Sunday, March 31, 2013

David Stockman: We're Doomed

An epic op-ed in the New York Times from Reagan's old Budget Director:

So the Main Street economy is failing while Washington is piling a soaring debt burden on our descendants, unable to rein in either the warfare state or the welfare state or raise the taxes needed to pay the nation’s bills. By default, the Fed has resorted to a radical, uncharted spree of money printing. But the flood of liquidity, instead of spurring banks to lend and corporations to spend, has stayed trapped in the canyons of Wall Street, where it is inflating yet another unsustainable bubble. 
When it bursts, there will be no new round of bailouts like the ones the banks got in 2008. Instead, America will descend into an era of zero-sum austerity and virulent political conflict, extinguishing even today’s feeble remnants of economic growth. 
THIS dyspeptic prospect results from the fact that we are now state-wrecked. With only brief interruptions, we’ve had eight decades of increasingly frenetic fiscal and monetary policy activism intended to counter the cyclical bumps and grinds of the free market and its purported tendency to underproduce jobs and economic output. The toll has been heavy. 
As the federal government and its central-bank sidekick, the Fed, have groped for one goal after another — smoothing out the business cycle, minimizing inflation and unemployment at the same time, rolling out a giant social insurance blanket, promoting homeownership, subsidizing medical care, propping up old industries (agriculture, automobiles) and fostering new ones (“clean” energy, biotechnology) and, above all, bailing out Wall Street — they have now succumbed to overload, overreach and outside capture by powerful interests. The modern Keynesian state is broke, paralyzed and mired in empty ritual incantations about stimulating “demand,” even as it fosters a mutant crony capitalism that periodically lavishes the top 1 percent with speculative windfalls. 
Without any changes, over the next decade or so, the gross federal debt, now nearly $17 trillion, will hurtle toward $30 trillion and soar to 150 percent of gross domestic product from around 105 percent today. Since our constitutional stasis rules out any prospect of a “grand bargain,” the nation’s fiscal collapse will play out incrementally, like a Greek/Cypriot tragedy, in carefully choreographed crises over debt ceilings, continuing resolutions and temporary budgetary patches. 
The future is bleak. The greatest construction boom in recorded history — China’s money dump on infrastructure over the last 15 years — is slowing. Brazil, India, Russia, Turkey, South Africa and all the other growing middle-income nations cannot make up for the shortfall in demand. The American machinery of monetary and fiscal stimulus has reached its limits. Japan is sinking into old-age bankruptcy and Europe into welfare-state senescence. The new rulers enthroned in Beijing last year know that after two decades of wild lending, speculation and building, even they will face a day of reckoning, too. 
The United States is broke — fiscally, morally, intellectually — and the Fed has incited a global currency war (Japan just signed up, the Brazilians and Chinese are angry, and the German-dominated euro zone is crumbling) that will soon overwhelm it. When the latest bubble pops, there will be nothing to stop the collapse. If this sounds like advice to get out of the markets and hide out in cash, it is.

Wednesday, March 27, 2013

Why the Hell did Obama Make Bibi Apologize to Turkey?

So Turkish terrorist supporters attack Israeli soldiers armed with paint ball guns and Israel is made to apologize to Turkey?  And Turkey now says this is a victory for Hamas?  Why?  At first I was pleasantly surprised by the Obama visit as he finally acknowledged the Jewish people's historic ties to the area but now it looks like it's a disaster, hurting Israeli prestige majorly.  Here is Caroline Glick on the apology:

US President Barack Obama was on the line when Israeli Prime Minister Benjamin Netanyahu called Turkish Prime Minister Recep Tayyip Erdogan to apologize for the deaths of nine Turkish protesters aboard the Turkish ship Mavi Marmara on May 31, 2010.

For those who don't remember, the Mavi Marmara was a Turkish ship that set sail in a bid to break Israel's lawful maritime blockade of Hamas-controlled Gaza's coastline. When Israeli naval commandos boarded the ship to interdict it, passengers on deck attacked them – in breach of international maritime law. Soldiers were stabbed, bludgeoned and thrown overboard. In a misguided attempt to show the good faith of Israeli actions, the naval commandos were sent aboard the ship armed with paintball guns. As a consequence, the soldiers were hard-pressed to defend themselves. In the hand-to-hand combat that ensued, nine of the Turkish attackers were killed.


By 2010, Prime Minster Erdogan had a long track record of anti-Israel actions. Indeed, by 2010, Erdogan had effectively destroyed the strategic alliance Israel had developed with Turkey since 1949. In 2006, Erdogan was the first major international leader and NATO member to host Hamas terror chief Ismail Haniyeh. The same year he allowed Iran to use Turkish territory to transfer weaponry to Hezbollah during the Second Lebanon War.
In 2008, Erdogan openly sided with Hamas against Israel in Operation Cast Lead. In 2009, he called President Shimon Peres a murderer to his face.

By the time the flotilla to Gaza was organized, Erdogan had used Turkey's position as a NATO member to effectively end the US-led alliance's cooperative relationship with Israel, by refusing to participate in military exercises with Israel.

Following the incident, rather than apologize for his allied NGO's gross violation of international maritime law and acts of wanton aggression against Israeli forces, Erdogan doubled down. He removed Turkey's ambassador from Israel. He demanded an apology as a condition for the restoration of relations. He had his court system open show trials against IDF soldiers and commanders. He stepped up his exploitation of Turkey's NATO membership to block substantive military cooperation between Israel and NATO. And he cultivated close economic and political ties with Iran and the Muslim Brotherhood.

At the same time, Erdogan has cultivated close ties with President Barack Obama and his administration, and has spent millions of dollars on lobbying efforts on Capitol Hill to neutralize congressional opposition to his hostile behavior towards Israel and the US.

For three years Israel refused to apologize to Turkey. And then Obama came to Israel for a visit, and before he left the country, he had Netanyahu on the phone with Erdogan, apologizing for the loss of life of the Turkish protesters who stabbed and bludgeoned Israeli soldiers. Netanyahu also offered restitution to their families.


By apologizing for responding lawfully to unlawful aggression against the State of Israel and its armed forces, Israel did two things. First, Israel humiliated itself and its soldiers, and so projected an image of profound weakness. Due to this projected image, Israel has opened itself up to further demands for it to apologize for its other responses to acts of unlawful war and aggression against the state, its territory and its citizens from other aggressors. The Arab League like most of its member nations is in an official state of war with Israel. The Arabs wish to see Israel destroyed.


By forcing Israel to apologize to Turkey, Obama effectively forced Israel to acknowledge that it is in the wrong for lawful actions by its military taken in defense of international law and of Israel's national security. That is, Obama sided with the aggressor – Turkey – over the victim – Israel. And in so doing, he signaled, deliberately or inadvertently, to the rest of Israel's neighbors that the US is no longer siding with Israel in regional disputes. As a consequence, they now feel that it is reasonable for them to press their advantage and demand further Israeli apologies for daring to defend itself from their aggression.

