Monday, June 30, 2008

North Korean Brainwashing 2008-Style. Who Knew?

I've heard from many current and ex-military members that lots of South Koreans don't particularly like the U.S. nor do they appreciate what we did to save them from North Korea's past, current, and probably future "Dear Leaders" who routinely starve their people to death so they can afford the latest iPods.

I often wondered about this. But then, our European friends below, say, the age of 70 also forget why they're free today to bitch at the US.

Well, now I read the following on the well-regarded Strategy Page, re: the current neverending South Korean anti-US beef beef:
The South Korea government is beginning to realize why there is such a vigorous anti-U.S., pro-North Korea movement in a country that was devastated by a North Korean invasion 58 years ago. The reason is that most (OK, 51 percent) of South Korean teenagers know little about the Korean War (1950-53). After all, this was their grand-parents, or great-grand-parents war. The reason for the ignorance is the education system, dominated by leftists who have, over the decades, played down the unprovoked and savage North Korean invasion in 1950.
Gee, ya think?

Any of this remind you of another country's propaganda education system? Here's how it's done:
...the South Korean Communists went underground, and some remained after North Korean forces were driven out in late 1950. After the war, North Korea sent agents and money south to keep leftist organizations going. Suppressing the bad memories of the Korean war (the North Koreans were exceptionally brutal, ask any South Korean over 70) was a typical communist Information War ploy, and it has paid big dividends by creating a generation of teenagers who can be convinced that the Korean War was all the fault of the United States (who had withdrawn its troops just before the North Koreans invaded, and that was not a coincidence.)
Just like all the leftists in our public education and higher education institutions (i.e., everyone in those systems) went underground and have done the same to the last several generations of American kids, a lot of whom actually buy the "fact" that 9/11 was a Jewish-American plot or some other asinine nonsense. Or that the United States has singlehandedly caused "global warming," which tends to happen on its own every so often throughout recorded history.

Just remember. These leftist nutcases never give up on world socialism, run by them, of course with loads of money from you and me. If you doubt their plan, just read the Strategy Page link on the Korean Kids in its entirety. Then tell yourself it can't happen here.

Friday, June 27, 2008

Oil: While Congress Slept, The Value of the Dollar

Michael Hodges is an analyst probably not much loved in Congress. His Grandfather Economic Report Series has been online for quite a while. The writer has found, in checking other sources, government and private, that Hodges is a pretty good reporter.

America has become more a debt 'junkie' - - than ever before
with total debt of $53 Trillion - - and the highest debt ratio in history...That's $175,154 per man, woman and child - - or $700,616 per family of 4, $33,781 more debt per family than last year....Grandfather Economic Report Series: America's Total Debt Report, 2007 edition

He's an old-fashioned analyst and he's older than most of us. He's not fooled by professional jargon or by methodologies that obscure rather than reveal.

Inflation in my adult years increased average prices 1,000% or more - example 1: a postage stamp in the 1950s cost 3 cents; today's cost is 41 cents - 1,266% inflation;
example 2: a gallon of 90 Octane full-service gasoline cost 18 cents before; today (2007) it is $3.39 for self-service - 1,883 % inflation;
example 3: a house in 1959 cost $14,100; today's median price is $213,000 - 1,400% inflation;
example 4: a dental crown used to cost $40; today it's $1,100 - 2,750% inflation;
example 5: an ice cream cone in 1950 cost 5 cents; today its $2.50 - 4,900% inflation;
example 6: monthly government Medicare insurance premiums paid by seniors was $5.30 in 1970; its now $96.40 - 1,889% inflation; (and up 70% past 5 years)
example: several generations ago a person worked 1.4 months per year to pay for government; he now works 5 months.
And in the past, one wage-earner families lived well and built savings with minimal debt, many paying off their home and college-educating children without loans. How about today? Few citizens know that a few years ago government changed how they measure and report inflation, as if that would stop it - - but families know better when they pay their bills for food, medical costs, energy, property taxes, insurance and try to buy a house....Grandfather Economic Report Series: America's Total Debt Report, 2007 edition

These two elements, borrowing and inflation, play in the same sandbox. They interact with each other. Let's look at inflation first, then both together.

What has this inflation done? For essentials, such as housing, medical care, fuel, the dollar is worth less than ten percent of its purchasing value in 1950. As inflation was low until the 1970s, you can say almost the same about the purchasing power of a dollar in 1970 versus its value now. Some things, such as electronic gear (especially computers) etc, are dramatically cheaper, but for essentials the value in nominal dollars, i.e., the dollars you can actually hold, or write a check for, has skyrocketed. So have incomes (see below on the difference between median income in 1970 and 2008). The net effect is that a lot of us have a lot of money that isn't worth very much.

Historical Anecdote: My 7th grade teacher, a Ms. S., a single woman of about 30, made $6,500 in 1962. With this income, she owned a mid-priced car ($2500), a small co-op apartment near the Hudson River ($30,000), kept herself fed and clothed, and traveled to Europe for a few weeks each summer. Today, a 7th grade teacher in the same system makes $72,500. Sounds great, but look closely. What possible way could the teacher in 2008 afford a $30,000 car, and what is now a $900,000 condo, go to Europe for a few weeks each summer, keep herself clothed and fed on that income? You're right. She couldn't unless (drum roll) she borrowed a substantial amount of money. What does that do?

If you borrow money over and above your earnings, that adds more dollars to the system. That means more money chasing goods. And, inflation, simply put, is too much money chasing too few products and services. This is oversimplifying a bit, but the impact of dramatically increased borrowings is to put far more money into the system, which in turn drives prices higher. It's a vicious and relentless circle. And, without rigid indexing of incomes and pricing, which, in a complex economy is impossible to do, a point is reached where prices, earnings and borrowings begin to interact negatively. (Income is your earnings plus your borrowings.) This happened in housing over the last year or two. Result?

A sector, in this case housing, crashes. A bubble bursts. And another vicious cycle begins. As people put their houses on the market, they find that
a) because of widespread defaults and mortgage broker doubts about the sustainability of prices, there's insufficient available credit for buyers, which drives the price down further, and
b) they're paying a mortgage that was based on a price that's no longer supportable. This encourages default. To be blunt, if the cost of abandonment is less than recoverable equity, there's no reason to pay down a mortgage. That gravely threatens the credit markets because they don’t recoup interest or capital.

As Hodges makes abundantly clear in this remarkably detailed report, Americans (and their Congress) have been asleep for a long time regarding the interaction between earnings, credit, and prices. We are so heavily leveraged that a major disturbance in the credit market, as has been happening for six months in the subprime (and in other) mortgage markets, can get serious people awfully scared:

Barclays Capital has advised clients to batten down the hatches for a worldwide financial storm, warning that the US Federal Reserve has allowed the inflation genie out of the bottle and let its credibility fall "below zero"..."We're in a nasty environment," said Tim Bond, the bank's chief equity strategist. "There is an inflation shock underway. This is going to be very negative for financial assets. We are going into tortoise mood and are retreating into our shell. Investors will do well if they can preserve their wealth."...Barclays Capital said in its closely-watched Global Outlook that US headline inflation would hit 5.5pc by August and the Fed will have to raise interest rates six times by the end of next year to prevent a wage-spiral. If it hesitates, the bond markets will take matters into their own hands. "This is the first test for central banks in 30 years and they have fluffed it. They have zero credibility, and the Fed is negative if that's possible. It has lost all credibility," said Mr Bond....Barclays warns of financial storm,, 6/27/08

And just a few days before...

