A chill descending

Descending ... onto the ex-Soviet vassal states. Poland has signed the missile defense treaty with the U.S. for a reason: to try an cozy as close as they can in the face of the Bear. Make no mistake, the Russians are rattling the sabers rather vigorously and the threats from Moscow are not a joke. Ras-Putin is determined to make a show of it; having calculated that Russia is in the driver's seat with respect to energy, Russia is now going to try to being its previous satellite/vassal states once more under its wing. Who is really going to go to war to protect Poland, Lithuania, Latvia, Estonia, Ukraine, etc.? The Germans? The thought makes me laugh so hard, I could puke. N-obama? Har, har.

The Poles were secure behind a treaty in 1939 ... and nobody lifted a finger to help them. If France and Britain had invaded Germany in 1939, the war would have been short and over quickly. Instead, they chose to wait for the Germans to prepare ... and they they laid back with their legs in the air. Crushed by German military might and their own incompetence. Poland fought heroically and then .. then they were stabbed in the back by the Russians, courtesy of Von Ribbentrop and a Russian ruler that is starting to appear not that dissimilar to Ras-Putin.

History repeats itself. Endlessly. And appeasers never learn. The parties may change, but the lesson forgotten remains the same. Of course, in 1939 there were no nuclear weapons -- but that only serves to make the tendency to appease even greater, better serving the aggressor. No, there will be no European action ... certainly not for Ukraine which will be the first to go. And Poland better start arming itself tomorrow, or even better, start buying Leopard II and M2A2 tanks today.

The Russian army is decrepit, but large. It is not well trained and not well motivated -- in contrast to the Red Army of the Komissars ... but there are a lot of them. With their houses cold, you will not be able to count on Europeans for anything: for over 50 years they have spit upon the United States, all the while counting on the U.S. for protection, for their very ability to scorn us. Soon, when the Bear comes calling, I can't help but think that out zeal to protect and die for the liberty of others might not be diminished.

Of course, this could all be short-circuited with a little bit of chutzpah: seize Russian assets abroad, freeze their bank accounts, their yachts, their swiss chalets, their jewels ... refuse to honor any U.S. treasuries held as of record by Russian interests. Above all, the new Soviets are excellent capitalists ... the oligarchies and FSB officers would be up in arms and Ras-Putin, inspite of all his power in Russia, might find it to be a very dangerous place to live.

Peace out.

Euro-zoink

As you might know, the Euro-zone economies have suffered a contraction.... Yes, GDP shrank. If you recall, about 6 months ago, as the dollar was getting hammered again, I pointed out that this was over doing it: the U.S. had better growth prospects than Europe, and a hell of a lot more dynamism to permit change. While oil prices are directly responsible for part of this, it is a mistake to think that the cold from the U.S. would not spread to Europe. This hubris (of an independent, strong economy with a strong currency) caused Europeans to continue to ignore certain global realities: (1) Americans cannot continue to buy anything -- they are broke; (2) Europeans have to import staggering amounts of everything; (3) Americans actually produce a lot of what it consumes, in terms of raw materials and finished products; (4) the Asian economies are totally dependent on U.S. fortunes ... if we contract, they will fall off of a cliff -- meaning no Euro-sales in those areas; (5) a weaker dollar meant cheaper oil for the Europeans ... until the spike which far exceeded Euro srength. If energy skyrockets, prices will rise and consumption fall, for everyone.

Europe has been protected by the Euro, which being strong, insulated Europe from price rises, globally, encouraging growth and consumption. Huh? Yes, the Euro's strength helped shield it from the contagion of over-extension in credit and inflation. But, as the Euro suddenly seems vulnerable -- due to slower growth (the Euro can only get so strong and no stronger and in the process Euro-goods get too expensive), you get a double whammy effect: if you drop rates to boost the economy, you also make the Euro weaker relative to the dollar ... and a weaker Euro causes prices to rise more strongly, raising inflation and making the Euro even less attractive. Raise rates to deflect inflationary pressures and to protect the Euro, you positively kill off the already weaker economy, causing further economic contraction -- leading to greater Euro zone weakness. Net? The ECB, in letting the Euro get too strong, causing everything to look cheap, decreasing exports, increasing imports, choking off the engine that helped countries like Germany thrive. How can it be stable where a BMW 335 costs 50% of the European price in the United States? Sound familiar? Sort of like the Fed failing to raise rates to kill off the housing bubble that everyone was making money off of? Weren't the Europeans doing EXACTLY the same thing?

