David Stockman on the Republican Budget Betrayal

The budget deal is "a betrayal and a joke":

The Iranians Have the Best of Both Worlds Right Now, They Are Diplomatically Shielded from Attack Yet They Can Work Overtime on their Nuclear Program

In all the hoopla about the "agreement" with Iran, people seem to have missed that there actually is no binding agreement in place right now, not until "technical negotiations take place".  So it seems to me that Iran has an incentive to make the progress in those negotiations as slow as possible. As of now they can continue spinning their centrifuges and enriching to weapons grade as much as they want, but are effectively shielded by that worthless piece of paper they have signed.  I can picture Netanyahu coming to the US and saying they Iran just crossed the red line and Obama and his minions telling him that Israel can't attack Iran after they signed an "agreement" on their nuclear program.  Can you imagine the incredible pressure Netanyahu will be put under to not attack even with iron-clad intelligence?  This is all just such a farce.  You could see Iran breakout before even the technical negotiations are done.  Then what?  What a disaster.

The Holes in Obama's Agreement with Iran

Looks like there is a good chance that this will be Obama's Munich.  Hopefully, Israel ends up in a better place than Czechoslovakia did.  Check out the holes in Obama's agreement with Iran from Debka:

1. Parchin: This long-suspected facility remains out of UN oversight. President Obama and Secretary of State John Kerry boasted after the signing that daily IAEA inspections will take place at Fordo and Natanz. However, cameras are already fixed at both those facilities without an agreement, whereas Tehran’s consistent denial of IAEA access to Parchin is not addressed.2. Secret nuclear locations:  Under the heading "Possible Military Dimensions," the last IAEA report noted: "Since 2002, the Agency has become increasingly concerned about the possible existence in Iran of undisclosed nuclear related organizations, including activities related to the development of a payload for a missile.” The watchdog has received information indicating activities "relevant to the development of a nuclear explosive device." This was further corroborated by new information obtained since November 2011.Tehran’s non-cooperation for investigating these findings is not mentioned in the Geneva interim accord, nor was it addressed in the negotiations.3. Dirty bombs: Iran doesn’t need a full-scale nuclear bomb or missile warhead for attacking Israel. For decades, Tehran has been working on perfecting hundreds of dirty bombs as part of its nuclear program, by adding plutonium or enriched uranium to conventional bombs. These weapons are easy to make and easy to use. In the hands of Hizballah or other Shiite terrorist organizations in Syria or Iraq, for instance, they could be used to strike Israel without leaving a trail to Tehran.This peril too was ignored by the six powers in Geneva.4. Rollback. While President Obama has presented the deal as a first step toward freezing or even rolling back “key aspects” of Iran’s nuclear program. The fact remains that, so long as Iran is permitted to enrich uranium, even though this is restricted to a low 5 percent grade, it is free to produce as much fissile material as it wants, whenever it wants. This seems more like roll forward than roll back.5. Enrichment. Obama and Kerry said the new deal does not recognize Iran’s right to enrich uranium. They were contradicted by the Iranian president and senior negotiator as well as Russian Foreign Minister Sergey Lavrov. So what is the truth? If Iran won recognition for this right, it blows the bottom out of the Non-Proliferating Treaty because, in no time, all the signatories may start enriching uranium with permission from the big powers. Neither is there any point in making Iran join the NPT’s Additional Protocol for snap inspections.6. Centrifuges. Iran has undertaken not to add new centrifuges to its enrichment facilities, according to President Obama, but there is nothing to stop it from keeping up their production. In the six-month interregnum for negotiating a comprehensive nuclear deal, Tehran wins time to turn out enough centrifuges to substantially expand its production of enriched uranium.

9. A leap to breakout:  Far from being static or in freeze, as the Americans claim, Iran is free to step up centrifuge production and boost its stock of 3.5 percent enriched uranium, thereby accumulating enough material to enhance its capacity for producing enough weapons-grade uranium to break through to a nuclear bomb rapidly enough to defy detection by the IAEA or Western intelligence until it is too late.

Iranian Leader Calls Jews "Rabid Dogs" and That "They Cannot Be Called Human Beings", Obama Administration Silent

This is just unbelievable that the Obama administration has not condemned those comments and is in fact still willing to offer Iran billions in additional trade.  Can you imagine them doing the same thing if the Iranian leader said the same thing about Blacks?:

Jerusalem is "unpleasantly surprised" that, as of Thursday afternoon, the Obama administration had not unequivocally condemned vicious anti-Israel statements made Wednesday morning by Iran's Supreme Leader Ayatollah Ali Khamenei, senior Israeli officials told The Times of Israel.

In an address to an assembly of tens of thousands of Basij militiamen, Khamenei declared that Israel was doomed to fail and characterized the "Zionist regime" as the "sinister, unclean rabid dog of the region." He also said Israelis "cannot be called human beings." Footage of the event showed the crowd shouting "Death to America" and "Death to Israel."

...

And yet, protested Bar, "I was disappointed to hear no strong condemnation nor any official censure whatsoever by the United States, the European countries, nor the EU itself. These comments from Khamenei, in the middle of talks with the world's powers, allow the world to understand with what kind of regime we are dealing, and with whose leaders the world has been trying to reach a reasonable compromise in recent days. But reasonable compromises are made with reasonable people, not with inciting, racist, bloodthirsty leaders who intend to annihilate a democratic state – a UN member – and who are not ashamed to say it out loud."

Bar, a prominent advocate of intensified peace efforts with the Palestinians who recently led a solidarity visit of MKs to meet Palestinian Authority President Mahmoud Abbas in Ramallah, said he was demanding that recipients of his letter "issue condemnations in the strongest possible terms" and "stand up against the dark, racist statements and incitement" from Iran. "It is not easy to promote the idea of peace among the Israeli public," he noted, "when Israelis feel attacked and vulnerable, and when they do not have the verbal and moral support of our closest allies, countries that share with us the same moral values of peace, democracy and freedom."

At Least Obama Has Accomplished One Good Thing, He Has Brought Israel and Saudi Arabia Together... For an Attack on Iran

This is probably one of the most temporary of alliances but still, it is quite amazing.  I guess shock of Obama's incompetence makes strange bedfellows:

Israel and Saudia Arabia are secretly working together on plans for a possible attack against Iran in case the Geneva talks fail to roll back its nuclear program, British paper The Sunday Times reported.

The two countries' shared concern has put them at odds with the United States as the latter continues to seek an agreement with Iran to ease economic sanctions in return for pulling back nuclear development.

According to the diplomatic source quoted by the Times, Saudia Arabia has agreed to let Israel use its air space, and assist an Israeli attack by cooperating on the use of drones, rescue helicopters and tanker planes.
Israel's Mossad intelligence agency is reportedly working with Saudi officials to make arrangements following the signing of a nuclear deal in Geneva.

"Once the Geneva agreement is signed, the military option will be back on the table. The Saudis are furious and are willing to give Israel all the help it needs," the Times quoted the source as saying.

