Zombie Banks and Vampire Governments

The game of kick the can will continue

by Gary North

The term "zombie banks" refers to banks that refuse to lend to the private sector. They are run by fearful bankers who do not trust other bankers. They do not trust many potential borrowers. According to legend, zombies survive by eating the brains of their victims. It seems to me that zombie bankers must be limiting their diet to brains of other bankers and investment fund managers.

Governments are ready borrowers of money lent by zombie banks. Zombie bankers think that their banks' money is safer with sovereign nations' IOUs than with other forms of IOUs. The governments siphon off the money that could have been lent to the private sector.

Nanny Government Treats Its Citizens Like Children

Americans, unlike those of yesteryear, have become timid and, as such, come to accept all manner of intrusive governmental acts

By WALTER E. WILLIAMS
Last month, at a Raeford, N.C., elementary school, a teacher confiscated the lunch of a 5-year-old girl because it didn't meet U.S. Department of Agriculture guidelines and therefore was deemed non-nutritious. She replaced it with school cafeteria chicken nuggets.

The girl's home-prepared lunch was nutritious; it consisted of a turkey and cheese sandwich, potato chips, a banana and apple juice.

But whether her lunch was nutritious or not is not the issue. The issue is governmental usurpation of parental authority.

In a number of states, pregnant teenage girls may be given abortions without the notification or the permission of parents. The issue is neither abortion nor whether a pregnant teenager should get one. The issue is: What gives government the authority to usurp parental authority?

Falling Behind

Germany Fails To Meet Its Own Austerity Goals

European countries are expected to implement tough austerity measures amid the debt crisis. But Germany isn't setting a very good example. SPIEGEL has learned that Berlin failed to reach its own austerity goals in 2011. And despite pressuring its neighbors to save, Germany is behind this year too.

By SPIEGEL ONLINE

As she travels from one European Union summit to the next, Angela Merkel's constant mantra in recent months has been austerity, austerity, austerity. But apparently the German chancellor hasn't been quite as strict when it comes to her own country's budget.

SPIEGEL reports this week that the German government didn't reach even half of its planned savings in the federal budget. Only 42 percent of the spending cuts named by Merkel's coalition government, comprised of the conservative Christian Democrats and the business-friendly Free Democratic Party, were actually implemented.

Land of the Setting Sun

It is happening right now

By Patrick J. Buchanan   

Sunday was the first anniversary of the 9.0 earthquake off the east coast of Japan that produced the 45-foot-high tidal wave that hit Fukushima Prefecture.

Twenty thousand perished. Hundreds of thousands were driven from their homes when a nuclear plant swept by the tsunami exploded, spewing radiation for miles.

The Rain in Spain ...

Things That Make You Go Hmmm...

By Grant Williams

"... the Spain which emerged around 1960, beginning with its economic miracle, created by the invasion of tourists, can no longer result in impassioned dedication on the part of its intellectuals, and even less on the part of foreign intellectuals."

– JUAN GOYTISOLO

"In order to fully realise our aspirations, we must create in the masses of the people the sense of sacrifice and responsibility that has been the characteristic of the anarchist movement throughout its historic development in Spain."

– FREDERICA MONTSENY

"It is we the workers who built these palaces and cities here in Spain and in America and everywhere. We, the workers, can build others to take their place. And better ones! We are not in the least afraid of ruins."

– BUENAVENTURA DURRUTI

So Let's begin with Spain.

Spain is a problem. A real problem. Greece today triggered the biggest sovereign default of all time as it reneged on its commitments to pay back investors the €210 billion it had promised them some 2,400 years after 10 Greek municipalities became the first sovereign entities to default when they stiffed the temple of Delos, birthplace of Apollo.

How Goldman Sachs Fleeced Greece

Goldman Secret Greece Loan Shows Two Sinners as Client Unravels

By Nicholas Dunbar and Elisa Martinuzzi 

Greece’s secret loan from Goldman Sachs Group Inc. (GS) was a costly mistake from the start.

