Saturday, February 6, 2010

OT: Vancouver Olympics and World War II Concentration Camp for Japanese

Did you know that Vancouver Olympics is about to start in a week? I didn't, as I don't have TV any more.

Did you know that one of the venues sits right next to the park (Hastings Park, Wikipedia makes no mention of this) where, during World War II, the Canadian government forcibly relocated the Japanese Canadians from their coastal homes (many of them were fishermen) and put them in exhibition halls and horse stables?

Pacific Coliseum, which will host figure skating events, sits right next to that park, and the top contenders for gold medals for both men's and women's figure skating are Japanese.

Here's an article in Yomiuri Shinbun, one in the series for the coming Olympics. In Japan, both summer and winter Olympics are major, popular events. Japanese athletes increasingly compete on the top, world-class level in many sports, and the winter Olympics figure skating is one of them.

Olympics Figure Skating Venue Sits Next to Former Japanese Concentration Camp Site (Shoichi Yamashita, 2/6/2010 Yomiuri Shinbun; my partial translation, original is in Japanese)

Winter Olympics will start in a week in Vancouver. Few people know that, right next to the building that will host figure skating, in which top Japanese skaters are competing for medals, there was a concentration camp for Japanese Canadians during World War II.

10 kilometers east from the center of Vancouver stands "Pacific Coliseum" in a large park. It is a venue for figure skating and short tracks ice skating.

According to the archive at the city library, 8,000 Japanese living on the pacific coast side of Vancouver were interned for a half year in 1942, in pavilions and horse stables in the park. Many Japanese in Vancouver at that time were fishermen, and the Canadian government was afraid that they would collaborate with the imperial Japan providing the detailed information on coastlines. The government seized their fishing boats and houses, and forced them on a bus.

Mary Ohara, 80-year-old Canadian-born Nisei, was one of them. The police came to her house one day, and ordered the family to leave the house within 24 hours. They were allowed to carry one suitcase. She left with her parents and siblings. Obediently, because they were taught not to resist the government and the police, lest they became a shame onto the Japanese.

In the camp, a horse stable was the living quarters for women and children. Ms. Ohara had to endure the smell of horse manure by laying down the cushion stuffed with straw on the concrete floor. Only privacy they had was a blanket between the double-deck bunk beds. Freedom was restricted. Ms. Ohara remembers watching white children playing in the park, from behind the fence.

Japanese Canadians were later moved further east, and couldn't come back to Vancouver until after the war. The Canadian government formally apologized in 1988.
In "multicultural" Canada, increasing number of Japanese are marrying out. People who knows the hardship of Issei and Nisei have decreased. Ms. Ohara's son and daughter are no exception. Ms. Ohara, who spent 8 years in Japan after the war and then came back to Canada, says she doesn't hold hard feelings toward Canada, and she will cheer for both Canada and Japan in the Olympics.

Starting in 1942, the Canadian government forcibly moved 22,000 Japanese Canadians in British Columbia from the coastal region to 100-mile inland. They were initially housed in a concentration camp in this park. They were allowed to come back to Vancouver after the war, but since all their belongings had been taken away by the government, many went back to Japan.

[And I remember the irony of irony... It was Japanese American soldiers who liberated a Nazi concentration camp in Dahau, while their families were still "interned" back in the United States.]

FDIC Failed Banks in 2009: 140

Sorry for the tardy posting.

January 2010 already started with a robust number: 15 banks failed.

And remember, FDIC is broke. As of September 2009, its DIF (Deposit Insurance Fund) was negative $8.243 billion. When FDIC releases its Quarterly Banking Profile for the 4th Quarter 2009 sometime this month, it's safe to assume it is in the hole for over $10 billion, guaranteeing $5.3 trillion (or more) deposits.

These days, numbers in billions fail to surprise anyone, don't they? If this is not inflation, I don't know what is.
For this inflated perception, we can thank Henry M. Paulson for throwing $700 billion number for the bank bailout - any number that's big enough to scare people into passing the bill. Up till then, George Bush's stimulus of over $100 billion was considered extravagant spending.

Friday, February 5, 2010

"He looks like a crook. He looks like he would take every single thing you have."

This footballer was referring to Ben Bernanke, whose face he didn't recognize, but he saw the truth deeper down.

This from Lew Rockwell at LRC Blog, "Football Truth":

"Every year, CNBC’s Squawk Box quizzes some of the Super Bowl players on current financial issues. I only caught a little of it this morning, when they were asked to identify a photo of Ben Bernanke. One untutored guy was full of wisdom: “I don’t know who he is, but he looks like a crook. He looks like he would take every single thing you have.”" [emphasis is mine]

Here's the video clip of the show segment. When he was asked if he knew what the Fed (Federal Reserve) does, his answer was "To lock you up."

Another player, when asked if he knew what the current unemployment number was, answered "50%. 38%?" The reporter was saying no, no, until the player came down the right answer that he was looking for (10%). For him, the number was surprisingly LOW. I tend to share his surprise than the government number. In some cities the true unemployment number (U6) is that high, actually, and the unemployment among young blacks is 35%.

