Europe Fills With Unassimilable Third World Malcontents

France is gearing up for another summer of violent protest originating within the growing ghettos of third world immigrants -- overflowing with malcontented youth.

You probably didn’t hear about it, but Muslim youths rioted in Grenoble, France, on July 16, sparking some of the worst instability the country has faced since the 2005 riots. Now, like then, most of the media declined to mention the religious or ethnic background of the rioters, instead painting them as unruly youngsters and covering the eyes of the public to the slow dissolution of France as we know it.

The violence began soon after a Muslim robbed a casino and opened fire as he tried to flee the police, who then shot and killed him. This apparently raised the ire of major elements of the mostly Muslim urban communities who live in poor neighborhoods unassimilated into the greater society. The shooting was seen as an attack on Muslims, rather than an act of justice. Shortly following a speech by an Islamic cleric at a ceremony for the robber, the match was struck. As of now, there are no media reports revealing what the cleric said, if anything, to stoke the flame.

...This is France today. Police must fear that any use of force against a criminal with a Muslim background could be interpreted as an act of brutality and racism that must be responded to with violence.

The country was first forced to recognize the problem in 2005 when riots broke out in 300 towns for three weeks following the deaths of two Muslim teenagers who were electrocuted when they hid in a power station believing they were being chased by police. Fires were set to over 300 buildings and over 9,000 cars. A state of emergency was declared and nearly 3,000 rioters were arrested and 126 police officers were injured. Schools, gyms, stores, churches, and police stations were attacked as the rioters clashed with police. Saudi Prince al-Waleed bin Talal would later boast that he convinced Rupert Murdoch to order Fox News to stop describing the rioters as Muslims.

It didn’t take long for the disgruntled Muslim urbanites to go for a second round. In May 2006, about 100 youths with baseball bats fought with police on the same battlefields from the previous year. The mayor had to flee his home when it was stoned, homemade explosives were tossed at the town hall building, trash cans were in flames, and four cars were blown up. It is not clear what exactly sparked the violence, but two arrests for separate incidents did precede the upheaval.

Then in November 2007, a police officer arrived at a traffic accident involving a police vehicle and motorcycle that killed two teenagers. The officer’s car was set on fire before he could escape. He ended up in the hospital with several broken ribs and a punctured lung from being beaten with baseball bats and iron bars. Clashes with police continued for two days as gang members, armed with shotguns, fired at police as they committed acts of looting and arson. About 130 police officers were injured, 70 cars were burned, and various buildings were attacked including a library and two schools. One police officer described the scene as an “open rebellion” by “urban guerillas.”

These hubs of impoverished, mostly Muslim immigrant communities exist because the French government has designated them as “sensitive urban zones.” These are areas where the police do not have control, effectively making them “no-go zones,” as Dr. Daniel Pipes describes them. Almost five million people live in these areas which are left to themselves, allowing gangs and hostility to authority to breed. _PJM

Since police are reluctant to enter these decaying fortified bulwarks of third world primitivism and violence, these ghettos are developing under the harsh rules of Darwinian evolution. And since these violent-prone zones are overloaded with unassimilable youth, high birth rates bringing ever more of the same is the likely expectation for the future.

Meanwhile, the French and other Europeans are not keeping up in the demographics department, with the violence-prone youths of the primitive third world in their midst.

Debt and demographics. The death of the European subcontinent, by leftist suicide.

Tragedy in Gaza: Evils of Zionism Exposed to World

The mall is not representative of Gaza as a whole, but even in the malls you see traces of religious hatred and fanaticism. It is no less tragic for the reality that they are doing it to themselves. The reason to escape Gaza is to get away from Gazans.

Gaza is a microcosm of hatred, brutality, and mindless self-defeatism. The perversion of the human spirit that one sees in places such as Gaza and south Lebanon is a clear throwback to the tribal hatreds of long-extinct false starts toward civilisation. The nightmare descent into bloody negativity, which is a way of life passed down from parent and grandparent to children, is almost impossible to reverse.

When a society becomes so immersed in hatred, suicide takes on overtones of escape, in addition to the payback and religious redemption motivations.

Does Obama Have Blood on His Hands? More Than You Know

US President Obama refuses to secure the US border with Mexico until he can arrange for a quasi-amnesty immigration policy to be passed. Meanwhile, a lot of people are dying on both sides of the border as a result of Obama Pelosi policies of malignant neglect.

At least 17 young people were killed at a private birthday party early Sunday morning in the city of Torreon in northern Coahuila state. It was one of the worst single attacks of its kind since Mexican President Felipe Calderón began cracking down on drug cartels upon taking office in Dec. 2006.

...In late January, more than a dozen teens were shot and killed at a party in a modest neighborhood at the edge of Ciudad Juarez, the troubled industrial city that sits across from El Paso, Texas.

The first – and, to date, only – public attack at a mass gathering in Mexico, came in September 2008, when a grenade was tossed into a plaza in Morelia in Michoacan state during independence celebrations. Since then, political aspirants have been killed, as were employees associated with the US consulate in Ciudad Juarez. Hitmen have fired on drug-rehabilitation centers and killed Mexicans fleeing checkpoints on the road.

Just last week, perpetrators feigning car trouble detonated 22 pounds of explosives with a cellphone in Ciudad Juarez, killing first responders at the scene. _CSMonitor

The lawlessness and murder in Mexico is reflected by gang violence and random violence and lawlessness of illegals inside the US. President Obama wants to reward this bloody violence because he sees a political advantage for himself and his associates. He wants to make illegals into voting citizens of the US.

