Tuesday, August 30, 2011

Gibson Guitars in the Obama Admin's Crosshairs...


In one of last Friday's posts, I linked to several stories regarding the Obama Administration's raid of Gibson Guitar's plants in Tennessee.

The Holder Justice Department raided Gibson Guitar facilities in Nashville and Memphis this week because the company is using unfinished wood from India and this violates Indian law… Not American law.

(again via Gateway Pundit)

Juszkiewiz said the government suggested that the company’s use of unfinished wood from India is illegal, not because of U.S. law, but because of the Justice Department’s interpretation of a law in India. The Holder Justice Department raided at least two Gibson manufacturing plants this week forcing hundreds of workers off their jobs. Juszkiewiz says the company lost a million dollars this week.

Finally, Henry Juszkiewicz told Dana, “The Obama Justice Department wants us to just shut our doors and go away.” He says he will continue to fight for the Gibson company and its workers.

Federal agents swooped in on Gibson Guitar Wednesday, raiding factories and offices in Memphis and Nashville, seizing several pallets of wood, electronic files and guitars. The Feds are keeping mum, but in a statement yesterday Gibson's chairman and CEO, Henry Juszkiewicz, defended his company's manufacturing policies, accusing the Justice Department of bullying the company. "The wood the government seized Wednesday is from a Forest Stewardship Council certified supplier," he said, suggesting the Feds are using the aggressive enforcement of overly broad laws to make the company cry uncle.

It isn't the first time that agents of the Fish and Wildlife Service have come knocking at the storied maker of such iconic instruments as the Les Paul electric guitar, the J-160E acoustic-electric John Lennon played, and essential jazz-boxes such as Charlie Christian's ES-150. In 2009 the Feds seized several guitars and pallets of wood from a Gibson factory, and both sides have been wrangling over the goods in a case with the delightful name "United States of America v. Ebony Wood in Various Forms."

WSJ concludes:

Last year, Dick Boak, director of artist relations for C.F. Martin & Co., complained to Mother Nature News about the difficulty of getting elite guitarists to switch to instruments made from sustainable materials. "Surprisingly, musicians, who represent some of the most savvy, ecologically minded people around, are resistant to anything about changing the tone of their guitars," he said.

You could mark that up to hypocrisy—artsy do-gooders only too eager to tell others what kind of light bulbs they have to buy won't make sacrifices when it comes to their own passions. Then again, maybe it isn't hypocrisy to recognize that art makes claims significant enough to compete with environmentalists' agendas.

Well, more info has come to light (via HotAir):

Commenters yesterday wondered whether Gibson Guitar CEO Henry Juszkiewicz is a Republican donor. Yep, he is. It also turns out that Chris Martin IV, the CEO of Gibson competitor, C.F. Martin and Company, is a long-time donor to Democrats. C.F. Martin uses the same “questionable” Indian rosewood in its guitars, but has the federal government raided a C.F. Martin factory? Didn’t think so. Juszkiewicz said yesterday he feels like this is a personal attack. Could it be because it is?

...It’s also worth noting that the U.S. is a “trivial” importer of rosewood from India and Madagascar. According to Hinderaker, 95 percent of it goes to China. So, the whole “it’s for the trees” argument doesn’t really hold up.

Even MORE interesting info is THIS:

But if it turns out that the Indian rosewood in question is illegal contraband in the eyes of Obama’s DOJ, then Michelle Obama is just as guilty of trafficking in it as Gibson. In 2009, Michelle Obama gave [French First Lady] Carla Bruni-Sarkozy a Gibson guitar with a fretboard made of the material...

According to a list of the gift’s specs at Gibson.com, the fretboard was made from a “choice piece of Indian rosewood.”
Hypocrisy, thy name is Obammy!



The Obama Administration wrote in a plea document to Gibson Guitars, "Your problems would go away if you used Madagascar labor instead of ours." In other words, don't use American workers, use foreign workers to manufacture your guitars. (!!!)


The Obama Administration wrote in a plea document to Gibson Guitars, "Your problems would go away if you used Madagascar labor instead of ours." In other words, don't use American workers, use foreign workers to manufacture your guitars. (!!!)

Another point of interest is that Tennessee is a "right to work" state, and Pennsylvania is not. Just like the Boeing issue in which the O-Administration is pressuring Boeing to move their new plant in South Carolina (another "right to work" state) to Washington state (not a "right to work" state).

