Congratulations to the U.S.A. for their deft handling of the Egyptian problem. And who is Nobel laureate, ElBaradei? Globalist? Islamist? Secularist? Saviour? Opportunist? Sorry. Colour me sceptical when it comes to this guy.
Update: Feb. 1, 2011 ……
“For every complex problem there is an answer that is clear, simple, and wrong.” ~ H. L. Mencken
I decided that I would update this post with a little less ‘knee-jerk’ and a little more chin-scratching. I decided to take down a video spoofing U.S. Secretary of State Hillary Clinton … a little too anti-American and, frankly, I just don’t believe much of it’s message. I still wanted to express my frustration with the U.S. for exacerbating the situation in Egypt and elsewhere in the world. It is my contention that the unwillingness of the U.S. Government to change its’ monetary policy to something approaching rational and prosecute the perpetrators of widespread banking fraud has led to inflation around the world. This inflation and shrinking of opportunity has hit the poor and less-advantaged hard and it is little wonder that people in these nations are taking to the streets. It’s not all America’s fault. For the most part, it is the repressive and regressive nature of their ruling regimes that have left these people vulnerable – whether those regimes are arrayed against Israel and America or not.
The Ticker Guy, Karl Denninger, puts hammer to nail here:
It’s always amazing to watch our government play patty-cake with tin-pot dictators when it suits us, even though they have a habit of torturing and otherwise abusing their citizens. They hold fraudulent elections or no elections at all, they refuse to bend to the will of the people, and they claim a right to perpetual rule.
Mubarak has a brutal and long history. Coming to power after Anwar Sadat was assassinated in 1981, he has been an effective dictator since ascending, as the nation has been under an Emergency Law since 1967. This state of emergency has provided the government with the excuse to take virtually all rights and bin them, including freedom of the press, assembly, and others. Unlimited imprisonment without charge or trial is permitted and reports of torture of prisoners are common.
Thaddeus may be well-intentioned but ex-post-facto analysis usually is. The United States has a history of supporting this thug that goes well beyond the last few weeks and days.
In addition since 2005 the Egyptian Pound has been pegged to the United States dollar, and the nation has undergone a cumulative 45% inflation rate in the last three years imposed on it by our Central Bank and profligate Federal spending, which Bernanke has been all too eager to monetize.
With a per-capita GDP of about $2,700 it’s people are 1/17th as capable of producing income as those of The United States on average and well-below other nations such as China ($4,300) and Belize ($4,500) that are commonly regarded as quite poor.
The nation’s people are clearly incapable of absorbing a 45% increase in their cost of living and this has largely played into the causes of the current uprising.
(read the rest)
Update: The Wall Street Journal has an interesting graphic comparing global inflation rates. Note where Egypt sits.
The fools of the world have been those who have established religions, ceremonies, laws, faith, rule of life. The greatest asses of the world are those who, lacking all understanding and instruction, and void of all civil life and custom, rot in perpetual pedantry; those who by the grace of heaven would reform obscure and corrupted faith, salve the cruelties of perverted religion and remove abuse of superstitions, mending the rents in their vesture. It is not they who indulge impious curiosity or who are ever seeking the secrets of nature, and reckoning the courses of the stars. Observe whether they have been busy with the secret causes of things, or if they have condoned the destruction of kingdoms, the dispersion of peoples, fires, blood, ruin or extermination; whether they seek the destruction of the whole world that it may belong to them: in order that the poor soul may be saved, that an edifice may be raised in heaven, that treasure may be laid up in that blessed land, caring naught for fame, profit or glory in this frail and uncertain life, but only for that other most certain and eternal life.
We hereby, in these documents, publish, announce, pronounce, sentence, and declare thee the aforesaid Brother Giordano Bruno to be an impenitent and pertinacious heretic, and therefore to have incurred all the ecclesiastical censures and pains of the Holy Canon, the laws and the constitutions, both general and particular, imposed on such confessed impenitent pertinacious and obstinate heretics… We ordain and command that thou must be delivered to the Secular Court… that thou mayest be punished with the punishment deserved… Furthermore, we condemn, we reprobate, and we prohibit all thine aforesaid and thy other books and writings as heretical and erroneous, containing many heresies and errors, and we ordain that all of them which have come or may in future come into the hands of the Holy Office shall be publicly destroyed and burned in the square of St. Peter before the steps and that they shall be placed upon the Index of Forbidden Books, and as we have commanded, so shall it be done..
- Official judgment on charges of heresy (16 February 1600); as translated in Giordano Bruno : His Life and Thought (1950) by Dorothea Waley Singer, Ch. 7 “Martyrdom (1591-1600)”
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In case your wondering how yesterday’s trading “aberration” on the DowJonesIA could possible happen, I point you to this beautiful article I found posted on Zero Hedge by JS Kim – “The Near 1,000 Point Slide of the DJIA Compels Further Investigation of the Wall Street Casino Scam”. I’ll share a couple of excerpts that are too great not to capture – but you really have to read the whole thing:
Predatory algorithmic HFT programs aren’t called “predatory” without good reason. Not that yesterday’s selloff wasn’t partially the result of fear injected into a Fed Reserve inflated stock market bubble, because it was. But Wall Street deployed HFT programs had a lot to do with the cascading nature of the decline in yesterday’s trading. Continuing our casino analogy, HFT programs act in the same capacity as the thugs employed by casinos that take you to the back room to rain down their “thuggery” upon you if you start winning too much. HFT programs are designed to block the retail investor from making successful trades against the trades of the house (Wall Street) and often prevent the retail investor from obtaining fair prices in the execution of trades in numerous financial markets.
