Thursday, August 31, 2006

Can we talk?

Now that Team Bush has begun yet another PR blitz to reinforce support for its Middle East democracy project (by demonizing their critics and scaring the bejeezus out of the rubes, natch), it’s time to lay out a simple fact to which many people evidently are blind: Terrorism does not pose an existential threat to the United States.

You know how people say if such-and-such had occurred during World War II, “we’d all be speaking German today?” Try applying it to the present situation. It’s preposterous. Islamic fundamentalists can never conquer us, occupy us, and make our women cover their heads. Not going to happen. (For one thing, the populace in parts of the South and West are well-armed and will use their arms to defend themselves; this is one of the purposes of the Second Amendment.) Even if, God forbid, terrorists set off the proverbial suitcase nuke in a major city, the United States as we know it would not cease to exist. No, the true threat to the United States as we know it comes from the politicians (of both parties) who overreact to acts of terrorism by stripping us of the liberties that, as the Founders made clear, are not something for government to give to us or take away from us, but rather are our birthright. They're the liberties that made this country the most free and prosperous in the history of the world, and make no mistake -- they are in grave danger.

Tuesday, August 29, 2006

Plain language

As noted below, the fact the housing market is coming off the tracks is now conventional wisdom. But no one in the American media will state it as bluntly as Britain's Guardian:

The downturn in the US housing market will force businesses to slash 73,000 jobs a month in the new year and could be more damaging to the world economy than the dotcom crash, economists have warned.

And no, the article does not quote Nouriel Roubini.

Keeping up appearances

So here's how Team Bush plans to demonstrate that it's keeping federal spending under control: Delay cutting checks until the new fiscal year. Note I said demonstrate. Spending will of course be as out-of-control as ever.

Sunday, August 27, 2006

The week that was

Yes, posting has been thin the past few days. I'm still figuring out how to fit in blogging with the rest of my life, seeing as no one has yet developed the 27-hour day. So I'll consider this a good opportunity to do a week in review. And what a week it's been.

The most momentous development is that the bursting of the housing bubble has finally made its way into the public consciousness. As I've said before, no amount of real-life human experience in the U.S. economy is considered news by my profession unless it's backed up by some statistic from a government agency or an industry organization. That statistic came on Wednesday, with existing home sales falling 4.1% in July. The story led the evening newscasts on all three of the traditional broadcast networks -- about as good a reflection of conventional wisdom as you can find. The collapse of the housing market has gone mainstream. What will we contrarians harp on now?

Well, there's still peak oil. Here's something that flew under my profession's radar: Russia has overtaken Saudi Arabia, at least for the moment, as the world's leading oil producer. The few news outlets that took notice tended to pooh-pooh the significance. Granted, world oil flows aren't about to make a sudden dramatic shift as a result, and the rankings could well reverse again next month. But you just know Team Bush is getting jittery at the thought that at some point in the foreseeable future, the country pumping out the most oil won't be a reliable U.S. ally, but rather a country that's making a concerted effort to build what diplomats like to call a "counterweight" to U.S. power around the world.

Of more immediate concern at the White House, however, is what sure looks like the buildup to war against Iran. Laura Rozen nicely sums up just one day's worth of ominous developments -- last Wednesday. Granted, they got nudged aside in the headlines by the housing numbers, but I'm struck by a coincidence of timing. It was this same week four years ago that Vice President Cheney gave an explicit public signal that Team Bush would put its preventive war doctrine into action in Iraq.

As I say, what a week it was. Thanks for bearing with the longish post. I hope to return to a regular schedule of more manageable missives this week.

Tuesday, August 22, 2006

Collateral damage from Sarbanes-Oxley

Anyone looking for ammunition to argue the odious post-Enron legislation known as Sarbanes-Oxley has done more harm than good should turn to an article in the current issue of the Independent Review.

Its key finding: All the money that financial firms are spending on compliance with the law is money that's been taken away from the research they do to monitor publicly-traded companies.
"We estimate that more than half of the listed companies in the United
States are now unable to attract research coverage, which is generally
thought to be necessary to support investment by institutional
The law of unintended consequences strikes again.

Dispatch from the forgotten war

So even if the American venture in Iraq is going poorly, the first post-9/11 stab at regime change is still going well, right?

No, not really.

The housing bubble by the numbers...

