Saturday, September 11, 2010

September 11, 2001

On this day, I'll remember all the people who perished on that fateful day 9 years ago in the World Trade Center buildings, fire fighters and policemen and volunteers who tried to save as many people as possible, and the families who lost their loved ones.

It should never have been about:

Koran burning,

Islam vs Christianity,

Ground-Zero mosque,

all of which seem to have been quickly foisted upon us just in time so that we forget what the day was about. It all started to accelerate when President Obama suddenly decided to speak out in favor of the Ground-Zero mosque/community center, citing, of all things, the US Constitution. Wag the dog.

It was the day that America as we knew died. Much like September 2008 when the financial system - lifeblood of a free market and thus of a free society - died. In a way, September 2008 financial market collapse was long-time coming; it was inevitable after the country had "died" seven years prior. For both deaths, we still don't know how they happened; hastily enacted measures have most likely made things worse, be it the Patriot Act, or the doubling of the Federal Reserve balance sheet and market intervention.

Instead of burning Koran, why don't they burn the symbol of oppression in the United States - the Patriot Act which was pressed on us immediately after 9/11 and which keeps on taking away our rights?

(Who is this pastor who wanted to burn Koran, anyway?)

To a small faction of the Christian opponents of the Ground Zero mosque who are confusing the radical Islam with the far more moderate form of Islam as practiced in many parts of the world (Indonesia and Malaysia come to mind as an excellent example - and they are smart too, for using gold coins): Do you know that the Koran venerates Jesus Christ?

And as for this Sufi imam who picked that site as his mosque/community center precisely because it is only two blocks away from the Ground Zero, as alleged by this blogger at Forbes, is it OK for him to be overtly provocative and insensitive just because he is a Muslim? (Or just because the US is occupying the Muslim countries?) Does it bother anyone that he is a regular at Davos meetings (World Economic Forum) and that his trips to Middle East have been paid for by the US government? A total insider approved by PTB (power that be)?

Friday, September 10, 2010

Obama's War in Afghanistan

It feels more and more like a cross between Apocalypse Now and Lord of the Flies.

Twelve U.S. soldiers face trial after Afghan civilians 'were killed for sport and their fingers collected as trophies' (9/10/2010 Mail Online)

"A dozen US soldiers are facing trail accused of being part of a 'kill team' that allegedly killed Afghan civilians in an arbitrary fashion - and they even collected their victims' fingers as trophies of war.

"Five soldiers have been charged with the killing three Afghan men 'for sport'. And seven more are accused of covering up the murders.

"In one of the most serious accusations of war crimes to come out of the Afghan war, the deaths are alleged to have been carried out by members of a Stryker infantry brigade based in Kandahar province, southern Afghanistan.

"But the father of one of the five accused of murder said today he tried to warn the Army that troops in his son's unit had killed civilians.

"By the time suspects were arrested in May, two more Afghans were dead.

"Christopher Winfield said his son Adam, 22, was so disgusted after the first killing that he sent Facebook messages home asking for help.

"Winfield called the Army and a military hot line asking officials to investigate - to no avail." [The article continues.]

Well, who needs Wikileaks to see the Afghan war for what it is?

What Obama is doing in Afghanistan, aside from killing Afghan civilians in the name of ... why are we there anyway? ... is to kill and maim the young Americans, both physically and psychologically.

Winfield's son says the following in the article:

'There are no more good men left here. It eats away at my conscience everyday.'

Will the Commander in Chief be playing yet another round of golf this weekend? Just curious...

a currency = a yield = a commodity index = a unicorn = energy = healthcare = technology = a rat’s ass

a strange world of what used to be a market, where everything and anything is now correlated positively to everything and anything.

From a guest post @ Zero Hedge:

From John Lohman

"A hedge fund manager/friend of mine recently described forces driving the market as “barely manned scrip cannons.” Unfortunately, I believe it’s a fairly accurate description of the HFT-ETF-Algo driven cluster that used to be a market for financial assets. Individual investors have lost confidence, voted with their feet, and left us with a single asset. It comes with a put option underwritten by the federal government and its value fluctuates in response to barely manned scrip cannons.

"For perspective on how this is impacting macro markets, consider the chart below. It plots the average one year rolling correlation of various markets with the S&P 500 Index. In short, a currency = a yield = a commodity index = a unicorn, etc. Completely different assets with completely different cash flow streams and terminal values are apparently fungible.