Obama feels that if he continues to make it easier for illegals to enter the country en masse, that when the time comes for a legislative settlement, the amnesty-seekers will have a better hand to play.

Unfortunately, Obama's "leaky borders" policy allows violent drug gangs in Mexico to continue growing wealthier and stronger. As the Mexican gangs get more violent, Obama's hands continue to get bloodier, from his part in the tragedy. In the meantime, everyone pretends not to notice.

"Pink Shirted (?) Union Thugs": How Far Would These Goon Faced Tough Guys Go If There Were No Cameras?

Organised labour, organised crime, and the US Democratic Party. Three legs of the troika of doom. Eventually Americans will decide they have had enough, or they will let their constitution shrivel the rest of the way to non-existence.

Once the rule of law is gone, you are left with the rule of thugs.

Better Prepare for the US as a Third World Country

As the US descends into government-made debt and demographic disaster, the rest of the world which had come to subconsciously depend on the US is in for a shock. US residents are in for something of a shock themselves, as the rule of law gives way to the rules of the Chicago Way of lawyer, mob, union, and general thuggishness.

When an individual goes bankrupt in the United States, it’s usually a Chapter 7. When a business goes under, it’s Chapter 11. Farmers have a Chapter 12, and there is a more complex individual option known as Chapter 13.

But what do you call it when a U.S. state goes under? There’s no official “chapter” for that. But it’s looking more and more like there should be. Your humble editor proposes “Chapter 66,” in honor of a famed stretch of interstate.

...“People think we’re becoming a third world country,” says Arnella Sims, a Los Angeles County court reporter. “We are on the verge of system failure,” warns the executive director of the California Budget Project.

“California’s fiscal hole is now so large,” The Globe and Mail further adds, “that the state would have to liberate 168,000 prison inmates and permanently shutter 240 university and community college campuses to balance its budget in the fiscal year that begins July 1… Mass layoffs, slashed health and welfare services, closed parks, crumbling superhighways and ever-larger public school class sizes are all part of the new normal.”

...#50) In 2010 the U.S. government is projected to issue almost as much new debt as the rest of the governments of the world combined.

#49) It is being projected that the U.S. government will have a budget deficit of approximately 1.6 trillion dollars in 2010.

#44) U.S. corporate income tax receipts were down 55% (to $138 billion) for the year ending September 30th, 2009.

#43) There are now 8 counties in the state of California that have unemployment rates of over 20 percent.

#42) In the area around Sacramento, California there is one closed business for every six that are still open.

#41) In February, there were 5.5 unemployed Americans for every job opening.

#40) According to a Pew Research Center study, approximately 37% of all Americans between the ages of 18 and 29 have either been unemployed or underemployed at some point during the recession.

... _DirectorBlue_with links, graphs, and images

In a short time span, Obama has set the federal government on a course of rapid failure, and helped accomodate the collapse of state governments and the private sector.

Find a state and local jurisdiction that is in solid condition and burrow down. And you'd better stock up on food, water, vital medicines, fuel, and necessary items of personal and family defense.

Obama is pouring the distillate of devastation across the land, and Pelosi's Congress is lighting the match. Be prepared.

The Joke is On Minnesota -- and the USA

A group of political watchdogs in Minnesota has proven that Al Franken was elected US Senator on the basis of illegal votes. Franken was declared a 312 vote winner of an election recount, when at least 341 convicted felons have been shown to have voted.

...at least 341 convicted felons in largely Democratic Minneapolis-St. Paul voted illegally in the 2008 Senate race between Franken, a Democrat, and his Republican opponent, then-incumbent Sen. Norm Coleman.

The final recount vote in the race, determined six months after Election Day, showed Franken beat Coleman by 312 votes -- fewer votes than the number of felons whose illegal ballots were counted, according to Minnesota Majority's newly released study, which matched publicly available conviction lists with voting records.

Furthermore, the report charges that efforts to get state and federal authorities to act on its findings have been "stonewalled."

"We aren't trying to change the result of the last election. That legally can't be done," said Dan McGrath, Minnesota Majority's executive director. "We are just trying to make sure the integrity of the next election isn't compromised." _FN

It was obvious at the time that Democratic Party officials in charge of the recount were not serious about disqualifying illegal votes for Franken. And the same attitude is found in Democratic Party voting officials around the country. In other words, this time it was Minnesota, tomorrow it may be your state.

The US Democratic Party is joined at the hip and the head to the US labour movement. But the US labour movement is joined at the lips and the anus to organised crime in the US and elsewhere. In other words, it is not just an embarrassing coincidence that Democratic Party officials and elected representatives in Illinois, New Jersey, New York, Detroit, and elsewhere have proven ties to organised crime. It is simply how things are done when you are a Democrat.

Not that Al Fin has any fondness for Republicans or the Republican Party. The GOP has its own faults and crooked kinks. Just not the type that is likely to get you beaten up and sent to sleep with the fishes.

ACORN, the New Black Panther Party, violent elements of the Nation of Islam, various hispanic separatist movements and pro-illegal immigration movements, pro-jihad Islamic organisations, etc. may as well be thrown into the mix -- at least for this particular administration. If it has a violent history, it is probably in bed with the One, and his buddy Sen. Franken.

