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.

Simon Wiesenthal Center: The Muslim Brotherhood is a Hate Group

Read this piece from the folks at the Simon Wiesenthal Center written a week ago and try not to feel sorry for the Muslim Brotherhood:

Secretary of State Kerry is to be commended for declaring that the Egyptian military was "restoring democracy" by deposing Morsi. Now the U.S. should drop its flawed Muslim Brotherhood policy. Never a force for moderation, it should be recognized for what it is: An enemy of freedom and tolerance-- a hate group with a long enemies list.

There should be no more grants and no more White House visits for bigots.

Let's rejoin the original Tahrir Square campaigners and never again confuse the Brotherhood's successful leveraging of democratic process with their contempt for democratic values espoused by their Supreme Spiritual Leader Mustapha Mashour in 1981:

"Democracy contradicts and wages war on Islam. Whoever calls for democracy means they are raising banner's contradicting God's plan and fighting Islam."

...

While in power, the Brotherhood proved clueless about running an economy, yet retained boundless hate for its enemies. It's 80- year vendetta against Jews inside and outside the Holy Land ranges from its WWII alliance with Hitler to creating genocidal Hamas.

Brotherhood spiritual guides Mohamed Badi and Sheikh Qaradawi relentlessly stoke the hatred: "[We will] continue to raise the banner of jihad against the Jews, [our] first and foremost enemies . . ." declared Badi, adding, "resistance is the only solution against the Zion-American arrogance and tyranny."

Qaradawi, an al Jazeera favorite spouted, "Throughout history, Allah has imposed upon the [Jews] who would punish them for their corruption. The last punishment was carried out by Hitler…There is no dialogue between us [Muslims and Jews] except by the sword and rifle . . .. [We pray Allah] to take this oppressive, Jewish, Zionist band of people  . . . kill them down to the very last one."

At a mosque to deliver his first "Unity" speech, President Morsi answered "Amen" to a Sheikh's fervent prayer: "Deal with the Jews and their supporters. Oh Allah, disperse them, rend them asunder. Oh Allah, demonstrate Your might and greatness upon them. Show us Your omnipotence, oh Lord."

On Morsi's watch, Cairo's only synagogue lost its designation as a Jewish House of Worship.

But Jews aren't Egypt's "canary in the coal mine",  millions of Christian Copts are.

Gatestone Institute, echoed in Christianity Today, reports that: "right at the beginning of the June 30 revolution, anonymous letters addressed to the Copts threatened them not to join the protests, otherwise their 'businesses, cars, homes, schools, and churches' might catch fire. . . ."

Analyst Raymond Abraham wrote about violent post-Morsi attacks targeting Christians: "On July 3rd, in a village in al-Minya in Upper Egypt, the services building of St. George Church was looted and torched. Likewise, the evangelical Saleh Church in Delga was attacked and caught fire. . . According to the pastor . . . 'supporters of former President Morsi are engaged in continuous and unprecedented harassment of Copts. He said that a number of those people broke into the homes of Christians at gunpoint, terrorizing women, children and seizing gold jewelry and furniture'." Elsewhere, Christians—particularly children—are kidnapped and held for ransom.

The Washington Post reported on Islamist websites threatening action against anyone opposing implementation of Sharia law.

A Coptic Christian woman lamented, "This is just the beginning. They won't be happy until they steal everything we own and kill us all. How can anyone be full of so much hate?"

It's true millions of Egyptians continue supporting the Brotherhood, just as millions once supported Stalin and Hitler, but is that how we should gauge when America should remain silent? That was the disastrous mistake Winston Churchill saw repeated in England during the 1930's -- the more powerful the Nazis became, the more accommodating Chamberlain tried to be. America cannot signal the world it is only willing to take on small-time bigots and terrorists.

No one knows what Egypt will look like next month, let alone next year. But if millions of moderate Muslims, Christians and secularists have the courage to stand up to the hateful Muslim Brotherhood, dare we remain shamefully silent?

