Wednesday, November 30, 2011
The big problem is that we are simply not facing a liquidity crisis. We are facing a sovereign debt crisis which could eventually lead to a solvency crisis. Pumping more dollars into the system won't help unless somehow people use those dollars to buy Italian, Greek, Spanish and French debt. And they won't. As the folks at GaveKal mentioned, sovereign debt investors are usually the types who will give a well funded government $100 with the assurance that they will be getting $102 in a year. These are not swing for the fences, high risk, I've-got-a-feeling-on-this-one types. Essentially, the natural market for EU sovereign debt has disappeared. So how are these governments going to fund their operations over the next year given their 100%+ debt/gdp ratios? How can they roll over hundreds of billions of dollars worth of debt? What happens when they default and force banks to mark bonds to market, wiping out bank capital and causing a solvency crisis (remember MF Global was taken under by Italian sovereign debt)? None of these issues have been solved by this intervention to lower the rates charged to borrow dollars. In fact, if this intervention shows anything it is how close to the brink we really are. Stay nimble and stay liquid.
Tuesday, November 29, 2011
Insider Advantage also conducted a poll Monday in South Carolina, where Newt leads Romney by 23 points, 38% to 15%. Note that 38% is a highest level attained by any candidate this election cycle in a South Carolina based poll and Newt's lead is tied for the largest of any candidate since Perry led by 23 points in a PPP poll back in August. Considering this poll was conducted after the lobbying allegations, the immigration comments and all the other stuff the media/Romneybots have dredged up, this lead is probably much more secure than Perry's. Also, as in Iowa, Newt does well amongst the Latinos in the sample and Romney does horribly among the independents.
And finally we have the Rasmussen Reports poll in New Hampshire, the first one conducted after Newt's surprise endorsement by the only state-wide paper, the Manchester Union Leader. In this poll, Romney is down to a 10 point lead, one of the smallest leads he has had in this race. Given he was Governor next door and has been clearly focusing on New Hampshire for so long, it's amazing that 2/3 of New Hampshire voters are still saying "not Romney". In this poll you are even seeing 11% of NH voters going with Huntsman.
I do realize that polls can change on a dime but I think Newt should be feeling pretty good at this point given the amount of effort people have been putting in to try to shoot his candidacy down. First, there were his consulting contracts, which in the end nobody cares about but the pundits (I never really thought GOP voters would begrudge someone making a living in the private sector, Democrats might, but not Republicans). Most recently, there was the whole immigration kerfuffle. Prior statements from down-the-line conservatives in the race which lined up or matched Newts seems to have deflated that in a hurry. You've also had an ongoing barrage of pundits, from Ann Coulter to Jennifer Rubin getting completely unhinged by the prospects of a Newt nomination and trying to convince us that Romney is somehow inevitable despite not a single vote being cast yet. So after all that going on in what seems to be a non-stop fashion, Newt is still surging.
Today's news of Herman Cain reconsidering his candidacy signals that Newt's numbers are likely to get even better as Cain voters look for a new home. I would say that philosophical distance from Cain to Newt is much shorter than from Cain to Romney, so most of the core Cain supporters are likely to either break for Newt or go to another conservative candidate (I also wouldn't discount the possibility that Cain may officially endorse Gingrich). And judging by the latest poll numbers, there are still a large number of them out there. In the polls mentioned above, 10% of Iowa voters and 13% of South Carolina voters still consider Cain their top choice as of Monday.
With 5 weeks to go until Iowa, Newt is certainly in the drivers seat. Unless he drives himself into a ditch, of course.
Monday, November 28, 2011
Certainly some conservatives have said that government should do nothing. But my view is that since 1968 the country has pretty decisively decided it does not want a left-wing president. The result has been a center-right governing coalition, which includes Jimmy Carter, who was an aberration.
The country wants that coalition to govern, not juxtapose. So they're going to ask "What are your answers for so many working mothers? So many single heads-of-households?" A party which says "We have no answer" or "Our answer is a cultural revolution which will take generations, so in the meantime you'll just have to suffer" is going to be in a minority status.
What you're going to see is an argument between a governing conservatism, which is pro-active and willing to solve problems with conservative values, and a more theoretical conservatism.
There's going to be a lot of arguing, but I don't think it will splinter. In Teddy White's "The Making of The President" from 1960, you will find a description of Theodore Roosevelt and an active conservatism. That is the model I've had in my mind for 28 years. For example, we now have a great concept in tenant management and ownership of low-income housing. That empowers citizens, and says "You're not just a client, you're a citizen. You have real responsibility and real authority." If you're truly going to be a citizen, you have to have both opportunity and responsibility.
On these issues we have a common bonding around a couple of premises. The first is that the concept, liberal welfare state has failed. Read "City for Sale" by Jack Newfield and Wayne Barrnett, or "Honest Graft" by Brooks Jackson. You can see that there is a systemically corrupt, liberal welfare state. The process of giving some people enormous power and calling them bureaucrats, while depriving other people of power and making them clients, rather than citizens, is in the long run corrupting. That is best expressed by Mario Varga Llosa in his introduction to "The Other Path" by Hernando DeSoto.
There is almost a new synthesis evolving with the classic moderate wing of the party, where, as a former Rockefeller state chairman, I've spent most of my life, and the conservative/activist right wing. You have work being done by the Heritage Foundation as well as by such moderates as Tom Petri. Petri has extraordinarily broad support for his living wage concept, which represents an empowerment/citizen choice replacement for the bureaucratic/corrupt, liberal welfare state.
Clearly, I am comfortable taking on Democrats. I would suggest to moderates that the best example of this is Theodore Roosevelt. If you're the minority party, you better be able to generate attention.
You have to convince people that it is worth being part of your group. By definition, that means a willingness to fight with the Democratic Party. If the Democratic Party is okay, then why do we need Republicans? If the Democrats do some things that are not okay, then isn't it our job to point that out? I just do that more enthusiastically and energetically than has been the tradition in the last 40 years. Now, the other 95 percent of the time, I've been bipartisan. Norman Mineta, Jim Oberstar or Frank Anunzio can tell you that. I've worked with them on House committees. I also helped found the Military Reform Caucus, although the Washington Post doesn't put that on page one. If you get involved in a controversy, then that becomes the mesmerizing event that people remember you by. In general, where confrontation is needed, I'm willing to do that. But where honest bipartisanship is possible, I'm going to be real practical.
