Bill Roggio says that five Iranian Qods operatives are being released from US detention, despite the misgivings of US intelligence. Roggio writes:
The US military recently released five Iranian Qods Force agents who had posed as diplomats and were detained in northern Iraq in late 2006. The Iranian agents were released to the Iraqi government, which is expected to promptly turn them back over to Iran. … “The five detainees are connected to the Iranian Revolutionary Guard – Qods Force (IRGC-QF), an organization known for providing funds, weapons, improvised explosive device technology and training to extremist groups attempting to destabilize the Government of Iraq and attack Coalition forces,” noted Multinational Forces Iraq in press release announcing the arrest in mid-January 2007. …
US intelligence officials who directly deal with the Iranian threat in Iraq are dismayed by the release of the Qods Force agents, and say the release of more is in the pipeline.
“If you didn’t like the release of Laith and the Irbil Five, you’d better get used to it,” one official told The Long War Journal in disgust.
“We worked hard to catch these bastards, now we’re cutting them loose with little thought to the consequences of doing this.”
McClatchy says that the US military didn’t want to release the Qods operatives to Iran and suggested that the Iraqi government, for reasons of its own, decided to release the operatives once it became legally possible for them to do so.
State Department spokesman Ian Kelly said the U.S. military turned over the five Iranians after Iraq issued arrest warrants for all third-country nationals in U.S. custody. … Kelly acknowledged misgivings about the release, and its impact on U.S. military personnel in Iraq. “That is a big concern of ours, is the safety of American forces. And we . . . have of course made our concerns known to the Iraqi government,” he said. Kelly and other U.S. officials said the release did not involve a quid pro quo with Iran and was not a part of the Obama administration’s attempts to engage that country’s leaders.
Rather than re-arrest the five, the Iraqi government granted them a meeting with Maliki and then reportedly turned them over to Iran’s embassy in Baghdad … Thursday’s developments were further evidence of the shifting relationship between Iraq and the United States, which just over a week ago withdrew its remaining combat troops from Iraqi cities. In carrying out the forces agreement — and in negotiating it last year — Maliki has acted with increasing assertiveness, and sometimes in ways not in line with U.S. interests.
The release of the Qods operatives came even as US intelligence reported more Iranian-backed terrorists coming into Iraq. Roggio writes:
The US and Iraqi military believe the Special Groups are preparing to re-initiate fighting as their leaders and operatives are beginning to filter back into Iraq from Iran. On Feb. 4, Lieutenant General Lloyd Austin, the deputy commander of Multinational Forces Iraq, said that Iran continues to arm, fund, and train the Special Groups, and that munitions traced back to Iran continue to be uncovered in Iraq. Recent intelligence and the finds of new Iranian caches “lead us to believe that Iranian support activity is still ongoing,” Austin warned.
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157 Comments
1. buddy larsen:wonder if O would be releasing these birds if he had a son or daughter over there in uniform, driving the roads.
Jul 10, 2009 - 4:24 am 2. Mark Razak:Buddy,
I would bet that O would still release these killers. Any child of O’s who would don the uniform that act would be considered by O to be the ultimate act of apostasy and betrayal.
Jul 10, 2009 - 4:35 am 3. Doug:I wonder if 0 would be ignoring freedom loving Iranians and continuing to curry favor with the tyrants killing them, tyrants who are also responding to his signals by escalating efforts to kill more of our troops, if he had a heart?
He has already shown far too many times that he has a heart of stone.
Jul 10, 2009 - 4:40 am 4. ledger:“Take a Pain Pill.
Have a good day.“
I would bet the big O knew about this and approved it. It’s just his style to stab the Troops in the back when he can. Nothing of this nature happens without Obama knowing.
If the Obama gets lucky these same Iranians will come back to Iraq to kill more Americans.
I am beginning to like the way Biden sounds each day.
Jul 10, 2009 - 4:42 am 5. buddy larsen:Christamighty, things have really gone to hell, when Biden starts looking good.
Jul 10, 2009 - 4:44 am 6. Glenmore:The release of these prisoners to the Iraqi government when requested was required by the US-Iraq Status of Forces agreement. If we are going to claim we are not an occupying force but an ally of the sovereign Iraqi government then this is how it has to be.
Jul 10, 2009 - 5:00 am 7. Doug:A more significant question is ‘Why is the Iraqi government releasing them to Iran?’ One presumes Iran is giving the Iraqis something in trade – perhaps they are saying they will back of on the current Qods force redeployment into Iraq. Or perhaps Maliki and the Shia in charge of Iraq are actually Iranian allies/moles as some have claimed all along.
U.S. releases five Iranians in Iraq
Jul 10, 2009 - 5:07 am 8. RAH:These agents were posing as diplomats. This is a deliberate gray area and generally they are expelled. If they are killed while on assignment then an apology is done and explanation that the host nation that the people were in an illegal operation and presumed terorists and had no idea they were diplomats.
If the US caught Russia agents doing a criminal act like setting bombs with some locals we also could not hold them unless we charged them with the criminal act and they had no diplomatic immunity. Generally they are then held as a bargaining counter.
Same thing. This Qods wer caught and then held and used as a bargaining piece with Iraq and then Iraq has the choice to release or not.
Soldiers like clean cut solutions enemy dead and friend alive. But life is not so black and white. These agents and their capture was a pointed lesson at the time to Itan that we will grab their people and to cut down on the imports of shaped charges. It worked but now Iraq is being let free to determine its own fate and we have a change in administration.
This is the risk in choosing to capture rather than kill foreign agents.
Jul 10, 2009 - 5:42 am 9. what is occupation:It’s a shame they didnt just disappear…
I know, I am a hater….
It’s time to wake and learn…
you are dealing with modern day nazis…
snap out of it…
Jul 10, 2009 - 5:44 am 10. Lifeofthemind:Our strategy after 9-11 rested on two legs.
1) Was the military response. Refuse to play the interactive game of plausible deniability and cut the gordian knot by attacking any regime that supported the terror network.
2) Was the the organizational response. Restructure Homeland Security and tear down the walls that prevented a timely response to threats. Rebuild and refocus our intelligence capabilities.
Obama has crippled our ability to prevent future attacks by undercutting both legs.
Jul 10, 2009 - 6:05 am 11. dtmack:1) He has slashed our military and committed us to the rule not of Law but of Lawyers in what is a military conflict.
2) The basis of successful military and security operations is Intelligence. The threats of prosecution for engaging the enemy, the threats of prosecution for interrogating the enemy, the release of captured enemies, all will have the same results. Prisoners will not be taken. Intelligence will not be collected. Future attacks will not be prevented. Our people will die.
Glenmore – I agree.
What’s in it for the Iraqis? Anybody have any ideas?
Jul 10, 2009 - 6:07 am 12. programmer:Super Secret Agents who have been captured, interrogated, and had pictures taken of them aren’t quite as useful in the future.
Jul 10, 2009 - 6:17 am 13. Lifeofthemind:If the Israelis or the Israelis and the Saudis destroy the Iranian regime then Iraq wins and the Iraqi Shia become more important as a force in the arab world. If Sistani succeeds in overthrowing the Iranian regime and leads a reform of Shia Islam then Iraq wins under Shia leadership and becomes more important in the arab world. If the Iranian regime wins and destroys Israel as America crawls into a hole then Iraq wins by submitting to a client status. Maliki accommodating the Iranians makes sense. My expectation is that the Iraqis, the Iranians and the Turks will start ratcheting up pressure on everyones second favorite punching bag (after the Jews), the Kurds.
Jul 10, 2009 - 6:17 am 14. Dave the Kapampangan:Nanny Obananarama says: “Those Qods guys? I traded them plus a hundred low level terrorists to free Roxana Saberi on May 11th. But let’s blame it all on Maliki.”
Jul 10, 2009 - 6:26 am 15. Parabellum:I remember back in the good old days when captured spies were shot.
Jul 10, 2009 - 6:38 am 16. feeblemind:Paranoid Iranian leadership will have to wonder if any have been flipped and are now Iraqi agents. ChiComs routinely returned ChiNat prisoners for precisely that reason.
Jul 10, 2009 - 6:38 am 17. aaron:RFID anyone?
Jul 10, 2009 - 6:41 am 18. exhelodrvr:I don’t think this is an Obama issue. Not everything bas that happens is his fault.
Jul 10, 2009 - 7:02 am 19. Doug:Correct, but my points (#3) still stand.
—
“The U.S. has been releasing detainees steadily since the accord took effect in January, and it has until year’s end to free the remaining 10,000 or so.”
I wonder what Maliki has planned for these nobles?
Jul 10, 2009 - 7:28 am 20. Lucy:Not everything bad that happens is President Won’s fault?
Harry S. Truman “The Buck Stops Here.”
Jul 10, 2009 - 7:48 am 21. Lifeofthemind:1) Put the 10,000 on the former USS Independence (CV-62).
Jul 10, 2009 - 7:58 am 22. Doug:2) Tow her to the middle of the Indian Ocean and sink her.
3) SCUBA Concession!