Obama's "Fix" to the Cancelled Healthcare Plan Problem Won't Work

From Andrew McCarthy:

As a practical matter, it is nearly inconceivable that insurance companies would be able to reissue the canceled health-care plans. The process, as Avik Roy expertlyexplains, is too extensive and complex to complete in the few weeks between now and Obamacare’s coverage deadline — something that an administration that can’t, after three years, get a functioning website running should know. But even if it could be done, the insurance companies would be insane to offer plans that failed to comply with the letter of the Obamacare statute. Similarly, the state insurance commissioners would be insane to permit them, and Americans would be insane to buy them. The policies would be legally unenforceable. 

As the telecoms learned, Bush’s assurance that they’d be held harmless meant nothing once Obama and his base started urging warrantless wiretapping victims to sue. The companies spent untold millions in legal fees and costs. The health-insurance companies, too, would be deluged with lawsuits by insureds who claimed that the policies were illegal and wrongly denied coverage for this or that treatment. The insurance companies themselves would get into the act, filing suits to be compensated for payouts they’d made based on the illegal policies. The Obama “waiver” would avail them of nothing in a court, where a judge would be obliged to follow the law, not Dear Leader’s enforcement preferences.

Obama Really Does Think He is King

Mark Steyn does a great job mocking Obama for ignoring the rule of law so we don't have to:

It is a condition of my admission to this great land that I am not allowed to foment the overthrow of the United States government. Oh, I signed it airily enough, but you'd be surprised, as the years go by, how often the urge to foment starts to rise in one's gullet. Fortunately, at least as far as constitutional government goes, the president of the United States is doing a grand job of overthrowing it all by himself.

On Thursday, he passed a new law at a press conference. George III never did that. But, having ordered America's insurance companies to comply with Obamacare, the president announced that he is now ordering them not to comply with Obamacare. The legislative branch (as it's still quaintly known) passed a law purporting to grandfather your existing health plan. The regulatory bureaucracy then interpreted the law so as to un-grandfather your health plan. So His Most Excellent Majesty has commanded that your health plan be de-un-grandfathered. That seems likely to work. The insurance industry had three years to prepare for the introduction of Obamacare. Now the King has given them six weeks to de-introduce Obamacare.

"I wonder if he has the legal authority to do this," mused former Vermont governor Howard Dean. But he's obviously some kind of right-wing wacko. Later that day, anxious to help him out, Congress offered to "pass" a "law" allowing people to keep their health plans. The same president who had unilaterally commanded that people be allowed to keep their health plans indignantly threatened to veto any such law to that effect: It only counts if he does it — geddit? As his court eunuchs at the Associated Press obligingly put it: "Obama Will Allow Old Plans." It's Barry's world; we just live in it.

Think Worries About a Nuclear Arms Race in the Middle East are Overlbown? Think Again. The Saudis are Prepared to Acquire Pakistani Nukes

Looks like American pussyfooting around the Iranian nuclear program is about to lead to a nuclear arms race in the Middle East.  As soon as Iran gets nukes, the Saudis will, with some pointed at Iran, some at Israel.  Yes, bombing Iranian nuclear facilities is not a perfect solution, but the risks of not bombing are just too great:

Saudi Arabia has invested in Pakistani nuclear weapons projects, and believes it could obtain atomic bombs at will, a variety of sources have told BBC Newsnight.

While the kingdom's quest has often been set in the context of countering Iran's atomic programme, it is now possible that the Saudis might be able to deploy such devices more quickly than the Islamic republic.

Earlier this year, a senior Nato decision maker told me that he had seen intelligence reporting that nuclear weapons made in Pakistan on behalf of Saudi Arabia are now sitting ready for delivery.

Last month Amos Yadlin, a former head of Israeli military intelligence, told a conference in Sweden that if Iran got the bomb, "the Saudis will not wait one month. They already paid for the bomb, they will go to Pakistan and bring what they need to bring."

Since 2009, when King Abdullah of Saudi Arabia warned visiting US special envoy to the Middle East Dennis Ross that if Iran crossed the threshold, "we will get nuclear weapons", the kingdom has sent the Americans numerous signals of its intentions.

Gary Samore, until March 2013 President Barack Obama's counter-proliferation adviser, has told Newsnight:

"I do think that the Saudis believe that they have some understanding with Pakistan that, in extremis, they would have claim to acquire nuclear weapons from Pakistan."

The story of Saudi Arabia's project - including the acquisition of missiles capable of delivering nuclear warheads over long ranges - goes back decades.

In the late 1980s they secretly bought dozens of CSS-2 ballistic missiles from China.

These rockets, considered by many experts too inaccurate for use as conventional weapons, were deployed 20 years ago.

This summer experts at defence publishers Jane's reported the completion of a new Saudi CSS-2 base with missile launch rails aligned with Israel and Iran.

It has also been clear for many years that Saudi Arabia has given generous financial assistance to Pakistan's defence sector, including, western experts allege, to its missile and nuclear labs.

Jamie Dimon: It's "Virtually Assured" for the Bond Market to Turn Against the United States

From Bloomberg (h/t ZeroHedge):

Q. How worried are you that one morning the bond market has moved against the United States?

A. It’s virtually assured, the question is when and how. I don't know if it will be two years of five years but it will happen. It is a matter of time, the United States can’t borrow indefinitely. Over hundred years bankruptcies of country after country who thought they could get away with it because they had the reserve currency and the military power of the world. We are going to have fiscal discipline. It’s imposed upon us or we do the right thing and do it to ourselves the right way.... America knows the way, it doesn't have the will.

Obama is Sabotaging Egypt's Battle with Al-Qaeda and Hamas

Looks like the US has quietly cutoff military aid and spare parts to Egypt.  This is hurting their fight against terrorists in Sinai, pissing them off royally and increasing the chances that Egypt turns to Russia:

Egyptian military leaders expressed concern over the apparent slowdown in U.S. military shipments of advanced helicopters and other parts needed to keep their warplanes in service, according to retired Army Col. Ken Allard, who recently spent three days in Cairo with his colleagues meeting with the top Egyptian military leaders.

This purported slowdown is said to have hindered military efforts to combat terrorist forces in Egypt's Sinai region and cut off the flow of weapons across the porous Libyan border, according to Allard and others.

Senior Egyptian military leaders "told us there's a problem in getting the AH-64 Apache helicopter" and other replacement parts for their F-16 fighter jets, Allard said during a Tuesday press briefing.

Both of these aircraft have been critical in Egypt's fight to stop Muslim Brotherhood-aligned terrorists who have gathered in Egypt's Sinai region and could be attempting to smuggle weapons across the Libyan border.

The problems are "part of a slowdown" in U.S. weapons shipments since the Egyptian military deposed former President Mohammed Morsi in what Americans have dubbed a "coup," Allard told the Washington Free Beacon.

Egyptians have also noted a stoppage in deliveries of additional F-16 parts, according to retired U.S. Air Force Lt. Col. Rick Francona, who also participated in the trip, which was organized by the Westminster Institute.

These critical F-16 parts were being used to modernize the American-made F-16 planes and make them more efficient.

The Egyptian military is consequently "having to cut back operations in the Sinai" that are meant to prevent terrorist attacks, according to Francona.

...