Ripon Forum: Several years ago you described yourself as a "Jeffersonian populist." Could you please explain that?
Gingrich: It's one of the points I make to conservatives who often describe themselves as "Jeffersonian conservatives." It usually means they want passive, lean, inactive government. That I would never favor, nor did Jefferson. He bought half a continent, sent the Navy to Tripoli, and sent a scientific expedition half-way across the U.S. when that was a longer trip than going to Mars today.
The Founding Fathers were practical men who wanted a system that remained free and worked at a practical level for human beings. Their vision of America was a successful, working America, and that's why a century, later William James called "pragmatism" the one uniquely American contribution to philosophy.
What I'm suggesting is that it's possible to be a conservative in the broad sense - i.e; the world is dangerous and some men are evil, so government must repress those instincts and protect US from those dangers - and hold that private markets and the rule of law are essential to economic prosperity. One can hold those broad values and still believe in the cooperative efforts of Americans - whether it is building the Transcontinental Railroad, populating the West through the Homestead Act, setting up the Agricultural Agent system, or any of the innovations which made this such an extraordinary place.
My challenge to all Republicans is to invent the systems and the approaches that allow human beings to help themselves, to think through the replacement for the misgovenance of New York City that will allow its citizens to help themselves. Then you'll have a remarkable explosion of energy and opportunity. Centralized government giveaways through politicians and unionized bureaucrats just guarantees the focus on the acquisition of power and invites the systemic corruption which now dominates all big cities and is at the core of our domestic problems.
The Republican Party has to be the party of individual rights and individual opportunity. It should be for affirmative action but against minority quotas. There's a big difference. If a young person of any ethnic background is inadequately educated in math, we should find a way to have compensatory math so that person can try for the best math or engineering scholarship in America. The problem with quotas is that they say, "For reasons that have nothing to do with you as a person, we're going to punish you. We're going to punish you if you come from one ethnic background in order to reward you if you come from another ethnic background." Quotas are contradictory to the desire for an integrated America because they put a premium on figuring out who you are ethnically.
So there you have it. None of this is frankly that surprising, giving his record but it is still helpful to know the philosophy behind the man. He is a big government conservative. He thinks government doesn't work not because of the idea of government itself but because the wrong methods have been used. That is distinctly not libertarian though it is probably closer to traditional Whig/Republican thought which wanted a more activist government than the states rights focused Democrats. If his solutions are in place we probably will have a better and smaller government than under Democrats, but we will still be far from having a government at a manageable size. Is that enough? It might be this time around because Obama has been such a disaster for this country in terms of both foreign and domestic policy and any improvement is welcome. But will I have moments when I want to pull out my hair in frustration at having a big government Republican in office? You bet. I just think I will end up with more hair than under Obama or Mitt Romney for that matter.
OBAMA SAYS U.S. `READY TO DO OUR PART' TO RESOLVE EURO CRISIS. - BBG
It's hard to actually write a cogent critique of this as this is just such a horrible idea, it practically renders me speechless. What exactly is our part? Are we part of the Euro? Wasn't the Euro created in part to be a competitor to the supremacy of the US Dollar? So isn't it partly in our interest, in order to keep the US Dollar the world's reserve currency, to see the Euro fail horribly? And one more question. The money will come from where exactly? Aren't we ourselves faced with a debt/GDP ratio of 100% with an annual deficit equal to 11% of GDP? Where exactly are we going to find the hundreds of billions, if not trillions, of dollars necessary to stem this crisis? There was a rumor this weekend that the IMF was readying a bailout of just Italy which could have totaled $800 billion, so if you add Spain, Portugal and Greece to the mix (and potentially France) the numbers get very serious very fast (of course the rumor was swiftly denied, I guess it was too early to mention that discussion point). Even if Obama is simply referring to the bailout of Europe via the IMF, our "quota" is almost 18% of the funding so for Italy alone this could cost the American taxpayer $144 billion. And chances are it would be much higher as Italy's quota is over 3% and all the countries smaller than Venezuela contribute 28% (how exactly do you ask third world countries to bailout out a lazy first world country?) so my guess is some IMF participants simply won't participate. Try getting that through Congress. Senate Democrats can't even pass a budget.
The Federal Reserve option just isn't much better. So we are going to print money to buy European bonds now? Our monetary base is $2.6 trillion right now so printing of the magnitude that would be required could have severe a severe inflationary impact, hurting American consumers as commodity prices will undoubtedly skyrocket. As an extra kick in the face, the Euro will actually get even stronger as we will be printing massively at the same time the ECB isn't. Just brilliant.
For once, it might be a good thing that Team Obama is in campaign mode 24/7. As soon as they see their poll numbers dropping (and they will, like a rock), they will probably chicken out of any actual bailout and do nothing but the usual handwaving. Unless they want to get to the point where even Ron Paul can beat them in the general election.
Sunday, November 27, 2011
You know, about five blocks down the street, you'll see a statue of Einstein. Einstein came here as an immigrant. So let's be clear how much the United States has drawn upon the world to be richer, better and more inclusive.
I did vote for the Simpson-Mazzoli Act. Ronald Reagan, in his diary, says he signed it -- and we were supposed to have 300,000 people get amnesty. There were 3 million. But he signed it because we were going to get two things in return. We were going to get control of the border and we were going to get a guest worker program with employer enforcement.
We got neither. So I think you've got to deal with this as a comprehensive approach that starts with controlling the border, as the governor said. I believe ultimately you have to find some system -- once you've put every piece in place, which includes the guest worker program, you need something like a World War II Selective Service Board that, frankly, reviews the people who are here.
If you're here -- if you've come here recently, you have no ties to this country, you ought to go home. period. If you've been here 25 years and you got three kids and two grandkids, you've been paying taxes and obeying the law, you belong to a local church, I don't think we're going to separate you from your family, uproot you forcefully and kick you out.
