The Religion of Peace Strikes Again

This time in Mumbai.

And in case you've ever wondered what the eyes of the devil look like, here they are:


No, this isn't going to stop the bullets and bombs:


I don't know about where you went to school, but where I did, appeasement never stopped a bully. But an ass-kicking did.

Better hope they're stopped while they only have Kalashnikovs.

Of Hubris and Moral Hazard.

Suppose you lived in a nice neighborhood. Suppose further that anyone, friend or foe, could buy fire insurance on your house. Suppose even further that they did buy it, and that there was no limit to how much they could buy -- even up to multiples of the value of the home -- as long as someone was willing to sell them a policy. In fact, you even bought a little fire insurance on your neighbor's houses.

And let's suppose you and your neighbors are in the fire insurance business. Why would you sell so much insurance? Well, for one thing, your neighbors didn't really talk much about who was buying policies from them, and neither did you. But you all were pretty sure you were fireproof, being experts in the business. So you kept selling policies and collecting those big premiums.

Then say over the spring and the summer a half a dozen houses in your neighborhood did burn down. Wouldn't you have to wonder what caused all those fires, one after another, in the same neighborhood? How are you going to pay all those claims?

Crazy, isn't it? It would never happen! The insurance industry is regulated; the bright guys in the suits at City Hall would never allow such a thing.

Well, it is crazy, and it's not regulated, and it has happened. The "homes" in question are broker dealers and big banks; the insurance policies are CDS contracts, and it's anyone's guess who bought all the protection. But the "insurance companies" -- the sellers of protection -- are also among the ones whose homes are on fire, so it's a downward spiral for them, and with each fire they are less adequately capitalized to pay the claims.

That's why the taxpayers being called on to bail them out.

Talk about a perfect storm.

Somebody had to bring it up.

Considering the action in the financials of late, we thought it might be a good time to finally get around to posting these.

As had been our habit for so long, and one we are glad to say we now make every effort to be rid of, we hinted at, waxed metaphorical about, and otherwise danced around the topic of financial terrorism for weeks. For example, we had spoken out against naked short selling, and observed, "markets do not crash one name at a time;" yet the broker/dealers were falling like targets in a sniper's crosshairs, as their stocks were relentlessly pummeled into single digits, clearly being shorted to death.

Finally, when it was to us so obvious a potential explanation for and yet so absent from any public discourse we had seen on the name-by-name unravelling of the financial system, we decided to speak up about our hunches.

On September 17, 2008, we were the "guest" who posted the following on Dealbreaker:

Link here.

The very next day, Mr. Jim Cramer said this:

Link here.

Chalk up another one for the new media.

Incidentally, the correlation between lifting the moratorium on naked short selling and the collapse of giant US financial institutions is as close to a perfect 1.0 as it gets. Limitless shorting of the stock of a company whose survival is predicated on the stability and level of its share price -- a company, in turn, upon which the financial system is in a large or small way dependent, is a systemic flaw so egregious that it defies analogy. Soldier without a helmet? Knight without a breastplate? No problem in peacetime. But this is not peacetime, is it?

We trust you can come up with your own metaphors. Perhaps we could have a contest to see whose is best.

101 Ways to Give the Market a 10% Haircut, part 36

Have the designee for White House Chief of Staff (the one they call "Absolute Enforcer") "call on business leaders to help push universal health care" (Wall Street Journal, Wed, Nov 19, 2008, page A6). This helped take 872.46 points, or 10.63%, off the collective wealth of the free world in two short days.

They don't get it. They don't understand that talk like that is kryptonite to capital. Even though Mr. Obama said that "government stands ready to do whatever it takes to revive the economy," he – more importantly, those whose strings he's attached to – simply won't fathom that all the government need do is concentrate on limiting its own interference in private enterprise and the pursuit of happiness, and stick to legislating what is just, protecting the innocent and defending the country.

The market, left alone, will do what markets always do: price things rationally, enable prosperity, and get things from where they are to where they need to be.

Security, economy are priorities, Obama tells CBS

Gee, that's some change.

Or did I miss something?

You can read it here, if you want. But why bother?

B-movie From Hell.

Have you ever seen a really, really bad movie? The kind with a plot so bad it that makes you bemoan, "do they think we're idiots?"

Imagine "Night of the Living Dead," "Attack of the Killer Tomatoes," that movie about giant tarantulas taking over the world, and, say, the worst episode of "The Partridge Family" all rolled into one. Oh, and let's toss in "Brazil" for a sub-plot. Wouldn't having to sit through that be torture?

Never seen something that bad? No worries, just open your eyes -- you're living in one. We're all extras in The B-Movie from Hell.

That's what I said when I saw the headline "O eyes Hill for Secretary of State" -- "do they think we're idiots?" And this, after months of getting my head around the fact that some nobody with absolutely no history at all can come from the bowels of American politics -- that's Chicago -- and become President of the United States; after having to endure the whole "messiah" theme, the utterly absurd campaign gimmicks, the whole underbelly-of-Hollywood feel of it.

I mused in a previous post about how glad I am for the separation of powers in American government. I suspect the cast of characters that will ultimately assume authority here will render that concept a sentimental artifact of a time when men had backbones and people thought for themselves.