Obama Pelosi Destroying US Economy on Basis of Hoax

The Obama Pelosi cap and tax climate bill will explode energy prices throughout the US. It could be the coup de grace for the struggling private sector, already overburdened by Obama Pelosi ham-handed incompetence. Here is more on the climate hoax:

When I was at Cambridge in the 1960s, everyone knew that climate was cyclical and was driven largely by astronomical cycles. And there is good evidence that recent decades have also seen warming on Mars and elsewhere in the solar system - pointing to a solar cause.

But the Warmists have the bizarre idea that only CO2 matters. Certainly CO2 is a greenhouse gas, but it's not even the most important one. That's water vapor, and there's nothing we can do about it (as long as the wind blows over the ocean).

I'm horrified that the Environmental Protection Agency has declared CO2 a pollutant. They might as well declare oxygen a pollutant. We are a carbon-based life form, and CO2 is vital to the whole biosphere. Higher levels of atmospheric CO2 drive increased bio-mass formation and improved crop yields.

Al Gore is excited by a correlation between mean temperatures and CO2 levels over the past 600,000 years. He's right about the correlation, but he doesn't mention that the temperature graph leads the CO2 graph by several hundred years. The inescapable conclusion is that temperature drives CO2 - not vice versa.

Over the longer term, the correlation breaks down entirely. Current atmospheric CO2 levels are quite low in geo-historical terms. They have been 10 times as high in the past - and that was during an ice age. There is no tipping point. There is no runaway global warming.

Our efforts to control climate by reducing emissions are doomed to failure. Bjorn Lomborg, author of "The Skeptical Environmentalist" (Cambridge University Press, 2001), has studied the economics of climate change and estimates that the European Union's 20 percent emissions-reduction target will cost around $250 billion a year. Yet the impact by 2100 on global temperatures is likely to be only 0.05 a degree Centigrade - almost too small to measure.

The EU's "Cap 'n' Trade" scheme has been a disaster. It has imposed high costs on industry, achieved little or nothing and introduced very severe distortions into the market. As a conservative, I hate new taxes, but if we had to disincentivize CO2 emissions, a straight carbon tax would be a vast improvement (especially if offset against other taxes to be revenue neutral). It would be fair, inclusive and predictable, and avoid the distortions of Cap 'n' Trade.

They argue that Cap 'n' Trade is "a market-based solution." But it's a wholly artificial market, trading in a virtual commodity, and subject always to the whims of bureaucrats and legislators. The carbon price in the EU has been extremely volatile, and often close to zero. I appeal to America: Look at the European experience before you go down that route.

Don't believe the nonsense about "green jobs." President Obama likes to cite the Spanish experience. But recent reports from Spain show that most of the green jobs created were ephemeral, while high costs meant that each new green job cost two or more jobs in the real economy. They talk about the economic opportunities presented by green industries. But how can you achieve economic growth by doubling the cost of electricity? _Examiner

The clowns in charge of the US legislative and congressional branches are intent on making permanent and irrevocable changes to the root structure of US society.

Concerned that the radical Pelosi Congress may lose control in November elections, Obama Pelosi is determined to ram as many radical changes through the perverse system as possible. Then let the devil take the hindmost.

Imagine No Uncles, Aunts, Cousins, Nieces, or Nephews

The burden of China's one-child policy will fall upon those who need a strong extended family structure. And on successful people who would like to be able to do something to help their kin -- but simply do not have any. A society without uncles, aunts, cousins, nieces, nephews -- without any extended families -- is difficult to imagine for most outsiders. Particularly those from tribal societies such as those in Central Asia, North Africa, the Middle East, etc.

The one child society is the opposite of the tribal society -- where wealth and trust reside within the clan and tribe, and all outsiders are mistrusted and reviled. In a one-child society, everyone is an outsider.

Thirty years ago this September, China began seriously pruning family trees of cousins — and simplifying kinship taxonomy in the process — through the mandatory enforcement of its so-called one-child policy (a misnomer because, among others, rural families and ethnic minorities are allowed to have more than a single kid). By becoming the only country in the world to make compulsory family planning a pillar of national identity, China hoped to prevent a Malthusian nightmare....

...With a current population of 1.3 billion people, China now boasts fertility rates of around 1.6 births per woman, well below the 2.1 replacement rate at which a population is maintained. But the country is also saddled with one of the planet's worst gender imbalances, largely a result of women aborting female fetuses due to a traditional preference for male offspring. Other countries such as India and South Korea also have skewed sex ratios, but the pressure to bear a son is all the greater in China precisely because many families are limited to just one child. The Chinese Academy of Social Sciences estimates that by 2020 there will be at least 24 million "bare branches" — men destined to stay single because there are not enough wives to go around. As more of those boys become bachelors, China risks all sorts of social plagues — from criminal gangs to greater trafficking in women.
The other danger is that China will grow gray before it is rich enough to cope. Reducing population growth has meant that per capita GDP rates have zoomed upward. But factories are now facing shortages of young, skilled labor. By 2050, one-third of Chinese will be elderly. Despite its communist heritage, the People's Republic has little in the way of a national social-security system. Will a generation of "little emperors" be willing or able to support their parents and grandparents?...

...In today's urban China, where fertility rates have dipped so low as to convince local officials to actually encourage procreation, many couples are still choosing a single child. Their preference can be partly explained by 30 years of official propaganda. But it's also a choice made the world over by yuppies who don't want their freedom and finances compromised by the pitter-patter of too many little feet. If anyone's still using my old Mandarin textbook, it's probably safe to skip that page with the dizzying array of cousins. _Time

SunBin

GeoChinaOneChildPolicy

Is Chinese society strong enough to hold together when one third of the population is old, and there are not enough young people to take care of the hundreds of millions of elderly? Without strong kinship relations, and in the face of possible economic turmoil, will overworked single children -- perhaps with single children of their own -- want to take the time to watch over sick, frail, and possibly demented parents or grandparents?