The Creeble Foundation is a very good red card program that says you get to be legal, but you don't get a pass to citizenship. And so there's a way to ultimately end up with a country where there's no more illegality, but you haven't automatically given amnesty to anyone.
Well, I mean, two things, first of all, in the DREAM Act, the one part that I like is the one which allows people who came here with their parents to join the U.S. military, which they could have done if they were back home, and if they serve on it with the U.S. military to acquire citizenship, which is something any foreigner can do.
And I don't see any reason to punish somebody who came here at three years of age, but who wants to serve the United States of America. I specifically did not say we'd make the 11 million people legal.
I do suggest if you go back to your district, and you find people who have been here 25 years and have two generations of family and have been paying taxes and are in a local church, as somebody who believes strongly in family, you'll have a hard time explaining why that particular subset is being broken up and forced to leave, given the fact that they've been law-abiding citizens for 25 years.
I don't see how the -- the party that says it's the party of the family is going to adopt an immigration policy which destroys families that have been here a quarter century. And I'm prepared to take the heat for saying, let's be humane in enforcing the law without giving them citizenship but by finding a way to create legality so that they are not separated from their families.
That doesn't sound so outrageous does it? In fact, Bachmann, who is viewed as conservative down the line by many, said much the same thing at a debate just over 2 months ago:
HARRIS: A quick 30-second rebuttal on the specific question.
The fence is built, the border is under control. What do you do with 11.5 million people who are here without documents and with U.S.- born children?
BACHMANN: Well, that's right. And again, it is sequential, and it depends upon where they live, how long they have been here, if they have a criminal record. All of those things have to be taken into place.
But one thing that we do know, our immigration law worked beautifully back in the 1950s, up until the early 1960s, when people had to demonstrate that they had money in their pocket, they had no contagious diseases, they weren't a felon. They had to agree to learn to speak the English language, they had to learn American history and the Constitution.
Doesn't seem like they actually disagree now does it (despite the fact Bachmann kept trying to say that Newt's plan would be amnesty for 11 million people)? And that is why Newt's comments probably won't hurt him much in the long run. Who exactly in the field has a tougher stance on illegal immigration? Obviously, Perry doesn't. Cain has trouble articulating any argument anymore after being put through the ringer. Bachmann, largely agrees with Newt. And what about Santorum? Check out this segment of the debate at the Reagan library:
GINGRICH: We should insist that first-generation immigrants who come here learn American history in order to become citizens. We should also insist that American children learn American history.
And then find a way to deal with folks who are already here, some of whom, frankly, have been here 25 years, are married with kids, live in our local neighborhood, go to our church. It's got to be done in a much more humane way than thinking that to automatically deport millions of people.
HARRIS: Senator, your solution?
SANTORUM: Well, my solution is very similar to Newt Gingrich's.
Look, I'm the son of an Italian immigrant. I think immigration is one of the great things that has made this country the dynamic country that it continues to be, people who are drawn because of the ideals of this country. And so we should not have a debate talking about how we don't want people to come to this country, but we want them to come here like my grandfather and my father came here.
They made sacrifices. They came in the 1920s. There were no promises. There were no government benefits.
They came because they wanted to be free and they wanted to be good law-abiding citizens. So we have to have a program in place that sets that parameter that says, you're going to come to this country, come here according to the rules. It's a very good first step that the first thing you do here is a legal act, not an illegal act.
So right after Newt mentioned the exact same plan that got him into "trouble" last week, Santorum's first words are that his solution would be similar. The anti-immigrant issue voters seem to be left with voting for Mitt Romney, who everyone knows will probably never even talk about getting tough on immigration after getting the nomination. In the end, this stance might cost Newt some votes but probably won't drive votes to any other candidate as they all substantially agree with him. As they should, if they did favor deporting every illegal who is here, no matter how long they have been here or what ties they have to the community, the GOP would be faced with the reality of having to win 70% of the caucasian vote to win national elections.
Wednesday, November 23, 2011
INTERVIEWER: Philosophically speaking, what was the wellspring of your ideas? Were you influenced by people like Friedman or Hayek?
NEWT GINGRICH: No, I think I was influenced more by Adam Smith and by the founding fathers -- Jefferson, Adams, Madison, Hamilton, Washington -- and to some extent by the Whig historians of the 19th century. I was very much influenced by Goldwater's "Conscience of a Conservative" and by Reagan's speeches starting with "A Time for Choosing" in October of 1964. I actually came to Hayek backwards through Reagan, rather than the other way. In my mind, at least, what you had was a clear overdevelopment of the state in the 20th century as a vehicle for humans to organize their lives, so you needed a party of freedom that was committed, almost in the British 19th-century liberal tradition, to argue for personal choice for markets, for private property rights, and for taking Bismarck's insurance state and transferring it into a personal insurance system, as we're trying to do now on social security.
What I saw was a deviation from the long 18th- and 19th-century rise of freedom in the Whig tradition with four different patterns: the regulatory state in response to industrialization, where Theodore Roosevelt is probably the leading American developer of it; Fabian socialism with its British class warfare style, which never fit America, but the underlying anti-wealth, anti-achievement patterns did, [such as the] distrust of private property and private activity; third was Bismarck's insurance state, which gradually spread across the industrial world and which is essentially right if you can organize it so that people are insuring themselves rather than as a paternalistic bureaucracy trying to take care of you; and then finally, with Ludendorff's war economy in Germany in 1917, you really get what shapes John Kenneth Galbraith and a whole generation of younger economists, including Keynes, and that is the power of the state for a very short time to mobilize power and wealth remarkably. What they didn't realize was that while you can do that for about the length of the second world war, which in the American experience is not quite four years, if you do it much longer than that, it creates its own internal distortions. [This] is exactly what Hayek writes about it and what Smith understood: that a combination of politics, bureaucracy, [and] the distortion of power in the long run is radically less effective than the market as a place to allocate resources. So you had, from 1917, compounded by Leninism and then by Maoism, this affection of the left for the state as an organizing system, which when I was a young person in the late '50s was really close to its peak. There was a sense [that] this is the intelligent, sophisticated future, and those of you who favor free markets and private property represent this obsolete past. What all of us who believed in freedom felt was that in the long run centralized commanding control systems decay and collapse, and that's a historic pattern. You have to concede at least that Reagan was far more right than most of his left-wing critics in his understanding of the Soviet empire and the fact that in the end it just couldn't keep functioning.