What's a "right to work" state?:

Right-to-work laws are statutes enforced in twenty-two U.S states, mostly in the southern or western U.S., allowed under provisions of the Taft-Hartley Act, which prohibit agreements between labor unions and employers that make membership, payment of union dues, or fees a condition of employment, either before or after hiring, thus requiring the workplace to be an open shop.

Prior to the passage of the Taft-Hartley Act by Congress over President Harry S Truman's veto in 1947, unions and employers covered by the National Labor Relations Act could lawfully agree to a closed shop, in which employees at unionized workplaces must be members of the union as a condition of employment. Under the law in effect before the Taft-Hartley amendments, an employee who ceased being a member of the union for whatever reason, from failure to pay dues to expulsion from the union as an internal disciplinary punishment, could also be fired even if the employee did not violate any of the employer's rules.

The Taft-Hartley Act outlawed the closed shop. The union shop rule, which required all new employees to join the union after a minimum period after their hire, is also illegal. As such, it is illegal for any employer to force an employee to join a union.

A similar arrangement to the union shop is the agency shop, under which employees must pay the equivalent of union dues, but need not formally join such union.

Section 14(b) of the Taft-Hartley Act goes further and authorizes individual states (but not local governments, such as cities or counties) to outlaw the union shop and agency shop for employees working in their jurisdictions. Under the open shop rule, an employee cannot be compelled to join or pay the equivalent of dues to a union, nor can the employee be fired if he joins the union. In other words, the employee has the right to work, regardless of whether or not he is a member or financial contributor to such a union.

The Federal Government operates under open shop rules nationwide, though many of its employees are represented by unions.

Which states are "right to work" states?

Friday, August 26, 2011

Friday's Round-up: Part II...

(via Gateway)

The Obama Administration raided a Gibson Guitars plants in Tennessee! Because of wood from India.

And Captain Ed over at Hot Air has a take on it.

Meanwhile, we have a nasty beetle in larva form that arrived in a 10-lb bag of rice from - of all places - INDIA.

NYC Mayor Bloomberg bars any clergy from taking part in the 9/11 ceremonies. WTF?!? Yet, he's supporting the mosque being built at Ground Zero. Again, WTF?!?

The Republican debate on Sept 7 at the Reagan Library has been set. This last sentence is interesting:

Giller said the eight candidates are the final lineup unless someone else declares his or her candidacy and meets the debate's criteria.

And guess who's making a major announcement in Iowa on Sept 3?

Friday's Headline Round-Up...

We've got a lot to cover here. Take a deep, cleansing breath, hold it....... count to 10....... and sloooooowly release.......... OK. Here it goes:

The 1st Quarter GDP numbers had been revised downward (surprise, surprise) from 1.9% to 0.4%. The 2nd Quarter GDP numbers were initially 1.3%. Well, guess what?:

The U.S. economy grew at a meager 1 percent annual pace this spring, slower than previously estimated. The downward revision will likely increase fears that the economy is at risk of another recession.

Fewer exports and weaker growth in business stockpiles led the Commerce Department to lower its estimate for the April-June quarter from its previous rate of 1.3 percent growth. That means the economy expanded only 0.7 percent in the first six months of the year.

The report continues:
Most economists aren't forecasting a recession. JPMorgan Chase projects the U.S. economy will grow only 0.9 percent this year and 1.7 percent in 2012, much lower than the bank's estimates just a few weeks ago. Other economists have made similar downgrades.

Nine of the past 11 recessions since World War II have been preceded by a period of growth of 1 percent or less, economists note.

Morgan Stanley had also cut it's global forecast less than two weeks ago (so did Goldman Sachs):

Morgan Stanley slashed its global growth forecast for 2011 and 2012, saying the U.S. and the euro zone were "dangerously close to a recession", and criticized policymakers in Washington and Europe for not acting more decisively to contain the sovereign debt crisis.

The bank cut its global gross domestic product growth forecast to 3.9 percent from 4.2 percent for 2011, and to 3.8 percent from 4.5 percent for 2012.

First, data on unemployment claims, manufacturing and existing home sales lent weight to the case that the U.S. economy is slowing. (Of course, other data released this week, such as the leading economic index and retail sales suggests the U.S. economy continues to plow along at a positive, but not satisfactory, rate.)