Consider the following example. Stock A’s bid is $10.10 and the ask is $10.13. An investor places an order to buy at $10.13. Instead of his order being filled and executed as it would if human traders were executing the trade, HFT programs often immediately step up the ask price to $10.14 and screw both parties in the trade. Depending on the orders that HFT programs “see”, sometimes the HFT will see an order at $10.13, and step up the price to $10.18 so the bids follow higher and the bid price gets reset from $10.10 to $10.13 almost immediately. Or, if the bid price does not follow higher, then the bid-ask spread becomes grotesquely distorted from $0.03 to $0.08 for no other reason than HFT programs are blocking liquidity. Should the human trader withdraw his order to buy at $10.13, then often the bid-ask spread almost immediately returns to $0.03 and the ask will subsequently fall from $10.18 back to $10.13. Should he place the order again seconds later, however, the bid-ask spread will often immediately increase again with the bid price increasing to a point higher than $10.13 again.
The ratings agencies like Moodys and Standard and Poors are the pretty cocktail waitresses that lure the mark (the retail investor) into the Casino (stock markets) with free alcoholic drinks (abominably horrible and deceitful credit ratings of financial instruments) to instill the mark with the false sense of confidence necessary to induce gambling in the rigged Casino. The regulators like the CFTC and the SEC are the pit bosses that oversee the floormen (Wall Street firm CEOs) that oversee the table games dealers (the firm’s traders) and ensure the games (stock markets, currency markets, commodity markets) you are allowed to play possess a feature (HFT trading programs) that ensures that the odds will always enormously be in favor of the house. The pit boss oversees all floor dealers and conspire with the regulators (the cocktail waitresses) to give gamblers (the investor) a sense that all dealings are legitimate even though the odds of every table game (currency markets, commodity markets, stock markets) are insanely rigged in favor of the house (Wall Street firms). If we consider the table game of blackjack, in a real casino, should you receive a good hand, the dealer will pay out your bet. In the case of Wall Street, due to HFT programs, in many instances, should an investor receive a favorable hand (i.e., a favorable move in the stock market) in the game he or she is playing, HFT programs move in to prevent the bet from paying out in full or paying out at all (an investor’s sell order never executes at the price at which the market has informed the investor that he or she can cash out).
Read the rest.
Here’s what the SEC alleges (you can find this over at Zero Hedge):
The SEC alleges that one of the world’s largest hedge funds, Paulson & Co., paid Goldman Sachs to structure a transaction in which Paulson & Co. could take short positions against mortgage securities chosen by Paulson & Co. based on a belief that the securities would experience credit events.
According to the SEC’s complaint, filed in U.S. District Court for the Southern District of New York, the marketing materials for the CDO known as ABACUS 2007-AC1 (ABACUS) all represented that the RMBS portfolio underlying the CDO was selected by ACA Management LLC (ACA), a third party with expertise in analyzing credit risk in RMBS. The SEC alleges that undisclosed in the marketing materials and unbeknownst to investors, the Paulson & Co. hedge fund, which was poised to benefit if the RMBS defaulted, played a significant role in selecting which RMBS should make up the portfolio.
The SEC’s complaint alleges that after participating in the portfolio selection, Paulson & Co. effectively shorted the RMBS portfolio it helped select by entering into credit default swaps (CDS) with Goldman Sachs to buy protection on specific layers of the ABACUS capital structure. Given that financial short interest, Paulson & Co. had an economic incentive to select RMBS that it expected to experience credit events in the near future. Goldman Sachs did not disclose Paulson & Co.’s short position or its role in the collateral selection process in the term sheet, flip book, offering memorandum, or other marketing materials provided to investors.
The SEC alleges that Goldman Sachs Vice President Fabrice Tourre was principally responsible for ABACUS 2007-AC1. Tourre structured the transaction, prepared the marketing materials, and communicated directly with investors. Tourre allegedly knew of Paulson & Co.’s undisclosed short interest and role in the collateral selection process. In addition, he misled ACA into believing that Paulson & Co. invested approximately $200 million in the equity of ABACUS, indicating that Paulson & Co.’s interests in the collateral selection process were closely aligned with ACA’s interests. In reality, however, their interests were sharply conflicting.
According to the SEC’s complaint, the deal closed on April 26, 2007, and Paulson & Co. paid Goldman Sachs approximately $15 million for structuring and marketing ABACUS. By Oct. 24, 2007, 83 percent of the RMBS in the ABACUS portfolio had been downgraded and 17 percent were on negative watch. By Jan. 29, 2008, 99 percent of the portfolio had been downgraded.
Investors in the liabilities of ABACUS are alleged to have lost more than $1 billion.
The SEC’s complaint charges Goldman Sachs and Tourre with violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Exchange Act Rule 10b-5. The Commission seeks injunctive relief, disgorgement of profits, prejudgment interest, and financial penalties.
Dylan Ratigan does a great job explaining the con:
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“Stop the looting and start the prosecuting!”
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