INTERVIEWER: Do you make a connection between free markets and personal freedom, personal liberty?
NEWT GINGRICH: Absolutely. In fact, so did all the founding fathers. That goes back to the English Civil War, which is really the wellspring from which the American model of freedom emerges. It is the English Civil War and the effort of people to protect themselves from judges who are instruments of the state, not instruments of justice, to protect themselves from troops in their houses, to protect themselves from the king's right to kill you. And it's out of that English Civil War that you begin to have the rise of what we now call freedom, [the] first truly mass democratic societies in history, even more than the Roman republic. I think it's inextricable if you read Locke, if you read Jefferson, if you read the founding fathers, it is inextricable that if you don't have the right to private property, if you don't have the right to trial by jury, if you don't have the right to vote and fire the people to whom you loan power, you don't have freedom. The idea of a socialist free society in the long run, as Hayek points out, is an impossibility.
Tuesday, November 22, 2011
Even more disturbing, real disposable personal income was flat compared to a year ago. This is a number that only turned negative in Q1 2009 and before that you had to go back to the 1974 recession to see it turn negative. Also, on a sequential basis, it's down two quarters in a row. No wonder people are so gloomy, their personal finances are officially in a recession. Anyway, here is real disposable personal income over the last 10 years:
Given this situation, it's really nice to see a President demanding tax increases, sabotaging shovel ready projects and focusing almost exclusively on campaigning.
Monday, November 21, 2011
Sunday, November 20, 2011
I think Newt did a very good job talking about his personal redemption and a lot of social conservatives who may have been wavering on him will probably feel more comfortable now. Bachmann, Perry and Santorum are clearly the most socially conservative candidates out there which everyone has already known. While their, especially Santorum's, performances were good, they probably didn't broaden their appeal much as they might have been a bit over the top (especially Bachmann and Santorum). Cain just can't get a break. In an answer about abortion legislation in which he thought he was saying he would sign anything that restricted abortion that crossed his desk, it actually came across that he would be very passive on the issue.
Friday, November 18, 2011
Go Newt go!
Dear Clients, Industry Colleagues and Friends of Barnhardt Capital Management,
It is with regret and unflinching moral certainty that I announce that Barnhardt Capital Management has ceased operations. After six years of operating as an independent introducing brokerage, and eight years of employment as a broker before that, I found myself, this morning, for the first time since I was 20 years old, watching the futures and options markets open not as a participant, but as a mere spectator.
The reason for my decision to pull the plug was excruciatingly simple: I could no longer tell my clients that their monies and positions were safe in the futures and options markets – because they are not. And this goes not just for my clients, but for every futures and options account in the United States. The entire system has been utterly destroyed by the MF Global collapse. Given this sad reality, I could not in good conscience take one more step as a commodity broker, soliciting trades that I knew were unsafe or holding funds that I knew to be in jeopardy.
The futures markets are very highly-leveraged and thus require an exceptionally firm base upon which to function. That base was the sacrosanct segregation of customer funds from clearing firm capital, with additional emergency financial backing provided by the exchanges themselves. Up until a few weeks ago, that base existed, and had worked flawlessly. Firms came and went, with some imploding in spectacular fashion. Whenever a firm failure happened, the customer funds were intact and the exchanges would step in to backstop everything and keep customers 100% liquid – even as their clearing firm collapsed and was quickly replaced by another firm within the system.
Everything changed just a few short weeks ago. A firm, led by a crony of the Obama regime, stole all of the non-margined cash held by customers of his firm. Let's not sugar-coat this or make this crime seem "complex" and "abstract" by drowning ourselves in six-dollar words and uber-technical jargon. Jon Corzine STOLE the customer cash at MF Global. Knowing Jon Corzine, and knowing the abject lawlessness and contempt for humanity of the Marxist Obama regime and its cronies, this is not really a surprise. What was a surprise was the reaction of the exchanges and regulators. Their reaction has been to take a bad situation and make it orders of magnitude worse. Specifically, they froze customers out of their accounts WHILE THE MARKETS CONTINUED TO TRADE, refusing to even allow them to liquidate. This is unfathomable. The risk exposure precedent that has been set is completely intolerable and has destroyed the entire industry paradigm. No informed person can continue to engage these markets, and no moral person can continue to broker or facilitate customer engagement in what is now a massive game of Russian Roulette.
I have learned over the last week that MF Global is almost certainly the mere tip of the iceberg. There is massive industry-wide exposure to European sovereign junk debt. While other firms may not be as heavily leveraged as Corzine had MFG leveraged, and it is now thought that MFG's leverage may have been in excess of 100:1, they are still suicidally leveraged and will likely stand massive, unmeetable collateral calls in the coming days and weeks as Europe inevitably collapses. I now suspect that the reason the Chicago Mercantile Exchange did not immediately step in to backstop the MFG implosion was because they knew and know that if they backstopped MFG, they would then be expected to backstop all of the other firms in the system when the failures began to cascade – and there simply isn't that much money in the entire system. In short, the problem is a SYSTEMIC problem, not merely isolated to one firm.
Perhaps the most ominous dynamic that I have yet heard of in regards to this mess is that of the risk of potential CLAWBACK actions. For those who do not know, "clawback" is the process by which a bankruptcy trustee is legally permitted to re-seize assets that left a bankrupt entity in the time period immediately preceding the entity's collapse. So, using the MF Global customers as an example, any funds that were withdrawn from MFG accounts in the run-up to the collapse, either because of suspicions the customer may have had about MFG from, say, watching the company's bond yields rise sharply, or from purely organic day-to-day withdrawls, the bankruptcy trustee COULD initiate action to "clawback" those funds. As a hedge broker, this makes my blood run cold. Generally, as the markets move in favor of a hedge position and equity builds in a client's account, that excess equity is sent back to the customer who then uses that equity to offset cash market transactions OR to pay down a revolving line of credit. Even the possibility that a customer could be penalized and additionally raped AGAIN via a clawback action after already having their customer funds stolen is simply villainous. While there has been no open indication of clawback actions being initiated by the MF Global trustee, I have been told that it is a possibility.
