Angst ... everywhere

So, the market took another bath today. No big surprise. As a reader of this page, you will know that I have been worried that it would poop the bed since last June. I am only shocked that it has taken this long for people to start to get scared. Oil is $140 ... my guess is $150 top, but this is predicated on something -- anything -- serving to stop up the dollar. The Fed has placed itself in a tough position: it really needs to hike rate to halt the mess of the declining dollar and the inflation that it engenders. But to raise rates, is to cause the housing market to totally "get the trots." And plunge the economy into recession for sure. Consumer confidence has dropped off of the table to lows not seen since the 1970's. But higher oil and inflation will kill the economy as surely as higher rates. So what to do?

Look, raise the rates and take the recession on the chin. Let's clear out the housing bubble and move on with life: to fail to do so now, is only to delay the time in which it will happen. As described above, inflation and a dollar worth kleenex will accomplish the same, but with artificially low rates. But the housing market and recession will come, nevertheless. Count on it.

But with higher rates, we could see oil retreat, bringing down inflationary pressures and re-igniting consumer confidence. And really, it does not matter what the rates are in the big scheme of things: nobody is going to get a mortgage anyway, and those who are barely holding on right now won't make it through a recession anyway. Tough to say, but probably true. The notion of some ill-considered $300 billion foreclosure rescue plan is just a band-aid.

GM is in a very tough spot. As I have written recently, it is just a pension fund that happens to build cars and trucks. But the truck and SUV market numbers are even worse than we thought just a week ago. Far worse. There is considerable thought that they will have a liquidity crisis in the near future -- you can't bleed $3 billion each quarter or more and not suffer long-term consequences.

The inflation genie is out of the bottle: Asia is seeing real inflation pushing towards 10pct. Really. Don't look at those ex-energy numbers, that's tosh. Real inflation for producers and consumers is up, way up. With housing and real estate prices falling (essentially) globally, we have shrinking assets bases and soaring cost. And a shrinking global economy to go with it. A perfect storm in the making. Bond yields are going to start to soar, no matter what the idiot Fed does or the ECB or whomever. Oil demand is not a one-way street. It is to a degree dollar inverse correlated, but once demand is seen to bite the dust, it too will fall out of bed. No matter how fiercely they stock the stuff in the Middle East.

It is happening, folks. Right now. Believe it.

Peace out.

Two weeks off

Shady's back.

Went to France. Went to Nantucket. Uh, huh.

So, there is much that is going on that is blog-worthy, but little of it really matters --as the English would say -- "a toss."

A ferry capsized in the Philippines. Lots of people died. A tragedy. What was a ferry doing setting sail into the teeth of a cyclone (hurricane below the equator)? This ferry was some 23,000 tons, hardly a puny vessel and still it managed to lose power and ... voila ... turn turtle on a sandbank or reef. Talk about Poseidon adventure, this was the real gig.

Iran has declared that nothing the UN will do in terms of sanctions will deter it from pursuing its nuclear ambitions. Sphincters. So Israel has been practicing long distance assaults over the Med with a view to attacking Iran: why not? If nobody will do anything, why wait for Iran to visit death on them at Iran's time of choice? Sure Iran has threatened immediate grave consequences for any attack by Israel on it, but at the same time has promised to remove Israel from the face of the Earth. From Israel's point of view, why wait?

If I were Israeli, I'd "get it on", too. In fact I'd make damn sure that my attack leaves the messiest radioactive debris that I possibly could, "to encourage the others." Let Iranian citizens know why they are playing with Armageddon -- and it is of their making. I read that John Bolton predicts that Israel will wait until after the US election to make the strike, for fear of affecting the outcome: huh? Obama has been ludicrously pro-Israel in his last dozen outings, and McCain has always been staunchly pro-Israeli. Either way, they win and the Palestinians lose. No, it has to be before, and sooner rather than later ... why let Iran prepare for a predicted attack? And when has Israel ever let anyone prepare or come at the appointed hour? Meanwhile, Iran is buying the newest and latest Russian point defense systems ... typical that those creeps would aid and abet the most repressive regime outside of Myanmar, and the Taliban.

I am interested as to what sort of devices the Israelis might use ... would they go nuke to get the nukes? Do they have something new up their sleeves?