Whether or not Obama meant to send this message, this is a direct consequence of his visit. Now Israel needs to consider its options for moving forward. For Israel's allies in Congress, it is important to take a strong position on the issue. Members of Congress and Senate would do well to pass resolutions stating their conviction that Israel, while within its own rights to apologize, operated with reasonable force and wholly in accordance with international law in its interdiction of the Mavi Marmara, which was on an illegal voyage to provide aid and comfort for an internationally recognized terrorist organization in contravention of binding UN Security Council resolution 1379 from September 2001, which prohibits the proffering of such aid. Congress should enjoin the administration to issue a declaration noting US support for Israel in its actions to defend itself from aggression in all forms, including from Hamas-controlled Gaza.

Second, Israel should scale back the level of military assistance it receives from the US. While Obama was in Israel, he pledged to expand US military assistance to Israel in the coming years. By unilaterally scaling back US assistance and developing its domestic military industries, Israel would send a strong signal to its neighbors that it is not completely dependent on the US and as a consequence, the level of US support for Israel does not determine Israel's capacity to continue to defend itself.

On a wider level, it is important for Israel to develop the means to end its dependency on the US. Under Obama, despite the support of the great majority of the public, the US has become an undependable ally to Israel, and indeed to the rest of the US's allies as well. The more quickly Israel can minimize its dependence, the better it will be for Israel, for the US and for the stability of the region. The apology to Turkey was a strategic error. To minimize its consequences, Israel must boldly assert its interests in Syria, Iran, and throughout the region.

And Turkey's actions since the apology make it clear that this was all a mistake as the Times of Israel reports:

On Tuesday, Erdogan outlined Turkey's conditions for full normalization with Israel. In addition to an apology over the Marmara episode and compensation to the victims, Turkey was also insisting that Israel lift its naval blockage of Gaza, he told lawmakers in the Turkish parliament.

The Turkish leader called the Israeli apology a "victory" for his country and its allies in the region, including Hamas leader Khaled Mashaal, the Turkish newspaper Hurriyet reported. Erdogan also noted that his phone conversation with Netanyahu had been recorded to make the "process safe." While the apology was initially welcomed as an important first step toward patching up relations, Erdogan on Tuesday said that an Israeli refusal to lift the blockade would be a deal-breaker.

Netanyahu, according to the Prime Minister's Office account of the phone call, did not agree to lift the blockade. Netanyahu told Erdogan "that Israel has already lifted several restrictions on the movement of civilians and goods to all of the Palestinian territories, including Gaza, and added that this will continue as long as the quiet is maintained," Friday's PMO statement said. "The two leaders agreed to continue to work on improving the humanitarian situation in the Palestinian territories."

Israel and Turkey have entered negotiations on a compensation package to the affected families, but these talks hit a snag on Wednesday when it appeared disagreements arose over the sum of payments to the families.

What a complete disaster.  It just boggles the mind that not only does Israel have to apologize but give money to the families of people who were trying to kill Israeli soldiers.  WTF???

How is Cyprus Not Going to Need Another Bailout?

Capital controls for Cyprus were just announced.  Here is a list (as translated by Google):

(A) No cashing checks. Provided that may deposit checks into account.

(B) No non-cash payment or money transfer outside the Republic, except:

(i) payments for commercial transactions within the ordinary activities of the client by presenting documentary evidence. Not require the production of documents for amounts not exceeding € 500.
(ii) payment of salaries of employees working outside the Republic
 (iii) subsistence expenses up to € 10.000 per quarter tuition and persons studying abroad and first-degree relatives of persons who have their habitual residence in the Republic, with the presentation of relevant evidence. Provided that all payments made to the beneficiary.
(iv) Payments or transfers outside the Republic by debit or credit card or prepaid, to € 5.000 per month per person for each institution.
(v) Payments of claims by insurance companies
(vi) or other payments and money transfers is ensured provided that prior approval of the Commission
(C) Any termination filing deadline before the specified end date unless the product will be used to repay the loan within the same institution.
(D) The transport of euro banknotes or foreign currency in excess of the amount of € 3000 or the equivalent in foreign currency per person per trip abroad.
The Director of Customs shall implement this measure.
(E) Financial transaction, payment or transfer, which is not completed before the commencement of this Ordinance, subject to the provisions of this Order restrictive measures.
(F) prohibit a credit institution to perform cashless payments or money transfers that aim to circumvent the restrictive measures.
(G) The restrictive measures apply to all accounts, payments and transfers, regardless of the currency.
Excluding restrictive measures:
(A) All money transferred from abroad to the Republic.
(B) Diplomatic Missions
(C) financial transactions on their own behalf institution
(D) Payments authorized by the Commission ∙
(E) The Republic ∙
(G) The Central Bank. This Order is valid for a period of seven days commencing from the date of publication in the Official Gazette.

Essentially Cyprus banks will be like a roach motel.  Your money can come in but will have severe restrictions for getting out.  So even if you don't have to deal with a haircut, what is your incentive to deposit any money into an already existing bank account in Cyprus?  Wouldn't you just let your money dwindle by paying expenses out of your bank account but not depositing any more money, just to be safe?  Also, the average Cypriot makes about 1,765 Euros per month, I'm sure some scheme will pop up where they will be able to transfer their money off the island using credit, debit or prepaid cards (which have a 3,000 Euro per month limit) and also first degree relatives (10,000 Euros per quarter limit).  And then there is the issue of where the money is going to come from to actually even let Cypriots get paid.  If most businesses just lost between 40-90% of their cash and the economy is in shambles, won't most just go belly up and lay off everyone?  Or move to a barter system?  My guess is that these capital controls won't work and will only incentivize people to stop depositing in their bank accounts leading to the necessity of another bailout, or more preferably, a Cypriot exit from the Euro.  Given the pound of flesh the Germans wanted seems to include vital organs, I'm not sure Cyprus can afford another bailout and will need to get free from the Eurocrats once and for all.

Medicare Has Stopped Paying the Bills for Medical Diagnostic Tests

Just pure bureaucratic ineptitude.  CMS has effectively ended the old system for diagnostic reimbursement without creating a new one.  Now the local carriers need to decide on pricing and are completely unprepared to do so:

The Obama Administration has stopped paying the bills from hundreds of health care companies, and it has nothing to do with sequestration.

This is a story of bureaucratic mismanagement at the Centers for Medicare and Medicaid Services, and the harm it's visiting on the diagnostic testing industry.

At issue is the way that Medicare reimburses everyone from the big laboratory companies such as the Laboratory Corp of America (LH:NYSE) and Quest Diagnostics Inc. (DGX:NYSE), to the molecular diagnostic labs inside academic hospitals, and especially smaller firms that make proprietary tests used by doctors to more effectively target treatments to patients with conditions like cancer.


At issue are molecular diagnostics, used to screen for everything from genetic markers that predict disease to proteins that help diagnose illnesses and guide peoples' response to treatments. These tests are transforming the treatment of cancer, among many other maladies.

The Medicare agency decided to change the way it reimburses these sorts of diagnostic tests. But it's been slow to decide on its new approach. So in the absence of a policy, the Medicare program is simply not paying its bills.


