Slowing Growth

First quarter advanced estimate of GDP growth in the U.S. came in at an anemic 1.3%. This was far less than the consensus 1.8% estimates, or the more pessimistic Briefing.com estimate of 1.5%. This is an advance number, so an upward revision is possible.

More troubling than the slowing growth is the ever increasing inflation pressures. The PCE chain deflater (which is the Fed's preferred measure of inflation) rose to 4.0% which, like the GDP figure, surprised most analysts.

Roger asks why European rates of growth are a concern. Well, first of all, this is not a European rate of growth whatsoever. The Euro area is outpacing U.S. growth currently (Q4) and with these numbers, the gap is sure to widen.

But more importantly, with the dollar weakening, and inflation pressures much stronger in the U.S. as a result, a slowing economy will create other problems, namely budgetary ones. Currently, the Public Debt in the U.S. is over $8.8 trillion and is growing at well over 5% per year, amounting to nearly 70% of GDP. The Bush tax plan seeks to spur economic growth by reducing the tax burden of the investor class. This growth, then, will increase tax revenue despite lower tax rates. Many, such as Alan Greenspan, suggest that there is no way to verify weather or not this tax plan is actually the catalyst for growth that the supply-siders claim. But more importantly, with reduced taxes, if the economy underperforms, the debt will be sent soaring. Likewise, if inflation outpaces economic growth, the benefits of that growth are erased.

In short, sub-European rates of growth in the U.S. are problematic because the budget is dependent on high rates of growth to sustain itself. Europe, with higher taxes, is less dependent on growth to meet their budget targets. Furthermore, inflation in the U.S. is outpacing inflation in the Euro zone by nearly 35%. This makes greater economic growth in the U.S. even more vital if we are to enjoy its benefits. Right now we may be seeing the beginning of the dreaded stagflation which has been at the doorstep for quite some time.

Finally, as markets continue to react overoptimistically, the potential for a much more disruptive correction which can cause a ripple effect around the world increases daily.

Insane Conservatives (Part 2)

Nearly two weeks ago, I posted about some Insane Conservatives. Essentially, the claim was made that lynchings in the 19th and 20th century were largely politically motivated, and it was the Democratically controlled legal apparatus of the southern states that precluded the perpetrators from facing trial for their crimes.

I thought the claim was rather dubious, so I posted a comment requesting some substantiation to the claim. Then I went out and tried to substantiate or refute it myself (original post).

I couldn't find anything in the source documents, and I didn't get a response to my question on the forum. So, I wrote to the editor (editor@theconservativevoice.com). I didn't really expect to hear back from them, but I did, several times. Of course, I never did get any evidence to back up their claim, but I did get a litany of name calling directed at me that I haven't received since grade school.

For your enjoyment, here is the exchange I've enjoyed over the past couple of weeks. Keep in mind logic 101: If A, then B. I never got A, but the editor expects B.

Dear Nathan,

Thanks for the account. I have posted a question regarding your claim that most lynchings were politically motivated and against Republicans.

http://www.theconservativevoice.com/article/24248.html

If you could please cite your source for this dubious claim, I would be most appreciative.

You can see the work I have done in an effert to substaiate or debunk the claim you have made here on my blog....

http://praguetwin.blogspot.com/2007/04/insane-conservatives.html

If you can substantiate your claim, I will post a retraction of this post along with an apology.

If you can not, I expect that you will do the same on your blog.

Thanks and best regards,

Michael
(Prague Twin)

********

Michael, words like dubious and insane conservatives don’t lend to an open minded discussion. Best of luck!

Nathan Tabor

********

Nathan,

I am doubting the claim, thus it is dubious to me by definition. As to the insane conservative part, if you back up the claim, which is in doubt, I will be glad to post an apology as I mentioned.

Regards,

Michael

*******

Michael – since you obviously aren’t the brightest I will enlighten you – I didn’t write the piece – please talk with Paul

Please post an apology to me – thanks!

*******

Nathan,

I guess we are even. Personal attacks don't lead to open discussion, I think you would agree. You are the editor, are you not? Does not that make you responsible for the content? Usually when one questions the content of a publication, they address their concerns to the editor.

I'll post an apology as soon as I get a response to my question.

Perhaps you would be so kind as to pass on my concern to the writer, Paul, who's writing you have published on a site of which you claim to be the editor.

Michael

*******

Michael, perhaps you would like to read the disclosure at the bottom of the page.

You are a typical liberal. You say something then when given the truth you don’t keep your word. I would assume this is a character flaw with you.

If you have a problem with Paul post it in the forum.

