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.
Thursday, April 30, 2009
Tuesday, April 28, 2009
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.”
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?"
Monday, April 27, 2009
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..
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..
Wednesday, April 22, 2009
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.
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.
I must admit that it challenged my own thinking on the matter.
Tuesday, April 21, 2009
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.
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.
Monday, April 20, 2009
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:
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.
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.
Sunday, April 19, 2009
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.
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.
Wednesday, April 8, 2009
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.
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.
Tuesday, April 7, 2009
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.
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.
Monday, April 6, 2009
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.
"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.
Sunday, April 5, 2009
Friday, April 3, 2009
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.
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.
Monday, March 30, 2009
Where are the Clowns?
If this 4-1/2 minute video doesn't make you tear up thinking of all we have lost (and are in the process of losing still) I don't know what will.
I hope my kids will some day discover that there was a time in America when funny men and women could make us laugh at ourselves, our politicians and even our culture without anyone seriously taking offense. Perhaps they will learn that if a society must curtail its speech for fear of offending anyone, it will ultimately offend everyone.
Enjoy this piece of nostalgia, and note Orson Welles' prophetic lament at the end. Unfortunately the clowns in the video are amateurs compared to the ones running our government (and soon our lives.)
I hope my kids will some day discover that there was a time in America when funny men and women could make us laugh at ourselves, our politicians and even our culture without anyone seriously taking offense. Perhaps they will learn that if a society must curtail its speech for fear of offending anyone, it will ultimately offend everyone.
Enjoy this piece of nostalgia, and note Orson Welles' prophetic lament at the end. Unfortunately the clowns in the video are amateurs compared to the ones running our government (and soon our lives.)
Friday, March 27, 2009
Mob Rule Coming to a Continent Near You?
“The time has come to address the entire robber banker culture. Investment banks have been run not for the benefit of society, customers, or even shareholders, but exclusively for the advantage of the bankers themselves…This is why we must stand outside their homes throwing rocks through the windows until they do.”
So says newspaper editorial Max Hastings in the U.K.'s Daily Mail. And he is not alone. College professors, union bosses and politicans in the U.K are stoking the fires of anarchy and mob rule, just in time for the G-20 summit in London next week. Some 2,000 protestors are set to descend on the meeting, causing trouble and hanging capitalist bankers in effigy.
Could it happen here? Consider: when AIG acting chairman Ed Liddy appeared before Congress last week he testified that many of his employees have received death threats in the wake of the AIG bonus "scandal" ginned up by our politicans. Barney Frank shrugged off his testimony, New York's attorney general Andrew Cuomo is suing to have the names of the bonus-receiving executives outed and a Republican U.S. Senator gently suggested that the executives might consider suicide. And then the U.S House of Representatives, including 85 shameless Republicans, voted to impose a 90% tax on the bonuses retroactively.
Never mind that the bonuses were specifically accounted for in the "stimulus" bill insisted upon by the President and passed by our dear members of Congress, none of whom read the final bill. Never mind that Connecticut Democrat Senator Dodd lied about his role in inserting the bonus waivers in the legislation (I am sure even liberal Connecticut voters would agree that Dodd is a walking advertisement for term limits, not that he is the only one). The politicians needed to divert attention away from their own reckless incompetence and who better to vilify than the very capitalists who they have showered with a gazillion dollars of bailouts, guarantees and the like.
When the New York Times published the resignation letter of AIG VP Jake deSantis, I thought for sure that average, hardworking Americans would applaud his ethic of hard work and duty to the company he served for many years. I felt that surely no one would begrudge him the right to the bonus that he was promised and deserved (especially since he took only a $1.00 salary).
Yet I saw nothing but scorn for Mr. deSantis in the press, including a column by Margaret Carlson pooh-pooing his plight. Is this what America has come to? Heaping scorn on a private citizen who was just doing his job, and then got stiffed on his way out the door?
So again, I ask: could the rule of the mob that threatens to storm the G20 summit happen here? I don't know. But Michelle Malkin thinks it can. It already has.