It basically means that the local carriers, which contract with CMS to administer the Medicare program for different regions of the country, now have wide discretion to come up with their own prices. The entire punt gave the local Medicare contractors no time – and no clear direction – on how to assign prices to the different diagnostic codes. The result is that no prices have been established for the vast majority of the marketplace. And so many tests simply aren't being paid for.


Some contractors have not priced anything, such as the Medicare contractor for the market covering Florida. That means diagnostic labs located in markets like Florida aren't getting paid at all. In many cases, Medicare contractors look into setting a price only after they see a lot of claims for the same sort of test.


There's no clear deadline on when this will all get resolved. There's some speculation that when the Medicare contractors submit their 2013 pricing on April 30th, they'll have to declare their prices for these various molecular tests. Once they do, the labs should get paid retroactively. But the April 30th deadline seems soft. This could linger much longer.

There's also a risk for labs that the individual Medicare contractors may decide not to pay for certain codes (and tests) altogether.

Large Russian Depositors Likely Got Their Money Out of Cypriot Banks Without a Haircut

Looks like many of those large Russian depositors, the ones the ECB wanted to punish, probably took their money out of Cypriot bank branches in London and Russia, which remained open.  What this means is that pensioners who have been saving a lifetime and local super market owners will be almost completely wiped out as there won't be enough bank capital left for them to retain almost anything.  From Spiegel:

The central bank now stands accused of not doing enough to control the movement of capital. Transfers for humanitarian aid were permitted which, while certainly an acceptable exception, opened a loophole for abuse. Many are also furious that the bank allowed "special payments," the definition of which was never adequately established.

The Cypriot central bank has defended itself by saying that it was impossible to completely prevent all transactions, despite the account freeze. Much of the money was withdrawn from overseas, where Cyprus had no authority. Branches of Cypriot banks in non-euro-zone countries such as Russia and Britain do not answer to the European Central Bank. Their liquidity is controlled by central banks in those countries.

Such a defense is nothing less than a voluntary admission of impotence. Holders of smaller savings accounts have been unable to access much of their money for almost two weeks, companies have been unable to pay their suppliers and across the country people are concerned that their salaries will not arrive on schedule on the first of the month. Meanwhile, rich businesspeople and those with connections overseas have been able to transfer their money into foreign accounts.

Parliament in Nicosia is suspicious. Lawmakers have demanded that the central bank assemble a list of those customers who withdrew large amounts of money prior to the closure of the country's financial institutions. In particular, parliamentarians want to know if central bank employees or members of the government received early warning and were able to quickly rescue their assets.


Bank customers could suffer for much longer and experts say that those with more than €100,000 in their accounts stand to lose up to 90 percent of their deposits. According to the Greek television station skai, Cypriot banks will remain closed until April 1. And economists forecast a deep recession for Cyprus with high unemployment, comparable to that which has gripped Greece in recent years.

Tuesday, March 26, 2013

Stratfor: Europe's Disturbing Precedent in Cyprus

My mind is still boggled by the Cyprus "bailout" and I'm not the only one:

Since the global financial crisis of the 1920s, all advanced industrial countries -- and many others -- had been operating on a fundamental principle that deposits in banks were utterly secure. They were not regarded as bonds paying certain interest, whose value would disappear if the bank failed. Deposits were regarded as riskless placements of money, with the risk covered by deposit insurance for smaller deposits, but in practical terms, guaranteed by the national wealth.

This guarantee meant that individual savings would be safe and that working capital parked by corporations in a bank was safe as well. The alternative was not only uncertainty, but also people hoarding cash and preventing it from entering the financial system. It was necessary to have a secure place to put money so that it was available for lending. The runs on banks in the 1920s and 1930s drove home the need for total security for deposits.
Brussels demanded that the bailout for Cypriot banks be partly paid for by depositors in those banks. That demand essentially violated the social contract on the sanctity of bank deposits and did so in a country that was a member of the European Union -- one of the world's major economic blocs.


The impact on Cyprus is more than Russian mafia money being taxed. All corporations doing business in Cyprus could have 20 percent of their operating cash seized. Regardless of precisely how the Cypriot banking system is restructured, the fact is that the European Union demanded that Cyprus seize portions of bank accounts from large depositors. From a business' perspective, 100,000 euros is not all that much when you are running a supermarket or a car dealership or a construction company, but this arbitrary level could easily be raised in the future and the mere existence of the measure will make attracting investment more difficult.

The more significant development was the fact that the European Union has now made it official policy, under certain circumstances, to encourage member states to seize depositors' assets to pay for the stabilization of financial institutions. To put it simply, if you are a business, the safety of your money in a bank depends on the bank's financial condition and the political considerations of the European Union. What had been a haven -- no risk and minimal returns -- now has minimal returns and unknown risks. Brussels' emphasis that this was mostly Russian money is not assuring, either. More than just Russian money stands to be taken for the bailout fund if the new policy is approved. Moreover, the point of the global banking system is that money is safe wherever it is deposited. Europe has other money centers, like Luxembourg, where the financial system outstrips gross domestic product. There are no problems there right now, but as we have learned, the European Union is an uncertain place. If Russian deposits can be seized in Nicosia, why not American deposits in Luxembourg?

Friday, March 22, 2013

Can Cyprus Come Up with 40% of Their GDP by Monday?

What is going on in Cyprus really is mindblowing and judging by US equity market actions people seem to think that there will be some last minute solution.  I'm not so sure.  First, there is pretty much no way that Cyprus can come up with 6.7 billion Euros by Monday.  What do you mean 6.7 billion you ask?  You thought it was only 5.8 billion?  Well the powers that be at the Troika decided to up it as "conditions worsened", which is a also a sign that Germany is not just going to back down and simply bailout the country.  Of course they keep talking about a tax on bank deposits but at this point, with 68 billion in deposits, they would have to skim 10% off the top of every bank account in the country.  If they do that, will anyone ever put money in a Cypriot bank again?  So even if they are able to come up with the money, the problem is they won't have much of an economy left afterwards as the banking system completely collapses (and of course they would need another bailout).  They can slow down the collapse by using capital controls like freezing bank accounts and limiting withdrawals, but I don't see how that fixes anything.  And can you imagine what happens to an economy when people aren't allowed access to their money for weeks or months?  They might as well start buying tires now to try to float to Italy or something to escape the collapse (hopefully not Syria).