Orphans and parents who lose children to accidents or disease will find themselves in a particularly bad situation.

An extended family with close ties is able to do far more for individual members than most politically focused persons tend to admit. Perhaps that is why religions are beginning to make inroads into Chinese society. Membership in religious organisations may provide the extended family which restricted kinship cannot provide.

Testimony Against Obama's Justice Department -- Racial Bias

A policy of systematic racial bias appears to be in place at the Obama Justice Department. Besides the failure to prosecute the racist New Black Panther Party for voter intimidation and other infractions of voting rights law, the Obama Justice Department has apparently chosen to systematically disregard cases where the victims were white and the accused were black.

While such policies may not be as bad as some under the Clinton Justice Department -- which directly resulted in the deaths of informants against organised crime -- this type of blatant racial bias should not be tolerated at the city or county level, much less at the federal level.

The Chicago way of the Obama administration is simply the mob machine style of politics that has taken control in any number of corrupt Democratic Party controlled adminmistrations at all levels of government. Such criminal political machines typically maintain close ties to organised labour, and therefore to organised criminal organisations.

In such criminal administrations, prosecution is extremely selective, and citizens are typically not protected from genuine crime and oppression. Instead, citizens are subjected to ever greater levels of infringement of basic rights. Throw in the growing threat of frivolous lawsuit from the trial lawyer cabal, and the average person's rights are being cut off at the knees.

We have seen how the Obama administration has diminished the ability of persons in the private sector to create new businesses and jobs. By inflating the sinecured public sector at the expense of the productive sector, Obama Pelosi is shrinking the wealth creating capacity of the entire nation.

The nation was on the same downward trajectory under President Carter, before President Reagan rescued the drowning nation's economy. Now Mr. Obama has come to finish President Carter's unfinished mandate of irreparable malaise. That is the one thing he appears to be good at, other than teleprompter lip-synch.

A Downward Spiral with Obama at the Wheel

The US EPA has invaded Texas in an attempt to energy-starve the Lone Star State into submission. Talk of secession is beginning to circulate once again.

The US government is in no position to lecture anyone on the topic of competency, as the Obama Depression probes the depths of joblessness.

A new batch of documentary films are exposing government schools for their corruption and incompetency. Generations of students have already been lost. How many more will be sacrificed to government ineptitude?

No matter how bad government schools get, you simply cannot shut them down. No matter how bad union teachers get, you cannot fire them. It is a Catch-22 for those who pay their taxes -- and ultimately pay for the corrupt system.

Corruption in the America of Obama Pelosi is beginning to approach the corruption in Russia -- one of the most corrupt nations on Earth. No wonder Obama wants much closer political and economic relations with Russia.

If Obama can stack the Supreme Court with a few more hand picked statists, it will become difficult to distinguish the downward trajectories of the two nations.

Truly, it is amateur hour in Washington DC these days. America is sinking in a quagmire of debt and deception.

The US continues to lose jobs, and Obama hasn't a clue what to do about it. So he does exactly the wrong things.

Under Obama Pelosi, the US is experiencing an unprecedented divisiveness and sense that the nation is being mismanaged out of an innate incompetency residing in Washington DC. If you add the "radical seed" component to the Obama Pelosi plan, you can see more clearly that such a profound level of incompetence could not have occurred totally by accident.

Obama Pelosi has been busy inserting an autopilot into the machinery of government, just in case. This autopilot will make sure that the government continues to run itself into the ground with the same Obama Pelosi level and style of designed incompetence -- regardless of who gets elected to fill the figurehead elected offices and political appointments of government. The ruin is becoming irrevocable. As some of us knew it would.

Excellent Video on Public Sector Pension Debt Avalanche

Cities are forced to reduce the size of their police and fire departments in order to pay the princely pensions of healthy 50 somethings in the prime of their lives. Swimming pools for kids are being closed down, and vital services are being curtailed so that clerks, bureaucrats, and mid level managers can live like millionaires for a longer period of time than they ever worked.

It is not sustainable, folks. It is a slightly subtler form of piracy than the warlords and warrior kings utilised, but piracy all the same. The longer it takes to bring back to sanity, the more bitter the ending will be.

A Moment of Honesty: Caught In One's Own Web

The current president of the US is generally caught up in his own sense of destiny.  But now and then bits and pieces of reality slip through the cracking facade.  And despite the best efforts of a massive news media that adores and covers for him, a massive pseudointelligentsia in academia and professional punditry hungry for radical change, tax supported public sector unions willing to use the fist and club to protect his standing, and a leftist base still living in a fantasyland of wish fulfillment -- the US economy is crumbling beneath the bloating Obama-ocracy.

What else can the economy do?  Obama has crushed private investors, private entrepreneurs, small business -- all the usual sources for new job growth and the expansion of wealth in a healthy private sector.  No one in the Obama administration understands the private sector and its vital role in a healthy economy.  Too, too bad.

I am sick of Keynesian clowns who do not know the cart from the horse, who think debt is a free lunch, who think spending and debt are the ways to get out of debt problems and most of all never say how this debt is going to get paid back.

What causes depressions is an unsustainable runup in credit and debt that precedes it, NOT a failure to go deeper in debt.