The Egyptian Military Really Had No Good Options

I know people are all in shock over the crackdown on the Muslim Brotherhood in Egypt but seriously, what else could the Egyptian military done?  They really had 3 options:

1.  Allow the protests to continue unmolested

2.  Do what the Obama administration and the EU has been pushing for and allow the Muslim Brotherhood back into the government either immediately or through a future election

3.  Clear the protests and aggressively suppress the Muslim Brotherhood

The first choice does sound appealing but in the long run it clearly wouldn't have worked.  First, it would make the military look weak and unwilling to do what needs to be done.  The Brotherhood would have become more and more aggressive over time, seeing where the line actually was, making the military look even weaker if they continued to do nothing.  Plus, as the economy is likely to continue to be weak thanks to the second Revolution in a year, the Brotherhood protesters would soon be joined by more secular anti-Mubarak and anti-Morsi protesters who would be upset by the economic situation more than anything else.  As the numbers would swell, we would see a repeat of the last two revolutions.  And if the military waited until then to have a crackdown, it would be an order of magnitude bloodier than today's.

The second choice is also a non-starter.  In the west we are used to losers in elections simply coming back for the next one or start to make real money on the speaking circuit.  That is not the way it works in the middle east (outside of Israel of course).  Losing power can lead to losing your life or your freedom.  The military simply can't risk giving up power at any point to the Muslim Brotherhood, not after the recent coup.  And don't think the military has missed the  actions of the Islamist President of Turkey.  He recently purged 250 military men, politicians and journalists claiming they were planning a coup and the former head of the armed forces just got life in prison.

That leaves us with the third choice, which clearly from the military's point of view is the least bad option.  Will it radicalize elements of the Muslim Brotherhood?  Sure, but they really are only capable of terrorism, not a sustained guerrilla campaign and hence not much of a danger to the military in charge.  The military can probably hold power almost indefinitely as long as there are no mass unit defections and the US & EU don't mess things up and force them to share power with the Brotherhood.

US Treasury: The Market is Only Going Up Because of the Federal Reserve

The US Treasury Department recently released an interesting presentation which contained the following charts on the impact of Fed purchases on equity markets (h/t Zerohedge):

As you can see, the market corrects every time the Fed is no longer in QE mode (the white sections) and then spikes up every time they restart it (the blue sections).  Here is another chart:

As you can see from the above chart, on a weekly basis, the more active the Fed is, the higher the market goes.  And if the Fed isn't active that week, the market tends to go down.

Clearly the stock market can no longer be relied upon to provide signals of anything other than how active the Federal Reserve is.  The Fed just blew another stock bubble to help in the aftermath of a real estate bubble that they created in the aftermath of the last stock bubble.  

Isn't the definition of insanity doing the same thing over and over again, expecting different results?

Oh and just one more chart from that Treasury presentation:

You know how we are pretty much dependent upon foreign institutions to fund our debt?  Well they seem much less interested in doing so now than they used to.  So who is going to buy our debt when the Federal Reserve starts to taper?  Say hello to higher interest rates (which is probably a good thing longer term).  

Looks like New York City is About to Go Straight to Hell

20 years of falling/low crime is about to change:

A judge's overhaul of stop-and-frisk could send Big Apple crime soaring to levels found in blighted cities like Chicago and Detroit, NYPD cops warned yesterday.

"Welcome to Chicago," said a veteran Bronx police officer, who believes cops will become overly cautious about stopping suspects and let criminals slip through their grasp.

Numerous members of New York's Finest blasted Manhattan federal Judge Shira Scheindlin's ruling against stop-and-frisk, which included the appointment of an outside monitor and a requirement that cops in some of the most crime-ridden precincts wear cameras to record their conduct.

...

"If that's what the judge wants, crime's going to go up,'' the Bronx cop said.

"It would be real difficult to go after someone that you suspect for doing a crime" with the new ruling.

He said the ruling will even discourage some officers from trying to solve reported crimes.

"It sounds like all that cops are going to do now if someone is robbed, mugged or shot is take a report, and that's it," he feared.

"He's not going to be able to look for the person who did it,'' in contrast to the police tactic of hunting for perps through stop-and-frisks, the source said.

And according to a new poll, Bill de Blasio, a liberal's liberal who wants to reverse much of what has happened over the Giuliani/Bloomberg years, is leading the race to get the Democratic nomination for Mayor. 