"We're in danger of losing a key strategic ally in the Middle East, the linchpin of the Middle East." Allard said. "I heard [Egyptian] generals say, 'Friends do not treat friends this way.'"

It "shows you what we're talking about with the Russian potential," he added.

...

"They are very upset with the U.S.," said retired Maj. Gen. Paul E. Vallely, a former deputy commanding general for the U.S. Army Pacific Command. "That we didn't do our homework better, that our State Department didn't do their homework better and sided with the Muslim Brotherhood."

Bill de Blasio Was Also a Fan of Robert Mugabe, the Genocidal Dictator of Zimbabwe

Bill de Blasio's support for the Sandinistas has been described as a "youthful indescretion" (despite the fact that he was in his late 20's and definitely an adult at the time).  But how do you explain the latest revelation that he honored Robert Mugabe at an event that had been boycotted by 36 of 51 City Council members?  This was in 2002, when de Blasio was 41 years old.  

Seriously, this guy, who seems to have a murderous left-wing dictator fetish, is likely to be New York's next mayor?  Disgusting.  

What if Ted Cruz Wins?

No, I don't think Obamacare as a whole will be defunded but I think any delay for any major segment of Obamacare will be a very clear victory for Ted Cruz who almost nobody thought had a chance of achieving anything.  The White House's position was made weaker today by the fact that a Democratic Senator said that the individual mandate should be delayed a year using pretty simple logic:

"Don't put the mandate on the American public right now," Manchin said. "Give them at least a year. If you know you couldn't bring the corporate sector, you gave them a year, don't you think it'd be fair?"

That coupled with the fact that there is another glitch in the exchange software, you really can't argue that Obamacare is ready for primetime.  So why shut down the government in order to implement something on time that can't be implemented on time anyway?  Launching Obamacare now would be the equivalent of Apple launching an Iphone where you can only get data access by using a PC already connected to the Internet.  I'm sure there are other red state Democrats, besides Manchin, who don't want to risk their political careers to Obama's vanity.

The more Democrats that come around, the more Obama will look like a complete schmuck for refusing to negotiate and the more he will be blamed for any shutdown.  

I know the GOP is scared that people will blame them for a shutdown but I don't think it will be as bad as they say.  The GOP lost a handful of House seats and gained a couple of Senate seats after the last shutdown and that was before Fox News was around to give the conservative perspective to people.  It was also when the Internet was still just a niche and before blogs.  People were hammered day and night how this was the Republican's fault by the mainstream media and yet the GOP still suffered few ill-effects.  

Anyway, I am keeping my fingers crossed that the Republican caucus in the House keeps Boehner's backbone stiff and sees this thing through.  There is a decent chance that the Democrats will offer a delay to the mandate or other aspects of Obamacare before this thing is over.

The Complete Video of Ted Cruz's 21 Hour Filibuster on Obamacare

Gotta say I'm impressed.  I saw the very beginning and the very end and he was amazingly lucid after speaking for 21 hours straight.  He also made some great points:




 It was also nice to see him read Green Eggs and Ham on the Senate Floor (at his daughters' bedtime):

New York's Next Mayor Supported the Sandinista's and Honeymooned in Cuba

Just in case you didn't think New York was completed f*cked with the passing of the Giuliani/Bloomberg years (not that I was always a fan but they did leave NYC better off than how they received it, in shambles after the administration of de Blasio's old boss, David Dinkins), read this:

"My work was based on trying to create a more fair and inclusive world," he said in a recent interview. "I have an activist's desire to improve people's lives."

Mr. de Blasio became an ardent supporter of the Nicaraguan revolutionaries. He helped raise funds for the Sandinistas in New York and subscribed to the party's newspaper, Barricada, or Barricade. When he was asked at a meeting in 1990 about his goals for society, he said he was an advocate of "democratic socialism."

...

In 1987, Mr. de Blasio was hired as a political organizer, soon after he finished graduate school at Columbia, earning $12,000 a year. He worked inside the Quixote Center's Maryland office, converted apartments filled with homegrown squash and peace posters. Hunched over his desk with a phone to his ear — his colleagues likened him to "Big Bird with a beard" — he oversaw efforts to solicit and ship millions of dollars in food, clothing and supplies to Nicaragua. He also proved to be a skilled provocateur, twice being arrested during rallies against United States foreign policy that were held in the Washington area.

...

In the cramped Lower Manhattan headquarters of the Nicaragua Solidarity Network of Greater New York, where he volunteered, Mr. de Blasio learned to cause a stir. He and a ragtag team of peace activists, Democrats, Marxists and anarchists attempted to bring attention to a Central American cause that, after the Sandinistas lost power in a 1990 election, was fading from public view. "The Nicaraguan struggle is our struggle," said a poster designed by the group.

The activists tried everything: brandishing George H. W. Bush masks on subway cars, advertising parties to celebrate the Cuban revolution and hawking subscriptions to the international edition of Barricada. (Mr. de Blasio, who was living in a basement apartment in Astoria, Queens, was one of the first to sign up.)

Despite some debate over whether it should support only humanitarian causes, the Nicaragua Solidarity Network held dances to benefit the Sandinista party. "They gave a new definition to democracy," Mr. de Blasio told The New York Times in 1990 in an article about the wistful reaction of American activists to the defeat of the Sandinistas. "They built a democracy that was striving to be economic and political, that pervaded all levels in society."

At a retreat later that year, members of the network were asked to articulate their visions for society. One suggested a "real peace movement," according to minutes of the meeting. "Rewards for altruism," another said. Mr. de Blasio suggested "democratic socialism."

...

Mr. de Blasio remained supportive of the Sandinistas, often referred to by their acronym, F.S.L.N., even after they lost power. "People who had shallow party sympathies with the F.S.L.N. pretty much dropped everything when they lost," said Jane Guskin, a fellow activist in the solidarity group. "Bill wasn't like that."

He has remained interested in Latin America — he even honeymooned in Cuba (in violation of a United States travel ban). To this day, he speaks admiringly of the Sandinistas' campaign, noting advances in literacy and health care. "They had a youthful energy and idealism mixed with a human ability and practicality that was really inspirational," he said.

Israeli Minister of Strategic Affairs: Iran is 6 Months from Nuclear Capability

Yuval Steinitz, the Israeli Minister of Intelligence, International Relations & Strategic Affairs, gave a candid, no-nonsense interview with Israel Hayom.  While I suggest reading the whole thing, check out this section on the subject of Iran:

"There is no more time for negotiations. The Iranians have been negotiating for four years. Over the last 18 months, there has been some progress in imposing sanctions that have pressured the Iranian leadership. The sanctions are estimated to have cost the Iranian economy about $100 billion just over the last 18 months. Since the entire scope of the Iranian economy is about $450 billion, this signifies a massive blow. Their economy is on the verge of collapse, but they still keep advancing their nuclear program."

"[Iranian President Hasan] Rouhani has launched a charm offensive on the West, but he plans to charm his way to a nuclear weapon. While he sends letters to [U.S. President Barack] Obama and wishes the Jews a happy new year, the centrifuges continue to spin. Not only has the [nuclear] project not stopped, it is galloping forward."