Moving on to the 300 billion mortgage rescue bill being kicked around by Congress ... the Black Caucus claims that it won't do enough for African-Americans. Come on. This bill is designed to give support against foreclosure to people that cannot meet even the loosest requirements of Federal programs for a fixed rate mortgage. We are talking about giving money to those who cannot possibly afford their mortgage as it is.

Let's get this straight: home ownership is not a right. It is a privilege afforded to those that are responsible enough to save and make enough money to buy and keep a house. Home ownership is not lotto for those who want to flip a house and get rich quickly. It is not an entitlement program for the needy. And if you cannot meet the criteria to get a mortgage under normal rules, what on Earth gives anyone the idea that you deserve public (taxpayer money) to have another shot at it? Talk about a $300 billion give-away. Might as well as invade another country. Lets spend the $300 billion on programs for educating our youth, giving them backgrounds in engineering, medicine, chemical sciences ... things that might make our country self-sufficient again?

Nantucket. Too many billionaires -- and those who unfathomably want to rub shoulders with them. A micro-economy where a sandwich costs $15. 3Br, 1.5 bath for $2.5 million. Add another $1 million if there is a view. Watching the ferry unload, I saw a stream of large SUVs, roof boxes, bikes strapped to the tailrack, and Mommy (bottle blonde) driving. Friends greeting the ferry and dressed in the best Lilly Pulitzer has to offer were jumping down and waving as the steady stream of gas-guzzlers poured out off the belly of the ship. License plates from New York, New Jersey, window stickers of prestigious prep school plastered across the tailgate. According to locals it was not even close to "busy" yet ... even then I felt that there were too many people frantically trying to "live the life" as it was. I rode my bike over to the airport ... just to see. And I saw a steady stream of private jets roaring in for a landing, only to taxi to the far end of the row of Citations, Lears and other status symbols. If ever there was an island with a carbon footprint too large for its size or year-round population, this was it. Ignore the use of bikes in town: if you flew in on your private jet, you had your caretaker meet you at the airport in your Range Rover ready to whisk you away to your 10,000sq ft. + "rustic" cottage you had built a few years ago when they upgraded to all-weather capability at the airport. Keep it heated in Winter and airconditioned in Summer, pool at 85 degrees (who wants sand in their swimsuit?). Play golf at the club, take a cruise in the Hinckley picnic boat, fly to New York to see the hair dresser to retouch those "sun-streaked" highlights, maybe have nanny come back on the jet with the kids.... Nantucket.

I imagine that it might be a nice place in September or October.

Tiger won the US Open. With a busted knee and fractures on the tibia. If healthy and fit, the rest just don't stand a snowball's.

Imus is in another rat-ball with black activists. Only this time, Imus is clearly defended by his black crew on his show, and the weenies are taking his comments out of context: they were waiting and listening for a chance to do so. Don't these liberal loonies have something better to do witht their lives?

Oh yes, the UK credit market is taking a bath ... well more like those trying to take out mortgages. There was a 20% drop in mortgage approvals (that is to say, of those actually trying to take one out) in one month in Britain. That is huge. It is saying: "we don't trust you" to the British public. So now Gordon Brown and his henchmen are eyeing the banks, building societies and others for making things too difficult and pushing rates up to fast and too high. Effectively, trying to prevent themselves from going bankrupt ... and they should be punshed for this? Have we gone mental?

Ladies and germs ... the property market is headed south. Still. You know it is bad when building suppliers associations take radio adds to ask for support for from people for a recovery bill to try and jump start house building. The claim was that housing supports the economy better than anything else, and we need to get back to building houses.... Right. And who the hell is going to buy them? This bubble since 2003 has been "building" precisely because the economy has been supported by unsustainable housing development.

Weird.

And weirdest, the 2012 mania is starting to catch on: survivalists are buying out stocks waiting for the end of the worlds as predcited by the Mayan calendar. Hey ... I got news for these people: where are the Mayans now? If they could predict this sort of problem, why did they not predict their own demise? Didn't sacrifice enough virgins to the sun-god? Weird.

Toast ... stick the fork in.

For sure this time. And the fat lady has sung ... not that I am implying that Hil-liar is fat or anything. More Yogi Berra. Its not over until its over. And its over.

