"All The News That Fits...Our Agenda"

That should be the real motto of The New York Times. Blogger and writer Roger L. Simon, founder of center-right Pajamas Media, sheds light on one of the darkest chapters in 20th century history, and how it was distorted by Stalin apologist Walter Duranty, The Times' top foreign corrrespondent circa 1932.

Sadly, not much has changed at The Gray Lady. To this day the newspaper refuses to consider returning the Pulitzer awarded to Duranty in 1932, even though his lies and falsehoods in downplaying the Stalin-induced Ukranian famine of the 1930s are widely acknowledged. If the "paper of record" one day falls under the weight of its accumulated breaches of journalistic integrity and agenda-driven reporting, the Sulzberger-Ochs family will have no one to blame but themselves.

Take 6 minutes and view Roger's second installment of "Burning down The New York Times." (think Jayson Blair).

The Debt: A Visual Aid for the Math Impaired

A year ago liberals and conservatives alike excoriated George Bush for spending money like Paris Hilton on a bender. Of course, way back then we were all a little naive, believing as we did that a $450 billion fiscal year deficit was outrageous and irresponsible.

Apparently liberals have had a change of heart, now that their patron saint is president. With an FY 2009 projected deficit of almost $2 trillion, and a 10-year accumulated deficit projected by Obama's own budget team at $1o trillion, liberal outrage at spending has been strangely absent. You know, like liberal outrage over David Letterman's sexist "slut" jokes about Sarah Palin's daughter.

Next time a liberal tells you how all Obama is doing is trying to get us out of the mess that George Bush got us into, you might want to send him this two-and-a-half-minute visual aid and then ask him exactly how what Obama is doing is going to make anything better.

(HT: Chuck Stein).

Obamacare Posters

From http://www.michellemalkin.com/:

Obama's Muslim Outreach Fails First Test

Only an American administration headed by an utterly arrogant and naive ideologue could have asserted that the Iranian elections were characterized by a "robust debate" which will advance the U.S.'s ability to engage Iran in "new ways." This assertion rings hollow not just because the administration's preferred candidate lost in a rigged election. Even if the so-called "reformist" Mir Hossein Mousavi had won he would have likely followed the party line (and there is only one party in Teheran) laid out by the mullahs, the real bosses of Iran.

Of course Mousavi did not win, and the fact that Team Obama thought he could betrays either a stunning failure of intelligence vis-a-vis events in Iran or a shocking inability to understand the world as it really is. More than likely it wasn't the intelligence that was faulty, it was the way it was massaged by the utopians who populate the State Department and the White House's National Security Council. Using the Left's own derisive characterization of the Bush administration's case for war against Iraq, the Obamacons politicized the intelligence.

Notwithstanding the outcome of the Iranian election (which the nutty Mahmoud Ahmadinejad won by an apparent landslide), Obama's faux-visionary "Hope and Change" routine has morphed pathetically into "Hope for Change." Obama gives a speech in Cairo 10 days ago in which he hails Islam's "tolerance" and its indispensable contributions to humanity that his minions in government and the media hope will result in sweeping change throughout the Muslim world. (I am a little fuzzy on the need for all this change when according to Obama all is fine and dandy in Islam). This is wishing against the evidence that mere words (as long as they are Obama's) can change the directional flow of human nature and thus change the course of human events to Obama's liking.

If the election results were not a definitive rebuke to those who engage in such wishful thinking, then the events immediately following should be. According to reports, "by Saturday afternoon, riot police and Revolutionary Guards thugs were clashing with thousands of protesters who surged onto the streets of Tehran after their defeated hero, Mousavi, said he strongly protests 'the many obvious violations that could lead to tyranny in Iran.' The Iranian government has blocked Mousavi's ability to communicate to his supporter via text messaging and has refused to allow him access to Iranian TV. Even the "BBC," the Left-leaning British government controlled media, reported that their satellite has been jammed by the Iranians, preventing them from transmitting to its Persian and Middle east viewers the true state of affairs in post-election Iran.

When asked about such irregularities, including the blocking of the publication of allegations of election fraud by Mousavi's house newspaper, Ahmadinejad abjured his questioner not to worry about such things as press freedoms. ""Newspapers come and go and reappear. Don't worry about it."

Perhaps this is the Iranian regime's understanding of "robust debate." And yet it is unlikely that any of these gross displays of power and intimidation will in any way dissuade Obama from attempting to "dialogue" with the rogue regime.

And all of this comes at a time when Iran threatens Israel daily with nuclear destruction while North Korea seems determined to ratchet up the pressure on the Obama administration by threatening a nuclear confrontation if Obama enforces the U.N. Security Council's sanctions against the country. It is no coincidence that America's enemies are probing our new president for weakness, just as V.P. Biden said they would. It is apparent to them that President Obama has no stomach for standing up to those who would threaten us.

It is becoming increasing obvious that Obama is as clueless when it comes to the nature of dictatorial regimes (other than his own, at least) as he is when it comes to fiscal and economic policy. In either case such detachment from reality is dangerous. But with regard to our dealings with apocalyptic regimes like Iran and North Korea, Obama's flight from reality can be downright catastrophic.

"We are going to change the world. Please, don't interfere."

So said an American official to Israeli Prime Minister Netanyahu, according to Israel's Channel One televison. Netanyahu's aides reportedly took that as a "threat."

Ya think?

Europe swings Right as depression deepens

So says Ambrose Evans-Pritchard, the U.K. Telegraph's International Business Editor based in London, in his business blog Monday. He notes that in European parliamentary elections "left-wing incumbents in Germany, Austria, the Netherlands, Spain, Portugal, Hungary, Poland, Denmark, and of course Britain were either slaughtered, or badly mauled." Evans-Pritchard is not quite sure why, given the "ultimate crisis of capitalism" so many of the "blue-collar working base has swung almost overnight from Left to Right," but he suspects rising unemployment is the key to it all.

Evans-Pritchard was an early economic doom-and-gloomer, and remains so even while most economists and pundits keep tending those 'green shoots" we keep hearing about. He believes that the deficit countries (U.S., U.K., Spain, etc.) have sharply increased their savings rate and thus reduced consumption while the "surplus countries" of China, Japan and Germany have not stimulated demand sufficient to offset this. According to Evans-Pritchard the global system is in depression, with a potentially devastating "Stage II" still to come (a la 1932 after the "green shoots" of 1930-31).

Speaking of green shoots, Evans-Pritchard concludes his recent piece with this:

Don't count on the political fabric of Europe holding together if our green shoots shrivel and die in the credit drought of the long hot rainless summer that lies ahead.

Tough stuff. You won't find that sort of frankness in the American business press.

Obama in Wonderland

I read parts of President Obama's appalling "Muslim outreach" speech given last week in Cairo but haven't watched the whole thing...yet. I heard it was almost an hour long and I'd rather take a root canal without Novacaine than sit through that.



Thanks to columnist and military expert Ralph Peters I may never have to. He has delivered a devastatingly sarcastic piece summarizing the whole dismal thing. Peters says thanks to Obama's speech he has learned quite a lot about Islam that he never knew before, like “Islam has a proud tradition of tolerance” and “Islam has always been a part of America’s story.” He wonders how the Founding Fathers missed that last part.



Peters most pungent line is in response to Obama's statement that “America’s strong bonds with Israel are . . . unbreakable.” "Yup," says Peters, "And they're issued by Chrysler."

Proven Wrong in Less Than a Day?

Yes, its true...I may have to admit that I erred. In Wednesday's post about journalist Caroline Glick's PJTV interview in advance of Obama's speech yesterday, I mentioned security policy expert Frank Gaffney's prediction that once Obama's policies vis a vis Israel come to light, the president will encounter resistance even from liberals in Congress. I pooh-pooed that as a "faint hope," in that liberals in Congress seemed quite ok with Obama's Middle East policies.

Today Politico.com reports that some Congressional liberals are indeed chafing at Obama's audacious bid to change drastically America's Israel policy, especially the pressure being brought to bear on Israel to halt settlement expansion. Rep. Anthony Wiener, a reliably liberal New York Democrat, said: “There’s a line between articulating U.S. policy and seeming to be pressuring a democracy on what are their domestic policies, and the president is tiptoeing right up to that line." Even the rabid defender of Obama policy Rep. Robert Wexler of Florida takes issue with the administration's broad definition of "settlements."