The Royal Bank of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks..."A very nasty period is soon to be upon us - be prepared," said Bob Janjuah, the bank's credit strategist...A report by the bank's research team warns that the S&P 500 index of Wall Street equities is likely to fall by more than 300 points to around 1050 by September as "all the chickens come home to roost" from the excesses of the global boom, with contagion spreading across Europe and emerging markets...Such a slide on world bourses would amount to one of the worst bear markets over the last century....RBS issues global stock and credit crash alert,, 6/18/08

Why the scare? It's no longer just a 7th grade teacher involved here, no longer just America. For almost forty years, dollar credits and deposits have been driving the world economy. If the dollar continues to slide, all of those credits and deposits will have a lot less real value. People won’t want them anymore. Another vicious cycle could start with an effort by the Fed to fix the problem. How?

If the Fed followed the recommendations of Barclays and the Bank of Scotland, and dramatically increased rates, the ability of borrowers to pay back (or qualify for) loans would dramatically decline. The credit crunch wiping out housing values across the United States, and depressing real-estate mutual funds across the world, would get much worse. In a credit crunch, it's not just mortgage-seekers who suffer; everybody does. Pilot to copilot: We are going down.........

What has this got to do with the price of oil? Oil, far more than gold, is a direct reference to value of a given currency, especially in a developed country (US, Europe, China, Japan, Europe). We all need oil to run modern industrial economies. We don't store oil in a bank vault. We burn it and convert it into plastics and other materials. And a conclusion related to what Hodges reports emerges: a dollar that would buy 1/10th of a barrel of oil in 1970 will only buy 1/140th of a barrel of oil in 2008. While speculators and political manipulators have pushed that ratio to probably double what it should be, it's still a dramatic change in value for the dollar.

That's the monster in the living room that nobody wants to talk about. We’d better start because this monster's bite could be fatal.


Thursday, June 26, 2008

Wall Street Lays Another Egg

In a postscript on my postscript below, those of you who are market mavens will have duly noted that all the averages took another swan dive today, with the closely watched (though not always representative) Dow Jones Industrials down a whopping 358.

A lot of it's due to the analyst antics I described below. And more of the usual suspects piling on, with an ever-cockier Qaddafi threatening to cut HIS oil production, with the white collar workers at a Nigerian facility deciding to strike(!), and with everyone telling the Fed they should have RAISED interest rates yesterday. Which of course would have even put more bullets in the already bullet-riddled corpses of the banks. The HEALTH of which banks is still the main reason the Fed was chartered in the first place.

The press loves to yowl about "epidemics," most of which are caused by Bush. Well, I think we have an epidemic right here, right now. An epic of stupidity and irresponsibility on the part of the analysts as well as the always clueless so-called business media.

Example: Here's a lede from that should win a Pulitzer Prize for Stupidity and Asininity:
U.S. stocks tumbled, sending the Dow Jones Industrial Average to its worst June since the Great Depression, as record oil prices, credit-market writedowns and a slowing economy threatened to extend a yearlong profit slump.
How does the writer KNOW it's the worst June since the Great Depression? What's the yardstick? What's the date? How high were the Industrials back then, 400? (That's two zeroes, not 3.) Where's the context? What the hell is this, a baseball game where you throw out useless stats while the new pitcher warms up on the mound?

The report drops this eyecatching little bomb and never follows up with the pertinent information. But the lede leaves the average reader in about the same state as the beautiful, buxom blonde teenager who opens the door only to find Jason and his eversharp blade staring back at her. Be afraid. Be VERY afraid.

What I am afraid of these days is the near zero-base of knowledge and responsibility that's being exhibited by the Wall Street press these days. It's only making matters worse.

BTW, I'm off once again to Cleveland tomorrow, still ground zero in the land of foreclosures.

Jeez, what a year.

A Postscript on the Oil Speculation Thing...

After lobbing another anti-personnel mine at Wall Street this morning, I thought it would be a good idea to refer you back not only to the Luther post that inspired me on this, but also to his excellent followup entry here.

To wit, Luther's latest entry picks up on a piece I sort of left by the wayside in my oil speculation diatribe. To wit: there are indeed some wealthy villains behind the common man's speculation in this market, and Luther reminds you about who they are.

Let's not forget. It took a stunned world, particularly in the Sino-Soviet sphere, a good decade to figure out that Ronald Reagan had used stealth, not Star Wars, to destroy the Soviet Union. The Star Wars threat--that offensive weapons could be launched at the Chinese and the Rushkies from space--caused the Russians to spend their limp economy into oblivion to counter something that Reagan never had in his arsenal. In short, the Soviets WERE SPENT TO DEATH BY THE CAPITALISTS.

Hey, this is a hell of a way to win a war, eh? Aside from a little leverage, it's pretty cheap. Nobody gets killed, the enemy gets demoralized, and the infrastructure remains intact. Putin and the Chi-coms figured this out. So did 5th Columnists like the so-called Greens and George Soros. And so did the Islamofascists, who, I must remind you, are the distillation of evil. But they are by no means dumb. And they learn very quickly.

And these people are indeed, as Luther points out, clearly playing the game. Particularly when you look at the volume of energy futures contracts traded. There's a lot of money behind it.

And again, per Luther, it's a complicated game. The action has indeed panicked average investors into gobbling up oil, gas, and related ETFs, hugely magnifying the "investing" the big boys have already caused.

And indeed, it's all part of the far left dream, at least on one hand--to pull a reverse Pol Pot and force suburbanites, who can no longer use their cars, back into the cities where they can be more easily managed by the socialists who run them. Overgrowth will eventually overtake the McMansions and starter castles, maybe even allowing polar bears to adapt and summer in, say, what's left of Minneapolis.

Except at the rate things are going, the now overcrowded cities will not be run by the lazy leftists who are passively manipulating us into an economic doomsday. They'll be run by mullah-psychopaths, and the lefties' bloody heads, with their eyes still wide with surprise, will all be arrayed on pikes at the city gates of San Francisco, Los Angeles, and New York.

People tend to laugh at this sort of stuff when I bring it up. But it's there staring at all of us if we'd only take a look at where the clueless Pied Pipers of the Left and their minions in the MSM are leading us.

Maybe some of us should consider making plans to head for Galt's Gulch to wait out this episode.

A New Kind of Institutional MEMRI

Just a quick note on the little "MEMRI widget" I've dropped on the left of this page as sort of an experiment.

Until recently, and even now sporadically, your intrepid HazZzMat bloggers have been distracted from time to time by the hazards of life and haven't had the time to post as often as they might like.

Rather than leave the few, the proud, the HazZzMat readers completely bereft and lacking material to read, I thought it might be a good idea to put in the aforementioned widget which will connect you to various MEMRI sites.

MEMRI, which stands for "Middle East Media Research Institute," is generally a much more reliable source of news and information on the Middle East than the Islamofascist propaganda organ known as CAIR (Council on American-Islamic Relations). We thought we'd offer it via the widget at least for awhile so you can discover the truth as opposed to the phony baloney that CAIR feeds to a willing MSM every day. If folks find the info here useful, we'll keep the widget hanging around. Let us know.