Running mate? Nah. Michelle hates her.

Cabinet member ... be sure to check her for cluster bombs every time she enters the White House. Or anthrax. Or something. How about regular old Senator Clinton. Itself a travesty, but she will no doubt retain her seat in a state of morons.

I wish I could write something pithy or exciting to the intellect ... but it is just so "played out." She is baked and so is her campaign. Time to write the epitaphs, the memoirs, the insider-a-clefs. Cash in, tell-all, air the dirty laundry. They won't wait until the election ... to do so would be to risk being pipped at the post of the bookstore: Hil-Liarcrats are in it for the position and money, so count on a rapid turn-around.

Wonder how the campaign is going to pay back the $30 million in unpaid bills? That in of itself should be an interesting exposee in political finance.

I am off to France for a week to enjoy cheese and making fun of the French. Hope that the world does not come to an end in the meantime.

Peace out.

Morons in Detroit

Leafing through the Boston Globe-Rag, my eye spies an article with the tagline: "Pickup, SUV sales fall as gas cost soars...." Duh.

In this blog about 18 months ago, I opined that sooner or later, Detroit was going to wake up with a huge backlog of unsold trucks and SUVs. And that "Mom behind the wheel" of her huge senseless SUV would suddenly find that she doesn't want to pay for the gas required to make her mobile office/limo run. Sooner or later, America and Americans would discover why Europeans covet small, fun-to-drive, efficient cars.

Then $4.00/gallon gas came along. I have been ranting on about how good the small Euro-diesels are, and how a Ford Focus (Euro-version) is a brilliant car ... but friends went and bought Tahoes and Suburbans. Now, they can't sell them. After all, who wants a used pile o' crap which needs a refinery to operate? "Ken Thompson never had much trouble selling Silverado pickups at Classic Chevrolet in Grapevine, Texas, the largest US truck dealership. Now, at the 23-acre, 2,000-vehicle lot near Dallas, customers walk away from deals at $16,988, a third off the sticker price, he says." -- (Boston Globe).

Industry sources predict that GM/Ford/Chrysler will sell 1 million fewer of these vehicles this year ... at the cost of $10 billion less pre-tax profit. And since that is the lifeline that has been keeping these fantastically mis-managed companies afloat, it is time to buy "puts" on these stocks. Because they still try to sell (mostly) crap small cars. Sure they are better than before, but so is Smucker's preserves better than toe-jam. Still wouldn't want to slather up some toast with either of them.

GM is shutting pickup and SUV plants to cut 700,000 in production and increasing small car production by 200,000. The cut is a good idea, but it implies that they will be able to cover the expenses of "turning on the lights in the morning" by selling small cars. Unless they bring over and build the designs for small cars from Europe (where each of GM and Ford sell loads of excellent small cars), they won't be able to con enough people into their wheeled crap to fund a Bar Mitzvah in Lebanon.

Yesterday, I saw my first Chevy Tahoe Hybrid driving along the local roads around my house. It gets about 20 mpg. As opposed to less than 10 mpg that they really get in their regular SUVs during lead-footed city driving. Will that be enough to save the GM Pension Fund? No. Not even close.

What I am getting at is this: I suspect that GM et al. have placed so many eggs in the basket of SUVs and pickups that they will not be able to wriggle their way out of this mess. Essentially, short-term greed and lack of realistic planning just may have conspired to kill off the great American auto manufacturers this time around. Sales of full sized pick-ups fell 36% in May and SUVs by 42%. Those numbers are staggering. Sure, I think that oil prices will fall back under $100 -- but maybe they will and maybe they won't. But the change in car purchasing habits is not so much as a fuel-related sticker shock, it is also related to a growing recognition that just wasn't there in earlier oil price shocks: there is only limited oil to burn and there are other people who want it just as bad as we do ... we might not be able to get all we want at anything remotely resembling a reasonable price.

