Moral Hazard In Pictures

US Federal Reserve

European Central Bank

Bank of England

People's Bank of China

German Bundesbank

Bank of Japan

Banque de France

Swiss National Bank

The British Knee Is On The March!

“It’s quite impossible that the man who had invented Sir Roderick Spode in 1938 was prey to any covert sympathy for fascism.”

-- Christopher Hitchens on P.G. Wodehouse, quoted here

Deposit Insurance In Spain Is Meaningless

If you want to know why 100 billion euros have fled Spain in the first quarter of this year, here's why:

In Spain there are about 800 billion euros of insured deposits, but the deposit insurance fund has assets of just 7.9 billion euros, and 5.3 billion has already been committed to troubled savings bank Caja de Ahorros del Mediterraneo (CAM), Barclays analysts estimated.

Unemployment Rate Climbs To 8.2 Percent Despite Weasel Words From Bureau Of Lies And Statistics

Obama's Laser-Like Focus On Jobs

The report from the Bureau of Labor Statistics may be found here. PDF here.

Notice the attempt to weasel out of the fact that the rate actually increased 0.1 from last month by stating the rate was "essentially unchanged":

Nonfarm payroll employment changed little in May (+69,000), and the unemployment rate was essentially unchanged at 8.2 percent, the U.S. Bureau of Labor Statistics reported today. Employment increased in health care, transportation and warehousing, and wholesale trade but declined in construction. Employment was little changed in most other major industries.

The Obama regime is presiding over an employment catastrophe above 8 percent for his entire presidency: 3 years and 4 months.

GDP Revised Down For Q1 2012 From 2.2 Percent To 1.9 Percent

You talkin' to me?

Way to go, Brownie!

Here's the story from the horse's mouth:

Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 1.9 percent in the first quarter of 2012 (that is, from the fourth quarter to the first quarter), according to the "second" estimate released by the Bureau of Economic Analysis. In the fourth quarter of 2011, real GDP increased 3.0 percent.

The GDP estimate released today is based on more complete source data than were available for the "advance" estimate issued last month. In the advance estimate, the increase in real GDP was 2.2 percent (see "Revisions" on page 3).

The increase in real GDP in the first quarter primarily reflected positive contributions from personal consumption expenditures (PCE), exports, residential fixed investment, private inventory investment, and nonresidential fixed investment that were partly offset by negative contributions from federal government spending and state and local government spending. Imports, which are a subtraction in the calculation of GDP, increased.

The deceleration in real GDP in the first quarter primarily reflected a deceleration in private inventory investment, an acceleration in imports, and a deceleration in nonresidential fixed investment that were partly offset by accelerations in exports and in PCE.

Michelle Obama Lies About When And Why Obama Gave Up Pot

Neither one can tell the truth

Here's what Michelle Obama has just claimed, as quoted here, in response to a question about her husband's prolific pot-smoking habits:

'When he lost his father, that was one of those click-in moments. And he really buckled down, he transferred schools, went to Columbia, and thought about how to use his life to the fullest.'

This is nothing but the same sort of fictionalization we've come to expect from Obama himself, say, about his girlfriends, experiences with whom are conflated in his book in composite characters, not real ones.

Michelle is lying about the chronology of events which supposedly led to Barack becoming a serious person, pinning it all of the death of Barack Obama Sr. But Obama's father died late in 1982 when Barack was already at Columbia for a year. Barack transferred to Columbia in the fall of 1981. See for example, here.

The death of Obama's father had nothing to do with transferring to Columbia. In fact, the death post dates the move from Occidental to Columbia by two years.

The truth is we don't know when Obama quit smoking weed. But we do know Michelle Obama isn't telling the truth about it.

President Pothead Strikes Again, Angering Poland

This time the president has referred to Nazi concentration camps in Poland as Polish concentration camps.

Just one more reason why the president's past (?) drug use makes him unfit for office in the present. Kind of like how Biden's 1988 brain aneurysms have something to do with his now very full repertoire of offensive gaffes which disqualify him.

The story is here.

But look on the bright side. At least Obama didn't call Jan Karski a corpseman.

Middle Class Implies Far More Than Being Able To Buy A House

Robert Weissberg details here the older definition of what it meant to be middle class, you know, the one which is now politically incorrect to talk about, let alone be:

The core of being middle class was a strong work ethic, self-discipline, a willingness to defer gratification, an aversion for flashy consumption,  and an embrace of what might be called “respectability,” (i.e., sobriety), a morality that stressed honesty, a solid family life, being law-abiding, and valuing education (though not necessarily being “intellectual”).

Inner dispositions were associated with speaking clear, grammatical English, exhibiting decent table manners, never using profanity in public (and almost none in private, too), being “clean cut”  in appearances and always acting politely. Middle class members also abhorred the thought of taking government handouts. ...