...from Barron's:

• 32.6% of new mortgages and home-equity loans in 2005 were interest only, up from 0.6% in 2000

• 43% of first-time home buyers in 2005 put no money down

• 15.2% of 2005 buyers owe at least 10% more than their home is worth

• 10% of all home owners with mortgages have no equity in their homes

• $2.7 trillion dollars in loans will adjust to higher rates in 2006 and 2007.

The last figure I was already familiar with, but the others are new to me, and even more scary. And as Dr. Kurt Richebacher points out [scroll down], a housing slump has a bigger impact on the overall economy than a stock-market slump.


While my profession (particularly the "conservative" wing of it) goes berserk over the notion that today's the day Iran might choose to dentonate a nuclear weapon (for God's sake, even Team Bush's own intelligence chief believes Iran is still five years away from a working nuke), the simmering pot in Mexico is coming to a boil.

Which is more likely to affect the U.S. economy and markets -- non-existent nukes, or rebellion on America's doorstep?


(And I'm just comparing two stories within the realm of geopolitics. Don't even get me started on JonBenet.)

Thursday, August 17, 2006

Can we get our stories straight here?

Cracks are beginning to surface in the edifice of conventional wisdom when it comes to inflation. The New York Times says everything is still hunky-dory, don't worry, be happy -- as does nearly everyone else, to Chuck Butler's understandable consternation. But the Washington Post has a story headlined "Cost of Living Gets Costlier:"

Despite efforts by the Federal Reserve to bring the increases under control, consumer prices rose twice as fast in July as in the month before. So far this year, inflation is running at an annual rate of 4.8 percent, higher than any yearly increase since 1991.

Is my profession at least starting to wake up to reality? Could it be that all the hedonics, substitution, and other feats of statistical legerdemain are starting to run out of steam?


For the first few days after I was sorely inconvenienced by flying, every indication seemed to me that the plot to blow up transatlantic flights was for real -- as opposed to, say, the clowns in Toronto and Miami who were lured by government agents into saying they might like to sow some death and destruction if only they had the means.

But doubts are starting to surface, even among "respectable" pundits. Go read Andrew Sullivan. (And that's not something I'll say very often!)

Wednesday, August 16, 2006

$200-a-barrel oil postponed (continued)

With Israel and Hezbollah having fought to a draw, Pat Buchanan says Washington will draw pretty much one conclusion about where to go from here.

What comes next? That is obvious.

With our War Party discredited by the failed policies it cheered on in Lebanon and Iraq, there will come a clamor that Bush must "go to the source" of all our difficulty – Iran. Only thus can the War Party redeem itself for having pushed us and Israel into two unnecessary and ruinous wars. And the drumbeat for war on Iran has already begun.

"(T)he dangers continue to mount abroad," wails The Weekly Standard in its lead editorial. "How Bush deals with Ahmadinejad's terror-supporting and nuclear-weapons pursuing Iran will be the test" of his administration. Yes, the supreme test.

Bush is on notice from the neocons and War Party that have all but destroyed his presidency: Either you take down Iran, Mr. Bush, or you are a failed president.
Take the War Party's go-for-broke mentality, and a late-term president mindful of his "legacy," and $200-a-barrel oil becomes a distinct possibility.

Monday, August 14, 2006

$200-a-barrel oil postponed (for now)

Seymour Hersh's latest piece in the New Yorker reveals that Team Bush "was closely involved" in the planning of Israel's assault on Lebanon, seeing it as a dry run for a U.S. assault on Iran.

Cheney’s point, the former senior intelligence official said, was “What if the Israelis execute their part of this first, and it’s really successful? It’d be great. We can learn what to do in Iran by watching what the Israelis do in Lebanon.”

Or what not to do, as the case may be:

Israel believed that, by targeting Lebanon’s infrastructure, including highways, fuel depots, and even the civilian runways at the main Beirut airport, it could persuade Lebanon’s large Christian and Sunni populations to turn against Hezbollah, according to the former senior intelligence official. The airport, highways, and bridges, among other things, have been hit in the bombing campaign.

Oops, guess that didn't work. So much for the idea that bombing Iran would somehow inspire Iranians to rise up and overthrow the mullahs. But it would seem Team Bush won't be dissuaded:

Nonetheless, some officers serving with the Joint Chiefs of Staff remain deeply concerned that the Administration will have a far more positive assessment of the air campaign than they should, the former senior intelligence official said. “There is no way that Rumsfeld and Cheney will draw the right conclusion about this,” he said. “When the smoke clears, they’ll say it was a success, and they’ll draw reinforcement for their plan to attack Iran.”
Which might yet occur sooner rather than later.