On the day the 2001 deal was struck, the government owed the bank about 600 million euros ($793 million) more than the 2.8 billion euros it borrowed, said Spyros Papanicolaou, who took over the country’s debt-management agency in 2005. By then, the price of the transaction, a derivative that disguised the loan and that Goldman Sachs persuaded Greece not to test with competitors, had almost doubled to 5.1 billion euros, he said.

Rotting from the Head Down

Marking out a territory and intimidating others

 A member of Britain’s intellectual elite celebrates his nation’s social collapse.

by THEODORE DALRYMPLE

In his article on London in last Sunday’s New York Times Magazine, titled “Oh, London, You Drama Queen,” novelist China Miéville writes: 

“The aftermath [of the recent riots] was one of panicked reaction. Courts became runnels for judicial cruelty, dispensing sentences vastly more severe than anything usual for similar crimes.”

This is the statement of a typical intellectual whose indifference to the actual lives of the urban poor masquerades as compassion for them. Miéville fails to mention that most of the sentences handed down were for people with criminal records, no doubt in many cases long ones. The real judicial cruelty—not to the criminals but to their victims—was the leniency before the riots that gave the rioters a hitherto justified sense of impunity.

Economic disaster in the works

Stockman On The Economy

By Bernard Condon

He was an architect of one of the biggest tax cuts in U.S. history. He spent much of his career after politics using borrowed money to take over companies. He targeted the riskiest ones that most investors shunned — car-parts makers, textile mills.

That is one image of David Stockman, the former White House budget director under Ronald Reagan who, after resigning in protest over deficit spending, made a fortune in corporate buyouts.

But spend time with him and you discover this former wunderkind of the Reagan revolution is many other things now — an advocate for higher taxes, a critic of the work that made him rich and a scared investor who doesn't own a single stock for fear of another financial crisis.

Stockman suggests you'd be a fool to hold anything but cash now, and maybe a few bars of gold. He thinks the Federal Reserve's efforts to ease the pain from the collapse of our "national leveraged buyout" — his term for decades of reckless, debt-fueled spending by government, families and companies — is pumping stock and bond markets to dangerous heights.

Germany's Strategy

Searching for a New Entente

By George Friedman

The idea of Germany having an independent national strategy runs counter to everything that Germany has wanted to be since World War II and everything the world has wanted from Germany. In a way, the entire structure of modern Europe was created to take advantage of Germany's economic dynamism while avoiding the threat of German domination. In writing about German strategy, I am raising the possibility that the basic structure of Western Europe since World War II and of Europe as a whole since 1991 is coming to a close.

If so, then the question is whether historical patterns of German strategy will emerge or something new is coming. It is, of course, always possible that the old post-war model can be preserved. Whichever it is, the future of German strategy is certainly the most important question in Europe and quite possibly in the world.

Nassim Taleb on curing economic cancer

Fragility and Strength

Can the president kill you?

Elimination of al-Awlaki was more Stalinesque than Jeffersonian

By Andrew P. Napolitano

Can the president kill an American simply because that person is dangerous and his arrest would be impractical? Can the president be judge, jury and executioner of an American in a foreign country because he thinks that would keep America safe? Can Congress authorize the president to do that?

Earlier this week, Attorney General Eric H. Holder Jr. attempted to justify presidential killing in a speech at Northwestern University law school. In it, he recognized the requirement of the Fifth Amendment for due process. He argued that the president may substitute the traditionally understood due process - a public jury trial - with the president's own novel version of it; that would be a secret deliberation about killing. Without mentioning the name of the American the president recently ordered killed, Mr. Holder suggested that the president's careful consideration of the case of New Mexico-born Anwar al-Awlaki constituted a form of due process.

This is their fight, this is their history, these are their countries

How Invisible Children's Kony 2012 Will Hurt - And How You Can Help - Central Africa

By Michael Deibert

The  "Kony 2012" campaign and accompanying film advocate -- via technological assistance, training and the presence of United States military personnel throughout Central Africa -- for military support of the government of Ugandan President Yoweri Museveni, ostensibly to facilitate the arrest of Joseph Kony, the leader of the Lord's Resistance Army (LRA) rebel group and an accused war criminal indicted by the International Criminal Court.

To anyone who has spent time in Central Africa in general and Uganda in particular, this appears to be a road fraught with peril. In response to several requests that I elaborate further on the problems of this approach and a possibly more constructive approach, I offer the following.

There are several instances of blatant dishonesty in the film that immediately catch one's eye and trouble one's conscience.

Killing Newborns

Conceding no moral difference between the born and unborn, "ethicists" defend killing either.

Cute, sure, but not an actual person according to Oxford academics

By Walter Hudson

Cute, sure, but not an actual person according to Oxford academics.

Parents should be able to kill their newborn children. So have concluded a group of academics with ties to Oxford University. In a recent article  published in the Journal of Medical Ethics, the authors concluded that there is no difference between abortion and killing a newborn. They called the latter “after birth abortion.” The Telegraphs’ Stephen Adams reports :

They argued: “The moral status of an infant is equivalent to that of a fetus in the sense that both lack those properties that justify the attribution of a right to life to an individual.”

Just War

The Health of the State

by Murray N. Rothbard

Much of "classical international law" theory, developed by the Catholic Scholastics, notably the 16th-century Spanish Scholastics such as Vitoria and Suarez, and then the Dutch Protestant Scholastic Grotius and by 18th- and 19th-century jurists, was an explanation of the criteria for a just war. For war, as a grave act of killing, needs to be justified.

My own view of war can be put simply: a just war exists when a people tries to ward off the threat of coercive domination by another people, or to overthrow an already-existing domination. A war is unjust, on the other hand, when a people try to impose domination on another people, or try to retain an already existing coercive rule over them.

Euro Area – The Day After

The First Default of a Western Regulatory Democracy Since the Interwar Period

by Pater Tenebrarum

The importance of what has happened on Friday probably can not be overstated, widely expected though the event was. It represents a cesura the likes of which have not been seen since the end of World War I. PIMCO chief Bill Gross, the world's biggest bond trader, complained that the 'sanctity of  sovereign bond contracts' has been violated:

“The “sanctity” of bondholders’ contracts has been diminished by Greece’s pushing through the biggest sovereign restructuring in history, according to Bill Gross of Pacific Investment Management Co.

“The rules have been changed here,” Gross, co-chief investment officer at Pimco, said in a radio interview on “Bloomberg Surveillance” with Tom Keene and Ken Prewitt. “The sanctity of their contracts is certainly lessened. Bondholders have that to look forward to going into the future.”

We can only say to that: finally. 

A brief moment of clarity

The murder of Wilmar Villar Mendoza - Repost

By Alberto de la Cruz

When I found out the Castro regime had accomplished its mission of ending the life of Wilmar Villar Mendoza, I was once again unprepared for the nausea and the painful knot in the pit of my stomach. It is a sensation that I have never been able to get used to no matter how many times I endure the painful experience. 


It is the same severe and unpleasant reaction I experienced when I learned of Orlando Zapata Tamayo's horrid assassination, and that caustic malaise returned upon hearing the news of the violent murder of Juan Wilfredo Soto and again when the Castro regime finally silenced Laura Pollan. 

Diverse Champions of Liberty

Murray Rothbard & Ayn Rand  
By Tibor R. Machan

No one should attempt to treat Ayn Rand and Murray N. Rothbard as uncomplicated and rather similar defenders of the free society although they have more in common than many believe. As just one example, neither was a hawk when it comes to deploying military power abroad. There is evidence, too, that both considered it imprudent for the US government to be entangled in international affairs, such as fighting dictators who were no threat to America. Even their lack of enthusiasm for entering WW II could be seen as quite similar.

And so far as their underlying philosophical positions are concerned, they both can be regarded as Aristotelians. In matters of economics they were unwavering supporters of the fully free market capitalist system, although while Rand didn’t find corporations per se objectionable, arguably Rothbard had some problems with corporate commerce, especially as it manifest itself in the 20th century. One sphere in which they took very different positions, at least at first glance, is whether government is a bona fide feature of a genuinely free country. Rand thought it is, Rothbard thought it wasn’t. Yet the reason Rothbard opposed government was that it depended on taxation, something Rand also opposed, so even here where the difference between them appears to be quite stark, they were closer than one might think.