So says newspaper editorial Max Hastings in the U.K.'s Daily Mail. And he is not alone. College professors, union bosses and politicans in the U.K are stoking the fires of anarchy and mob rule, just in time for the G-20 summit in London next week. Some 2,000 protestors are set to descend on the meeting, causing trouble and hanging capitalist bankers in effigy.
Could it happen here? Consider: when AIG acting chairman Ed Liddy appeared before Congress last week he testified that many of his employees have received death threats in the wake of the AIG bonus "scandal" ginned up by our politicans. Barney Frank shrugged off his testimony, New York's attorney general Andrew Cuomo is suing to have the names of the bonus-receiving executives outed and a Republican U.S. Senator gently suggested that the executives might consider suicide. And then the U.S House of Representatives, including 85 shameless Republicans, voted to impose a 90% tax on the bonuses retroactively.
Never mind that the bonuses were specifically accounted for in the "stimulus" bill insisted upon by the President and passed by our dear members of Congress, none of whom read the final bill. Never mind that Connecticut Democrat Senator Dodd lied about his role in inserting the bonus waivers in the legislation (I am sure even liberal Connecticut voters would agree that Dodd is a walking advertisement for term limits, not that he is the only one). The politicians needed to divert attention away from their own reckless incompetence and who better to vilify than the very capitalists who they have showered with a gazillion dollars of bailouts, guarantees and the like.
When the New York Times published the resignation letter of AIG VP Jake deSantis, I thought for sure that average, hardworking Americans would applaud his ethic of hard work and duty to the company he served for many years. I felt that surely no one would begrudge him the right to the bonus that he was promised and deserved (especially since he took only a $1.00 salary).
Yet I saw nothing but scorn for Mr. deSantis in the press, including a column by Margaret Carlson pooh-pooing his plight. Is this what America has come to? Heaping scorn on a private citizen who was just doing his job, and then got stiffed on his way out the door?
So again, I ask: could the rule of the mob that threatens to storm the G20 summit happen here? I don't know. But Michelle Malkin thinks it can. It already has.
My Purim Video
For the Jewish holiday of Purim I produced a 10-minute video for our synagogue's Purim party.
For those of you who don't know the "players," it may not be as much fun to watch as it is for those who do. But I hope you will watch and enjoy anyway.
For those of you who don't know the "players," it may not be as much fun to watch as it is for those who do. But I hope you will watch and enjoy anyway.
Tuesday, March 24, 2009
GSEs: Government Sheltered Enterprises
If we had anything resembling a fair and independent media then the Dems wouldn't control Congress today. If instead of slavishly hyping failure on the part of the Bush administration to regulate the financial services industry the press simply presented the facts and allowed them to speak for themselves, Americans might have learned the truth about the role that Barney Frank, Chuck Schumer, Maxine Waters, Chris Dodd and company played in the recent housing market bust and related credit freeze. These Democrats did everything they could to keep the wraps on the corruption and accounting shenanigans at the GSEs (Fannie Mae, Freddie Mac), notwithstanding increasing pressure from the White House, Treasury and the Fed and even the GSE regulator (who is accountable to Congress) to reign in the massive bureaucracies.
This doesn't come as a shock to those of us who pay attention to these kinds of things. Many have seen this video of Maxine Waters, Barney Frank and others excoriating the inspector general of the agency overseeing the GSE's when he tried to raise the warning flag about problems at Freddie and Fannie in 2004. The money quote from Maxine: "Everything [with the GSE's] has worked just fine...what we need to do today is to focus on the regulator...so as not to impede [the agency's] affordable housing mission."
But shouldn't this have been Page One material? Doesn't a congresswoman's attempt to intimidate a government regulator warrrant serious attention? It took internet blogger sleuths to find this stuff and feed it to YouTube and talk radio because the media elites shunned it. A journalism industry worth more than spit would have not only brought this shameless shilling and intimidation by Democrat bigs to light but would have asked the obvious question: why?