—
We Sinned, Again
“Second, there is likewise a spreading feeling of doubt about our foreign policy. All Americans like to be liked — and like to think they are confident enough to admit mistakes. But Obama is beginning to be predictable, boring even, in his once sincere, but now serial apologies about America’s past and present — to almost everyone from Latin Americans and Europeans to Turks and Muslims in general. And why are we more worried about the feelings of a hostile Ahmadinejad than of a friendly Maliki or Netanyahu?
We already have come to expect a certain boilerplate theme, in which the president seeks to placate his hosts by confessing the errors of previous Americans. But the lawyer does not regularly apologize to his rival firm over courtroom disputes; the contractor does not routinely call up his competitor to confess to his own past unfair business practices that unduly won him the disputed contract; the principal, as a matter of habit, does not call in the teacher to show regret over his own theatrical exercise of influence and power.
In the perfect world of the university lounge, perhaps such noble things transpire. But most Americans suspect that gratuitous magnanimity can earn contempt as often as appreciation. Like serial borrowing, a tab comes due. And in the case of foreign affairs, we all sense that sometime soon, a rather dangerous thug or two is going to gamble that his aggression either will not or cannot be deterred by a remorseful and unsure United States.
Also, in emphasizing America’s alleged sins, Obama shows himself to be somehow oblivious to the simple fact that he enjoys such power and prestige as a U.S. president because someone, at some time, must have done something quite extraordinary. Surely there is more to America than slavery and Hiroshima.”
—
Growing Worries about Our Pied Piper
Americans are catching on to Obama’s fiscal sins and rhetorical devices.
Jul 10, 2009 - 8:13 am 23. Doug:Victor Davis Hanson
(from the 0 Video:)
“Carbon Footprints, rising sea levels, health problems, thus, we must reduce “Carbon Emissions” by 80% in 2050.
Thus, the World Warming will be limited to no more than 2 degrees Celsius.
Man, it’s Cool, running the World!”
Jul 10, 2009 - 8:29 am 24. Doug:“Also, in emphasizing America’s alleged sins, Obama shows himself to be somehow oblivious to the simple fact that he enjoys such power and prestige as a U.S. president because someone, at some time, must have done something quite extraordinary.
Surely there is more to America than slavery and Hiroshima.
So many Americans are vaguely beginning to sense that Obama is simply ignorant of Valley Forge, the Oregon Trail, and Iwo Jima.
What happened at these places seems absent from his knowledge of the past, and so fails to inform his present narrative of and future plans for the nation.”
Jul 10, 2009 - 8:40 am 25. Roderick Reilly:What #6, Glenmore said.
It’s easy to see how this release would fit into Obama’s philosophy, but that isn’t the guiding reason behind the releases. We have an agreement with what we have stated is a sovereign nation (Iraq), and the chips are going to fall the wrong way sometimes. Remember, our forces had to take Fallujah twice. We had to give it back the first time because 1) the Iraqi interim gov’t got nervous about our assertiveness or something, and 2) Bush got nervous about casualties while trying to get re-elected (he needn’t have worried, but hey).
Jul 10, 2009 - 9:11 am 26. Peolesdru:Solution: Stop capturing them alive.
Jul 10, 2009 - 10:33 am 27. Bob Smith:suggested that the Iraqi government, for reasons of its own, decided to release the operatives
For reasons of its own? Uh, because they’re Muslim? Duh!
Jul 10, 2009 - 11:09 am 28. OldSalt:The war is over. Obama won. America lost. The QUD’s agents are spoils of war. They go back. Iraq will be an anti-American Shite led state. Get over it.
The Democrats will do whatever they damn well please, consistent with Saul Alinsky’s “Rules for Radicals”. Every American life lost in Iraq and every life that was lost in Afghanistan was wasted, with the election results last November 2008.
I want our troops home – now. I don’t want an immoral war waged in my name.
Sounds familiar, right? However, the leftist define “immoral war” as any effort to defend American interests and Western ideas, including combat. I define “immoral war” as placing military men in harms way for an effort we don’t intend to win. “Immoral” means waging war for the political expediency and power of one political party.
Bring the troops home. It’s over. The bad guys win as long as the American President isn’t committed to victory, or indeed, doesn’t view victory itself as a moral imperative.
The current war effort isn’t worth one more American son or daughter. Let the Muslims subscribe to Sharia law, and beat the crap out of each other. Let Israel nuke Iran or roll tanks into Syria if she needs to do so to defend herself. (Israel will be as ruthless with Muslims as Muslims are with every captured Israeli soldier, or they will lose and the next Holocaust will commence.)
Bring the troops home.
Jul 10, 2009 - 11:47 am 29. Wadeusaf:What did Malaki say to those five? What message did he give to them for the folks from Qods?
Where is my vote? This is how you treat people, like adults not like animals?
Here are your children back, don’t be so pigheaded?
May Ayatollah Rafsanjani make better use of them than their previous master.
Jul 10, 2009 - 2:08 pm 30. wretchard:Reuters says the Iraqi government denies that prisoners were not freed as a the result of a US policy shift on Iran. However sources have told me there are reports that the Obama administration is driving this. But no documentary evidence has been provided for that claim. That’s the state of information so far as I can see it. Officially this release is the result of an internal Iraqi process and that I suppose, is how it must be regarded for the moment. But there’s the chance this story may develop.
Jul 10, 2009 - 2:22 pm 31. Mad Fiddler:Consider the wisdom of Old Salt.
We may need the tr**ps b*ck in the c*ntin*nt*l U.S. to d*f*nd the C*nst*t*t*on against an increasingly blatant series of b*tr*y*ls.
Jul 10, 2009 - 2:32 pm 32. Unsk:The one and only good thing that has happened since Buraq began to disarm America and betray the Western World, is that other countries are now starting to think they must defend themselves and not rely on America.
The fact that Egypt allowed Israeli subs in the Suez and the Saudis acknowledged that they will grant Israel fly over rights to attack Iran tells me that Israel is now serious about taking out Iran’s nukes. It also says the Arabs have chosen a side – the right one in this case. Plus, it seems in the nature of those diplomatic acts, that attack may imminent. All those things are to the good. If we are lucky we may still have a successful attack on Iran’s nukes, despite what our Dear Leader wants.
As far as Buraq is concerned, I think the June jobs report was the straw that broke the camel’s back. Quite a few of the squishy moderates I know had to finally admit the Stimulus had failed and the economy is not going to get better any time soon. That realization is kind of a psychological break; the realization that our vaunted Savior Buraq won’t and can’t save us. Once the moderates fail to believe in Obama’s Savior construct, the questioning begins and the One is looked at in a new way.
Buraq is going to do what he is going to do, but more and more World Leaders are going to dis or ignore him, just like Russians did last week and the Isrealis did before that on the settlements issue.
Jul 10, 2009 - 2:38 pm 33. Mad Fiddler:I apologize for the asterisks.
I’m beta-testing automatic censorship program being considered for my secure government work.
It ztill hus sum bujs.
Jul 10, 2009 - 2:47 pm 34. buddy larsen:fiddler, sometimes i’m not so sure that you don’t ztill hus sum bujs
Watch Thomas Sowell explain that the Obama administration is ‘a great deal less intent on reviving the economy than on forever altering the relationship of Americans to the federal government’.
Jul 10, 2009 - 3:12 pm 35. Doug:(sorry o/t –IE8 is plaguing me –long story)
8 must be great.
Jul 10, 2009 - 3:28 pm 36. Doug:I’ll be late, thank you.
“The bad guys win as long as the American President isn’t committed to victory, or indeed, doesn’t view victory itself as a moral imperative.”
—
On the contrary:
The bad guys win BECAUSE the American President IS committed to Victory:
Theirs.
Just ask Iranian protestors, or Hondurans, or Venezuelans, or…
And on the homefront, just ask ACORN, The Panthers, Planned Parenthood, Rev Wright…
Jul 10, 2009 - 3:37 pm 37. Doug:Brain Fade
Jul 10, 2009 - 3:41 pm 38. buddy larsen:trust me, it won’t fade very far
o/t #2 (#4?) but this pathetic pathogenic shadow of a (former) news magazine NewsWeek just burns my ass SO bad –up on google news right now:
Beyond the Palin
Newsweek – Rick Perlstein – 4 hours ago
Why the GOP is falling out of love with gun-toting, churchgoing, working-class whites. From beauty queen to vice-presidential candidate.
double propaganda –not only for lefties, but also, ‘how to tell Palin supporters that they are out of touch with uhhh, Palin supporters’.
–???
Jul 10, 2009 - 3:53 pm 39. Doug:U.S. Said to Have Averted Inquiry Into ’01 Afghan Killings
Jul 10, 2009 - 5:32 pm 40. Doug:The mass killing of Taliban prisoners was carried out by the forces of an American-backed warlord during the 2001 invasion of Afghanistan.
Gen. Abdul Rashid Dostum
Jul 10, 2009 - 5:32 pm 41. Walt:Some will say now what the hey
Jul 10, 2009 - 5:38 pm 42. Doug:Releasing these five Qods
Will just be seen to only mean
Obama’s brand new buds
In Teheran will surely plan
To be more kindly for
A week or two and then, who knew
Will show our prez the door
We’re now of course the weaker horse
For crawling on our knees
And begging odd Madinejad
To be nice pretty please
And stop the dance and if by chance
You need something from us
We’ll gladly send Israeli friend
Under the Persian bus
The Dance is Eternal, Walt.