And so, to the very unpleasant crux of the matter. The futures and options markets are no longer viable. It is my recommendation that ALL customers withdraw from all of the markets as soon as possible so that they have the best chance of protecting themselves and their equity. The system is no longer functioning with integrity and is suicidally risk-laden. The rule of law is non-existent, instead replaced with godless, criminal political cronyism.
Remember, derivatives contracts are NOT NECESSARY in the commodities markets. The cash commodity itself is the underlying reality and is not dependent on the futures or options markets. Many people seem to have gotten that backwards over the past decades. From Abel the animal husbandman up until the year 1964, there were no cattle futures contracts at all, and no options contracts until 1984, and yet the cash cattle markets got along just fine.
Finally, I will not, under any circumstance, consider reforming and re-opening Barnhardt Capital Management, or any other iteration of a brokerage business, until Barack Obama has been removed from office AND the government of the United States has been sufficiently reformed and repopulated so as to engender my total and complete confidence in the government, its adherence to and enforcement of the rule of law, and in its competent and just regulatory oversight of any commodities markets that may reform. So long as the government remains criminal, it would serve no purpose whatsoever to attempt to rebuild the futures industry or my firm, because in a lawless environment, the same thievery and fraud would simply happen again, and the criminals would go unpunished, sheltered by the criminal oligarchy.
To my clients, who literally TO THE MAN agreed with my assessment of the situation, and were relieved to be exiting the markets, and many whom I now suspect stayed in the markets as long as they did only out of personal loyalty to me, I can only say thank you for the honor and pleasure of serving you over these last years, with some of my clients having been with me for over twelve years. I will continue to blog at Barnhardt.biz, which will be subtly re-skinned soon, and will continue my cattle marketing consultation business. I will still be here in the office, answering my phones, with the same phone numbers. Alas, my retirement came a few years earlier than I had anticipated, but there was no possible way to continue given the inevitability of the collapse of the global financial markets, the overthrow of our government, and the resulting collapse in the rule of law.
As for me, I can only echo the words of David:
"This is the Lord's doing; and it is wonderful in our eyes."
With Best Regards-
Thursday, November 17, 2011
So now, apparently, we have to go through the cycle of the media pushing Newt Gingrich. This is going to be fantastic.
In addition to having an affair in the middle of Clinton's impeachment;
I didn't know that having an affair was an impeachable offense? Oh wait, it's not, committing perjury is, which is what Clinton was being impeached for. Also, in Newt's defense, he might have affairs but he does actually manage to marry his mistresses and has been married to Callista for 11 years now. I don't seem to remember Clinton ever marrying Lewinsky or any of the other girls he was schtuping. There is a difference between falling in love and getting married and throwing girls away like kleenex right?
apologizing to Jesse Jackson on behalf of J.C. Watts -- one of two black Republicans then in Congress –- for having criticized "poverty pimps," and then inviting Jackson to a State of the Union address;
I'm sure the apology was just damage control. I don't think many remember or care about this incident (or even remember when J.C. Watts was considered a rising star). This is like some sort of longstanding inside the beltway grudge with Coulter isn't it? Not that I don't hate Jesse Jackson. Anyone who refers to New York as "hymie town" is a special kind of a**hole. I'll just leave it at that.
cutting a global warming commercial with Nancy Pelosi;
I'm definitely in the global warming skeptic camp (I'm not sure the Earth is warming, and even if it is, it is probably due to solar effects, which can't be changed by us destroying our economy) so I definitely don't like that commercial. But he doesn't actually say anything that bad in that commercial, he is pretty much just pimping green energy. Big deal. Even I think that would be nice (though I don't think government should be involved).
supporting George Soros' candidate Dede Scozzafava in a congressional special election;
I didn't like Scuzzy Face at all and supported Doug Hoffman, the conservative candidate. But in the end, Newt was unfortunately correct. Check this quote out, ""I just think it is a mistake for the conservative movement to think splitting in the special election is a smart idea, If we give that seat to the Democrats, shame on us." And that seat, which had been Republican for decades, has now fallen to the Democrats for two elections because the conservatives keep splitting the vote between the GOP and the Conservative party. So he was correct. Oh and once Scuzzy Face left the race officially, Newt did endorse Hoffman.
appearing in public with the Rev. Al Sharpton to promote nonspecific education reform;
Oh my god, the specter of nonspecific education reform! I am certainly no fan of Al Sharpton, who should probably rot in hell for the blood on his hands, but you really have to do better than that.
and calling Paul Ryan's plan to save Social Security "right-wing social engineering,"
Admittedly not his finest hour, though Ann, I believe the plan only changed Medicare, Social Security was decidedly absent. I guess the Romney lobotomy took that fact out of your head. Anyway, Newt, unlike other politicians actually did apologize personally to Ryan for that. I believe his thought process for that charge was just that it was too big a leap which from a tactical political point of view could be true (as it could keep you from winning elections and actually implementing that plan or any reform plan).
we found out this week that Gingrich was a recipient of Freddie Mac political money.
I'm pretty sure that every politician, while either looking for office or while in office has received political contributions from quite a few organizations, many of which we might not agree with. But that doesn't seem to be an issue, usually. So what's the big deal about a private citizen doing some consulting work? There was nothing illegal, nothing improper. How can you begrudge people making a living in the private sector?
The mainstream media keep pushing alternatives to Mitt Romney not only because they are terrified of running against him, but also because they want to keep Republicans fighting, allowing Democrats to get a four-month jump on us.
Meanwhile, everyone knows the nominee is going to be Romney.