Anyone who understands 5th grade math should be able to figure that out. Unfortunately, Nobel prize winning economists can't. _Mish

Structural problems are immense and the sad fact of the matter is those problems cannot be cured by more deficit spending. Krugman is correct about a depression, just wrong about the cure. Logically the disease and the cure cannot be the same.
_Mish

"There is no means of avoiding the final collapse of a boom brought about by credit (debt) expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit (debt) expansion, or later as a final and total catastrophe of the currency system involved." - Ludwig von Mises

...Congress and the Fed added to the misery by wasting trillions of taxpayer dollars bailing out banks and Wall Street while leaving the private sector in shambles, and millions of homeowners debt slaves to their houses.

Each time the day of reckoning is put off, the bigger the price down the road. Thus, we should all be fearing more Keynesian and Monetarist attempts to forestall the inevitable collapse.

Attempting to stave off further debt writedowns and another recession is like attempting to stave off a hangover by drinking more whiskey.

Yes there will be short term pain and lots of it to do the right thing now, but there will be greater pain down the road if we don't. _Mish

Americans elected this clown and his troupe. They are going to have to pay an immense price before they are finally rid of him.

The Fear and Hate that Leftists Feel Toward their Detractors

viaImpactLab
When the left wants to caricature its detractors, it has an entire palette of media colours with which to work. Late night talk and comedy shows are willing to do whatever it takes to ridicule anyone who publicly objects to the mainstream steamroller of expanding central control and dictate.

The rules are different when the left attacks the center or the right. When the left is on the attack, there are no limits, no rules of conduct, nothing beyond the pale -- everything is allowed, including violence and various forms of privacy invasion. The end justifies the means, when you are assured of your own righteous purity in the service of the One Truth.

Understanding the way that a person's brain would have to be wired in order to derive any type of assurance or self-confirmation from viewing the caricatures pictured above will leave an educated observer more than a bit discomfited. It is rather like the way a Palestinian's brain is wired, that leads him to rip an Israeli to bloody pieces with his bare hands. Disturbing.

Humans are naturally violent, so it is necessary for any surviving human populations to possess the capacity for violence -- if only in self-defense. But when latent human violent tendencies are stoked by political opportunists, the problem can become endemic or institutionalised. Such perverted societies can promote war in the name of peace, or genocide in the name of tolerance.

Why the left lends itself to this approach is fairly easy to see. It is desperation and fear of loss of power. Such desperation can be used to excuse virtually anything. And it will be.

Is Everything You See, Hear, and Read in the Media Wrong?

It often seems as if the news media is just one giant distraction from the things that people should be paying attention to. The "media as smokescreen" meme is a fairly accurate way to look at the mainstream.

America's demographic makeup is changing, but the US may be the only advanced industrial nation to have a healthy supply of young workers in the year 2050. For the future of African American communities, the greatest threats come from within themselves.

If the US can only survive its greatest threat since slavery -- The Obama Syndrome -- it may revive itself in the post-Obama age. With the threat of a worsening Obama Depression looming, America's approach to economics could certainly stand a hard reboot. The beginnings of the modern industrial age of capitalism were rough and rowdy. For capitalistic wealth creation to succeed, there must be areas of "open frontier", wild ranges of economic, technological, and real space to be explored and settled.

Europe is attempting to pull back from the abyss of financial collapse, but is Europe too deeply into the welfare state mentality to succeed? The emotional appeal of socialism may prove too strong for European intellectuals, despite its fatal flaws.

Thanks Loads, Barney, You Pustular Disgrace

Congressman Barney Frank is the greatest defender of Fannie Mae and Freddie Mac in the US government. So if one is to blame Fannie and Freddie for a lion's share of the great economic bust of 2008, it follows that Barney is just as much to blame.

The current financial crisis did not happen because investment companies were dealing in derivative products that no one understood (the simplistic general Democratic explanation), nor was it a result of an abnormal growth in homeownership rates in the United States (the simplistic general Republican explanation). The real reason for our current crisis is that our economic leaders allowed Fannie Mae and Freddie Mac to mismanage mortgage rates and thus mismanage a substantial portion of our “debt economy” for more than twenty-five years.
Here are the facts that back up this statement. Exhibit 1 shows a 12-month running average plot of Freddie Mac single family fixed rate mortgages against the 12-month running average of the CPI between 1972 and 2008 (nearly the full period of time mortgage-backed securities had been issued prior to the recent financial crisis).

...For the last 27-years (almost the full time for a 30-year loan to mature), inflation as measured by the CPI has averaged 2.99%, yet only very recently have long-term rates begun to come into sync with long-term inflation. With mortgage-rates set so far above what they should have been set in 1983, Fannie Mae and Freddie Mac were allowed to establish a policy that slowly lowered mortgage rates year after year, in effect allowing us to enjoy one refinancing cycle after another so that their mortgage portfolios could grow and grow and grow.

...One, the Federal Reserve was asleep at the wheel. Even though we may revere our esteemed Reserve economists; the Federal Reserve never understood mortgage debt, nor did they ever question mortgage rate policy. Instead, the Fed simply received regular reports from Freddie Mac telling them what the current GSE mortgage rate policy was. The Fed either was ignorant or played ignorant while we added nearly $7.5 Trillion in “new mortgage debt” during the fifteen-year period between 1992 and 2007. Talk about Keynesian economics! Any Reserve Chairman of the Great Depression era would have been envious of what Alan Greenspan was allowed to get away with while collecting accolades—and that does not include the stimulus that was being added during his reign from our Government’s deficit spending and growth in our “national debt”.
Two, demand for Mortgage-Backed Securities, was always there. MBSs have always served as one of the best “risk free” hedges against inflation. An 18% MBS when compared against a 3% long-term inflationary perspective is an extremely attractive product, as is a 14% MBS, as is a 10% MBS. Need I go on? Anyway, what could be safer than investing in American housing? The stock market carries risk, does it not, or have we forgotten what happened in 2000-2001?