Second, Morgan Stanley and Goldman Sachs downgraded their forecasts for global growth in 2011 and 2012. Stocks are leveraged bets on growth. The big firms that populate the Dow Jones Industrial Average and the S&P 500 now get a very large chunk of their revenues, and much of their growth, from overseas. The prospect of a growth slowdown in China and India is far more daunting to investors than the possibility that U.S. and European growth could fall.

Third, there are continuing problems emanating from the euro zone. Growth seems to have stalled in both France and Germany, the engines of the continent's economy. The big fear this week is that French and German banks might suffer a two-fold blow. They're heavily exposed to government and private-sector debt in Greece, Spain and Italy — countries whose ability to repay debts is being questioned. And they're also heavily exposed to consumers and businesses in their suddenly flat home markets.

Of the three problems listed above, it's the last that I find most troubling.

He ends his report with this:

Europe is dishing up a toxic brew: a rigid currency, fiscal contraction, begrudging aid from the central bank, and a long history of enmity between its constituents. That's a recipe for collective paralysis, not for the sort of bold collective action that is required to halt banking crises. Pundits have floated the idea that Europe could solve its problems by issuing eurobonds. And it's true that selling bonds that are guaranteed collectively by European countries would allow countries to escape the tender mercies of the bond markets. But that plan, which would require true collective action, has been rejected.

The reality is that Europe today resembles the U.S. states during the Article of Confederation period — an agglomeration of allies and frenemies, unwilling fully to cast their lot with one another. European policymakers aren't inclined to take advice from American political thinkers. But they'd be well-advised to heed the warning Benjamin Franklin issued at a time when collective action was being considered: "We must all hang together, or assuredly we shall all hang separately."

Bernanke today says the Fed ain't gonna do anything right now. No QE3...yet. And he already stated previously that interest rates will remain the same for two more years (until mid-2013). So what else could he really say or do, anyway? Nothing but sitting on his thumbs, I guess.

Meanwhile, unemployment rose in July in 28 states. California (at 12%) is second only to Nevada's 12.9%.

As Gateway Pundit also reports (via CSN News), "The percentage of young people employed was the lowest ever for a July since the government started tracking the numbers in 1948."

On an interesting tack, one college student decided to try and see if his fellow students would put their GPA where their mouth is. Since students are so eager to want the wealthy to have that wealth taken away and given to those less fortunate, would they themselves be willing to give their 4.0 Grade Point Averages to other students who're less fortunate?

“They all earn their GPA,” said Darcy in an interview with "Fox and Friends." “So we asked them if they’d be interested in redistributing the GPA points that they earned to students who may be having trouble getting a high GPA.”

Darcy, who films his encounters with teachers and fellow students, doesn’t have much luck selling this theory.

He said many students on college campuses support high taxes on the rich, but when put into relative terms, cringed at the thought of spreading around their academic wealth.

In a video posted on Exposingleftists.com, one student said, “If I do give GPA points to students that don’t deserve it, it isn’t fair, I work for what I have.”

Heads of over 100 major companies have joined Starbucks Corp. CEO Howard Schultz in a pledge to boycott political donations until Congress and the president agree on a long-term debt and deficit plan, Schultz announced in a letter Wednesday.

"Remarkably, the initiative triggered a national dialogue and a groundswell of support," Schultz wrote, adding that in the 10 days since releasing his pledge, he "heard directly from thousands of concerned citizens and was astounded by the volume of support we received through calls, emails, social media exchanges and various other public votes of confidence."

That included over 100 business leaders who signed on to Schultz' initiative, including Myron Ullman of JC Penney, Duncan Niederauer of NYSE, and Walter Robb, co-chief executive of Whole Foods, Tim Armstrong of AOL, Mickey Drexler of J. Crew Group, and billionaire investor Pete Peterson.

Nearly one in 10 midsize or large employers expects to stop offering health coverage to workers once federal insurance exchanges start in 2014, according to a survey from a large benefits consultant.

Towers Watson also found in a survey completed last month that an additional 20% of companies are unsure about what they will do...

In fact, a survey of employers published by McKinsey in June found that as many as 30 percent will definitely or probably drop coverage once the exchanges begin, and among those with a “high awareness” of the new rules post-ObamaCare, that number rises to 50 percent. And why not? If you can cut costs by paying a fine instead of buying insurance for workers, why not push them off onto the exchanges and let taxpayers pick up the slack?
Speaking of ObamaCare, remember when Rep. Joe Wilson caught flack for yelling, "You lie!" during The One's State of the Union address when Obama insisted that illegal aliens will not benefit from ObamaCare?