Analysts Trash Dow and S&P Averages

Continuing in the current financial grain, which has mostly included discussions of the oil pricing nonsense by Luther and Wonk, I'd also like to toss in another typical bit of folly today.

Stock analysts, most of 'em employed by large brokerage and/or financial firms, make a lot of money. But for all the bucks they pocket for their prognostications, the info they often put out is so little and so late that it proves to be an excellent contrary indicator.

Take today's action. This morning, at approximately 11 AM, the market, of course, is tanking again and oil is exploding back to the upside after taking a break yesterday. This morning's open was a mild downer, as stock darling Research in Motion (RIMM) announced good numbers but maybe a wobbly quarter or two upcoming. Undeclared reason: there might be a little competition from the newly upgraded iPhones going on sale in July. Gosh, who knew? The stock was hammered at the open.

But more conspicuous was analyst action. Analysts hadn't had much to say about RIMM except buy, buy, buy. So if you did, you got whacked yesterday.

But most analysts also didn't have much to say, action-wise, about two of the worst Dow stocks, Citicorp (C) and General Motors (GM). Citi, of course, has been an ongoing disaster with prospects for more gloom before the financial mess is finally put to bed. Any prescient investor would expect a bad quarter. And most investors have, already driving the stock down continually so that it rests near its lows.

Likewise, GM. Like Ford, dependent on selling mass quantities of trucks and SUVs the size of McMansions for a substantial profit in spite of each vehicle getting about negative 20 miles per gallon, GM has been announcing for weeks that it's cutting back production and clearing inventory--even offering an astounding 0%-6-year financing deal on models nobody wants in order to move the 2008 inventory out so they'll have room for the 2009 models nobody wants. Sure tells you something about the numbers they might be expecting for the quarter, right? First grade math might give you a clue here.

So over the past couple weeks in particular, GM stock has likewise been pummeled, down to the single digits at one point. Since most single digit stocks are considered (rightly or wrongly) near-death experiences, that tells you something about investor sentiment, doesn't it?

So what do we get this morning? The analytical geniuses at Goldman Sachs (which is actually a pretty good firm) DOWNGRADE CITI to a "Conviction Sell" AND CUT GM's ESTIMATES! Gosh, what a concept! When all your investors have already gotten killed, when the stocks have gone down pretty much as far down as they can go, NOW the Goldman IQ kings and queens tell you to sell. Hey, do you think they knew what they claim to know now maybe a few quarters ago? Could they have issued those SELLs then, when you still had some chance to convert your holdings of C and GM to a little mattress money?


Like the lemmings in the media, most analysts don't like to get too far out in front of events. They are basically chickenshit that they'll piss off a large corporate client. (These are technical terms.) So they tend to wait for the obvious to occur before making their moves. Then someone at Goldman (usually) ascertains the coast is clear to declare the obvious. They do. All the other analyst monkeys follow, and ta-da, the stocks get crushed a little more, killing the poor saps (you and me) who were hanging on to their C and GM because the analysts, well, had told you they were a "hold."

To be perfectly blunt, when you start to get an analyst gang-bang of a stock or a group of stocks on the sell side after said stock or stocks have already had the crap beat out of them, it might just be time to buy a little nibble at a time rather than sell and get completely wiped out.

Who do these bozos think they're kidding? Let's say your neighbor's house caught on fire and burned completely to the ground. The poor family returns the next morning and stands in their front yard holding each other close, staring at the still-smoking hulk and sobbing bitterly at their disastrous loss. So you walk over to them. And say, "Damn, did you know your house has completely burned to the ground?" Well, that's the equally stupid thing the analysts did this morning with C and GM.

The fact that they also cheer oil prices up every time they fall by predicting newer, higher highs (protecting their firms' long positions in the commodity) is another sacrilege best discussed in a later diatribe. My advice: do your own homework if you invest in stocks.

Oil: While Congress Slept, Collusion Among Our Enemies

The wise man of Virginia has done it again, illuminating the common source of contradictory evidence. This kind of thing has a long history.

In 1593 tulips were brought from Turkey and introduced to the Dutch. The novelty of the new flower made it widely sought after and therefore fairly pricey...The true bulb buyers...began to fill up inventories for the growing season, depleting the supply...and increasing scarcity and demand. Soon, prices were rising so fast...that people were trading their land, life savings, and anything else... to get more tulip bulbs. Many Dutch persisted in believing they would sell their hoard to hapless and unenlightened foreigners, thereby reaping enormous profits. Somehow, the originally overpriced tulips enjoyed a twenty-fold increase in value - in one month!...Prices were not an accurate reflection of the value of a tulip bulb. As it happens in many speculative bubbles, some prudent people decided to sell and crystallize their profits. A domino effect of progressively lower and lower prices took place as everyone tried to sell while not many were buying. The price began to dive, causing people to panic...Dealers refused to honor contracts and people began to realize they had traded their homes for a piece of greenery...The government attempted to...halt the crash by offering to honor contracts at 10% of the face value...the market plunged even lower, making such restitution impossible. No one emerged unscathed from the crash. Even the people who had locked in their profit by getting out early suffered under the following depression....Crashes: The Tulip and Bulb Craze,

Sounds like what Wonker was describing, except that it happened four hundred years ago with a group of the soberist merchants in Europe. Add in a large quotient of political manipulation, à la George Soros and his friends in Russia, China and Teheran, and you have a modern tulip market. This writer feels the political coordination of the oil price runup is at least as important as speculation, and that it involves Greens, Russia, Saudia Arabia, China, Iran, and 5th column Democrats in the United States. These otherwise competing groups have a common goal: panic in the United States, panic that would depress large markets, such as housing and energy. For the Greens, this panic might well yield wholesale abandonment of the suburbs and of the automobile. For Russia, not so subtle since the Reds bailed out in 1991, it's just the money. For China, it's another tool in an ongoing asymmetric war with the United States in which Beijing has already allied itself with Islamic terrorists. For Iran and Saudi Arabia, a panicked United States offers a freer hand in an ongoing war of competing visions of Islamic domination of the future. For 5th column Democrats, panic among constituents gives them yet another chance to pitch "change," i.e., the failed leftist policies of the last 100 years.

The writer offers this little ditty for those who are unhappy about being used:

Oh, ye sucker-punched masses,
Praying for relief
The kick you felt in your asses
Commenced with false belief.


Wednesday, June 25, 2008

Speculators Driving Up Oil Prices?

Congress says yes. Wall Street MSM consensus, however, is "Naaah!" Since Luther's on an oil roll, I figured I'd join the fun and throw in another piece of the puzzle.

The short answer to the above conundrum is that for once, Congress, even the Idiotarian Democrats on the left, are actually right here. But, of course, since they don't understand capitalism, they're right for precisely the wrong reasons.

[Fair warning. Long post incoming. But you'll never read the truth on this topic anywhere else.]

Speculators are a convenient target for the Dems because they think that the oil speculators in this case are all the evil white dudes up on Wall Street who spin the trades that are impoverishing you and me. And in one sense they're right. But again for the wrong reason.