So for twenty-five years we Americans took advantage of mortgage rate mistakes made by the GSEs going back as far as the early 1980s to live off our houses and build up our debt to unreasonable levels, while the executives at the GSEs gloated over their growing MBS portfolios and their “well-deserved” bonuses. The money-making machines that the GSEs owned were the envy of Wall Street bankers, so they, too, joined into the game. After all, housing prices would never fall—another gross misconception made by our elite financial leaders. _BI

The situation is still settling out from those decades of plundering by Fannie, Freddie, Barney, friends of the Fed, Goldman, and everyone else who belongs to the revolving-door-of central banking, the government treasury, and big finance.

And Barney just laid the foundation for yet another round of the same bubble, starring the same players as the last bubble of devastation.

Photo credit

Needed: Food that Plants, Cultivates, and Harvests Itself

NextBigFuture
Humans have always dreamed of a Garden of Eden where they could pick their food fresh from the vine every day, without want or toil. One possible step in that direction is the development of perennial grain crops, which survive to grow in the same soil year after year.

Perennial grains would be one of the largest innovations in the 10,000 year history of agriculture, and could arrive even sooner with the right breeding programs, said John Reganold, a Washington State University Regents professor of soil science and lead author of the paper with Jerry Glover, a WSU-trained soil scientist now at the Land Institute in Salina, Kansas.

“It really depends on the breakthroughs,” said Reganold. “The more people involved in this, the more it cuts down the time.”

Published in Science’s influential policy forum, the paper is a call to action as half the world’s growing population lives off marginal land at risk of being degraded by annual grain production. Perennial grains, say the paper’s authors, expand farmers’ ability to sustain the ecological underpinnings of their crops.

“People talk about food security,” said Reganold. “That’s only half the issue. We need to talk about both food and ecosystem security.”

Perennial grains, say the authors, have longer growing seasons than annual crops and deeper roots that let the plants take greater advantage of precipitation. Their larger roots, which can reach ten to 12 feet down, reduce erosion, build soil and sequester carbon from the atmosphere. They require fewer passes of farm equipment and less herbicide, key features in less developed regions.

By contrast, annual grains can lose five times as much water as perennial crops and 35 times as much nitrate, a valuable plant nutrient that can migrate from fields to pollute drinking water and create “dead zones” in surface waters.

“Developing perennial versions of our major grain crops would address many of the environmental limitations of annuals while helping to feed an increasingly hungry planet,” said Reganold.

Perennial grain research is underway in Argentina, Australia, China, India, Sweden and the United States. Washington State University has more than a decade of work on perennial wheat led by Stephen Jones, director WSU’s Mount Vernon Research Center. Jones is also a contributor to the Science paper, which has more than two dozen authors, mostly plant breeders and geneticists. _WSUNews_via_BrianWang

NextBigFutureOriginal study in Science (via Brian Wang)

Al Fin would prefer that more effort go into the development of a perennial barley -- rather than wheat. Beer made from barley is infinitely better than beer from wheat, and who has ever heard of a single-wheat Scotch? No, the best whisky is single malt, the malt being made from barley.

We are in the midst of a biological revolution. That revolution will certainly spread to agriculture, and everything else that biology touches. Fuels, chemicals, animal feeds, plastics, and more.

Expect conventional food crops and innocuous ornamentals and wild forage to be modified to produce virtually any chemical, any compound. I think you can see with a little imagination, that things are already well out of hand and soon to be completely out of control. Try to use your brain, because by the time the reality of tomorrow's harvest hits the mainstream, it will already be too late for the dull majority.

Americans Have 2 Years to Put Their Economic Affairs In Order

As Niall describes, when the debt loads become so large, it only takes a small increase in rates to create a fiscal crisis because you become overwhelmed by the huge amount of debt issuances that you need to service. For example: Increasing interest rates by 2% on bonds with the overwhelming amount of debt we have today might be the equivalent of taking rates to 8-10% in the early 1980's when it comes to the percentage of GDP it will cost us to service the debt (pay interest on the debt).

The bond market will eventually call the Fed out by taking rates higher as they begin to realize that our GDP will simply not be large enough to service the debt.

Will the PIIGS and the rest of Europe get called out before us? Sure, but eventually we will end up in the same place; our situation is no better. We get a pass for now because we are still considered to be the safest haven left. Or as I like to say: The best of the worst!

This is all unsustainable and I think the reality is beginning to set in that we cannot continue to spend like this. Anyone that has a job and pays bills understands that you cannot spend more than you bring in every month over a long period of time without going bankrupt.

The problem we have here is the political will is not there to make painful decisions we need to make in order to clean up our fiscal house. It's going to take a fiscal crisis similar to Greece in order to finally force the government to clean up its balance sheet.. _SeekingAlpha

There will be no fiscal discipline, no national fiscal housecleaning. Not under Obama Pelosi or any equivalent government. That is why Americans -- and all who rely on the American economy -- need to put their economic affairs in order.

The blowback from this debt buildup will be devastating, and global in extent. The US needs to begin pulling back its military forces -- particularly ground forces -- before the US government loses all credibility. Otherwise, the precipitous withdrawal of overseas troops made necessary by the economic collapse of the US government, may resemble Dunkirk.