Sorry you aren’t a man of your word.

Nathan

*******

Nathan,

I've been checking the forum nearly everyday since I posted my question on the 17th of April. When I last wrote you, on the 22nd there was still no response.

Usually, I am able to respond on my blog within 24 hours, so after 5 days of no responses, I was waiting to hear back from you via email.

Your personal attacks and stonewalling have been less than helpful. Currently, your blog is not loading, so if there is a response there, I'm unable to read it.

Perhaps you will let me know when your server is functioning again.

I am most certainly a man of my word, and as soon as I have the information I need from you or Paul, or anyone else from your establishment, I'll keep my promise.

Michael

*******

Your a liar Michael. The site is loading fine.

You made a promise that you didn’t keep. Once I provided you with my information you then changed your word – typical liberal.

Personally, I don’t care if you ever visit my site again.

Even your email now is a lie – I wrote you last and you didn’t respond.

Take care and try to become a man of character.

*******

Interjection: At this point I really started to wonder. Had I missed something? Did he provide the information? I checked the forum again and looked at all of the emails from Nathan. Nothing. This guy is truly insane. I mean, I think he really thinks he provided me with some information, but clearly he hasn't. The conversation continues.....

*******

Nathan,

I went back a couple of hours later and it was loading fine. Still, though, no response from Paul. I check this email once every 24 hours maximum so dont expect a response immediately.

I am not a liar, but you are certainly paranoid.

I made it clear that if you, Paul, or anyone else could substantiate the claim with which I took issue, I would post an apology. To date neither on the forum, nor via email have you, or Paul taken the time to do so. Instead I get a littany of abuse and undeserved titles.

You will kindly note that Paul's email does not appear on his profile, so your orginal suggestion that I take it up with Paul is misguided at best. I did take it up with him on the forum and, as I mentioned, to date have not received a response. Thus I took it up with you, and you've done nothing but abuse me, label me, and utterly fail to fulfill my most simple of requests: to source a claim made on your publication.

You are not only a poor editor, Nathan, you are childish and mean.

Best of luck,

Michael

*******

Michael, you can apologize now for lying – your latest email said you “I made it clear that if you, Paul, or anyone else could substantiate the claim with which I took issue, I would post an apology.”

However, you first email (below) says time and time again that you are challenging my claim and if I can substantiate my claim you would post an apology to me.

You call me paranoid (not sure why) - however, it is obvious you are ignorant and not a man of your word.

Your last part of your email is a typical whining liberal. You attack but then when confronted with the facts you try to act like a victim. Grow up and be a man.

Nathan

*******

Nathan,

O.K. Help me out. Maybe I'm not so bright. Where can I find substantiation of the claim?

Michael

*******

Waiting for your apology.

*******

As soon as you substantiate the claim, you'll get it.

*******

I’m sorry. I don’t deal with liars and those who don’t keep their word. You made a promise and then broke it. Take care.

*******

So here is the question. Do I put the basic logic question to Nathan once again? IF A, then B. Not B, irrespective of A.

Here is another one. Is he insane, or just a total idiot?

I'll let you all be the judges.

I'm It

So I've been been tagged by Kvatch at Blognonymous. First of all, I just want to say I'm honored. I've never been tagged for anything before, but being included in Kvatch's list of "Blogs That Make You Think" has me feeling pretty good. Thanks Kvatch!

Two of his other picks, Club Lefty and Grub Stree Journal are also on my blog roll and very well may have made the cut in other circumstances. So leaving those two out, here are my picks for "Blogs That Make You Think."

• A Republic, if you can keep it: David Schantz is a Constitutional Liberatarian. His "Question of the Week" every Sunday will get those synapses firing.



• Left in East Dakota: Graeme is a Socialist who makes me consider the benefits of Socialism. Well done Graeme, that is a tall order.



• Craig Murray: His header speaks for itself...
  As Britain's outspoken Ambassador to the Central
  Asian Republic of Uzbekistan, Craig Murray helped
  expose vicious human rights abuses by the
  US-funded regime of Islam Karimov. He is now
  a prominent critic of Western policy in the region.



• Mccs1977: Frederick can be a little vague sometimes. I like that. It makes me think.



• XDA: Last but certainly not least, my blogfather, Roger, is a former DA from Colorado with whom I disagree on almost everything. But he is a thinking man, and loves a good fight. Enjoy!

I think I have a pretty good mix from left to right here. I hope you will all enjoy these picks.

