Let Greece Fail

Yes. Fail. Default. Whatever.

The subject is a tad complex and I'm not going to rehash the intricacies here, but if you are reading this, you probably already know a thing or two about global finance and/or central banking. The key point is this: Greece is the tip of the iceberg. The debt crisis will balloon out of control if monetary authorities don't hold fiscal actors to account. The bond market too. The bond market must make it so that these political chumps don't take perpetual debt rolling as a given. If allowed to stand there at the edge of abyss by the EU central banking authorities and the bond market, the politicians will have to wake up. Greece is the perfect test case to send this message too. It's puny. It'll be a mere bump in the road. Italy and Spain will be much bigger trouble if we travel down this road with them. California too. If Greece and Portugal can cause this kind of a headache, what is gonna happen when California hits the wall? Better to send the signal that sovereign borrowers are on their own and have to figure their own problems out with Greece now than with somebody bigger later. Greece is the perfect sacrificial lamb. This is very akin to Bear Stearns and Lehman. If we had just let Bear fail, perhaps Dick Fuld & Co. would have got the message and had time to get financial religion.

Closer to home, I think this gets it right. Personally I welcome our new double AA future.

Socialism Rocks On!

Chalk up another achievement for Socialism! Electrical emergency in oil-rich Venezuela!

Venezuela: Chavez Declares Electrical Emergency
Stratfor Today »-->February 9, 2010
Venezuelan President Hugo Chavez declared a countrywide electricity emergency on Feb. 8, Globovision reported. The decree announced the creation of a state commission for the electrical sector comprising the ministers for Energy and Petroleum, Electrical Energy, Finance and Planning, and Mining and Basic Industries. Vice President Elias Jaua will coordinate the commission.

C'mon Hugo, you're still just a piker. A real socialist could bring about FAMINE!!

Very Best of Hands

Hey guess what? Corrupt minor NJ machine politician who was appointed to the US Senate does not elevate his behavior when attaining the upper chamber. Who'da thunk it!
Lament: The country is in the very best of hands.

One point I've wondered. What were Dems thinking appointing Menendez to the leadership of DSCC? This guy had a fairly typically corrupt run as a Congressman from a gerrymandered district, only won his Senate seat by virtue of incumbent advantage and a tidal wave of Democratic momentum in 2006, and has had ethics violations hanging over him. Who was the genius who said, "Yeah, I want that guy recruiting Senate candidates!" when the nation is clearly sick of the political class and on the verge of a small scale revolt. Did he recruit Marcia Coakley?
Consolation: The Democrats are in the very best of hands.

Huh?

OK, fine. But then who were Bush's critics helping?

When He Hears 38%, He Doesn't Think 62%, He Thinks, Well, 38%

The well-regarded former CEO of my former employer once said in a speech to us peons, "We have 72% market share. That's nice, but when I hear 72%, I immediately think 28%." Seems Obama got this one reversed. When presented with his numbers, he didn't reflexively focus on the opportunity set, he seems to have tried to alienate what numbers he did have in his corner.

The President's published poll numbers on "handling the deficit" were 38% back in September and yet he still put out this budget?!?! It's official, the guy doesn't care; which is to say that he doesn't care about you if you don't agree with him. It's full speed ahead to a transformed America as per his unabashedly lefty vision or die tryin'.

In a way it's kinda refreshing to see such indifference to the polls. With Bush, it was win the Iraq War come hell or high water, with Big O, it's create a cradle to grave entitlement state come hell or high water. Problem is I don't want to live in a cradle to grave entitlement state, so that "refreshing" bit wears off in about a nano-second.

Business View of Political Landscape

As per usual, the NY Times is slow on the uptake (or slow to buck the idealogical narrative) and is just now getting around to mentioning big business's severe case of "buyer's remorse" over its 2008 support of candidate Obama. I first gave my readers the official diagnosis of BR back in April '09 and have chronicled it steadily since then. The NY Times focuses in on Wall Street, but I can assure you that the remorse is much more intense in other industries. Wall Street is a fickle crowd, they place bets on politicians the way they place bets on investments, so the Dems can certainly win the industry back, but it'll be hard and this spells a big problem. Other business sectors are likely lost for good, they see a failed bet as a failed bet - you suck up losses and move on. No campaign cash is a problem, but no business support takes a big chunk of the coalition that put Obama over the top in 2008 out of the picture. In fact, business is likely to gravitate aggressively to a 2012 candidate who understands the importance of the business environment to national well-being. On a side note, a guy who could very well play the leading role, if not just a leading role, on the Romney economic team takes to the pages of WSJ today to talk deficit reduction, probably the winningest theme for the Republicans going into 2010 and beyond.

Unsustainable, That's What You Are

We know that Mark Steyn reads Donny Baseball. Turns out I am his secret straight man. I go off on unsustainable and he puts it to Natalie Cole...

I'm waiting for Mark to invite me to take this on the road with him like O'Reilly and Beck.

Forward to the Past!!

