The March of Islam

Who’s Sleeping More Deeply — Europe or America?

My book came out in the midst of the Danish cartoon crisis. And during that crisis I saw things in Europe that — quite frankly — surprised and impressed me. I saw the editors of a Danish newspaper, Jyllands-Posten, stand up for freedom of expression in the face of worldwide rioting, vandalism, and murder by Muslims and contempt on the part of foolish Westerners. I saw a Danish prime minister, Anders Fogh Rasmussen, in defiance of the UN, the EU, and most of the “international community,” stand by that newspaper and refuse to meet with Muslim ambassadors who were out to intimidate his country and to force Sharia-like restrictions on Western liberties. I saw the people of Denmark, in overwhelming numbers, stand behind their prime minister in his refusal to yield to jihad. And I saw major newspapers across Europe reprinting the Jyllands-Posten cartoons in acts of free-speech solidarity.

I don’t mean to paint too rosy a picture. The Danish response wasn’t perfect. Not a single newspaper in Britain reprinted the cartoons. And both the Swedish and Norwegian governments provided textbook cases of cowering dhimmitude. But none of that was really a surprise. What did surprise, and disappoint, me was the American political and media establishment. Both Bill Clinton and George W. Bush condemned the Jyllands-Posten cartoons out of hand. The State Department denounced them too, and only reversed itself after getting an earful from the Danish government, one of its few allies in Iraq. In the entire United States of America, exactly one major newspaper, the Philadelphia Inquirer, reprinted the cartoons. And while the major broadcast networks, as well as CNN, Fox News, and MSNBC, reported extensively on the cartoon riots, none of them ever showed the cartoons at all.

Read the whole thing at Pajamas Media.
I am not forgetting. I hear that most muslims are peaceful and that only a handful of homicidal maniacs have highjacked the religion. Well those murderous turds are the only ones I care about. The so called moderates have allowed their religion to be stolen and sit silently in the corner. They deserve no consideration. But the terrorists must be taken seriously and dealt with ruthlessly. Never forgive never forget.

From Iowahawk: Hey Barack

Watch the video at Iowahawk. very funny.

Rogef tells us who is at fault.

from Roger's Rules via Insta;undit

Who caused “the biggest financial crisis since the Great Depression?”

read the article at the link

Who gave us the house of cards? Watch the whole thing here

Going Down Like The Titanic

The Baltic Dry Index is an index of shipping rates. Market analysts watch the index as an indicator of growth or shrinkage in the global economy. Right now we are getting shrinkage worthy of Seinfeld.
Thanks to Bespoke for the chart.

Overheard in Washington

"Son, we live in a world that has bonds and those bonds need to be bought by men with balance sheets. Who's gonna do it? You? You, Lieutenant Fuld?
I have a greater responsibility than you can possibly fathom. You weep for Bear Sterns and curse the short sellers; you have that luxury. You have the luxury of not knowing what I know: that Lehman's death, while tragic, probably saved firms and that my existence, while grotesque and incomprehensible to you, saves markets.
You don't want the truth because deep down in places you don't talk about at parties you want me buying bonds, you need me buying bonds. We use words like TSLF, PDLF, Super SIV. We use them as the backbone of a life trying to defend something. You use them as a punchline.
I have neither the time nor the inclination to explain myself to a man who rises and sleeps under the blanket of the very freedom I provide and then questions the manner in which I provide it. I would rather you just said "thank you," and went on your way. Otherwise, I suggest that you pick a sub-prime option arm bond and pay par.
Either way, I don't give a damn what you think you are entitled to."

(I do not know the author of this comment but I love it.)

Magazine Indicator?

The Economist cover via Fullermoney

More on Eurobanks

The beginning of the end game…

WSJ: Euro Banks Too Big To Rescue?

This is not good , nor is it surprising. From the Wall Street Journal:

European banks face greater capital shortages than their U.S. counterparts, but have become too big for any one European country to save, according to an article published Saturday by European economists Daniel Gros and Stefano Micossi on the Centre for European Policy Studies’ Web site.

The “overall leverage ratio” - a measure of total assets to shareholder equity - of the average European bank is 35, compared with less than 20 for the largest U.S. banks, the economists say, and relatively small writedowns on their assets could have a devastating impact on a bank’s capital.

The problem for European regulators is that European banks rival or in some cases exceed the economic size of their native European economies, making a rescue package in Europe difficult, according to Gros and Micossi. For example, Deutsche Bank, with an overall leverage ratio of 50, has liabilities of €2 trillion, over 80% of the entire German economy.

The Fed snatches AIG at last moment

Bloomberg:

Sept. 16 (Bloomberg) -- American International Group Inc. avoided the worst financial collapse in history by accepting a rescue that provides an $85 billion loan from the federal government in return for a majority stake.

I feel bad for Mr. Greenberg who built the company. But I don't feel bad for the other equity holders that is what equity risk. Just like Bear and Lehman profits had becoming from a highly leveraged strategy with total disregard for risk. The shareholders benefitted and then they lost. That is how high leverage works.