Well, there apparently was one "mainstream" media outlet that made a run at the story. In September Fox News Special Report ran this segment exposing the GSE protection racket. (Why it took months for this to hit my inbox is beyond me.) It has been viewed an incredible $3.4 million times since it was posted by ProudtobeCanadian.ca, a conservative group of...proud Canadians (who knew?). Think things today might be different if the story had been pushed by CNN, The New York Times and the rest of the elite media?
That this is not a scandal of huge proportions is itself a scandal of huge proportions, and future historians will have plenty to chew on in analyzing why a free and independent press would engage in a cover-up that rivals the cover-up they were covering up.
This doesn't come as a shock to those of us who pay attention to these kinds of things. Many have seen this video of Maxine Waters, Barney Frank and others excoriating the inspector general of the agency overseeing the GSE's when he tried to raise the warning flag about problems at Freddie and Fannie in 2004. The money quote from Maxine: "Everything [with the GSE's] has worked just fine...what we need to do today is to focus on the regulator...so as not to impede [the agency's] affordable housing mission."
But shouldn't this have been Page One material? Doesn't a congresswoman's attempt to intimidate a government regulator warrrant serious attention? It took internet blogger sleuths to find this stuff and feed it to YouTube and talk radio because the media elites shunned it. A journalism industry worth more than spit would have not only brought this shameless shilling and intimidation by Democrat bigs to light but would have asked the obvious question: why?
Well, there apparently was one "mainstream" media outlet that made a run at the story. In September Fox News Special Report ran this segment exposing the GSE protection racket. (Why it took months for this to hit my inbox is beyond me.) It has been viewed an incredible $3.4 million times since it was posted by ProudtobeCanadian.ca, a conservative group of...proud Canadians (who knew?). Think things today might be different if the story had been pushed by CNN, The New York Times and the rest of the elite media?
That this is not a scandal of huge proportions is itself a scandal of huge proportions, and future historians will have plenty to chew on in analyzing why a free and independent press would engage in a cover-up that rivals the cover-up they were covering up.
Monday, March 23, 2009
Magnificent Monday on Wall Street. Can it Last?
I read several news accounts describing the Treasury's new plan to rescue the financial sector by ridding banks of their "legacy assets." (While that sounds like priceless stuff you'd like to hand down to your kids and grandkids, the term its just a fancy name for the toxic real estate-related assets that have clogged credit markets for the past year or more.) The Public-Private Investment Program (I'll be the first to call it "Pub Pip") will apparently finance up to a trillion dollars of asset purchases by private investors and the taxpayers using $100 billion of already-authorized bank rescue money plus FDIC guarantees, Federal Reserve financing and what not.
(To tell you the truth I'm kind of tired of seeing the word "trillion" show up in every other paragraph of every financial news story of late. It just doesn't sound like a hell of a lot of money anymore. Pretty soon my wife'll come home one afternoon and tell me she just bought a dress on sale: "but hon, it only cost a trillion!" It would be nice if the next time I saw the term "trillion" it was printed on my 401K statement or the appraisal of my home's value. Of course the way the Fed is inflating money these days a trillion may not quite get me through next month.)
I read tax cheat Treasury man Tim Geithner's opinion piece in the Wall Street Journal today announcing Pub Pip. I'm pretty smart but I couldn't make heads or tails out of it, honestly. (I'm having a contest--if any one of my readers can tell me in 10 paragraphs or less how the plan works I'll buy him or her a free subscription to "This Week at American General," AIG's employee newsletter). But I guess the really smart guys on Wall Street liked it, because they sent the Dow soaring almost 500 points today. That didn't do me a whole lot of good since much of my net worth is now in cash.
But I'm happy for my friends and clients who saw their investments rise by 8% in one day, and I hope the rally continues. But I caution against what the now-discredited former Fed Chairman Greenspan called "irrational exuberance." The market rose almost entirely on sentiment and a sigh of relief that Mr. Geithner actually had a plan, not just a promise of a plan. (For a sobering reaction to the Treasury's new plan, click here).