"If the Iranians continue to advance, they will have nuclear capability within six months. Time has run out and the West, chiefly the U.S., must clarify to the Iranians that they have two options: either abandon their nuclear aspirations and save their economy or continue with the nuclear project and risk a real military attack that will destroy the nuclear project and humiliate them. There is no middle ground."

Steinitz suggests that the solution may ultimately emerge from the Iranian people themselves, who crave a better economic situation. "There is an internal debate within Iran and it should be intensified. The people in Iran have said their piece: If they have to choose between a bomb and saving the economy, they prefer to save the economy. Now an ultimatum must be set, accompanied by a timetable: If you don't honor the Security Council resolution by a certain time, we will attack."

Over the last two months, Steinitz has met with the foreign ministers of three key European countries: Germany, France and Britain. "All the meetings focused on the Iranian issue," he recounts. "If the world fails to maintain a clear, unified front in the face of Iran, they will try to disintegrate the sanctions."

The minister notes that at this point the Iranians have yet to cross the red line set by Netanyahu, but they are constantly trying to erase it. "They have turned the question of how much material they have enriched to 20% irrelevant. They have added so many centrifuges, and even installed second and third generation centrifuges, which are several times more efficient than the old ones. In the past they had to enrich the material from 3.5% to 20%, and that is a process that takes time, and only then from 20% to 90%. Today they can jump directly from 3.5% to 90%, which is fissile, weapons-grade material. The timetable today is much shorter."

Looks Like the Organizers of the "Million Muslim March" Were a Tad Optimistic in Their Original Projection

Maybe they meant the Dozen Muslim March? (h/t Washington Times):

Why is Syria OUR responsibility again?

It really boggles the mind why almost every humanitarian disaster is the responsibility of the US to stop.  Yes we have a large military and therefore have the capacity to do something about Syria but it seems that there are other countries in the area that have a greater interest in what is going on in Syria as well as the military wherewithal. Why should we borrow money from China to send our people into harms way in a country where we have few, if any, interests?

Look at Turkey.  They are right next door to Syria and therefore should be the most concerned with the use of chemical weapons.  They also have an Army with 391,000 soldiers and over 3,000 main battle tanks.  Their Air Force has over 200 F-16's.  Why can't they handle Syria's decrepit military that is mired in a Civil War?

Then there is France, which used to occupy Syria and has expressed interest in intervening. Their military is smaller than Turkey's (122,000 soldiers, 270 main battle tanks and 250 modern fighters) but they could definitely do more than the "unbelievably small" attack we apparently are planning.

And finally there are the Saudi's who are actively funding the rebels.  They have 288 very modern aircraft in their Air Force (half of which are F-15's) and so could really help out countries like Turkey or France if they decided to intervene.

So why America?  Why do we have to expend our treasure all the time?  People like to point out how much more we spend than everyone else on the military.  Part of the reason is that so many countries, especially those in Europe, have become so accustomed to our protection that they have invested only nominal amounts to their own defense.  I was shocked when I noticed that Turkey has a 10 to 1 advantage over France in terms of tanks.

In 2012, the US spent about 4.7% of GDP on the military.  Turkey and France spent less than half that, about 2.3%.  The UK is at 2.5%, Italy is at 1.7% and Germany is at a paltry 1.4%.  It seems that we could save billions upon billions of dollars if we just made our allies bear the burden of dealing with these local flare ups that they seem to care so much about.  It's time for us to stop subsidizing their defense.

The Federal Government is Just 3 weeks Away from a Possible Government Shutdown and 5-8 Weeks Away From Completely Running Out of Cash

While the news cycle has been dominated by Syria and the full-court press by the White House to get people to sign on to his unbelievably small operation in Syria meant to make Assad eat his Cheerios with a fork (no word on whether Assad knows how to tip the bowl into his mouth), people have forgotten that we may have a government shutdown October 1 and we might run out of cash in late-October early November.

Congress needs to pass another continuing resolution to fund the government (God forbid they actually pass a budget) and then they need to vote again to raise the debt ceiling.  Check out this chart from the Bipartisan Policy Center which shows when the Federal Government will completely run out of cash:

Hopefully the GOP leadership keeps its spine and is able to squeeze out further discretionary spending cuts.

Lawrence O'Donnell to Anthony Weiner: What is Wrong With You?

You have to watch this train wreck of an interview.  I love seeing Anthony Weiner crash and burn.  Though he did get a zinger out at O'Donnell at the end when O'Donnell asks him to stay so they can continue the argument online.  Weiner said "nobody watches this show, who do you think is online?"  Ouch:

Visit NBCNews.com for breaking news, world news, and news about the economy

Syria Fails Reagan's 4 Conditions for Military Intervention

According to Reagan's 4 conditions for military intervention that he listed in his autobiography, he would be on Rand Paul's side in the fight against intervention. Obama's plan for an "unbelievably small" attack that makes Assad eat his Cheerios with a fork doesn't meet any of the conditions. All Presidents should refer to these often when they contemplate military action (h/t Newt):

1. The United States should not commit its forces to military action overseas unless the cause is vital to our national interest.

2. If the decision is made to commit our forces to combat abroad, it must be done with the clear intent and support needed to win. It should not be a halfway or tentative commitment, and there must be clearly defined and realistic objectives.

3. Before we commit our troops to combat, there must be reasonable assurance that the cause we are fighting for and the actions we take will have the support of the American people and Congress. (We all felt that the Vietnam War had turned into such a tragedy because military action had been undertaken without sufficient assurances that the American people were behind it.)

4. Even after all these other combat tests are met, our troops should be committed to combat abroad only as a last resort, when no other choice is available. (Ronald Reagan: An American Life, 466)

Senior Obama Administration Official: We are going to make Assad eat his Cheerios with a fork

USA Today had this nugget this morning:

A second senior official, who has seen the most recent planning, offered this metaphor to describe such a strike: If Assad is eating Cheerios, we're going to take away his spoon and give him a fork. Will that degrade his ability to eat Cheerios? Yes. Will it deter him? Maybe. But he'll still be able to eat Cheerios.

The two officers with current and recent service in the Middle East say the term "degrade" is so vague that it could be used to describe the effect of a single cruise missile strike.

Between this and Kerry's comment that the strike will be "unbelievably small" the only thing to conclude is that these people are really just not serious.  I just don't see how this is going to deter anyone.  "Don't do that or you will face unbelievably small consequences"!  Oh yeah that works in a tough neighborhood like the Middle East.  It seems that all those pro-strike folks who claim that a No vote from Congress would degrade American prestige, I have to argue that an "unbelievably small" strike would degrade our prestige even more.  You never want to look like a paper tiger.

Valuation Guru: Tesla is Worth a Fraction of Its Stock Price

Aswath Damodaran, who literally wrote the book on stock valuation, took a close look at Tesla's value and came up with a fair value at a fraction of its current stock price.  It closed on Friday at $166.40 but according to Professor Damodaran, it's fair value is only $67.12, 60% lower.  Some might assume that he was using pessimistic assumptions to value TSLA and that is why he came up with such a low number.  Nope.  In fact, I would argue that he used optimistic assumptions.  