One Neoconservative to Obama: Bomb Iran and Save Your Presidency

I hear that President Obama will be interviewed by Katie Couric of CBS during the pre-game show of the Super Bowl this coming Sunday. He's been going all over the place in the U.S. since the Massachusetts special election, trying to cast a new image of a aggressive, combative commander in chief who is not afraid to be unpopular to do the right thing. (Or something like that.)

And this neo-conservative writer is egging on Obama to embark on a sure-winner to further boost his image and popularity among Americans and America's allies: Bomb Iran.

Bomb Iran, and the American people would rally around you, he says.

How to Save the Obama Presidency: Bomb Iran
(Daniel Pipes, 2/2/2010 National Review)

"I do not customarily offer advice to a president whose election I opposed, whose goals I fear, and whose policies I work against. But here is an idea for Barack Obama to salvage his tottering administration by taking a step that protects the United States and its allies."

"...... He needs a dramatic gesture to change the public perception of him as a light-weight, bumbling ideologue, preferably in an arena where the stakes are high, where he can take charge, and where he can trump expectations.

"Such an opportunity does exist: Obama can give orders for the U.S. military to destroy Iran’s nuclear-weapon capacity."

After citing the poll numbers seemingly suggesting the American public would support attacking Iran (but remember, poll questions are crafted to elicit the desired answers...), he continues:

"Not only does a strong majority — 57, 52, 58, 61, and 61 percent in these five polls — already favor using force, but after a strike Americans will presumably rally around the flag, sending that number much higher."

So he is suggesting Obama bomb Iran to boost his poll numbers.

"Just as 9/11 caused voters to forget George W. Bush’s meandering early months, a strike on Iranian facilities would dispatch Obama’s feckless first year down the memory hole and transform the domestic political scene. It would sideline health care, prompt Republicans to work with Democrats, and make the netroots squeal, independents reconsider, and conservatives swoon."

In other words, everyone in the U.S. would flock to Obama with starry eyes, if only Obama bombs Iran, a country that has never attacked the U.S. and which has never posed a threat to the U.S.. For what? Obama presidency makeover? And he is not suggesting a makeover in substance but image and perception.

Much like ads for branded goods.

The most recent buildup in the Middle East does indicate something may be up. Since Obama seems to be on a rampage beating up on nation's top banks, Supreme Court judges, Americans who oppose his policies (half the country), GOP, Reuters, Toyota, Ken Lewis, it's about time he ventures outside the border for a fresh target.

To be sure, if John McCain had been elected as president, he would have bombed Iran long time ago, as he merrily sang. (Sort of.)

Here's what one weary observer says about Obama and Iran:

Will Obama Play the War Card? (Pat Buchanan, 2/5/2010

Confusing Employment Numbers from Government, the Stock Market Drops Another Day

The market is not believing the government numbers today. January unemployment number "unexpectedly" dropped to 9.7%, but the country lost another 20,000 jobs at the same time.

Yeah right.

The latest adjustment to the Birth/Death model added over 1 million job lost on top of 7.2 million job loss since the recession started in December 2007. Now the total job loss since December 2007 is $8.4 million, the highest since World War II.

The model was off by 13%, and the government has no intention of abandoning it. Why? Probably because it is highly manipulative to suit their changing needs.

The U.S. major stock indices, after the bottom fell out yesterday, cannot even sport a DCB (dead cat bounce). Dow is currently down 135 points to 9,865. Goodbye, Dow 10,000. It is going to be a huge overhead resistance, coming from below (if that ever happens).

I should have gotten "Dow 10,000 2.0 Hat" from NYSE. Maybe I will still do, as a sentimental memento. For I am not so sure if the version 3 ever happens.

Thursday, February 4, 2010

Phoenix AZ OKs 2% Tax on Food

Trust me, this will be so popular with every city and county managers in the U.S. Also with public unions (police, firefighters, teachers, etc.), which already successfully campaigned in Oregon for "tax the rich" scheme that would save their jobs and pensions at the expense of higher tax for higher-income earners and private businesses, big and small.

Tax on food, you can say it is "tax everyone" scheme. But there is no equality here, because the poor will suffer more as the proportion of income going to food items is higher for them. (Unless of course they rely 100% on food stamps in Phoenix.)

Phoenix gives OK to 2% tax on food (2/3/2010

"Desperate to save police, fire and other city jobs, a divided Phoenix City Council on Tuesday approved a sales tax on grocery items that will generate tens of millions of dollars a year.

"The 2 percent food tax will take effect April 1 and expire after five years, though Mayor Phil Gordon said the council has the option of reversing its decision after it hears from the public during 15 budget hearings planned for this month.

"The tax on milk, meat, vegetables and other food purchased by shoppers will generate an estimated $12.5 million for the fiscal year that ends June 30. It will raise another $50 million for fiscal 2011. Food purchased with food stamps will not be taxed." [The article continues.]

$12.5 million new tax will fill only 5% of $241 million deficit that Phoenix has to fill.

Let's all go bankrupt and receive food stamps. Walk away from the mortgages. Why bother struggling, trying to make ends meet on your own? All they (government, federal and state and local) do is to take from us. "It's for your own good", they all say.