Back when Wonker was a stockbroker, the futures traders in a brokerage house were a breed apart. Where I worked, they'd sit in a back room they had all to themselves with several proprietary TV futures screens running constantly in foreground tracking the ongoing trades. (This was in the early 1980s before you could actually get this stuff on your own computer.)

True gunslingers, they'd be on the phone to their customers constantly. When things were working, they'd all make a fortune. When they weren't, the futures traders and their clients all went bust (seriously). The shattered and sometimes chastened traders would have to be staked by the manager for a couple of months of draw until they could rebuild their their clientele with fresh blood and replace those huge lost commisions. And then the cycle would begin anew.

Lest you feel there was anything rotten about this, keep in mind that the futures traders were required to screen their customers very carefully, vetting them for net worth, assets, suitability of trades, etc. Essentially, your average lay futures trader was an older rich guy with plenty of time and money, enabling him to play in the futures market. Which, as any futures trader will tell you, is a contact sport requiring constant phone interaction and presence.

One important practical rule of thumb was, the client had better not put on a few contracts, then fly off for an extended vacation in a wilderness area where there were no phones. (And again, in those days, there were no cells. Without a landline, you were hosed, brother!) You can get wiped out in an instant in futures, what with only having to put up 10% of each contract in cash. The rest was margin--basically money loaned by the house. With a volatile market run on that kind of leverage, you had no business being out of contact range or you deserved whatever happened to you. Yet guys would do this all the time which is often why they got wiped out.

But my main point is, these were rich guys who usually had plenty more in their piggy banks and had been carefully vetted and qualified by the house as suitable customers for this kind of investment mayhem. So when their accounts disappeared down the rat-hole of fate, they were generally capable of recovering. Since, after a raft of cuss words and half a bottle of scotch, they still had enough resources in another bank account to get back in action.

That, folks, is speculation. Buying futures contracts for which you'll never take delivery of the commodity. And trading them rapidly for fractional gains vastly magnified by the enormous amount of leverage brought to bear. The leverage, pure and simple, was key to making, and losing, fortunes quite quickly. Not a game for the faint at heart. Or for the average Joe. It's a game that's still best played by the professionals, however insane they may be.

Which starts moving us to our point. A new generation of computer-savvy but still rich, greedy guys on Wall Street invented, a few years back, something called the "ETF," or exchange-traded fund. These are essentially good old-fashioned mutual funds except they trade just like stocks on the exchanges. Unlike a broad-based mutual fund, however, most ETFs are closely targeted to meet this or that average or marketbasket of stocks. You have biotech ETFs, ETFs that track the S&P 500, ETFs that track baskets of stocks in a single country (Brazil, Malaysia, Thailand ETFs). Etc.

ETFs turned out to be massively popular, so new ones come out every month as the firms who package these mutual-funds-turned-floating-crap-games are in hot competition to move this kind of popular merchandise since it's quite profitable for them. And in theory, it's really good stuff, enabling you to, say, track a whole basket of risky biotech stocks, thereby smoothing out the kind of extreme risk you'd take if you invested in just one of them and guessed wrong. I mean, who know much about Brazilian stocks anyway? But the country is on a winning streak. So why not invest in a Brazilian stock ETF, even out your risk in that country, and not worry too much about needing to know each and every stock you're sort of into.

But as I said, the brokerage firms and investment banks who invented these things were going nuts trying to create new products. So they hit upon a great new idea. Why limit ourselves to boring old stocks. Been there, done that. Let's make futures ETFs too!

So they started inventing precious metals ETFs that invested in mining stocks AND the raw metal. And, ta-da, ENERGY ETFs that did the same kind of combos, a little drilling stock here, a few actual barrels of oil there. Or sometimes, only the commodity, as in United States Natural Gas Fund LP (symbol: UNG, traded on the Amex). The blurb on my current brokerage's info page (no link) describes UNG as follows:
The investment seeks to replicate the performance, net of expenses, of natural gas. The trust will invest in futures contracts on natural gas traded on the NYMEX that is the near month contract to expire. It is nondiversified.
Now we're getting there. You're saying, why, (splutter), that means that little jerks like me and Wonker can invest in futures contracts without qualifying, without documenting net worth, and without any experience at all! And if that's really what you're saying, well right you are.

The energy ETFs are hugely, hugely popular right now. Guys (and gals) like you and me are plunking massive amounts of money into them because we think that oil (and gas, and gold, and God knows what else) are going to make us a lot of money since currency, particularly the dollar, is worthless, and since we're upside-down on our mortgages.

And for now, a lot of average investors, little and big, ARE making good money in energy future-centric ETFs. But now it gets more interesting. As the little investors pile into these ETFs, just like mutual funds, the guys who own the EFTs are getting more and more and more cash, which means they have buy more and more and more futures contract to issue more and more and more ETF shares so we can all make more and more and more money forever, right? What a game. Like Jay Leno used to say on that old Frito commercial: Eat all you want. We'll make more!

Problem is, the game is getting a little like the Y2K dot-bomb and the 2006- residential real estate crash--which still seems to be going on, BTW. Don't people ever learn? Guess not.

Back to our original question: is speculation driving up the price of oil catastrophically? You bet!

But, as I've just described, at least in part, we've met the enemy and he is us! (Hat tip to Pogo fans.) Sure, you can bet that the odd Russian hoodlum, Al Qaeda's investment bankers, and Communist-capitalist George Soros are also having fun at our expense. But it's John Q. Public, snapping up energy ETFs that invest wholly or partially in futures contracts, that have become, I think, a driving force behind the current oil price disaster. We ourselves are helping to massively drive up the price of the commodity we bitch about whenever we fill up the tank of the Hummer we wish GM hadn't made us buy.

So this is why Congress has it partially right. Rich guys created this EFT monster. But the ones really driving it now are you and me, and yes, I've been in and out of these bloody things with mixed results, mainly to learn how they work. And the way they work: They are sliced and diced FUTURES CONTRACTS that are just as volatile as they always were, and even more so now that they're being devoured by amateurs who have no clue what they're setting themselve up for.

Mark my words: in the terminology of technical traders, oil futures contracts have now gone "parabolic." That means that their charts have prices going up so fast that the composite direction of those charts is not up and down but STRAIGHT UP. When any investment goes parabolic, it's generally but a short period of time before something breaks the momentum. At which point a selling panic occurs, driving the investment down much faster than it went up. Which is usually known as a crash. Dot-bombs went parabolic in 1999-2000. Residential real estate went parabolic in 2004-2006. And now, even as we still reel from the still-ongoing real-estate bust, what are we doing but wiping ourselves out again by buying so many futures contracts via ETFs that we're going parabolic again. As the oil futures go, so will their ETFs.

Folks, I don't know when the swan dive is going to start. I just know that it will, and for folks on the long side of this trade, it won't be pretty. Right, Iran can do something wilfully stupid, Al Qaeda can bomb all the Saudi oil fields, or the idiots in Nigeria can keep wrecking their own facilities. Any of these plausible events will drive prices catastrophically HIGHER if any of these scenarios unfold. But in the end, that'll only increase the already perilous verticality of the oil futures parabola and make the inevitable dive-bombing crash all that more breathtaking. I think people have no clue what is coming. Particularly those who read the press which is so wilfully stupid in this area it takes my breath away.

