New Studies Say
By Juliet Eilperin
Washington Post Staff Writer
Monday, March 10, 2008; Page A01

"The task of cutting greenhouse gas emissions enough to avert a dangerous rise in global temperatures may be far more difficult than previous research suggested, say scientists who have just published studies indicating that it would require the world to cease carbon emissions altogether within a matter of decades.

Their findings, published in separate journals over the past few weeks, suggest that both industrialized and developing nations must wean themselves off fossil fuels by as early as mid-century in order to prevent warming that could change precipitation patterns and dry up sources of water worldwide.

Using advanced computer models to factor in deep-sea warming and other aspects of the carbon cycle that naturally creates and removes carbon dioxide (CO2), the scientists, from countries including the United States, Canada and Germany, are delivering a simple message: The world must bring carbon emissions down to near zero to keep temperatures from rising further.

"The question is, what if we don't want the Earth to warm anymore?" asked Carnegie Institution senior scientist Ken Caldeira, co-author of a paper published last week in the journal Geophysical Research Letters. "The answer implies a much more radical change to our energy system than people are thinking about."

http://www.washingtonpost.com/wp-dyn/content/article/2008/03/09/AR2008030901867.html
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"The era of procrastination, of half-measures, of soothing and baffling expedients, of delays, is coming to a close. In its place, we are entering a period of consequences." - Winston Churchill, The Gathering Storm

Resignation of top GAO official

"Facing indifference on the Hill and unrealistic spending promises, Walker is resigning with five years still remaining in his term to head the newly formed Peter G. Peterson Foundation. Peterson, senior chairman of The Blackstone Group and Commerce secretary in the Nixon administration, has pledged an astounding startup budget for the foundation of $1 billion.

That money will attack what the foundation considers "the most substantial economic, fiscal and other sustainability challenges of our current age" -- including federal entitlement programs, health care, unprecedented trade and budget deficits, low savings rates, mounting foreign debt, soaring energy consumption, an uncompetitive educational system, and the proliferation of nuclear warfare materials. Maybe Congress will listen this time.

"I have been around a very long time, and I have never seen so many simultaneous challenges that I would describe as undeniable, unsustainable and virtually untouchable politically," Peterson said in a prepared statement.

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http://custom.marketwatch.com/custom/myway-com/news-story.asp?guid={D566230C-F9D9-4384-B64E-E9B480D2B23F}


"The era of procrastination, of half-measures, of soothing and baffling expedients, of delays, is coming to a close. In its place, we are entering a period of consequences." - Winston Churchill, The Gathering Storm

Yet Another Shoe About to Drop

How many feet does the damn thing have, anyway? ...

In many cases, munis are sold as part of "tender option bond," or "put bond," derivatives. In these programs, which became very popular among hedge funds in this decade because their low risk profiles permitted a lot of leveraging, a bond could be tendered back to the issuer if any of a variety of troublesome events triggered, ranging in severity from a default to a ratings downgrade. The programs required the issuer to buy the bonds back at par, or face value.

If the monoline insurers that guarantee the bonds lose even one notch of their high ratings, then every one of the hundreds of thousands of munis they have underwritten over the years likewise loses its high rating. And that would be an event that could lead bondholders to attempt to tender the bonds back to issuers. Only cities and states don't have anywhere near the tens of billions of dollars it would cost to buy them back. They would need to issue more debt at higher interest rates, and, well, you can see this can spiral way out of control.

Continued: A worst-case scenarios

It's one thing for corporate bonds to run into trouble, because they are typically backed by hefty amounts of assets that can be sold, even if that must happen at rock-bottom prices. And besides, there just aren't that many corporate bonds in the country: If they were all listed in a telephone book, it would be around three-quarters of an inch thick. But there are hundreds of thousands of U.S. muni bonds -- at least enough to fill a 9-inch-thick telephone book -- and cities can't just sell a bridge or sewer line or school building to raise money to pay them off in a crisis.

Let me give you an idea of the magnitude of the worst-case scenario: When ratings agency Moody's put the rating of monoline insurers Ambac and MBIA on downgrade alert last month, it was obligated to, in turn, put about 1,000 structured finance issues -- those CDOs and the like -- on "negative watch," which is a way of telling holders to beware of downgrades of their own. This is exactly what led in turn to banks' headlong efforts to get in front of the crisis by writing down the value of those issues and take multibillion-dollar losses, putting their shares in free falls.

What got less publicity was the fact that Moody's put 60,000 munis on negative watch at the same time for each monoline insurer. And when another ratings agency, Fitch, downgraded a much smaller privately held monoline called Financial Guaranty Insurance, it was forced to put 114,560 municipal bonds on negative watch.


http://articles.moneycentral.msn.com/Investing/SuperModels/TheBigThreatOfMuniDebt.aspx?page=all