The academy has done its job well. A majority of Democrats and an overwhelming majority of liberals view Socialism positively. In an ironic note to this data release, Russian and Polish officials are getting together just now to memorialize and apologize (the Russians are apologizing) for one of Socialism's relatively minor atrocities, which is a fitting example of how Socialism always ends, in death. Yet I would wager that a similar numerical majority of professors working in the modern American university probably think that Stalin was a swell guy. My neighbor's kid came back from college and recounted a course and a professor that attempted to leave just that impression. The kid of course had never heard of the Katyn Forest, a piker of an atrocity among Stalin's total handiwork. In a further irony, what these progressive liberals don't know is that in Socialist/Communist systems, guess who gets marched off to the gas chamber or the killing fields first? Yeah, that's right...intellectuals. Sure the leaders of socialist movements are "educated" too (in a sense) but are usually sociopathic on top of it, so unless you are part of the power-mad, sociopathic, educated vanguard willing to murder en masse to further the revolution, well, you're toast. Pol Pot slaughtered folks that wore eye-glasses, as it was a rough proxy for membership in an educated class that just may cry foul over the depradations of "the revolution." If we ever had a Stalinesque political leader here in the US, you can be pretty sure that the busiest killing fields would be located on the outskirts of places like Cambridge, Madison, Berkeley, New Haven, and Chapel Hill. These glaring blindnesses or misunderstandings of history is why history gets repeated and why the same tragedies befall the human race over and over. Further evidence that "educated" doesn't mean "smart" and "intellectual" doesn't mean "intelligent".

If disdain for socialism is far right, welcome the label and relish in it. History is on your side. Morality is on your side.

Recommended reading for this depressingly large number of Democrats and liberals.

Has An Athlete Ever Acted So Badly?

Athletes can do alot of things without much social approbation...commit adultery with a small army of women, gamble away millions, frequent strip clubs, pull guns on each other in practice, take illegal drugs, beat their wives, even have dogs fight to the death. But man alive, if you really want to get people worked up into a serious lather, broadcast a commercial on TV that argues your mother was perhaps, just perhaps, courageous and noble to take you to term and give birth to you in the face of adversity (and against the advice of the world renown, crackerjack Filipino healthcare industry in the golden age of medicine that was the 1970s no less). Yeah, that is some seriously sinister and evil stuff. Who the fuck does this Tebow guy think he is? What message is he sending to our youth?

OK, lest you think I am brilliant and a leading light of social commentary in America today, I have to admit that the above is not at all my analysis. I ripped it off. From here. Click and watch it all.

Note to readers: Ignore everything I say here, because I am a PRO-LIFE ZEALOT! (If Glenn Reynolds can be a "conservative blogger", then, heck, I guess I can be a pro-life zealot. This is kinda my version of "happily married gay couples with a house full of semi-automatic weapons". Does. Not. Compute. To. Liberal/progressive. Cranium. Head about to explode...3...2...1...splat!

Then & Now

Then: In the future, everyone will be famous for 15 minutes.

Now: In the future, everyone will make a Hitler YouTube clip.

It Is a Cruel Cruel World

So you're a good-hearted, environmentally-conscious, lefty kinda person...you want to help save the world by doing your part. So you pay an extra $4000 for a car to get a Prius because you want to stop global warming. It'll take nine years for that investment to pay off, but who cares, there is more to good global citizenship than dollars and cents. Secretly though you actually like having more money than less money (sshhh! don't tell the gang at the coffee house!), and relish the prospect of a quick payback because Barack Obama is in the White House and he's going to ban drilling for oil in US waters and gas is going to skyrocket. You are on the road to not just environmental righteousness but savvy financial geniusdom as well. You are awesome and everyone is gonna have to admit and bow to your awesomeness! Awesome!

That was one year ago. Since then it turns out that the global warming scientists were cheating and lying. There may not even be global warming. There certainly isn't going to be any global policy achievements to reduce it, so your Prius is a worthless bust when it comes to doing something for the environment. Well, at least the impending scarcity of oil is going to make that $4000 payback come sooner, right? Maybe not since President Obama, in his first SOTU address called for more oil and gas drilling offshore. Who knows, but maybe that nine years is going to really be like, twelve. Oh, and you may have faulty brakes...

Chavez Invents New Basis for Legitimacy

Is increasingly stupid and desperate-sounding rhetoric a sign that Hugo Chavez is getting scared? Latest wisdom from El Commandante: The Russians want me to rule Venezuela.

Venezuela: Chavez Says Other Nations Want Him In Power
Stratfor Today »-->February 4, 2010
Venezuelan President Hugo Chavez announced Feb. 4 that Russia and other nations with major investments in Venezuela want him to continue in power, Globovision reported. Chavez said that if the opposition returned to power, oil in the Orinoco Belt would belong to the United States.

That's rich. The Russians! Um, er, what about the people of, say, Venezuela? Do they factor in?

