Front And Center

clipped from wizbangblog.com The administration made its announcement on Christmas Eve night. Transparency, baby! We knew all along that Fannie and Freddie are nothing but arms of the US government. The conclusion: The above actions would preserve and strengthen the government's involvement and control over the country's housing finance system and make it harder to reintroduce substantial private sector involvement later on. They would also continue distortions in the marketplace leading to who knows what unintended consequences. Finally these steps would do nothing to deleverage the housing finance system, a key step in returning it to any degree of normality. The first commenter at the article made this disturbing observation: I live in Beijing and am shocked to realize that the US housing system is now far more Socialist than China's. Welcome to the New America, where the government is front and center in virtually every aspect of your life.

Rotten In Denmark

clipped from www.co2science.org

The Zombie Ponzi II: Good Luck

clipped from www.zerohedge.com Out of the $2.22 trillion in expected 2010 issuance, $200 billion will be absorbed by the Fed while QE continues through March. Then the US is on its own: $2.06 trillion will have to find non-Fed originating  demand. To sum up: $200 billion in 2009; $2.1 trillion in 2010. Good luck. And while things are hair-raising in "gross" country (not Bill...at least not yet), they are not much better in netville either. Net of maturities, 2010 coupon issuance will be about $1.8 trillion, a 45% increase from the $1.3 trillion in FY 2009 (and the paltry $255 billion in 2008). What options does this leave for the administration? Very few, and all of them are ugly. As we stated earlier on, the options for the Fed are threefold: Announce a new iteration of Quantitative Easing. Prepare for a major increase in interest rates. Engineer a stock market collapse. We very well may have passed into the stage where blind growth is the only alternative to a complete collapse. We hope that is not the case.

The Zombie Ponzi

clipped from www.zerohedge.com As everyone is engrossed by assorted groundless Christmas (and other ongoing bear market) rallies, and oblivious to the debt monsters hiding in both the closet and under the bed, Zero Hedge has decided it is about time to present the ugliest truth faced by our 'intellectual superiors' and their Wall Street henchman who succeeded in pulling off Goal #1 for 2009 - the biggest ever bonus season If someone asks you what happened in 2009, the answer is simple - two things. There was a huge credit and liquidity crunch, and then there was Quantitative Easing. The last is the Fed's equivalent of band-aiding a zombied and ponzied corpse, better known as the US economy. And here is the kicker. Accounting for securities purchased by the Fed, which effectively made the market in the Treasury, the agency and MBS arenas, but also served to "drain duration" from the broader US$ fixed income market, the stunning result is that net issuance in 2009 was only $200 billion. Take a second to digest that.

Just A Hunch

clipped from www.powerlineblog.com Pardon me if I'm being overly cynical here, but we know the Obama administration has backed off on any number of the Bush administration's anti-terror policies on the ground that they were too draconian. In pursuit of Obama's policy of "engagement" with those who hate us, has the administration loosened no-fly restrictions? Has it allowed people like Abdulmutallab to take international flights to the U.S. on the ground they are merely misunderstood ambassadors for a peaceful movement? Is the administration's soon to be embarked upon review of how the "intelligence community" is "integrating itself" the precursor to a massive transfer of blame from Obama's radical staffers to intelligence professionals? Hey, at this point it's just a hunch. Stay tuned.

Resets

clipped from financialsense.com In the short term, a catastrophic deflation is quite possible. But in the long term, extremely high levels of inflation are now inevitable. The situation is very serious. Gold is the best hedge against both of these things. The better part of your financial assets should be in gold, augmented by well-thought-out speculations. Doug Casey, November, 2009. Doug Casey and the editors at Casey Research are very skeptical that we are experiencing any sort of economic recovery. In our opinion, too many economic indicators are based on faulty data and optimistic assumptions. Our research suggests that a recovery isn’t sustainable yet. And with that, we lack the foundation needed to support the rapidly rising stock markets. Among the many reasons for our doubt is this standout: Over the next two years, the so-called Alt-A and Option ARM loans face massive resets.