These “square” traits were associated with material well-being but were really a result of middle class values, not its defining elements. Nobody believed that the causal flow was reversible—home ownership could inculcate middle-class values. In principle, it was possible to be lower class despite owning middle-class doodads. A well-paid entertainer may live well but could still be considered white trash if he dressed in tattered clothing, beat his wife, openly philandered, cursed and spit in public and spent a dime for every nickel earned.

Case Shiller Home Price Index Falls To 128.13 Through 12/31/11

And everyone's happy for some reason.

When you consider that the mean for the whole history of the index is 123 and the median 120, which include the irrational exuberance of recent history, today's new low of 128 after this massive, outlier, bubble merely looks like more progress in the direction of regression toward the mean, not a "bottom" as many are saying. Indeed, the historical mean implies we have a fair way DOWN to go in price, to say nothing of the very real possibility of overshooting that to the downside.

The quarterly index, adjusted for inflation, has now hit today's level eight times in the post-war period:

Dec. 31, 2011 128.13

Mar. 31, 1999 128.40

Dec. 31, 1990 128.27

Dec. 31, 1979 128.78

Sep. 30, 1978 128.22

Dec. 31, 1955 128.21

Mar. 31, 1955 128.15

Dec. 31, 1954 128.30.

There's enough history between 110 and 130 to suggest that "normal" is still somewhere south of 128.

Take two aspirin every morning and call me in ten years.

Go here for the chart.

Banking Since 1913 In A Nutshell

From Daniel Oliver at Myrmikan Capital, here: 

Like any Ponzi scheme, the fractional reserve system must periodically collapse because wealth creation cannot stem from an eternal expansion of credit. Betrayed and confused, the little people march into the halls of power and hang the perpetrators from the nearest lamp posts. ...

When the next crisis comes, as it must, the central banks of the world will face the same choice as in 2008, only on a larger scale. They will have to decide whether to allow the major banks to fail, wiping out trillions of dollars of paper wealth and plunging the globe into a 1931-style bond market failure depression, or to print money on an even larger scale.

That crisis may be here now, which, perhaps, is what the gold markets have been telegraphing for months. ... 

In 1944, Christian Men Made The Best Soldiers

Dear Friend:

Pvt. V. L. Meyer was with us in our Field Service last Sunday afternoon. The men of his Battalion and attached units are on maneuvers in the Wichita Mountains near Fort Sill for two weeks. Since the men cannot come to the Chapel on Sunday, we take the service out to them.

We take our Field Organ and small books with familiar hymns in them. The men are usually brought by truck to a place set for the service. It is entirely up to the men whether they attend.

We meet them at the appointed place and have an informal outdoor service. The men choose the hymns and we have a short message, scripture readings and prayers.

The outstanding leaders of our armed forces are convinced that Christian men make the best soldiers, sailors and marines. With their fine cooperation, we do our best to help the men be real Christians.

Sincerely yours, 

Lawrence C. Upton

Chaplain (Capt.)


Jan. 3, 1944

They Didn't Die . . .

. . . for this

TSA VIPR Unit Patrolling Beneath Elevated Trains For Detroit Electronic Music Fest

As reported here by an attendee:

“[I]f you don’t like it,” the solution is clear: don’t leave your house. Or, you know, you could make your disapproval of TSA antics known now, before the TSA can expand in this absurd fashion and say, “Well you let us do it in the airports, so why can’t we do it in train stations?” “…at bus stops?” “…as you’re driving down the street?” “…whenever we want to.” If we don’t demand the Fourth Amendment in airports now, can you really, truly believe that I’m just talking hyperbole about what will happen next?

Waste Management Converting Over 18K Trucks To Natural Gas

Read all about it here in the Houston Chronicle.

Anti-Christian Army General Thomas Bostick Sued For Discriminating Against Women

Gen. Bostick and wife

The general who helped craft the Army's DADT policy and a five-year personnel reduction plan meant to weed-out members of the military who object to homosexuality on moral grounds has been sued by women in the military who want to fight in combat but are barred from doing so.

The general, Thomas Bostick, just assumed command of the US Army Corpse of Engineers on May 22 (a little Obama lingo there).

I'm guessing he's secretly happy he's named in the suit and that he hopes he'll lose so women, like homosexuals, can hit the front lines with the men.

In the job of transforming America, Obama's work is never done.  

The New York Times has the story here.

The UK Isn't Austere: Spending Has Increased To Record Levels

So reports the UK Telegraph here:

[T]he Office for National Statistics (ONS) revealed that the double-dip recession was even worse than feared. The economy shrank by 0.3pc in the first quarter of the year, the ONS said in its second estimates, rather than the 0.2pc initially thought. Government spending hit record levels in the three months to March in spite of the austerity drive, rising by 1.6pc to £81.5bn and delivering 0.4 percentage points of overall economic growth. However, the taxpayer-funded boost was not enough to offset weak activity in construction, trade and the financial sector.

Unfortunately for Great Britain, it has a leader who is more concerned with gay marriage, tax increases and diverting attention away from domestic failures.

Gee, kind of reminds one of none other than Barack Obama.

Hm.

The UK Lets Taxes Rise in 2010, Gets Ugly Recession in 2012

Louis Woodhill for Forbes details the history here, wondering why they call tax increases in the throes of an economic crisis Conservatism in the UK.

Maybe because Prime Minister Cameron isn't really a conservative, just like George Bush wasn't a conservative (junking free market principles to save the free market system). The top marginal tax rate went from 40 percent to 50 percent in 2010 in the UK.

Conservatism hasn't been practiced in either place in a very long time.

Radiation From Fukushima Accident Revised Up In New Report

CNN.com reports here:

Japan's largest utility said Thursday that more radiation than previously thought was released into the atmosphere in March 2011, in the days after the nuclear disaster that followed an earthquake and tsunami. TEPCO (Tokyo Electric Power Co.) estimates about 900,000 terabecquerels of radioactive materials were released between March 12 and March 31, according to Japan's Kyodo news agency. ... In one town in the Fukushima area, the estimated thyroid doses to infants are within a dose band of 100 to 200 millisieverts (mSv), the preliminary report said. This level of radiation exposure could be associated with an increased likelihood of developing cancer. However, in the rest of Japan, the estimated thyroid doses are within a dose band of 1 to 10 mSv, the report said. Outside the country, the estimated thyroid doses are less than 0.01 mSv, and are usually far below this very low level, it said.

PBS.org had a fuller report here, comparing the accident's severity to Chernobyl and assessing the health consequences of the radiation releases:

Tokyo Electric, the plant’s operator, said on Thursday that reactor meltdowns at the Fukushima Daiichi plant released approximately 900,000 terabecquerels of radioactive substances into the air in the immediate aftermath of the March 2011 accident. By comparison, approximately 5.2 million terabecquerels of total radiation were emitted in the 1986 Chernobyl disaster. ... In terms of the accident’s health implications, the World Health Organization said on Wednesday that the amount of radiation released fell below cancer-causing levels in nearly all of Japan. Outside of “no-go zones” in Fukushima prefecture, residents were exposed to radiation levels between 1 millisievert and 10 millisieverts, the W.H.O. said. The annual average amount of exposure from naturally occurring background radiation is 2.4 mSv globally, according to the report ... . Cumulative exposure to 100 mSv is generally thought to raise a person’s risk of cancer death by 0.5 percent.

Reuters.com reports here that Namie and Iitate were the two towns hardest hit:

In a preliminary report, independent experts said that people in two locations in Fukushima prefecture may have received a radiation dose of 10-50 millisieverts (mSv) in the year after the accident at the power station operated by TEPCO. ... The areas estimated to have received the highest doses of radiation were Namie town in Futaba county and Iitate village in Soma county, northwest of the stricken plant, the report said. Infants in Namie were thought to have received thyroid radiation doses of 100-200 mSv, it added. The thyroid is the most exposed organ as radioactive iodine concentrates there and children are deemed especially vulnerable.

Follow the labels at the end of this post for this blog's reporting on the accident from the beginning.

President Pothead Has Been Saying, Repeatedly, He Has Sons

Maybe Joe Biden isn't the only one who needs his head examined.

The story is here.

Irrational Exuberance in Corporate Debt Reaches $7.8 Trillion v. $1.2 Trillion in Cash

"I would go a hundred percent equities if I thought that we had reached a point when equity values made sense."

"People always say stocks are cheap, stocks are cheap. They're trading 10 times forward PE, 12 times PE. The problem is, I don't know the E[arnings]."

"What if the U.S. had a balanced budget? What would GDP be? Then what would earnings be? The U.S. cannot in perpetuity run a $1.3 trillion annual deficit. I don't believe in any of the earnings numbers."

"You basically have 30 years of accumulated debt that funds consumption and that has to unwind. And as it unwinds, it's going to have implications on economic activity and it's impossible that it won't ultimately find its way back to U.S. companies."

--Andre Kovensky, Managing Director of bond and real estate investment firm, Octavia Investment, quoted here.

Stocks presently are relatively expensive when measured by the Shiller p/e, which this morning stands at 21.21, almost 34 percent elevated from the median level of 15.84 going back to 1881. Investors might want to consider that the Shiller median level itself incorporates earnings from past decades when increased borrowing by both business and government might make the metric somewhat artificially elevated anyway.

The assertion that debt "has to unwind", however, is evidenced in the post-war period by the corporate data set only in the early 1990s when aggregate quarterly debt dropped briefly by 2 percent, and in the decline just concluded when it dropped briefly by 3.5 percent or just $256 billion.

Total corporate assets, by way of contrast, have reached an all time high of nearly $30 trillion.

One wag notes that Kovensky is just talking his book.

Bonds remain at nose-bleed prices, as do all assets.   

Lt. Gen. Thomas P. Bostick's Policy To Cleanse Army Of Christians

Lt. Gen. Thomas P. Bostick, recently promoted to head the Army Corps of Engineers and infamous for his equation of principled religious objections to gays in the military with racism and bigotry, is the person chiefly responsible for the Army's new force reduction program announced in the Army Times last September:

The Army is preparing to launch in March [2012] a five-year, nearly 50,000-soldier drawdown, using a combination of accession cuts and voluntary and involuntary separations, similar to the post-Cold War drawdown of the 1990s, according to Lt. Gen. Thomas P. Bostick, service personnel chief. ...

“We are currently reviewing the lessons drawn from the 1990s as captured in reports by the Army, Congressional Budget Office and the other services to ensure that we retain as much experience as possible from the ongoing conflicts (in Iraq and Afghanistan),” said a member of Bostick’s staff.

“As in the 1990s, the Army may need to conduct involuntary separations to meet mandated end-strength, but we will do everything we can to shape the force through competitive promotions, reclassifications and voluntary separations before we take harsher measures,” the official said.

Some force-shaping tools added to Army policy over the past two years include new, and stricter, retention control points for enlisted soldiers, a Qualitative Management Program to separate retirement-eligible senior noncommissioned officers who do not measure up to Army standards of behavior and performance, and the elimination of selective continuation for certain categories of officers who are twice passed over for promotion.

Gee, why have people who don't "measure up to Army standards of behavior" been allowed to remain in the ranks in the first place? Maybe because the standards being promulgated now are "new, and stricter", designed to weed-out undesirables like the Christians Bostick said had better comply or get out in these remarks in 2010:

“Unfortunately, we have a minority of service members who are still racists and bigoted and you will never be able to get rid of all of them,” Lt. Gen. Bostick said. “But these people opposing this new policy [homosexuals serving openly in the military] will need to get with the program, and if they can’t, they need to get out. No matter how much training and education of those in opposition, you’re always going to have those that oppose this on moral and religious grounds just like you still have racists today.”

NATO Is Listing Badly To Starboard

David Warren says as much for The Ottawa Citizen here:

What use is NATO? This was the unexamined background question in Chicago, where the 28 member states and a couple dozen with “observer” status gathered for the summit ritual . . . the grand question of what NATO has been doing as the institutional face of western intervention, both realpolitik and humanitarian, in trouble spots far away from the North Atlantic. The U.S. has needed NATO as diplomatic cover for what otherwise might look like “American imperialism.” They’d use the UN if it wasn’t so full of vetoes; and “coalitions of the willing” are passé.

By increments, NATO has been transformed from a hard and necessary Eurocentric alliance against a pointed Soviet threat into a prism for political and diplomatic “optics.” ...

I have argued before that if we must have summits — and I have yet to see why — they should be held on cruise ships. (And may I recommend Costa Cruises.) ... NATO does not know what it is for. Its member governments are unable to formulate a common purpose. Its use as a flag of convenience, for exotic foreign adventures that may be popular for a brief time, subverts its function as a military alliance. It has lost the luxury of a common, public enemy.

Thanks To Obama Your Electric Bill Will Skyrocket 8 To 22 Times What It Is Now

As reported here:

Last week PJM Interconnection, the company that operates the electric grid for 13 states (Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia) held its 2015 capacity auction. These are the first real, market prices that take Obama’s most recent anti-coal regulations into account, and they prove that he is keeping his 2008 campaign promise to make electricity prices “necessarily skyrocket.”

The market-clearing price for new 2015 capacity – almost all natural gas – was $136 per megawatt. That’s eight times higher than the price for 2012, which was just $16 per megawatt. In the mid-Atlantic area covering New Jersey, Delaware, Pennsylvania, and DC the new price is $167 per megawatt. For the northern Ohio territory served by FirstEnergy, the price is a shocking $357 per megawatt.

In Passive v. Active Management, Vanguard Is The Winner And Still Champion

So says Robert P. Seawright, here:

[O]ne of every three dollars invested in mutual funds and exchange-traded funds through the first four months of ... 2012 has gone to Vanguard, according to Morningstar Inc. (and as reported by Investment News).  Investment in Vanguard so far this year is roughly $65 billion, nearly four times more than the next closest mutual fund company – PIMCO.  In ETFs, year-to-date through the end of April, Vanguard had gathered $21.6 billion, while BlackRock’s iShares collected $13.3 billion and State Street added $7.2 billion. As always, Vanguard focuses on passively managed index funds and ETFs. 