Media ferrets out real news (Part 2)

Delayed credit to USA Today for telling its readers that if Uncle Sam used the accounting practices that private businesses use, the federal deficit would be more than twice the figure typically quoted. And if it included Social Security and Medicare liabilities, it would be ten times the figure typically quoted.

Granted for some of us, this isn't news. But it's good to see it out there. Now if my profession would pick up on how Uncle Sam doctors the inflation, unemployment, and GDP numbers as well. (Actually, The Wall Street Journal did pick up last year on one of the distortions in the inflation numbers, only to imply the truth-tellers are cranks.)

Media ferrets out real news (Part 1)

Kudos to the Associated Press for noting that not just Turkey, but Iran too, is massing troops along the border of northern Iraq to try to keep Kurdish separatist movements in check. It sums up the situation -- and implicitly, the potential for $200-a-barrel oil -- thus:

That has left the United States in a quandary. If U.S. forces take action, they risk alienating Iraqi Kurds, the most pro-American group in the region. And if they don’t, they risk increased tensions – and possibly worse – with two powerful rivals.

Granted, the Kurdish situation has been festering for quite some time. But anytime my profession gives it the attention it deserves, I'll give reporters the credit they deserve.

Thursday, August 10, 2006

In transit... posting might be light for a couple of days. And what a fine day I picked for air travel, with this alleged terrorist plot that's been allegedly foiled. To say nothing of the usual knuckleheaded response from Homeland Security:

“Due to the nature of the threat revealed by this investigation, we are prohibiting any liquids, including beverages, hair gels, and lotions from being carried on the airplane....These measures will continue to assure that our aviation system remains safe and secure,” Chertoff added. “Travelers should go about their plans confidently, while maintaining vigilance in their surroundings and exercising patience with screening and security officials.”

Here we go again: "Be very afraid -- but go on with your normal life."

Wednesday, August 09, 2006

To the rescue?

Now we're really in trouble:

U.S. crude oil futures stood little changed above $76 a barrel on Wednesday with data forecast to show another fall in U.S. gasoline supplies and BP's shutdown of half of its biggest U.S. oil field offset by pledges from Saudi Arabia and Mexico to help cover any shortfall in supply.

This is what's going to keep supply stable? When production at the world's largest oil field might be less than 60% of what "the experts" think it is [scroll way down] and production at the second-largest is falling farther and farther behind expectations?

Who needs a blowup in the Persian Gulf to send oil to $100/barrel? All we need is for reality to set in over the next few weeks.

India-Pakistan nuke watch

Nothing would disrupt markets like a nuclear war between perennial enemies India and Pakistan. So my radar perked up when I read this:

In a country widely referred to as the world’s largest democracy, the Indian government has succumbed to mounting Israeli pressure and ordered a nationwide ban on the broadcast of Arab television channels...It seems the ban is a move to ensure that Indians do not get to see the atrocities that are presently being committed by Israel in Lebanon and the occupied territories.

No one in the Indian government will confirm this is the case. But India's population is 13% Muslim, so the mindset of the government might be as follows: If the Arab satellite channels were available, Indian Muslims might be stirred to outrage on behalf of fellow Muslims in the Holy Land, and that in turn might stir up sympathy for the cause of separatists in Kashmir -- India's only Muslim-majority state -- which Pakistan would then try to exploit in the two countries' decades-long fight over that territory.

It's a plausible scenario, at least. Stay tuned.

Tuesday, August 08, 2006

Hillary gets it half-right

For all the blathering from Washington about how great the economy is, wily politicians from the opposition party know there's a vein of discontent into which they can tap. Bill Bonner notes in the Daily Reckoning how one presidential hopeful is doing just that.

“A lot of Americans can’t work any harder, borrow any more, or save any less,” says the sage senator from the great state of New York, Hilary Clinton.

Wow, she hits the nail on the head. But when she takes another whack with the hammer, the nail bends at well over a 90-degree angle:

She promises a “fair wage, access to college, home ownership, and a path out of poverty into the middle class.”

Bonner takes it from there. By the way, Hillaryphobes can take comfort from the scathing remarks pollsters are hearing from Democrats in New Hampshire.