...the Health and Human Services Department awarded millions to “migrant and seasonal farm worker” health care — a spokeswoman in the department was cited last week saying patients would not be asked about immigration status and an department official confirmed Monday that the centers receiving the grant money must offer primary care to “all residents” in a given area.

Wilson, on his campaign website, declared the funding announcement proved him right. Though most farm workers are here legally, the Pew Hispanic Center estimates that about a quarter of them are undocumented.

More to come in today's second post.

Thursday, August 18, 2011

Home, Home Down the Drain...

Let's see now...

June's existing home sales dropped nearly 1%. And approximately 70% of all mortgage applications are for refinancing, NOT for purchasing.

Also, prices for NEW homes in June rose. And (surprise, surprise) it didn't help the market much.

Banks are starting to bulldoze the worst of the foreclosed properties to help get rid of the glut, and some of the banks are giving the land back to the cities.

Increasingly, it appears banks are turning to demolition teams instead of realtors to rid them of their least valuable repossessed homes. Last month, Bank of America announced plans to demolish 100 foreclosed homes in the Cleveland area. The land is then going to be donated back to the local government authorities. BofA says the recent donations in Cleveland are part of a larger plan to rid itself of its least saleable properties, many of which, according to a company spokesperson, are worth less than $10,000. BofA has already donated 100 homes in Detroit and 150 in Chicago, and may add as many as nine more cities by the end of the year... And BofA is not alone... The banks do the deals because once the properties are donated they no longer have to pay taxes or for upkeep. Tax experts say the banks may also be able to get a write off for the donation. That appears to be a better deal than trying to repair some of these homes.

The number of people who bought previously occupied homes fell in July for the third time in four months. This year is on pace to be the worst in 14 years for home sales, as more Americans worry that the economy could slip back into another recession.

Home sales fell 3.5 percent last month to a seasonally adjusted annual rate of 4.67 million homes, the National Association of Realtors said Thursday. That's far below the 6 million that economists say must be sold to sustain a healthy housing market.

Housing starts for July dropped, as well. More info here.

Gary Shilling (one of the few who predicted the housing bubble burst) thinks that housing prices need (and will) drop down to as much as another 20% in value. More info with video here.

Excess inventories are the mortal enemy of housing prices. Lower prices are needed to unload surplus inventory, but in turn, lower prices bring forth more inventory from anxious sellers. The anxiety of house sellers and the reluctance of buyers are enhanced by the realization that house prices can fall – and are falling for the first time in 70 years.

Those excess inventories are huge. Historically, new and existing inventories listed for sale have averaged about 2.5 million. So that's the normal working inventory level, and anything above 2.5 million is excess. It's currently about 4 million, implying excess inventories of 1.5 million. But wait! There's more! As foreclosures keep mounting, a "shadow" inventory of as many as 500,000 additional homes will become visible as many more Americans choose to sell rather than endure further price declines.

[The] huge and growing surplus inventory of houses – at least 2 million above normal working levels – will probably depress prices considerably from here, perhaps another 20 percent over the next several years. That would bring the total decline in house prices from the April 2006 peak to 45 percent. My forecast may be optimistic, because declines tend to overshoot on the downside just as bubbles do on the upside.
After the markets did their major downturn last week, and after the S&P downgraded the debt holdings of the U.S., the Federal Reserve stated that they will keep interest rates at their current lows for another 2 years (until mid-2013).

The Federal Reserve sketched a dim outlook for the economy Tuesday, suggesting it will remain weak for two more years. As a result, the Fed said it expects to keep its key interest rate near zero through mid-2013.

It's the first time the Fed has pegged its "exceptionally low" rates to a specific date. The Fed had previously said only that it would keep its key rate at record lows for "an extended period."

The Fed announced no new efforts to energize the economy in its statement released after its one-day policy meeting. But the statement held out the promise of lower rates on mortgages and other consumer loans longer than many had assumed.

The decision was approved on a 7-3 vote. Three Fed regional bank presidents who have been worried about inflation objecting. It was the first time since November 1992 that as many as three Fed members have dissented from a policy statement. [emphasis mine]

Hmmm... dissension in the ranks of the Fed Board? More here.


The average rate on a 30-year fixed mortgage has fallen to its lowest level on records dating to 1971.