This argument makes no sense and is pretty unhinged. So the mainstream media are pushing alternatives to Romney? If they are so afraid of Romney why aren't they trying to cut him down with hit pieces? Unlike the other candidates, he is the only top contender who has been pretty much unscathed by any sort of media scrutiny. And it isn't that hard to find stuff. Romney said that Romneycare was paid for, unlike Obamacare. But as one of the architects of Romneycare mentioned in a pretty colorful interview, "they're the same f*cking bill". Basically the only reason that Romneycare was paid for was because of federal subsidies (essentially, you and me are paying for Romneycare). Has this been brought up by the press recently? Or at the debates by moderators? Nope, Romney gets no scrutiny and only softball questions. The media is completely in the tank for Romney, just as they were in the tank for McCain. Now Newt, he will drive them bonkers. They will go completely unhinged.
Also, not everyone knows that Romney will be the nominee. He still can't break out of his 22-25% range, not for more than one poll. That sounds like at least 3/4 of GOP voters still don't like him.
That's not so bad if you think the most important issues in this election are defeating Obama and repealing Obamacare.
Does anyone really believe that Obamacare is going to be repealed under Romney? He said he is going to issue waivers to all 50 states, but that doesn't waive Obamacare, just a tiny aspect of it. To repeal Obamacare you will have to fight tooth and nail. Is Romney really going to do that for a bill that so closely resembles his pride and joy? Also, having a moderate like Romney as the GOP candidate opens the door for a third party run by someone like Ron Paul, who would see a lot of conservatives offer him their protest vote, giving the election to Obama.
There may be better ways to stop Obamacare than Romney, but, unfortunately, they're not available right now. (And, by the way, where were you conservative purists when Republicans were nominating Waterboarding-Is-Torture-Jerry-Falwell-Is-an-Agent-of-Intolerance-My-Good-Friend-Teddy-Kennedy-Amnesty-for-Illegals John McCain-Feingold for president?)
Uhh, I think we were lamenting the fact that our choice was McCain or Romney or Huckabee? There really weren't any good choices in that election, that is where we were.
Among Romney's positives is the fact that he has a demonstrated ability to trick liberals into voting for him. He was elected governor of Massachusetts -- one of the most liberal states in the union -- by appealing to Democrats, independents and suburban women.
Didn't he implement universal healthcare? So how were the liberals tricked exactly? Didn't they get exactly what they want? By voting for Romney for President, the only people that will be tricked will be conservatives.
He came close to stopping the greatest calamity to befall this nation since Pearl Harbor by nearly beating Teddy Kennedy in a Senate race.
This reminds me of the intro for Brave Sir Robin in Monty Python's Holy Grail "Sir Robin the - not - quite - so - brave - as - Sir Lancelot, who had nearly fought the Dragon of Angnor, who had nearly stood up to the vicious Chicken of Bristol, and who had personally wet himself at the Battle of Badon Hill!". Also, a famous quote about horseshoes and hand grenades comes to mind.
He is not part of the Washington establishment, so he won't be caught taking money from Freddie Mac or cutting commercials with Nancy Pelosi.
True, he is a Washington outsider but unfortunately acts like a slick Washington insider. Oh and which group other than Freddie Mac is often blamed for the housing crisis? Oh yeah, Wall Street. Where Romney worked for years and where he currently gets most of his donations from. Like we won't be deluged with articles about that when he is nominated. Also, I'm pretty sure you'll find sob stories of people who lost their jobs because of actions by Romney when at Bain.
Also, Romney will be the first Republican presidential nominee since Ronald Reagan who can talk. Liberals are going to have to dust off their playbook from 30 years ago to figure out how to run against a Republican who isn't a tongue-tied marble-mouth.
How is this a case to nominate Romney over Newt? I think in a head to head debate, Romney would get creamed by Newt. And everyone knows it. Also, if he can talk so well, how come he has been so silent. He hasn't been giving any interviews lately.
As we've known for years, his negatives are: Romneycare and Mormonism.
We look forward with cheery anticipation to an explosion of news stories on some of the stranger aspects of Mormonism. The articles have already been written, but they're not scheduled for release until the day Romney wraps up the nomination.
I thought his negatives were Romneycare and the fact that he doesn't believe in anything. He is a fake, the Dorian Gray of the GOP. I really don't think people care about his religion, not outside the usual cranks anyway.
To the contrary, when his father, George Romney, was governor of Michigan, he was the most pro-civil rights elected official in the entire country, far ahead of any Democrat.
Oh yeah, let's talk about his father. Liberal George Romney who opposed Reagan and the war in Vietnam. How far does the apple fall from the tree these days/
No one is worried Romney will double-cross us on repealing Obamacare. We worry that Romneycare will make it harder for him to get elected.
I don't know, I'm pretty worried. I'm sure a lot of people are. Maybe the voices in Ann Coulter's head aren't. Maybe she should stop speaking for the rest of us.
He's already explained how mandating health insurance in one particular wealthy, liberal Northeastern state is different from inflicting it on the entire country. Our Constitution establishes a federalist system that allows experimentation with different ideas in the individual states.
Oh, he explained it, that makes it all better. Again, Massachusetts might be wealthy but they wouldn't have Romneycare without federal subsidies.
Instead of sitting on our thumbs, wishing Ronald Reagan were around, or chasing the latest mechanical rabbit flashed by the media, conservatives ought to start rallying around Romney as the only Republican who has a shot at beating Obama. We'll attack him when he's president.
We'll attack Romney when he's President? Awesome. Let the coronation begin! Seriously, is Ann Coulter on meth or something?
Wednesday, November 16, 2011
Reading right-wing commentary or listening to talk radio would give you the impression there is great aversion, even loathing, of Mitt Romney among Republicans. The reality is very different, suggesting that the chorus of "anybody but Mitt" for their presidential candidate is more a function of the media than of actual voter sentiment.
Really? It's not about actual voter sentiment? Has she seen the polls? Mitt has been running for President this election cycle since Obama was elected and yet has a national polling average of around 22% which is pretty much no different than what he had during the 2008 primary season. So after 3 years and at least 4 competitive candidates imploding (Pawlenty, Bachmann, Perry and Cain) Romney's support has not inched up one iota amongst Republicans. If there wasn't great aversion to Romney, you would have expected him to have picked up at least some of the voters from those competitors, especially the 5-6% who have supported Pawlenty, given he has endorsed Romney. Nope. No bumps anywhere. Now take a look at how her next paragraph where she cherry picks data from gallup, ignoring important data from the same poll:
Take for example the latest Gallup poll. According to that survey, Romney has the highest total favorable rating (67 percent) and the lowest unfavorable rating (24 percent) of any candidate.