"This phenomenon can also be seen within the equity market. Zero Hedge has pointed out the absurdity of the level of implied correlations several times. This chart from Barclays provides some context. As shown, the trailing one month cross-sectional correlation for the largest 1,000 stocks averaged roughly 20% for the last half of the 20th century. The remaining variance in prices would be explained by the fundamental factors within each sector, industry, and firm.

"But in today’s environment, idiosyncratic risk doesn’t exist. As implied correlations asymptotically approach 100%, energy = healthcare = technology = a rat’s ass, etc.

"This is the unfortunate result of markets where governments and central banks try to truncate risk and algos determine marginal prices based on short-term patterns. In the real economy, price signals have become distorted, thus causing capital to be inefficiently allocated. In the financial economy, the environment has become riskier than ever. The farther prices are pushed away from their true underlying value, the greater the adjustment will be. And one thing the algos don’t do - adjust slowly."

CBOE Wants Daily Expiring Options??

They already have Weeklys (options that expire weekly) on major indices and select stocks, which may have caused the range-bound market since June, when the Weeklys for individual stocks and some sector ETFs were first introduced.

Now they want Dailys. The US financial markets are on the solid track to self-destruct by becoming nothing but a casino for traders, not the place for price discovery.

By the way, CBOE is set to introduce Weekly options on VIX futures later this month, too. So now the market volatility will be range-bound forever.

What's next? Hourly options? How about Second options for algo bots? Since they can stuff 5,000 quotes in one second, that's enough duration to trade volatility for them, isn't it?

The market's dead, long live the dead market!

From Dow Jones Newswires:

"The country's biggest options-trading venue wants regulators' permission to list options that expire in as little as a day.

"If approved, CBOE Holdings Inc.'s (CBOE) Chicago Board Options Exchange would be the first U.S. exchange to offer options contracts that expire so quickly. The most heavily traded U.S. options are structured around monthly time frames. The proposed new ones have time frames ranging from one to four days.

"CBOE called the idea "a flexible and valuable tool to manage risk exposure, minimize capital outlays, and be more responsive to the timing of events" in a filing with the Securities & Exchange Commission dated Aug. 24. A CBOE spokeswoman had no further comment on Friday.

"The move, first reported by Bloomberg News, reflects the push for ever-shorter trading horizons, as well as exchanges' competition to lure customers." [The article continues.]

(h/t liveup, again)

Wednesday, September 8, 2010

Google's Sergey Brin Wants "Third Half" of Our Brain

Huh? It doesn't add up, does it? Or are there the fourth half and fifth half, too? I'm confused.

Sergey Brin: "We Want Google To Be The Third Half Of Your Brain."
(Jay Yarow, 9/8/2010 Business Insider)

"Sergey Brin wants Google to become the "third half of your brain."

"That's what he said at today's big search event, where Google released Google Instant, its fast, streaming search results.

"We're not exactly certain what Brin meant, but we think he was trying to say Google will know what you want in a search, perhaps even before you know." [Emphasis is mine.]

So, the recent comment from Google's CEO Eric Schmidt does indicate the direction that Google is taking. Schmidt said "I actually think most people don't want Google to answer their questions. They want Google to tell them what they should be doing next." (For more, read my post in August.)

I was hoping that the Google founders were somehow different from the CEO and that "Don't be evil" still meant paramount for them. I guess I was naive, after all these years.

Tuesday, September 7, 2010 Under Attack

Please read the article linked below, and donate to help them survive.

LRC Under Attack (Llewellyn H. Rockwell, Jr., 9/7/2010

"...This summer, however, there were two new assaults, which cost a lot of money to fix. The first was an attack on LRC’s small donation system, resulting in thousands of phony gifts that outraged the poor people whose names were used, and their card-issuers. We fixed it, and have prevented such a hate-scam in the future, but it was costly.

"At the same time, we were caught in the crosshairs of the copyright snipers. All of a sudden, thanks to a giant, Obama-connected law firm, what had been legal "fair use" on the Internet became a crime. We were threatened by huge fines and the obliteration of the URL. But that wouldn’t have been necessary. The fines would have taken care of us." [Emphasis is mine.]

Now that sounds like the same attack that has been launched against the GOP Senate candidate of Nevada, Sharron Angle, by Righthaven LLC, who is seeking "damages of $150,000 against Angle personally and forfeiture of her website domain name", according to Las Vegas Sun.

I don't know if the law firm that attacked was Righthaven LLC or not. There are other firms with the similar business model, which is "to buy the copyrights to newspaper content and then turn around and sue bloggers for copyright infringement." For more, read this blog. (The link also has the list of newspapers using the "services" of Righthaven LLC.)