Wait till they start talking about VAT again (which I suspect may be coming soon), and kiss any shred of hope for recovery goodbye.

States that already have tax on groceries: Arkansas, Georgia (same rate as state sales tax), Illinois, Lousiana (same rate as state sales tax), Missouri, North Carolina (same rate as state sales tax),Tennessee, Utah, Virginia, West Virginia.

(The information source, the Federation of Tax Administrators, is short on staff, so the information is 2-year old. The Federation hopes to update the data in January 2010. Well that's gone.)

Treasury: Debt Limit to Be Hit by End of February

Ah the danger of cash method accounting.


The House passed the legislation that would raise the debt limit by $1.9 trillion. The vote was extremely close, at 217-212, with all Republicans voting against and more than 30 Democrats joining them.

Remember, the Treasury Department said the new limit of $14.3 trillion would be hit by the end of this month.

The debt limit, which would be raised by $1.9 trillion to $14.3 trillion, will be hit by the end of February, the Treasury Department says. It is THIS FEBRUARY.

As this blog posted on January 28, the Senate already passed the measure by 60-39 (Scott Brown of Massachusetts was not not seated back then)

Now it's the House's turn to vote today, and the increased debt ceiling will carry them till the end of February. What a joke.

US debt to hit proposed ceiling by end-February: Treasury
(2/3/2010 AFP via Google)

"WASHINGTON — The US debt is on track to hit a congressionally proposed debt ceiling of 14.3 trillion dollars by the end of February, the Treasury said Wednesday, a day ahead of a key vote to raise it to that level.

""Based on current projections, Treasury expects to reach the debt ceiling as early as the end of February. However, the government's cash flows are volatile, making it difficult to forecast a precise date," the Treasury said in a statement.

"The current limit on the public debt of the United States is 12.374 trillion dollars.

"The US debt exceeded 12.349 trillion dollars on Monday, according to Treasury data.

"The US House of Representatives will vote Thursday on whether to raise the US debt limit to a historic 14.3 trillion dollars, allowing the United States to borrow another 1.9 trillion dollars." [The article continues.]

Here's the Treasury Department's "February 2010 Quarterly Refunding Statement" dated February 3, 2010. Aside from the debt limit, there are several interesting things in that statement:

  • "Treasury believes that auction sizes are at levels that give us the ability to adequately address a broad range of potential financing needs, while allowing the average maturity of debt to gradually extend. As such, Treasury anticipates that nominal coupon auction sizes will stabilize at current levels. "
  • Treasury is considering increased auction of TIPS, including a second reopening of 10-year TIPS. This would result in six 10-year TIPS in a year. In 2009, there were four 10-year TIPS auctions.
The amount of Treasury notes and bonds issued has been stable at $200 billion per month. (See the chart here.)

The Treasury Department keeps two sets of books - one done by cash method, and the other by accrual method like everyone else. It is disingenuous of the policymakers to wring hands and plead that they need additional $1.9 trillion to get by this year, when they should know, by accrual method, that they will have used all that up by the end of February. This February.

Government Policies Weighing Down the Economy

And the stock market is acting accordingly, at least for today. Dow Jones Industrial Average is down over 245 points (or 2.4%), to 10,025, threatening to break down below 10,000.

Hedge fund manager Jeff Matthews says the government policies and programs are weighing down on the economy. Uncertainty and direct fear, he says, over what the government might do (so far it's "Let's tax everything and let's spend everything and more.")

He talks about a friend of his, who runs a small manufacturing companies. He told Matthews that he is not going to higher anyone in the U.S. any more when Matthews asked him about implication of health care reform.

President Obama's temper tantrum (against bankers, GOP, Supreme Court, $3.8 trillion budget thrown at us...) over the Massachusetts special election result hasn't helped anything, anybody, except for the Democratic supporters who clearly approve highly of his renewed aggressive stance.

Wednesday, February 3, 2010

Fed's Warsh Wants to Have It Both Ways

The ex-Morgan Stanley banker and ex-PPT member Kevin Warsh, a Fed Governor, wants a system that lets insolvent firm fail, but at the same time wants more control for the Federal Reserve to regulate the global financial markets.

Fed's Warsh says restoring market discipline key
(2/3/2010 Reuters via Yahoo Finance)

"NEW YORK (Reuters) - Federal Reserve Governor Kevin Warsh said on Wednesday that regulatory improvements alone would not prevent future financial crises and the government must be willing to let firms fail.

""Regulation is too important to be left to regulators alone. We need a system in which insolvent firms fail," Warsh told the New York Association of Business Economics." [The article continues.]

Well, Mr. Warsh, that system is called "free-market system". It is almost dead at this point, thanks at least partially to the heavy intervention by none other than the Federal Reserve in both domestic and international financial markets.

Mr. Warsh continues:

"In response to an audience question, Warsh said it was "essential" that the United States coordinate regulatory reform with other members of the Group of 20 rich and emerging countries."