My advice: remember what Paul Volcker's Fed did in another era to the Hunt Brothers, who'd succeeded in virtually cornering the market for silver bullion in the early 1980s and driving it up from, oh, about $5 an ounce to around $55 an ounce in fairly short order. Volcker simply sat down, talked to a few people, and one bright morning, Wall Street raised the margin requirement on silver from 10% to 50%. Since the Hunts had cornered nearly all the bullion silver in the world (seriously), they immediately had to raise cash to cover their position--more cash than you or I can count. And they had to raise it, as I say, immediately. Silver buyers figured this out and stepped aside. Hey, it's an auction market, right? With no one to sell to, the Hunts saw the value of their massive holdings drop like a waterfall as their brokers were forced to sell out their positions for whatever they could get.

It was awe-inspiring. People came in off the streets at our brokerage house to watch the tape. Stocks in nearly every sector gyrated crazily. The stock market itself took a massive dive. Yeah, there was panic in the streets, and I had visions of myself selling apples on the street corner the following morning--and I don't mean the Steve Jobs kind of apples.

Maybe about 2 days later, it was essentially over. The Hunt Brothers, the fabulously wealthy Hunt Brothers, were effectively wiped out. Silver settled down to normal trading. And it's never been anywhere near that stratospheric high to this day. Margin requirements were again "normalized." And, in those early Reagan years, that was probably about the end of the end of the Carter bear market as normal trading and prosperity finally returned to the market at last.

Yeah, this was a long post, but I haven't seen any Wall Street geniuses write about this anywhere. The speculators ARE driving the oil market today. But while there surely are some rich and villainous traders and rogue countries playing the game, more and more energy futures contracts are being driven up by hungry, unqualified amateurs thinking they've found unlimited value. And they have. For now.

Unfortunately, as in 2000 and again even now in real estate, the bottom will drop out and the amateurs will be crushed again. They never learn. (And the press never helps them, BTW, feeding them frenzied crap and lies every day as they cheer the price of oil up, probably hoping to screw the Republicans worse than they're screwing themselves this fall.)

My advice to Ben Bernanke is to call Paul Volcker and ask him how he got the machinery cranking against the Hunts. (The SEC and the brokerage houses actually play the major roles here, with the Fed doing the jawboning as I recall. The details are actually somewhat unimportant.) Then, one fine morning, we'll get an announcement that owners of oil futures contracts (including ETFs presumably) will need to put up 50% rather than 10%. Then we all step away. By afternoon, blood will be running in the streets. And the oil speculation problem will be history. For now.

This doesn't solve the energy problem per se, of course. But it will buy us a nice chunk of time to do that. Just like we had in the 1970s, and again in the 1980s when prices busted back, albeit settling at higher levels than earlier eras. Except that maybe this time, we'll smarten up and really solve the problem this time rather than just talk it to death and worry about the polar bears. Next time, there might not be a next time.

Last call.

Oil: While Congress Slept: Green Agenda for Suburbs?

Since World War II North Americans have invested much of their newfound wealth in suburbia. It has promised a sense of space, affordability, family life and upward mobility...But as we enter the 21st century, serious questions are beginning to emerge about the sustainability of this way of life. With brutal honesty and a touch of irony, The End of Suburbia explores the American Way of Life and its prospects as the planet approaches a critical era, as global demand for fossil fuels begins to outstrip supply. World Oil Peak and the inevitable decline of fossil fuels are upon us now...The End of Suburbia, Oil Depletion and the Collapse of the American Dream, promotion for documentary End of Suburbia

Maybe Congress isn't sleeping after all. Maybe, as the Democrats listen to the Greens more than to you and me, what they see, as this doomsday "documentary" suggests, is that refusing American companies the right to drill for American oil is a way of realizing the Green Dream, all of us jammed into cities, no more cars, no more highways, no more intrusions on the lands that Greens feel belong to them or to a favorite minority.

National Public Radio, a lefty favorite for public relations, had a story about James Howard Kunstler, whose project End of Suburbia is, recently.

Kunstler says that big cities will become more population-dense at their centers and along waterfronts, but they'll essentially contract as people move to smaller cities and to towns. "Places that will be successful in the future are places ... that have some kind of meaningful relationship to food production, because we're going to have to grow a lot more of our food locally," he says. "The age of the 3,000-mile Caesar salad is coming to an end."...The End of Suburbia as We Know It?, National Public Radio/The Bryant Park Project

Who is James Howard Kunstler? Well, in the late 1990s, he was a leading fearmonger regarding Y2K. Remember that? Check it out. All the computer systems on Earth, for want of two digits in the date field of records, were going to suddenly transfer us back to January 1st, 1900.

In June of 2005, Kunstler predicted that the DOW would fall to 4000. See it here. It rose to 12,500.

You may be getting a picture of a slightly moonmad, leftist Jeremiah, a type with a long history in the United States. Generally, Congress doesn't listen to people like this. But, since the Republicans fumbled the ball in 2006, Congress is listening now. Why would that be? What possible value could a doomsday soothsayer have in a Senate hearing?

There is a basis for what Kunstler says that needs paying attention to:

If oil prices do stay high, how will this affect the real estate market? The conventional wisdom says -
* Demand will be higher for houses in the city and close to public transportation.
* Energy efficient housing will go main stream and there will probably be more tax breaks.
* Interest rate may move higher long term, as higher fuel prices feed inflation.
* Suburban sprawl will slow down over the long term.

I think these are all accurate predictions - if oil keeps going higher - but if history is a guide, I think it will be a while before we see any of these predictions come off in a major way. Oil prices were around $90 per barrel at the beginning of the year, so we have had almost a 50% increase since then. The question is whether the prices will continue to climb and, how far will they go. My guess is that we will have higher gas prices long-term, but there are reasons to think that prices will come down some first, and that we will get used to higher prices.How Will High Gas Prices Affect the Chicago Area Housing Market? Peter Thompson, Chicagoland Mortgage Insight, June 2008

This housing and mortgage analyst's key point: We will get used to higher prices. That's true if we can get past the panic induced by the doomsayers, political manipulators, assymetric warriors, and ETF speculators (see above). Why would we get used to the change?

This is one that Congress doesn't like to talk about. Why? Let's play a favorite game of economics analysts. Let's describe relationships over time.

Median Income-----Price of Gasoline
1970-- $ 8,734-------------$ .36 cents a gallon
1990-- $29,943------------$1.16 a gallon
2000-- $39,973------------$1.17 a gallon
2008-- $46,326------------$4.68 a gallon (est.)

*Sources: Wikipedia,

In thirty-eight years, median income measured in actual dollars has risen 530%. The price of gasoline has risen 1300%. In terms of the value of 1970 dollars, the relative price of gasoline today is 88.2 cents, high, but lower than it was in 1973, when gasoline reached a dollar a gallon for the first time. In real terms, i.e., proportion of income, gasoline is more expensive but not prohibitively so. It only seems that way because those responsible for the radical decline in the value of the dollar want you to concentrate on $4.68 instead of on a dollar that's worth less than 10% of what it was in 1970. In fact the real story in the changing price of oil (even with the panic/speculation factor included) may be that, in terms of the price of oil (or any other commodity), real median income has declined.