upside dOwn

clipped from gatewaypundit.firstthings.com It’s an Obama World… Up is down, big is small, losing jobs is creating or saving jobs, and heroes are asked to be seated. Yesterday, Jasper Schuringa, a video director and producer from Amsterdam, told CNN how he helped the cabin crew to subdue Umar Farouk Abdulmutallab, the 23-year-old who reportedly ignited a small explosive device on board the plane Friday as it prepared to land in Detroit. The New York Daily News reported: Schuringa said he heard a sound that reminded him of a firecracker and someone yelling, “Fire! Fire!” He saw Abdulmutallab’s pants open and he was holding a burning object between his legs. “I pulled the object from him and tried to extinguish the fire with my hands and threw it away,” Schuringa said. In response to this courageous act of heroism, the Obama Administration enacted new policies today. The new rules will force heroic passengers to stay in their seats for the final hour of their flight before landing.

War

clipped from gatewaypundit.firstthings.com Al Qaeda members and supporters in Yemen held a massive rally 4 days ago in a remote area of the poor Muslim country. The members declared war against the US just days before the attempted plane bombing on a flight from The Netherlands to Detroit. The plot to blow up an American passenger jet over Detroit was organized and launched by al Qaeda leaders in Yemen.

Did I Forget To Mention Cats And Dogs?

clipped from ace.mu.nu I'm even going to call her by her proper name for a change. December 23, 2009 Attorney General of the United States of America U.S. Department of Justice 950 Pennsylvania Avenue, NW Washington, DC 20530-0001 Dear Attorney General Holder: We write to demand an immediate investigation into the activities of White House Chief of Staff Rahm Emanuel. We believe there is an abundant public record which establishes that the actions of the White House have blocked any investigation into his activities while on the board of Freddie Mac from 2000-2001, and facilitated the cover up of potential malfeasance until the 10-year statute of limitations has run out. The purpose of this letter is to connect the dots to establish both the conduct of Mr. Emanuel and those working with him to thwart inquiry, and to support your acting speedily so that the statute of limitations does not run out before the Justice Department is able to empanel a grand jury.

The Decline Updated

clipped from www.youtube.com

The Nightmare Before Christmas

clipped from www.youtube.com

Frankly Speaking

clipped from www.zerohedge.com Just occasionally, we feel as if we might be a little too harsh with Barney Frank. In the heat of the credit crisis and as TARP was being hurriedly drafted, Frank injected language to carve in eligibility for OneUnited, a middling Boston bank facing near imminent and ignominious failure. OneUnited got in trouble in the first place by being heavily invested in, you might have guessed it, Fannie and Freddie. The most dismaying part of our work here at Zero Hedge is often the self-realization that narratives like these simply no longer surprise us.  Neither do reports like the one recently issued by Ran Duchin and Denis Sosyura which concludes, unsurprisingly, that connections to finance committee legislators and the Federal Reserve boards are a fairly reliable predictor for a bank's likelihood of sucking down TARP funds. Expect much more of the same.

Liar, Liar, Pants On Fire?

clipped from www.powerlineblog.com That's what ABC is reporting: The plot to blow up an American passenger jet over Detroit was organized and launched by al Qaeda leaders in Yemen who apparently sewed bomb materials into the suspect's underwear before sending him on his mission, federal authorities tell ABC News. At Hot Air, Ed Morrissey speculates about what this will mean for air travelers. We can't wear our shoes through security because of the shoe bomber, and we can't take liquids on the airplane because of the British explosives plot. Wasn't there once an airline where the passengers were supposed to fly naked? So this was a serious terrorist attack. Byron York points out that the White House, perhaps stung by public reaction to its moronic "we cannot fully know" approach to the Ft. Hood massacre, is handling this incident quite differently. No more talk about not "jumping to conclusions" about jihad.

Short Memories

clipped from firedoglake.com Kevin Drum writes: Apparently Jane Hamsher has decided that a healthcare bill that provides a trillion dollars worth of benefit to low and middle income workers is so odious that mere opposition isn’t enough. Nor is opposition that increasingly employs the worst kind of right-wing talking points. No, it’s so odious that it deserves a scorched earth campaign against the Obama White House in partnership with Grover Norquist. I guess Kevin wasn’t around two weeks ago when Campaign for America’s Future put together a letter seeking to stop Ben Bernanke from being confirmed until the Fed had been audited: Jane Hamsher, founder, FireDogLake Gary Kalman, Washington director, Public Interest Research Group Matt Kibbe, president, FreedomWorks Grover Norquist, president, Americans for Tax Reform In this instance, the fact is that most “liberals” who work at institutions can’t step out and take a shot at Rahm, because Rahm would take it out on their organizations.