Oh really? Are the members of G20 that homogeneous to allow a common regulatory platform? The government debt to GDP ratio of (so-called) advanced countries including G7 is above 100% and going higher, while the ratio for emerging countries will remain less than 40% and declining. Among BRIC, India has the highest ratio at 60%, Brazil is next at 46%, China at 18%, Russia is the lowest at 7%. The U.S.'s ratio is 40%, much lower than its G7 peers who are pushing toward 100%. Italy and Greece are already over 100%, and Belgium is 99%. (Source: CIA The World Fact Book country comparison of public debt)

In the eyes of BRIC, particularly R and C, a coordinated global regulatory reform would look like a wealth transfer from them to G7, not the other way around.

"Given the global nature of financial markets, the overall "policy prescription has to be global," even as countries make different choices about specific reforms, he said."

Uh huh. Speaking like a true globalist. So Greece made its own choices about its financials, but now Germany may get to bail them out under the umbrella of regional monetary system (Euro). Some raw deal for Germans.

My take on what Mr. Warsh really wants is this: he does want a stronger, global regulatory reform which the Federal Reserve will guide, and the like-minded globalists will pick and choose which firms or countries to let fail, to give a sop to "free market". More like a perception control.

As for his "global" focus, take a look at these charts. They are posted in an article by Bill Gross of PIMCO. Judge for yourself if any "global" regulation is even possible over such a diverse set of fiscal situations.

No Wonder He Won...

This was a campaign ad for Scott Brown, who will be be seated tomorrow as the Massachusetts Senator.

Obama: U.S. Must Address Currency Rates

Hail the Forex Trader in Chief!

On China, Obama says US must address currency rates
(Jeff Mason, 2/3/2010 Reuters)

"WASHINGTON, Feb 3 (Reuters) - President Barack Obama said on Wednesday China and Asia would be a huge market for U.S. exports going forward but it would be important to address currency rates to ensure American goods were not facing a disadvantage.

""One of the challenges that we've got to address internationally is currency rates and how they match up to make sure that our ... goods are not artificially inflated in price and their goods are artificially deflated in price," Obama told senators from his Democratic party.

""That puts us at a huge competitive disadvantage.""

In other words, Obama wants U.S. dollar to depreciate vis-a-vis Chinese yuan and other Asian currencies.

How is he going to achieve that? Chinese yuan is currently pegged to the U.S. dollar. Barring catastrophe (natural or man-made), U.S. dollar would continue to decline as long as Obama and his government are intent on spending out of recession. But since Chinese yuan is pegged to the US$, Chinese yuan would depreciate in tandem with the dollar.

So how is he going to force China to abandon the peg?

By lecturing the Chinese officials? By slapping tariffs on Chinese imports as a penalty until they abandon the peg?

The former would be scoffed at by the Chinese, the latter would probably damage the U.S. more than China. I'll keep thinking of other ways, but this administration has so far shown little understanding of how things work in the reality-based world, which doesn't quite work by decree. In order to figure out what this administration may do, I would have to think like them...

Maybe Mr. Obama could ask Mr. Chavez and ask him how his currency reform is doing. He could also learn from Argentina's Ms. Kirchner about how to raid people's retirement accounts and grab reserves at the central bank.

Tuesday, February 2, 2010

Toyota May Be Slapped A Civil Fine Over SUA

SUA: Sudden, Unintended Acceleration

More on my previous post on Toyota's recall, production halt, and Congressional hearing.

The National Highway Traffic Safety Administration is considering a civil fine against Toyota Motors, according to AFP report today.

Hmmm. Am I alone in smelling a rat?

Roger Hedgecock, a popular radio talk show host at KOGO San Diego, CA, suspects Toyota is being targeted by the Obama administration because Toyota produces cars and trucks that people want to buy, with its non-union labor force.

Obama attacks Toyota (Roger Hedgecock, 2/1/2010 World Net Daily)

"Toyota owners stormed dealerships all over the country last week demanding "fixes" for "defects" described in wildly inflammatory press reports.

"Toyota apologized for "defects" that to date are still being investigated. Before whatever problems might exist had been determined and before any "fix" has been found, the government ordered Toyota to begin the largest recall of vehicles in automotive history. Toyota then shut down its U.S. plants and stopped selling eight of its popular models, including Camry and Corolla.

"The sales suspension affects about 56 percent of all Toyota and Lexus vehicles sold last year. The nation's Toyota dealers estimate they stand to lose $2.5 billion each month that sales of these popular models are suspended.

"...Toyota faces a perfect storm from SUA. But is government "greed" a factor here? As a co-owner of Toyota rivals GM and Chrysler, is the Obama administration and its jihad against Toyota "consumer protection" or revenge against a successful, non-union, red state based rival? Given what Rahm Emanuel said about crisis as an opportunity to "advance the agenda," this question deserves closer attention.

"A year ago, Toyota was riding high. With non-union manufacturing plants in Georgia, Texas, Mississippi, Kentucky and Indiana, Toyota made the most popular and most highly regarded vehicles in the U.S. Rivals GM and Chrysler were imploding, and the president stepped in with massive taxpayer cash infusions and took over these companies as joint ventures between the federal government and the UAW.