HR 676

I'm hearing some rumblings in my little blog world about supporting HR 676. Let me just say that I think universal health care is inevitable, and is needed. However, having said that, the transition is going to be very, very painful.

Total health care costs in the United States are running at $2 trillion per year. HR 676 proposes that this sum be paid for in the following manner:

(1) by vastly reducing paperwork; (2) by requiring a rational bulk procurement of medications; (3) from existing sources of Government revenues for health care; (4) by increasing personal income taxes on the top five percent income earners; (5) by instituting a modest payroll tax; and (6) by instituting a small tax on stock and bond transactions.

Ok, point (1) is a good one. Administrative costs may account for $500 billion so we could easily save $200 billion a year there. That would be great, but let's keep in mind that those costs would be largely saved by reducing the workforce in health care administration.

Point (2) is also a good one. Drug prices are outpacing even skyrocketing medical costs, and need to be reigned in. How much can actually be saved with this approach? That is anyone's guess, but let's be generous and say another $200 billion.

Point (3) is logical enough. The Government currently spends nearly $700 billion on health care (or $2,360 per person).

So the first three points are all logical and painless (unless you work for a hospital administrative unit or a pharmaceutical company). The next three involve some pain. We have to figure that despite the savings in drugs and administration, we are going to be facing at least another $1 trillion per year that is currently unfunded. So where will it come from?

Point (4) talks about raising taxes on the top 5% of wage earners. Since there are currently 146 million working men and women in the U.S., the top 5% represents about 7.3 million people who make on average about $260,000. If these 7.3 million people had their taxes raised by 10% (which is a lot) that would generate nearly $200 billion.

Ok, only $800 billion to go, and we are there.

Point (5) talks about a "modest payroll tax" being added. Now, I'm going to ignore point (6) for now because for one, it is a stupid idea which probably will backfire, and for two, it probably isn't going to raise that much money. Clearly, the bulk of the added resources will have to come from this "modest paroll tax." And what will this modest payroll tax be? Well, $800 billion divided by 146,000,000 (yeah, that top 5% who is already paying an additional $26,000 a year will have to pay it too) is.......

$5,479.45

I have been very kind in my calculations. I can't imagine that the top 5% is going to pay an additional $30,000 per year without a fight, and a lot of people are not going to be able to pay that amount, so the burden will have to be shifted up. Also, although the first two points will help to control the growth in health care costs, they are still going to grow. Also, don't forget that all those people who lose their jobs in the administrative industry are not going to be employed.

One final thought... what about all the people (like my sister, for example whose family pays nearly $1,000/month for insurance) who earn their living through investments such as real estate? I guess they get to shift the burden of their insurance on to the American worker? That is a HUGE whole in this plan.

Like I said, I think universal health care is a must, but HR 676 falls well short of providing it in any kind of sane or equitable manner.

The Buzz (or lack of it)

By now, I'm sure you have all heard the buzz that the bees are disappearing.

I don't have much to add here except, seriously, it is time to panic. That, and that this type of event reminds us all that we live in an ecosytem that is interconnected. We can go on killing everything around us and destroying our environment, but some day, it is going to bite us back.

Let's hope it is not today.

Postscript: Another in-depth article (CSM)

h/t: Publia

Another Impetuous Move?

The Dow has closed at a new record high for the third day in a row, largely due to better than expected earnings reports and higher oil prices. I'm sure consumers will be glad to know that Caterpillar is cutting huge profits and oil is surging up above $63 a barrel.

But all kidding aside, if you look at a one year chart, you will see that the big dip in February has been erased almost as if it wasn't there. What I though would be a wakeup call for investors to show a little restraint has been so quickly forgotten.

I had predicted a correction down to 11,700 before it would turn around. I missed by about 300 points (quite a significant amount). When I posted about "the golden ratio" a couple of weeks ago, I pointed out that if the 61.8% level were to be broken, we could expect a new high in "short order". Well, here we are.

I fear though that this all too fast. I am of the opinion that the February correction was a good thing, but that it didn't temper the market as it should have. We are off and running again. Let's see what happens in May when investors typically "go away."

UPDATE: Great article here by Larry Kudlow about inflationary risks, confirming my belief that the Fed should not, and probably will not lower interest rates. (h/t reality-based educator)

Guns and Healthcare

Yesterday I mentioned that I would address some gun-control measures that I don't agree with. Without getting into too much detail, I don't think that nit-picky measures that say you can't have this or that gun, or that limit the amount of cartridges a magazine can hold do anything to prevent crime. Does it make a difference if I have 3 magazines with 10 rounds each, or if I have 2 magazines with 15 rounds each? Not a bit. I can't own an M16, but I can own an A15 and it is the same damn thing. Does the fact that I have to have a permanantly fixed magazine on my A15 prevent me from sniping people from a fourth story window? No, it just makes it a little bit harder to load.