The rate on the most popular mortgage dipped to 4.15 percent from 4.32 percent a week ago, Freddie Mac said Thursday. Its previous low of 4.17 percent was reached in November.

The last time long-term rates were lower was in the 1950s, when 30-year loans weren't widely available. Most long-term home loans lasted 20 or 25 years.

Few expect record-low rates to energize the depressed home market. Over the past year, the average rate on the 30-year fixed mortgage has been below 5 percent for all but two weeks. Yet prices and sales remain unhealthy and are holding back the overall economy.

Five years ago, the average 30-year fixed rate was near 6.5 percent. In 2000, it exceeded 8 percent...

...After previous recessions, housing accounted for 15 percent to 20 percent of overall economic growth. This time, in 2009 and 2010, housing contributed just 4 percent to the economy...

...The average rate on a 15-year fixed mortgage, which is popular for refinancing, fell to 3.36 percent, also a record low. It's the third straight week of record lows for the popular refinancing option. Freddie Mac's records date to 1991, but analysts believe the new low on the 15-year mortgage is the lowest ever.

For someone like myself and my wife, as potential first-time home buyers, this all could bode well come this fall and winter. Remains to be seen.

ObamaCare Debacle...

AARP has gotten an ObamaCare waiver.

As of July 14, the total number of individual companies, organizations, unions, etc. (even the state of Maine!), reached 1471. And that's just the numbers up to the end of June.

Obama-appointed Supreme Court Justice Kagan (and the White House) lied about her role in ObamaCare litigations. So, I hope this means that she will have to recuse herself when all those lawsuits reach the desks of the "9 in Black".

HotAir has this post of the coming cost explosion due to ObamaCare.

Obama concedes that ObamaCare won't control costs (surprise, surprise).

And a Federal Appeals Court ruled 2-1 that the individual mandates are unconstitutional.

UPDATE: On the 1472 waivers (that will last three years).

Tuesday, August 09, 2011

It's All in the Numbers and the Solution is Common Sense...

THIS gives you an inkling of an idea of what the issue - THE issue - is today. Namely, the national debt.

MORE charts and numbers from Hot Air.

Hmmm... $16 trillion in loans to banks in just three years. Read it. It'll pi** you off.

Rep. Paul Ryan points to healthcare reform (true reform) as a key to the debt crisis. Remember that, in my post yesterday, I quoted the S&P head saying that:

"The key thing is, yes, entitlement reform is important because entitlements are the biggest component of spending, and the part of spending where the cost pressures are greatest."

...the agreement last week to reduce the nation's debt by at least $2.1 trillion over the next 10 years "fell well short" of comprehensive reforms that some had advocated.

In other words: ObamaCare, Medicare, MedicAid, Social Security.

Remember, also, that CC&B (Cut, Cap and Balance bill) that sailed through the House, but stalled in the Senate and was threatened a veto by The One himself. Seems that, 2-to-1, adults approve of that bill. And it's a CNN poll. The ratio of approval, I'm sure, would be even higher for registered voters. And higher still with likely voters.

Let's re-watch Rick Santelli from a couple days ago:

(with analysis by HotAir here)

Rick goes off some more here:

(thanks to Gateway Pundit)

So, let's go way back to February of 2009 and watch Rick's original rant on CNBC:

Inspiring, isn't it?

Sarah Palin posts her views here (required reading!):

HotAir comments here:

...Sarah Palin came through today with a Facebook post that strikes the right tone and is at once simple, direct, and comprehensive. It doesn’t rail at past mistakes, nor does it come across as a raised-voice, you’ve-got-to-get-this-people communication. Palin takes it for granted – with refreshing common sense – that we are in a crisis, its features are obvious, and the task now is to deal with it, not continue to argue whether it’s really a crisis or how big it is or whose name we can pin on it.

She makes no bones about the significance of the problem we face. I am particularly impressed with her point that if we don’t square ourselves away, the specter hangs over us of IMF staffers showing up on our doorstep with China and France and Germany arrayed behind them, ready to throw folders on a desk and start telling us how much we can spend on cable TV and incidentals each month. Whether things would really play out for the US as they are playing out for Greece and Ireland is a valid question, but Palin is quite correct that the pitched confrontation is on the horizon now, as it was not six weeks ago – and she has the courage to face that possibility head-on. It’s not pleasant to mention it, but it’s the right thing to do.