Rand Paul > Paul Ryan

Rand Paul just released his 2014 Budget Plan and it really is nice to see a budget that you can be proud of.  It makes Paul Ryan look completely overrated and boring (though honestly I have thought that for a while).  Paul Ryan's budget doesn't touch Medicare until it is about to go bankrupt in 2024, doesn't touch Social Security at all and doesn't balance for 10 years (you think we can continue adding to our massive $16 trillion deficit pile for 10 years without a crisis?).  It's no wonder that FreedomWorks gave it a B-.  Conversely, Rand Paul's does a lot of things right (which is why it got an A+ from FreedomWorks):

1.  Achieves a $17 billion surplus in FY2018
2.  Remains in surplus after initial balance, pays off $1.8 trillion of our national debt in 10 yr. window
3.  Includes entitlement reform for Medicare and Social Security
4.  Block-grants Medicaid, SCHIP, foods stamps, and child nutrition
5.  Proposes Social Security reforms to fix trust fund
6. Preserves Medicare by giving all seniors the same health care plan as Members of Congress, starting in 2015
7.  Reduces most discretionary spending to FY2008 levels
8.  Defense: replenishes $126 billion over sequester levels
9.  Freezes foreign aid spending at $5 billion per year (buh-bye aid to Egypt!)
10.  Defunds duplicative or wasteful agencies and programs
11.  Sells off excess federal properties and land
12.  Eliminates the Davis-Bacon prevailing wages provisions
13.  Liquidates government ownership of "bailout" companies
14.  Eliminates the Department of Commerce
15.  Eliminates the Department of Education (preserves Pell grants)
16.  Eliminates the Department of Housing and Urban Development
17.  Eliminates the Department of Energy (transfers nuclear research and weapons to re-established Atomic Energy Commission)
18.  Privatizes the TSA

Obviously there is no chance of this being passed but it's nice to see someone who actually provides a blueprint of how things SHOULD be working.

Wednesday, March 20, 2013

Dianne Feinstein: Syria has crossed a Red Line. Me: So?

The war drums are sounding, this time for an intervention in Syria:

"This is highly classified and we have been advised to be careful with what we say," Sen. Dianne Feinstein (D-Calif.), the chair of the Senate Intelligence Committee, said on CNN.


"I'm told that the White House has been briefed…and the White House has to make some decisions in this. I think the days are becoming more desperate and the regime is more desperate and we know where the chemical weapons are. It's not a secret that they're there and I think the probabilities are very high that we're going into some very dark times. I think the White House needs to be prepared now that both committees have been fully briefed," she said.

House Intelligence Committee chairman Mike Rogers (R-Mich.) concurred.

"I have a high probability to believe chemical weapons were used," he told CNN. "We need that final verification but given everything we know over the last year and a half, I…would come to the conclusion that they are either positioned for use or in fact have been used, and in both of those scenarios I think we need to step up in the world community to prevent a humanitarian disaster."


"Do I believe that they may have configured weapons and used them? Yes. However, we don't know for sure and for certain, I think that will happen within hours if not days, that we'll get some sort of confirmation about chemical weapon use to prove that point," he said. "I think that we are morally obligated to take some action to make sure that they cannot use – that they lose their capability to use their chemical weapons, I think that's incredibly important. "

Rogers said the likeliest action would be a "limited military strike" targeted at the regime's chemical weapons depository.

"If in fact we prove beyond a shadow of doubt that they have used these chemical weapons, I think we are morally obligated to do something I think we're morally obligated to do something about their ability to deliver these weapons," he said. "If that was a limited military strike to do that, I think we're obligated to do that if in fact they've crossed the president's red line of chemical weapons use."

I love the part about a "limited military strike".  Are they going to just hit the big pile of chemical weapons that is under the sign that says "Syrian Chemical Weapons Depot".  My guess is that since the war started, the weapons moved around some so anyone who thinks that all this will take is a one time military strike is daydreaming.  Remember when are Libyan intervention was about stopping the Libyan army advance into Benghazi and not about regime change?  These interventions have a mind of their own and will likely lead to places we don't want them leading.  How, for instance, is a Muslim Brotherhood government in Syria superior to one headed by Assad from our point of view?  Instead of having a regime that has essentially kept the peace (unofficially) with Israel for the last 40 years, we would have one that is calling for Israel's blood on a regular basis.  I'm no fan of him or his father but how exactly is it in our interests to lift a finger to depose him?  And if you think there will be peace in the country, guess again.  Besides reprisals against the Alawite minority and Assad supporters, we will see plenty of infighting between the different rebel groups themselves.  Our intervention isn't even likely to stop the killing.

Also, just going past the argument of whether we should go into Syria or not, I think this "red line" of chemical weapons use is just laughable as a casus belli.  The latest estimates point to 70,000 killed in the Syrian civil war, so why are we getting ready to intervene after 31 people are killed?  Plus, chemical weapons are horrible but let's keep things in perspective.  They were associated with 90,000 deaths and another 1.2 million casualties during World War I.  Whatever was done here was small scale and for all we know was released by the rebels to provoke an international response, there is no evidence of mass use or an intent to kill the entire civilian population or anything.  Plus, from a logical perspective, what difference does it make if you set 31 people on fire or if you kill them with chemical weapons?  It seems that one is okay according to the international community and the other is verboten yet the people are still dead.

An intervention in Syria would serve no purpose for America's interests and really makes no sense.

The Political Strategy Behind Rand Paul's Immigration Plan

I know there are some conservatives who are upset with Rand Paul's immigration plan, calling him a sellout  just like they did after he voted "yes" on Chuck Hagel (despite the fact that he voted to continue the filibuster against him twice).  At the time, I thought then that there was probably something behind that, that he might have voted yes in order to increase the chances that he would get support from someone like Ron Wyden in his battle against Brennan, who was nominated for CIA, who was clearly his ultimate target.  Lo and behold, we get his historic 13 hour filibuster with Ron Wyden joining in and civil libertarian progressives lauding Rand Paul and damning Democrats for not being as supportive as Wyden was.  I know we aren't used to this but Rand Paul seems to be a politician who actually THINKS THINGS THROUGH.

So why did Rand Paul come out with his immigration plan, one that probably has little chance of actually being passed?  Two reasons.  First, if you haven't noticed, Rand Paul has been focusing on his beliefs that many on the left can agree with.  This has given him an enormous amount of positive press from many publications across the political spectrum.  This positive press will likely be the first impression that many voters have of him, and first impressions can be hard to shake.  People's first impressions of Mitt Romney were of an unprincipled stuffy out-of-touch rich guy and no amount of spin or stories of personal charity could change that. Conversely, Rand Paul will look like someone who is inclusive, who fights the establishment of both parties and is highly principled.   It will help him get a pass for some of his beliefs that are decidedly less attractive to the liberal media (i.e. his entire economic and fiscal platform).  Second, and this is probably more a tactic than a strategy, by proposing his own comprehensive immigration reform plan, he now has the cover to vote No on the gang of 8 plan which immediately grants amnesty without border security.  Without his own plan, Rand Paul would have been labelled anti-Latino and anti-immigrant by the MSM, that is much harder to do now, especially after his heart felt speech about growing up amongst immigrants in Texas.

In other words, please stop flipping out about every move that Rand Paul makes, there is a method to it, one that will reap huge benefits down the line.

Banking in Cyprus

(h/t Powerline)

Tuesday, March 19, 2013

Nigel Farage: Get Your Money Out While You Can

Another great one from Nigel Farage on the Cyprus mess (h/t ZeroHedge):

Has the EU Completely Lost It's Mind with This Proposed Cyprus Bailout?