"Why is Toyota singled out for SUA? A Consumer Reports study indicated that, for the model year 2008, there were 52 complaints filed with the National Highway Traffic Safety Administration against Toyota for SUA, representing 41 percent of all such complaints even though Toyota had just 18 percent of the U.S. market.

"However, the same Consumer Reports study relates that GM and Chrysler also were the subject of SUA complaints to the NHTSA, but none of their plants were shut and the affected models were not recalled nor banned from sale. One of the vehicles named in these complaints is GM's Pontiac Vibe but the NHTSA has not ordered its recall nor banned its sale.

"The American Company (CTS of Elkhart, Ind.) that supplies some Toyota models with the gas pedal in question also supplies the same gas pedal to Honda, Ford, GM and Chrysler.
Worth noting, too, is the fact that SUA complaints increased after 2002 when Toyota replaced mechanical throttle linkages with electronic ones. It's just easier to find and fix mechanical defects than software glitches. Even the NHTSA could not find the electronic defect that some "experts" allege must be causing the SUA in these complaints.

"All of this is a field day for the Plaintiff's Bar, another Obama ally. Attorneys made fortunes in the "unsafe at any speed" Corvair, exploding Pinto and rollover Ford Explorer cases. These could pale in significance compared to SUA and the scale of Toyota's recall. The publicity over 52 complaints out of 1.8 million Toyota/Lexus vehicles sold in the U.S. in 2008 has made every owner concerned about the safety of their Toyota vehicle.

"This panic could fuel lawsuits big enough to put Toyota out of business in the U.S. What a boon for Government Motors! Indeed, last Friday, GM, Chrysler and Ford all announced ad campaigns aimed at worried Toyota owners.

"Toyota will announce a "fix" for the gas pedal this week. What's at stake here is not just the safety of the individual Toyota vehicle, nor even the financial health of that company – but the very existence of a free competitive vehicle market in the U.S."

Volcker and Bernanke: Of Same Mind about Fed

Contiuing on the theme of "Everything is alright now", let's go to today's Bloomberg article. It's about Paul Volcker, who many people secretly, and some openly, hoped would replace Ben Bernanke and return to the Federal Reserve as the chairman. He would clean up the Fed, the greedy banksters, he would know what to do, unlike Bernanke.

So much for that. Volcker and Bernanke are of the same mind when it comes to the Federal Reserve and the Fed's regulatory power over the nation's financial industry. Volcker probably wouldn't have done any differently than Bernanke.

Volcker Looms Larger as Ties With Bernanke Strengthen
(Rich Miller, 2/2/2010 Bloomberg)

"Feb. 2 (Bloomberg) -- Paul Volcker is enjoying increased influence with the Federal Reserve as well as the Obama administration, central bank records show.

"Volcker, who headed the Fed from 1979 to 1987, met current chairman Ben S. Bernanke six times in the year through November, the latest month that the Fed has made its records available. In the prior year, the two men only got together once.

"“Volcker has had very strong views on regulation going way back,” said Lyle Gramley, who served as a Fed governor under Volcker and is now a senior economic adviser to New York-based Potomac Research Group. “It would be logical for Bernanke to talk to him about financial reforms” as policy makers wrestled over how to prevent another crisis.

"Bernanke in the past year has advocated tighter rules for banks’ capital, leverage and liquidity, moving closer to Volcker’s view that more regulation is necessary to protect the financial system. “We cannot lose sight of the need to reorient our supervisory approach and to strengthen our regulatory and legal framework,” Bernanke said in a speech on Oct. 23. "

"...“Ben has been through the fire,” Volcker said in a telephone interview. “He’s much better qualified now than he was four years ago, before he went through that experience.” "

Just like all was forgiven for Geithner with Obama's hug, Ben's past mistakes are forgiven by Volcker. Bernanke has learned, and Volcker is satisfied. All is well.

Volcker, who had been somewhat marginalized within the Obama administration until a few months ago, clearly has no intention of rocking the boat.

"Volcker initially voiced concern about the Fed’s actions in combating the crisis, telling the Economic Club of New York in April 2008 that the central bank had acted at “the very edge” of its legal authority in helping to rescue Bear Stearns Cos.

"When he next appeared before the club, on Jan. 14, Volcker devoted much of his speech to a pitch for the Fed to retain a role as a financial supervisor. His comments came a day after Bernanke sent an 11-page paper making the same argument to members of the Senate Banking Committee. "

For Volcker, it's "the Federal Reserve above all".

"That anger -- and the threat it poses to the central bank’s independence -- may have convinced Volcker to step up his support of Bernanke and the Fed, said former Fed economist David Jones, president of Denver-based DMJ Advisors and author of four books on the central bank.

"“His dedication to the principle of central banking independence has no limits,” added Neal Soss, who served as Volcker’s assistant from 1981 to 1983 and is now chief economist for Credit Suisse Holdings USA Inc. in New York.

"Volcker endorsed giving the Fed the power to guard against risks to the financial system as a whole in an opinion article in the New York Times on Jan. 30. "

All is well. Nothing to see here. Move along.

Obama Hugs Timmy, and Everything Is Alright

Little 'Toinette, trying best not to look at her straight, says to Madame Du Barry, "There are so many people at Versailles today."