First, he assumes that by 2022, TSLA would be much bigger than more established companies like Kia, Porsche and Mazda and be about as big as Audi.  We'll see about that.  Tesla doesn't exactly have a wide range of cars, so it is unclear whether it can even be any bigger than a niche car brand.  It also doesn't have a track record outside of the US and all of those other brands get much of their sales internationally.  

Second, he assumes extremely high profitability for TSLA, much higher than the norm:

Note that the sector has low pre-tax operating margins, with the median value of less than 5%. Companies at the 75% percentile generate margins of between 7.5% and 8.5% and there are a few companies that generate double digit margins.  One of the outliers is Porsche which reported a pre-tax operating margin of close to 16% in 2013, though its ten-year aggregate margin is closer to 10%. You can download the dataset that includes the key numbers for all auto companies by clicking here. 

For Tesla, we will assume that its focus will continue to be on high-end automobiles and that is margins will converge towards the higher end of the spectrum. In fact, I am assuming that the technological and innovative component that sets Tesla apart will allow it to deliver a pre-tax operating margin of 12.50% in steady state, putting it in the 95th percentile of auto companies (and closer to the margin for technology companies).

... 

Based on my estimates, Tesla will generate more than $8 billion in operating income by year 10, making it more profitable than all but three other automobile companies today (Toyota, Volkswagen and BMW).  

So TSLA is assumed to become one of the most profitable companies in the industry.  That seems pretty aggressive, no?  Especially considering that if it wasn't for using non-GAAP revenues (a sign that the company is really just manufacturing good news for their earnings press releases) they wouldn't be anywhere close to profitability. 

What this all means is that even if the stock price falls 60%, it still is not anywhere close to cheap as you would need historically optimistic assumptions just to justify that stock price, much less show any upside.

We have an equity bubble in this country thanks to Ben Bernanke and the Fed printing press.  Eventually it will pop and TSLA investors are going to get creamed.  Unless of course they find a greater fool to sell their paper to before then.

The Only Way the US Wins in Syria is if a Western Style Democracy Takes Hold and That Isn't Going to Happen

I've been on vacation the last couple of weeks, in Israel, and I've been really amazed how people have gone so crazy over Syria in the US while I was gone.  Look, I am not for chemical attacks on anyone but why is a chemical attack so much worse than the 100,000+ who have been murdered with good old fashioned guns and knives?  Are we saying that it's only wrong to kill your own people if you don't do it the old fashioned way?

Anyway, what's clear is that this is a no win situation for the US.  What does the US gain by attacking without changing the situation on the ground?  The US will simply look impotent.  And if they do change the situation on the ground, it brings Islamists into power, which is bad for the US and bad for Israel.  Seriously, do we really want to be al-Qaeda's air force?  And what is the probability that a western style democracy takes hold?  Pretty much close to zero.  The only thing that might make sense for us would be to help the Syrian Kurds carve out an autonomous area in Syria, as they are actually our allies.  I doubt this administration would actually do that however as that makes way too much sense for them to do it.  They only make boneheaded foreign policy moves (see the overthrow of Mubarak and their support of a Chavez-like dictator in Honduras among others).

One thing I will have to say about Obama though is that he has done something that few have been able to do, unite the right and left in Israel.  No, they are not united in supporting his move to attack Syria. They are united in thinking that Obama is just not a serious actor on the world stage and he has made a laughingstock of the US by waffling the way he did.  Attack or don't attack but make a decision and stick with it (though honestly I heard about as much support for intervention in Syria there as I do here, almost none).  

What really is the case to risk American lives in Syria?  John Kerry made it sound like this is all going to be like some video game where some soldiers push some buttons and some missiles are shot.  But this is serious business.  Some American child is going to lose their father because of a decision to go into Syria.  And for what?  What interest do we even have there?  You can just as easily argue that it is in our interest to keep Assad in power as it is to overthrow him.  

And as a Soviet immigrant to the US, I have to say I am deeply troubled by the fact that Putin is running rings around a US President.  How bad a President do you have to be to make the Russians look good?  To make Putin look like a reasonable and dependable ally?  Putin has no respect for Obama and it shows.  

According to a former Muslim Brotherhood official, El-Sisi is Jewish and is implementing the Protocols of the Elders of Zion

Tell me again why the Muslim Brotherhood should be allowed to take part in an Egyptian government?  They are Nazis.  All their enemies are always portrayed as Jews and everything bad that happens is because of the Jews.  The Jewish community in Cairo is currently 14 elderly women and yet somehow they had enough power to convince millions of Egyptians to overthrow the Brotherhood.  Anyway, check out this clip of the former Media Secretary to the General Guide of the Muslim Brotherhood spouting the usual anti-semitic conspiratorial nonsense (on al-Jazeera of course):

Is the Real Estate Market Recovery a Mirage?

Today, the existing home sales number was released by the National Association of Realtors.  The number was very positive but ZeroHedge put together a chart to show that the strength doesn't quite make sense in light of mortgage applications plummeting:

There is probably a bit of a delayed reaction here because mortgage applications precede actual sales by a couple of months, so in coming months you would expect sales to start to crater.

Another issue though is that the entire real estate market recovery has been a bit abnormal from the beginning.  The bulk of purchases are not being done by the middle class but by the 1% who have been investing in homes in order to rent them out.  Take a look at this chart from Goldman which used data from multiple sources to triangulate the percent of purchases that are all-cash:

So over half of sales right now are all-cash, which is about 30-40% higher than it was pre-crash.  I don't really know any middle class folks who can afford to buy a decent house all cash (especially with median household income down to 1996 levels), so the bulk of the volume which is causing the market to appear to recover is coming from the 1% either buying personally or through investment companies.  Imagine what happens to the market when they no longer view this trade as profitable and the real estate market has to once again depend on ordinary Americans for growth?

Even the growth attributable to conventional mortgages is a bit suspect.  Mortgage rates for 30 year fixed conventional mortgages have been below 4% for much of the last two years thanks to the unnaturally low rates pegged by the Federal Reserve.  Imagine what would happen to the bulk of these sales if mortgage rates normalized to where they were pre-Great Recession?  Rates were at 6.8% in July of 2006 and at 8.5% in May of 2000.  How many middle class Americans could afford to buy a home at today's prices with those rates?  At some point, we will be going back to them.  And potentially soon if the foreign investors that have been funding our debt continue to turn away as they have been since June.

Camille Paglia on Hillary

Ever since I saw her speak while I was a student at Penn, I've really had the greatest respect for Camille Paglia and her ability to continue to think indepedently.  Anyway, she has some classic lines during her interview with Salon:

Any hopes, fears or predictions for the presidential elections in 2016?

As a registered Democrat, I am praying for a credible presidential candidate to emerge from the younger tier of politicians in their late 40s. A governor with executive experience would be ideal. It's time to put my baby-boom generation out to pasture! We've had our day and managed to muck up a hell of a lot. It remains baffling how anyone would think that Hillary Clinton (born the same year as me) is our party's best chance. She has more sooty baggage than a 90-car freight train. And what exactly has she ever accomplished — beyond bullishly covering for her philandering husband? She's certainly busy, busy and ever on the move — with the tunnel-vision workaholism of someone trying to blot out uncomfortable private thoughts.