Democrats, or some of them anyway, apparently think it is unwise for Obama to be equating the relatively small issue of Israeli settlement expansion with Palestinian terrorism, Arab hostility to Israel and Iranian intransigence in regard to the nuclear issue. They are not likely to be comforted by Obama's Cairo speech, which continued the moral equivalence game to an outrageous degree, in effect blaming Israel for the "intolerable" plight of the Palestinians.

So it does appear, as Gaffney suggested, that there is a growing reluctance among Democrats to support fully Obama's new Israel policy, at least at the margins. Whether that reluctance will lead to full-throated resistance, or whether in any event it will have any effect on Obama's headlong rush into the arms of the enemies of freedom, is an open question.

June 4th, 2009: Day of Infamy?

Tomorrow, one day before the 42d anniversary of the famed "Six-Day War" between Israel and the Arab countries surrounding it, Barack Obama will deliver an address in Egypt, the primary antagonist and big loser of that war. While only Obama and his advisers know what is in the speech, it is not hard to predict that it will be dismaying to Israel's leaders and citizens, and millions of Jews elsewhere. Not only will Obama reiterate the themes of his interview with Al-Arabiya Arab television early in his presidency in which he advocated closer ties between America and the Arab-Islamic world, but he will likely use the speech to signal to Israel's friends and foes alike that the "special relationship" between the U.S. Israel is drawing to a close.

On the eve of this historic event it would be well to take time to watch this 15- minute PJTV interview of The Jerusalem Post's Caroline Glick. Ms. Glick is known to many who follow security issues in the the Middle East and in particular Israel for her insight and moral clarity with respect to the threats facing Israel and the West. Like her writing style, her tone and demeanor is direct, dry and humorless, which tracks rather well with her downbeat outlook on a depressing series of events. Nevertheless, I think her assessment of the current state of play between the U.S., Israel and the rest of the world is, regrettably, dead on.

Some examples:

--Obama is intentionally engineering a crisis in U.S. relations with Israel in advance of Obama's trip to the Middle East. The crisis is designed to marginalize the Israeli government in the hopes that it will crack (fall) under the pressure.

--It is now American policy to forcibly remove almost a million Jews from their homes in the West Bank (Judea and Samaria, the historical biblical lands of the Israelites) to make way for an "apartheid" Arab state in which no Jew will be permitted.

--America is openly and clearly overturning a range of strategic agreements with Israel established under previous American administrations (Democrat and Republican alike), but particularly understandings with President Bush concerning Israel's security and borders.

--The U.S. policy is now abject appeasement of the Arab world, and Israel is the "currency" we are using to do this.

--Rahm Emanuel (about whom I wrote in this space several weeks ago) is Obama's hatchet man in implementing this policy. He is actively trying to destabilize the Netanyahu government by pressuring American (liberal) Jewish organizations to criticize Israel's policies regarding settlements and borders as well as control of Jerusalem's holy sites. In effect Emanuel is trading on Obama's popularity among American Jews in order to convince them to sell out Israel.

--Obama has raised the possibility of sanctions on Israel if it doesn't follow Obama's demands on halting settlements. He has also suggested that the U.S. cannot be counted on to veto anti-Israel resolutions in the U.N.

--Palestinian leader Abbas continues to incite his populace against Israel and has not one iota of interest in peace with the Jewish state. He refuses even to entertain the notion that Israel would or should retain its Jewish character.

--The fact that there is no one among the Palestinians with whom Israel can negotiate seems not to trouble Obama one bit, for he is intent on shoveling money and support to the failed-state-in-waiting.

--Obama's decision to bypass Israel on this trip to the Middle east is a deliberate and "dismal" signal to Israel's enemies that it is now open season on Israel.

It is worth noting that Glick's colleague Frank Gaffney of the Center for Security Policy doesn't believe that Americans will ultimately support this dastardly policy:

It is hard to believe the Obama Middle East agenda enjoys the support of the American people or their elected representatives in Congress. Historically, the public and strong bipartisan majorities on Capitol Hill have appreciated that an Israel that shares our values, that is governed democratically and that is in the cross hairs of the same people who seek our destruction is an important ally. Quite apart from a sense of moral and religious affinity for the Jewish people's struggle to survive in their ancient homeland, most of us recognize it is in the United States' strategic interest to stand with Israel.

Gaffney hopes that as Obama's policies and their implications become more widely known "he will find himself facing the sort of popular and congressional revolt that has confronted him in recent weeks on Guantanamo Bay." This is a faint hope indeed, since Obama appears to have support for his policies from the vast majority of liberal Jews and Jewish congressmen.

In the meantime, if as predicted Obama's Cairo speech is the opening salvo in a campaign to marginalize Israel, then tomorrow, June 4th, 2009, will truly be a day of infamy.

The Clock is Ticking (and the Bond Market Knows it)

Forget "what are we doing to our kids and grandkids?" How about: "what are we doing to ourselves?" Check it out.

The Jewish Delusion (Part II)

A few weeks ago I wrote about the self-deception of American Jews
when it comes to the Obama administration's approach to Israel. That Jews are deluded into thinking that Obama's Israel policy is benign was crystallized in the reaction of liberal Jews to Rahm Emanuel's selection as President Obama's Chief of Staff. It was said that Emanuel's pro-Israel credentials were "impeccable," and thus he would temper any inclination on Obama's part to pressure Israel unduly vis a vis the conflict with the Palestinians.

Events have quickly shown just how misplaced the Jews' faith in Emanuel is. Last week Israeli Prime Minister Benjamin Netanyahu came for his first audience before His Holiness Barack Obama, the Omniscient. It must have been humiliating for the experienced pol Netanyahu, in his second turn as his nation's leader, to bow and scrape to the young, callow yet arrogant fellow who now leads the country that has heretofore been Israel's closest ally and protector. Netanyahu's effusive praise for Obama's intelligence and leadership at the post-meeting press conference illustrated what a political pro Bibi really is, for only a professional could make such sickening sycophantism sound sincere.

A close read of the transcript of the press conference reveals just how large the chasm between Obama's agenda and geopolitical reality is. While both leaders acknowledged the threat that Iranian nukes would pose to Israel, the Middle east and the U.S., it was clear that the Iranian problem is secondary to Obama's desire for a Palestinian state. In answering a reporter's question about linkage of the Palestinian-Israeli "peace process" to stopping the Iranian nuclear program, Obama said, "to the extent that we can make peace with the Palestinians -- between the Palestinians and the Israelis, then I actually think it strengthens our hand in the international community in dealing with the potential Iranian threat."

Much was made also about Obama laying out a negotiating timetable with Iran. But according to Caroline Glick of The Jerusalem Post, talk of a timetable is a red herring designed to sucker Israel into non-action until it is too late. Obama's timetable would extend until December or January the appeasement negotiations with Iran, after which would begin the fruitless effort to win approval of international trade sanctions against Iran. By the time this effort is seen to be a dead end, Iran's nuclear program might well be unstoppable.

Thus, Obama's statements can be seen as either hopelessly naive (believing the absurdity that if Israel will only give away its security for the sake of a Palestinian state Iran will stand down) or craftily manipulative (holding Israel's fear of Iran as a sword of Damocles over it in order to force Israel into untenable territorial concessions). Whichever it is, the result is the same--a potentially fatal reversal of the priorities which common sense dictates should command the world's attention.

In other words, a relentless and successful effort to stop Iran's nuclear aspirations in its tracks is a prerequisite to ridding Fatah and Iran's proxies Hamas and Hezbullah of the belief that it could ever hope to vanquish Israel, which in turn is a sine qua non of Israel having the breathing space to actually consider "taking risks" for peace.

As for Bibi Netanyahu, according to Glick he survived his close encounter of the weird kind with Obama, in that he "succeeded in evading the policy traps Obama set for him. Netanyahu reserved Israel's right to act independently against Iran and he conceded nothing on the Palestinian issue." Indeed, late reports indicate that Bibi has already defied Obama's call for a building freeze in the West Bank. While for now Israel won't build new settlements, Bibi refuses to halt expansion of existing ones within "natural boundaries."

But this only sets the stage for a titanic battle of political will between Israel and the U.S. that Israel cannot win without deft maneuvering. Glick suggests that Bibi take steps to mitigate Obama's upcoming June 4th Cairo speech in which he will lay out his vision of Middle East peace by first announcing a new Israeli plan. In essence, the Glick-Bibi plan would call for immediate dialog between Israel and the Arab League or the Islamic Conference with a view towards quick normalization of Pan-Arab relations with Israel. This would be followed by implementation of a joint program for combatting terrorism, which in turn would lead to final status negotiations between Israel and the Palestinians.