“Lying b**** . . . shrew . . . Machiavellian . . . evil, power-mad witch . . . the ultimate self-serving politician.”

How that makes her substantially different from the rest of the scamsters and scalawags in our fair capital I'm not sure, but it's entertaining reading.

Monday, August 07, 2006

Rising property values=higher property taxes? You don't say!

Here's another one of those housing-bubble-is-bursting-but-we-don't-really-want-to-say-so articles. It's also something that makes you say "duh" when you read it -- as if it's a shock that people's property taxes are rising faster than their incomes. It's been happening for several years now, as millions of people around the country know first-hand -- but it's not news to my profession unless some government agency spits out a bunch of statistics to support the anecdotal evidence. Hooray to the New York Times for performing "a review of statistics." It would have been better if it had reviewed the day-to-day reality of people's lives a couple of years ago. Oops, I repeat myself.

On the media's ignorance

I tend to shy away from blunt blanket statements, but we as a nation are screwed as long as my profession continues to serve up things like this as some sort of big revelation:

It may be, say military experts, the future of warfare: a powerful army frustrated by a much weaker enemy. As Israeli ground troops flood into southern Lebanon in a bid to create a buffer zone to protect its territory from rocket attacks, some military analysts believe Israel has made the same mistakes as the US in Iraq. They say its focus on high-technology warfare and tactical advantage has led it to underestimate the strategic importance of public opinion.

"Local, regional and global perceptions of the conflict will be as important in sustaining a war, and in terminating a conflict on favorable and lasting terms, as the numbers of enemies captured or killed," Anthony Cordesman, a military analyst at the Center for Strategic and International Studies in Washington wrote. "Israel has failed to understand this in Lebanon as the US to some extent failed to understand it in Kosovo, Afghanistan and Iraq."

Or Vietnam. Good grief. If the media's understanding of guerrilla warfare is still at this gee-whiz stage, God help the public in trying to grasp the concept. It's only been, what, five years since 9/11 -- the mother of all "asymmetric" attacks. (Hat tip to Sam Smith.)

But wait! This just in -- further evidence of how the media fails the public in matters of war and peace abounds.

It would be funny if it weren't so pathetic.

The real reason Israel attacked in Lebanon...

...might be a grab for water resources. Then again, it might simply be that Israel's post-Sharon leadership took umbrage at an insult to their manhood.

While we're on the subject, the Financial Times tackles the matter of how Israel's airstrikes have taken out one factory after another. Buried in the story is this tidbit that caught my eye: "Proctor and Gamble’s warehouse in Beirut was bombed with damage to stores estimated at $20m." A Google News search reveals this bombing happened more than two weeks ago, and the warehouse was full of "canned goods, soap, and shampoo." But unanswered in any of the media accounts are these questions:

  1. Did the Israeli military claim the warehouse had some connection, however tenuous, to Hezbollah (Israel's usual justification for bombing such sites?)
  2. Has anyone accused Proctor and Gamble of actively supplying Hezbollah?
  3. If not, is Proctor and Gamble suing the Israeli Defense Force for compensation?

Just asking.

To wrap up these assorted thoughts on Lebanon, I pass along this claim that the U.S. and Israeli military are working together to pick out sites for attacks by American cruise missiles -- presumably in Syria, or maybe even Iran. Not sure how credible this is, but I throw it out there for what it's worth. (Thanks to Kev Hall via the Lew Rockwell blog.)

The unified oilfield theory

I'm not one of those people who says the Iraq war was "all about oil" (or Israel, or both -- not exclusively, anyway). So how in the world could it be that the United States government egging on the Israeli military in Lebanon is part of an oil strategy by Washington? The University of Michigan's Juan Cole (his blog is essential reading to follow Iraq, and now Lebanon) engages in a thought experiment that concludes thus:

It may be that that hawks are thinking this way: Destroy Lebanon, and destroy Hizbullah, and you reduce Iran's strategic depth. Destroy the Iranian nuclear program and you leave it helpless and vulnerable to having done to it what the Israelis did to Lebanon. You leave it vulnerable to regime change, and a dragooning of Iran back into the US sphere of influence, denying it to China and assuring its 500 tcf of natural gas to US corporations. You also politically reorient the entire Gulf, with both Saddam and Khamenei gone, toward the United States. Voila, you avoid peak oil problems in the US until a technological fix can be found, and you avoid a situation where China and India have special access to Iran and the Gulf.