You know who #2 is for favorability? Herman Cain at 66%. #3? Newt at 65%. From a statistical point of view, this is a tie. The same goes for the unfavorable rating where Cain and Newt are both at 26%. So statistically, on that metric, Romney is really no better than the other two contenders. Importantly, Ms. Rubin completely ignores the positive intensity score rankings from Gallup. This is where they take those who strongly favor a candidate and subtract those that have a strong dislike for a candidate (this ignores those that have more muted feelings towards a candidate). In this score, Newt and Cain score the best at 17, while Romney is only at 10. I'm sorry, GOP voters are just not that into Mitt. Also, most importantly, this survey includes GOP leaning independents, who might not vote in many primaries and they are probably skewing the data for Romney. So again, after campaigning for years and having the largest war chest of any candidate and having done the best, besides Newt, in the debates, Romney is still unable to get more than a fraction of GOP voters to back him and quite a few to openly hate him.
He may be a non-starter or ultimately unacceptable to a significant number of conservative pundits and hard-core Tea Partyers, but there is little reason to doubt that he could pull the party together if he does take the nomination.
Hard core tea-partiers? You mean the people who came out in droves to hand the GOP the House of Representatives in 2010? I don't think we'd have much of a party without them. Also, I think many Republicans are sick of voting for Democrat-lite candidates who don't stand up for conservative beliefs, the Bob Dole's, the John McCain's, one or both of the Bushes. Hell, even Jimmy Carter has said he would be "very pleased" if Romney won the nomination.
The worst part is that Romney supporters can't even tell us why we should be supporting him besides the whole electability thing (even Ann Coulter), which may not even be true. Just think about this scenario, what if the anger of conservatives and "hard-core tea partiers" leads someone like Ron Paul to run on a third party ticket? This could hand the election straight to Obama and would be more likely to happen under a Romney candidacy than one of a more conservative candidate who has more overlap with a Ron Paul (at least economically).
When you take away Romney's electability what do you have? His 59 point plan which looks like it was written by a Bain consultant (lots of pretty pictures with not a lot of real content). And some of his policies seem purely for rhetorical purposes. He wants to eliminate capital gains taxes, but only on the people who pay almost no capital gains taxes. He thinks Obama's decision to withdraw the surge troops from Afghanistan in September 2012 is a mistake, but only because he would withdraw them in December, just three months later. And Romney seems to know that his positions are a joke or else he would be giving more interviews. It seems you see Newt everywhere, just about every day. He does both personal campaigning as well as interviews for the media (both mainstream and conservative). Romney, on the other hand, is pretty much nowhere to be seen. You don't see him doing interviews and usually when I check his calendar on Politico it has one event. And today it's empty! Either he is spending all his time at fundraisers or he is afraid of scrutiny. He is probably both.
The establishment of the Republican Party needs to stop trying to nominate people who they, in their infinite wisdom, think have the best chance of beating Obama, but instead try to nominate people who will actually govern from the right. We don't need perfection, we just want someone who we have confidence will do the right thing most of the time. Romney just ain't it. Also, it would be nice if they didn't try to blow everything a conservative says out of proportion in order to help their friend Mitt, as Jennifer Rubin laughably attempted to do by criticizing Newt's talk of zero-based foreign aid as a threat to Israel (one of the first things he will do as President is move the embassy to Jerusalem, I don't think Israel has to worry under President Newt!). I expect that much from the lamestream media, not from people we are supposedly allied with.
Tuesday, November 15, 2011
The reason that Perry flamed out was that people, without really knowing him, expected him to be a competent big-state conservative Governor with a great record and Reagan hair. Instead, he turned out to be not as conservative as advertised with his competency coming into question with not just one but two major senior moments in the middle of nationally televised debates. Cain, though an unknown with no political experience, was expected to be a competent administrator given his successful business career. Instead, he has run an incompetent campaign, focusing more on his book tour than anything else and he seems to know less about foreign policy than a 3rd grader in Appalachia. His recent Libya flub was really painful to watch. Also, he completely mishandled the sexual harassment allegations against him (despite knowing the Politico story was coming 10 days in advance) giving at least 3 different responses in the course of 24 hours. For someone who people expected to at least be a competent administrator, he seems to be anything but. He is disorganized and uninformed. It is no wonder his campaign has started to implode.
Newt, on the other hand, is a known quantity. People already know of his imperfect conservative record and his sordid personal history, and they are supporting him in the polls despite all that. To bring Newt down, you will actually have to surprise people with something you find. However, given his record was combed over by Clinton and his minions, you kind of get the idea there probably isn't anything major that people missed before 1999. And so far there really hasn't been anything major that people have found since then. The $300,000 advisory fee from Freddie Mac in 2006 is not it. I don't think anyone begrudges him from making a living after a lifetime of public service, especially one that is not obviously immoral. Unless he actually cold-called subprime borrowers and tricked them into signing away their houses, this will not stick. Neither will most of anything else that people dig up, unless they found out he is Sanduskie's best friend or was head of his local KKK. It's just like with Romney and his flip flops. The 25% of GOP voters who like him will not change their mind because of another flip flop. They know and have accepted the fact that Romney bends like a reed in the wind, so another flip flop is just not a surprise to anyone.
Now I am not saying Newt is unstoppable, of course he is. Because he lacked in funding for so long, he also lacked organization. So it is unclear how effective he will be in getting out the vote for him in the caucuses and primaries and on capitalizing on any victories. Lack of a large campaign infrastructure has a much greater chance of torpedoing his candidacy than anything dug up in opposition research.
Monday, November 14, 2011
Scott Pelley: Governor Romney, would it be worth goin' to war to prevent Iran from obtaining a nuclear weapon?
Mitt Romney: Well, let's-- let's start back from there and let's talk about where we are. This is, of course, President Obama's greatest failing, from a foreign policy standpoint, which is he recognized the gravest threat that America and the world faces-- and faced was a nuclear Iran and he did not do what was necessary to get Iran to be dissuaded from their nuclear folly. What he should have done is speak out when dissidents took the streets and say, "America is with you." And work on a covert basis to encourage the dissidents.