Europe Proves Nothing Except That Tax Increases Reduce Growth

So says Joseph Y. Calhoun here:

The G-8 met this weekend at Camp David to address the failure of austerity in promoting economic growth, specifically in Europe where it has allegedly been practiced. Of course, austerity, as modernly defined by a certain segment of the economics profession, has nothing at all to do with the definition from Merriam-Webster ... . Austerity is reckoned by those who oppose it to be an attempt to balance government budgets primarily through cruel spending cuts. Those who make this claim will find it hard to back up with facts in any European country outside Greece[,] which had little choice in the matter given that no one will lend them the Euros to keep up their previous pace of spending. The reality is that efforts to balance budgets in Europe have depended much more on tax increases than spending cuts. The European experience proves nothing except that tax increases reduce growth.

Returning To The Gold Standard, But At What Price?

John Tamny argues here for the ten year average price of about $800 the ounce, against Nathan Lewis who would prefer something closer to the current market price, $1,500 the ounce.

The 1933 US ten dollar gold coin pictured is worth about $300,000.00 in a recent valuation.

Sorry Krauthammer, A Drone's Already Been Shot Down

A cheap $300 drone anyone may purchase, but still a drone. It was shot down anonymously, by small arms fire, here in the USA.

For Krauthammer's remarks, see here. For the drone shoot-down, which was in February already, see here.

What Krauthammer doesn't realize is these things are going to get so small you'll never know one from the moth resting on the side of the house in a shady cool spot in the heat of the day.

Better shoot while the shootin's good, because pretty soon you're going to need a flyswatter instead of a shotgun.

First Known Incident Of TSA VIPR Unit Stopping, Searching Cars

This photo is taken from a video reporting the first known case of a TSA VIPR unit pulling over private cars and searching them at random, without cause and without warrant, in Florida at SRQ on 12/28/11.

The story is reported here.

Tip of the hat here.

Report your stories of being stopped and searched at TSA checkpoints and roadblocks at TSANewsblog.com here.

Boris Johnson, The Only Man Talking Sense In Britain

Hell, he's the only man talking sense in Europe, except for that hippie in Sweden, Anders Borg. Alexis Tsipras, call your office.

From the Mayor of London's column in the UK Telegraph, here:

[T]he euro ... has been a catastrophe for Greece and pretty bad (with one notable exception) for the rest of the continent. ...

We are told that the only solution now is a Fiscal Union (or FU)[!]. We must have “more Europe”, say our leaders, not less Europe – even though more Europe means more suffering, and a refusal to recognise what has gone wrong in Greece.

The euro has turned out to be a doomsday machine, a destroyer of jobs, a killer of growth, because it entrenches and exacerbates the fundamental and historic inability of some countries to compete with Germany in making high-quality goods with low-unit labour costs. Unable to devalue their way back into the game, these countries are forced to watch industry wilt under German imports, as the euro serves as a giant trebuchet to fire swish German saloon cars and machine tools across the rest of Europe. ...

Europe now has the lowest growth of any region in the world. We have already wasted years in trying to control this sickness in the euro, and we are saving the cancer and killing the patient. We have blighted countless lives and lost countless jobs by kidding ourselves that the answer to the crisis might be “more Europe”. And all for what? To salvage the prestige of the European Project, and to spare the egos of those who were wrong and muddle-headed enough to campaign for the euro.

Price Of Gold Is Not A Function Of The US Dollar

Gold is nearly $1600 the ounce today with the dollar index near 81, yet in 2004 when the dollar index was at the same level, gold was far cheaper.

So Mish here with charts:

Note that the US dollar index is right where it was over seven years ago. 

The US$ index is at a spot first touched in late 2004. Gold was well under $500 an ounce at that time, so please do not tell me gold is a function of the US dollar.

One of the reasons gold is at $1600 with the US dollar index above 81 is precisely because central banks in general (notably the Fed, the ECB, the Bank of England, and China) have printed nonstop and the Fed and the ECB have initiated all sorts of liquidity and QE measures. In addition, the ECB's balance sheet is more bloated than the balance sheet of the Fed thanks to the LTRO program.

  

The proper conclusion is that gold is a function of mistrust in fiat currencies in general, not just the US dollar. However, nothing moves in a straight line including faith (or lack thereof) in central banks' ability to handle this crisis.

Million Schmillion

$1 million in today's dollars would have been the equivalent of $43,000 in 1913.

That's still a lot of money for the time. In the early 1940s, for example, median income was about $2,400 a year. In 2011 it was about $26,400.

So, You Think You're A Millionaire, Huh?

Europe Is Failing Because It's Already Taken So-Called Balanced Approach

Namely, very minor adjustments to spending combined with tax increases.