Obama is determined to turn Afghanistan into another Vietnam. If his economic policies create the disastrous collapse that many observers anticipate, he will succeed in his perverse determinations of designed defeat.

We Are Marching to Utopia...We Will Soon Be There

...optimists and idealists -- with their ignorance about the truths of human nature and human society, and their naive hopes about what can be changed -- have wrought havoc for centuries....instead of utopian efforts to reform human society or human nature, we [should] focus on the only reform that we can truly master -- the improvement of ourselves through the cultivation of our better instincts. _OUP Review of "Uses of Pessimism"

Sure as I know anything, I know this - they will try again. Maybe on another world, maybe on this very ground swept clean. A year from now, ten? They'll swing back to the belief that they can make people... better. And I do not hold to that. _Captain Malcolm Reynolds

There is something deep in human nature which has resisted change -- despite the best efforts of crusaders, utopians, religionists, and wishful thinkers -- for many [tens of?] thousands of years. After countless failures to reform the human spirit, most utopians are unfazed. If they can only grab enough power and control over how resources are distributed, they are sure that they can bring perfection to the land, under their own benevolent leadership. "The land will heal, the sea levels will begin to subside, and every man will say to every other man, you are my brother." And so on.

Philosopher Roger Scruton -- author of The Uses of Pessimism -- takes a somewhat more reluctant view:

The belief that humanity makes moral progress depends upon a wilful ignorance of history. It also depends upon a wilful ignorance of oneself – a refusal to recognise the extent to which selfishness and calculation reside in the heart even of our most generous emotions, awaiting their chance. Those who invest their hopes in the moral improvement of humankind are therefore in a precarious position: at any moment the veil of illusion might be swept away, revealing the bare truth of the human condition. Either they defend themselves against this possibility with artful intellectual ploys, or they give way, in the moment of truth, to a paroxysm of disappointment and misanthropy. Both of these do violence to our nature. The first condemns us to the life of unreason; the second to the life of contempt.

...In order to see human beings as they are, therefore, and to school oneself in the art of loving them, it is necessary to apply a dose of pessimism to all one’s plans and aspirations. _GloomMerchant

In another piece, Scruton presents a paradoxical recommendation for how to teach children to think for themselves, logically and clearly:

...children are drawn to magic...they spontaneously animate their world with spirits and spells...they find relief and excitement in stories in which the heroes can summon supernatural forces to their aid and vanquish untold enemies – these facts reflect layers of deep settlement in the human psyche. But they also remind us that, in the life of the child, belief and imagination are not to be clearly distinguished, and that both serve other functions than the pursuit of truth.

...humanists should wake up to this point, and be careful when they seek to deprive their children of enchantment, or to replace their spontaneous fantasies with the cold hard facts of empirical science. It could well be that religion is a better discipline than pop science, when it comes to shaping the rational intellect, and that [we can offer our] children more in the way of a solid foundation, by anchoring their imagination in sacred stories and religious doctrines, than they are likely to be offered by those “Darwinian fairy tales’” as David Stove has called them, which have gained such currency in the wake of Dawkins and Hitchens.

In response to a child’s metaphysical curiosity grown-ups can say that everything has a scientific explanation. But they will know that this is a lie. The proposition that everything has a scientific explanation does not have a scientific explanation – it describes an amazing fact about our universe, a point where reasoning falls silent. There are many such points, as anyone who has children knows: why is there anything? Why should I be good? What existed before the Big Bang? What is consciousness? You can wrestle with these questions through philosophy, but science won’t answer them.

Children have an inkling of this. They also recognise that behind these questions lies a huge void – an emptiness which must be filled with love and reassurance, if their existence is not to seem like an accident. _Art_of_Certainty

Utopians try so hard to purge their children's minds of falsehood and "error", to create the perfect children of rational thought, capable of seeing through all the corrupt fables of the past. Except...children will be who they will be. You cannot make boys into girls or girls into boys without destroying who they are. And you cannot make humans into angels without ruining the essence of what they are. And still the utopians continue to try -- until they finally throw their hands up in complete exasperation at and condemnation of the utter evil of those who do not think along the same lines as themselves, the utopians.

The disgusted dismissal of homo rapiens and all his works that we find spelled out by John Gray in Straw Dogs is not a form of pessimism. It is an attempt to dismiss humanity entirely, as a kind of plague on the face of the earth. That kind of misanthropic nihilism is of no use to us. It removes the ground from all our values, and puts nothing in their place. _GloomMerchant

At that point, they often begin to plot and fantasize the great dieoff, to cleanse the otherwise pristine Earth of the incorrigible human demons who infest the lands and oceans. Fortunately, utopians are as incompetent in planning the great dieoff as they are in most other aspects of their lives.

The point is not to resist all change or improvement of humans. But any lasting change for the better is likely to happen from the bottom up, not from the top down.

Nothing illustrates the different approaches to a better world than the contrast between the French and American revolutions of the late 19th century.

The primary difference in causes that led to the American Revolution and the French Revolution was based in the world view of the innate goodness or innate evil of man. _Hyperhistory

Not all utopians believe in the innate goodness of men -- sometimes they only believe in the innate perfectibility of men. But utopias born of such ideas all come to a bitter end.

Every child has to learn to think for himself, from the beginning. But he must have a beginning from which to start.