You can read the whole thing to see how he gets there. I'm not convinced this is reality (nor is Cole for that matter), but it's food for thought.

Sunday, August 06, 2006

About Cuba, Fidel, and oil

Few of us will shed a tear at the eventual passing of Fidel Castro. But columnist Georgie Anne Geyer gives us pause about what comes next from the standpoint of Team Bush:

Obviously, they see a long-suffering people yearning for freedom, for American tutelage, to be just like the "americanos."...Sort of like our original ideas about Iraq, only now in the tropics, close by and so much easier to get to!

But this is NOT Cuba today -- and, despite the fact that hundreds of thousands of Cubans have over the years chosen the danger of leaving for the United States, it will not be the post-Fidel Cuba. This will be a Cuba of sullen, frightened people; of people who have known only one leader for 47 years and who have submitted to him; of people who will feel both guilt at that submission and some fleeting joy, but who will not know where to go next; of people who will rightfully fear that the Miami Cubans will come back and reclaim their old property; of people who have to be de-ideologized from Fidel before they can become something else.

I'm not sure what's more scary -- how Cubans react to Fidel's passing, or how Team Bush reacts -- especially when you consider Cuba's newfound oil and gas action.

Friday, August 04, 2006


Tomorrow marks the start of a five-day window in which we could see a dramatic escalation of the crisis in the Middle East -- if the web bots can be believed.

"Web bots" is a term used to describe a sophisticated computer program in use at a website called Half Past Human. Its advocates believe it has at least a vague ability to predict future events. What the bots do is troll the Internet, message boards, Usenet, etc. and attempt to detect subtle shifts in the use of language that offer clues to shifts in cultural awareness, and ultimately, where the world’s “collective consciousness” might be headed. (Yes, we’re getting into deep water here.) Supposedly the bots gave advance warning of 9/11 and can even foretell certain natural disasters.

Half Past Human is a pricey subscription site frequently talked up by George Ure at Urban Survival, and he’s pledged to pass along any of the bots’ major finds free of charge as a public service. So what do the next few months hold? He doesn’t spell it all out in a single convenient web page -- you have to spend a while rooting around his site to piece it together -- but it goes something like this:

  • A significant “emotional release” (i.e., big geopolitical blowup) as early as tomorrow but more likely next Tuesday or Wednesday. This could perhaps mean Syria getting dragged into the Middle East conflict, or something else entirely. But whatever it’ll be will pale in comparison to...
  • Some sort of uprising/revolution around August 31 or September 1. This could be something in the Middle East that would quickly lead to an oil embargo, but Mexico is a potential wild card. Whatever it is will lead to...
  • The equities markets sliding so badly the Dow falls to a tenth of its present value by year’s end. Then...
  • Some sort of attack in December, possibly in revenge for Israel’s bombing of Qana, Lebanon last weekend, leading to a major war involving Israel (more major than is the case now, anyway) continuing into the new year.

Granted, much of this is rather vague. There’s all manner of qualifiers to the predictions the bots spit out, which I suppose can explain away whatever predictions don’t pan out. For now, I’m following the bots’ dire predictions with the same mixture of curiosity and skepticism which which I followed the dire predictions surrounding Y2K and the dire predictions surrounding the attempted launch last March of an Iranian oil bourse trading petroleum in euros instead of dollars. (At last word, the launch is at least six months behind schedule, and many knowledgable people say if it ever does get off the ground, it's no big deal.) I figure by Labor Day I’ll know enough to cast an informed justment of whether the bots are for real. Stay tuned.

Wednesday, August 02, 2006

Sign of the times

Seems people are trying all sorts of creative (desperate?) measures to sell their houses: "Here, if you buy my overpriced home, I'll even throw in this gas-guzzling Hummer so you can pour even more money down a rathole!"

(The link above might require free registration. You do use the invaluable, don't you?)

Cantarell can't do well

Score another one for the Peak Oil theorists. Production at the world's second-largest oil field, Mexico's Cantarell, is falling "faster than expected:"

"The situation is probably much graver than the government would like us to think it is,'' said David Shields, an independent oil consultant based in Mexico City who has covered the industry for 18 years. "Oil production and oil exports are going to decline considerably over the next three years.''