Veronique de Rugy has the details here, for The Los Angeles Times:

"In a 2009 paper, Harvard economists Alberto Alesina and Silvia Ardagna looked at 107 examples in developed countries over 30 years and found that successful austerity packages — defined by a reduction in debt to GDP greater than 4.5% after three years — resulted from making spending cuts without tax increases. They also found that this form of austerity accompanied by the 'right policies' (easy monetary policy, liberalization of goods and labor markets, and other structural reforms) is more likely associated with economic expansions rather than with recessions. This makes intuitive sense: Austerity based on spending cuts signals that a country is serious about getting its fiscal house in order in a way that taxing and spending certainly does not.

"On the other hand, they found that the so-called balanced approach — typically a mix of spending cuts and tax increases — is a recipe for failure. It fails to stabilize the debt, and it is more likely to cause recessionary economic contractions. And when it comes to plans such as Hollande's that would explicitly increase spending and taxes, they find little chance of either economic expansion or debt reduction."

Anita Dunn's Inspiration: A Monster Whose Excellence Was Killing Millions

Dunn, now 54, served Obama in 2009

"The third lesson and tip actually comes from two of my favorite political philosophers: Mao Zedong and Mother Teresa — not often coupled with each other, but the two people I turn to most to basically deliver a simple point which is: you're going to make choices; you're going to challenge; you're going to say why not; you're going to figure out how to do things that have never been done before. But here's the deal: These are your choices, they are no one else's. In 1947, when Mao Zedong was being challenged within his own party on his plan to basically take China over. Chiang Kai-shek and the Nationalist Chinese held the cities, they had the army, they had the air force, they had everything on their side. And people said, 'How can you win? How can you do this? How can you do this, against all of the odds against you?' And Mao Zedong said, you know, 'You fight your war, and I'll fight mine.' And think about that for a second. You don't have to accept the definition of how to do things and you don't have to follow other peoples choices and paths. Ok? It is about your choices and your path. You fight your own war, you lay out your own path, you figure out what's right for you. You don't let external definition define how good you are internally, you fight your war, you let them fight theirs. Everybody has their own path".

Red Guard member Wang Jiyu, 60, confessed killer

“The children now don’t know what happened. We are choosing to forget. We should not let them forget and everyone should know what happened to this country. Some people still miss and praise those years – let them go to hell.” (quoted here, Sept. 27, 2011)

"'I think the most terrible thing, when I recall that period, the most terrible thing that struck me was our indifference,' said Gong, today a 38-year-old graduate student at Harvard researching her own history. ...

"[D]ramatic new figures for the number of people who died as a result of Mao Tse-tung's policies are surfacing, along with horrifying proof of cannibalism during the Cultural Revolution.

"It is now believed that as many as 60 million to 80 million people may have died because of Mao's policies--making him responsible for more deaths than Adolf Hitler and Josef Stalin combined.

"Gong said killer is not a strong enough word to describe Mao. 'He was a monster,' she said." (Beth Duff-Brown in The LA Times here, November 20, 1994)

The ignorance of some is willful. 

Talking Bull Warren Lifts Recipes For 'Pow Wow Chow'

So says Breitbart.com, here.

Stealing an ethnicity, and then a recipe.

What's next, a gender?

The Original Birther

Obama's Real Lie: Hiding His Own Bogus Claim Of Kenyan Birth

Erick Erickson at Red State, here:

The point is not that Barack Obama was born in Kenya. The point is that Barack Obama has repeatedly been perfectly okay embellishing and having others embellish his qualifications and biography to make himself someone unique instead of just another Chicago politician. The pattern goes back to his job as a “financial reporter”. A former colleague of his and Obama fan, way back in 2005, claims Barack Obama really embellished his resume describing his financial related reporting. ...

Barack Obama embellishing his biography to make himself look unique? Hardly worthy of press attention. In fact, nothing Barack Obama has done suggesting serious character flaws — and that’s what this is about — is ever worth the media’s collective attention. Why? Because some people think Barack Obama was born in Kenya, but much of the press corps is pretty damn sure he was born in Bethlehem.

One last point — a friend raised this on email. Could this be why the campaign screams bloody murder about racists and birthers every time someone asks about Barack Obama’s college transcripts? This would explain why Obama is so squirrely about the issue and waited until Donald Trump caused him measurable damage in the polls on this issue before responding. He’s not embarrassed that people will find out he lied about being born in Hawaii; he’s embarrassed they’ll find out he lied about being born in Kenya.

Literary Agent's 1991 'Born in Kenya' A 'Mistake' Left Uncorrected Until 2007

Yeah right.

Gov. Mitch Daniels Denies Mourdock Is Tea Party Phenomenon

lefty makes a point

The former Lugar associate might be expected to say something like this, but the fact is, and Rush Limbaugh is right, Sen. Lugar of Indiana represents the Republican establishment, and Mourdock beat him with the help of the Tea Party.