The last third of Palin’s post is devoted to laying out what we need to do. Grow the economy by releasing the regulatory clamps on it, starting with the energy sector. Cut spending and reform entitlements. She doesn’t pretend the latter would be easy, but she faces head-on the fact that it is inescapably necessary. I urge you to read her post for the discussion of particulars. It is material and convincing without being in the weeds.

The piece is positive and encouraging for its forthrightness. There is nothing “clever” to be done in this situation; it’s all straightforward. The US federal government has to cut spending and let the economy grow, even if that means breaking the stranglehold of unions on the public trough and overruling advocacy groups and government bureaucrats who don’t want the economy to grow. Pretending that the federal budget is too complex to be governed by the ordinary rules of accounting – or that the US is too special to be limited by the ordinary definition of fiscal solvency – is a dodge, not a sign of insight or expertise.

Palin focuses like any good executive on the big picture. We have to cut spending and get government out of the economy’s way so it can start pumping out revenues again. These things are increasingly obvious to everyone, and moreover, they constitute a plan.

Palin in 2012 with Santelli as Treasury Secretary!!!

Monday, August 08, 2011

The Obama Alphabet...

Brought to you by Brett Stephens of the Wall Street Journal on-line:

A is for the Arab world, and our standing in it: This year, Zogby International found that 5% of Egyptians had a favorable view of the U.S. In 2008, when George W. Bush was president, it was 9%.

B is for the federal budget deficit, which is estimated to come in at around 11% of GDP in 2011, up from about 3% in 2008.

C is for China's military budget. For 2012, Beijing plans to increase spending on defense by 12.7%. The Obama administration, by contrast, proposed Pentagon cuts in April averaging out to $40 billion per year over the next decade, and Congress may soon cut a lot more.

D is for—what else—the federal debt, which grew to $14.3 trillion this month from $10.7 trillion at the end of 2008. D is also for the dollar, which has lost almost half its value against gold since Aug. 2008.

E is for energy. The average retail price of a gallon of gas hovered near the $1.80 mark when Mr. Obama was inaugurated. It has since more than doubled. E is also for ethanol, the non-wonder fuel the U.S. continues to subsidize to the tune of $5 billion a year.

F is for free trade. Bill Clinton signed Nafta in 1994, which facilitates $1.6 trillion in the trade of goods and services between the U.S., Mexico and Canada. George W. Bush midwifed more than a dozen FTAs, from Australia to Singapore to Morocco to Bahrain. Number of FTA's signed by the current president: zero.

G is for Guantanamo, which remains open, and for Gadhafi, who remains in power, and for Greece, which offers a vision of America's future if we don't reform our entitlement state.

H is for Hillary Clinton, who—I can't believe I'm writing this—would have made a better president than Mr. Obama.

I is for Israel, a Middle Eastern country the president claims to support even as he routinely disses its prime minister, seeks to shrink its borders and—why not?—divide its capital.

J is for jobs. In November 2008, president-elect Obama promised he would create 2.5 million jobs by 2011. By October 2010 the economy had shed 3.3 million jobs.

K is for Karzai, Hamid, Afghanistan's feckless leader. Still, the Obama administration probably did itself no favors by publicly dumping on the man, leading him to seek new best friends in Tehran.

L is for Laden, Osama bin. The president's greatest triumph, which will forever put him one notch—if only one notch—above Jimmy Carter.

M is for Mexico, a country that manages 5.4% unemployment and 4.2% annual growth even as it fights a war against the drug cartels.

N is for NATO, once a pillar of Western security, which Mr. Obama is in the process of destroying through his decision to withdraw from Afghanistan and his refusal to give NATO the push it needs to win in Libya.

O is for ObamaCare, which goes far to explain B, D, J as well as the Greek part of G.

P is for Pyongyang, whose ruler the administration is once again attempting to engage in the six-party talks. This is after the Kim regime welcomed Mr. Obama's plea for a nuclear-free world by testing a nuclear bomb, torpedoing a South Korean ship, shelling a South Korean village, and unveiling a state-of-the-art uranium enrichment facility.

Q is for QE2, the most disastrous experiment in monetary policy since Fed Chairman William Miller's low-interest rate policy crashed the dollar in 1978.

R is for the reset with Russia, the principal result of which is an arms-control treaty that brings us to parity in strategic nuclear weapons, leaves us behind in the tactical category, and ill-equips us for the challenge of a proliferating world.

S is for shovel-ready. Enough said.