The problem is that bear markets don't usually end with a bang. And bull markets don't usually start with one either. Bulls are built on a solid foundation of a strong financial system, a stable currency and a positive outlook for the political, regulatory and global environment. Bulls like a predictable tax system that at the very least does not punish risk-taking. Bull markets like government spending to be in the 20% of GDP range or less, not the 23% or 24% range it is fast getting to. And bulls sure don't like the idea of $9 trillion (oops, I said it again) in projected deficits over the next decade, 3 times the deficits racked up under the evil President Bush.
Bulls probably are not happy when the Russians and the Chinese threaten to introduce a new reserve currency because of America's rush to cheapen its own. Bulls look askance at protectionist policies like those that crept into the omnibus spending bill keeping Mexican trucks off our highways. Bulls shy away from economies in which entire sectors are under threat of government domination (financials; energy; health care) and those that are not face increased labor costs, taxes and regulation.
Bulls worry that the "quantitative easing" announced by the Fed last week (printing money to buy up government debt) will not work, and even if it does will result in massive inflation, thus throwing all deficit projections out the window. Bulls wonder whether any of this will inspire confidence in our trading partners and debt holders.
And finally, a bull would have to ponder whether our government's headlong rush to appease Iran, Hamas, Syria and other despotic regimes at the expense of our allies, particularly Israel, might lead to a bad end--bad for children, markets and other living things. It may be hard to predict what and when could go wrong, but its not hard to predict with confidence that if we sell out our friends to please our enemies, something unpleasant this way comes.
So have your fun with the market rally. I hope it endures long and profitably for those with the stomach for these sorts of things. I will probably wince with every uptick since I will not be benefiting from them. But until some of the systemic risk of the financial system is worked out, and until I am no longer frightened by the government's regulatory, energy, spending and tax policy, I will stand on the sidelines cheering.
I suspect I will know when its safe to come back on the field when my recurring nightmares featuring Barney Frank dressed as Nancy Pelosi finally cease.
(To tell you the truth I'm kind of tired of seeing the word "trillion" show up in every other paragraph of every financial news story of late. It just doesn't sound like a hell of a lot of money anymore. Pretty soon my wife'll come home one afternoon and tell me she just bought a dress on sale: "but hon, it only cost a trillion!" It would be nice if the next time I saw the term "trillion" it was printed on my 401K statement or the appraisal of my home's value. Of course the way the Fed is inflating money these days a trillion may not quite get me through next month.)
I read tax cheat Treasury man Tim Geithner's opinion piece in the Wall Street Journal today announcing Pub Pip. I'm pretty smart but I couldn't make heads or tails out of it, honestly. (I'm having a contest--if any one of my readers can tell me in 10 paragraphs or less how the plan works I'll buy him or her a free subscription to "This Week at American General," AIG's employee newsletter). But I guess the really smart guys on Wall Street liked it, because they sent the Dow soaring almost 500 points today. That didn't do me a whole lot of good since much of my net worth is now in cash.
But I'm happy for my friends and clients who saw their investments rise by 8% in one day, and I hope the rally continues. But I caution against what the now-discredited former Fed Chairman Greenspan called "irrational exuberance." The market rose almost entirely on sentiment and a sigh of relief that Mr. Geithner actually had a plan, not just a promise of a plan. (For a sobering reaction to the Treasury's new plan, click here).
The problem is that bear markets don't usually end with a bang. And bull markets don't usually start with one either. Bulls are built on a solid foundation of a strong financial system, a stable currency and a positive outlook for the political, regulatory and global environment. Bulls like a predictable tax system that at the very least does not punish risk-taking. Bull markets like government spending to be in the 20% of GDP range or less, not the 23% or 24% range it is fast getting to. And bulls sure don't like the idea of $9 trillion (oops, I said it again) in projected deficits over the next decade, 3 times the deficits racked up under the evil President Bush.