Orwellian Reality: Unsustainable = Will Clearly Be Sustained

We need a new word to replace "unsustainable" in speaking of our government's fiscal policy. Our current fiscal path is unsustainable to be sure, but, aside from stating to grate, the word "unsustainable" is perversely providing cover for the type of behavior that it is supposed to check. Whereas ordinarily the goal of pointing out the unsustainability of something is to get the object of your concerns to cease to sustain the dangerous behavior in question, the word has come to be a feeble bona fides for a basic level of connectedness to reality. One can, as most all politicians seem to be doing, agree to the assessment of "unsustainable" to establish membership in the world of the sane and then go back to sustaining the status quo. In the modern political lexicon "unsustainable" now means, "we have more time until the implosion." This is how you can speak of a drug addiction as unsustainable if it is somebody else's drug addiction, but if it is your teenage child's drug addiction then unsustainable takes on its normal meaning, aka "this must stop and I will make it stop, now." The critical difference in the two meanings is whether one cares about the implosion or not. A loving parent cannot countenance the disastrous, rock bottom situation that a child will eventually arrive at if a drug addiction is allowed to persist, so unsustainable means, "shall not be sustained." A left-wing government's concern over the eventual bankruptcy of a free-market, capitalist nation is slight, perhaps even desired. But there are elections, so a nod is made to "unsustainable" so voters can be lulled into thinking "he gets it," but the behavior somehow persists. When enough people view our government's spending habits as that loving parent, things will stop, otherwise things will hurtle along unsustainably until we hit the wall and we'll look back and say "I guess we were right, this all was unsustainable, why didn't we do anything about it?" Let me clue you in folks, there is no joy in being correct and yet bankrupt.

We need a new Congress to be sure, but first we need a new word. Personally, I prefer two words - "f**king insane." Until we ditch "unsustainable" and start talking about government spending in new terms - like "f**cking insane" - we won't get any traction.

Academic Pursuits

In a very strange post indeed, Greg Mankiw highlights ongoing lamentations among academic economists over cap-and-trade legislation. Who says modern intellectuals have evolved from the bad old days of arguing how many angels can fit on the head of a pin? Haven't these guys heard the news - there is no more underlying fundamental need for cap and trade legislation, so why waste time debating its finer points? It seems cap-and-trade mechanisms have a rare quality of arcane interest to academics, and I guess it may even be pretty interesting if I thought about it enough, but I don't because cap-and-trade is a policy solution to a non-problem (that is getting more non-problemy as we speak).

Not Even the Smallest Violin...No Damn Violin

I've said it before (twice) but it bears repeating: "Hey Europe, tough titties."

File Under: Be Careful What You Wish For

You wanted smaller Wall St. bonuses...well, you got 'em! So tack on another $750 million to the black hole that is New York State's budget deficit.

Also, another I told ya' so...

Global Finance Heh

You've heard of the BRICs. Now meet the PIIGS...

"The Portuguese government failed to find sufficient investor interest in its bonds on Feb. 3, with only 300 million euros ($417 million) of its 12-month bonds sold out of an expected 500 million euro bond offering. The interest that Portugal will have to pay on the bonds was 1.38 percent, compared to 0.93 percent at a Jan. 20 auction. The increase in the cost of financing debt indicates investor skepticism toward Portuguese debt. This follows Portugal’s Jan. 25 budget announcement in which Lisbon failed to convince credit rating agencies — specifically Fitch and Moody’s — that its austerity measures were sufficient to cut its budget deficit. Furthermore, Portugal’s 2009 budget deficit was 9.3 percent of gross domestic product — higher than the forecast 8.5 percent — and Lisbon will only be able to reduce the deficit by 1 percent in 2010. The news of a poor bond sale from Portugal follow some positive news from Greece, where a semblance of investor confidence returned on Feb. 3 — interest on government bonds fell to 6.73, after hitting a high of 7.16 on Jan. 28 — due to positive comments from the EU Commission regarding the Greek budget austerity plan. The dire news from Portugal, however, indicates that investors still lack confidence in the PIIGS (Portugal, Ireland, Italy, Greece and Spain) as a group. A sufficiently negative perception of PIIGS economies could force financing costs to skyrocket, making it difficult for Eurozone’s peripheral states to finance their ballooning budget deficits. This could force the EU to step in; rumors have swirled recently around European capitals that eurozone members are discussing the possibility of floating a eurozone-wide bonds which would then provide funding for countries in trouble. It is unclear at the moment, however, how willing Berlin is to offer such a lifeline to the PIIGS when it wants to put the onus on budgetary austerity measures instead."

Somewhere in a Boardroom in Tokyo...

"Shit, it's hard enough doing business in America wot with Jesse Jackson shaking you down, now we have to deal with this doofus LaHood!

Ooops!!

Um, sorry about that 12 year running lie that the MMR vaccination causes autism. If you were a parent addled with fear and angst, or made a bad decision, or your life was ruined becasuse of us, we can only say, "Dude, sorry."

A lesson in not believing the "science is settled" until it is well and truly settled about ten times over. Beware the scientific absolutists.

WR Mead: Yes, Global Warming Is Dead

Wow, Walter Russell Mead agrees with me. I beat another big name pundit to the punch!