T is for taxes, which Mr. Obama would like to see raised for "millionaires and billionaires"—curiously defined as people making $200K and up.

U is for Iran's uranium enrichment. When Mr. Obama came to office promising to extend his hand to the mullahs, Iran had enriched 1,000 kilos of uranium. Today they have produced more than 4,000 kilos.

V is for Venezuela, a country whose extensive subterranean links to Iran the administration has consistently downplayed.

W is for the Dubya, whose presidency now looks like a model of spending restraint.

X is for Liu Xiaobo, an example of what a deserving winner of the Nobel Peace Prize looks like.X is also for Xanax, likely to be remembered as the drug of choice of the Obama years.

Y is for Yes, We Can! Unfortunately, it's also for Yemen.

Z is for zero, which is the likelihood that one of the current GOP hopefuls will defeat Mr. Obama in 2012.

It's getting ugly (except for oil & gold)...


After S&P downgraded the U.S. credit rating from AAA to AA+ on Friday after the markets closed, the Dow (and other markets) take another dump.

Since the July 21 high of 12747, the Dow is now currently at 11125. That's a 13% drop in just two and a half weeks! Oil has dropped to $83/barrel (one bright spot in all of this) while Gold breached the $1700 threshold (another bright spot IF you invested in gold).

Ratings agency Moody's Investors Service on Monday warned it might also downgrade the U.S. government'scredit rating if its planned measures to reduce its budget deficitturned out to be not "credible" after all.

In his first comments after the move by rival rating agency S&P, Moody's analyst Steven Hess sounded a note of caution about Moody's rating of the U.S., repeating that the August 2 plan to cut deficits by $2.1 trillion was positive for the U.S. credit standing, but not enough to keep its rating on a stable outlook...

..."If the process for further deficit reduction that is included in the budget control act produces results that are not really credible, that combined with the economic performance could potentially cause an early move on the rating," Hess told Reuters in an interview.

Meanwhile, today S&P downgraded Frannie Mae & Freddie Mac, and others:

Standard & Poor's Ratings Services on Monday downgraded the credit ratings of Fannie Mae and Freddie Mac and other agencies linked to long-term U.S. debt.

The agency also lowered the ratings for: farm lenders; long-term U.S. government-backed debt issued by 32 banks and credit unions; and three major clearinghouses, which are used to execute trades of stocks, bonds and options.

All the downgrades were from AAA to AA+, reflecting the same downgrade S&P made of long-term U.S. government debt on Friday.

The S&P head stated that:

"The key thing is, yes, entitlement reform is important because entitlements are the biggest component of spending, and the part of spending where the cost pressures are greatest."

...the agreement last week to reduce the nation's debt by at least $2.1 trillion over the next 10 years "fell well short" of comprehensive reforms that some had advocated.
Via Hot Air, Rick Santelli (he of Feb '09 fame who's impromptu on-camera CNBC rant sparked the Tea Party movement) says, "they're still not listening":

UPDATE: Dow now down 523 points just for today! That's almost 15% down since July 21.

UPDATE#2: The markets closed with the Dow down to 10810. So, in just 13 business days the Dow has gone down 15.2%, the S&P down 16.4%, and the NASDAQ down 17.5%.

Thursday, August 04, 2011

Down Dow Down... Up Gold Up...


The Dow closed down over 500 points today. The worse single-day drop since Oct 22, 2008 (remember THAT time?...can YOU say TARP, QE1-2-3, Corporate Bailouts, Freddie & Fannie Faux Pas, Too-Big-To-Fail-BS, and the beginning of all this mess?). Since Monday morning, the Dow's dropped almost 900 points. All the markets (S&P, NASDAQ, etc.) were hit even harder.

Gold's at $1650/ounce, though! The average price of gold in 2008 was........ $872. The average price in 2005 (before the housing crash began?)..... $445. Gold was stable for many, many years, until 1933. Then it up-ticked a bit. Stayed stable again until the early 1970s when it went from $36 in 1970 to $124 in 1976 to $615 in 1980. Nixon/Ford, then came Carter, and look out!

Gold stabilized and fluctuated in the $317-460 range thru the late 90s. Dipped into the high $200s for a few years. In 2001 it was at $271, then it went back to it's 2+ decade range until... 2006. It went from $445 in 2005 to $603 in 2006. Then to $695 in 2007, $872 in 2008, then $972 in 2009, then $1224 in 2010. And now it's at $1650. Welcome back, Carter!!