Jul 10, 2009 - 5:42 pm 43. blert:…but then, you knew that.
Classy
Glad we get to fund her “fashion” fantasies.
H loves ‘back.’
Jul 10, 2009 - 6:05 pm 44. trangbang68:Its hilarious that intelligence folks are not in favor of releasing the shiiteheads. I wonder if they’re the same treasonous rats that undermined Bush at every turn and leaked classified information to the NY Slimes.
Jul 10, 2009 - 6:06 pm 45. Doug:They’re working day and night, Trangbang.
—
US military ’should ban smoking’
—
Too Cool:
1 in 3 GI’s will be mandated out.
Big Brother Barry still sneakin smokes.
Walt Material.
Personal Choice?
Jul 10, 2009 - 6:15 pm 46. steveaz:We don’t need your Stinking Personal Choice!
Buddy @#5, I echo that: the rear end of this horse is prettier than the front.
Glenmore @#6,
“‘Why is the Iraqi government releasing [the Quds bastages] to Iran?’”
Good question.
What with all the crises goin’ on right now, one can be forgiven for forgetting that the Gwen Ifill’s, and Winnie Mandela’s and Davos’ so-called ‘College of Elders’ are kneading the “truth-and-reconciliation” dough in the Middle East right now: Cowboy Unilateralism is out, Swedish NGO’s (pbuh) are in.
And, as our new Rajs’ ball of Deepak Choprah-dough rises steadily next to the mullahs’ oven, one should expect to see eruptions of South Africa-style amnesties, Oprah hand-holds, wealth redistributions and public confessions rising, bloating, coursing and bursting along the loaf’s length. The Qud’s officers’ release is one of those boils bursting: it’s truth-and-reconcil’ boiler-plate.
And so, I guess…Whoopee!
The ANC won big in Gwen Ifill’s much-touted T’n R gambit in S. A. If I were Maliki I’d be wondering how largely Muqtada’s party and Syria’s Baathists figure into the same “Elders” plans for Iraq.
My guess is, we can count on Hillary to advise Maliki about the dangers of courting Araby’s socialists. Which should give one ample cause to worry.
Jul 10, 2009 - 6:50 pm 47. Walt:Doug @45 – You ask, you get
They’re against the folks
Jul 10, 2009 - 7:32 pm 48. 13times:Who like their smokes
They’re makin’ them a criminal
But for some blokes
There’s different strokes
The lesson here’s subliminal
If you’re Joe Doaks
The butt of jokes
A redneck like yo mama
You take your pokes
And nasty jokes
But at least you don’t sneak ‘em like that smiley hopey changey guy Obama
Major General Hussein Ali Kamal Ahmedfahmi
Deputy Minister
Ministry of Interior
The current Deputy Minister of National Intelligence and Interrogation Affairs of the Iraqi Ministry of Interior, Major General Hussein Ali Kamal Ahmedfahmi, attended law school in 1976 to 1977 and obtained his degree in BA in Legal Sciences from the University of Baghdad in 1980 to 1981.
In 1982, he joined and became active in Military service until the following year, 1983. In 1987, he started his legal practice in Sulaimaniya. He was appointed member of the first Kurdistan regional parliament under the Kurdish Democratic Party bloc in 1993.
He has since held various posts in the regional parliament: reporter of legal committee from 1993 to 2001; chief of internal committee in 2001; and chief of interrogations of the Kurdistan region security and intelligence. He became the Deputy Minister of Interior for Intelligence Affairs of the Iraqi Federal Government in 2003.
Major General Ahmedfahmi, who recently earned his masters from the National Defense College this year, 2008, has been actively involved in several conferences and courses held in the USA, UK , and other venues outside of Iraq. He has also participated in several official delegations.
Jul 10, 2009 - 7:41 pm 49. Doug:Simply Amazing, Walt.
Not to mention Amusing.
—
“There are Far More Conservatives than there are Liberals.
There are Far More Conservatives than there are Republicans.
There are Far More Democrats than there are Liberals.
Democrats need to reach out to moderates to build on their partisan base.
Republicans need to reach out to conservatives to build on their partisan base.”
– Rasmussen
Jul 10, 2009 - 8:20 pm 50. buddy larsen:Up at 46, steveaz
agrees, if the choice we has,
that a Menshevik ‘toon
beats a Bolshevik goon
(cuz he ain’t quite as dangerous as).
Jul 10, 2009 - 9:08 pm 51. Walt:Buddy — Just curious. Why do you guys have a space between the 2nd and 3rd and 4th and 5th lines in a limerick? I have never seen that, and I’m a limerick guy from way back. I’ll start one off for you, one I began as an epic limerick, but only got 4 stanzas before running out of limerick:
A Scotsman named Angus McNair
Jul 10, 2009 - 9:19 pm 52. Charles:Had a p*n*s all covered with hair
So he hooked up a laser
To act as a razor
And sat himself down in a chair
Why are they releasing the quods agents.
I think its a karma thing.
Remember the shop keepers in Iran’s capital are sending their tithes to Iraq’s ayatolla.
Jul 10, 2009 - 9:30 pm 53. Robohobo:Doug @ 42: re: Classy
Gaak! [Where did I leave that brain bleach?] Curse you, Doug!
I agree with OldSalt, time to come home. Declare victory and be done with it. Let them have their (?) …. whatever it will be.
Walt – Ever read Silverstein’s “Billy Markham and the Devil”? It was published in Playboy many years ago. Kind of a riff on Charlie Daniels’ “The Devil came Down To Georgia” or maybe the inspiration for that song? Now that epic poem brought the funny.
Jul 10, 2009 - 9:59 pm 54. buddy larsen:and gave the folks at Best Buy quite a scare!
dunno, walt –always seen ‘em writ thataway. that McNair, he was loving his girl on the stair. The stairway broke, so he shortened his stroke, and finished her off in the air!
Jul 10, 2009 - 10:06 pm 55. Walt:robohobo — Never read it, but if it’s online I’ll find it.
Buddy — Damn good. Fits right in. Here’s the whole thing. Maybe you can finish it. Been bugging me for a couple of years.
A Scotsman named Angus McNair
Had a p*n*s all covered with hair
So he hooked up a laser
To act as a razor
And sat himself down in a chair
He turned on the gleaming machine
And shaved himself all nice and clean
Then with pardonable pride
He hitchhiked a ride
To London to show to the Queen
The Queen, when she saw the bare member
Said when you were last here in September
I seem to recall
It was wrapped in a shawl
Once owned by the Prisoner of Zember
It was his a one time McNair answers
But he gave it to some Spanish dancers
Who used it, I’m told
To keep out the cold
While screwing your Majesty’s lancers
And here it rests. I need help, probably in more ways than one.
Jul 10, 2009 - 10:25 pm 56. buddy larsen:Then the Lancers of Bengal
Jul 10, 2009 - 10:59 pm 57. Walt:(to add final wrinkle)
donned bearskins and boots
fired up their cheroots
and rode off with spurs all a-jingle.
Buddy — Quite nice, but the meter could be improved.
Then the beautiful Lancers of Bengal
Jul 10, 2009 - 11:10 pm 58. buddy larsen:To add to the big final wrinkle
Donned bearskins and boots
Fired up their cheroots
And rode off with their spurs all a-jingle
you’re right –it’s the spaces not the taps –i was stretching them too much.
Maybe would be merrier as:
Then the scandalized Lancers of Bengal
Jul 10, 2009 - 11:21 pm 59. buddy larsen:Extracted themselves from the mingle
Said “Flamenco’s a hoot
But we’ve got to go shoot
And you girls, please put out a shingle!”
Rode off, swords & spurs all a-jingle.
oops, fergot to erase last line –fooey.
Jul 10, 2009 - 11:32 pm 60. Walt:The girls, to a tune by Der Bingle
That caused all the lancers to tingle
They swinged and they swayed
Until they got laid
Which is why all the girls are still single
The trouble with epic limericks is THEY NEVER END. It is 3:15 am in the East, time for bed.
Jul 11, 2009 - 12:15 am 61. Doug:As a kid we’d watch Der Bingle at the Hearst Ranch Stables.
Jul 11, 2009 - 1:44 am 62. Doug:Then watch him ride in the Cambria Parade.
Hi point for me being a flyover of Super Sabres.
In days of old when pilots were bold:
—
“Over 500 F-100Ds were lost, predominantly in accidents.
After one aircraft suffered wing failure, particular attention was paid to lining the wings with external bracing strips.
During the Vietnam War, combat losses constituted as many as 50 aircraft per year. On 7 June 1957, an F-100D fitted with an Astrodyne booster rocket making 150,000 lbf (667.2 kN) of thrust successfully performed a zero length launch. [5]
The capability was incorporated into late-production aircraft.
After a major accident, the USAF Thunderbirds reverted from F-105 Thunderchief to the F-100D which they operated from 1964 until it was replaced by the F-4 Phantom II in 1968.[6]“
Jul 11, 2009 - 1:48 am 63. Gaffe Prices:If we’re down to the level of limericks, than its even worse than I thought. Abandon hope, all ye that stray hee
Onobhamas sure has done what he can to help out with those plummeting ul Kai-eee-do! recruitment numbers [or the lack of them]. (of course, ul-kai-eee-do getting its A$$ kicked all over the place was sure an incentive killer…)
yeah, gittin some of those detained veterans back into circulation, that ought to help out, at least a little bit. /sarc off
yeah what a pluperfect chump
Jul 11, 2009 - 1:54 am 64. buddy larsen:hmm, lessee, what’ll it be, write more limericks, or drink the Lysol?
Jul 11, 2009 - 5:16 am 65. buddy larsen:The charge of the light brigade,
in this event, it is said, i’m afraid,
meant the lancers went ‘light’
(stiffed the dancers that night),
and just ‘charged it’, to be later paid.
((walt, tha’s it, i can do no more witout getting the rotten tomatoes throwed))
Jul 11, 2009 - 6:47 am 66. Doug:You serve as a great contrast agent for Walt.
Jul 11, 2009 - 7:55 am 67. buddy larsen:walt’s the King –the rest of us’ns is just court jesters –
Jul 11, 2009 - 8:14 am 68. Charles:New Al Qaeda Book on ‘Muslim Spies’ Paints Picture of Weakened Group, Experts Say
Jul 11, 2009 - 8:15 am 69. buddy larsen:Pic of the new World coin, introduced by Russa at the G8
Jul 11, 2009 - 8:35 am 70. Charles:Central bankers return to gold and dollars
A second lesson is that in an extreme crisis, there is no alternative to the US dollar. Indeed, far from needing a new “super-sovereign currency” most central banks need more US dollars. Moreover, those dollars need to be invested in the safest instruments possible, namely US Treasury bills, notes and bonds. All other assets in a crisis are ineffective. ”
The last 10 yr Treasury auction was oversubscribed 2 1/2 times.
Jul 11, 2009 - 9:26 am 71. Charles:Obama greeted in Africa with song that slams America and him
Originally steping out-a Kenya Africa
Jul 11, 2009 - 9:47 am 72. exhelodrvr:(Ed. Note: Smile …)
Adopted into the cold woodlands of America
Trust me Iyah,
Dem youth defy every order an’ turn senator
Rat-Rat-Rat-Rat!
De gunshot of hate continue fi echo in-a every corner
How com blackman become president in a money-mecca?
Barack beware! Barack beware! Barack beware!
before dem turn ya name into Barack Osama
In a dis ya time,judgement a com without waata
For legalising abortion in a america,a-fyah! fyah!
(Ed. Note – “In a distant time, judgment will come without water for legalizing abortion in America – fire! Fire!)
Not to worry, everybody – a headline on CNN.COM
“After enormous successes early, some of President Obama’s political vulnerabilities have started to emerge”
Just give him a little time, and he will have many more of those “enormous successes.”
Jul 11, 2009 - 11:10 am 73. Charles:Shrinking US trade gap seen as positive for economy
Jul 11, 2009 - 2:04 pm 74. Doug:exhelo:
My favorite is when he habitually repeats his boilerplate sermon against our “arrogance” of the past, inserting new names and events appropriate to his locale and reason for being there.
Always delivered with disgusting arrogance, and assurances from on high that things won’t be the same now that The Messiah has the levers of power.
All from the mouth of a pathological liar of negligible accomplisment.
Jul 11, 2009 - 3:05 pm 75. Doug:I see I just plagerized VDH at his best:
@ 22. Doug:
Jul 11, 2009 - 3:09 pm 76. Doug:Death by Cliff Plunge, With a Push From Twitter
Jul 11, 2009 - 3:54 pm 77. Nine-of-Diamonds:@73: Wasn’t the Great Depression the time period when the US had the best import/export ratio in its history? Not my area of expertise, so I hope someone could explain why this keeps happening during bad economic times.
Jul 11, 2009 - 5:18 pm 78. steeple:77 Nine of Diamonds The key drivers of our trade balance improvement are 1) lower commodity prices, particularly oil, driven by slowing economic growth and 2) Americans using their incremental cash to repay debt or build savings at the expense of buying BMWs and stuff from China. When the economy slows down, Americans hunker down and buy fewer foreign goods. We are seeing the other side of the economic blade when we witness higher savings rates and improved trade deficits. It’s a “be careful what you ask for” scenario.
A smart guy once schooled me on why the trade balance figures dont matter, and it is primarily driven by our government’s poor ability to measure trade. Particularly when it comes to our primary exports of intellectual capital. His prime example is that a copy of Microsoft Windows is classified as “plastic” rather than software. So if Microsoft exports $300 worth of Windows whatever, US Customs values it at the weight of the plastic in the CDs. So the export is probably measured at about $1. Multiply this across professional services, entertainment, etc… and you can see why the export figures particularly are not well measured.
Of course, if our trade deficit was as bad as the govt reports it, we would have gone broke a long time ago. Tells you that the trade figures are a good directional barometer, but that they don’t tell economic truth per se.
Jul 11, 2009 - 5:33 pm 79. Charles:The shrinking US trade deficit takes pressure off the dollar when the feds issue bonds.
As well, I think that cratering demand for imported oil means that oil prices are likely to drop through the old bottom.
It should be understood here that none of this has anything to do with Obama’s fiscal and regulatory policies.
Here’s a graph of US oil demand
US trade gap seen as positive for economy A steep 11 percent drop in oil imports — with volume dropping despite rising oil prices — accounted for half the decline in the May trade gap. Excluding oil, the trade gap closed 4.7 percent.
Jul 11, 2009 - 6:10 pm 80. Doug:“— with volume dropping despite rising oil prices —”
—
Somehow the law of supply and demand has been (temporarily, we hope) suspended.
China and India aren’t using more than last year are they?
Jul 11, 2009 - 6:23 pm 81. blert:The Chinese are stockpiling barrels instead of Treasury bonds.
This is currency revulsion at its most basic.
This is stage one in hyperinflation.
Jul 11, 2009 - 7:00 pm 82. Doug:What’s your guess as to how much time we have til that hits, blert?
I assume you’d agree with me that asset depreciation is currently overwhelming everything, esp the token 10% of the counterproductive 700 billion of ours thrown down the drain.
Jul 11, 2009 - 7:14 pm 83. blert:When you’re funding your external deficit with printed money…
And the long market is being stuffed down the Fed’s throat as FCB’s go short on the time curve…
Then you are building up money avalanche conditions.
A single stick of dynamite can then send the mountain down upon the bunny slopes.
The way these things play out is an exercise in mass psychology and chaos theory. Everything looks like it’s going to work — until it don’t.
Like the Lehman event the psychology of the market moves too fast for policy reversals.
H and TT and BB are burning through our financial and faith based design margin.
The Syn-CDO market coupled to the collapse in state revenues = icebergs directly ahead. Captain Smith to the bridge!
I recommend all investors get out of steerage. ( 401K funds )
Jul 11, 2009 - 8:10 pm 84. Charles:80 Doug
Agree. that logic in the article was bass ackward.
Here is Zee Frank. A guy both funny and true
Jul 11, 2009 - 8:14 pm 85. Doug:“( 401K funds )”
Jul 11, 2009 - 8:17 pm 86. buddy larsen:—
And into what?
http://www.istockanalyst.com/article/viewarticle/articleid/3108593
Jul 11, 2009 - 8:33 pm 87. Doug:Isn’t it a little weird to make no mention of the unprecedented (since the big one) Trillions of Liquidated Wealth, or is that accounted for in one of the M’s?
Jul 11, 2009 - 8:53 pm 88. buddy larsen:A lot of that evaporated wealth wasn’t monetized, doug. Real estate and equities aren’t in the cash accounts. damn sure on the balance sheets tho.
Jul 11, 2009 - 9:14 pm 89. blert:Buddy…
The Fed never had a gas peddle…
Read Steve Keene on the Roving Cavaliers…
Mass psychology, animal spirits and faith based investing drives expansions…
Right up until the Wile E. Coyote moment.
Then everyone wants to find a chair.
Soros captures the dynamic with ‘reflexivity.’
If you’ve got your money in a 401k or a 200.5k…
Shift into Treasurys only money market funds.
A train wreck is directly ahead.
Porkulus is a fiasco.
If Congress fails to extend unemployment we’ll see riots before Christmas.
Jul 11, 2009 - 9:30 pm 90. blert:BTW CIT is another firm of whom many a CDS was written.
CIT looks like she’s gone.
Jul 11, 2009 - 9:32 pm 91. blert:A slew of bankruptcies is right around the corner for the MSM.
Out here the Chronicle just fired its press union. Another bastion of Democrat votes was torpedoed.
Instead of calling this a mancession it might be termed the death of Democrat economics: the year the constituencies blew up.
Atlas is Shrugging at last.
Jul 11, 2009 - 9:34 pm 92. Doug:“Mass psychology, animal spirits and faith based investing drives expansions…
Right up until the Wile E. Coyote moment.”
Jul 11, 2009 - 9:38 pm 93. Doug:—
Charles’ link touches on that in a clever skit.
Why We’ll Leave L.A.
The business climate is worse than the air quality.
If New Yorkers fantasize that doing business here in Los Angeles would be less of a headache, forget about it. This city is fast becoming a job-killing machine. It’s no accident the unemployment rate is a frightening 11.4% and climbing.
I never could have imagined that, after living here for more than three decades, I would be filing a lawsuit against my beloved Los Angeles and making plans for my company, Creators Syndicate, to move elsewhere.
But we have no choice. The city’s bureaucrats rival Stalin’s apparatchiks in issuing decrees, rescinding them, and then punishing citizens for having followed them in the first place.
Jul 11, 2009 - 9:41 pm 94. Doug:Subprime Resurfaces as Housing-Market Woe
The U.S. housing market is facing new downward pressure as holders of subprime-mortgage bonds flood the market with foreclosed homes at prices that are much lower than where many banks are willing to sell.
While nationwide figures are scarce, a review of thousands of foreclosures in the Atlanta area shows that trusts managing pools of securitized mortgages sold six times as many properties as banks during the six months ended March 31. And homes dumped by subprime bondholders sold for thousands of dollars less on average than bank-owned properties, the data show.
Jul 11, 2009 - 9:41 pm 95. blert:In a day of price declines…
He who is first gets out best.
The banks are political creatures awaiting Obama balm.
Jul 11, 2009 - 9:54 pm 96. blert:The Detroit Public Schools are headed straight for Chapter 9…
Jul 11, 2009 - 9:55 pm 97. blert:Democrat pensions are going to implode just about everywhere.
One unifying theme of Democrat goals across all sectors is a wonderful retirement funded by wealth transfers.
The Greatest Depression is going to implode that dream.
Expect the Boomers to stay in their traces until they expire.
There can be no rest for Boxer.
Jul 11, 2009 - 10:00 pm 98. buddy larsen:yep, blert –don’t get me started on Citi. I think we ended up at 35% nationalized so far. The PPIP just got started last week –maybe it’ll buy some o the toxic assets. There’s another crony deal for ya –gov’t picks nine private companies to buy the bad assets at around 10 – 20 cents on the dollar, with the gov’t financing the purch at below makt rates AND taking on the risk (well, 90% of it). The cronies in the PPIP –in exchange for their management expertise –stand to make billions in a few years, at zero risk of losing more than 10% of the money borrowed from the gov’t in the firdst place.
Jul 11, 2009 - 10:01 pm 99. blert:Buddy…
I’m referring to CIT not Citi…
They make loans in the manner of GE Capital.
Of course Citi is a basket case rogue institution…
INRE the PPIP… I’m of the opinion that the banksters will game the program and pay par values for the ‘assets.’
Mutual back scratching or shell fronts will permit the players to move the pea around in this nine-card monte.
The net result is that write downs of 60% turn into write downs of 7%… which is a great deal for Citi, Wells, et. al.
I don’t see the CDO/ RMBS turds being plunge priced, period.
Jul 11, 2009 - 10:11 pm 100. blert:BTW, the FDIC hates the PPIP and is trying to run from it!
Jul 11, 2009 - 10:14 pm 101. Doug:Mortgage Fraud Report – Burn after Modifying:
FBI Finds Rampant and Deep Fraud in Real Estate Industry.
—
It is bad enough that we have legally sanctioned bank robbery being perpetrated by the U.S. Treasury and Federal Reserve punting the U.S. Dollar off the financial edge in Wile E. Coyote fashion.
The U.S. Treasury, FDIC, and Federal Reserve are greasing their gears for the obnoxiously named private-public investment program that will start buying “legacy assets”, what we all know as nuclear waste mortgages.
Jul 11, 2009 - 10:16 pm 102. ledger:“Christamighty, things have really gone to hell, when Biden starts looking good.” –Buddy
They sure have. I agree that Israel is has a right to defend herself as Biden stated – until the big 0 ridiculed him.
I don’t like Biden but he is make more sense than the big 0.
Jul 11, 2009 - 10:17 pm 103. ledger:I do agree with Wretchard @ 30. I can’t imagine the big 0 was not involved in this high level trade of prisoners (assuming we got some prisoners back).
Jul 11, 2009 - 10:20 pm 104. blert:I have a pet rock that makes more sense than the 0.
Jul 11, 2009 - 10:32 pm 105. Doug:…AND it’s not obnoxiously arrogant.
Jul 11, 2009 - 10:36 pm 106. buddy larsen:GE Capital is one of ‘em –i guess NBC will be reporting “favorably” on the PPIP.
Jul 11, 2009 - 10:38 pm 107. blert:PPIP = Taxpayers Gift to the Uber- Wealthy
Jul 11, 2009 - 10:48 pm 108. Doug:Green GE has all the bases covered.
Jul 11, 2009 - 10:48 pm 109. Walt:Blert, Buddy and Doug,
I do rhymes
But in these times
I listen to my betters
Virtually all of my money is in short term Treasury Bills and bank CDs. The T-bills have a very low yield but are safe. Bank CDs are covered by FDIC. I too think 1970s style inflation is around the corner, which will see my hard earned money devalued. I fear putting my money into the stock market may be too risky. Am I right to hunker down as I am and await developments? Is hunkering down good advice for everyone?
Walt
Jul 11, 2009 - 11:07 pm 110. buddy larsen:When it comes to financial advice, i believe in charity, and will take all of it that i can get
Jul 11, 2009 - 11:13 pm 111. buddy larsen:Obama’s head regulator
designed Enron’s trading system
which allowed Enron to plunder and ruin
and then he designed the Enron fix (Sarbanes Oxley)
which then powered the formation of huge offshore unregistered ‘dark pool’ hedge funds
that used the unregulated, uncleared, unregistered, otc CDS
(that he had deregulated in the Commodities Futures Modernization Act of yr 2000)
which grew from a 2000 pittance to sixty trillion in 2007
which shocked a horrified world just in time for the election of his new boss, O !
(many compare him to Wesley Mouch, one of “The Looters” in Atlas Shrugged)
(so, walt, to your question, this is the sort of person poised to take your head off if & when you unhunker. If you want to try to maintain purch power in fixed income during an inflation, take a look at “TIPS”)
Jul 11, 2009 - 11:37 pm 112. blert:Walt…
Better to get your money back than to lose it trying to get a better return on your money.
The government is manipulating the markets…
Visit Zero Hedge…
The number one financial blog…
Get up to speed on front running by Government Sachs.
Today’s posts are particularly timely.
CHRONY capitalism run riot.
I’d stay safe and liquid….
And watch as so many destroy themselves.
Be ever mindful of the destruction of the dollar by the big 0.
Only vigilance can save you.
LOVE your stuff, BTW…
Keep it coming.
Jul 11, 2009 - 11:47 pm 113. Walt:blert
Thanks. Confirmed my opinion to stay safe and liquid.
Walt
Jul 11, 2009 - 11:56 pm 114. Doug:Walt,
Jul 11, 2009 - 11:59 pm 115. buddy larsen:The best advice I can give is to listen to blert and Buddy, and ignore me.
…except when I’m complimenting your work.
BTW, the guy in #111 is from Government Sacks –before he entered “public service” and began “serving the public” to hungry Tranzis.
(from the eponymous link in #111)
Wesley Mouch
Jul 12, 2009 - 12:00 am 116. Doug:A member of the Looters and, at the beginning of the storyline, the incompetent lobbyist whom Hank Rearden reluctantly employs in Washington. Initially Wesley Mouch is the least powerful and least significant of the Looters – the other members of this group feel they can look down upon him with impunity. Eventually he becomes the most powerful Looter, and the country’s economic dictator, thereby illustrating Rand’s belief that a government-run economy places too much power in the hands of incompetent bureaucrats who would never have positions of similar influence in a private sector business. His name, appropriately, is evocative of the word “mooch,” his modus operandi. Wesley Mouch appears in section 131 and is mentioned in section 161.
It’s simply unbelievable (except we know who 0 is) that every detail is meticulously arranged backwards and upside down.
Jul 12, 2009 - 12:06 am 117. blert:I was going to make some hypothetical about Gorelick, but much easier to point to Napolitano as head of homeland security!
That’s BRUNO Napolitano?
What a stud !
Jul 12, 2009 - 12:12 am 118. Doug:Senate Upholds No-Match — Would Supercede Napolitano’s New Stop Order
No-Match letters are sent out by the SSA notifying employers that they’ve reported income where the social security and the name of the employee don’t match.
The Bush Administration strengthened the No-Match program making it easier for employers to fire employees when a no-match occurs, but the Obama Administration has killed the the Bush rule.
Jul 12, 2009 - 12:19 am 119. ledger:Buddy, Gary Gensler is not only a hustler but one of the big 0’s most important cronies. I expect more financial destruction from him.
Doug, we will see if the big 0 crushes the “No-Match letter” by Sen. Vitter’s (R-La.). I would guess it will be edited out of the bill at 3:00 AM before it goes to the big 0 for his signiture.
When I see Sanctuary Cites get cut-off from Federal Funding then I will begin to believe the big 0 is serious about boarder control. Until then I don’t think the big 0 or his aunt Zeituni Onyango will change their behavior.
Jul 12, 2009 - 2:14 am 120. Unsk:Blert, Buddy, Doug, Walt:
Mish Shedlock on the Fed’s broken accelerator:
http://globaleconomicanalysis.blogspot.com/2008/12/humpty-dumpty-on-inflation.html
Until the banks start to lend, that increase in the Fed’s Balance Sheet won’t increase the money supply, and won’t become inflationary. But when it ever does, (that could be a while ) oooops. Mish argues that we are in an extended period of pronounced deflation until the banks lend.
Jul 12, 2009 - 2:16 am 121. Lifeofthemind:buddy larsen #106,
Jul 12, 2009 - 2:17 am 122. ledger:There are semiofficial providers of the party line where you can see what is happening or what is said but not happening. For example it may be a good idea to keep an eye on Charlie Rose. On June 26th he had Jeff Imholt of GE on for the hour. It reminded me of the interviews he had with auto executives over the years. It was my belief that last year Dick Fuld had gone on the show to say “All is well” but I must be wrong about that.
http://www.charlierose.com/view/interview/10412
Here is a little humor
[Sultanknish]
He was the first black President of the United States, and he also became its last President when in 2019, after his term in office had been extended indefinitely by HR:0666 or “The Hope and Faith in Obama’s Everlasting Presidency Act” (Holo-Link), he was forced to leave office because the government had run out of money to pay for itself.
Though he lived a very public life, few could agree on even the basic facts of his life, such as where he was born, who his father was, or what his real name was, or even what race and gender he was. For a man who spent most of his life before the camera, his death leaves us with few answers about who Barack Obama (Holo-Link) really was…
There is no denying that Obama cheerfully used fraud and strong arm tactics throughout his political career, but the chief weapon in his arsenal was flattery. Many of his supporters remember the special feeling of being made to feel that he was their friend. As one former aide wrote, “He taught us to laugh, he made us believe, and then he took all our money”… across the land formerly known as America, millions are choosing to remember Obama in their own way. From the vigils held in front of the Apollo Theater, where the musical, “Barack Superstar” has been running for almost three decades straight, even under artillery fire from Englewood during the Tri-State War, to the ceremonial million dollar burnings in the Republic of New Hampshire, where crowds burn the infamous “million dollar bills” with Obama’s portrait on them that were issued during the 2017 devaluation which made ten thousand dollars equivalent to a single Euro, no one can ignore the death of America’s last President.
See: Looking Back on the Life of Barack Obama
http://sultanknish.blogspot.com/2009/07/looking-back-on-life-of-barack-obama.html
Jul 12, 2009 - 2:37 am 123. Lifeofthemind:Unsk,
Jul 12, 2009 - 2:42 am 124. Unsk:If the market can see that 3 trillion dollars are sitting in the Fed waiting to be tossed into the economy in 12-16 months then there will be a push to purchase assets as a hedge against anticipated inflation. That should start the up spiral going. Economics is not engineering. It is not a measure of some real worth that counts but only an aggregate of expectations. Economics is mass statistical psychology. At this point the best thing the Fed could do is probably burn a trillion dollars in public, maybe in a big pile with Congress in the middle.
Doug,
You know of course there is a new rule requiring real estate appraisals for sales to be bank appraisals, except for FHA loans. Those same FHA loans that allow loan to value of 96.5% at the lower end of the market. Here we go again.
Right now in LA County , there is a huge sales boom in the lower end of the market, ( sales price less than $500K) with multiple offers on almost every single family deal under $400K. And btw, hardly any jumbo sales. Prices rising on the little stuff, falling on the big stuff.
You know it’s funny that the Fed seemed not to notice after 2005, that while it restrained credit on the conventional ,jumbo real estate sales and other conventional forms of bank credit, the sub prime went ballistic. One would have thought a Fed on its game would have investigated and addressed that problem. But nooo not a peep from the Fed, and perhaps that lack of proper oversight had a purpose. A wealth transfer to the poor.
So now with the FHA appraisal games encouraging massive sales to the less wealthy with little collateral on government backed loans, we see that the same old game continues, a massive fraudulent laden government sponsored wealth transfer from higher incomes to lower.
Jul 12, 2009 - 2:49 am 125. Doug:No, Unsk, as a matter of fact, I did not know about the FHA loophole.
Jul 12, 2009 - 3:40 am 126. Lifeofthemind:I’d be interested to see what kind of volume that represents so far.
What I’ve heard is that the volume has been fueled by the over 50% sales in California being foreclosures, and the resultant low prices.
The lower and middle tiers have seen massive reductions whereas the high end is only now begining to capitulate.
The Housing Bubble Blog I’ve been linking to has had several posts regarding that situation.
I guess we shouldn’t be surprised by anything these days (except good news) including that ridiculous FHA LTV.
Interesting that Creators’ Syndicate is moving. Wonder where they will go to?
Jul 12, 2009 - 4:05 am 127. Doug:Maybe they’ll win their lawsuit?
Jul 12, 2009 - 4:17 am 128. Doug:(adjusts rose colored glasses on nose)
The Great Lie of 2009:
“A Recovery Is Around The Corner”
Despite some shedding of risk here and there, every single one of the five largest derivatives players is still grossly overexposed to defaults by trading partners:
Bank of America has total credit risk in this sector to the tune 169 percent of its capital;
Citibank, 216 percent;
JPMorgan Chase, 323 percent;
HSBC Bank USA, 475 percent;
Goldman Sachs, a whopping 1,048 percent, or over TEN times its capital.
—
In our 2006 “Global Vesuvius” issue (download the pdf), we identified five major threats:
Major threat #1.
The sheer size of the derivatives market. At that time, the global market for derivatives was $285 trillion.
Now it’s $592 trillion. Its six-year compound rate of growth: A shocking 34.5 percent per year!
Major threat #2.
Jul 12, 2009 - 4:18 am 129. Doug:The Lack of Transparency. We railed against over-the-counter (OTC) derivatives, representing 96 percent of all derivatives held by U.S. commercial banks. We warned about the lack of disclosure to investors, the lack of standard pricing and the fact that “two financial institutions can trade whatever the heck they want … and no one but the parties involved knows precisely what the contracts are, or what their value really is.”
Here comes the high end, Unsk:
Westside Los Angeles:
The Ultimate Prime and Stagnant Real Estate Market.
Comparing March and May 2009 Data.
Gear up for the Foreclosure Storm.
$17.5 Million Foreclosures happen when you let WaMu and BofA Play Together.
Jul 12, 2009 - 4:50 am 130. Lifeofthemind:Digging into the Housing Shade of Palms.
Didn’t the WH announce last week that they intend to “regulate derivatives?”
Jul 12, 2009 - 5:01 am 131. Unsk:Doug-
It seems Ray La Hood, Buraq’s new Sec of Transportation wants to implement the same insane “smart growth” policies that destroyed LA’s housing market and helped create horrendous traffic.
Jul 12, 2009 - 7:42 am 132. steveaz:http://www.heritage.org/Research/SmartGrowth/wm2536.cfm
Buddy, Unsk, LoTM, and BC’s other late-nite investors,
I’d sure like to know your thoughts on something:
I keep hearing about a “treasuries bubble.” There is a lot of evidence to support this, and the bulk of it undermines my confidence in T-bills
Mud: Although everyone, even Beijing, knows that greenbacks are the only show in town right now, T-bills’ exposure to the vagaries of unaccountable (dare I say, “corruptible”) governments’ currency manipulations makes them seem particularly prone to manufactured swings. Doctrinaire, unrepresentative, “at-the-point-of-a-gun” governments like China’s or Zimbabwe’s or Iran’s can absorb the pain of roiled currency valuations. Western, therapeutic democracies not so much. Essentially, the result is there is a great discrepancy between these two opposing models’ pain thresholds. This means that a tactical, strategic advantage is enjoyed by the un-democratic buyers of America’s debt, which renders a dollar-for-dollar transaction between the US Treasury and the globe’s majority of governments something other than it’s documented, “real” value.
I expect that, if a forced equalization of America’s economy with India’s, China’s and Brazil’s economies is truly underway, this tactical defaulters’ advantage will be exploited in the Tranzi’s bid to get Anglo Saxon Free-Market Capitalism to cry “Uncle.” In a nut-shell, barring new evidence that the Fed has hedged against the “Autocracy-default-loss” (by, say, advocating for constitutional democracies in China and her client states – a diplomatic hedge that the US State Department has just publicly rejected), I’ll continue to be wary of T-bills.
So, considering the following quadraped of events, (1) rising calls to “create a new global currency,” (2) the prospect of 70’s-style, global inflation, (3) China’s burgeoning interests in Indian Ocean shipping, Californian deep-water ports and Cuba’s off-shore oil fields, and (4) Russia’s recent incursions into Georgia (and their relevance to Western Europe’s economy), it is evident that the global economy is switching organically to a plurality of key, essential commodities like oil, titanium and steel, as measured in provable, untapped reserves, to underpin national prestige during this time of unprecedented uncertainty and flux. All of which hints that there is an alternative available to US T-bills for income-reliant investors.