Number two, he should have put-- put in place crippling sanctions against Iran. But instead of getting Russia, for instance, to-- what-- what he gave in our-- our missile defense system to agree to-- to stand with those crippling sanctions, he gave Russia what they wanted, their number one foreign policy objective, and got nothing in return....
(Successfully argues with moderator over the time after being prematurely cut off)
Mitt Romney: Fin-- finally, the president should have built credible-- threat of military action, and made it very clear that the United States of America is willing, in the final analysis, if necessary, to take military action to keep Iran from having a nuclear weapon. Look, one thing you can know-- and that is if we reelect Barack Obama, Iran will have a nuclear weapon. And if we elect Mitt Romney, if you'd like me as the next president, they will not have a nuclear weapon.
Scott Pelley: But sir, let me-- you just described where we are today, and that's what you're going to have to deal with if you become president. How do you prevent them from obtaining a nuclear weapon? Is it worth going to war to prevent that?
Mitt Romney: Well, it's worth putting in place crippling sanctions. It's worth working with the insurgents in the company to encourage regime change in the country. And if all else fails, if after all of the work we've done, there's nothing else we can do beside mil-- take military action, then of course you take military action. It is unacceptable for Iran to have a nuclear weapon.
We will not allow Iran to have a nuclear weapon. This term "unacceptable" has been applied by several presidents over history, and our current president has made it very clear that he's not willing to do those things necessary to get Iran to be dissuaded from their nuclear folly. I will take a different course. I will make sure that the sanctions, diplomatic pressure, economic pressure, and support of insurgents within the country help them become dissuaded to get away from their nuclear ambition. And finally--
Scott Pelley: This time, it is time.
Mitt Romney: Yeah, and finally, have to-- have to have military presence there.
Then there was the question about Afghanistan:
Major Garrett: Governor Romney, a much smaller footprint in Afghanistan? Do you support that? And secondarily, sir, is it time or would it ever be time for the United States to negotiate with the Taliban?
Mitt Romney: We don't negotiate with terrorists. I do not negotiate with the Taliban. That's something for the Afghans to decide how they're gonna-- pursue their course in the future. With regards to our footprint in Afghanistan, the right course is for us to do our very best to secure the victories that have been so hard won by the soldiers, the men and women of-- of our-- fighting forces who have been in Afghanistan.
The commanders on the field feel that we can take out 30,000 to 40,000 troops sometime by the end of next year. The commander in chief, perhaps looking at the calendar of the election, decided to bring them home in September, instead, in the middle of the fighting season. Our commanders said that puts our troops at risk, at danger, "Please don't pull 'em out there," they said.
But he said, "No, I'm gonna get 'em out early." I think that was a mistake. Our surge troops should have been withdrawn by December of next year, not by December. And the timetable, by the end of 2014, is the right timetable for us to be completely withdrawn from Afghanistan, other than a small footprint of support forces.
His big argument with Obama on Afghanistan is that the surge troops should be withdrawn in December instead of September? That's it? While I do understand that withdrawing troops in the middle of the fighting season is clearly a mistake, I would hope a GOP nominee has a greater difference in policy than 3 months in a timetable. Also, he is for us withdrawing completely by 2014? What happened to working for our victory? This just seems like a replay of Vietnam where the debate was over the pace of withdrawal instead of over strategies to actually win (in fact, we were turning the tide thanks to the Creighton Abrams strategy there but we weren't able to see it through due to wishy washy politicians back home who waffled on the war, like Mitt's father George).
And then there is the question of safe havens for insurgents in Pakistan:
I do realize that Pakistan, as a nuclear power, is at ouch issue but once again, Mitt has clearly not learned any lessons from Vietnam. As a reminder, Vietnamese troops were given safe havens in Cambodia and Laos and even ran a supply network through those countries (the Ho Chi Minh Trail) thanks to a lack of political will in Washington. By making safe havens off limits to devastating assault by the United States, you are putting American counterinsurgency activities at a major disadvantage. We won't be able to defeat the Taliban until they don't feel safe anywhere.
Scott Pelley: Governor Romney, would you send American troops across the border into Pakistan to clear out those save havens? American men and women are coming under fire from those locations every single day.
Mitt Romney: The right way to deal with-- Pakistan is to recognize that Pakistan is not a country like other countries, with a strong political center that you can go to and say, "Gee, can we come here? Will you take care of this problem?" This is, instead, a-- nation which is close to being a failed state. I hope it doesn't reach that point, but it's a very fragile nation.
It really has four centers of power: the ISI, which is their-- their intelligence services, the military, separate group. You have the political structure, and of course, the fundamentalists. And so we have to work with our friends in that country to get them to do some of the things we can't do ourselves.
Bringing our troops into Pakistan and announcing at a stage like this that, as president, we would throw American troops into Pakistan, could be highly incendiary in a setting like that. Right now, they're comfortable with our using drones to go after the people that are-- that are representing a gr-- the greatest threat.
Then of course, there is the issue of Israel. Romney didn't talk about Israel much during this debate but in the Fox/Google debate back in September, Romney gave you a hint that he might not be as pro-Israel as you would like.
QUESTION: As president, how would you approach the new reality in the Middle East, specifically with regards to our ally, Israel, and the existential threats it faces from Iran, Hamas, Hezbollah, and now the Palestinian Authority?
Just before Bibi Netanyahu came to the United States, he threw Israel under the bus, tried to negotiate for Israel.
The right course -- if you disagree with an ally, you talk about it privately. But in public, you stand shoulder-to-shoulder with your allies. The right course for us...
The right course for us is not to try and negotiate for Israel. The right course is to stand behind our friends, to listen to them, and to let the entire world know that we will stay with them and that we will support them and defend them.
Once again, when you get past the rhetoric with Mitt Romney you see there just isn't much there. His foreign policy, at best, is an Obama-lite approach which might see some differences (somewhat harsher sanctions on Iran, a slight delay in Afghan withdrawal) but really there are few substantive differences.