What's next, Elliot Spitzer as Attorney General? It would be hilarious if it weren't probable. Am I the only person who wondered why the powers that be let him off without a single criminal charge after paying a young prostitute lots of money for his pleasure? Mr. Spitzer, the degenerate abuser of power, makes Janet Reno look like The Church Lady. He can be touted as "the man who cleaned up Wall Street." How's that for a stock character? [I see I have inadvertently made a bad pun, and, in keeping with the theme, I've decided to leave it in.] Anyway, you read it here first.

This movie is shaping up to be really, really bad already. It makes me long for reality. I think a Great Depression might be more bearable than this. Oh, wait, that's probably the double feature.

At least the soundtrack is good. Right now I hear the line,

"...and I get on my knees and pray
we don't get fooled again..."

President Bush and Miss Market Take Obama to School.

Today, President Bush came to New York to tell the seething socialists from across the pond and south of the border, and especially the one that's packing up to move into 1600 Pennsylvania Avenue NW, that they fool around with free markets at their own peril.

Apparently he made a compelling case because, after touching its market-meltdown low, the market inexplicably rallied 10.86% off its Obama-fearing low to close up 552.59 points or 6.67% on the day. This, dear readers, is the rally that Obama coveted. It is also the rally that George Bush got.

This is what markets do when they see a light at the end of that long, dark tunnel of socialism. Flip the chart over (or refer to my Nov. 5th post) if you want to see what they do when socialists get themselves elected

Mr. Obama, you've just been schooled. Hope you were paying attention.

On the first Black President of The United States

Well, the thing is, he's not exactly black, is he?

Both readers of my blog will no doubt be aware that I am no fan of Barack Obama or his friends. So waking up on November 5 was not the usual joyful experience that it is on other mornings. But something interesting did happen as the day wore on.

I found myself picking up the genuine elation that seemed to be radiating from many of my black coworkers. Not arrogance, not gloating, but just...elation.

I wrote these words to a friend in an email during the day:

However, I also recognize that black Americans must [be] -- and probably can't help being -- elated that someone who understands (or at least that might understand) the black experience is in the highest office in the greatest nation in the world. I pray he will not disappoint any American, especially black Americans. Of course, I believe that, apart from a miracle, he will disappoint. I also thank God for the separation of powers...

I am happy for black Americans -- not that Obama is president, but that a black American is. I try to imagine how they must feel, and have felt before and after. They may have a sense of being American now more than any forced busing or affirmative action legislation could ever make them feel.

Don't be put off by the pronoun "they," it's simply correct grammar when referring to a particular group of individuals.

So, instead of being overcome with a sense of impending doom -- which really isn't too extreme a sense to have when someone like Barack Obama gets a whole lot of power -- I was gracefully transported to a place of peace and joy, in sympathy, I suppose one might say, with my fellow American citizens of color, whose histories have been so difficult.

I am thrilled that the American experiment works that much. I was thrilled to see record turnouts, and people so engaged in the process of electing their president.

But as to the man himself as president, I'm certain that -- apart from that miracle or series of miracles -- he will be a political, economic, and administrative disaster.

The stock market is starting to tally the cost of his idea of hope and change. Miss Market is not a fool for long. She can hear the rumblings of every half-baked socialist, environmentalist, victim-creating-and-exploiting scheme being hatched by the leftist morons in congress and elsewhere.

She understands how, coming as it does in the midst of a market crash and credit hibernation, the bill for such waste will be borne by the taxpayer, and any business that happens to turn a profit, and she knows that will hinder growth. She knows it will exacerbate the problem, perhaps bring on that feared depression. Miss Market rightly feels threatened.

She marked this brand of Hope and Change down another 443.48 points, or 4.85% today, the second day in a row. That's about 10% in two days. This market will test the ultimate bottom, before it's all said and done. As in, cut in half, from here. Unless...

...there is one mitigating circumstance, and it's not small, but it's not a no-brainer, either. There is still a half or so of the civilized world that needs to move into the 21st century economically and infrastructurally. Lots of people need to be fed, clothed, have transportation and the stuff of the business of life. There's a huge, ongoing demand for commerce to meet these needs. But as commerce requires credit, therein lies the rub.

How fast can the global credit machinery can be primed, put in motion, and stabilized? And, incidentally, at what cost to individual liberty? Will things get so bad that any price will be paid to put a chicken in every pot?

Commerce also requires markets, so if Barack's socialist tendencies get shoved down our throats, it will drive capital further into hiding. All bets are off for a very long time, both here and abroad. Capital, being a smart thing, may discover another, more market oriented center from which to base. But that wouldn't be so good for America, would it. And, the reader should understand, what's good for America is good for the world.

Back here at home, with Barack Obama as president, and a leftist, activist congress at his side, look for the biggest shakedown of the taxpayer in modern times. If they're smart, they'll keep the body alive while they parasitically exploit it. But, they're not smart, are they? At least not in the best sense of the word.

Hopefully the marketplace of ideas won't be annexed by the powers that be and this Brave New Administration can be kept from doing too much damage to America.

Maybe somehow Obama will come to understand markets; maybe he'll understand what it really means to be an American, and how America stands with Israel, or fails to at its peril. Maybe he'll have that Damascus Road experience that will show him the difference between "being punished" and being pregnant. Maybe the hard-edged arrogance I heard in his voice was only my imagination. Maybe he'll trade in his mantle as "messiah" for one of "public servant."

I believe in miracles. I'm just not presumptuous enough to bet on them.

Welcome to Wall Street, Mr. President Elect

That had to be the shortest honeymooon on record, hunh?



Hope and Change marked down another 486.01 points, or 5.05% today.