This is also why Mitch Daniels went nowhere this cycle as a possible presidential candidate. Mitch is also the Republican establishment. He might as well be Senator John McCain.

Rush has the full story, and here's Daniel's denial:

DANIELS:  It would be a complete misunderstanding to label this a Tea Party phenomenon when in fact the winner had a very strong majority with rank-and-file Republicans who felt they knew him, have seen a lot of him, he's been elected twice statewide in just the last six years, so he's a Republican regular himself, and that was the decisive factor.

Greek Exit Could Expose Banking Ponzi in Italy

Ambrose Evans-Pritchard for the UK Telegraph, here:

The IMF said Italian bank exposure to the state is 32pc of GDP, including all forms of lending. ... Almost half of this is owed to foreigners. Italy's central bank owes a further €278bn in 'Target2' claims to peers in Germany, Holland, Finland and Luxembourg, reflecting capital flight.

Italy's former premier Romano Prodi said the EU risks instant contagion to Spain, Italy, and France if Greece leaves. "The whole house of cards will come down", he said. ...

The ECB's emergency lending may have made matters worse, encouraging banks to buy their own states' debt. It has led to an incestous inter-linkange of fragile banking systems and fragile sovereign states, each propping the other up. Many of the banks used ECB money to buy state bonds until they need to roll over their own debt. They are now nursing stiff losses.

Like Much Else, US Electrical Consumption Flat to Declining Since 2000

Euro Zone GDP Flat For Q1 2012 After -0.3 Q4 2011

CNBC.com here has the full story.

For Q1 2012 Germany carried the weight for the whole zone, with growth up 0.5 percent.

But France was flat at zero growth.

Italy was down at -0.8 percent, and down -1.3 year-over-year.

The Netherlands came in at -0.2, and -1.1 year-over-year.

Spain was down at -0.3 percent.

Markets across the pond at this hour are down 1 percent.

Green River Formation Oil Shale Deposits Spell Death of Peak Oil

Mark J. Perry reports here:

Shouldn't it be newsworthy that the U.S. has 1.5 trillion barrels of recoverable oil in the Green River Formation, an amount even greater than th[e] estimate of 1.392 trillion barrels of proven oil reserves in the entire world? 

Today's Gold to Oil Ratio is a Little High at 16.47

1584 the ounce/96.13 the barrel, almost 10 percent.

A pull-back in gold from here to the 1450 area or a rise in oil to about 105 would move the ratio toward the average of 15.

Since oil is a commodity constantly needed and therefore in constant demand, gold is money, and over-indebtedness is ubiquitous, I'm guessing we'll see continued liquidation of gold to help pay the bills. 

President-Elect Hollande Of France Owns Property Worth $1.5 Million

According to this story, three properties in the French Riviera.

Part-ownership apparently is involved with two of the three properties, which are smaller, say other reports, a few of which also state that the Paris apartment is not owned but rented.  

'Mr. Normal' has claimed to dislike the rich and regards the world of finance as his enemy.

So here:

The 57-year-old Socialist has openly admitted that he "does not like the rich" and declared that "my real enemy is the world of finance". This means taxing the wealthy by up to 75 per cent, curtailing the activities of Paris as a centre for financial dealing, and ploughing millions into creating more civil service jobs.

Norway's Peace Geezer Johan Galtung Erupts With Sustained Anti-Semitism

'Principal Founder of Peace and Conflict Studies'

Blaming the Jews not just for the inspiration, mind you, but for the crime of the Norway shooter, according to this story:

Appearing on the left-wing radio show Democracy Now, Norwegian academic Johan Galtung, whose grand-daughter was nearly killed during the attack, hinted darkly that Breivik drew inspiration from the notorious Irgun bombing of the King David Hotel in Jerusalem, which occurred on the same date in 1946. In a subsequent speech, Galtung suggested Mossad involvement in the Norwegian massacre, noting for good measure that Jews control the American media.

Here's a transcript of Galtung's remarks on Breivik's choice of 22/7:

JOHAN GALTUNG: Well, she is doing fine. She’s a strong young woman, a wonderful person. Thanks for having me.

Well, the mass murderer is now in court. There’s a lot of talk about his psychology. I find that less interesting. Much more interesting are the deep motivations, always thinking politically. And in order to get into that, you can start with the date he chose. That was 22nd of July. Twenty-second of July, 1099, the Knights Templars liberated Jerusalem for the Christians, later on for the Jews. The 22nd of July, 1946, King David Hotel was exploded by what was at that time Jewish terrorists. Some of them later became prime ministers of Israel. So the day is not quite by chance. He has deep, deep anchorings in Judeo-Christian mythology and the myths of the Knight Templars.


So, I suppose we're supposed to believe that the King David Hotel attack was chosen by Jews, what, to commemorate an attack on Jerusalem by Christians in 1099? What a crackpot.