The option I recommend – and the one I’d love to get BC’ers’ informed buzz on – is, create a diversified, 30-50 symbol portfolio of high-div yield energy trusts and private “Mid-stream” companies. The companies held would be ones that own either provable reserves of fossil fuels (crude, NG, coal, etc), or the means for delivering the raw or refined commodity to wholesale buyers, local utility companies and final consumers (Note: Pipelines are especially attractive options due to their being multi-purpose, transcontinental transport chutes for liquids of all sorts, even liquified coal). The framework I’m asking folks to consider is (1) peer through the haze of Geithner-treasury announcements and the media-propagated crises like “Climate Change,” and “Evil Bankers,” and discern the larger, real trends – then buy accordingly. And (2) count on pocketing regular yields in lieu of selling stock positions at an unpredictable market for incremental gains, all the while resting confident that this sector will gradually engorge with capital as the Tranzi’s vandalize the globe’s prevailing national currency, the dollar.
A last rationale for investing in energy is, heaven forbid, if America finds herself in a real, global war (not a benign, localized and popular “Nation-Building” operation like Iraq – A REAL WAR), her navy, air force and marines’ll be burning distillates at a rate exponentially greater than anything we’re pulling now. To put it lightly, if we find ourselves at war, I’d bet my last shell that energy, ’specially crude oil, will be in high demand.*
I may be totally wrong, though. If I am, pinch me Buddy, Walt or Doug. ‘Cuz I’d like to know if I’m dreaming or not!
Jul 12, 2009 - 7:53 am 133. steveaz:-Steve
* Ralph Peters’ prediction that a prolonged series of mulitple, regional wars demanding American troops and materiale is likely to face us in the next quarter century informs my investment decisions.
Oops!
I meant, “(3) China’s burgeoning interests in Indian Ocean shipping lanes … [a]ll of which hints that there is an alternative to US T-bills available to income-reliant investors.”
Gosh. My fifth grade English teacher just rolled over in her grave!
Jul 12, 2009 - 8:22 am 134. buddy larsen:How grimly funny that 122 and 123 almost simultaneously posted references to the literal (tho not actual yet) burning of greenbacks.
***
Lotm/123; some say that is exactly what has already happened, and that it accounts for the move off the March lows.
***Unsk/124; i think you’re on to something, but do recall that Gspan did make references, in hearingafter hearing, to mispriced risk. Of course, that was in the line of ‘irrational exuberance’ and ‘the conundrum’ –both of which until late 2007 come to seem excessively conservative sentiments.
Jul 12, 2009 - 8:41 am 135. Doug:Folks that lost their jobs and are unable to heat their homes can warm their souls with visions of the coming bonfire of the insanities.
Jul 12, 2009 - 8:47 am 136. buddy larsen:they hide their insanity
behind their inanity
and no Sotomayor
will ever deplore
warm therapeutic inhumanity
***
steveaz/132; what they mean by ‘treasury bubble’ is simply hyperinflation –ylds rising = prices falling. Remember that the secondary (resell) bond mkt dwarfs the stock market, and that tho the Fed Funds Rate controls the short end, the market controls the long end. When the ratio is wide (AKA steep yield curve) banking can make money by simple borrowing short and lending long.
hell i forgot where i was going with that. oh yes –coffee –i need sum.
but, re war and continents and commodities, you can be rigt as rain, but if the market has already priced your scenario, you can buy in and still get badly clipped. The sort-timers routinely get moidered in commodities in just that way –listen, by the time buddy or steve figures it out, the giant brains in the trading cities along the trading routes have already done so and acted.
if you want to invest global growth –IMHO you stick with those (as you say) divvy-paying, low-debt suppliers to the commod boom –companies like Cat and Deere. Tho –politics and esp USA politics — is making even no-brainers –such as CAT at a low P/E –very difficult for short time horizons to pick the entry point. ok now coffee…
Jul 12, 2009 - 9:45 am 137. steveaz:Hmmmm! Coffeeee. Just had a cup, Buddy, and I feel a song comin’ on.
C-O-F-F-E-E
Coffee, whether your java be…
Ripe or green,
or even scat-gleaned,
coffee….
Fresh ground’n roasted
or to the rim with Brim,
coffee…
Be it Starbuck’s or Costco’s
Or Seattle Best’s,
coffee…
Whether it’s
blond or straight-up,
comes in a mug or a cup,
coffee…
It makes no never mind to me,
Jul 12, 2009 - 10:13 am 138. steveaz:because spilt on my knee
at 140 degrees,
they all make me quite the payee.
Thanks for the feedback, BL.
I (like the lauded author of “Liberal Fascism”) reduced the number of middle men between me and my modest portfolio last Fall.
This economic/political mess we’re in is largely due to the proliferation of middle-men associated with the agency explosions that accompany (define?) bubble economies. The temptation for these layers and layers of “twice-and-thrice-removed’s” to launder their FHA-derived, or “Green Funds”-derived, or SEIU pensions-dependent JUNK in my mutual funds’ day-to-day transactions – essentially, selling earnest, investing Americans their slop – has been, and still is, way too great.
So far, nothing Obama has done has altered this perverse set of incentives. In fact, all signs are he’s counting on this laundromat to make his GM/Green/DNC brand appear profitable in time for the next election.
So, ’til this incentivized feedback loop hits a wall, I expect more regular-Joe IRA owners, tired of finding rocks in their flour, will view their money-guys’ buy recommendations, whether they concern individual stock options or managed fund shares, with a gimlet eye…while many grab the bull by the horns, and create and manage their own mini-MF’s.
Thanks again for the view.
Jul 12, 2009 - 10:57 am 139. buddy larsen:If it wasn’t for coffee i think i would die
not from bad health but from psychic ennui
mini MFs, that’s really what i’ve done over these last few years –”fewer shares of more issues”, to mimic the uber trend of more people consuming more stuff –AKA growing global trade creating growing vertical and horizontal productivity and efficiency in an enviro of no big war. How’m i doin’ wit dat? ’bout like a chimp throwing darts. This is the toughest imaginable investment market –”system uncertainty”.
AKA “paralyzing cross-signals”, AKA “WTF!?”
Jul 12, 2009 - 11:22 am 140. steveaz:I’ll jot this down on Wretchard’s site just for the practice of putting it down in words (sorry for the OT nature of it, Richard):
RE Mini-funds and cutting out the middle-man: keeping it simple enough for the regular Joe or Jane to manage him or herself is essential.
A prototypical “mini” fund combines a manageable number of cross-hedging columns (say, three), each column containing a sufficient number of individual options as to be self-hedging and still provide a reliable hedge to the other columns – just like three, cross-braced legs holding a table up.
This structure has proved itself sturdy enough to “stand-up to” the recent 400 point drop in the markets, and, as investing schemes go, it is simple enough for this average Joe to analyze and compare regularly, and to tweak to suit.
In a “mini” high-div ‘folio, the columns (or legs) are differentiated by their percentage yields: the more volatile high-yield column hedges against changes in both distribution pay-outs and stock depreciation in the lower-yield columns. Also, each column is fortifed internally by hedging within the column: the riskier hi-yield column contains more individual options and this column spends less per option (ie. Buddy’s “fewer shares of more issues,” so there is less at stake per option) than the medium and lo-yield columns. The lo-yield column, by way of comparison, holds fewer, more-expensive options, but is less volatile in distributions and stock price than the other columns (ex. CVX, or BA, or CAT). This column “anchors” the ‘folio. And the other, “hi-yield” column, as changeable and volatile as it can be, gives the ‘folio its needed wings.
Three things have driven this portfolio forward even during times of across-the-board market losses. (1) it’s average 8.7% dividend yield, (2) it’s cross-hedged structure (I never sell an option at a loss without balancing it with a gain) and (3) the ‘folio’s selective energy-sector focus. The cross-hedged regular dividends provide a reliable income stream, and any gains in stock price I might wring-out by selling options on today’s shaky markets is welcome, but unnecessary, “icing on the cake.”
So, all, take a Sunday, brew a strong pot, turn on your ‘puter and devise your own “mini-fund” within your IRA. Cut out the middle-men, and make your money-guy blush with the knowledge that his stream of brokerage fees derived from reselling you “shares” of this or that “family of funds” (call it “automatic reinvestment of dividends”) has ended where you are concerned.
Jul 12, 2009 - 12:44 pm 141. Charles:Heh,
-Steve
Ken Fisher a writer for forbes and money management guy had a book out a couple years ago. One of the things he pointed out is that you can’t really trust the US yield curve any more as a predictor of growth and decline. He said because of the massive amount of interbank lending swaps and such on an international level you have to create a synthetic composed of a bunch of yield curves.
Jul 12, 2009 - 12:50 pm 142. Charles:Portfolio Strategy
The Obama Effect
Ken Fisher, 06.03.09, 06:00 PM EDT
Forbes Magazine dated June 22, 2009
Call me an eccentric, but one reason I’m optimistic is that Barack Obama is in the White House. No, I’m not enamored with him–never am with a politician. It’s strictly a matter of numbers. Statistics favor a bull market in 2009. As I write this (with the S&P at 888), the market is flat in the year to date. There are seven months left for the pattern to be borne out with a rally.
Here are the stats: S&P 500 returns (including dividends) for the first year of first terms for Presidents fit a neat pattern. Since 1926 five of six Republican first years have been negative, the lone exception being 1989 under George H.W. Bush (when the market was up 32%). Of six Democratic first years, five show double-digit gains, the lone exception being 1977, under Jimmy Carter (off 7%).