I for one think it was a very big deal that our ambassador was murdered in Benghazi. In saying "I take responsibility" for it as secretary of state, Hillary should have resigned immediately. The weak response by the Obama administration to that tragedy has given a huge opening to Republicans in the next presidential election. The impression has been amply given that Benghazi was treated as a public relations matter to massage rather than as the major and outrageous attack on the U.S. that it was.

Throughout history, ambassadors have always been symbolic incarnations of the sovereignty of their nations and the dignity of their leaders. It's even a key motif in "King Lear." As far as I'm concerned, Hillary disqualified herself for the presidency in that fist-pounding moment at a congressional hearing when she said, "What difference does it make what we knew and when we knew it, Senator?" Democrats have got to shake off the Clinton albatross and find new blood. The escalating instability not just in Egypt but throughout the Mideast is very ominous. There is a clash of cultures brewing in the world that may take a century or more to resolve — and there is no guarantee that the secular West will win.

Maybe It's Time for Medical LSD?

A study just came out which suggests that not only are psychedelics not bad for your long term mental health they might actually be good for it.  We are talking about but statistically significant reductions in certain mental health issues and trends in the almost all the rest:

Serious psychological distress. 

Lifetime psychedelic use was not significantly associated with serious psychological distress in the worst month of the past year. Among the specific psychedelics, lifetime psilocybin use (aOR 0.8, p = 0.009), lifetime mescaline use (aOR 0.9, p = 0.04), and past year LSD use (aOR 0.7, p = 0.01) were associated with lower rates of serious psychological distress. 

Mental health treatment. 

Lifetime psychedelic use was not significantly associated with any of the mental health treatment variables. Among the specific psychedelics there were a number of significant associations with lower rate of receiving or needing mental health treatment. Lifetime LSD use was significantly associated with a lower rate of outpatient mental health treatment (aOR 0.9, p= 0.002) and psychiatric medication prescription (aOR 0.9, p = 0.04). Lifetime psilocybin use was significantly associated with a lower rate of inpatient mental health treatment (aOR 0.8, p= 0.04) and psychiatric medication prescription (aOR 0.8, p = 0.00008). Lifetime mescaline/peyote use was significantly associated with a lower rate of psychiatric medication prescription (aOR 0.8, p = 0.004) and needed but did not receive mental health treatment (aOR 0.8, p = 0.001). Lifetime peyote use was significantly associated with a lower rate of psychiatric medication prescription (aOR 0.8, p = 0.01). 

Psychiatric symptom indicators. 

Lifetime psychedelic use was not significantly associated with any of the eight past year psychiatric symptom indicators (aOR range 0.8 to 1.1), and lifetime psychedelic use was significantly associated with a lower rate of one of the seven psychotic symptoms (“Felt a force taking over your mind”: aOR 0.7, p = 0.03). Among the specific psychedelics, lifetime psilocybin use was significantly associated with a lower rate of symptoms of panic attacks (aOR 0.9, p = 0.006), and lifetime mescaline/peyote use was significantly associated with a lower rate of symptoms of agoraphobia (aOR 0.6, p = 0.005). Lifetime psilocybin use and lifetime mescaline/peyote use was significantly associated with a lower rate of one of the specific psychotic symptoms (“Felt a force taking over your mind”: psilocybin, aOR 0.6, p = 0.004; mescaline/peyote: aOR 0.7, p = 0.04). 

Stratified samples. 

In a series of multivariate logistic regression analyzes stratified by gender (male; female), age (18 to 25 years; 26 and older), any past year illicit drug use (no; yes), or lifetime extremely stressful event ever (no; yes) there were no significant associations with lifetime psychedelic use and greater risk of any of the mental health outcomes. Rather, in twelve cases there was an association with psychedelic use and lower rate of various mental health outcomes; however, most of these cases had marginal statistical significance (0.05<p<0.01). Among females, psychedelic users had a lower rate of the psychotic symptom “felt force taking over mind” (aOR 0.5, 95% CI 0.3 to 0.7, p = 0.0005). Among younger people, psychedelic users had a lower rate of symptoms of generalized anxiety disorder (aOR 0.8, 95% CI 0.6 to 1.0, p = 0.03). Among older people, psychedelic users had a lower rate of psychiatric medications (aOR 0.9, 95% CI 0.8 to 1.0, p = 0.03) and the psychotic symptom “felt force taking over mind” (aOR 0.5, 95% CI 0.3 to 0.8, p = 0.01). Among people with past year illicit drug use, psychedelic users had a lower rate of inpatient mental health treatment (aOR 0.7, 95% CI 0.5 to 0.9, p = 0.02), needed mental health treatment (aOR 0.9, 95% CI 0.7 to 1.0, p = 0.04), symptoms of generalized anxiety disorder (aOR 0.7, 95% CI 0.5 to 1.0, p = 0.05), symptoms of agoraphobia (aOR 0.6, 95% CI 0.4 to 1.0, p = 0.05), and symptoms of posttraumatic stress disorder (aOR 0.7, 95% CI 0.5 to 1.0, p = 0.02). Among people without a lifetime extremely stressful event, psychedelic users had a lower rate of symptoms of psychosis (aOR 0.5, 95% CI 0.3 to 0.9, p = 0.03) and the psychotic symptoms “felt force inserting thoughts” (aOR 0.4, 95% CI 0.2 to 0.9, p= 0.02) and “felt force steal thoughts” (aOR 0.3, 95% CI 0.1 to 0.7, p = 0.008).

(h/t Reason)

Everyone is Blaming the Jews for Egypt

I remember last week someone tweeted on Egypt "I wonder how long before people start blaming the Jews for this", well that time has come, despite the fact that there are less than 100 Jews left in Egypt. Everyone from the Turkish Prime Minister to "western diplomats" to the New York Times and Peter Beinart think the Jews or Israel are at least partly to blame for what is going on.  

The Turkish PM, Erdogan, thinks we are completely to blame.  Erdogan, Obama's "most trusted" ally in the middle east.  He says Israel is behind the coup in Egypt.  His proof?  A YouTube video featuring Tzipi Livni and Bernard-Henri Levy from 2011 in which Levy states that the Brotherhood won't have power even if it wins the election (speaking of which, Morsi might not have been elected legitimately).  What is it with Obama and his friends constantly blaming YouTube videos?  It's pretty frightening this guy is the leader of a NATO country with his Nazi-like Jewish conspiracy theories.  Maybe it is time to disband the body and make a new one. This time, though, hold the Turkey.

Then came the New York Times article in which unnamed "western diplomats" blamed Israel for the Egyptian military ignoring calls from the west to make a deal with the Muslim Brotherhood:

The Israelis, whose military had close ties to General Sisi from his former post as head of military intelligence, were supporting the takeover as well. Western diplomats say that General Sisi and his circle appeared to be in heavy communication with Israeli colleagues, and the diplomats believed the Israelis were also undercutting the Western message by reassuring the Egyptians not to worry about American threats to cut off aid.

The damage to US, Israeli and Egyptian interests from that one paragraph cannot be discounted.  This completely plays into the Muslim Brotherhood narrative that El-Sisi is just an Israeli stooge and given the prevalent anti-semitism among the Egyptian people only increases the chance that the military might, in turn, be overthrown. Israel can only support Egypt from the shadows for that very reason.  That said, blaming Israel for what happened is pretty ludicrous.  El-Sisi is perfectly aware that he and the Muslim Brotherhood is engaged in an existential struggle and so any ground he gives up puts the axe closer to his neck.

And then there is Peter Beinart who strangely blames the American Israel Public Affairs Committee (AIPAC) for taking Israeli interests into account with regards to Egypt and lobbying for a continuation of aid to the new government.  It's like blaming NAACP for focusing on African Americans or the Sierra Club for focusing on the environment.  What else would AIPAC do especially given that a Muslim Brotherhood regime in Egypt is an existential threat to Israel?  Why the double standard?

What Exactly is the Obama Administration Trying to Achieve in Egypt?

Usually in geopolitics there is some sort of endgame in mind when policy decisions are made.  However, I really can't discern one with this administration when it comes to Egypt, unless of course our policy is to give comfort to the Muslim Brotherhood.  According to Senator Pat Leahy, Obama has just temporarily suspended the disbursement of military aid to Egypt.  What exactly are they trying to achieve with this move?  It only seems to help the Muslim Brotherhood by showing them that the White House is sympathetic to their plight. 

Bret Stephens really puts it well when he writes that the Obama administration has more of an attitude rather than a policy and if you think things through support of the Egyptian military is our best option out of some lousy ones:

Releasing deposed President Mohammed Morsi and other detained Brotherhood leaders may be realistic, but it is not desirable—unless you think Aleksandr Kerensky was smart to release the imprisoned Bolsheviks after their abortive July 1917 uprising.

Restoring the dictatorship-in-the-making that was Mr. Morsi's elected government is neither desirable nor realistic—at least if the millions of Egyptians who took to the streets in June and July to demand his ouster have anything to do with it.

Bringing the Brotherhood into some kind of inclusive coalition government in which it accepts a reduced political role in exchange for calling off its sit-ins and demonstrations may be desirable, but it is about as realistic as getting a mongoose and a cobra to work together for the good of the mice.

What's realistic and desirable is for the military to succeed in its confrontation with the Brotherhood as quickly and convincingly as possible. Victory permits magnanimity. It gives ordinary Egyptians the opportunity to return to normal life. It deters potential political and military challenges. It allows the appointed civilian government to assume a prominent political role. It settles the diplomatic landscape. It lets the neighbors know what's what.

And it beats the alternatives. Alternative No. 1: A continued slide into outright civil war resembling Algeria's in the 1990s. Alternative No. 2: Victory by a vengeful Muslim Brotherhood, which will repay its political enemies richly for the injuries that were done to it. That goes not just for military supremo Abdel Fattah Al Sisi and his lieutenants, but for every editor, parliamentarian, religious leader, businessman or policeman who made himself known as an opponent of the Brotherhood.

...

There's also an argument that since our $1.3 billion in military aid hasn't gotten Gen. Sisi to take our advice, we may as well withdraw it. But why should we expect him to take bad advice? Politics in Egypt today is a zero-sum game: Either the military wins, or the Brotherhood does. If the U.S. wants influence, it needs to hold its nose and take a side.

As it is, the people who now are most convinced that Mr. Obama is a secret Muslim aren't tea party mama grizzlies. They're Egyptian secularists. To persuade them otherwise, the president might consider taking steps to help a government the secularists rightly consider an instrument of their salvation. Gen. Sisi may not need shiny new F-16s, but riot gear, tear gas, rubber bullets and Taser guns could help, especially to prevent the kind of bloodbaths the world witnessed last week.

Ted Cruz's Dad Rocks

I finally got a chance to view his speech at the Family Leadership Summit.  Talk about a passionate speaker:

Some Simple Math Suggests that Increasing Bond Yields Have Reduced the Fair Value of Stocks by 30%

With bond yields spiking to 2 year highs thanks to mass selling by foreign investors (and I'm sure plenty of US ones as well) a simple exercise in terms of what higher yields do to equity valuations is probably in order.  Check out Brett Arends' very interesting piece in which simple math suggests that fair value for the stock market has just been reduced by 30%.  And if yields normalize to their long term level of 4.5%, fair value will be reduced by 50%:

Imagine a share of stock that will pay you $100 in dividends every year for the next, say, 100 years. How much is that worth in today's money? How much would you pay for that stock? To know the value, you have to apply a relevant "discount rate" — in layman's terms, and with some oversimplification, you have to know what interest rate you could get on the money if you didn't buy the stock.

In May, you knew you could earn 1.6% a year, at least for the next 10 years, if you left your money in ten-year Treasury notes. Applying a 1.6% discount rate to our stream of $100 dividends produces a value of $4,972. In other words, that's how much that theoretical stock would be worth, in today's money, if we use a discount rate of 1.6%.

Hike that discount rate to 2.7% — the interest rate on the Treasury note today — and that value collapses by nearly a third, to $3,445. Hike the discount rate to 4.5% — a normal rate on the Treasury — and the value halves to $2,240.

To put this in very simple logic: The Federal Reserve has been suppressing interest-rates to boost the economy. That suppression artificially hiked the value of the stock market, by a simple mathematical equation. Now that suppression is coming to an end, interest rates can be expected to rise. That rise ought — again, by a simple mathematical equation — to reduce the value of the stock market. Dramatically.

You can play with the numbers. I've applied different discount rates, adding in an 'equity risk premium' for the extra return stock-market investors want to earn above risk-free Treasury bonds. I've assumed the stream of dividends will grow year after year. None of that changes the direction of the math. (Indeed, if we assume dividends will rise over time, which seems reasonable, the math gets even worse — higher interest rates reduce the valuations by even greater amounts). Taking the ten-year Treasury rate from May's 1.6% to a "normal" 4.5% adds about three percentage points to the discount rate. Mathematically, that can slash the valuation of the stock market by 30% to 50% under basic financial calculations.

Dan Greenfield: Crush the Muslim Brotherhood

Can't argue with his points:

In or out of power, the Brotherhood is murderous, intolerant and ruthlessly bent on absolute power.

Responding to the carnage with new calls for an end to foreign aid is an explicit form of collaboration in the Muslim Brotherhood's atrocities and the surest way to ensure that they will be repeated. Egypt may deserve to lose its foreign aid, but issuing such calls now is handing a victory to the world's worst terrorist organization and giving it every incentive to up the body count next time around.

The calls for Brotherhood participation in an Egyptian government are senseless insanity. Is there room for a movement that seeks nothing but death in the ranks of any government? Should murderous madness on such a scale really be the currency that purchases power? Should the burners of churches and the torturers of peaceful protesters be rewarded with power a second time?

Western governments fear escalation in Egypt. And that fear is the secret weapon of every terrorist group. The terrorist groups always escalate, spending their currency of blood cheaply to break the will of their enemies. The only way to break that cycle is to out-escalate them by showing that their currency of blood is worthless because the people and governments they are terrorizing will not be bent under its terrible weight.

Wars aren't won through de-escalation, but through escalation. America lost in Afghanistan because it wasn't willing to fight harder and bloodier than the Taliban. The Egyptian government has shown that it is willing to match the Muslim Brotherhood's ruthlessness without backing down.

To reward the courage of the Egyptian soldiers and police who fought the Muslim Brotherhood in the streets by forcing their government to stand down and surrender to the terrorists who nearly turned Egypt into a second Iran is an unmitigated crime. It is a crime whose consequences will not only be felt by the women and Christians of Egypt, but by all of us.

Are 2,776 Rule Violations by the NSA "Consistent with the Constitution and Rule of Law"?

Back in June, Obama had this to say about the NSA snooping on innocent Americans:

This program, by the way, is fully overseen not just by Congress but by the FISA Court, a court specially put together to evaluate classified programs to make sure that the executive branch, or government generally, is not abusing them and that they're — it's being out consistent with the Constitution and rule of law.

Then comes this bombshell in the Washington Post today:

The NSA audit obtained by The Post, dated May 2012, counted 2,776 incidents in the preceding 12 months of unauthorized collection, storage, access to or distribution of legally protected communications. Most were unintended. Many involved failures of due diligence or violations of standard operating procedure. The most serious incidents included a violation of a court order and unauthorized use of data about more than 3,000 Americans and green-card holders.

...

The May 2012 audit, intended for the agency's top leaders, counts only incidents at the NSA's Fort Meade headquarters and other ­facilities in the Washington area. Three government officials, speak­ing on the condition of anonymity to discuss classified matters, said the number would be substantially higher if it included other NSA operating units and regional collection centers.

So 2,776 rule violations by the NSA in one year is really just at ONE center and the actual number of rule violations by the NSA is substantially higher.  Considering that even if they followed the rules perfectly the entire program is still a violation of the constitution and rule of law this number of violations is incredibly alarming.  They have absolutely no respect for our privacy or really anything at all.  

And can you imagine if your business or company violated the law thousands of times a year, what do you think would happen to you?  You'd have the FBI breaking down your door and arresting everyone involved.  But somehow, thousands of rule violations, impacting the privacy of countless innocent Americans leads to no major repercussions.  Is it constitutional for their to be one set of rules for taxpaying citizens and another for the looters in power?  That doesn't sound like America to me.

Obama is Messing Egypt Up So Badly that the Military Ruler Refused to Take His Call

Obama clearly doesn't know what he is doing.  First let's start with his lame audio-only remarks he made today from Martha's Vineyard (I guess he didn't want to be seen giving a speech in golf gear) on Egypt.  He acts like there is really no difference between the current regime and the Muslim Brotherhood it overthrew when one is a natural ally and one is bent on our destruction and the destruction of the State of Israel (and its people, wherever they may live).  There is a huge difference!  Both in objective terms and in terms of our interests.  See how he minimizes their dictatorial actions from when Morsi was in power:

While Mohamed Morsi was elected President in a democratic election, his government was not inclusive and did not respect the views of all Egyptians.  We know that many Egyptians, millions of Egyptians, perhaps even a majority of Egyptians were calling for a change in course. 

Really?  Not being inclusive is their biggest crime?  That's a bit light of a touch isn't it?  Since when is any democratically elected government truly inclusive?  The Obama regime from 2009-2011 certainly wasn't when they had both houses of Congress and chose to cram Obamacare down our throats.  The Muslim Brotherhood wasn't just "not inclusive" they were actively persecuting Coptic Christians, free-thinking journalists and anyone else who dared oppose them.  They usurped power from all other branches of Government, making Morsi effectively a dictator.  "Not inclusive" just doesn't even come close to cutting it as a description of what they did.  

Obama, of course, also makes sure that you know that Morsi was democratically elected and the second revolution may not have been the will of the majority of the people.  He seems to be very diplomatically taking the Muslim Brotherhood line and that is exactly NOT what he should be doing.

Then this is my favorite part, which is completely tone deaf considering the recent NSA scandal:

We oppose the pursuit of martial law, which denies those rights to citizens under the principle that security trumps individual freedom, or that might makes right. 

You oppose the principle that security trumps individual freedom?  Then what do you call the NSA spying on EVERY innocent American?

And now the best part:

We don't take sides with any particular party or political figure. 

Really?  Why not?  Isn't it your job to take sides especially when facing a clear choice?  Isn't it pretty clear that a pro-Western, pro-Israeli military government is preferable to a government run by the Muslim Brotherhood?   The Egyptian military should be lauded for their actions, not condemned.  They are fighting not only for their lives but for the freedom of generations of Egyptians, keeping them free from a theocratic dictatorship like Iran's taking root in a country with 85 million people.

No wonder Egyptian leader El-Sissi refused to take Obama's call.  He knew that nothing good could come from taking it:

When the clashes between Egyptian security forces and pro-Morsi protesters were at their peak in Cairo Wednesday, Aug. 14 – 525 dead and 3,700 wounded to date - President Barack Obama put in a call to Egypt's strongman, Defense Minister Gen. Abdel-Fattah El-Sissi, DEBKAfile's intelligence sources report.  The US president wanted to give the general a dressing-down much on the lines of the call he made to former president Hosni Mubarak in February 2011 at the high point of the Arab Spring Tahrir Sq demonstrations against his rule, namely:  Stop repressing the protesters and firing live ammunition. Step down!

 When Mubarak asked for a three or four days' grace to break up the massed rally, Obama shot back that he has to quit NOW!

And indeed, on Feb. 11, the army announced the president's resignation.

Realizing what was coming, Gen. El-Sissi decided not to accept President Obama's call, our sources report. The Egyptian officials who received it informed the US president politely that the right person for him to address was Egypt's interim president Adly Mansour and they would be glad to transfer the call to him. The White House callers declined.

This anecdote shows that the military strongman is not only determined to avoid the pitfalls which brought Mubarak down but is equally determined to keep the US administration from interfering in his plans for driving the Muslim Brotherhood out of Egyptian politics.

...

DEBKAfile's sources report that harsh international condemnation of Gen. El-Sissi's crackdown will do more harm than good. The backlash will come in three forms:

1. The Muslim Brotherhood will be encouraged to pursue increasingly extreme measures to fight the Egyptian army in the expectation of international applause.

2. The generals will be encouraged to escalate their steps for repressing the Brotherhood.

3. The Saudis and the Gulf Emirates will redouble their support for the Egyptian general and his campaign against the Brotherhood. This will widen the rift between those Arab rulers and the Obama administration.

Our intelligence sources also disclose that, while President Obama was trying to get through to Gen. El-Sissi, the general was on the phone with Prince Bandar, Director of Saudi Intelligence.

On July 31, Bandar arrived in Moscow and was immediately received by President Vladimir Putin for a conversation that lasted four hours. The Saudi prince next received an invitation to visit Washington at his earliest convenience and meet with President Obama.

Bandar has still not responded to that invitation.