I think people have forgotten what NYC used to be like.  Remember David Dinkens and what a disaster he was (de Blasio actually worked on his campaign!)?  NYC was cleaned up through hard work and tough police tactics to actually stop crime.  Otherwise it would have been a sh*thole like Detroit, Philadelphia, Chicago, Baltimore or NYC pre-1994.  

I really need to change my commute.

Last Week Obama Promised a Review of NSA Surveillance by a Group of "Outside Experts", Then Appoints an Insider to Head It

But I'm sure that the Director of National Intelligence, James Clapper, won't stack the deck or anything as he clearly has no vested interest in these matters.  Here is the irreplaceable Conor Friedersdorf on the latest BS:

President Obama pledged last week that he would take "specific steps" to reform U.S. surveillance policy. This week, he proved unable to keep his word for any longer than a weekend.

...

An independent group of outside experts, whose tasks include ensuring that there is no abuse and assessing the impact of surveillance on privacy. That's what he promised the American people.

...

As Marcy Wheeler notes, "In the memo Obama just released ordering James Clapper to form such a committee, those words 'outside' and 'independent' disappear entirely." Indeed, putting the director of national intelligence in charge all but guarantees that the effort will be neither of those things -- especially since the Clapper has already lied to Congress about NSA spying. This "Review Group" won't even report its findings directly to the public or Congressional oversight committees. It'll report to Obama ... but indirectly, through Clapper.

"If this was about 'restoring the trust' of the American people that the government isn't pulling a fast one over on them, President Obama sure has a funny way of trying to rebuild that trust," Techdirt comments. "This seems a lot more like giving the concerns of the American public a giant middle finger."

There's even more bad news. In the newly released directive, there is no longer any mention of assessing how federal surveillance programs affect "our privacy," or figuring out how to make sure that there is "no abuse."

What happened to those goals? The closest the Monday directive comes to them is an instruction to remember "our need to maintain the public trust" as one of many policy considerations.

Forget whether abuses are happening, or whether privacy rights are in fact being protected. Clapper need only probe the perception of trust. Remember, this is a man with a demonstrated willingness to tell lies under oath when he decides doing so serves the greater good. How might he interpret the charge to make sure that public trust is maintained? I strongly suspect his approach will involve hiding certain truths that, if exposed, would diminish public trust more.

400 Surface to Air Missiles were Taken by Al-Qaeda from Our Benghazi Annex

Just great:

Four hundred American surface-to-air missiles were 'taken from Libya' during the terror attack on the U.S. consulate in Benghazi, a former U.S. Attorney who represents whistleblowers claimed on Monday. 

He added that the U.S. intelligence community is terrified they might be used to shoot down airliners.

Joe diGenova, whose wife Victoria Toensing – a former deputy assistant attorney general – also represents Benghazi witnesses and others with knowledge of the terror attack, told WMAL radio that the loss of those missiles is also one the reason the U.S. State Department shut down 19 embassies across the Middle East last week. 

'A lot of people have come forward to share information with us,' he said during the radio station's 'Mornings On The Mall' programMonday morning.

'We have learned that one of the reasons the administration is so deeply concerned' is that 'there were 400 surface-to-air missiles stolen, and that they are ... in the hands of many people, and that the biggest fear in the U.S. intelligence community is that one of these missiles will be used to shoot down an airliner. 400 missiles, surface-to-air missiles, taken from Libya.'

Asked if the missiles are now 'in the hands of al-Qaeda operatives,' DiGenova replied, 'That is what these people are telling us.'

Is now the perfect time for Israel to Strike Iran?

One of the issues that has been worrying folks is the prospect of a broader regional middle east war following an Israeli strike on the Iranian nuclear facilities.  I think though that given what has been going on in the surrounding countries recently, striking around now would really limit any blowback.

Think about it, following last month's coup in Egypt, the military, which has a history of cooperating with Israel has been actively destroying smuggling tunnels into Gaza and even actively battling with Hamas and other jihadists in the Sinai.  Hamas' ability to respond will therefore likely be limited as they simply won't have the supplies to mount any concerted effort.  

Hezbollah, Iran's ally/affiliate, has been involved in a costly civil war in Syria and as a guerrilla organization, doesn't have the means to fight a 2 front war.  Any major attack on Israel could result in the loss of Syria from the Iranian axis which is clearly something the Iranians don't want.  Especially since all they can hope is some symbolic revenge on Israel.