Cosmic Rays And Glacial Epochs

clipped from tucsoncitizen.com In the graph below, the top panel shows several calculated cosmic ray flux reconstructions. In the bottom panel, that curve is flipped to represent the cooling effect. Notice that the cosmic ray flux coincides with the geologic reconstruction of ice ages. (The green “residual” curve represents the mathematical variance between models and observations.) Glacial epochs within ice ages seem to be controlled by the relationship of the earth to the sun. There are three main variations called Milankovitch cycles (after Serbian geophysicist Milutin Milankoviæ who first calculated the cycles): Orbital Eccentricity, Axial Obliquity, and Precession of the Equinoxes. All these cycles affect the amount and location of sunlight impinging on the earth. The following explanation of the cycles are summarized from The Resilient Earth:

Fluff II: Cosmoclimatology On View?

clipped from wattsupwiththat.com Right: The anatomy of the heliosphere. Since this illustration was made, Voyager 2 has joined Voyager 1 inside the heliosheath, a thick outer layer where the solar wind is slowed by the pressure of interstellar gas. Credit: NASA/Walt Feimer. [larger image] The fact that the Fluff is strongly magnetized means that other clouds in the galactic neighborhood could be, too. Eventually, the solar system will run into some of them, and their strong magnetic fields could compress the heliosphere even more than it is compressed now. Additional compression could allow more cosmic rays to reach the inner solar system These events would play out on time scales of tens to hundreds of thousands of years, which is how long it takes for the solar system to move from one cloud to the next. “There could be interesting times ahead!” says Opher. John (10:09:06) : Interesting, but how does this have any bearing on our climate and ice age cycle? REPLY: Why does it have to?

Anthony points out to the commenter that this may have nothing to do with climate.

But let's think for a moment. Tens to hundred of thousands of years for the solar system to move from one "fluff" cloud to the next? How sure are we that Milankovitch cycles are totally determinant of the current roughly 100,000 year -- with smaller warmings occuring on intervals measured in tens of thousands of years -- warm episode periodicity?


And what if Leif Svalgaard is correct in the comments later on in this post that:

Leif Svalgaard (10:28:05) :

Eventually, the solar system will run into some of them, and their strong magnetic fields could compress the heliosphere even more than it is compressed now. Additional compression could allow more cosmic rays to reach the inner solar system, possibly affecting terrestrial climate

I don’t think this is correct. Cosmic rays are scattered away from the inner solar system by compression regions in the solar wind including the big one at the edge of the heliosphere, so I think that a more compressed heliosphere would mean less cosmic rays. Also, think of the opposite scenario: slowly take away the solar wind until in the end there is no heliosphere. That would IMHO lead to an increase in cosmic rays.

That would correlate with this being a time period of low cosmic rays -- which according to Henrik Svensmark's theory of Cosmoclimatology would lead to fewer clouds and more warming. That is, the current Holocene warm period may in fact be correlated with passing through the current "fluff" cloud!

Over to you Henrik... (Merry Christmas and I hope you've recovered now and able to comment soon on the "fluff" discovery.)

Fluff

clipped from wattsupwiththat.com December 23, 2009: The solar system is passing through an interstellar cloud that physics says should not exist. In the Dec. 24th issue of Nature, a team of scientists reveal how NASA’s Voyager spacecraft have solved the mystery. “Using data from Voyager, we have discovered a strong magnetic field just outside the solar system,” explains lead author Merav Opher, a NASA Heliophysics Guest Investigator from George Mason University. “This magnetic field holds the interstellar cloud together and solves the long-standing puzzle of how it can exist at all.” Astronomers call the cloud we’re running into now the Local Interstellar Cloud or “Local Fluff” for short. It’s about 30 light years wide and contains a wispy mixture of hydrogen and helium atoms at a temperature of 6000 C. So how does the Fluff survive? The Voyagers have found an answer. “Voyager data show that the Fluff is much more strongly magnetized than anyone had previously suspected—between 4 and 5 microgauss*