Missing these points is what the Greens depend upon their agenda. The conflation of agendas (see above) to produce a panic in real estate and energy could be defused if we'd all pay better attention to such things as the real value of the dollar.

Read above and below for more on what exactly this crisis is. It strikes this writer as one contrived to meet political and financial agendas unrelated to the availability or to the price of oil.



Tuesday, June 24, 2008

Oil: While Congress Slept

Thanks to new technology the Bakken Formation in North Dakota could boost America’s Oil reserves by an incredible 10 times, giving western economies the trump card against OPEC’s short squeeze on oil supply and making Iranian and Venezuelan threats of disrupted supply irrelevant...In the next 30 days the USGS (U.S. Geological Survey) will release a new report giving...assessment of the Bakken Oil Formation that covers North Dakota and portions of South Dakota and Montana. With new horizontal drilling technology it is believed that from 175 to 500 billion barrels of recoverable oil...The USGS did an initial study back in 1999 that estimated 400 billion recoverable barrels...but with prices bottoming out at $10 a barrel back then the report was dismissed because of the higher cost of horizontal drilling techniques that would be needed, estimated at $20-$40 a barrel. [1/7-1/4 of the cost per barrel in 2008! ED]...Massive Oil Deposit Could Increase US Reserves by 10X,

The proven reserves in the US, according to the US Geological Service, are currently 21 billion barrels. Apparently, Democrats and many Republicans in Congress think that's just fine and dandy. It's sort of like a stuffy, stodgy old club where the grandees sit around whining such original thoughts as What do we need all that dirty stuff for? Let's get those funny looking people overseas provide it for us. We've got the money! We can always send the volunteer Army if the price gets too high. That's worked so well in keeping the price down in the Middle East. And hey, what are volunteers in the Army but people who couldn't find anything else to do? And if the hoi-polloi doesn't like it, let them run their cars on corn oil! You're right. It doesn't sound like the Petroleum Club in Houston. It sounds like an upper class all-male club in the 19th century. The only differences? The stodgy members are from both sexes; it's illegal to smoke cigars. The rest, especially the bully pulpit for the pompous blowhard elites, has not changed.

Let's see. We've got 200-500 billion barrels of recoverable oil in North Dakota that Congress hasn't noticed. That's a range of between 39 and 80 years supply at current rates of consumption. What else?

An oil discovery by Chevron Corp. has bolstered prospects that petroleum companies will be able to tap giant reserves that lie far beneath the deep waters of the Gulf of Mexico...Oil analysts and company executives said...test results from a well 175 miles off the coast of Louisiana indicate that the oil industry will be able to recover well more than 3 billion barrels, and perhaps as much as 15 billion barrels, of oil from a geological area known as the lower tertiary trend, making it the biggest addition to U.S. petroleum reserves in decades. The upper end of the estimate could boost U.S. reserves by 50 percent. US Oil Reserves Get a Big Boost, Steven Mulson,Washington Post

Okay, taking a middle figure, say 10 billion barrels of oil, that's another 2 years of supply at current consumption. What else?

A 1993 United States Geological Survey (USGS) study indicated at least 4.3 billion (95% probability) and possibly as much as 11.8 billion...with a mean value of 7.7 billion barrels (1.7 km³). In addition, in the entire assessment area, which covers not only land under Federal jurisdiction, but also Native lands and adjacent State waters within three miles (5 km), technically recoverable oil is estimated to be at least 5.7 billion (95%) and as much as 16.0 billion (5%) barrels (0.7 to 1.9 km³), with a mean value of 10.4 billion barrels (1.2 km³). Economically recoverable oil within the Federal lands assuming a market price of $40/barrel (constant 1996 dollars - the highest price included in the USGS study) is estimated to be between 3.4 billion (95%) and 10.4 billion (5%) barrels (0.5 to 1.7 km³), with a mean value of 6.8 billion barrels (1.1 km³).

Long story short, about a year and a half of domestic supply. Congress slept through this one too, renewing the ban on oil from this source each year since 1993. Note that the "economically recoverable" price for the lowest figure was $40 a barrel, less than 1/3 of the current price.

Okay, we're up to between 43 and 84 years of recoverable reserves. More? Yep.

The offshore areas of the United States are estimated to contain significant quantities of resources in yet-to-be-discovered fields. MMS estimates of oil and gas resources in undiscovered fields on the OCS (2006, mean estimates) total 86 billion barrels of oil and 420 trillion cubic feet of gas. These volumes represent about 60 percent of the oil and 40 percent of the natural gas resources estimated to be contained in remaining undiscovered fields in the United States....Offshore Minerals Management, 12/12/2007

That's a 400% increase in reserves, or another 16-18 years of supply at current consumption. Gazooks, we're talking 59-100 years of supply, in our own back yard, that belongs to us!

Yes, you've asked the right question. What the hell is going on in the halls of Congress? You're paying $4.68 for regular and some snotnosed "representative" of the people is saying you can't have America's own stuff? Who do these people represent?

Not you. Not the oil companies.

And, not thoughts from some other significant representatives of the oil business, to wit:

Proven reserves are not a measure of future supply

“We are looking at more than four and a half trillion barrels of potentially recoverable oil. That number translates into 140 years of oil at current rates of consumption, or to put it anther way, the world has only consumed about 18 percent of its conventional oil potential...That fact alone should discredit the argument that peak oil is imminent and put our minds at ease concerning future petrol supplies...
The Impact of Upstream Technological Advances on Future Oil Supply" - Mr. Abdallah S. Jum'ah, President & Chief Executive Officer, Saudi Aramco, address to OPEC, Vienna, Austria, Sept. 13, 2006.

"The world has only consumed about 18 percent of its conventional oil potential"!!!

Even the Arabs know our Senators and Representatives are asleep at the wheel. When are you going to wake them up, voters?


Monday, June 23, 2008

Oil and Idiotarians

Yeah, I know, I've railed about this before. But one of many keys to socialist progress in strengthening government controls and weakening individual freedom is demonizing the wrong target while offering the government as solution and protector.

Take the current ongoing oil nonsense. Obviously, long-range, we need to develop a variety of new energy sources, renewable and otherwise. But one way to blow off the current, speculative bubble in oil is to first threaten to increase production, and then, dramatically, to do it. The obvious choice for the US is to remove restrictions on offshore and Alaskan drilling.

But now the Democrats have reared back and struck in force with an argument that's as fatuous as it is ballsy. Well, they say (as usual), it's the damned oil companies that are at fault. Why do we need to let them drill offshore and in the Alaska National Wildlife refuge? They already lease millions of acres of land for drilling but haven't done a damn thing. They're sitting on their existing leases to let the price of oil go up and then drill to collect ill-gotten windfall profits.

What's wrong with this picture? First of all, just because you "lease" x-million acres doesn't mean there's a gusher under every single acre. You lease acreage in promising drilling areas and hope for the best. Over time, only a modest fraction of these acres will ever yield oil, so you have to lease rights on an awful lot of acres to hedge your bets.

And the first thing you need to do is EXPLORE the acreage. With modern scientific instrumentation, you can just plunk a few devices down and get a pretty good idea as to where you might want to drill a few test wells before getting really serious.