Bulls probably are not happy when the Russians and the Chinese threaten to introduce a new reserve currency because of America's rush to cheapen its own. Bulls look askance at protectionist policies like those that crept into the omnibus spending bill keeping Mexican trucks off our highways. Bulls shy away from economies in which entire sectors are under threat of government domination (financials; energy; health care) and those that are not face increased labor costs, taxes and regulation.
Bulls worry that the "quantitative easing" announced by the Fed last week (printing money to buy up government debt) will not work, and even if it does will result in massive inflation, thus throwing all deficit projections out the window. Bulls wonder whether any of this will inspire confidence in our trading partners and debt holders.
And finally, a bull would have to ponder whether our government's headlong rush to appease Iran, Hamas, Syria and other despotic regimes at the expense of our allies, particularly Israel, might lead to a bad end--bad for children, markets and other living things. It may be hard to predict what and when could go wrong, but its not hard to predict with confidence that if we sell out our friends to please our enemies, something unpleasant this way comes.
So have your fun with the market rally. I hope it endures long and profitably for those with the stomach for these sorts of things. I will probably wince with every uptick since I will not be benefiting from them. But until some of the systemic risk of the financial system is worked out, and until I am no longer frightened by the government's regulatory, energy, spending and tax policy, I will stand on the sidelines cheering.
I suspect I will know when its safe to come back on the field when my recurring nightmares featuring Barney Frank dressed as Nancy Pelosi finally cease.
The Gold-en Years?
You are no doubt hearing a lot about gold lately. The internet pop-ups for gold dealers are ubiquitous (everywhere), and it seems every other commercial on talk radio urges us to buy gold bullion, gold ETFs or gold coins.
If you are a contrarian, you might conclude that with all the hype about gold it is exactly the wrong time to buy. The again, after hearing that the Fed is about to monetize our debt by asking the Treasury to print up to a thousand billion dollars, not to mention the next trillion dollar bank bailout plan announced just today, on top of the $5 to 7 trillion of bailouts, guarantees and the like since last fall, one might feel justified in hearing a massive inflationary timebomb ticking away. Inflationary pressures are bullish for precious metals.
Is this the right time to buy gold? I have no idea, but in case you are interested you ought to watch this 4 minute interview with Ambrose-Evan Pritchard, international business editor of the U.K. Telegraph and a man who closely follows the gold market.
For a note of caution on gold in the short-term check out this from the Wall Street Journal on Friday. For a more bullish take, see this article from Bloomberg.com.
If you are a contrarian, you might conclude that with all the hype about gold it is exactly the wrong time to buy. The again, after hearing that the Fed is about to monetize our debt by asking the Treasury to print up to a thousand billion dollars, not to mention the next trillion dollar bank bailout plan announced just today, on top of the $5 to 7 trillion of bailouts, guarantees and the like since last fall, one might feel justified in hearing a massive inflationary timebomb ticking away. Inflationary pressures are bullish for precious metals.
Is this the right time to buy gold? I have no idea, but in case you are interested you ought to watch this 4 minute interview with Ambrose-Evan Pritchard, international business editor of the U.K. Telegraph and a man who closely follows the gold market.
For a note of caution on gold in the short-term check out this from the Wall Street Journal on Friday. For a more bullish take, see this article from Bloomberg.com.
Friday, March 20, 2009
Making Money. Literally.
I read an email by one of blogger Hugh Hewitt's readers, whose nom de plume is Banker Guy, who implied that Ben Bernanke is the one adult in government who has a clue. Banker Guy likens Treasury man Geithner to a hapless team quarterback who is stuck for a gameplan. When the quarterback asks for the next play, Coach Obama is unavailable by virtue of being interviewed by Jay Leno. "Then," says BG, "all of a sudden, a walk-on player runs onto the field, grabs the ball, and starts running through the opposition toward the goal line … its Ben Bernanke!"