Madame Du Barry smiles a smile of victory, and the whole court erupts in cheer. "The Dauphine finally spoke to Madame Du Barry [Louis XV's official mistress]! All will be fine from now on!"

And so Obama hugs Timmy Geithner and all is well on the Imperial Court of Capitol Hill.

Capitol Hill Insiders Say Obama Hugging Geithner Changed Everything (John Carney, 2/1/2010 Business Insider)

"The end of Tim Geithner has itself come to an end.

"Sources on Capitol Hill say that Geithner's status was re-elevated last week when president Obama embraced him before the State of the Unions address.

"That is a 180 degree reversal in the perception of the Treasury Secretary's fate from just over a week ago. Back then people thought Geithner had basically been fired.

""When the president hugs you in front of every member of the US Senate and every member of the House, that's a signal that you still have the power," one Senate staffer told us.

"Others on Capitol Hill we spoke to agreed.

""It was a clear message that the perception from the Volcker announcement was wrong. Geithner is still in Obama's inner circle," another staffer said.

"The hug that changed the perception on Capitol Hill was preceded and followed by administration members talking to reporters and bloggers behind the scenes, saying the symbolism of the Volcker press conference had been misinterpreted. That message has now sunk in.

"At least in the eyes of many lawmakers and staffers on Capitol Hill, Geithner is back."

Obama White House Orders Reuters Article Recall

After ordering Toyota to recall and to stop the production of Camrys and Colloras and Tundras, the Obama White House orders (or pressures) Reuters to retract an article about the 2011 federal budget proposal.

Things are getting weirder by the day, and I don't like it a bit.

Earlier this morning, I went to Yahoo Finance as I always do every morning and read the news by Reuters about the 2011 federal budget proposed by Obama, "Backdoor taxes to hit middle class" written by Terri Cullen on February 1, 2010.

When I checked back later, the article was gone. Instead of the article, I get a Yahoo search page. Drudge Report's headline says "Reuters pulls tax story".

What's going on?

It turns out the Obama White House put the pressure on Reuters to withdraw the story last night, by ostensibly pointing out "the errors of fact":

Reuters Pulls 'Backdoor Taxes' Story (Rachel Slajda, 2/2/2010 TMP)

"The news service Reuters withdrew a story last night titled "Backdoor taxes to hit middle class" after the White House reached out and pointed out "errors of fact."

"The story, which claimed the White House's deficit reduction plan relies on raising taxes against the middle class by allowing tax cuts to expire, was withdrawn at about 8 p.m. Monday, according to Yahoo timestamps. The original story ran at 4 p.m. The withdrawal promises a replacement story later this week.

""The story went out, and it shouldn't have gone out," said Courtney Dolan, a spokeswoman for Reuters. "It had significant errors of fact."

"She would not elaborate on the specific errors, but said Reuters will "address those specific points that were incorrect."

""The White House did contact us and point out errors of fact," she added.

"The story was running at the top of the Drudge Report's front page this morning (here's the archived page) until White House Deputy Press Secretary Bill Burton tweeted about the withdrawal:

"FYI - Reuters has withdrawn the story at the top of the Drudge Report. Check it
out here:"

That Bush-era tax cuts are set to expire and that Obama has no intention of renewing them has been known. So what's wrong with the Reuters editor Terri Cullen, who worked for Wall Street Journal Online for 13 years, to point those out?

What exactly are "the errors of fact", and why does it take Reuters until "sometime later this week" to issue a replacement article? A replacement?

It seems that America is fast becoming 'Oceania', controlled by "Minitru".

Monday, February 1, 2010

Have Your Mind Scanned Before You Fly

Assaults are coming fast and furious again, after the Massachusetts special election which pissed off (I know I should say "energized") the president. More government, more control over more aspects of your life is the answer, the only answer, in these troubled times, according to him. Trust your government, he says.

And so it should be no surprise that we may be told to submit to the mind-reading scanners when we fly next time.

This from LRC Blog at

‘Can You Read My Mind’—in Hebrew? (David Kramer, 1/30/2010 LRC Blog)


As part of stringent measures to beef up airport security, US authorities may use an Israeli-made mind-reading scanner that allegedly predicts whether a passenger is a
potential threat or not. The Transportation and Safety Administration (TSA) and the Homeland Security are considering the installment of a controversial mind-reading system, that was recently developed by the Israeli-based WeCU Technologies, in all American airports, AP reported on Thursday.

The device, which functions by blending high computer technology and behavioral psychology, is essentially designed to “get inside the evildoers head” without the subject’s knowledge and prevent him or her from placing the lives of fellow travelers in jeopardy.
"This news shouldn’t come as a big surprise considering that Israeli minds have already taken over the U.S. Congress. "

Here's the AP article mentioned in the above blog post.

WeCU (pronounced "we see you") Technologies Ltd. has this to say about their product:

"The WeCU system ...... is able to identify persons who have any kind of involvement in a defined threat. The system identifies this involvement without requiring any type of a-priory information as to the checked subject, and while there are no other alerting signals, such as suspicious behaviour, belongings or profile. The system performs a fast and covert test procedure, which does not interfere with the routine activities and the flow at the protected site.

"The system is based on a unique probing method which uses knowledge from the behavioural sciences in combination with advanced biometric sensors. The system is effective for the detection of individuals who are manipulative, calm, do not have guilty knowledge, and are not being deceptive at the time of the detection. At the same time, it eliminates false results out of detecting individuals who are stressed or behaving suspiciously resulting personal, unrelated reasons. "

Oh that's assuring, isn't it?

U.K. will bar people from flying if they refuse to submit to full body scan.

Are we going to just shrug and follow the line to the body and mind scan?

Government's Plan for Your 401K and IRA

Here they come.

Zero Hedge has this post:

The Treasury Is Soliciting Your Feedback Regarding The Proposed Annuitization Of 401(k) (2/1/2010)

"Yes, slowly but surely it is happening. In a federal notice filed earlier, the DOL and Treasury are soliciting a response on what has been on many investors' mind, namely the process of converting 401(k)s into annuity-like products. To wit:

The Department of Labor and the Department of the Treasury (the "Agencies") are currently reviewing the rules under the Employee Retirement Income Security Act (ERISA) and the plan qualification rules under the Internal Revenue Code (Code)to determine whether, and, if so, how, the Agencies could or should enhance, by regulation or otherwise, the retirement security of participants inemployer-sponsored retirement plans and in individual retirement arrangements
(IRAs) by facilitating access to, and use of, lifetime income or other arrangements designed to provide a lifetime stream of income after retirement. The purpose of this request for information is to solicit views, suggestions and comments from plan participants, employers and other plan sponsors, plan service providers, and members of the financial community, as well as the general public, on this important issue.
"A cursory read of the document does not seem to ask about a flat out regulatory requirement for annuitization. We point your attention to item 13:

13. Should some form of lifetime income distribution option be required for defined contribution plans (in addition to money purchase pension plans)? If so,
should that option be the default distribution option, and should it apply to the entire account balance? To what extent would such a requirement encourage or discourage plan sponsorship?
"For readers who feel compelled to respond to this increasignly socialistic and ludicrous development, we suggest you voice your anger at the following address: Include RIN 1210-AB33 in the subject line of the message"

This blog has reported on this issue since June last year, most recently in this post in January 2010. As I said in my previous posts on the matter, this idea has been put into words by non-governmental entities - Brooking Institution (Mark Iwry) and Heritage Foundation (David John).

After virtually running around on the Internet trying to locate the document that Zero Hedge is citing (Department of Labor has such a hostile site for people looking for information), I've finally found it. Here it is:

DEPARTMENT of LABOR Employee Benefits Security Administration What I'm wondering is this:

Is this a regulation that would require Congressional approval, or could it be signed into law by an executive order signed by the president?

If it is the latter, then we could wake up one day and find out that we would be required to liquidate at least portion of 401K/IRA and buy some special Treasury securities that we would have to keep for 10, 20, 30, 40 years.

Again, should you wish to protest (or support, I guess, if you are hard-core socialist), the email address is:, and include RIN 1210-AB33 in the subject line.

Obama Support Shoots Up On War Prep in Middle East

I could be wrong, but that's what I think.

Rasmussen Presidential Tracking Poll for today (February 1, 2010) shows quite an anomaly. The gap between "strongly approve" and "strongly disapprove", which was in negative high teens, narrowed over the weekend to a mere -4.

"Strongly disapprove" percentage hasn't changed much, around 40%. It is "strongly approve", which jumped from Friday's 25% to 35%. That's a 40% jump in "strongly approve" category.

Also, there is hardly a change in "total approve" and "total disapprove". The sudden surge in "strongly approve", therefore, must have come from the Obama supporters who already approve of the president's handling of his job - i.e. switching from "approve" to "strongly approve" over the weekend. There had to be a trigger for such an abnormal move.

What changed from Friday to Monday? Have you read any cheerful news that makes you want to enthusiastically support the president?

It cannot be the $3.83 trillion budget of his that was unveiled this morning, with gaping $1.6 trillion deficit for yet another year.

The only significant news that I can think of over the weekend is this:

US raises stakes on Iran by sending in ships and missiles (1/31/2010 Guardian UK), and
China, Iran Spur U.S. to Develop Air-Sea Battle Plan (2/1/2010 Bloomberg)

If this news was a trigger for the sudden surge of strong support for Obama, it could only come from people who highly approve of more aggressive stance and action by the U.S. military around the world, particularly in the Middle East, whether they are Democrats or Republicans or Independents.

It seems neoconservatives (here's one) are alive and well, after all.

To protect "our allies". Which one? Pick your country and cheer.

Sunday, January 31, 2010

Swiss Justice Minister: UBS in Danger of Collapse

Uh oh...

Swiss bank in danger of going under (1/31/2010

"The top Swiss bank, UBS, could collapse according to Switzerland's justice minister.

"Eveline Widmer-Schlumpf has told Le Matin Dimanche newspaper that sensitive talks with the United States are proving to be very problematic, as they deal with high-profile tax fraud.