The pattern is not so strange when you think about what the market is and is not. It is not a register of current business conditions. It is an anticipator. Anticipating the worst from a populist presidential candidate, Wall Street marks down stocks before a Democrat takes office–before, in fact, he is even elected. After the inauguration there’s a good chance for a rebound.
With Democratic politicians the big fear is about how antibusiness and anticapitalist they will be. Obama says lots of stupid, scary things. That fear hit markets early in the election cycle. But once he is in office the overwhelming motivation of a left-of-center President slowly morphs toward getting reelected. Achieving that means pandering more to the independent voters and liberal Republicans, less to the Democratic power base. Obama’s concern now is the recession and the job creators that can take us out of it. That means slowly backing off soak-the-rich, anticorporate talk over time.
The reverse happens with Republicans. They come in riding high expectations for pro-business, pro-growth policies–and inevitably disappoint investors as they drift away from their power base. Optimism fades, depressing stocks.
Right now I am focusing my optimism on four sectors: consumer discretionary, materials, energy and industrials.
Jul 12, 2009 - 12:54 pm 143. Charles:I think fisher is wrong on energy–or anyhow the oil patch. Oil prices are going down fast and likely to crash through old lows.
Jul 12, 2009 - 12:56 pm 144. blert:Fisher is missing the reality of H: he’s a black swan crypto-muslim socialist.
He is not of the Democrat party: 0 is a contract politician.
He has a contract on America.
Subversion, Inc.
Jul 12, 2009 - 1:33 pm 145. steveaz:Charles,
Thanks for adding to things…
I’m no expert, but I expect oil to rebound with the markets, or, worst-case scenario to hover ’round $50/bbl if the industrialized countries continure to stagnate. That is, providing America doesn’t find herself in a shooting war soon.
I’m of the mind that oil is like inflation: as the economy heats up, so does the oil-patch. And, even if we capped and traded the American economic juggernaut to fit into Kyoto’s stringent limits, growth in the rest of the world, and continued expansion of plastics usage here at home, will drink all of it that we don’t “burn.”
Contemplating America’s other experiments with legislated scarcity (ex. prohibition in the thirties), the markets always seem to persist despite the gub’mint’s prohibition, and once the prohibition is repealed, they come roaring back in a fashion. Also, many politicians buy into the niche markets that they at first assiduously short-sell, counting on the fact that, when something’s scarce, it become more cher (the French word for “expensive”).
The manufactured scarcity in America’s domestic energy markets is shaping up to be prototypical in these respects.
Drill, Baby, Drill!
Jul 12, 2009 - 1:35 pm 146. buddy larsen:good stuff, guyz –i use the selfhedge, too –wanrt to r-read the posts but want to add Al Naimi’s name while it’s still visiting my short-term memory. He’s the Saudi oil minister, and anytime he wants to, as the pencil guy of OPEC, he can trump the classic short-term mkt effects of current supply/demand (just look at what he did to Putin last fall/winter, in retaliation for Georgia and as a favor to GWB). anyhoo, he wants 75 –and so will probably get it (remember we’re dealing with a cartel market (which would have long since been destroyed except the one-time-and-never-again nature of a non-renewable resource does in fact grant producers a certain narrow special-status).
Jul 12, 2009 - 1:36 pm 147. steveaz:I gotta say, to be fair, Fisher hasn’t been all wrong.
Consumer/discretionaries, like Rubbermaid/Newell have posted big gains since November’s lows. So has Alcoa – another producer of discretionary house-hold goods.
Notice, too, that both fit neatly into a hybrid consumer-discr./commodities category. Both pull key commodities during their products’ manufacture, like aluminum and petroleum distillates, and both cater directly to individual consumers.
And, although both recently dropped their dividend yields – a move that disqualified them from my hi-div ‘folio – the gains in their stock prices, even after dropping their yields, has been pretty impressive.
Always tryin’ to play the corpus callosum, I’ll have to give Fisher’s contradicting predictions some of my head-space as I research different investment approaches.
Thanks, Charles!
Jul 12, 2009 - 2:15 pm 148. buddy larsen:I have Alcoa –but alas at a much higher than current price. but i agree –it’s in the profile of winners, soon as we get the red white and blue hammer and sickle under control -
Jul 12, 2009 - 2:37 pm 149. blert:Oil cannot crash as long as China is throwing her dollars at it.
The oil market has supplanted the gold market as a mechanism for dollar revulsion.
Forget about supply and demand…
Think of oil as a store of wealth and that China wants real wealth instead of Treasurys.
Jul 12, 2009 - 3:18 pm 150. aaron:book recommendation:
Wealth, War, and Wisdom by Barton Biggs
It was recommended on Instapundit a year or so back and I tracked it down and read it.
Short version: wealth is destroyed periodically. what survives is iffy, but real wealth is often food (during scarcities), clothing (exposure and the elements can be rough), and a place in the country away from unrest and crime.
So last fall after I became unemployed I cashed in my 401k (i had good timing and didn’t lose as much as everyone else) and solarized my house to reduce my winter energy needs. I think this winter might be Very unpleasant for most people in northern climes.
I think the systems we’re familiar with are going away, so I don’t trust any form of wealth I can’t personally hold and defend.
I think we’ll see bank holiday’s (not vacations), hyperinflation, urban conflict, and Juarez style crime and banditry.
Jul 12, 2009 - 3:46 pm 151. aaron:assuming no civil war…
but I’m an optimist.
Jul 12, 2009 - 3:47 pm 152. Doug:For those who missed my last LA Real Estate Horror Story above, it was Wayne Gretsky selling at the top of the market in 2007 to Lenny Dykstra for 17.5 (million) with B of A and WaMu providing near 100% financing.
Lenny now “has no more than $50,000 of assets and between $10 million and $50 million of liabilities, according to a petition filed Tuesday with the U.S. Bankruptcy Court in the Central District of California.”
Jul 12, 2009 - 3:47 pm 153. Walt:Doug @152
I was saddened to read recently of Lenny Dykstra’s financial demise. A life-long Phillies fan, I remember him well from the 1995 World Series team, a season in which Lenny was possibly the best one season center fielder the Phils ever had. Of course, as it later turned out, he did it on steroids, a metaphor for his financial success, since he prospered in a steroid driven up-market where you could hardly lose. Still, you don’t like to see anyone who hasn’t actually done anyone deliberate harm come to such a catastrophic financial end.
Jul 12, 2009 - 4:27 pm 154. buddy larsen:i always like Lenny Dykstra, too. For awhile back in the boom, he often guested on the financial shows, talking about his very successful (the reason he was guest-worthy) put and call option strats. Of course, puts and calls are not property but rights, and timed-out rights to boot –if the underlying asset goes screwy and then doesn’t recover during the contract, it can lose 100%. Back in the late 70s Carter’s marxists had gotten energy policy so bollixed that i was able, over about a year, to parlay 20k savings into 500k, using call options on oil company takeover candidates. At one point, wife and i took off skin-diving for a long week on an incommunicado island near Belize, a week during which Dale Bumpers senator from Arkansaw decided to make a wild crazed anti-takeover cross-of-oil speech –and i stepped off the pan-am back staeside down 300k back when that was money. Of course that drove me instantly crazy, so i proceeded in a hot rush to blow the rest (including en passant a quick 100k bank loan) doubling up to catch up –always playing the call options that had been SO GOOD for so long. Then, busted and having to get back to the oilpatch, then and only then did i come back to earth and rejoin the segment of the species that artificial leveraged credit money hadn’t driven insane (haven’t touched options –or bolivian marching powder either –since). This was around the time of the Hunt bro’s attempt to corner the silver market (the joke then: they later wrote a book “How to Make a Small Fortune”) –then as now, crazy stuff was normal. That’s Democrats, folks! (insert Woody Woodpecker maniac cackle here).
But i deserved it –i led with my chin. Folks like Steve B at VDH’s comment #49 not only didn’t ask for a skinnin’ but did all the things that we are taught will avoid it. Yet he’s a-gettin’ it, sloow or fast, he’s a-gettin’ a skinnin’. that comment string, BTW, is eye-opening to say the least.
Jul 12, 2009 - 5:34 pm 155. blert:It’s starting to look like California state employees are getting into mortgage trouble: three unpaid days off has taken away their cash flow cushion!
We have two train wrecks right in front of us: California mortgage debt — debt generally PLUS the California state revenue collapse.
The tax shortfall is so profound that projections are falling apart faster than Sacramento can adjust.
The financial consequence of massive illegal immigration coupled to the nanny state is only now pulling into view — for Liberals and Rhinos.
BTW Buddy…
Any farmer is about to face a perfect storm of favorable events. Tight farm credit must constrain supply. Harvest income should be bounding up from here — Jim Rogers is right.
Jul 12, 2009 - 6:34 pm 156. buddy larsen:Jim Rogers has been right for a long long time. I used to hate listening to him, back when the Iraq war was teetering and he was busting on the American financial/fiscal/monetary system -i thought he had lost a piece of himself, the ‘my country’ piece was missing. now i see him in a much better light.
Jul 12, 2009 - 6:45 pm 157. buddy larsen:USA Today presents a penetrating & comprehensive analysis, compiled by no fewer than five by-lined staff reporters, examining the early (and likely permanent! –ed.) differences, in comparison to the Clinton and Bush administrations, noted early on in the new president’s cabinet orientation.
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