Seriously, I just don't know what the Europeans were thinking.  In case you haven't been following this, they agreed to bailout Cyprus in exchange for a 6.75-9.9% tax on bank deposits.  There is just so much wrong with this on so many levels that it pretty much guarantees that people will lose trust in their banks.  Here are a few:

Cyprus, as part of the EU, has a deposit insurance guarantee, just like the FDIC guarantee in the US of the first $100,000 (or in this case, Euros).  The whole purpose of deposit insurance was to make it so people would trust their banks and take their money out if they got worried about the bank possibly collapsing for whatever reason (bad loans, the economy etc.).  This took money out of people's mattresses and into the financial system at large as the banks would then lend that money to individuals and businesses that wanted to actually do something with that money.  As everyone immediately realized, this is not a wealth tax, it is a wealth tax on wealth deposited in banks.  So what will people do now?  Take their money out of banks because it is unsafe.  They will probably do it in any country where they feel that might have to ask the EU for a bailout.

Banks usually pay depositors interest in order to attract funds.  How can they possibly attract funds if the money deposited goes down?  People don't put their money in the bank for the sake of having a checkbook and ATM access (if you have your money in a mattress or personal safe you have 24/7 access to your cash).  It's to keep their money safe and maybe earn a little off of it.  This proposal drives a knife into the heart of the banking system (at least in Cyprus and probably in other troubled nations) as it makes clear that your money is neither secure nor are you earning any money off of it (quite the opposite).  

I know that people are talking about "moral hazard" and how such punitive actions are justified.  Russia oligarchs looking to escape Russian taxes shouldn't be bailed out by the Germans.  This is exactly the wrong way to look at it as you are punishing people who did nothing wrong nor had anything to do with this crisis.  What unusually risky behavior were people with money deposited in a bank engaging in?  Seems like that is the safest upon safe behavior, behavior that actually benefits the economy at large by making that money available to others through the bank's lending.  They weren't engaged in weird derivatives or triple leveraged CDO's.  They had their money in a friggin bank which is supposed to be safe giving the deposit insurance.  This bailout essentially aims to punish the good guys, the savers who do nothing wrong.  Let the Russian government worry about whether the Russians who had their money in the banks were evading taxes (considering that Russian government controlled entities also had money in Cypriot banks, it seems the Russian government itself is fine with it).  

Luckily the Cypriot government has done the right thing so far and not a single member of parliament voted for this scheme to tax savings.  The vote was 0-36 with 19 abstentions.  It's possible that the Germans made this deal so onerous that Cyprus would actually reject it and send a message to everyone that the era of bailouts is over.  But I wonder what that does to Portugal, Spain and Italy in the coming months.  Probably nothing good.

Friday, March 15, 2013

Another Blow To the Surveillance State

I never really knew what National Security Letters were before (and are they friggin scary), but luckily it looks like a judge has deemed them unconstitutional (appeal is pending of course).  Essentially the government could get a ton of personal information on you and the ISP providing it would not only have to comply but would not be allowed to tell you, or anyone else, about it.  The government even counter-sued a company who went to court over an NSL for "challenging its authority".  Seriously Orwellian :

Ultra-secret national security letters that come with a gag order on the recipient are an unconstitutional impingement on free speech, a federal judge in California ruled Friday.

U.S. District Judge Susan Illston ordered the government to stop issuing so-called NSLs across the board, in a stunning defeat for the Obama administration's surveillance practices.


The telecommunications company received the ultra-secret demand letter in 2011 from the FBI seeking information about a customer or customers. The company took the extraordinary and rare step of challenging the underlying authority of the National Security Letter, as well as the legitimacy of the gag order that came with it.

Both challenges are allowed under a federal law that governs NSLs, a power greatly expanded under the Patriot Act that allows the government to get detailed information on Americans' finances and communications without oversight from a judge. The FBI has issued hundreds of thousands of NSLs over the years and has been reprimanded for abusing them — though almost none of the requests have been challenged by the recipients.

After the telecom challenged the NSL, the Justice Department took its own extraordinary measure and sued the company, arguing in court documents that the company was violating the law by challenging its authority.


NSLs are written demands from the FBI that compel internet service providers, credit companies, financial institutions and others to hand over confidential records about their customers, such as subscriber information, phone numbers and e-mail addresses, websites visited and more.

NSLs are a powerful tool because they do not require court approval, and they come with a built-in gag order, preventing recipients from disclosing to anyone that they have even received an NSL. An FBI agent looking into a possible anti-terrorism case can self-issue an NSL to a credit bureau, ISP or phone company with only the sign-off of the Special Agent in Charge of their office. The FBI has to merely assert that the information is "relevant" to an investigation into international terrorism or clandestine intelligence activities.

Former Clinton Chief of Staff Attacks Obama's Secretive Drone Policy

John Podesta makes the point that there should be nothing secret about the legal justification the White House is using for drone strikes:

The White House is still bobbing and weaving on whether to share with Congress the legal opinions and memorandums governing targeted killing, which include the legal justification for killing U.S. citizens without trial.

The Obama administration is wrong to withhold these documents from Congress and the American people. I say this as a former White House chief of staff who understands the instinct to keep sensitive information secret and out of public view. It is beyond dispute that some information must be closely held to protect national security and to engage in effective diplomacy, and that unauthorized disclosure can be extraordinarily harmful. But protecting technical means, human sources, operational details and intelligence methods cannot be an excuse for creating secret law to guide our institutions.

In refusing to release to Congress the rules and justifications governing a program that has conducted nearly 400 unmanned drone strikes and killed at least three Americans in the past four years, President Obama is ignoring the system of checks and balances that has governed our country from its earliest days. And in keeping this information from the American people, he is undermining the nation's ability to be a leader on the world stage and is acting in opposition to the democratic principles we hold most important.

This is why I say, respectfully: Give them up, Mr. President.

Begin by fully sharing with the congressional committees that have jurisdiction all of the documents used by your administration to legally substantiate and govern the targeted killing program, including the justification for targeting U.S. citizens. The law that directs our government's activities should not be kept secret.

All branches of the people's government have the right to know the rules and standards under which the other branches act. Congress has the power to oversee the conduct of the executive branch, and lawmakers must be permitted to use it. As Woodrow Wilson wrote: "The informing function of Congress should be preferred even to its legislative function." Appropriate congressional oversight is critical in building long-term credibility with the public across the political spectrum for the actions the administration undertakes in the people's name.

This isn't to say that the executive branch is obligated to disclose information on operational details or case-specific profiles that are, deservedly, highly classified. But that information can be redacted without undermining the public's understanding of the legal justification on which the government's actions are based.

The American people have the right to know the laws they live under.

2-Year-Old in Critical Condition After Savage Palestinian Rock Attack

A savage rock attack by Palestinians has left a cute 2-year-old girl in critical condition.  The same group of rock throwers also attacked another car with a 1 year old in it, injuring the baby, though thankfully not nearly as seriously.  Animals:

A woman and her three young daughters were wounded on Thursday when Palestinians hurled rocks onto their vehicle, causing their car to swerve off the road and collide with an oncoming truck. By Friday morning, 10 Palestinians from a nearby village had been arrested and taken into custody for questioning. 