"She warned the actions of UBS in the United States would threaten all of the bank's activities if its licence were to be revoked in the United States.

"While Switzerland and the US had negotiated an agreement, under which UBS would hand over information on some 4,500 account holders to the IRS, a Swiss court ruling earlier this month has put the deal in doubt.

"Meanwhile, the president of the Swiss confederation Doris Leuthard has warned foreign governments not to pay for illegally obtained information regarding holders of Swiss savings accounts.

"Ms Leuthard made her remarks after the German newspaper Frankfurter Allgemeine said an informant had offered to sell the data of 1,500 account holders to the German tax authorities for 2.5 million euros.

"The information would reportedly allow the German authorities to collect over 200 million euros in evaded taxes from UBS account holders.

"Secrecy has been a feature of bank dealings in Switzerland for many years, with many citizens now accusing the government of failing to protect UBS."

In early January, the federal administrative court of Switzerland ruled that the Swiss Financial and Market Supervisory Authority (Finma) abused its power when it ordered that details of 285 account holders suspected of tax evasion in the US be sent to Washington. ("Court rules UBS data transfer to US illegal" 1/8/2010

Why did the Swiss authority and UBS relent to the U.S. pressure? Because the pressure was from Internal Revenue Service, which is supervised by Treasury Department which is headed by a tax-cheating Timmy Geithner. Oh that's scary. So the Swiss abandoned the best selling point of their banking system to get IRS off the back, only to be ruled by their own court that their action was illegal.

Will Germany Leave the Euro?

and leave the Club Med to sort out the mess?

Telegraph's Ambrose Evans-Pritchard speculates on what Germany may do, which by the way is what Jim Willie, aka Golden Jackass, has been saying in his writings for some time: Germany and its satellite states to leave the current Euro system and resurrect the powerful German Mark.

Should Germany bail out Club Med or leave the Euro altogether? (Ambrose Evans-Pritchard, 1/31/2010 Telegraph UK)

"Germany faces a terrible dilemma. Either Europe's paymaster agrees to underwrite a Greek bail-out and drops its vehement opposition to a de facto EU economic government, treasury, and debt union, or the euro will start to unravel, and with it Germany's strategic investment in the post-war order.

"The spike in yields on 10-year Greek bonds to 400 basis points above German Bunds has been shockingly swift – a warning to Britain, too, that markets can suddenly strike any country that takes creditors for granted.

"We can argue over whether Greece, Portugal, or Spain are at risk of being forced out of the euro. But there is another nagging question: whether events will cause Germany and its satellites to withdraw, bequeathing the legal carcass of EMU to the Club Med bloc.

"This is the only break-up scenario that makes much sense. A German exit would allow Club Med to uphold contracts in euros and devalue with least havoc to internal debt markets. The German bloc would enjoy a windfall gain. The D-Mark II would be stronger. Borrowing costs would fall. The North-South gap in competitiveness could be bridged with less disruption for both sides.

"To be sure, Germany is happily placed in the current EMU system. By compressing wages for a decade it has stolen a march on EMU. Critics unfairly call this a beggar-thy-neighbour policy. It is simply the way Lutheran society operates, in deep contrast to the way Latin society operates – a cultural clash that should have given pause for thought before Europe's elites launched headlong into their adventure. " [Emphasis is mine.]

Not all countries are equal, after all, and there is such a thing as cultural difference. (Duh.)

The EMU, or European Monetary Union, is one big moral hazard where fiscally prudent countries in the north end up subsidizing the profligate spenders of the south. The architects of the EMU (and of EU) believed they could force a pan-European suprastate in which countries like Germany and the Club Med (Spain, Portugal, Italy, Greece) share a common currency, common monetary policy, and eventually common fiscal policy, because they are all "Europeans".

For the sake of European unity, monetary and political, they would expect the wealth transfer from Germans to the Club Med, much like Germans did to East Germany. But Germans are balking:

""Politically," said Bundesbank chief Axel Weber, "it's not possible to tell voters that they are bailing out another country so that it can avoid painful austerity measures that they themselves have gone through. Such aid, whether conditional, or – even worse – unconditional, is counterproductive."

"Dr Weber is right on both counts. Fresh loans for Greece can achieve nothing useful at this stage. Greece already has a public debt hurtling towards 138pc of GDP by 2012 (Standard & Poor's). It is already in a debt compound spiral. The EU elites have yet to acknowledge that Greece and much of Club Med need gifts – not loans – akin to transfers paid to East Germany after unification, or North Italian perma-subsidies to the Mezzogiorno. "

The article concludes with these sentences:

"EMU architects were warned in the early 1990s that monetary union would prove unworkable as constructed. They scoffed, sure that any crisis could be exploited to force the pace of economic union. Commission chief Romano Prodi later admitted as much. "The euro will oblige us to introduce a new set of economic policy instruments. It is politically impossible now. But some day there will be a crisis and new instruments will be created."

"We will soon learn if this gamble will pay off, or prove catastrophically wrong."

A cynic in me is musing: Was the Euro designed to be "unworkable" from the beginning, in order to cause a crisis down the line that would force further economic (and political) union?