As we've seen the last few years, the middle east is anything but stable and so this current window can close quickly.  Israel might be smart to strike while they have a chance to avoid a major conflagration.  

The List of Murderous Terrorists Israel is Being Forced to Free by the Obama Administration

Just turns the stomach. The worst part is that these animals are being turned loose for absolutely nothing in return.  Officially it is a goodwill gesture to the Palestinians to get them to return to the table but it seems to me that its the Palestinians who need to provide a goodwill gesture.  They've been offered almost 100% of what they've been asking for on more than one occasion, only to turn it down.  The Palestinians will never make peace with Israel no matter how many of the "occupied territories" are ceded since they consider all of Israel to be "occupied territory".  Anyway, here is the list of coldblooded killers that are about to be set free:

The list included 17 names of prisoners who had murdered Israelis, including Abu-Musa Salam Ali Atia of Fatah, who murdered Holocaust survivor Isaac Rotenberg in a Petah Tikvah construction site in 1994.
According to Almagor, an organization of terror victims' families that has campaigned against the prisoner release, Rotenberg's family perished in the Sobibor extermination camp during World War II. Rotenberg escaped and joined the partisans fighting the Nazis in the forests of Eastern Europe. He arrived in Israel in 1947, joined the IDF and fought in Israel's Independence War on the Lebanese front.

A plasterer by trade, Rotenberg was attacked by Abu Musa and an accomplice at a construction site where all three men worked in March 1994. He sustained repeated blows to the neck with axes. His wounds induced a coma, and he died two days after the attack. He was survived by his brother and sister, who were also survivors of Sobibor, and by a wife and two children. Rotenberg was 67 when he died.

Rotenberg wasn't the oldest victim of the prisoners who made it onto the list Sunday. Fatah member Ra'ai Ibrahim Salam Ali was jailed in 1994 for the murder of 79-year-old Moris Eisenstatt. Eisenstatt was killed with ax blows to the head while he sat on a public Kfar Saba bench reading a book.
Another prisoner, Salah Ibrahim Ahmad Mugdad, also of Fatah, was imprisoned in 1993 for killing 72-year-old Sirens Hotel security guard Israel Tenenbaum by beating him in the head with a steel rod.

According to Almagor, the Poland-born Tenenbaum had immigrated to Israel in 1957, at age 36, and settled in Moshav Ein Vered. He was an agricultural worker on the moshav, but was working as a night watchman at the hotel in 1993. Tenenbaum was 72 at the time of his death. He was survived by a wife, two children and four grandchildren.

Two of the prisoners, Abu Satta Ahmad Sa'id Aladdin and Abu Sita Talab Mahmad Ayman, were imprisoned in 1994 for the murder of David Dadi and Haim Weizman. After killing Dadi and Weizman as they slept in Weizman's apartment, the attackers cut off their ears as proof of the killing.

Abdel Aal Sa'id Ouda Yusef was imprisoned in 1994 to a 22-year sentence for several grenade attacks, and for his part as an accomplice in the murder of Ian Sean Feinberg and the murder of Sami Ramadan.
Feinberg, a 30-year-old father of three, was a proponent of Palestinian economic development. He was killed by gunmen who stormed a business meeting in Gaza City which he attended in April 1993.

Also on the list was Kour Matwah Hamad Faiz of Fatah, imprisoned in 1985 after he was convicted of killing Menahem Dadon and Salomon Abukasis in 1983 and planning to murder then-prime minister Yitzhak Shamir.

Another two prisoners to be released, Fatah members Sualha Fazah Ahmed Husseini and Sualha Bad Almajed Mahmed Mahmed, were imprisoned for a stabbing attack on a crowded Ramat Gan bus, on the 66 line, in 1990. The two, together with a third accomplice, stabbed wildly at passengers, killing 24-year-old Baruch Heizler and wounding three young women. Heizler was named after his grandfather, who was killed during the Jordanian bombardment of the Jewish neighborhoods of Jerusalem during the 1948 Independence War.