When intellectuals such as Rand and Rothbard have roughly the same political-economic position, it isn’t that surprising that they and their followers would stress the difference between them instead of the similarities. Moreover, in this case both had a similar explosive personality, with powerful likes and dislikes not just in fundamentals but also in what may legitimately be considered incidentals–music, poetry, novels, movies and so forth.

Last to leave, Never Mind Turning Off the Lights

In Zimbabwe they're Already Off
By Ed Steer

In the 32 years of his benighted rule, Zimbabwe's President Robert Gabriel Mugabe has done more damage to the country than its white-led minority government ever did.

With the exception of the smuggling of "blood diamonds" the country's economy, once the "breadbasket of Africa," resembles nothing so much as a slow motion train wreck.

One of the foundations of modern nations' economic prosperity are reliable sources of power and here too, Mugabe and his Zimbabwe African National Union cronies have managed to screw things up.

While the country has a peak electricity demand of about 2,200 megawatts, it only produces 1,200 megawatts because its installed power generation capacity cannot meet demand, which primarily comes from the Hwange Power Station (HPS) and Kariba Power Station (KPS).

Cynicism and Boundaries

All's Fair in Politics and Celebrity
by Theodore Dalrymple 

If, as the French historian, Pierre Nora, recently put it in a newspaper article, the whole of human history is a crime against humanity, how is one to assess the significance of a single criminal act? And yet the human mind is so framed that it is inclined to see in such a single act all the deceit, evil and delight in cruelty of which Man is capable. One death, said Stalin, is a tragedy; a million is a statistic.

The report of a single dreadful crime is enough to plunge one into despair about the possibilities of human nature. For example, I read recently in a British newspaper a report of a man who picked up an achondroplastic dwarf in a pub and slammed him down on the ground so violently that the dwarf is now paralysed from the waist down and will spend the rest of his life in a wheelchair. Whether or not the final injury was intended by the assailant (was it worse if he did or he didn’t intend it?), the act was of insensitivity so gross that it makes one shudder. Of what would such an assailant not be capable? How is it possible for a human being even to conceive of such conduct as a possibility, for the thought of it to cross his mind, let alone for him not to know that it was inexcusably wrong?

Why the decline of the West is best for India – and them

When family is a “burden” and children an “encumbrance,” society goes for a toss

By R Vaidyanathan

Ten years ago, America had Steve Jobs, Bob Hope and Johnny Cash. Now it has no Jobs, no Hope and no Cash. Or so the joke goes.

Only, it’s no joke. The line is pretty close to reality in the US. The less said about Europe the better.Both the US and Europe are in decline. I was asked by a business channel in 2008 about recovery in the US. I mentioned 40 quarters and after that I was never invited for another discussion.

Recently, another media person asked me the same question and I answered 80 quarters. He was shocked since he was told some “sprouts” of recovery had been seen in the American economy.

It is important to recognise that the dominance of the West has been there only for last 200-and-odd years. According to Angus Maddison’s pioneering OECD study, India and China had nearly 50 percent of global GDP as late as the 1820s.   Hence India and China are not emerging or rising powers. They are retrieving their original position.

In 1990, the share of the G-7 in world GDP (on a purchasing power parity basis) was 51 percent and that of emerging markets 36 percent. But in 2011, it is the reverse. So the dominant west is a myth.

The Iranian battle of ideology over pragmatism

Iran vote lets Khamenei pull strings

By Mahan Abedin

The elections to the ninth Islamic Consultative Assembly (Iran's national parliament) generated enormous interest in the global media for two reasons. First, the poll was seen as a quest for legitimacy by Iran's rulers following the disputed presidential elections of June 2009. And for the first time in three decades, Iranian elections appeared to be a reductive contest between conservative groups.