At issue is not what weapons were used in the Virginia Tech massacre, but who used them.

Reality-based Educator sent me a very good article by Michael Isikoff from Newsweek. The basic point made is that Seung-Hui had no business buying the guns he used. He lied on the form, and the system in place should have prevented him from buying them. This bit of the article jumped out at me....

...groups like the NRA have long supported adding all relevant mental-health records to background check databases. "We have no problem as long as one is adjudicated mentally incompetent [in denying gun purchases] and we have no problem with mental health records being part of the NICS," the source said. "The problem is not with the gun community. The problem is with the medical community" that has traditionally opposed making such records available on privacy grounds.

Yesterday, I reviewed the Czech system for acquiring guns, and I highlighted the point that I need a note from my doctor that I am both physically and mentally fit to own a gun before I can purchase one. As I mentioned before, I think this system is preferable because unless I choose to purchase a gun, my medical records stay private and are not part of a national database.

Let me put that another way; if I am certifiably crazy, I can keep that a secret between me and my doctor unless I want to buy a gun. Under the American system, every time someone has an episode, their files should go into a a national database that is probably less than 100% secure, and as we have seen, much less than 100% complete.

So why can't there be such a system in the United States? "The problem is with the medical community." How many people don't even have a doctor? If you don't have a primary physician, who would issue the note? Here in the Czech Republic, everyone has a primary physician, and if you receive treatment elsewhere, your primary physician will know about it. But in the United States, with over 10% of the population uninsured, I'm sure many people don't even have a primary physician.

This is another way that the lack of comprehensive healthcare affects all Americans. Add to this the fact that psychological treatment is quite expensive, hard to come by (especially since the Federal Government absolved itself from funding it), and as was the case for Seung-Hui, not required for clearly insane people. It is clear to me that the lack of comprehensive healthcare affects all Americans, not just the ones without insurance.

More Thoughts on Gun Control

Now that it has become clear that Cho Seung-Hui was certifiably insane, the question of gun-control has be addressed. Should people who have been determined to be a threat to themselves, as this man had, be allowed to purchase firearms?

I think the answer to that question from any sane person is a resounding, "no".

When I talk about the right to bear arms (1, 2), I don't consider that right to be free of limits.

One of the main complaints I'm hearing, especially from New Yorkers, is that guns are much too easy to purchase in this particular state in question, Virginia. As much as I hate to think that there should be a federal mandate, it seems a little strange that the States can interpret the Constitution however they want.

But more importantly, what we should be looking at is what are appropriate forms of gun-control, and what are not. This case highlights the need for proper background checks. Here in the Czech Republic, I can get a gun, but I need three things before I can get my license.

First I need to take a very simple training in how to safely handle a gun, and pass a test at the end. No big deal.

Second, I need a note from my doctor that I am both physically and mentally fit to own a gun. There are no medical tests or psychological examinations needed, but if I had a history of mental illness, my doctor would not give me the paper. This is a better system than a data-base because medical information remains in the hands of the doctors, and not on some government server. If I did have a history of mental illness, I wouldn't have to disclose that to the government. Only if I want a gun do I have to more or less prove that I am healthy. Again, no big deal.

Finally, I have to provide the police a reason for wanting a gun (hunters and target shooters have a bit of an advantage here, but I can just say "self-defense" and that is enough), and they have to sign off that I don't have a criminal record. Again, no big deal.

So I am not opposed to a similar system for the U.S. Perhaps instead of the class, you could just pass a proficiency exam, so that those who already know how to use guns don't have to waste too much time.

Sure, it seems like a hassle, but owning a gun is a very big responsibility, and like anything else you do in society that has the potential to harm others (like driving a car for example), you have to prove to society that you are capable of handling that responsiblity.

Obviously, Cho Seung-Hui was not.


(Tomorrow I will post some thoughts on gun-control that I think are not acceptable or useful.)

Insane Conservatives

We all know that conservatives have been crying foul over media bias, claiming to be the victims of an unitentional but deadly "left-wing bias", but sometimes they really go too far. Take this post I found in the Conservative Voice. (O.K., actually my Uncle sent it to me, but what the hell, I guess that means I found it).

The April 11, 2007 edition of Salon.com, a leading liberal website, contains an article by Earl Ofari Hutchinson, titled, The Politics of Lynching. What is most peculiar about the article is that not once does Hutchinson mention that lynching was essentially a political crime, perpetrated by Democrats and their terrorist auxiliary, the KKK, against Republicans, both black and white.