But there's more, much more.

The Mossad connection to Breivik was asserted in a now infamous speech given by Galtung last September, all of which is neatly summarized with links here by Bruce Bawer:

Last September 30, he gave another lecture entitled “Ten Theses about July 22” – that being the date on which Anders Behring Breivik massacred 77 people in and near Oslo. The lecture, according to NRK, the Norwegian national broadcasting company, “was greeted with a standing ovation by some, while others chose to leave the auditorium.” Good for them. In Dagbladet on October 7, John Færseth neatly summed up the lecture’s message as follows: “Galtung comes dangerously close to the idea that the world is really controlled by Jews and Freemasons.” After Galtung replied to Færseth, the latter followed up by reprinting his Dagbladet article in the Humanist along with a reply to Galtung’s reply. Galtung’s reply to the reply to his reply – are you still with me? – appeared in a later issue of the Humanist, and both items from the Humanist were made available online on April 23. ...

Among the questions Galtung wants to see discussed freely – in order, you understand, to prevent an explosion of anti-Semitism – is whether, as one of his fellow “peace researchers” in Sweden has proposed, Anders Behring Breivik was an operative for the Mossad. (In other words, Galtung expects us to mull over the proposition that the government of Israel masterminded the cold-blooded execution of dozens of Norwegian teenagers attending a summer camp.)

Galtung also suggests that a more open and robust discussion of the contents of a certain book would be yet another healthy way to prevent anti-Semitism from spinning out of control. Which book?  Why, the Protocols of the Elders of Zion, of course. “I wonder how many of those who have such definite opinions about the Protocols of the Elders of Zion have actually read them?” Galtung writes. “It’s impossible to do so today without thinking of Goldman-Sachs.”

Norway, to paraphrase Harvey, is a pestilent seminary, the cause of more or less truculent plagues, of the Breivik variety, and of the Galtung.

Must be something in the water.

Money Is Hiding From Obama, Not From The Market

Jeff Cox at CNBC.com here, like most in the financial press, cannot understand that mom and pop no longer invest not because they do not trust the market, but because they do not trust the political leadership which is manipulating it:

[I]f investors are learning more, that education has taught them to flee the market.

Money market mutual funds, where investors typically park their money in times of duress before deciding where to deploy, has shrunk from just short of $4 trillion during the worst days of the financial crisis all the way down to $2.57 trillion, according to the Investment Company Institute.

But the lion's share of that money has gone not to stocks but to bonds. In the most recent week for which data is available, stock funds lost a stunning $5.3 billion while bond funds gained $7.5 billion.

All this, while the stock market has doubled gains off its March 2009 666 number-of-the-best intraday low.

President-Elect Hollande Of France Must Be Reading Clive Crook

Here's Clive just days ago:

The question is whether Hollande will row back from his campaign pledges quickly enough to avert disaster.

The mood of jubilation among France’s unreconstructed leftists will make it difficult. And Hollande doesn’t have much time. Mitterrand took from 1981 to 1983 to discover that his policies constituted the alternative that Margaret Thatcher had in mind when she said, “There is no alternative.” Hollande may have just days to come to the same revelation. Looming parliamentary elections complicate the tactical judgment. Hollande needs voters to give him the majority in next month’s vote for the legislature. He can’t betray his supporters before then.

Whether it’s sooner or later, Hollande will be forced to acknowledge reality, and the disillusionment of the French left will be terrible.

But if it’s sooner, some good could come of his election. ...

Wisely, Hollande’s campaign was more about posture than specifics. We know he’s against austerity and for taxing the rich -- but he hasn’t drawn up a budget. That must wait, he says, until auditors have checked the government’s books. This could give the new president cover to rethink his position on longer-term fiscal control and structural reform. If he does that and insists on short-term fiscal moderation, whether this is deemed a renegotiation of the fiscal pact or merely a supplement to it, his election might help Europe.

And now we have President-elect Hollande today here, taking cover and preparing his supporters for the bad news:

Hollande stuck to his own deficit reduction goals despite new European Union figures released Friday that paint a bleak picture for France and the whole eurozone.

"I have known for several weeks that there was a greater degradation than the outgoing government said there was. We conclude that this is a confirmation," Hollande told reporters in the central city of Tulle.

He said the new figures do not necessarily mean he has less room to maneuver after he takes office Tuesday. "No, we had already expected this," he said in remarks shown on French television.

He said he's asked for an audit of France's budget by the Cour des Comptes, budget watchdog. The audit is expected to be completed by late June.

The Rational Thing To Do Is Get Out Of Bonds Now

So Mark Hulbert, here:

Given your belief that bonds in a decade’s time will be lower than where they are today, and the dismal failure of bond market timers to successfully time the market’s gyrations, the rational thing to do is get out of bonds now.