In other words, we American have just realized that we have to change our habits -- because we can't afford to do otherwise. And that is what Americans understand: money. You won't wean the average soccer-mom or bubba redneck off of their land-yacht by appealing to their sense of civic duty, because they don't have one. You won't convince them that driving a frugal little car is better for the environment because they will tell you ten reasons why they are different, why they need their vehicle, why they should be exempt from all that applies to others. After all, hasn't the American educational system spent the past 50 years telling everyone that they are different, that everyone is special, everyone needs personalized care and treatment? One of the striking attributes of the "Greatest Generation" was that they did not whine about how life is unfair to them, or why nobody listens to them, or why the Government needs to take care of them. What the current 20-50 year old really understands is ... money. And how much of it can they spend. That's it.

Heck, people are dipping into their 401(k)s to fund their current spending habits, rather than cut back and save. Consider how stupid is that? They bought the damn SUV with money "made" by refinancing their house at a lower rate, and based on the "increased" value of that asset. Now that the house is worth less, the mortgage rate going up, monthly available income declining ... why save? Let's go to Disneyworld! We are living in a fantasy world anyway. Put it on our credit card.

Of course, I could also froth away at the stupidity of the American quarterly reporting system creating the need for short term thinking at the expense of long-term planning and performance ... but the average auto exec probably wouldn't even be able to understand that either. Nor that they are now an endangered species.

Morons....

Obama the Apostate

I wrote about this subject ... 6 months ago, but suddenly it is now the topic du jour among New York Clinton Times and readers: On May 12, the NYCT published an Op-Ed piece by a fellow named Luttwak -- "Edward N. Luttwak, a fellow at the Center for Strategic and International Studies, is the author of “Strategy: The Logic of War and Peace.” This Op-Ed piece opined that Obama's candidacy faces a problem in Sharia Law -- that Obama is an apostate, that he left the one true faith to become a Christian. The generally accepted punishment for apostasy is ... death. Beheading by a cleric is the primary desirable method, followed by stoning or hanging.

One Clark Hoyt -- the Public Editor of the NYCT -- took issue with this interpretation of facts as Luttwak saw them and consulted "five Islamic scholars at five American Universities" for their take on the matter. According to Hoyt, their (impliedly more reputable) take on the matter was that it was a non-issue and that Luttwak had misinterpreted the religion of peace. Their rebuttals included:

1. "Sherman A. Jackson, a professor of Arabic and Islamic studies at the University of Michigan, cited an ancient Islamic jurist, Ibn al-Qasim, who said, “If you divorce a Christian woman and ignore your child from her to the point that the child grows up to be a Christian, the child is to be left,” meaning left to make his own choice. Jackson said that there was not total agreement among Islamic jurists on the point, but Luttwak’s assertion to the contrary was wrong." (NYCT -- 6.1.08) Note that this scholar (and hence Hoyt) cites "an ancient Islamic jurist" but later in his piece Hoyt notes that modern thought might be the better way of interpretation (see #4).

2. "Khaled Abou El Fadl, a professor at the University of California, Los Angeles, School of Law, said the majority opinion among Islamic jurists is that the law of apostasy can apply only to individuals who knowingly decide to be Muslims and later renege. One school of thought, he said, is that an individual must be at least a teenager to make the choice. Obama’s campaign told The Los Angeles Times last year that he “has never been a practicing Muslim.” As a young adult, he chose to be baptized as a Christian." (Id.) El Fadl does not cite any body of Islamic jurists as his "majority" -- Sunni or Shia, Wahabbi or other. Also, a majority opinion can be slim or overwhelming. It may reflect American Islamic thought or Pakistani. In short, he says nothing.

3. "Abdullahi Ahmed An-Na’im, a professor of law at Emory University, said that Sharia, or Islamic law, including the law of apostasy, does not apply to an American or anyone outside the Muslim world. Of the more than 40 countries where Muslims are the majority, he said, Sharia is the official legal system only in Saudi Arabia and Iran, and even there apostasy is unevenly prosecuted, and apostates often wind up in prison, not executed." (Id.) This is blatant bullshit. In the non-Nato parts of Afghanistan, do you suppose that a constitution rules? Or in tribal Pakistan? Or Anbar Province in Indonesia? Chechnya? Oman? Yemen? And nowhere "is it written" that Americans are exempt. Heck, in the UK, Sharia almost rules already -- witness the refusal of Midlands Police to rebuke or reign in the Islamo-fascists forbidding Christians from talking with Muslims youths or handing out pamphlets in their neighborhoods. It is also unclear in this statement as to what constitutes apostasy -- and what degree of apostasy results in prison and for what will you lose your head. In practice, the "Full Monty" crime is going Christian, while prison is reserved for those who may utter thoughts implying apostasy. Hoyt, get it right.

4. "Several of the scholars agreed that, in classical Sharia, apostasy is a capital crime, but they said that Islamic thinking is evolving. Mahmoud Ayoub, a professor of Islamic studies and comparative religion at the Pacific School of Religion in Berkeley, Calif., said, “Whether (apostasy) is punishable by death or not, there are different opinions...”. (Id.) Another inconsistency as noted in #1, above. They admit that in classical thinking apostasy is a capital crime -- but people are put to death every year in the Middle East because of it. Are they "classically executed?" If Wahabbi Islam becomes the controlling theology (Al Qaeda and the Taliban), plus the Shia lunatics, "classical" apostasy will be the rule throughout Islam. And there are millions of Muslims who live by this rule already, by some measures, maybe 100 million or more. The differing opinions are far more likely to be found in the West, where so far the Islamo-fascists are afraid to overplay their "hand." Just wait until they do not have to be so circumspect.

5. "Last year, Egypt’s highest Islamic cleric, Sheik Ali Gomaa, the grand mufti, spoke out against killing apostates. He said punishment for those abandoning the religion would come in the afterlife. Egpyt has a problem: it is a modern secular state. It is tightly controlled by the military-politico combine designed to keep the Mubarak dynasty in control. But the Islamic Brotherhood "offed" Sadat for treating with the enemy ... and so you can bet that the Islamic Brotherhood would "off" you for apostasy, too. If the Mufti choses to remain at liberty in Egypt, he MUST come down on the side of liberal Islamic thought. Another ill-conceived rebuttal.

And lost in all this tit-for-tat is the reality that the persons who would be exempt under Sharia law for murder (of an apostate President) are the already radicalized Islamo-fascists, the Wahabbi-inspired goons who are "insurgents" in Iraq, the Taliban in Afghanistan, the teachers and students in Pakistani madrassas, and almost any Iranian cleric/student/Islamic Guard member. As stated above, there are perhaps 100 million radicalized Muslims. Think about it. If only 10% of that lot regards Obama as apostate, that's 10 million potential assassins.

But is Obama (reasonably) apostate? Under Hoyt's own rebuttal he acknowledges that under that Obama decided to be baptized as a "young adult," not the "child"being raised as a Christian of "classical" thought. Hoyt also explains that Obama's campaign stated that "he has never been a practicing Muslim." Does that mean he was a Muslim, but not practicing? Not exactly a tight argument.

Nothing that I have read is credible is asserting that Obama attended a madrassa, and was anything but a mixed-race kid who didn't know his real father. But that does not mean that people who would saw off someone's head with a pocket knife will see it that way. All indications would be that they won't. Any failure to locate Arabic-language blogs or newsprint featuring this possbility does not even remotely mean that they won't try to kill him: since when did Al Qaeda publicize its attack plans? Saudi Arabia, similarly, tries to keep a tight lid on its loonies, especially when one considers that a target might be the head of state of their largest oil client.

Mr. Hoyt, you have not done justice to Luttwak's thesis and claiming that Luttwak is dangerously out-of-touch or factually off-base only reveals the extent that you refuse to accept that there may be 100 million potential assassins out there who would love to kill any American, let alone a (perceived) apostate President.

Just a quick thought...

There is a Vanity Fair article coming out about Bill that is going to be the talk of the country -- count on it. It catalogs and describes Bill's self-obsessed personality in detail, the stain he left on Hil-Liar's campaign, the friends he keeps (and mooches off), and does a general hatchet job.

So it occurs to me: surely the Clintonistas can see that in the same way that Jeremiah Wright tarnishes Obama, in a far more personal and serious way, Bill must tarnish Hil-liar. One was a pastor who is out of his mind, the other a husband that does not know how to tell the truth (or keep his pecker in his pants). But while Obama is clearly damaged by willing association with Wright, the same must be said ten-fold about Hil-liar and Bill.

Obvious, no?