The need for foundations is quite clearly an adaptation, and these foundations must provide the promise of protection and love, if they are to fit the new organism for its brief time in the world. If that is so, you are not going to eliminate the need for faith: the best you can do is to withhold all objects of faith, so that a child goes hungry into the life to which he or she is destined. More often than not, a humanist education will leave a child exposed to massive and mind-clogging superstitions of the Harry Potter and Star Wars kind. But these superstitions contain far less in the way of insight than is contained in the first chapter of Genesis.

Religious stories are also the result of natural selection – though selection at another level: they have come down to us because they have fulfilled a moral need. They have survived refutation because they contain, beneath their superficial falsehood, the moral truths that people need, when they must order their lives by good examples. _The Art of Certainty

This is true not only of religious stories, but of all the mythology and lasting moral fables from antiquity. Children must have some kind of foundation that transcends deductive logic, because that is how minds begin. Then, later, when they choose to either reshape or reaffirm their beliefs, they will have a sense of having decided for themselves, and feel stronger for it.

Yes, humans can make choices that make them better. Improved nutrition of mother and child can make humans stronger, smarter, taller, and sometimes capable of clearer thought. But a power structure that attempts to legislate morality, to engineer the moral and ideological purity of the human souls of its citizens -- that power structure is morally bankrupt, and deserves to die quickly. If it is allowed to continue, its leaders will eventually decide that the recalcitrant citizens do not deserve the benefit of the leaders' great wisdom. Then, beware.

This question has been acquiring an ever greater urgency over the past century -- even longer. It is now coming to a head in the demographic and economic crises of many of the world's most advanced nations. A culture that has rested on its own laurels, that has comforted itself with mental images of its own progressive improvement, is soon to be reawakened to a coarse and unruly history.

Previously published at Al Fin blog.

Remind Me, Which Country Elected Obama President?

You might think that Mexico elected Obama president of the US -- or any country wanting to pick America's pocket, for that matter. Obama is the biggest catastrophe to befall the US since the founding fathers neglected to prohibit slavery in the southern states as a condition for statehood. Yes, that's right. Obama is the greatest disaster to befall the US since slavery.

Watch as the disaster unfolds, step by step. The US is too poor to afford an incompetent buffoon as president. Particularly a buffoon who hates his own country. This cannot end well.

A "Funny" Thing Happened On the Way to the Recovery

A few people are beginning to notice that we are not experiencing a typical recovery.

1. Job growth will be anemic at best. Given the layoffs necessitated by the dire straits of the State government finances, the completion of census work, and the lack of confidence in the small business community; I believe we will have a negative monthly jobs print by the end of the third quarter and very poor job growth into 2011

2. Taxes, user fees, license costs, and a variety of other costs will be increasing at the state level for consumers and businesses as legislatures throw everything but the kitchen sink (other than renegotiating pension, salary, more flexible work rules, and/or retiree health benefits with their unionized, overpaid and bloated public workforces that is) to try to balance their budgets.

3. The slowdown in Europe caused by the debt crisis will easily knock 25 basis points of projected domestic growth in the second half of the year

4. The fallout from the oil spill in the gulf will be felt by the Gulf states throughout the summer and will have an uncertain but negative impact on growth

5. The housing market will not recover in the second half in the year. Given recent reports and surveys it seems certain to stay dismal for the foreseeable future

6. A significant slowdown in China is likely in second half for a variety of reasons
a. Measures the government is taking to curb the bubble in the property market
b. Rising interest rates are likely to battle increasing inflation
c. Worker riots/strikes/increased wage demands are likely to squeeze margins and/or reduce productivity
d. Slowdown in Europe will impact growth at it accounts for 22% of Chinese exports

7. Corporations are likely to continue to hoard cash. They currently have 1.84T in cash on their balance sheets, a record. Concern about a slow and uncertain economy as well as an administration/congress that is anti-business, pro-union and increasing regulations by the day, will not do anything to facilitate deploying that capital into the economy

8. Taxes are going up for consumers and businesses at the Federal level starting Jan 1st, 2011. Income taxes on top earners, dividend and capital gains taxes in particular will increase significantly

9. Earnings comparisons are going to get much tougher in the second half of the year. The 1st and 2nd Quarters of 2009 were horrendously bad and beating them was akin to stepping over an ant. 3rd and 4th quarter comparisons will be more difficult to beat to the same degree

10. For a variety of reasons including new regulations, a steep yield curve that provides banks a massive incentive to invest in Treasuries instead of making new loans, still high delinquency and write off rates, lack of recovery in the securization markets, etc….lending will not recover in the near future and provide the fuel for economic growth to the extent that it has in past recoveries.

...The market has basically gone nowhere since the first of the year with the S&P 500 currently within basis points of where it started 2010. Given growth in the second half is likely to be even weaker, and the substantial risks that either did not exist (Oil Spill) or were not readily apparent (Sovereign debt crisis, Chinese property bubble); the outlook for the market for the next six months does not look good. I believe the market has seen its highs for the year. In this environment it pays to be small, stay in the defensive sectors (Healthcare, Telecom, Consumer Staples,Utilities) that have not participated fully in the rally since the March 2009 nadir and have good balance sheets, solid dividend yields and reasonable valuations. It also is prudent to keep a substantial portion of your portfolio in cash as we should have lower entry points later in the year. Be careful out there. _SeekingAlpha

In the opinion of my uncle Al Fin, the author of the piece above is being inordinately optimistic. He is clearly underestimating the stupidity of the Obama Pelosi regime. That is not surprising, since the world has never seen such stupidity on a grand scale in its many-storied past.

Try to clear your own balance sheets, make preparations for an extended dry spell, and hold on.

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