Good news out of China

from Bespoke:

China Finally Cuts Rates

Today, China cut their benchmark central bank rate for the first time since February 21st, 2002. The People's Bank of China cut their one-year lending rate from 7.47% to 7.20%, which will be effective tomorrow.

Bloomberg: Asian Stocks Extend Global Rout

Bloomberg.com: Worldwide

Sept. 16 (Bloomberg) -- Asian stocks plunged the most in
six months, extending a global rout, led by creditors of Lehman
Brothers Holdings Inc. and commodity producers after raw-
material prices slumped.

Mitsubishi UFJ Financial Group Inc., the largest Japanese
bank, dropped 9.8 percent in Tokyo. Babcock & Brown Ltd., among
Australia's biggest losers from the global credit crisis, sank
32 percent. American International Group Inc., seeking funds to
avoid failure, plunged 61 percent yesterday in New York, part of
the biggest tumble in U.S. stocks since the September 2001
terrorist attacks.

It's a bird, it's a plane, no, it's BankAmerica!!

Lehman left at the altar.

Sept. 14 (Bloomberg) -- Bank of America Corp. agreed to buy Merrill Lynch & Co. for about $44 billion, a person with knowledge of the deal said, after shares of the third-biggest U.S. securities firm fell by more than 35 percent last week and smaller rival Lehman Brothers Holdings Inc. neared bankruptcy.

Bank of America and Merrill reached a deal in principle, according to the person, who declined to be identified because the deliberations were private. A final merger agreement hasn't been signed yet, the person said. The boards of Merrill and Bank of America approved the transaction this evening, the Wall Street Journal reported, citing unidentified people familiar with the matter.

Lehman Said to Prepare Bankruptcy as Buyers Withdraw (Update1)

Aleph: On Doomed Sectors

From The Aleph Blog:

The Oil drum On Peak Oil

This chart on Peak Oil from Theoildrum.com

Some New Fine Print In Hedge Fune Credit Lines

From the FT:

Wall St duo bring in new lending systems

The message is that "if our firm is in trouble, we would rather fund ourselves than fund you [hedge funds]", said a brokerage executive with knowledge of the arrangements, who added: "We would only use it if there were a real issue."

This is an understandable but not helpful devlopment. Closing the barn door after the horses are gone in hopes of keeping future horses in the barn. But it also has the effect of locking the old horses out. that is a weak metaphor. But reducing credit to large hedge funds that are still functioning reduces liquidty and even further reduces participation in an already thin marketplace.

Coxe: The reason commodities are falling.

reportonbusiness.com: From the Coxe Files: The real reason commodities are tumbling

Donald Coxe who has been as right as anyone I know for about 4 years got caught in the recent commodity downdraft. His explanation at the link above; along with admiration for the Treasury and Federal Reserve.

Another helping of B12 please!

Vital Signs - Aging - Lack of B12 Linked to Brain Shrinkage - NYTimes.com

hat tip Instapundit

Fannie won't and Freddie can't

Jeff Saut leads off today's commentary on the Treasury "takeover" of Fannie Mae and Freddie Mac with the famous Desi Arnaz quote "somebody got some splain'in to do".

Larry Elder: asks JFK Democrats Role Model?

Larry Elder has written a terrific article: here

By Larry Elder
Published: 09-04-08

The John F. Kennedy legacy came up repeatedly during the Democratic National Convention. But today, would JFK even be a Democrat?

Kennedy supported, in today's lexicon, a George W. Bush-like "belligerent" approach to fighting the Cold War, and told CBS' Walter Cronkite it would be "a great mistake" to withdraw the American presence from Vietnam. In his 1961 inaugural speech, Kennedy said, "Let every nation know, whether it wishes us well or ill, that we shall pay any price, bear any burden, meet any hardship, support any friend, oppose any foe, in order to assure the survival and the success of liberty."

How would such a man feel about fighting today's global peril -- Islamofascism?

Barack Obama likes to point to the 1961 Kennedy-Khrushchev summit to support his desire for meetings "without preconditions" with enemies such as Iran and North Korea.

But Kennedy's secretary of State, Dean Rusk, urged against such a non-conditions-based summit. And later, Kennedy called the summit meeting the "roughest thing in my life. (Khrushchev) just beat the hell out of me. I've got a terrible problem if he thinks I'm inexperienced and have no guts." Indeed, Khrushchev thought Kennedy a weak amateur. Following the summit, Khrushchev built the Berlin Wall and placed missiles in Cuba, an action that led the world to the brink of nuclear conflict.

Kennedy believed in cutting taxes -- deeply and dramatically. Before Kennedy's tax cuts, the top marginal tax rate stood at over 90 percent, and Kennedy -- albeit after his assassination -- got it reduced to 70 percent, a much greater percentage reduction than did Bush. Kennedy, in a 1962 speech before the Economic Club of New York said, "It is a paradoxical truth that tax rates are too high today and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now. The experience of a number of European countries and Japan have borne this out. This country's own experience with tax reduction in 1954 has borne this out. And the reason is that only full employment can balance the budget, and tax reduction can pave the way to that employment. The purpose of cutting taxes now is not to incur a budget deficit, but to achieve the more prosperous, expanding economy, which can bring a budget surplus."