Banker Guy is particularly taken with Wednesday's stunning announcement that the Fed will expand its balance sheet another $1.2 trillion through the purchase of $300 billion in long-dated Treasuries, $750 billion in mortgage-backed securities (Fan/Fred), and another $100 billion in
U.S. agency debt. Called "monetizing the debt" or "quantitative easing," the debt buy-back program essentially requires the Treasury to print money. Lots and lots of it. BG says this has spurred "some real optimism in the markets."
With all deference to Banker Guy, I am wondering why, if the Fed's debt monetization policy is
such a brilliant play, the Dow is down now over 200 points since it was announced. And if Bernanke is providing such "sound leadership," why did the Dow drop 122 points today in a slide that began just as the Fed chairman was speaking to community bankers at noon? I think Bernanke's policy is rightfully seen as a monetary "Hail Mary" pass, only riskier.
Perhaps investors have had time to think about the implications of the debt purchase program. Having run out the clock on its ability to manipulate rates at the short end, the Fed is trying to bring down mortgage rates by buying back billions of medium-term Treasuries,
agency debt, etc. To my knowledge this is without precedent.
The Fed's stated purpose is to free up private credit markets, something that trillions of dollars in bailouts, guarantees and credit facilities established since last summer have not accomplished (apparently). But the real story seems to be that the Fed is not convinced that recovery is imminent notwithstanding the bits and pieces of positive news that sparked the bear
market rally of the past weeks. Rather the policymakers appear to be still concerned, perhaps even panicked, that we are danger of falling into a deflationary spiral.
Even if it succeeds, the massive debt purchases will weaken the dollar, increase tensions with our trading partners, and perhaps ultimately lead to a catastrophic bursting of
the bubble in Treasuries. Why would the Fed embark on a policy which is designed to create massive asset inflation when the risk of success is bad and the risk of failure could be catastrophic?
According to Larry Kudlow, the four killers of prosperity are high taxes, high inflation, protectionism (currency devaluation) and increased regulation. It seems to me that Bernanke's prescription will result in all four.
I hope that Banker Guy is right, and I am wrong.
Banker Guy is particularly taken with Wednesday's stunning announcement that the Fed will expand its balance sheet another $1.2 trillion through the purchase of $300 billion in long-dated Treasuries, $750 billion in mortgage-backed securities (Fan/Fred), and another $100 billion in
U.S. agency debt. Called "monetizing the debt" or "quantitative easing," the debt buy-back program essentially requires the Treasury to print money. Lots and lots of it. BG says this has spurred "some real optimism in the markets."
With all deference to Banker Guy, I am wondering why, if the Fed's debt monetization policy is
such a brilliant play, the Dow is down now over 200 points since it was announced. And if Bernanke is providing such "sound leadership," why did the Dow drop 122 points today in a slide that began just as the Fed chairman was speaking to community bankers at noon? I think Bernanke's policy is rightfully seen as a monetary "Hail Mary" pass, only riskier.
Perhaps investors have had time to think about the implications of the debt purchase program. Having run out the clock on its ability to manipulate rates at the short end, the Fed is trying to bring down mortgage rates by buying back billions of medium-term Treasuries,
agency debt, etc. To my knowledge this is without precedent.
The Fed's stated purpose is to free up private credit markets, something that trillions of dollars in bailouts, guarantees and credit facilities established since last summer have not accomplished (apparently). But the real story seems to be that the Fed is not convinced that recovery is imminent notwithstanding the bits and pieces of positive news that sparked the bear
market rally of the past weeks. Rather the policymakers appear to be still concerned, perhaps even panicked, that we are danger of falling into a deflationary spiral.
Even if it succeeds, the massive debt purchases will weaken the dollar, increase tensions with our trading partners, and perhaps ultimately lead to a catastrophic bursting of
the bubble in Treasuries. Why would the Fed embark on a policy which is designed to create massive asset inflation when the risk of success is bad and the risk of failure could be catastrophic?
According to Larry Kudlow, the four killers of prosperity are high taxes, high inflation, protectionism (currency devaluation) and increased regulation. It seems to me that Bernanke's prescription will result in all four.
I hope that Banker Guy is right, and I am wrong.
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