Sha'at Azat Shaban Ata was imprisoned in 1993 for helping to orchestrate the murder of 51-year-old Simcha Levi, a woman who made her living transporting Palestinian day laborers to work in Jewish settlements in the Gaza Strip. In March 1993, three of the women laborers were disguised male attackers, who beat and stabbed her to death.

Maslah Abdullah Salama Salma, a Hamas member likely to be sent to the Gaza Strip after his release, was imprisoned in 1993 for the brutal murder of Petah Tikvah convenience store owner Reuven David. Abdallah, together with an accomplice, entered David's convenience store on May 20, 1991, bound David's arms and legs and beat him to death, before locking the store and fleeing the scene. Born in Iraq in 1932, David was 59 at the time of his death, and was survived by a wife, three children and multiple grandchildren.

The remaining prisoners, in the order listed by the Prisons Service:

• Na'anish Na'if Abdal Jafer Samir, imprisoned in 1989 for the murder of Binyamin Meisner.
• Arsheed A'Hameed Yusef Yusef, imprisoned in 1993 for the murder of Nadal Rabu Ja'ab, Adnan Ajad Dib, Mufid Cana'an, Tawafiq Jaradat and Ibrahim Sa'id Ziwad.
• Al-Haaj Othman Amar Mustafa, imprisoned in 1989 for the murder of Steven Rosenfeld.
• Maklad Mahmoud Zaid Salah, imprisoned in 1993 for the murder of Yeshayahu Deutsch.
• Barbach Faiz Rajab Madhat, imprisoned in 1994 for the murder of Moshe Beker.
• Nashabat Jaabar Yusef Mahmed, imprisoned in 1990 for serving as an accessory to the murder of Amnon Pomerantz.
• Mortja Hasin Ghanam Samir, imprisoned in 1993 for the abduction, torture and murder of Samir Alsilawi, Khaled Malka, Nasser Aqila, Ali al Zaabot.
• Faraj Saleh al-Rimahi, imprisoned in 1992 for the murder of Avraham Kinstler.
• Mansour Omar Abdel Hafiz Asmat, imprisoned in 1993 as an accessory to the murder of Hayim Mizrahi.
• Asarka Mahmad Ahmad Khaled, imprisoned in 1991 for the murder of Annie Ley.
• Jandiya Yusef Radwan Nahad, imprisoned in 1989 for the murder of Zalman Shlein.
• Hamdiya Mahmoud Awed Muhammed, imprisoned in 1989 for the murder of Zalman Shlein.
• Abdel Nabi A-Wahab Gamal Jamil, imprisoned in 1992 for the murder of Shmuel Gersh.
• Ziwad Muhammed Taher Taher, imprisoned in 1993 for the murder of Avraham Cohen.
• Sabih Abed Hamed Borhan, imprisoned in 2001 for the murder of Jamil Muhammad Naim Sabih, Aisha Abdullah Haradin.

Further Proof Peace with the Palestinians Isn't Possible

Watch a convicted terrorist describe the glee that she and her fellow Palestinian busriders felt when hearing the death toll from the brutal Sbarro bombing (she led the suicide bomber to the Sbarro's):

The Sbarro's was full of women and children waiting for pizza.  Check out these details from the Wikipedia entry:

The dead included 13 Israelis, one pregnant American, and one Brazilian, all of them civilians. Additionally, 130 were injured. Chana Nachenberg remains in a persistent vegetative state a dozen years after the attack. 

Yocheved Shoshan, age 10, was killed, and her 15-year-old sister Miriam was severely injured with 60 nails lodged in her body, a hole in her right thigh, third degree burns on 40 percent of her body, and a ruptured spleen. 

... 

Mordechai and Tzira Schijveschuurder, both children of Holocaust survivors were killed along with three of their children. Two other daughters, Leah, 11, and Chaya, 8, were critically injured.^[4] The family was Dutch. During the Holocaust, Tzira's parents were in Bergen Belsen and Theresienstadt. Mordechai's parents successfully hid from the Nazis. 

... 