Of course Glick has no pretensions of success here. The point is to lay something on the table before Obama's June 4th speech that calls on the so-called "moderate" Arab states to put up or shut up. King Abdullah of Jordan and Obama both claim that the Arabs are willing to accept Israel. So why not test their seriousness with a serious offer to immediately conclude a recognition pact while at the same time press the case for action against Iran.

**********************************************************************

A more fundamental problem then the posture of the Obama administration vis a vis Israel is, according to journalist Aaron Klein, the political, social and religious dynamics within Israel herself. Klein, Jerusalem bureau chief for Worldnetdaily, has written an essay called "The Late Great State of Israel," excerpted from his book of the same name. Klein concludes that there is an ongoing war between Israel's secular governing elites (Netanyahu included) and the national religious Jews who comprise the vast majority of the almost 500,000 "settlers" who live in towns and cities and enclaves in the West Bank:

Few have any idea how the country is being torn apart by an Israeli war against the "national religious" - a battle of Jew versus Jew in which those in power who want the country to resemble a secular, Europeanized state suppress a significant segment of the population that wants to keep Israel a Jewish country defined by its profoundly Jewish history, traditions, and character.

This ideological battle led to a succession of disasters in Israel since 2005, when Israel uprooted 9,000 of its citizens from their homes in Gaza, ho then saw how their beautiful villages were turned into wastelands by the Palestinians who took over. The 2006 defeat in Lebanon followed by the inconclusive incursion in Gaza in 2009 has left Israel on the brink of national disaster, with a governing elite "hell-bent on pursuing the same failed policies that have resulted time and again in large numbers of Jewish deaths and the handover of strategic land to terrorists, fueling a worldwide perception of Jewish weakness."

Klein wrote his book not as prophecy but as a warning against complacency and self-delusion. He intends the book to stimulate debate and action to change the disastrous policies that have led Israel into an existential crisis. Israel's leaders have led the country into a "calamitous downward spiral" that will be difficult to reverse. Says Klein, "while the Psalms reassure us that 'the Guardian of Israel neither slumbers nor sleeps,' the current leaders of Israel are fast giving away the land and strength with which the Jews have been blessed."

It is a sobering essay and its thesis heartbreaking to contemplate. But Mr. Klein, obviously a believer in the G-d of Israel, concludes with a mixture of hope and angst:

I trust and believe that Israel will ultimately survive - against all odds and in spite of the threats from within and without - only through the grace of God. But for now, things don't look good.

The True Moral Hazard of Bailouts

from Eric de Carbonnel, an admitted perma-bear and market skeptic:

Most commentators misunderstand the true moral hazard of bailouts. While bailouts might have an adverse effect on the future actions of individuals and businesses by encouraging risk taking, the real problem is their effects on future actions of the government. Specifically, each bailout makes it harder to say no to the next bailout. This pressure to fund future bailouts is made far worse if those receiving bailout money are truly undeserving. After all, if the government is going to give $45 billion to Citigroup (one of the banks responsible for our current mess) and insure $306 billion of its riskiest assets, then how can it say no to bailing out the state of California or South Carolina?

This “me too” phenomenon will get much worse after the treasury market collapses, and the fed starts monetizing the treasuries that were sold to fund the current bailouts. If the Fed printed money to bail out the banks, why shouldn’t it print more money to fund unemployment benefits? Politically speaking, you can’t bail out the irresponsible and then let the responsible sink, which means Congress isn’t going to be saying no to a lot of the bailout requests this year. Unfortunately, these bailouts will become increasingly meaningless because, when you bail everyone out, you bail no one out, as you destroy your currency.

That was an excerpt from Eric's "Ten Major Threats Facing The Dollar In 2009" for the full treatment. It was written in January, and the bailouts and takeovers have only accelerated since then, as have the attacks on the status of the U.S. dollar as the world's reserve currency.

We are in a brave new world. We are going to have to educate ourselves about debt, currency and monetary policy. And gold, silver and other "physicals." Watch the stock market if you're worried about your retirement. But it's what happens to the money supply, the bond markets and the currency markets that is going to determine our standard of living in the not distant future.

"Inflate or Die"

WARNING: the subject matter of this post is the economy, monetary policy and the financial system. Reading this may lead to eyes glazing over, sudden fatigue and loss of wakefulness.

Many years ago I wrote that the fate of the US will be expressed in three words--INFLATE OR DIE. We are there now. Printing trillions of dollars of Federal Reserve Notes must end in inflation.-- Richard Russell, Dow Theory Letters, May 13, 2009

In a speech he gave in 2002 when he was a Governor of the Federal Reserve, Fed Chairman Ben Bernanke signalled his preference for aggressive Fed action to counter asset deflation should it occur on a sustained scale in the United States: "If we do fall into deflation," said Bernanke, "we can take comfort that the logic of the printing press...must assert itself, and sufficient injections of money will ultimately always reverse a deflation." In short, Bernanke argued that when traditional monetary actions to stimulate demand, i.e., reducing the short-term interest rates at which banks borrow money from the Fed, are exhausted, the Fed could and should "drop money from a helicopter" if necessary to increase (inflate) the number of dollars in circulation and effectively raise the dollar price of goods and services. This then-theoretical policy prescription earned Bernanke the nickname "Helicopter Ben."


In early March 2009, Bernanke's theory met reality. With the Fed funds rate practically "zero bound," the Federal Open Market Committee (FOMC) announced it was going to buy--monetize-- up to $750 billion of agency mortgage securities (i.e., securities issued by Fannie Mae and Freddie Mac) and $300 billion in long-term (30-year) Treasury bonds. The implications of this are manifold. First, the Fed doesn't have the money to buy over a trillion dollars of assets, so it has to "create" it out of thin air. This is accomplished by the Fed "borrowing" electronic credits from the Treasury which is then used to buy the assets. The issuance of these electronic credits is the digital equivalent of printing money.

Second, the debt instruments the Fed is buying are financing the "stimulus" and all of the other deficit spending of the last year and this year. In essence the Fed is soaking up the inventory of these instruments and thus keeping their prices up. This has the effect of keeping interest rates low (a bond's yield typically falls as its price rises), which in turn (theoretically) stimulates mortgage and commercial borrowing. But this comes with a price: the artificial creation of a "bubble" in bond prices, which cannot be sustained indefinitely.

Third, the monetization of agency debt and Treasuries poses a significant risk to relations with our trading partners, who get get nervous when they see what looks like the intentional debasement of our currency. An over supply of fiat dollars lessens the value of all dollars in the system. China holds more than a trillion dollars of dollar-denominated bonds in its reserves purchased with dollar surpluses from its exports to the U.S. They are rightly concerned that those reserves will lose value if our dollar is trashed, and so they are already curtailing their U.S. debt purchases. This will lead to higher interest rates forcing the Fed to come in and buy up even more debt with more printing press money, further debasing the dollar.

A devalued dollar will make our exports more attractive than those of our competitors in Europe and Asia, leading them to devalue their own currencies to save their economies. This sort of competitive devaluation leads to trade wars, which often lead to something more deadly.


It is instructive to note that although Bernanke in 2002 believed in the Fed's ability to cure deflation by injecting liquidity into the system, he believed even more in the Fed's ability to prevent deflation in the first place. Judging from the Fed's actions of late we are already past the point of prevention and now trying to effect a cure. Can it not be said that the Fed's anti-deflation policy has already failed, and that the policy prescription of printing fiat (paper) money and debt monetization is a last ditch effort to save the system?

Ah, you ask, hasn't the deflation risk been wiped away with the "green shoots" of the economic recovery we've been hearing about? And with the financial system awash with all this fiat money, shouldn't we turn our concern to inflation, maybe even super-inflation? Well, no. And yes.

The powerful stock market rally over the last two months has created the illusion of market and economic recovery. But it is well to remember that the rally was powered by the surprisingly strong first quarter bank earnings released in early April. A look behind the numbers, though, reveals two things. First, the banks benefited from a change in FASB Rule 157(e), allowing the banks to manipulate the balance sheet value of their assets. Second, the banks benefited from the low cost of borrowed funds as a result of the Fed's suppression of the Fed funds rate and the monetization policy. According to investment guru John Mauldin, this is the "equivalent of the US government reducing the cost of goods to zero for the embattled car companies and then going on to buy--courtesy of the US taxpayer--a couple of million cars that nobody really needs." In that environment anyone can show a profit.

Whenever you hear the financial mass media promoting "green shoots" and stoking a new bull market, it is wise to be cautious if not downright skeptical. If the financial pundits of CNBC say something, the opposite is likely true. The sobering fact is that the U.S. may be slipping further towards "outright deflation, just as Japan did," according to Albert Edwards of Societe Generale, the large French bank. Companies and consumers are retrenching en masse, with the former laying off workers and the latter hoarding cash and paying down debt.

In fact, some analysts calculate that the 15 largest banks have experienced reductions on their balance sheets of $3.6 trillion, with another $2 trillion more yet to be written off this year. And the problem may be worse in Europe. The IMF believes that European banks have written off less than half of total losses related to the credit crisis.

The media and many investors may be buying the "green shoots" spin, but clearly Bernanke is not. He has access to all the Fed's data and then some, and so he must know that another wave of the credit crisis approaches. Delinquencies on Alt-A and adjustable mortgages are accelerating, and prime and jumbo loans are now starting to suffer. And rumor has it that commercial real estate loans are the next shoe to drop. Another wave of losses means that more banks fail, credit gets tighter, businesses contract, layoffs accelerate and spending plummets.


That we are in deflation now may not be apparent in the prices of goods and services--yet--but is evident by the fact that the Fed is risking massive inflation in order to reflate the economy. Bernanke is frightened to death of deflation, because it is so devastating and so hard to climb out of. It is an economic death spiral of sorts. The Fed is doing everything it can to prop up the monetary system, by dropping money into it while at the same time propping up the bond market by buying medium and long-term Treasuries.

What if it doesn't work? Bernanke's theory as expressed in 2002 didn't anticipate a concurrent banking crisis, at the heart of which is a credit crisis caused by toxic assets of unknown value sitting like a cancer on the balance sheets of the banks. The data suggest that the injection of money into the financial system by the Government (through bailouts, guarantees, preferred stock purchases and mortgage purchases) is still trapped in the financial system. The banks are leaving their electronic money in the electronic vaults of the Fed because they are afraid to lend to one another. This means that all that created money has no "velocity," and doesn't have the stimulative effect intended by the Fed. Thus the country risks sinking further into the deflation trap.

And inflation? It is coming, sooner or later. The Fed's "inflate or die" policy ensures that it will do whatever it takes to get out of the deflation ditch, and eventually we'll recover. The question is, what impact will the government's deficits and the Fed's money policy have on our currency and on the rating of our bonds? According to the IMF the US has racked up almost 12 trillion dollars in debt with another 45 billion in off-balance sheet obligations, not to mention multi-trillion dollar annual deficits for years to come. Medicare and Social Security will go bust before 2017, threatening even more debt in the out years. Surely this will have consequences.

My guess, and its just a guess, is that we will end up defaulting on our debt. This will be done by cheapening the dollar through super- or hyper-inflation to the point that our creditors may as well forgive their loans to us. This may be less bad then it sounds because most other nations will be in the same boat. But the price we will pay for this is the loss of King Dollar as the world's reserve currency. Whatever else that means, it certainly means the loss of our economic sovereignty.

So what happens next is anyone's guess, but for clues keep your eye on the bond market. Thats where the real money is. Yields on 10-year Treasuries, which anchor mortgage rates, are over 3%. The Fed will try to suppress these rates with more debt purchases, but at some point they will run out of bullets. If and when that happens, rising rates will threaten the bond market.

I don't know quite what would follow a crash of the bond market. But I suspect it wouldn't be pretty.

Bulletin: Liberal Asserts Cheney Could Be Right!

Sometimes the liberal Richard Cohen of the Washingpon Post offers a point of view that surprises. In this case it is that the hated Dick Cheney may, for the first time in his 40-year career as a public servant be right: enhanced interrogation works.

In the sanest paragraph I've seen written by a certified member of the MSM on the "torture" memos, Cohen says:

Cheney says he once had the memos in his files and has since asked that they be released. He's got a point. After all, this is not merely some political catfight conducted by bloggers, although it is a bit of that, too. Inescapably, it is about life and death -- not ideology, but people hurling themselves from the burning World Trade Center. If Cheney is right, then let the debate begin: What to do about enhanced interrogation methods? Should they be banned across the board, always and forever? Can we talk about what is, and not just what ought to be?

Cohen also wonders whether these memos might shed some light on whether Nancy Pelosi is lying about her insistence that she wasn't briefed about these techniques.

In calling for release of the memos which Cheney says vindicate the Bush administration policy on interrogation post 9/11, Cohen argues: "The Obama administration ought to call Cheney's bluff, if it is that, and release the memos. If even a stopped clock is right twice a day, this could be Cheney's time."

I recalling praising Cohen in these pages on some other issue, since forgotten. Maybe even liberals are right twice a...life.

Michelle Malkin: Battered Hedge Fund Managers’ Syndrome

A hedge fund manager risks his career by calling out Obama's cheap political trick of demonizing the same financial industry heavyweights who got him elected in the first place.

Was Pelosi Briefed On "Enhanced Interrogations"?

She claimed she wasn't. But according to the CIA, she was among the first members of Congress to be briefed on the harsh interrogation tactics being used on Al-Qaeda prisoners, way back in September 2002.

Either Pelosi is a liar, or an idiot. Or both. (I vote for "both.") Nancy Pelosi is surely the most corrupt, disingenuous and craven politician in Congress today. Of course with Harry Reid, Chuck Schumer, John Kerry and Dick Durban in the Senate and Charles Rangel and Barney Frank in the House its a pretty close contest.

Lets see how much scrutiny Pelosi's lies get in the media in the days ahead. My guess is: not much.

The Jewish Delusion (Part I).

I found it curious that after the November election so many liberal Jews rationalized their vote for Barack Obama by touting his selection of the Jewish congressman from Illinois, Rahm Emanuel, as his chief of staff. We were told that Emanuel’s pro-Israel credentials are impeccable. "Rep. Emanuel is…a good friend of Israel, coming from good Irgun stock, davening [praying] at an Orthodox synagogue, and sending his children to Jewish day schools," said a top Jewish community spokesman, William Daroff, when Emanuel’s appointment was announced. (The Irgun was the right-wing military faction headed by the late Prime Minister Menachem Begin during Israel’s War of Independence). The clear implication was that Rahm Emanuel’s elevation to Obama’s chief aide proved that Jews had no reason to fear the new president’s policies towards Israel.

It seems rather odd to justify a vote for a political candidate based on an action taken by him after the vote is taken. No voter had the slightest idea who Obama would pick as his chief aide before pulling the lever for him, and frankly could care less. But obviously some Jews felt a wee bit defensive about suggestions that Obama would be hard on Israel and soft on its enemies, and thus played the “Rahmbo” card to convince others and perhaps themselves that the chief of staff would stand athwart any attempt by Obama to sell Israel to the Arab wolves. They and we had reason for nervousness well before the election, in light of the surfacing of audio recordings of the all-time greatest hits of Jew-hatred spewed from the pulpit of Obama’s (former) pastor the Rev. Jeremiah Wright as well as revelations of Obama’s associations with radical Arabs like Rashid Khalidi, the anti-Israel professor and acolyte of the late Edward Said, the polemicist/apologist for Palestinian terror against Jews. None of this prevented liberal Jews from voting for Obama, but they must have had some qualms nonetheless. Emanuel’s rise to chief of staff no doubt settled them.

That a well-placed Jew in the White House could or would be able to change the policy of a determined president is laughable. History is replete with examples of well-positioned Jews who succumbed to the blandishments of title, honor and position and willingly did the bidding of their rulers regardless of the consequences to their co-religionists. As a result of this, Jews may be the only people on earth with mixed feelings when one of their own seeks and/or obtains high government position. (During the 2000 presidential contest even Jews who admired Joe Lieberman fretted over whether having him as the first Jewish vice president would be “good for the Jews.”)

On Sunday Mr. Emanuel, the putative guardian of Jewish interests in the Administration, weighed in on the Israel-Palestinian conflict and the Iranian nuclear threat. The occasion is the AIPAC policy conference taking place this week in Washington, where thousands of pro-Israel activists are gathered to hear speeches by U.S. and Israeli leaders, lobby Congress to support efforts to stop Iran from going nuclear, and network with their fellow activists. According to The Jerusalem Post, Emanuel said in a closed-door meeting of 300 top AIPAC donors and board members that “it will be easier” to recruit Arab nations to oppose Iranian nukes if “progress” is made on the Israel-Palestinian track, meaning that Israel ought to first make concessions to the Palestinians before Arab countries will support sanctions against Iran. This echoed Hillary Clinton, who in April “warned Israel that it risks losing Arab support for combating threats from Iran if it rejects peace negotiations with the Palestinians.”

Mr. Emanuel’s defenders in the press point out that some who attended the meeting with Emanuel said he didn’t actually “link” the two issues—i.e., Israeli concessions to Palestinians and American efforts to stop Iran-- as had been reported on Israeli TV. Perhaps he didn’t, but that’s not the point. Taken together with President Obama’s stated belief that the creation of a Palestinian state is the key to addressing Arab and Muslim grievances in the Middle East, Afghanistan, Pakistan and south Asia, Emanuel’s remarks and Clinton’s warnings can be seen as a blunt threat to Israel: concede to the Palestinian Arabs’ demands for the West Bank, the Golan and Jerusalem first, then we’ll see if we can cajole the “moderate” Arabs to support sanctions against Iran.

This is obviously a dangerous and dastardly game for several reasons. First, it flies in the face of logic and history to suggest that Israel retreat to borders that are known to be indefensible. The so-called 1967 borders, in place for 19 years following the War of Independence, were unstable and constantly probed and breached by the Arabs. Throughout the 1950s and 1960s Jordanian and Egyptian gangs from the West Bank and Gaza plotted and staged terror attacks inside Israel proper, killing dozens of Jews. Syrian troops regularly rained rockets and artillery down on Israel from their perch on the Golan Heights. Jewish access to the Jewish holy sites like the Western Wall and the Temple Mount in Jerusalem or Rachel’s Tomb in Bethlehem was denied. And this was before the so-called "occupation;" before Palestinians had been fully radicalized by the likes of Yasser Arafat; and before they had access to sophisticated weapons like Kassam or Katyusha rockets.

Only a fantasist could believe that a retreat by Israel to the old borders would lead to a better result.

Second, the Administration makes no reference to the realities of Palestinian polity. George Bush wanted a Palestinian State, to be sure, but not at the expense of Israeli security needs and certainly not without reform of Palestinian institutions. Bush’s talk of two states “living side by side in peace” always implied the establishment of democratic institutions in Palestine as a prerequisite to peace. Bush may have been naïve in his belief that the Palestinians were capable of accomplishing this, but at least he understood that it was a sine qua non of Palestinian statehood. That’s why once the radical Hamas took over in Gaza Bush more or less turned his back on the whole enterprise.

Not so Obama. There is almost no talk by him or his emissaries of Palestinian institution-building as a predicate for peace. In fact it is quite the opposite. On her first visit to the region as State secretary, Hillary Clinton pledged $900 million dollars for Gaza reconstruction virtually without conditions, assuring that the money will be controlled by the Islamist terror group in charge of Gaza, Hamas. She then travelled to Jerusalem where she took Jerusalem’s mayor to task for demolishing illegal Arab buildings. She “urged” Israel to ease up on border closings and allow humanitarian aid to Gaza, as though Israel and not the Palestinians were responsible for the human crisis inside that fetid strip.

Clinton and special envoy George Mitchell have placed almost unrelenting pressure on Israel to curry favor with the Arabs on the Iran issue by caving in to their demands for an immediate commitment to give the Palestinians a state, no matter its character. Meanwhile the Administration and Europe hints at opening a “dialogue” with the Hamas, which rules Gaza with an iron fist and threatens Prime Minister Mahmoud Abbas’ hold on the West Bank.

Third, Obama gives every indication of backing away from the bipartisan “special relationship” with Israel. According to unconfirmed reports, Israeli intelligence has warned Israeli Prime Minister Bibi Netanyahu that Obama wishes to “incrementally diminish U.S. strategic cooperation” with Israel. Even if this report is unfounded, Obama has given every indication that he favors closer relations with Syria and Iran. He has made no secret of his desire to engage Iran, and he has sent emissaries to Syria to feel them out about improved ties. In fact, Jimmy Carter proudly boasted to the Israeli daily Haaretz that he expects full ties between Syria and Washington to be established this year. Who can doubt that Syria’s price for full diplomatic relations with the U.S. is a total repudiation by Obama of the “special relationship” with Israel?

None of this is a surprise to staunch supporters of Israel who opposed Obama. They understood Obama’s world view because they understood those of the radicals he hung around with. What is surprising (and dismaying) is the continuing refusal of liberal Jews to see the danger posed to the Jewish State and therefore to worldwide Jewry by the reckless and frankly depraved anti-Israel policy being pursued by Obama, Clinton, and Mitchell (with the apparent full support of their guard-dog, Rahm Emanuel). Undoubtedly many well-intentioned Jews believe a “two-state” solution is in Israel’s ultimate best interests. But even they must have gotten the lesson from the Lebanon war of 2006 and the Gaza war of 2008-09, to wit: territory surrendered by Israel to its enemies is soon converted into staging areas for rockets and missiles fired against its citizens.

The Jews who offered Rahm Emanuel’s elevation to Chief of Staff as proof that Barack Obama is committed to Israel’s security ought to take a second look at Obama’s Israel policy. In his first media interview after his inauguration (to Arab television), Barack Obama lauded the so-called “Saudi Peace Plan,” the terms of which demand that Israel retreat to borders cynically called the “Auschwitz” borders precisely because they are indefensible. Israel is now being pressured by the U.S. into accepting this “plan,” with some changes from the original, as the basis for negotiations with the Arabs, while the ticking time bomb of Iran’s nuclear program is held over its head like a sword of Damocles. Taking advantage of an ally’s existential fears in order to extract deadly concessions to an unrepentant enemy is not only audacious, it is immoral.

American Jews need to snap out of their Obama-induced delusion and see the world as it really is. Their lives depend on it.

Richard Russell on the Markets

Richard Russell, in his mid-80s, has been writing The Dow Theory Letter for 51 years. I recently became a subscriber and am fascinated by the economic and cultural insights of this veteran of the markets and of life.

Russell is a technical rather than a fundamental analyst. And yet he has a solid grasp of the fundamentals-- of economics, debt, money and life. He is not a perma-bear...in fact he has called several bull markets accurately...but he remains bearish notwithstanding the powerful market rally since early March.

What follows are excerpts from Russell's May 5 daily remark. You may agree or disagree but you at least ought to consider the musings of this old World War II combat veteran. His kind won't be around too much longer.

(Bold highlights are added by me).

"May 5, 2009

"A sound banker, alas, is not one who foresees danger and avoids it, but one who, when he is ruined, is ruined in a conventional way along with his fellows, so that no one can really blame him." John Maynard Keynes, 1931.

As the market works higher, bullish economists are falling victim to mass "brain washing." Every hint in the economy that "bad" is becoming "less bad" is leaped upon as "proof" that the worst has been seen and is past. Now bold predictions of a "rising second half of 2009" are heard. The worst crime that an analyst can commit is remaining bearish in the face of a rising market. Besides, aren't we in "a new bull market."
…

My opinion is that the economy is not fated to turn up towards the end of 2009 as widely predicted, nor will it turn up in 2010. I believe we are entering into the land of unintended consequences. We are now watching a deadly battle between deflation and over-creation of fiat money, meaning future inflation or even hyper-inflation. Making the picture even more confusing, there are increasing doubts about the viability of the US dollar and whether it can keep it reserve status.
…

Now, while everybody's fascinated by the stock market, I want to discuss a few other areas that you may not be looking at. The 30-year Treasury Bond…is very sensitive to the viability of the dollar and to inflation or deflation. The bond is in a steep decline, which means that long interest rates are moving higher (this is the last thing the Fed wants, but the Fed does not control long rates).
…

Right now, many central banks (and the IMF) are selling a portion of their gold, while other central banks (Russia, China) are buying gold. The IMF has announced that it wants to sell up to $100 billion of gold. Now why in the world would they announce their intention to sell gold unless they wanted to put pressure on gold? It doesn't matter because China is drooling to buy the whole lot, if only the IMF receives permission to place their gold on the market.

If you want to know what's happening in the world, then there's only one rule, and it's "follow the money." And in case you weren't aware of it -- gold is money.