Read the rest.

The Frenchocrat Attack Machine

Dean Barnett writes

Diminishing Palin
How the left will try.
by Dean Barnett
08/31/2008 The Weekly Standard

In 1981, former Harry Truman consigliere and LBJ Secretary of Defense Clark Clifford memorably labeled the new Republican sheriff in town an "amiable dunce." At the time, Clifford was the living embodiment of the Washington establishment, and his glib analysis showed that while you can find the occasional memorable phrase on the D.C. cocktail circuit, facile conclusions delight the crowd more than serious inquiry. It comes as no small irony that in the years that followed, the discovery of Reagan's voluminous private writings revealed him to be the finest writer and most original political philosopher to sit in the Oval Office since at least Theodore Roosevelt. As for the condescending genius Mr. Clifford, he ended up the 1980s enmeshed in the BCCI scandal, thanks largely to his own confusion. At least that's how he told the story, complaining to the New York Times, "I have a choice of seeming either stupid or venal." Clifford opted for the former.

However obtuse, Clifford's summation of Reagan sat on the cutting edge of a new school of political partisanship. Starting with Gerald Ford, the inside-the-beltway class and its amplifiers in the media have routinely decided that Republicans who seek national office are dullards. Literally every Republican candidate for president since 1980 has had his intellect belittled. Even Bob Dole, a candidate who had spent decades proving his remarkable mental acuity in Congress, had to face such salvos because his age had allegedly dulled his mental edge. Sound vaguely familiar?

The Republican should have her on TV all the time. She is attractive articulate and natural and no one who watches her is going fail to see her intelligence.

Gross: But not here

PIMCO - Investment Outlook Bill Gross Sept 2008 Bull Market

Investment Outlook

Bill Gross | September 2008

There's a Bull Market Somewhere?

A Depression-era bank robber
named Willie Sutton once said that the reason he robbed banks was
because “that’s where the money is.” Illegal for sure, but close to an
800 SAT score for logic if you were in the business of stealing other
people’s money. And now, while some will compare current government
bailouts to Slick Willie, citing moral hazard, near criminal regulatory
neglect, and further bailouts for Wall Street and the rich, common
sense can lead to no other conclusion: if we are to prevent a
continuing asset and debt liquidation of near historic proportions, we
will require policies that open up the balance sheet of the U.S.
Treasury – not only to Freddie and Fannie but to Mom and Pop on Main
Street U.S.A., via subsidized home loans issued by the FHA and other
government institutions. A 21st century housing-related version of the
RTC such as advocated by Larry Summers amongst others could be another
example of the government wallet or balance sheet that is required
during rare periods when the private sector is unable or unwilling to
step forward.

Mr. Gross is a smart man and a legendary trader of interest rates I hope he finds something to cheer him up soon.

Indian Markets Like Water Sloshing In The Tub

DNA - Money - India funds see $944m redemptions - Daily News & Analysis

It’s the fastest in the world in a month, & twice Chinese outflows

MUMBAI: The speed at which they are fleeing, investors in Indian
markets could give sprinters at the Beijing Olympics a run for their,
er, medals.

India-dedicated funds have seen $944 million outflows
in the month to July 9, the highest redemption faced by any
country-specific funds group in the period, according to EPFR Global
data.

According to EPFR Global, billions of dollars of outflows from
offshore Asian funds have been going on for five weeks in a row and
reached $1.8b in the week ended July
9.Comparing this with the
size of weekly redemptions between mid-December and late February, the
average outflow of $1.5 billion in the last five weeks is 48% bigger.
Citigroup
Asia Pacific analysts Elaine Chu, Markus Rosgen and Brian Li said with
Asian stocks underperforming world equities by 955 basis points year to
date, net outflows from Asian funds have risen to $13.2 billion so far
this year.

“Alternatively speaking, 80% of new money taken in last year is now redeemed,” they said in a strategy note on Monday.

Good News The Sharks Are Swimming In The Debt And Real Estate Waters

Bloomberg.com: Asia

Sept. 4 (Bloomberg) -- Merrill Lynch & Co.'s talks to sell a
``significant'' amount of bad loans to Korea Asset Management
Corp. are faltering because of a dispute over price, the Korean
firm's chief executive officer said.

``We have yet to reach an agreement because of differences
in assessing the value of assets,'' Lee Chol Hwi said yesterday
in an interview in Seoul. ``We have been seeking to buy a
significant amount, but a deal may be difficult at this rate.''

and

Bloomberg.com : Florida

Florida Real Estate Bottom Signaled by Sale of Distressed Condo

By Bob Ivry

Sept. 4 (Bloomberg) -- Sales of distressed Miami properties
have begun, signaling a bottom for south Florida's real estate
market and the end of waiting for vulture funds armed with about
$30 billion to spend.

Neither of the above news items is decisive but it is good news to see valuations have begun to attract interest from folks with dry powder. Actual buyers of distressed assets will draw competitors afraid to miss the bottom.