But wait--what the American public doesn't know is that the current legal situation ALSO PROHIBITS EXPLORATION. This is perfect for the Democrats. They can stand at the podium and denounce the oil companies 'til kingdom come. But the argument is bogus. The oil companies continue to sit not because they're waiting for Godot. They sit there because they can't even EXPLORE much of the acreage they've leased. Amazing. They are getting denounced because they're not doing something they're not allowed to do.

It's amazing to me that many Americans have bought these bogus arguments for decades. It is, in fact, Democrat policy to cave into the enviro-freaks to buy their votes while screwing most of their constituents in the gas tank. Blaming the oil companies and the Saudis is but a pleasant diversion, but it's been astoundingly effective. Up to this point.

Because folks are starting to notice, as per this great piece in today's by Eric Bolling. (Video is here, too.) For example, Bolling lays waste to another conventional Democrat's phony argument:

A Congressman followed my segment and suggested that drilling wouldn't help for 10 years or more. I know this is absolutely untrue, so I called Transocean (RIG - Cramer's Take - Stockpickr), the biggest driller in the world. An officer of the company told me that depending on the location of the drilling, oil could be realized in as little as a year.

Ultra-deepwater fields might produce in 3-5 years. For the most remote locations, without any prior infrastructure support, that barrel may require a 4-6 year window. I suggested 8 years and he said that he could not envision a situation where it would require more than 6 years to bring a barrel out of the ocean floor.

I'd add that they've been dishing this "it'll take 10 years" crap since the 1970s. And I'd point out if we'd done some more damn drilling in the 1970s and 1980s, 10 years would already have been up and we'd be pumping oil with more on the way. What a bogus argument, stating something won't help "now" when it would have helped "now" if they'd permitted it to happen decades ago. Jeez.

I'm going to have a lot more to say on this. Like you, I'm experiencing pain at the pump, although my budget seems able to take it for now. But hey, I'd rather be sending my $$ direction to Exxon instead of the terrorists who want to kill me, wouldn't you? And if we'd been sending our money to Exxon instead of listening to gasbagging Congressional Democrats, prices would still be reasonable, albeit higher than yesterday. And there'd be a lot more Americans at work on our own shores, pumping our own oil with our own money going into our own banks and not to those who'd like to take us back to those pre-oil days in the 7th Century. And their friends, the Congressional Democrats.

Wednesday, June 18, 2008

Senate Cafeteria: Preview of Socialized Medicine?

The Senate is downright ashamed of its cafeteria. The cafeteria is in the Dirksen Senate office building. I had to learn this through Google, even though, as I mentioned, I’ve been covering politics in D.C. for nine years and live and work only a few blocks away. The number of times I’ve lunched with sources, friends, and acquaintances who work in the Senate is far too numerous to count. Not once — even when I was already in the Senate office buildings — had anyone ever invited me to lunch in the Senate cafeteria....If You Like Creamed Raspberries in Plastic, Mark Hemingway, National Review, 6/18/2008

Well, sensible scions of the people, led by Dianne Feinstein, of all people, they've decided to privatize the cafeteria, figuring that an outfit like Aramark or Mariott can sort out the difference between food fit for a substandard nursing home and a showplace of the United State government.

However, the same crew, led by Barack Obama, Hillary Clinton, and Dianne Feinstein do want to create a national health care system. One ought to think about that carefully. If for more than half a century they were willing to describe as a "cafeteria" a place where only tourists, you know, "the people," would go, and most likely would never return to, what is their national health care system going to be like? You can guess.

In Italy, one of the first pieces of advice you'll get from a local friendly is "never use the state doctors." We had the names of several private doctors. This is because the state medical system in Italy is regarded in about the same way US Senators regard their own dining room.

One may also draw a simple conclusion about the way the United States Senate thinks of the beneficiaries of its subsidy programs. QED


Dodd-Shelby: Another "Save the People" Con Game

The principal author of the Dodd-Shelby housing-bailout bill is Sen. Christopher Dodd, a Connecticut Democrat who chairs the Senate Banking Committee, which has jurisdiction over the mortgage market. Last week, Portfolio magazine revealed that Dodd was one of two U.S. senators who benefited from a program under which Countrywide Financial gave loans at favorable terms to the influential and the powerful. The other senator was Kent Conrad, a Democrat from North Dakota....Countrywide Corruption, National Review, the editors, 6/18/2008

Oh, wonder of wonders, a "reformer" turns out to be a confidence man with designs on the money.

But as powerful as Conrad is, the allegations against Dodd are more disturbing because he wields so much power over Countrywide’s fortunes and because he has used that power to benefit Countrywide. According to Portfolio’s calculations, the preferential loan rates Dodd received on two mortgages could end up saving him $75,000...The troubling nature of this arrangement becomes clear when one looks at the fine print of the Dodd-Shelby housing lenders — of which Countrywide is the largest in the U.S. — would agree to renegotiate their most troubled home loans in exchange for a federal guarantee on those loans. If the borrowers who took out those troubled loans end up defaulting, the government would cover any losses the mortgage lenders incur....(Countrywide Corruption, continued...)

And guess who get to pay Chris Dodd and his constituents for their careless financial arrangements? Yep, you do! See, that's the way it works with the Left. If somebody makes a mistake, they were victimized. Therefore, someone else's mistake goes on your bill. If someone, say a mortgage broker, contributed to that mistake by unethical conduct, then -- hey! make a speech and then send the bill to the taxpayer (you).

Or, as the editors of National Review put it, "if the Senate passes the Dodd-Shelby housing bailout before such an investigation can run its course — especially if that investigation finds that members of Congress were improperly influenced — it will have allowed Countrywide to take the money and run."


Democrats: Murthless?

At Camp Pendleton yesterday, military judge Col. Steven Folsom dismissed all charges against Lt. Col. Jeffrey R. Chessani, the highest-ranking officer accused in the Haditha massacre-of-justice. The ruling makes him the seventh of eight accused in the Haditha skirmish to have charges dismissed....Murtha Lied; Marines Were Tried, Ben Johnson,, 5/18/2008

Democrats, in their ongoing lemming rush to electoral oblivion, probably won't get the joke in the headline above. Old line Democrats like Senator Joe Lieberman, however, may pray for Murthlessness every day a story like this comes out.

Murtha, an old friend of Speaker Pelosi's, is a disgrace to the office he holds and to the constituents he represents.


Friday, June 13, 2008

Marxist Juris-"prudence" Continued

We've already seen the lefti-wing Supremes gang up to trash the Constitution with yesterday's asinine and life-threatening 5-4 ruling that foreign terrorists who plan to rain death on the US get "constitutional rights" too. Just like the 3K + US citizens who died on 9/11 did, I guess. Already, American-bashing clowns in Congress and the media are predictably "hailing" this despicable and clearly unconstitutional ruling. Gives considerable credence to our ongoing theory that Gramscian leftists have steadily infiltrated all our cultural institutions as well as the media and the courts the better to eviscerate the American way of life. (You'll recall that a similar 5-4 margin that put George W. Bush in the White House continues to be trashed by 'Rats as "judicial interference," of course. Guess the validity of a 5-4 ruling depends on who's making it.)