One of the daughters, 2-year-old Adele, was in critical condition while the mother, Adva Biton, in her 40s, and two other daughters — Avigail, 4, and Naama, 6 — were moderately injured in the crash. Another daughter, 8, was not in the car. Adva Biton is a doctor of chemistry and works as a lecturer at several academic institutions. 
Two crowded buses were also targeted by the Palestinian rock throwers on Thursday, causing several injuries. A police patrol unit was summoned to the scene, but while en route to the bus, it received the call to rush to the scene of the crash in which Adva Biton and her girls were injured. 
Firefighters and emergency health services were summoned to the scene to provide first aid and rescue services. They found the girls trapped inside the vehicle, with varying degrees of injuries."Two firefighting teams arrived at the scene and began rescue efforts, which turned out to be complex," a firefighter at the scene said. "There were two girls in the back seat, aged 4 and 6, and we were able to extricate them quickly. The driver was trapped, as was the toddler strapped into a car seat in the front seat. The teams had to perform intricate extrication maneuvers, under difficult conditions and while making every effort not to further harm the driver or the toddler." 
Adele Biton was hospitalized in critical condition at Rabin Medical Center in Petach Tikvah, but was later transferred to the adjacent Schneider Children's hospital. The two older girls were hospitalized at Sheba Medical Center in Ramat Gan and at Rabin Medical Center. 
Upon receiving news of the incident, the girls' father rushed between hospitals to be with his wife and daughters. 
"The 2-year-old baby is in critical condition. We are not giving up. We are doing everything in our power to save her. We are optimistic," Dr. Oleg Kaminsky, a senior doctor at Rabin Medical Center, said Thursday. 
The girls' grandmother said, "They come over twice a week, every week. We ate and laughed, we had a good time together. I asked them to stay a little longer. After they left, my oldest son told me that he heard on the news that there had been a terror attack. I tried to call the house and their cell phone but there was no answer. I had a bad feeling. We then drove toward Yakir [near Ariel, where the Biton family lives] on the road, and I saw the accident. I was blown over. I said, 'Adele is gone,' because I knew she was in the front seat. I'm glad that at least the eldest daughter wasn't with them." 
Police officers and IDF troops combed the area in search of the perpetrators, focusing mainly on the nearby Palestinian village of Kif al-Hares. The police have yet to question the driver, and they have been careful not to rule the accident as directly caused by rock throwing. But judging from the sequence of events and the evidence on the road, it seems likely that the driver was hit by a rock, or lost control over the vehicle because of the barrage of rocks. 
Several minutes before the crash, rocks were also hurled at another Israeli vehicle, shattering the windshield. The driver, a resident of Eli, and his 1-year-old son were lightly wounded.

Wednesday, March 13, 2013

Obama Administration Continues to Refuse to Take Britain's Side in Falklands Dispute

It's really quite amazing that despite the recent Falklands referendum, where 99.8% voted to remain under British sovereignty (with 92% turnout) that Obama continues to remain neutral in the dispute with Argentina.  How can he not stand by one of our closest allies.  It's not like the Falklands are an "occupied" territory with an indigenous population suffering under the yolk of colonialism.  What exactly is stopping him?  Why even throw the semi-dictatorial government in Argentina any sort of bone?  But that is exactly what he seems to be doing.  Check out this transcript from the latest State Department briefing:

QUESTION: Yeah. What do you think about the results of this? Do you think that the three people who voted against should get their way and that you should – you'll start encouraging the Brits to hand over the islands to the Argentines, or what do you think?

MS. NULAND: Well, we take note of the results of the recent democratic referendum in the islands, where the residents voted to retain the islands' current political status as a British overseas territory. The residents have clearly expressed their preference for a continued relationship with the United Kingdom. That said, we obviously recognize that there are competing claims. Our formal position has not changed. We recognize the de facto U.K. Administration of the islands, but we take no position on sovereignty claims.

QUESTION: So you don't think that this referendum enhances the – or augments the British claim?

MS. NULAND: What we have said is that the residents have clearly expressed themselves and expressed their will, but we also acknowledge the competing claims.

QUESTION: Well, I'm sure, but you do agree with the principle of self determination? You do agree with that, correct?

MS. NULAND: Let me say it one more time, that the residents have expressed their clear preference. We acknowledge that there are conflicting claims, and we recognize the U.K. de facto administration.

QUESTION: Can you explain to me why it is that on this issue you refuse to give the Brits any leeway? I mean, they are your closest ally, arguably. And you're just – you've just refused to – all they're asking for – they're not asking for much here. They're just asking you to recognize the vote. And if you do agree with the principle of self determination, I don't understand why it wouldn't – this wouldn't affect your policy.

MS. NULAND: And as I said, we've been very clear about what we see in this referendum and the will that's been expressed by the people of the island, but that doesn't change the fact that there are competing claims. Our own legal position has not changed.

QUESTION: So are you going to now take a look at your position and perhaps review it going further down the line?

MS. NULAND: Again, I think I just stated where we are. I don't have anything further to announce.

QUESTION: So no change in the U.S. position?

MS. NULAND: As I said, conflicting claims, but we recognize the de facto U.K. Administration of the islands. We don't take any position on sovereignty claims. We do think it's important for the parties to continue to have – to be constructive in their approach and focus their own efforts on a resolution.

QUESTION: So would you consider this referendum a failure then? Because part of the reason for holding it was to demonstrate to the world that the people who live in the Falkland Islands want to remain British and to validate that position before international bodies and other governments. If the United States, which, as Matt said, is the closest ally of Britain, is not going to change its longstanding neutrality on this position, then by definition the referendum has failed to convince you of that.

MS. NULAND: Well, as I said, we have been very straight up here about acknowledging what happened in this referendum, which is that the residents have expressed their preference. But with regard to our legal position, it is as I stated.

Monday, March 11, 2013

Terrorist Defense Attorney Tries to Exclude Jews from Jury

I'm outraged by this but I have to say I find it somewhat ironic/funny that a guy named Cohn tries to convince a judge that having Jews on the jury (a jury selected by a judge named Levy) would be unfair because Jews couldn't be impartial in a terror case:

"Given that there's going to be inflammatory testimony about Jews and Zionism, I think it would be hard for Jews to cast aside any innate antipathy," said Cohn, who is Jewish.

"The American Jewish community is heavily aligned with Israel and Zionism. Here is a guy who is a Muslim, who is opposed to those things."

The subject of the controversial ban first arose at a recent court hearing.

"Your Honor . . . as you know, I'm not wild about having Jews on the jury in this case," Cohn told Brooklyn federal Judge Eric Vitaliano in February.

Federal prosecutors William Sarratt and James Loonam reacted with alarm.

"I don't think Judge [Robert] Levy will be ready to violate the Constitution and exclude people from the jury on the basis of their religious beliefs," Sarratt told the judge.