The central banks system was invented and put in place in order to turn the power over to the world's bankers. Who controls a nation's money controls that nation. Gold is the public's defense against the bankers. Try as they might, the bankers can't control gold, which is why the bankers don't want gold in the hands of the public. Since the bankers can't keep gold out of the hands of the public, they do the next best thing -- they denounce gold and try to manipulate gold's price down.

The public has little or no knowledge of money. This ignorance extends to our Congressmen and women. Ask your Congressman or Senator where your dollars (Federal Reserve Notes) come from. The odds are that they can't tell you. Ask them how the Federal reserve was formed and when it was voted on by Congress. Ask them anything about money and the odds are that they will be clueless. Don't even bother to ask the average American the same questions because all you'll get is a blank look. Hey, even ask your local banker, and it'll be the same. Americans have no idea of money or where it comes from, which is why bankers can get away with "financial murder." In fact, ask Barack Obama about money and I guarantee you'll get a blank look. The Obama answer -- "Yeah, I know about money, you take it from the "rich" and give it to the other Americans. And if you have any money left over after taxes,"you give it to the bankers."

What could those clever Chinese be up to? While the other central banks are selling their gold, the Chinese are loading up on gold as fast as they can. Aw, what do the Chinese know. That's the big (and maybe) frightening question.…

This government will stop at nothing even including manipulation. What the Fed does not want is a swooning stock market, surging gold, or sinking bonds. I think all three are now being manipulated. Pressure from various sources continues on gold, and we know the Fed is buying bonds. When an item is manipulated, the aftermath always ends unpleasantly. I expect "unpleasantness" ahead.
...

Despite the usual manipulative efforts, the Dow closed down 16. Despite yesterday being a 90% upside day, the market failed to extend the rally. My impression is that the market is tired, and that the big money remains on the sidelines. The Dow has been up 8 out of the last 9 weeks, and the market could be ready to correct.Flash -- NYSE volume exploded to over 11 billion today -- The market is "churning," and the battle of bulls versus bears is raging.

"Change" You Can't Even See, Much Less Believe In

When Barack Obama exhorted his cabinet to cut 100 million dollars from their collective budgets, even the lovesick media snickered that it was not a very impressive cut given the size of the proposed Obama budget. Still, some did suggest that at least the proposed cuts "are a start."

Well, think again. View this short demonstration and you'll see that like so much of Obama's rhetoric the proposed cuts are much less than meets the eye.

Its a Bull Market for these Bears.

Polar bears Bill, right, and Lara seem to like each other at their first meeting at the zoo in Gelsenkirchen, Germany. Bill came from the zoo in Bruenn, Czech Republic, as a new partner for Lara.

To Obama, "Never Again" = "Forgive and Forget"

Dr. Michael Ledeen is one of those smart think tank guys that from time to time show up on talk radio or cable news as an "expert" on a given issue, like terrorism or military spending. In Ledeen's case, he is a bona fide expert on Iran and national security. As the author of The War Against the Terror Masters and The Iranian Time Bomb you would expect Ledeen knows a thing or two about the grave threat that Iran poses to stability in the Middle East (such as it is) and to Israel's existence.

Beyond that, Dr. Ledeen is a student of history, particularly modern European history, and understands the nature of evil men and regimes and their terrible toll on mankind in the previous century. Unfortunately for us, Ledeen isn't so sure that our new president acknowledges much less understands the evil designs of our enemies, and doubts he intends to do much to stop them. Even more troubling is President Obama's penchant for reserving his harshest rhetoric for those who disagree with him politically and oppose his agenda.

Ledeen's thesis is that since the media has failed to show the slightest curiosity about Obama's curriculum vitae before the November election, the American people have little information about his beliefs, political philosophy or character. Accordngly we are left to anlayze the president's words and deeds on the world stage for clues to his convictions and intentions, indeed his worldview. And what Dr Ledeen has deduced and inferred from Obama thus far troubles him.


In a recent speech at the Capitol commemorating Holocaust Remembrance Day, Obama's utterances at first seemed elegant and appropriate. According to Ledeen: "First he [drew] hope from the survivors of the Holocaust. Those who came to America had a higher birthrate than the Jews who were already living here, and those members of 'a chosen people' who created Israel. These, he [said], chose life and asserted it despite the horrors they had endured." But then Obama continues with his own version of "Never Again:"

We find cause for hope as well in Protestant and Catholic children attending school together in Northern Ireland; in Hutus and Tutsis living side-by-side, forgiving neighbors who have done the unforgivable; in a movement to save Darfur that has...people of every age and faith and background and race united in common cause with suffering brothers and sisters halfway around the world...Those numbers can be our future, our fellow citizens of the world showing us how to make the journey from oppression to survival, from witness to resistance and ultimately to reconciliation. That is what we mean when we say “never again.”

And there is the rub, according to Ledeen. "Never again" is not and has never been a cry for reconciliation and forgiveness. It was a plea to the world to "destroy the next would-be Fuhrer." It is also a self-promise by Jews never to allow themselves to be sent like sheep to the slaughter without resistance. Finally it is a hope--sadly against the evidence--that the civilized nations of the world will rise as one to destroy any despot or regime that would dare to harass, intimidate or threaten destroy the Jewish people or the people of any other nation. But "never again" is decidely not, as Obama suggests, a pretext for turning the other cheek.

Obama's oratory betrays a lame attempt to portray the world not as it really is, but rather as he imagines it to be--a world where all disputes can be negotiated and past wrongs can be addresses through truth and reconciliation commissions. This is a dangerous misunderstanding of the way the real world works.

Perhaps Obama is merely naive. Maybe Obama feels a spirit of equanimity towards all men, believing them all to be of good will and honest intentions. Yet Obama does have harsh words for his opponents, at least those that reside within our own borders. As Ledeen notes:

Significantly, Barack Obama is a lot tougher on his domestic American opponents than on tyrants who threaten our values and America itself. He tells the Republicans that they’d better stop listening to Rush Limbaugh, but he doesn’t criticize Palestinians who raise their children to hate the Jews. He bows to the Saudi monarch, but humiliates the prime minister of Great Britain. He expresses astonishment that anyone can worry about a national security threat from Hugo Chavez’ Venezuela, even as Chavez solidifies an alliance with Iran that brings plane loads of terror masters, weapons and explosives into our hemisphere from Tehran via Damascus, fuels terrorists and narcotics traffic, and offers military facilities to Russian warships and aircraft. He is seemingly unconcerned by radical Islam and a resurgent Communism in Latin America, even as his Department of Homeland Security fires a warning shot at veterans–the best of America–returning from the Middle East. He seeks warm relations with Iran and Syria–who are up to their necks in American blood–while warning Israel of dire consequences if she should attempt to preempt a threatened Iranian nuclear attack.

According to Ledeen, Obama's words are designed to "internalize conflicts that are raging in the real world." Our enemies are left to wonder what to make of a man who seems intent on accommodating them while reserving his unkindest words for those in his own country who oppose measures that would weaken America. No doubt they will feel emboldened to try harder to bring us to ruin.

The bottom line for Ledeen is this: "if the president of the United States will not act, who can stop them?"

George Friedman on Obama's First 100 Days

I found this article by George Friedman of Stratfor.com interesting, as it asserts that so far Obama hasn't strayed much from the path laid out for him by....President George Bush.

Friedman did not mention the $3.6 trillion budget proposed by Obama and the staggering deficits projected over the next decade. He also didn't suggest that O's plans for universal healthcare, cap-and-trade and takeover of the financial and auto industries are radical departures from even the free-spending G.W. Bush. Finally, Friedman fails to mention the mindset that Obama brings to his office that America is arrogant, hegemonic and a large part of the world's problem, as starkly illustrated in his decision to release the "torture" memos over the objection of his own CIA director and national security advisors.

Nevertheless, Friedman makes points that even some of us who oppose Obama might consider meritorious..

Smiling at Chavez

A lot has been written in the past weeks about President Obama's first turns on the world stage, in Europe and then Latin America. Obama has been spending a lot of time apologizing for the past policies of our nation in foreign circles, including in France, Turkey and Trinidad/Tobago. It seems that wherever Obama went, if George Bush had been for it, Obama declared he was against it, and vice versa.

The apology/contrition bit is tiresome and counterproductive, for sure. There is a certain arrogance in apologizing for your predecessors, especially when there is so little to apologize for. Lest you think that Obama's bashing of his predecessors was merely partisan, consider that he took a swipe at fellow Democrat John F. Kennedy when he suggested that he (Obama) should not be blamed for the failed 1961 Bay of Pigs invasion, which occurred when "I was only 3 years old" (he was actually unborn at the time). But when the Apology Tour morphs into an embrace of dictators and depots, the danger signals go off.

Obama seems obsessed with establishing "new relationships" with thug regimes like Iran, Cuba and Venezuela. At the conference of the Organization of American States in Tobago, Obama encouraged direct talks with Cuba in order to overcome "decades of mistrust," essentially putting Cuba on the same moral footing as the U.S. He had already removed restrictions on travel to the country as well as restrictions on remittances.

Obama also had a few "chance" encounters" with Venezuelan dictator Hugo Chavez, which frankly he seemed to enjoy overmuch. Debate ranges on which leader approached the other first, but there is no doubt Obama seemed charmed by the autocratic thug. Obama was photographed gripping and grinning with Chavez, and videotape shows Obama accepting from Chavez the "gift" of a a book called "The Open Veins of Latin America," a sort of bible for Latin-Left anti-capitalists and West-bashers. And Obama seemed unperturbed by the 50-minute diatribe against America and Europe by Daniel Ortega of Nicaragua, avoiding any response to it which might signal displeasure with the Sandinista killer.

All this disturbs the commentator and moral observer Rabbi Shmuley Boteach, who wonders why Obama spends so much of his obvious charm and talent in wooing the globe's worst dictators. Boteach reminds us not only of the evils of men like Chavez and Castro, but also of others courted by Obama, like the Saudis (who regularly oppress their women and kill religious apostates) and the Turks (who have never acknowledged their slaughter of 1.5 million Armenians in the 1920s). While he thinks Obama is a "nice guy" who means well, Rabbi Shmuley asks:

Suppose Obama succeeds in building friendships with Chavez, Castro, Ahmadinejad and the Taliban. What then? Does America still get to feel that it stands for something? Will we still be the beacon of liberty and freedom to the rest of the world, or will we have sold out in the name of political expediency? And do any of us seriously believe that presidential friendship is going to get a megalomaniac like Hugo Chavez to ease up on the levers of power, or are we just feeding his ego by showing him he can be a tyrant and still have a beer with the president of the United States? Will the Iranians really stop enriching uranium through diplomacy rather than economic sanctions?

It would be nice if Obama's adoring cheerleaders in the media would take the time not just to report on Obama's new tone towards our enemies and antagonists, but also to ask and analyze the questions that Shmuley Boteach poses.

Torture and Intelligence

According to George Friedman at www.stratfor.com, his invaluable website dealing with geopolitics, intelligence matters and world affairs, the issue of torture is complex and defies easy analysis along ideological or partisan lines. Please take a few minutes to read this essay.

I must admit that it challenged my own thinking on the matter.

Dershowitz: U.N. Denies Holocaust

Anne Bayefsky, the noted scholar and Senior Fellow of the Hudson Institute and a chronicler of U.N. history and the Holocaust, moderated a panel Tuesday in honor of Holocaust Remembrance Day at the same U.N. hall in Geneva that is home to the Durban II "anti-racism"conference. The panel included law professor and Jimmy Carter antagonist Alan Dershowitz, actor/activist Jon Voight, human rights icons Elie Wiesel and Natan Sharansky and author Shelby Steele.

According to writer Roger L. Simon, founder of Pajamas Media, the panel was "electric," not surprising given the brain power and eloquence of the assembled panelists and Ms. Bayefsky. PJTV will have video of the panel in the days ahead.

In the meantime PJTV has some fascinating video of a conversation moderated by Mr. Simon today in which Professors Bayefsky and Dershowitz skewer the U.N. over its hypocritical and cynical obsession with Palestinian rights and Israeli "oppression." Click here--the video gets interesting at 4 minutes in.

While I don't share Prof. Dershowitz's generally liberal politics, I am forever grateful for his unflinching advocacy on behalf of Israel and the Jewish people and his willingness to take on those who would wish to do them harm. In a world of puny and shallow figures he is a giant.

A Truly Appalling Day at the U.N.

Today marked the opening of the U.N.'s Durban Review Conference in Geneva, whose ostensible purpose is to "evaluate progress toward the goals" enunciated at the World Conference against Racism, Racial Discrimination, Xenophobia and Related Intolerance in 2001. As any sentient being knows, that was the famous U.N.-sponsored hatefest in which Israel was vilified as a racist and criminal regime, after which the U.S. delegation left the conference at the behest of then State Secretary Colin Powell. This time around the U.S. toyed with the idea of attending if it only could get the conference to tamp down its anti-Israel rhetoric. But the conference organizers couldn't produce an agenda which met even the low standards set by the Obama administration, and so the U.S. finally withdrew, along with Canada, New Zealand, Australia, Italy, Poland, Germany and the Netherlands. There is intelligent life in Europe after all.

On its best days the U.N. is an extravagant, inefficient and ineffective disgrace. But today its reputation and prestige hit its nadir. For the U.N. gave center stage at this human rights conference to one of the world's biggest human rights abusers, Mahmoud Ahmadinejad of Iran, and predictably he used the occasion to rip the Holocaust and delegitimize the Jewish State:

“Following the World War Two, they [the West? Security Council members?] resorted to military aggression to make an entire nation homeless, on the pretext of Jewish sufferings and the ambiguous and the dubious question of holocaust. [sic] They sent migrants from Europe, the United States and from other parts of the world to establish a totally racist government in the occupied Palestine…”

This was immediately followed by the dramatic departure from the assembly hall of the representatives of those Western nations who failed to boycott the conference in the first place
(France, Belgium, the Czech Republic, the UK, etc.), and who apparently have their "redlines" even when it comes to bashing Israel. It remains to be seen whether they will return to the conference tomorrow, now that the Iranians are gone.

All this caused the U.N. High Commissioner on Human Rights to issue a statement expressing shock and disgust at Ahmadinejad's speech. Said Navi Pillay:"I utterly deplore the speech of the President of Iran delivered this afternoon at the Durban Review Conference against racism...I find this totally objectionable. Much of his speech was clearly beyond the scope of the Conference. It also clearly went against the long-standing UN position adopted by the General Assembly with respect to equating Zionism with racism."

This fake outrage is all rather confusing on a few levels. First, Israel-bashing is not beyond the scope of the Durban II conference, it is its heart and soul. Second, the U.N. General Assembly practically accused Israel of perpetrating war crimes during the Gaza defensive operation a few months ago, which certainly is akin to equating Zionism with racism. Finally, it was the U.N. who invited Ahmadinejad to speak to the conference on its opening day; if they wanted contrition they should have invited Barack Obama.

The U.N. is now completely discredited as a force for good in the world. In fact it can safely be said that the institution has become a safe haven for killers, thugs and despots who get from the U.N. legitimacy and a chance to strut their stuff in front of a world that should shun them instead. If there would be no U.N. there is a good chance that these two-bit
tinhorns wouldn't be given the time of day outside of their rotten little countries and failed states.

For a blow-by-blow of the Durban II conference, visit Roger L. Simon's blog and check out the video at PJTV. Note the heroic efforts of Alan Dershowitz, Shelby Steele and Jon Voight in Geneva to call attention to the freakshow that the U.N. has become.

Obama the next Gorbachev?

Says the Associated Press's Steven Hurst concerning Obama's determination to "reset" U.S. relations with the world:

Obama's stark efforts to change the U.S. image abroad are reminiscent of the stunning realignments sought by former Soviet leader Michael Gorbachev. During his short—by Soviet standards—tenure, he scrambled incessantly to shed the ideological entanglements that were leading the communist empire toward ruin.

Before hailing Obama as the new Gorbachev, it is worth remembering that Gorby was a stunning failure as Soviet leaders go: he presided over the implosion of the very empire he sought to save without establishing a viable governing alternative. Do most Russians today celebrate the end of their nation as they knew it before 1991? It is an open question.

Lets hope that Obama's rush to shed the "ideological entanglements" that have characterized our own country's relations with the civilized world for many decades doesn't lead to such a fateful conclusion.

Israel's New Foreign Minister--more dangerous than Ahmadinejad?

Thats what the left-wing Jersualem Post commentator Larry Defner thinks.

Avigdor Lieberman is the first Israeli Foreign Minister in may years who has actually told the world elites to go screw themselves. Good for him. Too bad all he will get for his trouble is vilification by the global media, the European elites and the Obama administration as a racist.

Obama won't have to take on Netanyahu directly as long as Lieberman is around. He will happily use Lieberman as a stick with which to beat Israel over the head.

Trust me on this.

Obama's Potemkin Summit

As Barack Obama headed off to London last week the American media painted a gloomy picture for the prospects of the summit of leaders of the G-20 nations and fretted over the difficult task ahead for the charismatic but inexperienced young American president. Anarchist riots would draw thousands of violent protesters to disrupt the conference. France's President Sarkozy was threatening a summit walk-out if he didn't get his regulatory scheme endorsed. Gordon Brown of the U.K. was being blamed for the "Anglo-Saxon" policies that brought down the global financial system. And Germany's Merkel stood ready to throw a wrench in the summit machinery by eschewing the stimulus mania that has gripped the U.S. and Britain. Comparisons to the disastrous London Economic Conference of 1933 were in the air, all in an effort to lower expectations for President Obama should the summit end in rancor and division.

Lo and behold, the summit ended with a "surprise" joint communique heralding a breakthrough that defied all the pundits--at least that was the message Obama's water carriers in the media delivered. ABCNews Online called the agreement an "historic step to jump start the global economy...a turning point," although the network acknowledged there was "no guarantee" of success. United Press International's Martin Sieff called Obama a "big winner," but then worried that whatever Obama won might not be of any use.

So what was Obama's big win? According to Sieff, he "agreed to Sarkozy and Merkel's demands to put pressure on nations that have long prospered as tax havens to reveal at last full details of the fortunes hidden away in their vaults and accounting records." That's like calling a guy who caves in to his ex-wife's demands for a rich alimony settlement a "big winner." In the event, this tax haven sop is vague and toothless and thankfully won't lead anywhere.

Obama's other "win," according to U.S. press accounts, is the agreement to create a global financial super regulator, the Financial Stability Board, a body that would consist of central bankers from the G20 countries, the IMF and the EU and the U.S. The FSB would extend “regulation and oversight to all systemically important financial institutions, instruments, and markets…[including] systemically important hedge funds” and in theory gives Europe a means of stifling our economic freedom. Dick Morris refers to this as no less than a surrender of U.S. financial sovereignty, but I'm not so sure. For one thing, we long ago surrendered national control over our economic fate when we agreed to export the bulk of our debt to China and other creditors and have made things worse of late by trashing our own currency. For another, Britain has rejected the latest regulatory regime proposed by Europe and without the U.K. on board we won't play ball.

The only agreement of substance to have emerged from the G20 was a trillion dollar bailout of the bankrupt central European countries through the IMF. That is a lot of money compared to the debt owed Western Europe by central Europe, but by the new American standard of government spending it is a pittance. This summit "accomplishment" was probably hashed out weeks in advance by the central bankers and finance ministers and can hardly be termed a breakthrough.

Thanks to the slavish and unquestioning U.S. media Obama and his friends in Europe have pulled off a Potemkin summit, that is, one which from a distance appears to have real weight and substance but which on close examination is but a facade built on a foundation of hype and invented tensions with the flimsy materials of communiques, sound bites, pretty pictures and an adoring media. It seems to have worked its magic in the short term--the announcement that Obama and company saved the global financial system lifted the markets immediately and significantly.

The fact is that the one thing the summit did not do is to address the underlying causes of the global financial crisis. Not a single toxic asset was bought or sold or removed from the balance sheets of the West's banks. No grand plan was discussed or announced to deal with the risks of global asset deflation, a looming inflationary recession, protectionism or currency stabilization. The grandees of the G20 pretended to fight the next war while the current battle rages on.

As for Obama, he may have done no real harm in Europe, but we did learn a few things about him. First, by agreeing, even vaguely, to a global regulatory scheme he showed he is unwilling to stand up for American values of economic liberty and sovereignty. Second, his vaunted oratorical skills won him few if any concessions, in particular from Germany. The United States wanted Germany to agree to massive spending to stimulate its own domestic demand and thus curb its exports, and Germany wouldn't budge. Finally, Obama's attempts to gain European troop commitments to Afghanistan failed, with Europe agreeing to deploy a meager 5000 non-combat troops temporarily.

At first blush, it seems that Obama was at the center of the action at the G20, negotiating complex agreements and bringing the other leaders to his side. Look a little closer and it appears that the opposite is true. Obama's charms persuaded no one. He gave up a lot and got little in return.

George Bush's problem was being perceived as a unilateralist cowboy. Obama will do everything he can to prove to the world he is no George Bush. If Barack Obama isn't careful he'll quickly become something far more dangerous--a laughingstock.

Barack Obama, the rabbit in North Korea's headlights, is Jimmy Carter II

by Gerald Warner, UK Telegraph Blog

"Obama calls for action on North Korea" reported today's headlines - which is much like a chief constable demanding something should be done about crime. If the President of the United States cannot bring the Pyongyang regime to heel, who does he expect to perform this task? It appears that, along with the bust of Churchill, Harry S Truman's maxim "The buck stops here" has also been banished from the Oval Office.

What was the point of America deploying two missile-killing destroyers, the USS McCain and the USS Chafee, in Japanese waters, only to spectate as Kim Jong-il's Taepodong-2 missile took off? US military sources have made much of the fact that the missile failed to launch a satellite into space or to achieve its stage three flight. That is like being complacent because Iran has not yet quite completed its nuclear armaments programme. It is the unimpeded process of pursuing nuclear weaponry that is threatening. No wonder West Coast Americans feel insecure.

Overnight, posturing and sabre-rattling, formerly the province of Kim, has become the role of America and its allies. Such chest-thumping followed by inaction is deadly dangerous. Do the names Sudetenland and Czechoslovakia not ring any bells? Ironically, Barack Obama was in Prague - the ultimate monument to appeasement - when he heard the news of the North Korean launch. Incredibly, he went on to deliver another turgid oration on the need to scrap nuclear weapons. That must have given them a good laugh in Pyongyang.

It did not take Obama long to emerge from his chrysalis as a fully-fledged Jimmy Carter II. What makes his supine appeasement worse is that the United States, under both Democrat and Republican administrations, has previous when it comes to being suckered by North Korea. Two administrations, Clinton in October 1994 and Bush in February 2007, made identical deals with Kim to freeze the Yongbyon plutonium plant in return for supplies of fuel oil - Uncle Sam bought the Brooklyn Bridge twice from the wide boys in Pyongyang.

Obama should have ordered the shooting down of the North Korean missile, launched in defiance of a 2006 UN resolution. Such ruthless action is the only thing Reds understand. Weakness and moderation excite their contempt and ambition. Instead, Obama is whining that something must be done. Indeed; and the person who should be doing it is you, Mr President. That is what you are paid your 400,000 bucks a year to do.

Obama's PR team is trying to depict him as firm because he still intends to implement the European missile defence shield. Yes; but how long before Vladimir Putin sells him another pup to join the one in the White House? The word has gone round the hard-faced power freaks of the geopolitical demi-monde that here is a US president who makes taking candy from a baby look challenging. Jimmy Carter is back. Be very afraid.

Europe does have its charms

Some things just transcend national borders after all!

Israel: Time for an " I Told You So."

In a January post about Barack Obama's interview with Al-Arabiya television, I noted Obama's reference to the "Saudi peace plan," which calls for a so-called "two-state solution" to the Israeli-Palestinian conflict, but which really is a Trojan horse for the delegitimization of Israel. As I said then, "the plan insists on 'return of the Palestinian refugees,' a poison pill that would require Israel to absorb millions of descendants of those who fled Israel during the War of Independence." I noted that no reasonable Israeli government would negotiate on the basis of the Saudi plan.

Now comes word that Obama not only literally bowed before the Saudi King Abdullah in Europe this week (which is the subject of hoots and hollers from the conservative punditry), but bowed also to the Arabist view of Israeli illegitimacy embraced by Europe and the American Left. According to the Jerusalem Post, "Obama reiterated his support for the Saudi initiative" in his meeting with the Saudi monarch. Strangely the Post article made no reference to the aspects of the Saudi plan which would spell destruction for Israel.

At the same time the Post reports that European leaders have already called new Prime Minister Benjamin Netanyahu to pressure him into negotiating with the Palestinians for a Palestinian state without regard to the facts on the ground (those facts clearly showing the unwillingness and unreadiness of the Palestinians to govern themselves). Caroline Glick meanwhile warns of the coming offensive by the civilized nations of the world to deligitimize Israel.

More on all of this later. Now I must sign off for Shabbat. Shabbat Shalom.