In case you've ever wondered about the loyalties of similar "patriots" who sit in judges' chairs around the country, get a load of this USA TODAY photo. It tells you everything you ever wanted to know about yet another a bleeding-heart leftist judge, who presides not too far from where I grew up in what's left of Ohio:

What's the story behind the story? As USA TODAY tells us in the first graf, this Idiotarian, Lorain County Common Please "Judge" James Burgess, is mounting yet another inside attack on the death penalty:
ELYRIA, Ohio (AP) — A judge in Ohio says the state's method of putting prisoners to death is unconstitutional because two of three drugs used in the lethal injection process can cause pain.
Funny, you never hear these clowns worrying about the "pain" of the people murdered by these felons and predators. In the end, it's just another way of undermining our system of justice, pleasing our Euro-socialist betters, and increasing burden for the taxpayers (for maintaining three squares a day and hotel space for convicted murderers), all of which is the point for judicial dictators like Burgess. Any doubts? If you haven't already looked closely, check out the pair of portraits that hang in this Marxist's phony's office. Kind of a Freudian slip, wouldn't ya say?

Meanwhile, last dude out of Ohio, please turn out the lights. No wonder my old home state is going down the tubes.

Sunday, June 01, 2008

The McClellan Hit Job

Leave it to the Democrats and/or their leftist pals in business and media to do their best to malign Republicans in the Presidential election run-up. Their latest effort is to use the blunt instrument of a tell-all book by a failed presidential press secretary to clobber the lame duck president on his way out and smear an entire Republican administration in the process. The hope here is to tar Republican candidate John McCain with the alleged taint, all the better to boost the chances of the sainted Barack Hussein Obama in this fall's presidential sweepstakes.

The Washington Post's review of Scott McClellan's "Culture of Deception" today, penned by longtime book critic and die-hard liberal Jonathan Yardley, gives the book a softball assessment, endorsing McClellan's low-key damnation of the "most unpopular president in American history" as yet another compelling chapter the media-manufactured "truth" we've been bludgeoned with over the last 8 years or so. (Actually, what ever happened to Warren G. Harding, Herbert Hoover, Chester A. Arthur, and John Quincy Adams who were easily as "despised" as Bush? Or how about Lincoln early-on in the Civil War?) Once having written a phony narrative, the left-wing media never gives up on the story.

Too bad the conservative blogosphere is out there shredding McClellan's feeble attempt at justification for his wretched handling of White House communications. In point of fact, the appointment of McClellan, a now-former Texas cronie of the President's, was a poor bit of HR R&D by Mr. Bush, a belly-flop for which he paid dearly while McClellan was muffing press curve balls. For which he is paying again as McClellan tries to restore his tarnished reputation with the media's favorite weapon, the "tell-all" attack book on a Republican.

Like many Republicans who'd like to be liked by the media before they die, McClellan is, with his weakly documented book, trying to attack the Republican administration of which he was a part in order to get some kind of moneymaking gig with the media like many Democrats before him. Won't work, Scott. The left will never trust you. But they'll be happy to use you for a couple months as a tool to discredit the Republicans before dumping you like they did with Cindy Sheehan.

But wait, there's more. As you might suspect, George Soros money is behind the publisher of this latest hit job. Soros has been burnishing his rep by providing economic patter to the media over the spring, making Republican-damaging gloomy assessments on the economy even as he profits from it via manipulating his billion dollar portfolios. He maintains his sanitized profile as an investment sage while using his profits to undermine the economy, the government, and most of all, Republicans. Helping underwrite McClellan's book effectively makes McClellan Soros' unwitting stooge. But, as he often proved in front of the media, you can never accuse Scott of being the sharpest knife in the drawer.

Now we learn that McClellan's Soros-supported editors "shaped" McClellan's original proposal in a way designed to rewrite the story to cause maximum damaging PR to the Bushies, according to an astute piece in The American Thinker:
An examination of published reports reveals that Scott McClellan's kiss-and-smell betrayal of George W. Bush is a far cry from the book McClellan started out to write and was shaped into an offensive tome by a publisher with close ties to George Soros.
And McClellan was further incentivized to push potentially damaging material, true or not, by being given a very small advance for such a book. Thus, the book would have to be written to fly off the shelves for McClellan to pocket a meaningful profit for his time. And there's no better way to do that these days than by "shaping" your manuscript to indulge the left's fetish with Bush Derangement Syndrome. The American Thinker's William Tate elaborates further, discussing comments made by McClellan's actual editor:
A book's editor and its author work extremely closely--with the author sweating over every word, every detail, and the editor helping shape the pacing and overall tone of the manuscript. Kaufman told the AP that as McClellan wrote the book the "tone began to be directed toward issues and events that some people would rather he not be straightforward and candid about." (Emphasis added.)
The lesson in all this? Don't bother buying "tell-all" books by either Republicans or Democrats with an axe to grind. They either started out as a pack of self-justifying lies or were transformed into same by unscrupulous editors or publishers with dollar signs in their eyes and dreams of another Nixon-like presidential scalp dangling from their belts. What the hell can you believe anymore?

Liberal Left: Constantly Petrified with Terror

I was just cruising through some financial new sites and came up with this headline at CNN/Money:
Hurricanes Could Mean $6 Gas
(No link since these main heads change throughout the day.)

The linked story, which you get on the jump, has the following head and subhead:
An ill wind for gas prices

Traders say that even though you're already paying for the hurricane season, the price could spike to $6 a gallon if catastrophe strikes.


Ever notice how many MSM "stories" indulge in this crap? All it is is hype, conjectural stories penned by lazy journalists involving sound bites from their favorite alarmists about this and that. Especially if it involves the latest "global warming" terrorism.

Try this quote from the story we've just cited:
Peter Beutel, oil analyst at Cameron Hanover Beutel, said if a Katrina-like hurricane were to hit in July, gas prices could go as high as $5 or even $6.
Now we don't know Mr. Beutel, and we don't blame him for his opinion since the pump was obviously primed. What was the likely question he was asked? Maybe something like, "Mr. Beutel, what would happen to gas prices if another Katrina hits?" That's how you get an answer like the above. It's a rational answer, but the question is bogus, alarmist, and meant to elicit the desired frightening response.

What if the reporter had asked "Mr. Beutel, assuming we have a benign hurricane season like last year, which didn't live up to all the Weather Channel hype, how low could gas prices go? And Mr. Beutel might have responded, "Well, if per barrel prices roughly continue their downward trajectory from last week, we could see per barrel prices decline to $90-100 per barrel and gas prices at the pump could dip close to $3.00 a gallon after Labor Day."

But obviously, that type of question is one that's never asked. The focus is always on fear.

This is an interesting characteristic of leftists, whether in journalism and government. They appear to have a vested interest in emphasizing the negative and keeping the populace in some kind of fear over something. Usually something that "requires" more government or higher taxes to "fix." Keep an eye out for these bogus stories. Not only do they emphasize the kind of hyped fear that allegedly keeps readers showing up. They also relentlessly steer the electorate to demand the government do "more" to protect them. Which ultimately means that the government will have to take "more" from our collective wallets to redistribute to the usual suspects.

It's a longstanding game we can ill afford. Be aware of what's being done. And remember: Things COULD get a lot worse. But they also COULD get a lot better.