The old guard is kind of hanging on

THE WORLD'S LARGEST ECONOMIES: 1990 Vs. 2011

By Joe Weisenthal

This is from a recent GE investor presentation.

In some ways we're struck by how similar now is compared to 1990. China has obviously had an amazing two decades, and Russia and India are new entrants. But the old guard is kind of hanging on.

Everything That's Wrong With Everything

Bernanke and his cohorts across the planet are determined to keep printing money even if it ruins us all

by M.N. Gordon

Is the economy improving or stagnating?  Are businesses hiring or firing?  Is the stock market a buy or a sell?  Will monetary inflation prevail over debt deflation?

Quite honestly, we don’t know the answers to these questions.  Nonetheless, we have some ideas on what we think the answers should be.  More important than what we think, however, is what’s going on…and how it’s making thoughtful ruminations on markets and political economies such a muddled mess…

“We have Monetary Anarchy running riot, where the elastic band between the real economy and the current liquidity-fuelled markets is stretched further and further beyond credulity,” noted Bob Janjuah, head of tactical asset allocation at Nomura, earlier this week.

Hell hath no fury like an abused bondholder

Legal skull-duggery in Greece may doom Portugal

"It does not matter how often the EU authorities repeat that Greece is a 'one-off' case, nobody in the markets believes them." 

By Ambrose Evans-Pritchard

"The rule of law has been treated with contempt," said Marc Ostwald from Monument Securities. "This will lead to litigation for the next ten years. It has become a massive impediment for long-term investors, and people will now be very wary about Portugal."

At the start of the crisis EU leaders declared it unthinkable that any eurozone state should require debt relief, let alone default. Each pledge was breached, and the haircut imposed on banks, insurers, and pension funds ratcheted up to 75pc.

Τhe lessons of Fukushima

The crisis of politics that is holding society back

On the first anniversary of the Japanese tsunami, Rob Lyons asks why some fairly minor damage to one nuclear plant became the story.

by Rob Lyons

Sunday marks the first anniversary of the earthquake and tsunami that devastated the east coast of Japan on 11 March 2011. The quake, measuring 9.0 on the Richter scale, was the biggest ever to hit Japan and one of the biggest anywhere in the world in the past century. The resulting tsunami caused roughly 20,000 deaths. Yet, shockingly, the biggest issue about the disaster remains the resulting inundation of a nuclear-power plant at Fukushima, which so far appears to have caused precisely zero deaths from leaking radioactivity.

There are many valuable lessons to be learned from this tragedy. One is the importance of development. The earthquake and tsunami that affected the Indian Ocean on Boxing Day 2004 were only marginally larger, yet killed well over 200,000 people. Direct damage from the Japan earthquake was relatively small thanks to high building standards. Warnings allowed many people to escape the unprecedented seawater surge that followed, though video of the wall of water hitting coastal towns is still shocking. Even so, the world’s third largest economy will take a long time to recover fully from what happened. Thankfully, Japan has the resources to do that.

Miss Fluke goes to Washington

When even casual sex requires a state welfare program, you're pretty much done for

By MARK STEYN 

I'm writing this from Australia, so, if I'm not quite up to speed on recent events in the United States, bear with me – the telegraph updates are a bit slow here in the bush. As I understand it, Sandra Fluke is a young coed who attends Georgetown Law and recently testified before Congress.

Oh, wait, no. Update: It wasn't a congressional hearing; the Democrats just got it up to look like one, like summer stock, with Nancy Pelosi and Harry Reid doing the show right here in the barn and providing a cardboard set for the world premiere of "Miss Fluke Goes To Washington," with full supporting cast led by Chuck Schumer strolling in through the French windows in tennis whites and drawling, "Anyone for bull****?"

Libya’ Does Not Exist

We defy it at our peril (Repost)

By Justin Raimondo On March 13, 2011

The idea that there is a nation called “Libya” is the central problem with our understanding of what is going on in that fake “country,” the flaw in our projections of what will or ought to happen.

Argentina's never-ending tragedy

What's gone wrong?

By Jeremy Warner

I'm not going to get into the rights and wrongs of Argentina's claim on the Falklands, but if I were a Falkland islander, I'd continue to avoid the embrace, well meaning or otherwise, of these Latinos of the South Atlantic like the plague – for, largely unreported by the Western press, Argentina is once more an economic basket case.

But how can that be? Since abandoning the folly of its fixed exchange rate regime with the dollar, Argentina has surely come on in leaps and bounds, right?

Wrong, though that has certainly been the narrative regularly trotted out by opponents of the euro, who frequently point to Argentina to demonstrate the merits of free floating over fixed exchange rate regimes. I've even used it myself. Unfortunately, Argentina far from proves the case, as I've been discovering in the past few days in researching the Argentine economy. With Greece and possibly others set to exit the eurozone over the next year or two, it's worth exploring the lessons.

Our "Let's Pretend" Economy

Let's Pretend Financialization Hasn't Killed the Economy

Like the bubonic plague, financialization has a lifecycle that cannot be reversed by Federal Reserve or European Central Bank intervention.

By Charles Smith

Let's pretend the Federal Reserve can force the financialization lifecycle back into expansion. Why do we need to pretend this can happen? Because the entire U.S. economy and its expansionist Central State now depends on ever-expanding financialization for its survival.

The Official Handbook on how to Kill American Citizens

FBI Director: I Have to Check to See If Obama Has the Right to Assassinate Americans On U.S. Soil

by George Washington

Fox News reports:

FBI Director Robert Mueller on Wednesday said he would have to go back and check with the Department of Justice whether Attorney General Eric Holder’s “[criteria] for the targeted killing of Americans also applied to Americans inside the U.S.

***

“I have to go back. Uh, I’m not certain whether that was addressed or not,” Mueller said when asked by Rep. Tom Graves, R-Ga., about a distinction between domestic and foreign targeting

The Ruling Class

Face of the True 1%

Xavier De La Torre of the 1%

by Dave Blount
There’s no need to worry about the economy, despite indications that California and soon after the entire country will go bankrupt. There must be much more money in the coffers than we thought. Otherwise, our rulers wouldn’t be shoveling it around like this:

Xavier De La Torre, 48, was confirmed Wednesday afternoon as [Santa Clara County, California's] top educator. He will be paid $299,500 annually, plus receive a $12,000 annual auto allowance and, with at least a satisfactory performance in the first year, $20,000 more toward purchase of pension credits. His salary will rise automatically every July by the percentage increase in the Consumer Price Index forthe Bay Area. …

The Church of Big Government

The Cube and the Cathedral

By Mark Steyn

Discussing the constitutionality of Obamacare's "preventive health" measures on MSNBC, Melinda Henneberger of the Washington Post told Chris Matthews that she reasons thus with her liberal friends: "Maybe the Founders were wrong to guarantee free exercise of religion in the First Amendment, but they did."

Maybe. A lot of other constitutional types in the Western world have grown increasingly comfortable with circumscribing religious liberty. In 2002, the Swedish constitution was amended to criminalize criticism of homosexuality. "Disrespect" of the differently orientated became punishable by up to two years in jail, and "especially offensive" disrespect by up to four years. Shortly thereafter, Pastor Ake Green preached a sermon referencing the more robust verses of scripture, and was convicted of "hate crimes" for doing so.

In the meantime, the debasement of paper money continues

ECB money injection not a reason for optimism

by DETLEV SCHLICHTER

Are you feeling optimistic yet? Are you confident that policy-makers have things under control? – If so, you must believe that we can solve any economic problem by throwing freshly printed money at it. Even problems that are evidently the result of previous periods of ‘easy money’– such as overstretched and weak banks.

The ECB this week allotted another €529.5 billion of new money to Europe’s banks. The banks get these funds for three years at 1 percent interest. That this is a gigantic subsidy for one specific industry does not require much explanation.

Going to the roof

Teens choosing death in Russia

By Will Englund

Russia is hard on its children, and Yelizaveta Petsylya and Anastasia Korolyova finally decided, at the age of 14, to do what thousands of other Russian teenagers have done. There was one way to assert control over their lives, and that was to end them.