As to the Righthaven connection to the Obamas, check here.

'Nuther Party at the White House by Michelle "Antoinette" Obama

It's a dance party tonight.

Michelle Obama hosts first White House dance event (9/7/2010 AP via Yahoo News)

"WASHINGTON – The stately White House East Room, home to many a bill signing and ceremonial gathering, becomes a stage Tuesday for pirouettes, jetes, gravity-defying leaps and maybe even some bumps and grinds as Michelle Obama inaugurates a new dance series.

"Dancers of all types — ballet, modern, hip hop and Broadway — take over the room, first for an afternoon workshop, during which students from around the country will have the chance to work with some of the biggest names in dance.

"Then, after a short break, the students return to see their mentors perform in an hour-long, star-studded show. Even Broadway's young "Billy Elliot" will be there — four Billys actually, from the show's rotating cast." [The article continues.]

Fed's Last Bullet May Be "Golden"

Now why didn't I think of that...?

Ben Bernanke's last bullet: drive up the price of gold and create an inflation expectation (or perception) so that people are scared into spending fiat money (US dollar) fast.

Here's the "golden bullet" part of the article from Zero Hedge:

Jim Rickards Tells His Clients To Get Out Of Stocks And Discusses The Fed's Final "Golden" Bullet (9/6/2010 Zero Hedge)

[From the interview of Jim Richards, Senior Managing Director for Market Intelligence at Omnis, Inc., with Eric King of King World News. Emphasis is mine.]

If you're worried about deflation and you want to cause inflation and you're printing money as fast as you can and the inflation is not happening, at some point you have to stop and ask yourself well what else can I do? Well the answer is that you can severely devalue the dollar against gold...So the Fed wakes up one day and as fiscal agent for the Treasury, we're a buyer at $1,495 and we are a seller at $1,505, and that represents a 20% depreciation in the value of the dollar.

You have to scare the American people into spending money. Right now the American people are more afraid of not having money, they are not afraid of inflation, but if you make them afraid, they will go out and start spending. So what better way than to devalue the dollar 20% against gold, and the way to do that is through open market operations...Well if that happens to be $2,000 an ounce what have you done? You've depreciated the dollar by not quite 50%. Well that's pretty powerful stuff if you are trying to get people to spend money and dump dollars. So they are not out of bullets, they have what I call the golden bullet...They have that kind of ace in the hole if they really want to trash the dollar.

(The whole interview is here.)

Monday, September 6, 2010

Obama Calls for $50 Billion Infrastructure Stimulus and "Permanent Infrastructure Bank"

Infrastructure bank? Be wary. Very, very wary.

Obama calling for more infrastructure spending
(Julie Pace, 9/6/2010 AP via My Way News)

"WASHINGTON (AP) - Vowing to find new ways to stimulate the sputtering economy, President Barack Obama will call for long-term investments in the nation's roads, railways and runways that would cost at least $50 billion.

"The infrastructure investments are one part of a package of targeted proposals the White House is expected to announce in hopes of jump-starting the economy ahead of the November election. Obama will outline the infrastructure proposal Monday at a Labor Day event in Milwaukee.

"While the proposal calls for investments over six years, the White House said spending would be front-loaded with an initial $50 billion to help create jobs in the near future.

"The goals of the infrastructure plan include: rebuilding 150,000 miles of roads; constructing and maintaining 4,000 miles of railways, enough to go coast-to-coast; and rehabilitating or reconstructing 150 miles of airport runways, while also installing a new air navigation system designed to reduce travel times and delays.

"Obama will also call for the creation of a permanent infrastructure bank that would focus on funding national and regional infrastructure projects.

"Administration officials wouldn't say what the total cost of the infrastructure investments would be, but did say the initial $50 billion represents a significant percentage. Officials said the White House would consider closing a number of special tax breaks for oil and gas companies to pay for the proposal." [Emphasis is mine. The article continues.]


So they don't even tell us how much the total cost would be, other than this initial $50 billion which "represents a significant percentage". What is a significant percentage for this administration? 5%? 10%?

And he wants to do it by penalizing the particular industry that he probably believes the sheeple of the United States will be happy to see penalized - the oil industry, because of the Gulf of Mexico oil spill (I'm guessing).

But I find the mention of "a permanent infrastructure bank" very peculiar. Maybe I'm paranoid, but I suspect the whole point of this "stimulus" exercise is to set up this bank, and I don't like the smell of it.

The White House fact sheet says this:

Infrastructure Bank. The President proposes to fund a permanent infrastructure bank. This bank would leverage private and state and local capital to invest in projects that are most critical to our economic progress. This marks an important departure from the federal government’s traditional way of spending on infrastructure through earmarks and formula-based grants that are allocated more by geography and politics than demonstrated value. Instead, the Bank will base its investment decisions on clear analytical measures of performance, competing projects against each other to determine which will produce the greatest return for American taxpayers.

Hmmmm. My questions:

1. So, instead of giving money to the states outright, is this bank going to make loans, with the infrastructure to be built as collateral?

2. Who's going to run the bank? Bernanke? Geithner? Goldman Sachs? Pimco? All of them? (Oh sorry, Morgan Stanley, too, now that the Chinese have more stake in the firm..)

3. Who's going to decide the loan terms and "clear analytical measures of performance"? Bernanke? Geithner? Goldman Sachs? Pimco? Obama? Congress? All of them?

(How are they going to measure the performance of asphalt pavement?)

4. Who's going to decide what is "most critical to our economic progress"? How is "critical" defined, and by whom? How is "progress" defined, and by whom?

5. "Leverage"? How? Will it be like Geithner's PPIP (remember that one?), where the taxpayers pay for 90% of the loan and 10% by the private investors, and the private investors take the upside? Will the investors set to collect fees, tolls etc. from the funded projects in exchange for the "risk" they take in participating? Or worse, if a state defaults on the loan, the taxpayer-funded portion of the loan will be non-recourse, and the private investors will get the collateral (infrastructure)? Is this bank a clever ploy to transfer public assets into private hands selected by the government?

6. Is this bank going to securitize the loans and/or create more leveraged instruments like CDOs to sell to investors? Will the initial $50 billion be leveraged 5 times? 10 times? 20 times? 50 times? Who will be responsible when the leverage blows up? (Answer: hapless US taxpayers.)

(I can see a whole set of leveraged instruments out of this bank - CDOs, CDS, interest rate swaps, the usual suspects. Except this time, it will not be Wall Street banks creating and selling them; it will be the US government in cahoots with private investors who will probably include Wall Street banks but not limited to them.)

7. Do you smell a new financial bubble? Is it all nice and dandy if your government does the blowing?

The Third Reich's leaders would be proud.

Sunday, September 5, 2010

Belgium About to Break Up?

This blog has already reported on a potential breakup of Belgium back in June. Dutch-speaking Flanders are sick and tired of subsidizing the socialist programs in the French-speaking Wallonia. Now, French-speaking Socialists in Wallonia are almost resigned to the breakup of their nation. If that happens, that has to be the first in post World World War II Europe.

End of a nation? ‘Get ready for the break-up of Belgium’
(9/5/2010 AFP via Raw Story)

"BRUSSELS — A top Belgian politician warned the country's citizens on Sunday to "get ready for the break-up of Belgium," as King Albert II seeks to relaunch knife-edge coalition talks.

"Leading francophone Socialist Laurette Onkelinx, considered a potential successor to party chief Elio Di Rupo, who gave up on negotiations with separatist Flemish leaders on Friday, gave her prognosis in a newspaper interview.

""Let's hope it doesn't come to that because if we split, it will be the weakest who will pay the heaviest price," she told La Derniere Heure. "On the other hand, we can no longer ignore that among a large part of the Flemish population, it's their wish.

""So yes, we have to get ready for the break-up of Belgium. Otherwise we're cooked."

"... The stark comments from Onkelinx followed those of another leading francophone Socialist, Philippe Moureaux, who has said Belgium was on the verge of a "progressive organization of separation."

"Formerly taboo among the poorer francophone parts of Belgium, the prospect of going it alone is no longer considered so -- with a third senior official, the head of the Wallonia state government, Rudy Demotte, also telling RTBF radio that "all options" are now open.

"Demotte added that Wallonia and the capital region of Brussels, the third federal state and increasingly the focus of arguments about financial settlements, had the wherewithal "to see what we can do ourselves without waiting for tomorrow."

"While located within Flanders' borders, Brussels is officially bi-lingual, although recent studies have shown accelerating numbers of registered French speakers, including the nearly one-in-three who hail from abroad.

"Tens of thousands of Flemish people, meanwhile, took part on Sunday in an annual demonstration which consists in symbolically "encircling" Brussels by bike or on foot, to remind locals that they are surrounded by Flanders."

(h/t berniemade_off)

OT: Tarp Surfing (Only in Santa Cruz...)

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