Chaviv Avrahami, who saw the scene of the attack after the bombing, recounted: "I heard a tremendous explosion, and I was thrown up a metre into the air. I knew immediately that it was a bomb attack, and a catastrophic one. There were people - babies - thrown through the window and covered with blood. The whole street was covered with blood and bodies: the dead and the dying." Naor Shara, a soldier who witnessed the attack, said, "The worst thing I saw, which I think will haunt me all my life, is a baby that was sitting in a stroller outside a shop and was dead. After the explosion, the baby's mother came out of the store and started screaming hysterically."

And Palestinian television treats this woman like a hero.

Where's a drone when you need one.

Former Chief of Israeli Military Intelligence: We Are Running Out of Time on Iran

Looks like Iran is getting to the point where a nuclear breakout could happen quicker than western intelligence services can detect it:

In the past year, Iran has installed thousands of centrifuges, including more than 1,000 advanced ones. A report by the International Atomic Energy Agency states that Iran already has enough low-enriched uranium to produce several nuclear bombs if it chooses to further enrich the fuel. Iran has deliberately refrained from crossing what is perceived as Israel's red line: 240 kilograms (about 530 pounds) of uranium enriched to a level of 19.75 percent.

Nonetheless, Western experts like Graham T. Allison Jr. and Olli Heinonen estimate that if Iran decided to develop a bomb today, it could do so within three to five months. That is assumed to be sufficient lead time for the West to detect and respond to an Iranian decision.

But a recent report from the Institute for Science and International Security estimatesthat at the current pace of installation, Iran could reduce its breakout time to just one month by the end of this year. The report also estimates that at that pace, by mid-2014 Iran could reduce the breakout time to less than two weeks.

Any agreement must ensure that an Iranian breakout is detected quickly enough to allow for a Western response — meaning that the international community must be able to uncover any concealed facilities and activities for the production of fissile material.

A solution will also have to address the potential for a plutonium bomb. In May, Iran announced that the heavy-water reactor in Arak would become operational early next year. Some American and European officials claim that Iran could produce weapons-grade plutonium next summer. These two announcements indicate that Iran is making progress on this alternative track. So far, the West has not paid much attention to the potential for a plutonium-fueled weapon. Now it must do so.

A functioning nuclear reactor in Arak could eventually allow Iran to produce sufficient quantities of plutonium for nuclear bombs. Although Iran would need to build a reprocessing facility to separate the plutonium from the uranium in order to produce a bomb, that should not be the West's primary concern. Western negotiators should instead demand that Iran shut down the Arak reactor.

This is crucial because the West would likely seek to avoid an attack on a "hot" reactor, lest it cause widespread environmental damage. Once Arak is operational, it would effectively be immune from attack and the West would be deprived of its primary "stick" in its efforts to persuade Iran to forgo a military nuclear capability.

Of the three countries that have publicly crossed the nuclear threshold since the Nuclear Non-Proliferation Treaty entered into force in 1970, two — India and North Korea — did so via the plutonium track. In order to deny Iran this route, any agreement between the West and Iran must guarantee that Iran will not retain a breakout or "sneak out" plutonium-production capacity.

Don't Think There is an Equity Bubble? People Are Using Margin Like It's March of 2000.

When the stock market is doing well and people think the Federal Reserve "has their back" (aka the Greenspan Put and now the Bernanke Put), they tend to start borrowing more and more to try to make more money on the market.  All they think about is the upside and they really forget about downside and the risk of things going the wrong way.  Eventually, the margin debt on the street gets so high that they just can't borrow any more and the incremental additional buyers simply aren't there.  At that point, the bubble bursts and people find out that margin works both ways and the market overshoots on the downside.  It looks like we are getting to that point again with inflation-adjusted NYSE margin debt now at March 2000 highs and pretty close to the highs of 2007 (h/t Doug Short).

Federal Tax Receipts Indicate a Slowing Economy

Many people almost exclusively focus on GDP as a measure of how the economy is doing but that number has so many moving parts that it's easy to get more noise than signal.  Inventory building or a big import quarter or government spending can all have a large impact.  Another proxy to look at are federal tax receipts.  As you can see from the chart below, when the economy is doing well tax receipts also do pretty well, growing ~10% year-over-year give or take a few percentage points.  Right now our tax receipts are still growing, 6% year-over-year, but the momentum is going the wrong way.  And if you look at the data over the last 20 years, every time it has fallen to 6% growth or below we have ended up in a recession shortly thereafter.