The idiocies of cheap credit and overbuilding -- the financial Goldilocks of the last five years -- was particularly extreme in Spain, Italy and parts of France. And totally insane in England. While the subprime mess is uniquely American (although the greedy world-wide bought the securities generated), Europeans may have even exceeded the overbuilding and property speculation of the Americans. And in America, you can be sure that the house or apartment you bought was built on surveyed land with surety of title, with appropriate planning permissions. That is not necessarily the case in Spain or France.

In Spain, builders and developers are simply walking out on projects: there is no money, there is no credit and there is no hope of their ever selling the product within the forseeable future. None. Even better is the ECB's determination to prevent inflation ... this guarantees that nobody is going to be able to buy housing due to non-existent credit. However ... if you let a small recession happen, then you benefit from weakened demand which relieves inflationary pressures, even if the Euro falls, but it might take longer than you'd like. And nobody wants a long recovery, so....

Ok, so the $/Euro is $1.49. Still very weak. I would not hold my breath for the time it takes to fall as the financial community is still looking at the basket case of the U.S. Nothing much is going to change until we get an idea of where the U.S. is going. Would you go long dollars in front of Obamonomics? Me neither. But I could see the dollar drift up to $1.30 in the run-up. And that is 20 cents, not small beer.

Oil will continue to fall, how much more, I don't know. Perhaps $80? Gold too will continue to drop as the dollar looks better and commodities worse. $700? $650? But say the Russians continue to seize oil/gas countries? Say the Russians simply tell the Europeans that this winter gas will cost them ... whatever, and if you don't like it, stuff it. Or sign a nice treaty of economic alliance, to bring them closer into the fold. I wonder if France would baulk? Or the U.K. .. but not with Red Gordon in power.

Russia still being Russia

Ceasefire, my suffering heine. Russian tanks continue to roll onwards to Tbilisi. Sarko apparently struck out, courage not withstanding. Simply put, the Russians don't give a damn. They are going for regime change. Now, it would be hard to seriously claim that Georgia was their Iraq ... a democratically elected government, no weapons to speak of -- all they had was inherited from the cold war Soviet Union -- and no ambitions except to secure their province of South Ossetia. That particular piece of land has been full of Russian "peace keepers" for the past three years, after militants and unrest effectively cleared the area of ethnic Georgians over the past 7 years. So what was left could be considered to be reliable for the Russians -- they handed out Russian passports to them after all.

The Georgian move was stupid ... plain and simple, but also perceived as necessary to stop the attacks coming from Ossetia, and re-establish the borders set at the collapse of the Soviet Union. They counted on western "allies" to guarantee their own security -- allies which notably did not show up to help them. But Georgia posed no threat to any other country. Sounds like double speak, but when looked at dispassionately, its not. Chechen troops are supporting Russian militia in cleansing areas south of Ossetia, around Gori and now, closer to Tbilisi. You want atrocities? Look there.

So Putin -- who was directing the attacks, having jetting in from Beijing -- is thumbing his nose at the West and the rest of the world: "what are you going to do about it?" The answer, is "nothing." But I am not so sure that this is going to work out for the Russians .... They seen to think that they are better off feared and respected, rather than liked and cooperative. And that, my friends, is exactly what the Russians have done and believed for millenia. Putin's intention to remain in power is exactly the actions of a Russian Czar.

They may have the money right now, because they have the commodities, but if commodity prices collapse, so too will Russia -- in contrast to the Saudis who have lots of oil and a small population, the Russians have 150 million no diversified economy. It is ALL paid for by oil and gas -- which might explain why they feel the need to secure Georgia. Given the record now: Shell, Yukos, BP, and a slew of pipeline and other oilfield confiscations, and you'd be crazy to deal with them. I suspect that the industry won't. Of course, meanwhile the stupid, stupid Pelosi and similar liberal idiots in the U.S. Congress continue to deride the oil companies to play to their public and short term political gain: the U.S. won't lift a finger to protect world energy in the climate they have fostered. To the loss of a strategic ally and the deaths of thousands. And many millions more who will now live in fear that the Russian bear can attack their countries with impunity to re-establish the Soviet/Russian empire. That attack may be military or economic, but it will come. Count on it.

But in so doing Russia may over extend itself ... the only friends will be coerced, not real friends, and in the modern age we have seen that this rarely works, if at all. The Russians will have less than 100 million people within 30 years. Less than 75 million in 50 -- demographics like that will not help them. What is it like to live in Poland or Lithuania? Latvia? Estonia? They turned off the gas spigot because a memorial to Stalin (sorry the Red Army) was removed from a city center in Estonia. For a friggin statue? I'd be arming myself like a bandit, making my country a frikkin porcupine if I were in their boots. But will they? What will the Germans do? Do the Rumanians and Bulgarians think that they are free and clean as EU members?

And here at home the Idiot-in-Chief, Dubbya, does nothing except make hollow speeches. Why are we not sending them weapons or at least humanitarian aid? Parachute the 101st to "keep the peace" around Tbilisi? Would Putin allow his forces to meet real soldiers and risk a shooting war between the U.S. and Russia over his greed for an oil pipeline. Be assured, from our point of view, this in not just about an oil pipeline that exports no energy to the U.S. and which benefits no U.S. oil company. It is about a strategic buffer keeping a corridor to the 'Stans clear of Iranian and Russian airspace, oil and gas coming from those countries outside the grasp of Russia and Iran. If not, Afghanistan is lost. So are the 'Stans ... Russia will choke them to death.

No, Georgia is about a lot more than a simple pipeline.

Not really time to gloat, but.....

Look, I gotta toot my horn a bit here: I called oil, I called gas, I called GM and Ford, I called Russia ... but not specifically Georgia. All of that was kind of easy. Harder was the call on the Euro and the Pound, but I have those in the bag too. Trust me, they are headed South.

But let's look at Georgia a sec ... what is the point here? Georgia has given the Kremlin the finger since 2004 ... actually since Shevardnadze was kicked out, the Russian poodle that he was. Russia replied with an embargo. Georgia thrived. Russia turned off the energy taps. Even better. Georgia stamped out Russian-style corruption: they fired 1/2 of the police force, then doubled the salaries of those remaining. Georgia started to look for NATO membership, even an idea of EU inclusion as a functioning democracy. Georgia sent troops to Iraq. Russia started handing out passports to "ethnic Russians" within Georgian territory ... not so good.

Then when Georgia moves to squash an insurgency orchestrated by Russia, Russia mysteriously produces 30,000 troops, Navy landing ships, squadrons of Sukhois, and armored divisions ... right in time to roll into Georgia during the Olympics. Putin watches the opening ceremony less than 10 feet from Dubbya. That is one cold (not cool) cat. Putin flies home to ramp up the propaganda BS even more: Georgians are doing a tad of ethnic cleansing.

Why are the Russians really there? I guess there are two main considerations: (1) tell all the rest of the satellite states that the line stops here ... no more NATO membership, no more reapproachment to the West/EU (think Ukraine); and (2) Russia is the second largest producer of oil and the largest exported of natural gas -- they need to exercise control over the Azerbaijani / Georgian export link which was constructed precisely to avoid Russian control, and they need to retain control over exports to the EU.

The EU is in a hammer-lock: they have trusted -- very stupidly -- that the poor impoverished Russians needed their money more than they needed the Russian's energy. It didn't work out that way, even though a moron with room temperature IQ could have told you that it wouldn't. But the EU was afflicted with the same sort of short-sightedness that they have always accused the U.S. of ... cheap energy now, and we will develop a "special relationship" with our kind Russian friends -- those dirty Americans have always been wrong about the Russians.

Idiots. History would have shown any interested observer that the Russians have always plotted and intrigued for the long haul, just like their Chinese neighbors. The xenophobic, conservative American has been proved right only too often. We Americans have been bought off by the Chinese because they hold our debt, we mortgage our homes for Arab fuel ... but we could ... just could ... manage without. Europe will freeze to death without the Russians. That is one shit-miserable place to be.

The Russians have had a chip on their shoulders since well before Stalin's time ... their goal has always been empire, communism a hiccough on the long road. Putin is a conniver in the mould of the Czars. So with the eyes of the world on the frou-frou of Beijing, they have started on the long road of military conquest. Again. Small steps to be sure, but the import is massive.

I think that it is very interesting that the current EU president is Sarko l'Americain. He showed himself to be presidential in every sense of the word, with testicular fortitude that would have been absent from every other potential EU country.

ANOTHER interesting facet of this messy little war, is the coordinated cyber-assault by the Russians against Georgia. This is the first time we have seen this attack in support of military movements, but certainly not the last. Russia, of course, denies it. Why bother? If you are killing Georgians with bullets, why not admit to the cyber attack? On July 20, various U.S. internet security organizations noted a denial of service attack against the Georgian government. Then, as tanks rolled, it became an all-out assault. American experts watched as internet traffic was re-routed against Georgia by servers run by Russian telecommunications firms, DDOS software downloadable on Russian language sites, and -- very interestingly -- a huge assault run through the "Russian Business Network" and dummy computers they are known to control. The RBN, based in St. Petersburg, is widely known in the internet world as the base of a criminal gang that phishes, does DDOS for hire, runs online scams, etc. The bad news bears of the internet world. And here the RBN runs an attack for the Russian government, proof absolute that the Russian government is at least a beneficiary of the profits and ill-gotten gains of the RBN, if not the actual boss of the whole operation: remember the blog stating "Kleptocracy?" Experts are saying that this is not necessarily the case, blah, blah. They are probably afraid of a Polonium milkshake.

I particularly like the fact that in the initial attacks, the servers that staged/ran them were based in the U.S. ... but had come online only in the previous few weeks. Clever, that. But in so doing, there are fingerprints all over the preparations, the botnets set up, the ownership of servers, the links, ... and the DNA of future attacks. Even to the extent of an early warning system.

The Bear is awake and he is hungry.

Got my goat

And I am back with another ill-tempered rant. Actually, this one just pisses me off, sort of like Bella Pelosi, on whom I would not urinate should she happen to catch fire.

Due to some greedy idiot (a King) in the 1640's, the Commonwealth of Massachusetts has an odd facet in its real property laws (that is land laws, as opposed to laws concerning other items you may own): a real property owner can own seaside land right down to the low tide mark. Effectively, this makes the beach forever private to the benefit of some lucky blighter who has the will and the dosh to exclude all others. In other words, some type of Nazi.

Many, if not most of the other States, Commonwealths, States with Providence Plantations, have the rule that a real property owner may own land to the high tide line, but no further. This effectively makes the beach state-owned land, with free right of passage to all who would care to walk it. Sensible, giving access to an incredibly valuable resource to the people of the State, for their enjoyment, sustenance and thoroughfare.

But not the oh-so-liberal Commonwealth of Massachusetts. No, Massholes prevent people from free enjoyment of "their" beach. And believe me, they are not Republicans ... there are no Republicans in this State (to use the generic term). Try to walk the shoreline by the Kennedy estate.... Or any other piece held by relatively new money (anything in the last 100 years ... this is Massachusetts, you know). In Massachusetts, residents own the sand on an at least transient basis until the next Nor'Easter. And they will defend it, even as they past their Obama stickers on their Volvos, Saabs and Priuses.

About 8 years ago, I was staying at a friend's house in Hyannis. She lives in a nice little neighborhood that has right to a communal beach. Not the Hyannis Public Beach (which is wonderful, but crowded), but a small, in-the-harbor beach. The strip the community owned was about 100 yards long and on a hot day it was crowded. To relieve the congestion, I decided to take my 6 year old son for a walk and gently toss a frisbee ... to an empty section of beach right next to the crowd. After no more than 90 seconds, a woman dressed in mumu, beads and headband came out to scream -- seriously scream -- at my son and me to get off her land and to stop trespassing and that she would call the police. My son started crying and I stated that we were below the high tide line ... as I learned in law school in New York that I had the right to be there. This provoked an even more shrill tirade about f-ing tourists who don't know Massachusetts law and she knows her rights and to get off right now.

I should have simply sat down and started meditating ... this would have most likely sent her to the ER with stroke, but I told my son that we needed to leave this unstable person. The following day back at work, I strolled down to the library at the firm and did a spot 'o research. She was right. Unbelieveable but right.

A year later I anchored no more than 20 feet from the low tide line on my boat -- outriggers flying, bristling with fishing gear and stereo providing a suitable sound track. Nothing else was within 500 yards of us on the water, maybe more. Within a short period of time the male of the property-defending duo came out to ask me to move citing some crative extension of property rights and other threats of nuisance, public disorder, etc. I told him that I was perfectly aware of the regarding his claim to the low tide line, but in fact I was anchored past the low tide line and therefore outside of his jurisdiction or ownership. He said that he owned the land under the water to the low tide line ... I concurred that this might be the case, but given the temporal proximity of low tide, the accurate fix of my GPS and the approximate depth under my keel, I could not be trespassing and accordingly, he should shove off (or words to that effect). He threats to call the authorities were risible: I offered that should he touch or otherwise damage my boat, I have VHF and I would immediately call the Coast Guard. I hope he liked my offerings of Green Day, AC-DC and other heros of the age of rock and roll. I only wish I might have been able to perhaps fire up the BBQ if the wind had been more favorably oriented.

Why does this bother me so much? It is the hypocrisy inherent in the politics of liberals or democrats and their actions to zealously defend their property/wealth but feel so free to tax me to redistribute my wealth. And in the instance that it is a Republican or Libertarian so insistent on retaining possession of what should inalienably by the public's, it refutes the great conservative notions of efficient use of resources for the greater good. Simply put, no use at all benefits no one and negligible use only provides negligible benefits. Either way, it exposes raw, naked, greed at its basest.

There are two exceptions to this ancient legislative folly: you can trespass for purposes of harvest the bounty of the sea (fishing) or land (fowling). In other words, carry a fishing pole and stick a line in the water and you can tell the shrieking harridan to sod off. Or carry a gun, a ruddy great shotgun along the shore during hunting season -- pending local regulations. Imagine what the average property-owning Cambridge armchair liberal weenie would say to Joe Six Pack strolling along the beach with a pump action Remington ... "ah, Ma'am ... I am fowling today, so I claim the exemption provided to me the Courts of the Massachusetts Bay Colony."

This ruling stems from the 1640's when the King of England was considered to own the tidal flats -- particularly important in places such as Chatham and Wellfleet. The King charged colonists to construct piers and wharves out beyond the low tide line. The local courts overturned this through upholding Colonial Ordinances (1641-7) by granting ownership to the low tide line, as even then people understood you could not own the sea.

Today, this has led to the absurd result that businesses such as the Ocean Edge Resort is trying to enforce their property rights at low tide ... more than 2000 feet out from the high tide mark. Get this, they have weenie running out with no trespassing signs as the tide retreats!! Why? They are defending an initiation fee of $10,000 plus monthly $200 to be part of this prestigious (or at least exclusive) club. But the law reads ... "100 rods" or 1650 feet. Beyond that, the ancient Roman rule of "in the public trust" still holds sway. So they can run out to the 100 rod mark and no further. Beyond that, you can have a circus!

But it is a judicially confected farce ... all the legislature would have to do is simply make the laws of the Commonwealth conform with those of the rest of the Union. Interestingly, Billy Bulger, democrat, crook, politico extraordinaire and general wheeler-dealer was unable to do it. No matter how much strong-arming he engaged in, he was unable to convince a DEMOCRAT controlled house or senate to pass what should unquestionably be a law for the people. How much money do you think has been flowing to keep this state of affairs? This is a uniquely crooked and anti-democratic problem. And it is time to point fingers and call a spade a spade.