Tuskegee Institute records tell us that, between the years 1882 and 1951, some 3,437 blacks and 1,293 whites, nearly all Republicans, were lynched.

Are you as stunned as I am? I really didn't know where to start, so I started at the Tuskegee Institute, the source. I found the exact figures that the Conservative Voice had used. They were in a paper from the Yale-New Haven Teacher's institute (The Negro Holocaust: Lynching and Race Riots in the United States,1880-1950 by Robert A. Gibson). From the paper:

According to the Tuskegee Institute figures, between the years 1882 and 1951, 4,730 people were lynched in the United States: 3,437 Negro and 1,293 white.

Sounds like the same quote to me, and wouldn't you know, Mr. Gibson used a footnote! (Note to Conservative Voice: try it sometime).

Guzman, Jessie P., ed., 1952 Negro Yearbook (New York, 1952), pp. 275-279.

Unfortunately, this particlular book is not available online, but in my desperate search for it, I found an earlier version of the Yearbook which showed that blacks in the late thirties were just becoming more politically active and voted more for Democrats than Republicans, but by no means did the Democrats have a lock on the black vote.

Going back to the Gibson paper, I found that the reasons for lynchings were myriad, but political affiliation isn't mentioned at all.

The accusations against persons lynched, according to the Tuskegee Institute records for the years 1882 to 1951, were: in 41 per cent for felonious assault, 19.2 per cent for rape, 6.1 per cent for attempted rape, 4.9 per cent for robbery and theft, 1.8 per cent for insult to white persons, and 22.7 per cent for miscellaneous offenses or no offense at a 11.5 In the last category are all sorts of trivial “offenses” such as “disputing with a white man,” attempting to register to vote, “unpopularity”, self-defense, testifying against a white man, “asking a white woman in marriage”, and “peeping in a window.”

I dug further, trying to prove or disprove this outrageous claim but I couldn't find anything that linked political affiliation with lynching. (1,2, ).

So what is most peculiar here is not that Salon.com left out this "fact", but that the Conservative Voice chooses to make this claim without citing any source whatsoever. I wrote to them asking for a source for their claim. I don't suppose I'm going to hear back.

Horrific

By now, anyone reading this blog is well aware of the horrific acts of violence perpetrated allegedly by a South Korean student at Virginia Tech, so excuse the lack of links.

A while back, I posted a piece about my recent target shooting experience, and my belief in the 2nd Amendment. This incident has not changed my mind.

It is too early to tell, but I have yet to hear anything about an illegal gun being used in this most recent incident. It looks like the perpetrator had a couple of ordinary handguns, and a reserve of magazines. One of the points I made in the earlier post is that limits on the number of cartriges that a magazine holds (please don't say clips by the way, they are magazines) is unlikely to prevent a crime. I think this case will bear me out on this point. The time it takes to reload a simple semi-automatic hand gun is not going to save lives.

However, having said that, certain gun laws actually can cost people their lives, as they did in this case. I don't want to get into the media bias argument made in this article, but I do want to point out something that may not have occurred to most of my readers. "Gun-Free Zones" do not work, and are incorrectly named. Obviously, Virginia Tech was a campus that was supposed to be gun-free, but clearly it was not. Only the law abiding students were without guns here. It only would have taken one more gun to end this thing a lot sooner and save some lives. Now, from the article I mentioned earlier....

Peter Odighizuwa tragically shot six people, killing Dean Anthony Sutin, Associate Professor Thomas Blackwell, and student Angela Dales.

Most news reports pointed out that the situation ended when several students "confronted," "tackled," or "intervened." However, Tracy Bridges, Ted Besen, Todd Ross, and Mikael Gross did not merely "confront" Odighizuwa. Bridges and Gross separately ran to their cars to get their handguns once the shooting began. Bridges approached Odighizuwa with Besen's and Ross' aid. Gross was close behind. According to Bridges, "I aimed my gun at him, and Peter tossed his gun down." Bridges, Besen, and Gross had previously received police or military training.

I understand that those who favor gun-control are well meaning, by and large. Perhaps if we had never needed guns in the first place, and America was not armed as it is, some type of gun-laws could have improved the situation. However, as it is now, gun-laws will only serve to disarm the law-abiding and leave those of us who abide by the law at the mercy of the thugs who do not.

I'll be sure to post further on this as more details come out and in reaction to the slew of comments that I hope I will get.