Syrian Rebels Vow to "Liberate" Golan Heights

Check out this article in Israel Hayom as well as the video posted by Syrian rebels who, while speaking in an area adjacent to Israel, vow to take over the Golan Heights while shooting their guns in the air.  And of course there is also a report that the US is providing training to Syrian rebels.  I guess we don't learn from the past.:

In a video published online, a rebel fighter, filmed against the backdrop of the Golan Heights, said "we are in the occupied Golan Heights, which the traitor Hafez Assad sold to Israel 40 years ago. These lands are blessed and the despicable Assad family promised to liberate them, but for 40 years the Syrian army did not fire a single bullet. We will open a military campaign against Israel. We will fire the bullets that Assad did not and we will liberate the Golan." 
A spokesman for the Foreign Ministry has voiced his concerns about the potential for radical Sunni elements to take power in a post-Assad Syria. 
"There is a great concern that uncontrolled elements at the service of extremist ideas will manage to take over smaller or bigger separate territories inside the Syrian borders,” Yigal Palmor told the Turkish Hürriyet Daily News in an interview in Jerusalem.
n July 2012, Israel Defense Forces Director of Military Intelligence Maj. Gen. Aviv Kochavi warned that global jihadists have moved into Syrian territory bordering the Golan Heights and could soon use the area to stage attacks on Israel. In a briefing to the Knesset Foreign Affairs and Defense Committee, Kochavi said that Islamic terrorists have taken advantage of the chaos created by the Syrian civil war to approach the Golan area. Kochavi told lawmakers that a power vacuum has created a possible arena in the Golan Heights for anti-Israel operations, similar to what was happening in Egypt's Sinai region, where the government in Cairo is finding it hard to impose its authority on the desert peninsula. 
"The Golan area is liable to become an arena of operations against Israel in much the same way the Sinai is today, and that's a result of the increasing entrenchment of global jihad in Syria," he said. 
In Dec. 2012 a senior Israeli intelligence official told Channel 2 TV that global jihad groups have been preparing near the border with Israel, and are "stockpiling huge amounts of lethal weapons for a fight with Israel." 
"The main problem is not the local rebel groups but fighters coming from outside Syria. Hundreds of fighters have begun streaming into Syria from Jordan and Iraq. They come from countries like Saudi Arabia, Iraq, Libya, and many other countries. We're talking about very dangerous people with experience fighting the U.S. army in Iraq as well as fighting the regime in Libya. We estimate that there are between 3,000 to 4,000 rebel fighters belonging to radical Salafist groups who all belong under the al-Qaida umbrella," the official said. 
"We expect these rebels to stockpile a large amount of rockets, a situation which will return the northern Israeli communities into the line of fire. We assess that once the foreign rebels have finished fighting Assad's army they will all turn their attention to the border with Israel. There is no question about it. Once the Assad regime falls, we will start seeing incidents on our border. I assess that it will start with a trickle of incidents, like we see on the Egyptian border, and further down the line we'll start seeing the firing of anti-tank missiles at IDF vehicles, roadside bombs against patrols, and these are only the incidents I can reveal. I believe we will see much worse things," the official said. 
Meanwhile, the German Der Spiegel magazine reported on Sunday that the United States is secretly providing military training in Jordan to Syrian rebels. According to the report, some 200 rebel fighters have already received training in recent months and there are future plans to train a total of 1,200 members of the Free Syrian Army at two camps in southern and eastern Jordan. The U.S. State Department declined to comment on the report.

Thursday, March 7, 2013

Video: Rand Paul's Post-Filibuster Interview with Glenn Beck

How Stupid is the Government? The TSA is Going to Allow Knives on Planes but Continue to Ban Shampoo and Water Bottles over 3.4 ounces

I think you need to have had a lobotomy to work in government, especially the TSA.  So snow globes larger than tennis balls are banned but items that can cut throats aren't?  I like how one of the excuses are that "these are popular items that we see regularly?"  And full sized water bottles are somehow rare?:

Starting April 25, passengers flying on U.S. flights will be allowed to carry small pocket knives – blades less than 6-centimeters, up to two golf clubs, ski poles, as well as sporting sticks used for hockey, lacrosse, and billiards. Baseball bats will remain on the no-fly list, though wiffle-ball bats and souvenir baseball bats (less than 24-inches long) will be allowed.

"These are popular items we see regularly," agency spokesman David Castelveter told Bloomberg News. "They don't present a risk to transportation security."

The move comes following a recommendation by a TSA working group that such items are not a security threat. The move will conform to international rules that currently allow the small knives and sporting goods.

"Frankly, I don't want TSA agents to be delayed by these," Pistole told the audience. Adding that TSA screeners at Los Angeles International Airport in the last three months of 2012, seized 47 of the small knives per day.

The Flight Attendants Union Coalition, which represents the 90,000 flight attendants on carriers nationwide, blasted the announcement calling it "poor and shortsighted."

"Continued prohibition of these items is an integral layer in making our aviation system secure and must remain in place," the statement said. "As the last line of defense in the cabin and key aviation partners, we believe that these proposed changes will further endanger the lives of all Flight Attendants and the passengers we work so hard to keep safe and secure."

Wednesday, March 6, 2013

Loving the Rand Paul Filibuster

This good old-fashioned talking filibuster of Brennan's nomination is a really nice surprise, like something out of Mr. Smith Goes to Washington.  At first I thought it would just be Rand Paul doing this for a few hours and then sitting down.  But now, it seems that Ted Cruz, Mike Lee and even Ron Wyden (a Democrat, how's that for bipartisanship!) are joining in.  It's amazing how if one person stands up for liberty, other people start joining in.  One of my favorite moments so far is when Ted Cruz read the Travis letter, written by Colonel Travis at the Alamo, asking if it gives Rand Paul encouragement and sustenance:

To the People of Texas & All Americans in the World:

Fellow citizens & compatriots—I am besieged, by a thousand or more of the Mexicans under Santa Anna—I have sustained a continual Bombardment & cannonade for 24 hours & have not lost a man. The enemy has demanded a surrender at discretion, otherwise, the garrison are to be put to the sword, if the fort is taken—I have answered the demand with a cannon shot, & our flag still waves proudly from the walls. I shall never surrender or retreat. Then, I call on you in the name of Liberty, of patriotism & everything dear to the American character, to come to our aid, with all dispatch—The enemy is receiving reinforcements daily & will no doubt increase to three or four thousand in four or five days. If this call is neglected, I am determined to sustain myself as long as possible & die like a soldier who never forgets what is due to his own honor & that of his country—VICTORY OR DEATH.

William Barret Travis

Lt. Col. comdt

The Sorry State of the European Economy

A great chart from ZeroHedge:

Tuesday, March 5, 2013

Robert Spencer Interview on Muslim Brotherhood Infiltration in the US

In Honor of Hugo Chavez

Holder to Rand Paul: Yes We Can (Target Americans on American Soil)

Rand Paul finally received a response from the Obama administration on the question of whether they can target Americans on American soil.  It boils down to, we haven't, we don't want to but yes we can:

As members of this administration have previously indicated, the US government has not carried out drone strikes in the United States and has no intention of doing so. As a policy matter moreover, we reject the use of military force where well-established law enforcement authorities in this country provide the best means for incapacitating a terrorist threat. We have a long history of using the criminal justice system to incapacitate individuals located in our country who pose a threat to the United States and its interests abroad. Hundreds of individuals have been arrested and convicted of terrorism-related offenses in our federal courts.