And The Reason Why?

clipped from planet-iran.com Iraqi parliamentarian Mithal al-Alusi is warning that Iran is much closer to attaining nuclear capability than most sources, including the International Atomic Energy Agency and the US State Department, believe. In fact, he predicts the Iranians could have a nuclear capability – and may announce that they have it – as soon as next month. Alusi said he cannot reveal his sources of this information, because that would place in grave and imminent danger individuals within the Iranian “establishment” who risked their lives to share it with him. “I am talking about Iranian insider information. Very clear, from inside Iran,” he said. “There are people within Iran who want to be normal… They know this is a dangerous regime. You see how they treat their own people… Iran is terrorizing the world already. What will they do once they have the bomb and they are stronger?”

Big

clipped from www.americanthinker.com

The Israel Ministry of Foreign Affairs has announced a call up to all top Israeli diplomats serving around the world to return home for talks. First-ever Heads of Missions Conference at the MFA

24 Dec 2009 Israel's ambassadors and consuls general serving throughout the world will discuss broad diplomatic and strategic issues at a conference to be held next week in Jerusalem. It's too late for Hanukah and way too early for Purim. Looks like something big might be up.

Right-O About That

clipped from www.realclearpolitics.com With only a touch of irony, columnist Frank Rich observes in The New York Times that Tiger ought be Time's Man of the Year because he's emblematic of America's ability to mythologize heroes (and leaders) while avoiding even a fleeting skepticism of what's beneath the surface of our personal biases. This observation is less about morality than about habits of mind forged on the left and the right by political spin. "Though the American left and right don't agree on much, they are both now coalescing around the suspicion that Barack Obama's brilliant presidential campaign was as hollow as Tiger's public image -- a marketing scam designed to camouflage either his covert anti-American radicalism (as the right sees it), or spineless timidity (as the left sees it)." Describing ObamaCare as genuine reform, he told us "the American people will have the (health care) they deserve ... ." A cynic would say he's right about that.

Conflagration

clipped from pajamasmedia.com The Dutch video director said that he heard a loud bang that sounded like a firecracker going off at which point somebody started shouting: ‘Fire! Fire!’ He then noticed smoke coming from Abdulmutallab’s seat, although the suspect remained still. Mr Schuringa claimed he then jumped over the passenger sitting next to him and lunged over Abdulmutallab’s seat, at which point he saw the Nigerian had his trousers down with a burning object between his legs. ‘I pulled the object from him and tried to extinguish the fire with my hands and threw it away,’ Mr Schuringa said. ‘My hands are pretty burned. I am fine.’ Abdulmutallab seemed dazed, he said. Mr Schuringa then ripped off items of the suspect’s clothing to make sure no more devices were strapped to his body before a crew member handcuffed him. The other passengers then burst into applause, Mr Schuringa said.

Welcome To Your Future

clipped from gatewaypundit.firstthings.com The rally continued until police road in, shot off pepper spray and beat them. FOX News reported: Iranian security forces beat protesters in central Tehran on Saturday, a sign of mounting tensions ahead of planned opposition rallies to mark a religious festival and the death of a dissident cleric a week ago, a reformist Web site said. The Rah-e-Sabz site said forces, including the elite Revolutionary Guard and the paramilitary Basijis, used tear gas and pepper spray in an attempt to disperse demonstrators, and broke the windows of cars that were honking horns in protest.

COTD: Riddle Me This

clipped from www.zerohedge.com Riddle me this Z-men (and ladies): When calulating an individual person's financial risk and viability, we look at his debt to income level (DTI), but when talking about a country we always look at debt to GDP. However, is this valid? Every dollar said government borrows and spends makes the GDP go up. This is akin to looking at an individual person and counting everything he has purchased with his credit cards as "income".     (Also, the GDP is not the Government's income.  It is ours. As soon as the government starts creating something of value and selling it at a profit, it can count it as it's income.)

Debt And Diversification

clipped from www.forbes.com Our colleague Rob Arnott, who always does terrific research, wrote in his recent report that "at all levels, federal, state, local and GSEs, the total public debt is now at 141% of GDP. That puts the United States in some elite company--only Japan, Lebanon and Zimbabwe are higher. That's only the start. Add household debt (highest in the world at 99% of GDP) and corporate debt (highest in the world at 317% of GDP, not even counting off-balance-sheet swaps and derivatives) and our total debt is 557% of GDP. Less than three years ago our total indebtedness crossed 500% of GDP for the first time." Add the unfunded portion of entitlement programs and we're at 840% of GDP. The world has not seen such debt levels in modern history. This debt is not serviceable. Is it any wonder that our biggest creditors, China, Russia and the Middle East, are diversifying out of the dollar and into gold?

Productized

clipped from michaelscomments.wordpress.com Due to overwhelming demand (well, one guy asked), I have collaborated* with the illustrious S. Weasel to bring you an exciting series of products featuring this Weaselized version of The Chart:

1

clipped from science.slashdot.org Dananajaya Ramanayake sends along this excerpt from Wired: "Nearly 62 years after researchers at Bell Labs demonstrated the first functional transistor, scientists say they have made another major breakthrough. Researchers showed the first functional transistor made from a single molecule. The transistor, which has a benzene molecule attached to gold contacts, could behave just like a silicon transistor. The molecule's different energy states can be manipulated by varying the voltage applied to it through the contacts. And by manipulating the energy states, researchers were able to control the current passing through it."

It's Called "Monetary Policy"

clipped from fofoa.blogspot.com A chief Austrian finding is that counterfeiting causes malinvestment. The fact that most counterfeiting is done by governments and called monetary policy does not change the consequences one iota. --Richard Maybury Counterfeit n (15c) 1: Forgery 2: something likely to be mistaken for something of higher value. Imagine if the Louvre crafted a near-perfect counterfeit Mona Lisa and hung it in the gallery behind bulletproof glass. Then imagine that the Louvre held a public auction selling the real Mona Lisa, but also refused to admit that the one in the gallery was a fake. Ridiculous! Isn't it? In most cases a counterfeiter wants to pass off his work onto an unsuspecting and paying public or to a specific mark. This is true for works of art as it is for currency. The counterfeiter must make his work at least good enough to pass muster with the inteded mark. We live today in a world of rampant fraud and misinformation.

Dynamic Debt Disaster

clipped from computationallegalstudies.com

Predictions II

clipped from cfecon.blogspot.com Prediction Four (P4) The US Dollar will be replaced as the world's reserve currency, eventually losing most of its value when the nations of the world's dollars are repatriated home to the U.S. Hyperinflation and an economic sudden stop event become not only possible, but probable. Prediction Five (P5) The world will decouple itself from the US Consumer. As the dollar collapses and other countries' currencies appreciate, domestic consumption in those countries will skyrocket. 300 Million US consumers will have to remember how to make stuff. Preparation Very little planning is necessary to not only survive, but thrive during this period. Take your head out of the sand and look around. Its happening.

Predictions I

clipped from cfecon.blogspot.com Collapse Predictions Prediction One (P1) The housing crisis of 08/09 was just the beginning. Subprime was merely the first domino to fall in a long line of real estate bubbles. Residential (Alt-A and OptionARM resets), Commercial, Retail, Hotel and Industrial properties are still looking at major default rates soon. Prediction Two (P2) Basic government services will begin to break down. Federal, State and Local governments will be unable/unwilling to deal with the loss of revenues and will completely implode before they are able to fix their budgets. Prediction Three (P3) Commodity scarcity and worldwide food shortages will be realized over the next few years. While the dollar loses value, and demand skyrockets from emerging markets, commodities will be harder to obtain even for the U.S.

Warming

clipped from www.nohrsc.noaa.gov

Tornado + COTD

clipped from wattsupwiththat.com Both my father and grandfather, both of whom had connections to steam locomotives in their life are undoubtedly cheering this story(wherever they are) from the BBC. So am I. Inconveniently, it runs on coal. In arctic like conditions, Tornado hauls the only train running on time through Britains big freeze - Image: Craig Stretton A1 Steam Passengers were rescued by a steam locomotive after modern rail services were brought to a halt by the snowy conditions in south-east England. Stan (16:45:57) : So Al Gore was right after all! He did say that global warming would mean we’d see more Tornadoes, didn’t he?