Economy Surging

Good news for investors as March retail sales increased more than expected. Retail sales increased by .7% in March even though most had predicted a more moderate .2 or .3% increase. This increase in sales was led by gasoline, building materials, apparel, and bars/food service. Also worth noting is that Feburary's increase was revised upwards from .1% to .5%.

At the same time as this data was released, the New York Empire State Manufacturing index showed very slow growth, notching up 3.8 points when most had been predicting a more healthy 10.1 reading.

So although manufacturing continues to suffer, American consumers are showing no signs of fatigue. The equity markets have taken their cue and are up sharply just after the open. In fact, the Dow has just crested 12,700 and is now less than 100 points from a new record high. About 10 days ago I mentioned that the Dow was at a key level. Now that that level has been passed, there is little resistance in the way of a new high.

However, tomorrow we get Consumer Inflation, Housing Starts, Building Permits, Industrial Production and other data that could put a damper on this rally.

One final side note, much less money flowed into the United States than expected in March, but because of the inherent volitility of the "TICS" data, and the shrinking trade deficit, it is of little concern.

Zinni Makes Sense

I saw Anthony Zinni's interview on Meet the Press this evening (transcript) and was shocked at how much sense he made....at least to me.

One of the reasons I was against the Iraq invasion is that I realized once you are in, you are in, and your choices are limited. As much as I'd like to see the troops come home, putting a time table on their return makes about as much sense as the surge (and the rest of the Bush tactics since Baghdad fell): none.

Here are some quotes which explain what I mean...

Those of us that know this region, have been involved in the planning, knew that this was a fragile society, that if you did not intervene in a way to gain control of the borders, the population, you could cause all sorts of internal issues to erupt into the kind of violence we saw.

...snip!

We threw away decades worth of planning and understanding of the situation. We discounted those that warned that the assumptions were too optimistic, and we had the results we have now.

...snip!

We have caused in the center of the Middle East a place where the—we could have a sanctuary for extremist groups, where Shia and Sunni strife can spill over, where we could have an Iranian or Persian/Arab conflict, and we have to find a way to contain this now. We can’t walk away from it. We cannot continue on the same course.

What has disappointed me is there hasn’t been this debate on the strategy, on the policy, a regional strategy on policy, let alone an Iraq policy. We’re, we’re debating the tactics. The, the surge is a tactic. In what context is the surge? You can make an argument for a surge if you were going to withdraw, to cover the withdrawal, for example, or to contain, to reposition forces or to re-engage in a different way or a stronger way. And why we got caught up in the tactical debate, in my mind, is an indication that we don’t understand what we want to do. What should our Middle East policy be? What should our policy be in terms of Iraq and, and the war against the extremists out there or the conflict against extremists? We seem to be strategically adrift, in my view.

As much as many of us would like to walk away from this, that is just completely unrealistic. However, to continue down this same path, altering tactics from time to time without changing the strategy is nothing short of suicide (or murder, depending on who you are).

What is needed is better leadership.

What we have is Bush/Cheney.

Typical

One thing that I've learned to count on from Bush appointees is their ability to embroil themselves in problems and scandal without help from anyone. Paul "Iraq will be able to fund their own reconstruction virtually immediately" Wolfowitz is now facing pressure to resign for allegedly securing pay raises for his lover, Shaha Riza who claims SHE is the victim in all this. Predictably, Bush supports Wolfowitz despite the pressure. Wolfowitz has admitted his mistake, which I guess puts him first in line for the next Medal of Freedom.

All four panelists on Mclaughlin Group, as well as Mclaughlin himself, agree that Wolfowitz will be forced to resign.

That won't affect his chances for a medal and a promotion though.

Missle Defense

As you may have heard, the U.S. plans to build a missle defense system in Europe. The Czech Republic has been selected to host the radar equipment, while Poland has been designated as the host of the actual missles. Today it was announced that the construciton of the radar system will cost $260 million. Negotiations over the details will continue throughout the year, and I suspect that the question of who is to shoulder the burden of the cost is still unresolved.

About 60% of the Czech people are against hosting the radar system. However, the ruling coalition is for it, with the exception of the Greens who are hesitant and want more oversight and specific information from NATO.

The Social Democrats, and the Communist parties are strongly against it, adopting the same tone as the Russians who claim this will destabilize the region. To be honest, since the Czech Social Democrats are little more than institutional criminals, and the Commmunists are, well, Communists, I'm starting to lean towards favoring it.

However, no one has yet said who this missle system is design to protect us from. I think that is a legitimate question.

So It Goes

Now that I've stolen the title of my post from several others who stole their title from the man himself, I'm going to pay tribute to the late, great Kurt Vonnegut Jr. with links to all my fellow bloggers who were kind enough to beat me to the punch.

Swerve Left has a very good clip from A Man Without a Country which contains his favorite joke, which he hoped would be used after his death. How could I let down Mr. Vonnegut? I hope he is in heaven. (laugh, tear).

Blognonymous, wishes he could have met the man. Libby Spencer did meet him. (Very touching story)

Frederick has a picture tribute worth looking at, and Dusty pays tribute with her well selected words.

Reality-based Educator quotes a dire poem and Expatbrian must be psychic. If you read thepoem that Reality-based Educator quoted, and then click on the world gone mad link, it is almost creepy considering that Brian posted before Mr. Vonnegut passed away.

I just want to say this: we could all learn a lot about being human from this very, very great man. I am sad that he is no longer with us..... I sure do hope he is in Heaven. (laugh, no tear this time).

Money Where Your Mouth Is

One of the things I like to follow is the selling of contracts on political events. While people were haggling about whether or not the Democrats would take the Congress in '06, I was following the odds makers and was confident that they would, in fact, take the Congress because rarely are the players that wrong. Now, one could have made a pretty penny on the Democrats taking the Senate, because that did surprise almost everyone, I think. The true believers got well.

So if you are interested, go to Intrade and have a look at both primaries and of course the general election. The number you see next to the candidate's name is the amount in cents you would have to pay to get a $1 return. Bid are contracts that people are trying to buy, and offer are contracts that people are trying to sell, so if you want to bet on a candidate, look at the offer price. If you want to bet against a candidate, look at the bid price. It is also possible to "job" the market by bidding or offering within the spread. It is likely that your bid or offer would be settled relatively quickly if you did that. Also, you can click on a candiates name to get the historical price of the contracts.

You will notice that Clinton is the hands-down favorite for both the primary and the general election. You can get just barely over 2 to 1 for her to win the primary, but Obama is a reasonably close second at just over 3 to 1. Incidentally, while Giuliani is the clear favorite to win the Republican nomination, the current odds of that are about the same as Obama's odds of winning the Democratic nomination. So the Republican primary is way more wide open than its Democratic counterpart.

Another interesting tidbit is that Obama currently holds better odds of winning the general election than does Giuliani.

Finally, for all of you out there who think Edwards has a chance to win the primary, you can buy a $1 contract today for only 8.3 cents. I say to you: put your money where your mouth is.

Happy Easter Monday

Here you see the Czech "pomlazka" which is used on Easter Monday (that is not a mistake, we celebrate Easter on Monday here) to whip the women with. This traditional whipping is to ensure that your woman will be lively, healthy, and beautiful the entire year. Certainly this tradition has it's roots in the the Pagan spring fertility rituals.

Upon being whipped, the women are then to be doused in water. Some say this is to cool them off (because being whipped makes them so hot) but others contest it is simply part of the ritual which injects life into the women. After this, the men are rewarded for their work with eggs and/or shots of liquor. In the villages, roaming packs of young men go door to door, extorting free booze from each house in return for NOT whipping the women.

It is all in good fun, but when I tell my American friends about this tradition they usually think I'm just making it up. Clearly, I'm not.

Nonfarm Payrolls

Nonfarm Payrolls came in stronger than expected and right at the 12-month moving average. Translation: 181,000 new non-farm sector jobs were created in March, which was about 45,000 more than the consensus estimate. This continues a pattern of strong jobs growth that the chart above reflects.


As a result of strong job growth, the unemployment rate continues it's downward trend, while wage growth remains robust.


The only negative comment one can make about the American employment picture is reflected above in the average workweek. The failure of the average workweek to increase (as it normally does during an expansion in employment) indicates that more part-time jobs are being worked during the current expansion than in the past. Underemployment continues to be an important factor, one that is often overlooked.

Thanks to Briefing.com from whom I've stolen these charts.

A Clue

Now that is a nice piece of glass (heh, heh).

Fusion Z

Fibonacci

Ok, It looks like I've completely lost my readers with the previous post. That is understandable, having just re-read it. I was hoping to introduce the golden ratio as it pertains to the stock market and charts in general, and I failed miserably.

If we take nothing else from the discussion, hopefully the picture above highlights the basic principle I was trying to get across. I do hope that it helps.

If it doesn't, please check out this very short flash animation for the most basic description of what it was I was trying to get a across. Really, check it out. I promise it is painless. If you like it, you might want to skim this article about the man himself.

What amazes me is that this ratio appears in nature, as well as in the stock market charts. Why is this so? Well, no one really knows for sure. That is why it is so interesting to me.

Where Are We Going?

The Dow is bobbling around at the 61.8% retracement of the downward move from the record high of just under 12,800 down to about 12,060. It is currently trading at 12,524. Why is this number significant? This level is providing resistance at the fibonacci, or golden ratio. Traders just call it the 61.8 fib.

If you are interested in why this is significant, check out this Wikipedia article on the subject.

Essentially, we expect that after a sharp move down, a retracement will occur. If the market fails to breach this 61.8% level, we expect it to go back down (perhaps only 61.8% of the original 61.8 fib). But should this level be breeched significantly, we would expect the Dow to match it's high in short order.

Tomorrow the "mother of all data" will be released. Expect the market to meander along today, as it did yesterday, with investors waiting to take it's cue from tomorrow's NFP data. Rumor has it that the data will be good.

I guess my theory that we will see a correction to 11,700 is out the window... or is it?

Gypsy Getting Noticed

A few weeks ago I posted about the recent Gypsy.cz concert in Prague. There were only a few hundred people at the concert and it wasn't sold out, so I was a bit surprised to see that their album has broken into the top ten on the European world music charts making them the first Czech band to do so.

Way to go guys! Maybe soon you will be able to buy it in the States.

Update

I had to get rid of one link, but I picked up three new ones. Please give them a look if you have the time.

First is the Disillusioned kid. He (I'm assuming he is a he) is a peace/liberty activist from the U.K. I've been checking up on his site for quite some time now, and finally got around to linking him.

Second is Craig Murray, the former British Ambassador to Uzbekistan who was forced out presumably because he highlighted the torture that was going on there. I guess the west has no plans to invade Uzbekistan otherwise he would have been given a raise or a promotion. He should probably be in my "Experts, pundits, and Hounds" section since he is most certainly the latter, but he responded to a comment I left there in a matter of hours so I'm feeling a fellowship. Also, he helped me (and the world at large) work out the British/Iranian dispute. If you don't know of him, you should.

Third is The Impolitic written by Libby Spencer. She just seems cool. Also, I have a great respect for anyone who is doing this for as long as she has and not for profit. Blog on Libby! You rock!

UK Sailors Taken Captive, World Holds Breath

When the story of the 15 UK sailors taken captive by the Iranian Revolutionary Guard broke, I was in the United States. After I heard about it, I picked up the morning LA Times to get some more information. Amazingly, this story was given third billing behind the House Resolution on Iraq (somewhat understandable) and the tainted dog food story (unbelievable). Perhaps now it is the lead story, as it should be.

This thing has the potential to blow up into a devastating conflict. One of the key points here is that neither side has provided convincing evidence as to where the incident actually took place. The UK Ministry of Defense announced last Wedndesday they would release proof later that day that the sailors were in Iraqi waters when they were taken hostage. They said the same thing on Thursday and then delivered. However, there is still a long way to go to actually prove such claims. For their part, the Iranians have changed their story as to the exact location of the UK sailors when they were captured. Neither side is very convincing.

Another key point here is that the UK's rules of engagement are such that these sailors did not defend themselves when they perhaps could have (Bloomberg). And what occurs to me is how easily the UK soldiers have succumbed to demands that they admit they were in Iranina waters. Also, the IRNA reports that that the sailors may face trial.

One story you won't hear on CNN is the claim by the Iranians that the UK fired on its consulate in Basra. Nor will CNN report in the same breath that the US took 5 Iranians captive in Iraq just a couple of short months ago. Instead, we get the very predictable tough talk from President Bush which can not be backed up. And as a further side note, it has been reported by a Russian news agency that US plans to strike Iranian nuclear facilities this weekend. That, of course, is just a rumor at this point, but that would NOT be a "Good Friday" at all.

Meanwhile, students in Tehran have surrounded the UK embassy in protest.

This leads me to the point where we must ask, "who has the most to loose from a conflict?" People who live in glass houses shouldn't throw stones, it has been said. So whereas the U.S. economy is facing a slowdown, the Iranian economy is already in shambles. Whereas the U.S. imports some 10 million barrels of oil per day, Iran exports about 2.2 million barrels per day.

Who stands to loose the most should a conflict push the price of oil above $100 per barrel and spark a global recession: the rich importers, or the poor exporter?

Finally, this is a perfect example of how a conflict in one place (Iraq) can spill over to conflicts elsewhere. America's gamble is getting riskier and riskier every day.