The question you have posed is therefore entirely hypothetical, unlikely to occur, and one we hope no president will ever have to confront. It is possible, I suppose, to imagine an extraordinary circumstance in which it would be necessary and appropriate under the Constitution and applicable laws of the United States for the President to authorize the military to use lethal force within the territory of the United States. For example, the president could conceivably have no choice but to authorize the military to use such force if necessary to protect the homeland in the circumstances like a catastrophic attack like the ones suffered on December 7, 1941, and September 11, 2001.

Notice the wording of the last sentence.  He could use such force to protect the homeland in circumstances like a catastrophic attack.  Does that mean to protect us from a catastrophic attack before it happens or protect us in the aftermath of one?   Thinking about it, both possibilities give me heartburn.  Could anyone who is planning a mass casualty attack be targeting by a drone in the US even without the threat being imminent?  Could the US military be sent in to restore "order" after a 9/11 style attack with authorization for the use of force against American civilians?  How long before they start using this belief in the lack of limitation on executive power against Tea Party groups?

Apparently Quoting What Paul Krugman Said Back to Paul Krugman is an Ad Hominem Attack

I guess he was backed into a corner during his debate with Joe Scarborough and didn't know what to do:

Monday, March 4, 2013

Did Kerry Just Take $250 million in Aid from Israel and Give it to Egypt?

Earlier today, I wrote a post titled "As White House Warns of FBI Agents and Soldiers Being Laid Off Due to Sequester, Kerry Announces $250 million to Egypt".  One of my liberal lawyer friends pointed out that this isn't how sequester works and so money wouldn't move from Justice to State.  Which is true, though I don't really take Obama's threats of doom literally.  Heck, even the Washington Post found a couple of the recent threats involving janitors and teachers to be complete and utter fabrications (see here and here).  So I figured some of the more serious threats regarding FBI agents and troops are probably fabrications as well.  After all it wasn't enough to just claim that 750,000 people will lose their jobs, they had to be made more real for people to get upset about it by the politicos in the White House.

But my friend got me thinking, weren't there stories about Israel potentially losing foreign aid funding due to the sequester?  In fact there were.  Kerry himself warned of cuts to Israel's funding with the sequester just a few weeks ago.  The size of the cuts are unknown but could be between $250 million and $729 million.  What this means is that money that is potentially being cut out of the aid budget to the Jewish State is instead going to a government that more likely than not wants to wipe Israel off the map at some point in the future. Let's hope this was more hyperbole. 

Is Obama Demanding an Israeli Timetable for a Unilateral Pullout from the West Bank?

A disturbing story.  The previous pullouts from Sinai, Lebanon and Gaza having worked so well after all.  Previous pullouts have only worked to give the terrorists more room to organize and brought the attacks closer to home.  And don't forget what this will mean to access to Jewish holy sites.  Let's pray it isn't true, though I have a feeling it most likely is and Bibi is going along with it:

Israeli sources said Obama, scheduled to arrive in Israel on March 20, wants a detailed Israeli withdrawal plan from Prime Minister Benjamin Netanyahu during the president's visit. The sources said the Israeli plan would be considered in what could be an imminent U.S. initiative to establish a Palestinian state in the West Bank in 2014.

"Obama has made it clear to Netanyahu that his visit is not about photo-ops, but the business of Iran and a Palestinian state," a source said. "The implication is that if Israel won't give him something he can work with, then he'll act on his own."

The sources said Obama's demand has sparked concern in the office of the Israeli prime minister. They said Netanyahu has been unable to form a coalition amid a boycott by left-wing parties and an alliance by two new movements — Yesh Atid and Jewish Home — with 31 seats in the 120-member parliament and opposed to major territorial concessions in the West Bank.


On March 1, the Israeli daily Makor Rishon reported that the next Netanyahu government would destroy numerous Jewish communities in the West Bank. The newspaper quoted Likud negotiators as saying that the plan

depended on Yesh Atid ending its alliance with Jewish Home, led by Naftali Bennett.

"We are going to difficult decisions," a Likud negotiator was quoted as telling a Yesh Atid parliamentarian. "If you do not break up your pact with Bennett we won't be able to uproot communities if there is a need for difficult decisions. Together we can do it."

Other Israeli newspapers, quoting Likud sources, carried similar reports. They said the first step by Netanyahu would be the dismantling of Jewish communities in the West Bank deemed isolated.

The sources said the White House warned that Obama's forthcoming visit could characterize U.S. relations with Israel over the next four years. They said Obama aides stressed that Congress, which approved $3.1 billion in military aid to Israel for 2013, supported the establishment of a Palestinian state as a U.S. priority.

"The Obama people are making this a litmus test of Netanyahu's leadership and credibility," the Israeli source said. "Obama supporters in Congress have sent Netanyahu a similar message."

As White House Warns of FBI Agents and Soldiers Being Laid Off Due to the Sequester, Kerry Announces $250 million for Egypt

The priorities of this administration really seem to be all wrong.  We are giving Egypt $250 million due to their "extreme needs" and because they promised to "complete the IMF process", which would put us on the hook for another billion (they want $4.8 billion in IMF aid, the US would be responsible for a significant portion of that).  Tell me how it wouldn't be better if the Egyptian economy collapses?  Wouldn't we be better off?  What's the worst that can happen?  A radical islamic government takes over?  Well, it already has.  Giving the Egyptian government support only gives them time to consolidate their power and prepare for the coming conflict with Israel, one which they are undoubtedly planning given past statements.  At least the locusts seem to be on our side for now.

Friday, March 1, 2013

Bibi to Punish Settlers in Next Term

Looks like Bibi wants to punish the settler community for voting in Likud primaries but not for Likud in the general election.  It's a petty political maneuver against people who are his natural allies and will only drive them away from Likud.  Maybe it would be better if he fails to form a government:

Prime Minister Binyamin Netanyahu's emissaries at Friday's coalition talks between Likud-Beytenu and Bayit Yehudi told the party that a moratorium would be placed on settlement construction immediately upon the formation of the new government, Channel 2 reported.

The move was posed as "payback" for the practice among residents of West Bank settlements of joining Likud en masse in order to back hawks in party primaries with no intention of voting for the party in general elections. Likud officials have complained of the practice for years.


According to Channel 2, Likud Beytenu representatives told Bayit Yehudi MK Uri Ariel on Friday that the next government would set out immediately to freeze building in all settlements outside of the major settlement blocs.

Channel 2 quoted sources close to Netanyahu as saying there would be grave consequences for the settlers "betrayal" of the prime minister and Likud.

One Day of Debt Issuance Has Wiped Out the Benefits of Sequester For the Year

Here is a snapshot of data from the Treasury on our current debt balance. Between February 27th and 28th, our debt increased by $80 billion. The sequester is supposed to cut $85 billion (h/t ZeroHedge):

Stanley Drunkenmiller: Seniors are Stealing from the Youth

A pretty blunt interview from the hedge fund legend on how seniors are stealing from the younger generation.  He also makes the point that he doesn't think the youth would be voting for people who opposed entitlement reform if they actually understood what is in store for them without reform: