Monday, February 1, 2016

What a New American Revolution Would Look Like

Here's just a taste of what a "new" American Revolution would look like.  Also see my blog entry "56 Items on America's To-do List"
  • Lower corporate taxes and bring back jobs from Asia.
  • Drastically improve border control, and track all immigrant's location, contact info and all other immigration info in a national database accessible by law enforcement all over the country. All long-term visa holders should report to immigration every 90 days to update current info.  
  • Reform immigration with "point system" to prefer English speakers, persons with college degrees, and those persons with unusual talents or accomplishments in arts, science, math, engineering (STEM) or athletics. No more asylum abuse, no more catch and release. America needs the 'best of the best' not the 'worse of the worse' which is Obama's ridiculous approach.
  • Pass laws to outlaw "sanctuary cities" with penalties of jail time for all top city officials and councils.
  • Pass a national right-to-work law.
  • End Unions at all levels of government; local, state and federal. Because of unions, Federal workers are collecting more pay than private sector when considering benefits.  Even FDR didn't believe that unionism belonged in the public sector.
  • Get rid of the Federal Reserve. Central banks all over the world are a bunch of fools that will bring ruin to our country and the world. They are so out-of-control and so stupid. Get rid of them.
  • Get rid of the carbon regulation mandate at the EPA.
  • Clean house at EPA, SEC and NLRB.
  • Get rid of the NSA -- It is out of control (and never will be controlled as "oversight" at the Federal level is a complete joke). It's not helping our security and costing $50 Billion per year and only causes mischief. You ARE aware that they are reading/scanning your texts, emails, watching your phone calls, and monitoring your Internet activity, right? Nearly all of this is contrary to your Constitutional rights. All this and nearly no terrorist attacks stopped.
  • Get rid of Dept of Energy-- which creates no energy at all.
  • Get rid of Dept of Education -- which doesn't educate a single child.
  • Downsize Dept of Housing and Urban Development and Commerce.
  • Get rid of TSA and FEMA.  TSA doesn't work and has never caught a terroris and misses 95% of fake bombs meant to test them!
  • Get rid of ObamaCare and replace it with a premium-support voucher system. Incentivize individual savings accounts, and promote competitive insurance markets. Transfer company-provided health insurance policies to employees so that each employee "own" their policies (and retain them even when they change employment), Companies would continue to provide pre-tax benefits to employees to pay their policies. Work to make policies portable across the 50 States.
  • Give states Medicaid money in the form of block grants. Let The States administer this money.
  • Give up on the "War on Drugs" We're not winning it. The US hasn't won any war since WWII.
  • Legalize Marijuana, regulate it and tax it at the state level.  Repeal Marijuana prohibition at the Federal Level. Free prisoners that were convicted on simple possession charges.
  • Eliminate ethanol subsidies
  • Repeal Bacon Davis Act which increases cost of government (all contractors will pay Union wages, ie., high wages at a burden to taxpayers)
  • Get government out of the home mortgage market, sell-off FHA, Fannie, Freddie Mac
  • Get government out of the student loan business. Sell off Sallie Mae. End loan guarantees that are creating a bubble in student debt and driving-up tuition prices. Stop it!
  • Get government out of the minimum wage business
  • Privatize the Post Office. Japan and UK did this recently.
  • Privatize Amtrak
  • End agricultural subsidies to large corporate farms. This would help to pay for health care premium support mentioned above.
  • End sugar price supports keeping sugar prices higher in US and driving jobs overseas
  • End electric car subsidies (especially to rich people buying $100k Tesla cars)
I could go on, but you get the point. This country needs a return of a true Federalist system where The States are largely independent and can do what they want as long as it doesn't violate the Constitution. This is the intent of our Constitution. In a Federalist system, Vermont could be a Socialist paradise with sky-high taxes and legalize cocaine if it wanted to. Equally, Texas could have a minimal state government, low taxes, light regulation, open carry, ban marijuana and ban gay marriage, etc.  This is what freedom looks like.

Saturday, January 30, 2016

Democrats Chasing Phantoms While World Burns

Why is that Democrats are constantly chasing false phantoms like climate "change" and the false claim of an unfair pay gap for women?

And this, while the world is falling apart and in flames, in part, because of Obama himself? Look at the Middle East where Obama has "changed sides" in supporting Iran. The social fabric in the US is in flames as Obama has tried to start a race war and a war against law enforcement resulting in increased inner-city violence and death of black persons (as in Baltimore). Or maybe they want to distract from the brewing worldwide financial crisis where China is crashing, and the US, Europe and Japan economies are sinking? Or the fact that the US economy has never really recovered since 2009?  Or that  64% of the public still says, after 7 years of Obama, the US is headed in the wrong direction?

Polls show "climate change" is the very least of our worries. And discrimination of women in the workplace is simply not true. Both are phantoms.

Democrats are obsessed by climate change even though, after 100 years, the effects are barely perceptible. Yeah, the earth has warmed 1.6 deg F and the seas have risen about 8" in the past 100 years. So, where's the imminent disaster? I don't know about you, but I'm enjoying the weather!  And there's reason to think that the earth will warm a further 1.6 deg in the next 100 years, which will probably mark the end of the hydrocarbon fuel era.  I don't care what "the models" say. Nor should you.

But, listening to idiots like Obama, you'd think we're facing imminent disaster -- just like Al Gore. Gore predicted 10 years ago: “within the next 10 years, the world will reach a point of no return” and “a true planetary emergency.” Sorry, I don't see any emergency except those caused by bankers and politicians.  And Gore is still spouting this nonsense! And he almost was President! He makes George Bush look like a genius.

In 2005 the UN predicted that, by 2010 (4 years ago), "some 50 million “climate refugees” would be frantically fleeing from those regions of the globe." There ARE millions fleeing the Middle East and North Africa, but they are fleeing collapsed economies caused by dictatorships, wars, violence and oppression, and corrosive Islam -- not climate change as our Idiot-in-Chief insists.

Obama, who apparently worships the United Nations, believes that ISIS is due to climate change! What a complete joke! ISIS came about after Obama's sudden and complete withdrawal from Iraq (against the advice of our $Trillion military) and his failure to act in Syria. And Obama's subsequent attempts to control ISIS would be a laughable joke if it  they weren't so disastrous. He still claims that he has a strategy, but no one can find it.

Obama recently claimed that the recent and laughable climate change "accord" in Paris, would "be a sharp rebuke" to ISIS. What? That he wasn't skewered thoroughly by the media for such a ridiculous statement again shows their bias. The media has been protecting him all along, from his first campaign until now, which has kept him in office and continuing his damage to our country. Shameful.

The other phony phantom is the repetition of false claims of discrimination in women's pay. There is, in fact, a 23% gap in women's pay nationwide but it's largely explained by logical reasons -- not discrimination. In fact, despite 7 years of this rhetoric, there continues to be a pay gap between men and women employees in the White House itself.

Again, rational people have long explained the pay gap. But Democrats need to keep alive myths and "causes" like this. They (and Obama) have become irrelevant without them. Economist and professor Mark Perry says "the differences in raw wages may be almost entirely the result of the individual choices being made by both male and female workers.”
  • Men work longer hours,
  • Men work in more physically demanding occupations like farming, construction, roofing, logging, truck drivers and working on oil rigs,
  • Women work in family-friendly workplace environments like teaching elementary school that coincide with their children’s schedules (with summers off, etc.),
  • Men take less time off, or no time off, for child birth and child care to minimize their time away from the labor force that might affect their earnings.
So, the world's burning and Obama Democrats are obsessing about non-existent problems. Obama is like Nero fiddling while Rome burns. More accurately, he's like Neville Chamberlain with his unexplainable appeasement of the terrorists in Tehran. He's instead igniting another World War.

Politicians and Central Bankers are the biggest danger to your health and well-being, not climate change.

Sunday, January 17, 2016

20 Teachings of Thich Nhat Hanh

Something different. I recently started looking into the teachings of a Vietnamese Buddhist monk named Thich Nhat Hanh.  I love Buddhist Monks, which comes from my enjoyable interactions with Buddhist monks from my many years of visiting or living in Thailand. You might enjoy having a look at Thich Nhat Hanh's community here.

Here's a nice collections of quotes of his from one of his followers:
  1. People usually consider walking on water or in thin air a miracle. But I think the real miracle is not to walk either on water or in thin air, but to walk on earth. Every day we are engaged in a miracle which we don’t even recognize: a blue sky, white clouds, green leaves, the black, curious eyes of a child – our own two eyes. All is a miracle.
  2. Life is available only in the present moment.
  3. If we have too many worries, fears, and doubts, we have no room for living and loving. We need to practice letting go.
  4. Letting go gives us freedom, and freedom is the only condition for happiness. If, in our heart, we still cling to anything – anger, anxiety, or possessions – we cannot be free.
  5. My actions are my only true belongings.
  6. May our heart’s garden of awakening bloom with hundreds of flowers.
  7. Let one embrace his own truth and devote himself to its fulfillment.
  8. Hope is important because it can make the present moment less difficult to bear. If we believe that tomorrow will be better, we can bear a hardship today.
  9. Walk as if you are kissing the Earth with your feet.
  10. I promise myself that I will enjoy every minute of the day that is given me to live.
  11. Because you are alive, everything is possible.
  12. Be like the earth. When the rain comes, the earth simply opens up to the rain and soaks it all in.
  13. Understanding is like water flowing in a stream. Wisdom and knowledge are solid and can block our understanding.
  14. Through my love for you, I want to express my love for the whole cosmos, the whole of humanity, and all beings. By living with you, I want to learn to love everyone and all species. If I succeed in loving you, I will be able to love everyone and all species on Earth… This is the real message of love.
  15. Using your intelligence and your compassion, you’ll be able to find your way out of any difficulty that arises in daily life. This gives you greater confidence in your own capability, making you even more solid.
  16. Drink your tea slowly and reverently, as if it is the axis on which the world earth revolves – slowly, evenly, without rushing toward the future.
  17. Because of your smile, you make life more beautiful.
  18. When you are a young person, you are like a young creek, and you meet many rocks, many obstacles and difficulties on your way. You hurry to get past these obstacles and get to the ocean. But as the creek moves down through the fields, it becomes larges and calmer and it can enjoy the reflection of the sky. It’s wonderful. You will arrive at the sea anyway so enjoy the journey. Enjoy the sunshine, the sunset, the moon, the birds, the trees, and the many beauties along the way. Taste every moment of your daily life.
  19. You have to learn how to help a wounded child while still practicing mindful breathing. You should not allow yourself to get lost in action. Action should be meditation at the same time.
  20. You must love in such a way that the person you love feels free.
Nothing like wisdom to calm your soul. Drink it in.

Friday, January 15, 2016

Obama's Legacy: Devastation Everywhere, Death of the Petrodollar

A chain of events leading to sudden political and economic upheaval in America is conceivable and not entirely out of the question.  Poor US monetary policies of ZIRP and various QEs, our political weakness at home and in the world, and the alienation of our traditional allies like Saudi Arabia could have a sharp and sudden impact to this country. Idiots like John Kerry and Barack Obama will never see it coming. An even larger explanation of the coming devastation lies here.

Well before the recent public "deal" with Iran's Rouhani, Obama was already removing the highly effective sanctions which forced Iran to the bargaining table in the first place. See my blog on this topic. This is appeasement in every sense. It is very likely that Obama's "reset" with Iran will end in disaster just like his entirely discredited Russian "Reset." In fact, he is reminiscent of Neville Chamberlain's appeasement of Hitler in the 1930s.  Liberals like Obama, who are immune to facts and reality, are dangerous and their policies lead to failure if not war.  They never see the truth to the "peace through strength" well-proven by Ronald Reagan.

Obama, who has stumbled and equivocated for years has helped to create a perception of a US power vacuum in the world. I say it's intentional as Obama is an enemy of our country (like the other US black "leaders")  Putin (and China and Iran) have been filling this vacuum. Saudi Arabia is in shock at the parade of incompetence since it's been a long-time ally of the US. That alliance is responsible for establishment of the Petrodollar.

By playing "nice" with the murderous Iranians in an effort to have a (any) foreign policy "victory," Obama has thoroughly annoyed our allies of Saudi Arabia, Israel, and many others.  But it's the Saudi's that could unleash real disorder for the US if ignored.

The Saudi's hate the Iranians and have watched the Iranians (and Russian) interests advancing in the region due to the incoherent and mindless American administration.

Could it be that the intentional aiding and abetting of our enemy Iran, and the loss of another long-standing alliance with Saudi Arabia, combined with the US policies of money printing and dollar debasement, might lead to a dollar (and economic) crisis for the US and world?  It's possible if not probable.

The potential chain of events might start with Saudi's willingness to accept other currencies for oil payments rather than just dollars.  Accepting all currencies for payment, rather than solely dollars, is hardly a radical concept.  (In fact, it would be normal except for the Saudi's leadership.)  Iran, China and Russia are already making deals for oil bypassing the US dollar in an effort to displace and diminish US power. If Saudi made a change, Iraq would quickly follow suit since they are increasingly aligning themselves with Iran (thanks to the US power vacuum).  Egypt is hardly sympathetic with the US these days too.  Libya could jump on the bandwagon too.  China would renew calls for a new reserve currency again at that moment.

The breaking of the petrodollar's status is a nuclear war without the nukes. If Saudi makes such a move and it will be followed by other oil exporters in the region, the demand for the dollar could fall significantly. Demand for treasury notes and bonds would also drop (due to less petrodollar recycling) leading to a fall of the dollar and/or possibly rising US interest rates.  Confidence is a delicate thing.  Loss of US dollar reserve status would be a huge blow for the US and cause a test of our ability to run huge trade budget deficits forever.

The economic and political decline of America could become apparent literally overnight.  Suddenly, US citizens might wake up one morning and find themselves significantly poorer vis-a-vis the rest of the world due to a decline in the dollar.  They can't say that they weren't warned.  Ron Paul, for one, has warned of this possibility for many years now, although he couldn't have predicted the chain of events.  The US might be compared to a frog sitting in a pot of water on a stove and suddenly finding itself cooked.

Wednesday, January 6, 2016

Devolved Muslim Animals Rampage In Cologne

I just wrote a blog entry called "Differences in Intelligence Cause Clashes of Civilization." There I explain that intelligence and culture go hand-in-hand.  I mentioned that one of the most obvious and extreme examples of a "clash of civilizations" was comparing "devolved" Palestinians, who are now devolving further with international 'welfare', versus the higher IQ Israelis mostly from Europe, who are civilized, tolerant, democratic and prosperous.  Clash of civilizations!

But it's not just the Palestinians who have devolved, it's the entire Arab/Muslim culture. It's in a state of collapse and has triggered a mass migration into Europe.

Over the New Year weekend, Muslim migrants in Germany showed their true colors by attacking and raping women in a stunning rampage of violent behavior -- in their host country!  These people, all Muslims no doubt, show that this population has devolved into animals. And that's an insult to animals!

Reuters says
“About 90 women have reported being robbed, threatened or sexually molested at New Year celebrations outside [the city’s] cathedral,” Reuters writes, adding that the men were “between 18 and 35” and appeared to be “mostly drunk.”
Listen to a chilling eye-witness account from a bystander in Cologne Germany (click here if video does not display):

Monday, January 4, 2016

Differences In Intelligence Cause Clashes of Civilizations

A higher average intelligence of a country is a good predictor of a higher degree of civil order and democracy, rule of law, higher levels of education, higher levels of economic activity, and more wealth and happiness. In other words, intelligent populatoins create prosperous and orderly societies. The opposite is true. Lower intelligence populations have disorderly societies, crime, poor achieving economies, poverty, less democracy and unhappiness. Intelligence causes civilization -- not the inverse.

Europeans and E.Asians (and their descendants) have created the most successful cultures the world has ever known. It's not an accident as these populations have median IQs in the upper 90s to 108. The remainder of the world has median IQs mostly in the the range of 75 to 91.  See this map of estimated country IQs. The difference doesn't sound like much, but a median IQ of 85 would mean 50 times fewer brilliant persons (and 50 times more mentally deficient) in a given population than a country with a median IQ of 100.

It's a tale of two worlds. It's also a tale of the clash of civilizations. 

The starkest example of this clash of civilizations is seen by comparing Israel with the Palestinians (and other Arabs in the region). Israel, full of higher IQ northern Europeans, is highly advanced and developed, prosperous, tolerant, democratic and highly civilized. The "Palestinians", like most other Arab/Muslim cultures, have devolved. Palestinians now find themselves locked behind walls due to their violence, are ruled by corrupt tyrants and completely dependent on international welfare to survive. That "welfare"creates a culture of victim-hood and dependence which furthers their cultural collapse, not unlike a substantial portion of US blacks. Palestinians could have decided decades ago, on any day, to make peace and work with/in Israel -- and enjoy the benefits of a very prosperous economy in that region. Instead, Palestinians have chosen intolerance and ruin for over 100 years now.

The entire Arab/Muslim culture in N. African and the Middle East has also collapsed and a huge refugee crisis has emerged. Those "cultures" have devolved thanks to lower IQ and Islam. Islamic cultures are extremely backward; autocratic (like the religion itself) and weighed-down by self-imposed factors such as poor education, the suppression of women and violence, And there is little happiness in Islamic cultures (in the West at least). Their uncontrolled migration into Europe is a huge clash of civilization and will bring huge problems to Europe. Muslims in Europe are not integrating or adapting. They form "ghettos" of poor people on welfare and re-create the same failed cultures that caused them to flee to Europe in the first place! They have little to offer European civilizations in their devolved condition. Then, "welfare" causes even more cultural decline.

Africa is "the heart of darkness" when it comes to low IQs -- with many countries having median IQs in the 60s and 70s. Low black African intelligence extends to the US, Latin American and Caribbean black populations. Blacks have the lowest IQs in the world and it shows. Black persons in the US continue to be a huge burden to the US and to many countries in Latin America/Caribbean. Haiti is easily considered a failed state, for example.

Latinos, who have somewhat higher median IQs, due to historical intermixing with Europeans (around 89 and a higher standard deviation according to "The Bell Curve" from 1995), are somewhat better off. But Latino economies are still mostly backward and poor and have high levels of crime. But Latinos, with intact families and family values, are more compatible with mainstream US culture. Even so, large uncontrolled immigration of Latinos into America will lower the average IQ of the US and reduce the performance of our economy on average; with lower income and more failed governance -- like what we see in Central and South America. Latinos fall for the false siren call of populist politicians who bring ruin to their countries. This is the mechanism for a large-scale decline of the US.

If Americans want to preserve our successful culture then, we should mostly limit our immigration for higher IQ persons from Northern Europe and East Asia. Also, America could interview and offer visas to interested PhD and Masters graduates, especially in STEM fields, to stay in the US regardless of country or region. Further large-scale Latino and 3rd World immigration should be limited if we want to limit a further "clash of civilization" in America. This is a prescription for preserving "American" culture.

Western countries should acknowledge that immigration of large numbers of "3rd world" immigrants causes needless clashes of civilization and burdens to their citizens. Some countries realize this. Japan allows no immigration and maintains a peaceful, homogeneous society. Sweden, on the other hand, has allowed large immigration of African and Middle Easterners and has become the "rape capital of the West" with vastly higher crime and simmering unrest and resentment of the Swedes. It's a powder keg now thanks to Leftist and Liberal politicians who are willfully blind and ignorant.

Sunday, January 3, 2016

Our Nation's Big Problem: Black Men

Check out "Too Important to Fail" on It's about an effort by Tavis Smiley to help black boys (and girls) who fail high school at very high rates. Black graduation rates aren't improving.

Of the black (boys) who don't graduate high school, 70% of those persons will be in prison at some point in their lives. On any year, ~37% of black high school dropouts are in jail or prison.  So, it's important to keep trying to improve high school attendance and performance.

The documentary says the following:
  • Only 54% of African Americans graduate from high school, compared to more than three quarters of white and Asian students.  
  • Nationally, African American male students in grades K-12 were nearly 2½ times as likely to be suspended from school in 2000 as white students.
  • On average, African American twelfth-grade students read at the same level as white eighth-grade students. (see here)
  • The twelfth-grade reading scores of African American males were significantly lower than those for men and women across every other racial and ethnic group. (see here)
  • Only 14% of African American eighth graders score at or above the proficient level. These results reveal that millions of young people cannot understand or evaluate text, provide relevant details, or support inferences about the written documents they read.
  • The majority of the 2.3 million people incarcerated in U.S. prisons and jails are people of color, people with mental health issues and drug addiction, people with low levels of educational attainment, and people with a history of unemployment or underemployment. (correlated with low median IQ and low cognitive ability)
It's important to try, but their biggest problem for the black population is significantly lower 'academic' intelligence. This fact is reflected in IQ tests, high school performance tests, SAT, and nearly every other "cognitive ability" test.  Possibly, with the passage of time, probably many generations, this disadvantage might be overcome with a huge concerted effort -- but after 40 years of busing, desegregation and affirmative action, not much has changed. Instead, there's evidence that government assistance and dependence is ruining black families and worsening black culture and achievement.

The reality is that black culture is in a state of near collapse -- all this within one of the greatest cultures the world has ever known. And this, after 40 years of equal rights and equal opportunity. The evidence could hardly be clearer:
  • If you add the numbers of black men in prison to the ranks of unemployed, unemployment for black men is 20%, (not 10%, see calculation here)
  • Black are committing crime at 7 times the rate of whites (page 11 of link)
  • 1 in 3 black men will be in prison is their lifetime
  • As of 2008, one in nine black men was incarcerated on any given day. (link)
  • Blacks (basically black men) committed 52% of all homicides, 57% of the gun murders and committed 66% of the drug-related homicides (1980 to 2008) or about 7 to 8 times the crime rate of whites. (table 7 at this link)  Remember, 93% of their victims are black
  • About 8,000 blacks are murdered in any recent year (over 1/2 of 16,000 total homicides). And 93% of those were killed by other blacks . 
  • In 2015, only 300 blacks were killed by police compared to 7 or 8,000 due to black-on-black violence; mostly men.  This point completely discredits black "leaders" who focus on a few 100 police incidents when 1000s of blacks are dying every year.  Forgive me if I no longer give a shit.
  • Black men comprising only 6.5% of the population, are committing more than 50% of all violent gun crimes. (BJS Table 7)  But no one will suggest seizing all the guns from black men!
  • By the time they turn 18, one in four black children will have experienced the imprisonment of a parent.(NYT)
  • More young black high school dropouts are in prison or jail than have paying jobs. (Washington Post)
  • Blacks make up about 40% of prison population but only 13% of the population. Whites are only 34.7% of the prison population but 77% of the population. Blacks are therefore about 7 times more likely than whites to be in prison.
  • Comparing all males aged 20 to 34 yrs old, black rates of incarceration in 2010 is 10 times that of white Americans. (link)
  • Some 37% of blacks aged 20 to 34 without a high school diploma are in prison right now! (link)
  • Abortion rates for black women is 5 times the rate of those for white women. (link)
  • Blacks are 44% of new HIV infections or about 8 times the rate for whites (link)
  • Washington DC has higher HIV infection rates than most African countries (and DC is only 58% black) (link and here)
  • Black gonorrhea infections among young black men (aged 20 to 24) are up to 26 times those of whites. (CDC)
  • 72% of newborn black babies are born to a family without a father. (link)
  • Over 80 percent of black children have been abandoned emotionally and, usually, economically by their fathers. (NYT)

Wednesday, December 23, 2015

Big Picture View of the Brewing World Financial Crack-up

The legacy of zero interest rates for 7 years has already planted the seeds of our next financial crisis. Super low interest rates, various QEs and China have inflated bubbles in equities, bonds, and housing since the 2008/2009 bust.   (After the great recession, it was China and the largest debt-fueled spending binge in history that "saved" the world -- something that can't happen again.). Housing prices are now much higher than the 2007 peak and rents have sky-rocketed.  Oh and add the bubbles in subprime auto loans, subprime student loans and the related tuition inflation. But the bubbles are starting to burst as the tide of liquidity has been ebbing all year -- and even before Yellen decided to raise the Fed Funds rate this week.

The lowest quality Junk bonds are falling sharply in value this month. This is not a good thing. In my blog, Two Charts That Show the Financial Crisis is Already Here, I show the fact that Junk bond issuance in just the past 3 years alone is about 3 times the magnitude of the subprime mortgage bubble in 2007. And recall that the 'blow-up' of subprime mortgages nearly caused the 2nd Great Depression. I don't know the magnitude of subprime credit overseas, but soon, if not already, all the debt of commodity producers and commodity producing country sovereign debts will be subprime with defaults galore in the coming months. The sovereign debt of Brazil was lowered to junk status this week, for example. We're in a slow-motion crash. It might speed up before it's over. Why?

Maybe it's explained by a trend of falling liquidity?  One of the biggest global factors in world finance and leverage in the past 20 years has been the rise and fall of Eurodollars including derivative products such as interest rate swaps. See the graph below taken from Jeffrey Snider at Alhambra Investment Partners. The Eurodollar's (and Asia dollar) rise drove interest rates lower in the 1990s and 2000s and funded the "world" and financial markets. It was "the wind at our back" for every financial instrument related to rates for a decade or so. But it all came undone in 2008 and 2009, only to be temporarily resuscitated by 2011 via QEs all over the world. But, ever since then, it's been downhill -- meaning lower bank leverage and liquidity. The "wind at our back" has turned into the "wind in our face."

The recent fall of this Eurodollar leverage may be most significant large-scale and long term trend that explains the collapse in China and commodities. And you can see the effect of this reduced leverage when Credit Suisse, Deutsche Bank and Morgan Stanley announce repeated capital raises, layoffs, and/or dividend cuts. Their trading in leveraged products is shrinking as economic activity is slowing. They go hand in hand. World equities are falling and global trade is declining.

Our schoolmarm-ish Chairman of the Federal Reserve, and the vast minions of clueless statististians, and over-educated PhDs, and who have no real world experience, appear blind to this major trend at the heart of the recent and persistent world-wide economic malaise.

So, the Fed Reserve raised the largely symbolic Fed Funds to 0.25 to 0.50 this week. The problem is not the rate rise itself, but even a small 0.25% rise in Fed Funds rate surely will require some removal of liquidity (reduce excess reserves?) at a time when liquidity is already shrinking world-wide. Maybe it had to happen, but I don't think the Fed knows what they are doing. Here's another graph showing shrinking liquidity in 2015 reflecting the same message as the first graphic above.

Global Liquidity Shrinking Before the Fed Raised Rates
The Federal Reserve, who is supposed to be so sophisticated, is completely missing evidence that their narrative of a strong economy is dead wrong. They appear clueless to the growing evidence of recession in the US and world.

The world and US is tilting toward recession. The fall of Junk credit (and yields rising) is giving a fairly clear signal that a recession is starting in the US. Rates of 16% for a large swath of job producing smaller enterprises snuffs-out any hope of job growth. And already a fairly wide variety of countries in the world are in recession including Canada, Japan, Brazil, Russia and nearly all of the commodity producing countries. Europe may not be in recession but it's close. China appears to be imploding under the weight of bad debt. Recession abroad has caused US exports to decline which hurts US GDP.

Even most will admit that US manufacturing is in recession. Yeah they say, but it's only 12% of the economy, right?  Well, the problem is that manufacturing drives many other sectors, such as transportation and employment.  It's no coincidence that the Dow Transportation index is down 20% this year. If manufacturing is in recession, it won't be long before there is a general recession. Already US retail sales in 2015 are the worst since 1990 and they are 70% of the US economy.

US Retail Sales (Ex-Autos) Is Worse Than Recession Levels. Depression Levels?

US Retail Sales Is Worse Than Recession Levels. Depression Levels?

Let's sum up the indicators that are nearly shouting recession: US durable goods orders are declining, US retail sales in 2015 are as weak as they have ever been outside of the great recession in 2008/2009, US ISM manufacturing is shrinking, Global trade is declining. US exports are declining. US corporate revenues are declining and corporate profits are now down year over year. These things don't occur together except in contractions. Due to high debt levels across the world, and with interest rates already at near zero levels, this next contraction will last for a long time since there are no policy tools to offset it.

US Manufacturing In Contraction Late in 2015
All of the commodity producers are already in recession due to commodity prices dropping to multi-decade lows. This, in turn, causes demand for US exports to decline.

Global Trade is Declining
Yep, time to raise interest rates, Janet. They don't know what they are doing. But does anyone is the US government know what they are doing? Nope.

Monday, December 21, 2015

Time For A New American Revolution: Burn Down Our Bloated, Failing Central Planning Bureaucracy!

Much of the Federal Government and Federal Reserve "central planning" bureaucracies should be largely burnt to the ground. There are so many failures and it is so expensive that they are threatening our Nation. The "Government" colossus is marching our once-great country to ruin. Anything the US Government touches turns to shit. How can anyone want more of it?? Dismantle it! Devolve power back to the States. Save our nation from financial and social ruin!
  • Socialized medicine as exemplified by the Veterans Administration is delivering sub-par care and killing veterans (higher infection rates due to poor management and unclean conditions) at an astronomic cost. Privatize it!
  • The chronic failure that is known as AMTRAK delivers sub-par, slow, Soviet-style service. It's slow and shabby. It shows what happens when the government tries to run anything. Privatize it! Amtrak crashes are killing passengers. The VA is killing veterans. How bad does it have to get for people to recognize that Big Government doesn't work?
  • The US Postal service has now become like Amtrak: a chronic financial failure. Privatize it! Japan and the UK just did. The fact that this isn't under consideration right now is another example of the failure of Big Government. "Oversight" is a sad joke.
  • Even our Defense Department is a failure. At $700 billion per year, it hasn't won a war since World War II. The Korean War was a draw, but we've lost all of the others. And we're causing chaos wherever we intervene such as Iraq and Afghanistan. We should have recognized our failure when we deposed Saddam Hussein, but the next administration worked to depose Assad, Gaddafi AND Mubarak, then suddenly abandoned the failed Iraq "experiment" setting up the rise of ISIS. All of these disasters are of the highest magnitude. What a complete and utter disaster!! I'm not writing this out of intellectual interest. Millions of people have died! Next is world war and millions more losing their lives. Didn't Ron Paul warn us about this??
  • Our TSA and Homeland Security is nearly a complete waste of money. The TSA missed 95% of planted fake bombs meant to "test" the screener's effectiveness. Only the Government can fuck up something this bad. Not surprisingly, the TSA has never caught a "terrorist." The whole thing is a joke since we should profile Middle Easterners from primarily Muslim countries and save $billions per year. Instead, we still grope millions of little white-haired ladies and middle-aged men in a ridiculous charade. Turn over airport security to local governments or the airlines. They couldn't do worse than the Feds! Don't get me started on Political correctness either regarding profiling!
  • In the case of the Boston Bombers, our vast bureaucracies failed to identify them and then, after their attack thousands of Homeland security and FBI agents swarmed into Boston with all their expensive vehicles to look for the Boston bombers. But it was local police, local citizens and and ordinary police work that caught the Boston bombers. Who needs the zillions of Federal agents and the vast and expensive bureaucracy? We need the FBI is all. Get rid of Homeland. Repeal the Patriot Act.
  • The NSA has only caught 1 or 2 terrorists in it's long existence and at an astronomic cost. Now, we find out, through "mission creep" (due to a failure of oversight and nonexistent budgeting) that it's monitoring your emails, tweets, any internet activities and your phone calls -- all against the Constitution. And it keeps growing and growing and hacking into foreign governments, spying on foreign leaders, reading their emails. We are not even allowed to know all the shit that they are doing! But you can rest assured that none of it is good. Burn it down! Repeal the Patriot Act.
  • You have the Federal Reserve, our Central Bankers are just massive central planners now. They have two mandates: to control inflation and maintain a sound banking system. Now it is clear that they have created 2 devastating financial crises in the past 15 years and a 3rd one is starting as I write this. Their bizarre monetary "experiments" of ZIRP, currency debasement and "money printing" are bringing ruin to this nation. This is about as far away from sound money as could be. For 7 years they have punished every saver in this country with zero interest rates to prop-up unworthy banks. Things have gotten so perverse that, rather than controlling inflation, they're trying to create it! And failing at that too (except soaring rent and food)! They've managed to reignite an "echo" housing bubble too. They just raised interest rates for the 1st time in 9 years as the economy is sliding into recession. The Fed Reserve has failed to predict every recession in recent history. What good are they? They only cause trouble! Burn it down! Ban "money printing" or eliminate the Federal Reserve entirely.
  • The "Government," including the Federal Reserve, caused the crisis of 2008/2009 and we are still suffering from it. At least six administrations boosted a housing bubble through favorable tax incentives, low rates and shoddy supervision. The FHA, Freddie Mac, the Federal Reserve and Fannie Mae all helped create the great housing crisis and resulting bust. They're still at it! They are creating a new bubble in housing and everything else! Ruination is in our future thank to "government."
  • The SEC is a complete failure. It's allowing high frequency traders, who collect a small amount on zillions of trades and are front-running investors. How else can they consistently make $billions?? The SEC failed to do their job in 2004 to 2007 as banks were throwing themselves headlong in mortgage-backed securities with questionable and fraudulent origins. Regulators failed to regulate and failed to do so at an astronomic cost! Burn it down! Even Mark Cuban, wrongly persecuted by the SEC and ultimately vindicated, says "Burn it down!"
  • Defenders of big government cite the "success" of Medicare and Social Security. But, the Democrats refuse to acknowledge that Social Security and Medicare are in the late stages of a demographic crisis where the number of workers compared to beneficiaries is rapidly dropping toward 2 to 1 (from 16 to 1 at conception).
  • Even as SS and Medicare is a long-run demographic disaster in the making, Obama had to enact ANOTHER entitlement that is already failing. ObamaCare, sold by promises that are all proven wrong and false, will add to the deficit forever. It's caused a huge cost burden for the average American and has dramatically hurt 98% percent of the country while helping only 2%. All along, since inception, the administration has been giving misleading enrollment data. Now, more than 50% of the Federal Co-ops have already failed and health insurance companies, reduced to being a "utility" for the inept Fed bureaucracy, are losing money. It won't be long before they ask for a bail out. Even the website development for O'care was a joke that only "Government" and government grade ineptitude can "accomplish."
  • It's not just health insurance costs that the government is inflating. Government guaranteed student loan debt is fueling a huge and unsustainable increase in college tuition costs and student debt. That bubble has reached $1.25 Trillion, enslaving an entire generation with debt. The whole thing is blowing up as delinquencies have reached 13% and rising. Proving that government never fixes anything, they are still enabling more and more of this debt -- despite evidence that the bubble is bursting! You'll soon read articles that much of that money was spent on everything BUT college costs.
  • "Your" government can't even remotely manage immigration! They can't do anything right! When I get an annual visa for Thailand, I have to report to an immigration office every 3 months to declare my address and phone number. If I don't, the police come looking for me. And, if I overstay my visa, I get a big fat "OVERSTAY" stamp on my passport and have to pay a big fine!. Thailand manages immigration FAR better than the incompetent, insane and screwed-up US Federal Govt. And"your" government doesn't even want to monitor our porous southern border, The pathetic Obama administration is intentionally releasing nearly anyone and everyone and 99% of the released persons know they don't have to show up for immigration hearings! Screwed-up is not a strong enough phrase. And if the border States step-in to fill the gap, the Feds come down on the States with lawsuits.  It's time for States to challenge the Federal Government and kick 'em out! And if they come back with weapons, fight them with weapons. That's WHY we have a 2nd amendment. We will one day have to fight our own government.  It's time for a new American Revolution, except this time our enemy is the US government.
  • The "weaponized" EPA is now even harassing local homeowners for small ponds that they are building on their own land! Talk about mission creep! Jesus! They are out of control. Now, through a ridiculous abuse of the Clean Air Act, they are marching headlong to regulate every business in the country (and then every house?) to "control" carbon emissions. And they'll need carbon police too! All this due to Democratic Party worshiping the false idol of climate change. Get rid of the carbon regulation mandate (mission creep). Downsize it. Devolve power to the States and Localities! Get back to a true Federal system that we had for 2/3rds of our history!
Will we ever learn?? We need a right wing dictator to dismantle much of the failed government apparatus. Then we need to ban public unions from all levels of government to keep costs down.

Tuesday, December 15, 2015

Democratic Bias of US Media Made Perfectly Clear

Some 93% of mainstream media 'personalities' in the US Media are Democratic; nearly all of them. That's just a fact. And any pretense of independence was thrown out the window and bias exposed, in the hatred and condemnation evident in this week's emotional, vitriolic and ad hominem media attacks on Donald Trump. Their heads blew up! They called him Hitler, fascist, etc.

Trump dared challenge the false Democratic/media narrative, led by Obama, that 99.9% of Muslims are peace loving. That is patently false -- especially abroad -- as substantial minorities support Jihad. Trump merely suggested that we temporarily halt immigration of Muslims given the attacks in San Bernardino. He also said that we should "profile" to help contain the threat.

He also blew up the false narrative that Federal employees are able to "vet" these immigrants. Today it was reported that that the woman in the San Bernardino shootings has been openly advocating for violent Jihad for years on Facebook prior to her visa approval, but the Feds are forbidden to check social media in their "vetting" process!  Incompetence, stupidity, political correctness, and absurdity is the rule for the entire Federal bureaucracy -- all the way to the top.

But their reaction shows the media for what it is -- advocates and even the propaganda arm for the Left and Democratic party. Like all Democrats, their thinking and attacks are hysterical, emotional, and irrational. They are not only unfit to govern, but unfit to report news.

You could say that Trump screwed up by not saying that we should temporarily ban immigrants from certain countries in the Middle East including Syria and most of the other predominantly Islamic middle eastern countries.  But you can't even have this conservation with screeching, deranged people -- all Democrats.  Therein lies the crux of our problem.

But Democrats don't want a conversation. They think they know everything. But the truth is that they are wrong about everything.  Obama is wrong about everything.

The only one crazier than Trump is Obama who's plan is to bring MORE Muslim immigrants and to trust our "vetting process." He and the Media are complete fools.

Sunday, December 13, 2015

The Collapse Begins

The large US junk debt market has been crashing for a month now, with spreads/rates reaching 2009 crisis levels of up 17% interest rates. That's amazing in itself. See Two Charts That Show the Financial Crisis is Here.  Zero Hedge noted today that the last time Junk Bonds hit 17% interest rates, Lehman filed for bankruptcy (on Sept 15, 2008).

They went on to muse:
We can't wait to find out if indeed Yellen's first rate hike in 9 years this Wednesday unleashes a Lehman-like neutron bomb that leads to the full collapse of the junk bond market first, and then the shockwave spreads across all asset classes leading to the same financial devastation witnessed at the end of 2008, unleashing the longest period of "free capital markets" central planning the world has ever seen.
It might not be THAT dramatic or could it?  Just think about the meaning of 17% interest rates for a large portion of smaller US businesses-- in a zero interest rate world no less! These businesses are creating the jobs.. Large corporations can still borrow at 3 or 4% but big corporations don't create the jobs. And when they borrow, they are just buying back their stock, NOT hiring employees or investing. This is partly why there has been a poor recovery since 2009--no "real" business investment.

The reason for this current junk bond credit crunch is that liquidity and the economy are contracting. Those two things go hand in hand. All year, retail sales have been some of the worse seen in 30 years outside of the most severe recession of 2008. Durable goods orders are contracting, ISM manufacturing went below 50% last month. Business inventories are ominously rising and portend more production slowdowns. US exports are declining, world trade is declining, Manufacturing is in recession both here and abroad. All the commodity producing countries are in recession including Russia and Brazil. Also, Canada and Japan are in recession. Europe is near recession.

The US manufacturing recession will, in all likelihood, morph into a general recession and nearly certainly so if credit (and then equity markets) continue to crash. Rising business interest rates, in addition to the sinking business environment indicated above, is solidly recessionary.

Against this background, the Federal Reserve and Janet Yellen have insisted that the time is right to raise rates. They have a near-perfect record of being completely wrong, out-of-touch and are set to tighten monetary conditions at the worse possible time. Like the rest of Washington, they don't know what they are doing, they have no real world experience and they are so incompetent that they wouldn't make it in the private sector.

A Fed funds rate rise or not, it appears that, absent a reflation of oil and other commodity prices, sovereign debt of commodity producers will be junk and in distress, ie., Brazil debt will soon be downgraded with a potential EM contagion from there. Already Russia, Argentina, Ukraine, Venezuela, Brazil are facing crises with the potential of defaults. As is the likes of Glencore.

It's not yet apparent, but one or more of the European banks may be the next Lehman. Notice how Credit Suisse, Deutsche Bank and lately Morgan Stanley are cutting dividends, repeatedly raising capital and firing employees -- and that's before the environment is in crisis. Imagine what it will be like when there IS a crisis?

The Federal Reserve will revert to the only thing that they know how to do:  easing and money printing.  But money printing has already been discontinued as it no longer works.  They could print but the money just shows up on a balance sheet as "excess reserves"with some leakage into financial markets.

For it to make it into the real economy, money must be "lent into existence." I think ZIRP or NIRP will be a piss in a bucket compared to a tsunami of bad debt/defaults that may appear. Confidence is a delicate thing.

All this because the world abandoned the gold standard which anchored currencies to something limited that governments (and Central bank PhDs) cannot pervert. That anchor kept budget deficits and trade deficits limited. Instead, fiat money builds up huge imbalances -- both budget deficits and trade deficits that blow up. And we're not even mentioning the excess of leverage of all types.

One day, out of the ashes of world destruction, a new generation will re-establish a gold standard once most of world's "money" has gone to "money heaven." It's possible that world population will be much lower too as part of that destruction.

    Friday, December 11, 2015

    Unworthy Martyrs

    Why do the black activists and race hustlers like Obama, Holder and Sharpton and other black "leaders" choose such unworthy "martyrs" when they play the race card?  Perhaps it's because there are so few worthy ones?

    Race hustlers like Sharpton and Obama rally to cases where white police interact with black persons where there is the appearance of wrongdoing. The stupid and Liberal (adjectives that go hand in hand) media help to raise the ante in the court of public opinion. Naturally the media fail to report the fact police operate in environments where black persons commit many crimes at 7 times the rate of whites putting officers in a "war zone."

    But remember how notably silent they are when black perpetrators gun down white officers. This shows their true intent and bias: to start a race war, disrupt the social fabric of the country and start a campaign against law enforcement. It's outrageous that the President of the United States himself is complicit in that effort. Therefore he is complicit in murders of black persons in Baltimore when the city erupted in lawless, black-on-black violence when the police backed-off their duties in response to this war on police and the "witch hunt" trial of 6 police officers.

    Obama is also complicit in numerous murders of white police officers across the nation due to this war-on-law-enforcement "activism." Obama and Holder also coordinated protests using 'professional' protesters in Sanford and Ferguson, so they are also responsible for deaths and property loss in Ferguson riots -- riots that hurt only responsible black residents.

    I call those "high crimes and misdemeanors" and impeachable offenses.

    Notable are the recent cases of Sandra Bland, Eric Garner, Michael Brown and Freddie Gray. But right away, it's easily apparent that all of them committed infractions, resisted arrest and failed to comply with officer's commands.

    Perhaps these "victims" act the way they do is because there are rarely daddies in the homes to teach basic lessons including the need to respect and cooperate with police? The likely root cause of their difficulties is a collapse of the black families whose decline started with Great Society income support that continues to reward the absence of a dad. When 72% of black families don't have a dad, and 90% of all black dads are emotionally or otherwise unavailable, the result is wild children who are in constant trouble with civilized society.

    Gray and Garner had huge rap sheets. Gray had 18 arrests. Garner had 30 arrests since 1980 on charges such as assault, resisting arrest and grand larceny. Sandra Bland had 10 run-ins with police officers in Chicago and Texas. She was in arrears by some $7,500 in past due traffic fines. I'm surprised there weren't warrants out for her arrest. Maybe there were?

    Eric Garner, the 350 lb black guy in Manhattan, who resisted arrest was wrestled to the ground. He was reported to have said "you're choking me, you're choking me" at least 15 times while wrestling with police -- proving beyond a shadow of doubt that he WAS NOT choking. (how could he have the breath to say that repeatedly if his airway was restricted?) The officers wrestled him on the ground but his death was a cardiac event on the way to the police station. A grand jury declined to indict officers.

    Egg on all the race-baiting faces.

    Michael Brown, the thug in Ferguson, who was caught on surveillance video robbing a convenience store and assaulting the clerk minutes before his run-in with Officer Wilson, also apparently had a 2nd degree murder charge as a juvenile (records sealed).  The grand jury and forensics confirmed that he fought then charged Wilson. Is there any doubt that his life would have been a life of crime? He was hardly the "gentle giant" the media tried to portray. ABCNews, a thoroughly discredited and incompetent media outlet, continued to portray Michael as an angelic kid who was going to college, even a day after the convenience store video blew up all the credibility of all those involved. The claim that Michael was going to college was a complete fabrication. He was heading to jail.

    Egg on all the black, race-baiting, and incompetent media faces.

    Sandra Bland, who was arrested by a cop in Waller County, Texas, committed suicide three days after her family refused to bail her out. She became a media darling for the "political correctness"crowd and Black Lives Matter crowd. The family blamed the police for her death.

    But Sandra had a long history of run-ins with cops.  According to NBC5, she she owed a total of $7,579.00 in court fines resulting from five traffic stops in various Chicago suburbs (including a DUI), and she had been cited several times for her failure to pay those fines. She had at least 10 encounters herself with police in both Illinois and Texas in past years.  The words "Failure to comply" was frequently cited by officials and police.

    In all these cases, once facts are gathered, the credibility of the complainants largely dissolves. In a publicity stunt, funded by who knows who, Sandra Bland's family filed a lawsuit against Waller County in order to "find out" what really happened to Ms. Bland. At a press conference, when someone asked the family why they didn't bail her out, the family walked out of the conference -- along with their credibility. You see, a despondent Ms Bland killed herself three days after her family refused to bail her out. Bail was a modest $500. It's a sad story really, but for the family to make racist allegations is bad.  It's black people who are the racists in this country!

    Egg on all the black race-baiting faces. By the way, there's now a Sandra Bland Boulevard in Waller County. It's sad that they can't find a more worthy person to honor. Bland was a troubled woman with apparent mental problems and is also a symbol of a collapsing Black "culture."

    The entire black community, and it's so-called "leaders,"are thoroughly discredited time after time when their "victims" are found to have caused trouble for themselves. There is usually no white bogeyman -- just black troublemakers in a culturally-collapsed community as far as the eye can see.

    MLK Jr. had a dream where all people would be judged by the content of their character rather than the color of their skin. It's sad that so few black persons including Obama, exhibit so little character. And it's getting worse, not better.