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Tuesday, November 16, 2010

European Debt Contagion

Contagion hits Portugal as Ireland dithers on rescue

The EU authorities have begun to vent their fury against Ireland over its refusal to accept a financial rescue, fearing that the crisis will engulf Portugal and Spain unless confidence is restored immediately to eurozone bond markets.


November 15, 2010

Europe Fears That Debt Crisis Is Ready to Spread

LONDON — European officials, increasingly concerned that the Continent’s debt crisis will spread, are warning that any new rescue plans may need to cover Portugal as well as Ireland to contain the problem they tried to resolve six months ago.

Any such plan would have to be preceded by a formal request for assistance from each country before it would be put in place. And for months now, Ireland has insisted that it has enough funds to keep it going until spring. Portugal says it, too, needs no help and emphasizes that it is in a stronger position than Ireland.

While some important details are different, the current situation feels eerily similar to what happened months ago in Greece, where the cost of borrowing rose precipitously.

European authorities stepped in with a rescue package, expecting an economic recovery and the creation of new European rescue funds to fend off future panics by bond investors whose money is needed by countries to refinance their debt.

But with economic conditions weakening, markets are once again in turmoil. Rescuing Ireland may no longer be enough.

Stronger countries and weaker countries using the common currency of the euro are being pulled in different directions.

Some economists wonder if unity will hold or if some new system that allows countries to move on one of two parallel financial tracks is needed.

Despite the insistence of Irish officials that only its banks need additional help, investors continue to bet on an Irish rescue, driving down the bond yields on that country’s debt against a benchmark again on Monday.

Portugal’s yields increased to 6.7 percent, underscoring the emerging concern in Brussels, the administrative center of the European Union, that it would be irresponsible to adopt a plan to prop up Ireland without addressing the possibility that turmoil could ultimately engulf Portugal, or even Spain. Like Ireland, Portugal has struggled to grow under the fixed currency regime of the euro. Though Portugal has raised enough funds of late from bond markets, its budget deficit is 9 percent of its gross domestic product, much higher than the 3 percent limit for countries in the euro zone. With its weak government and slow growth, investors have grown fearful that Portugal, too, will eventually run out of funds.

While Ireland has largely impressed European officials with its commitment to austerity, Portugal has been lagging in this regard, according to European officials. One official in Europe, who asked for anonymity because he was not authorized to speak publicly, said that the budget recently presented by the government in Lisbon did not contain the type of far-reaching changes proposed by other countries, like Spain.

“If Ireland were to ask for aid, then you’d have to look at what’s going on in Portugal as well,” the official said, putting forward a view rescuing Ireland alone would not keep speculators from other vulnerable countries.

José Manuel Barroso, president of the European Commission, said on Monday that Ireland had not requested aid. “We have all the instruments to address the problems that may come either in the euro area or outside the euro area,” he told reporters in Brussels.

The Portuguese finance minister, Fernando Teixeira dos Santos, said Monday evening in Brussels that the situation in Ireland was creating dangers for all countries using the euro.

“If things are getting worse in Ireland, for instance, that will have a contagion impact on the other euro zone economies and particularly on those that are under closer scrutiny of markets, like Portugal,” he said. Asked if Ireland should accept a bailout to stem the contagion, Mr. Teixeira dos Santos said, “It’s not up to me to make that assessment.”

Even so, Mr. Teixeira dos Santos emphasized that his country was not preparing to ask for a rescue package.

Mr. Teixeira dos Santos also said his government was preparing a robust budget that would cut wages, freeze pensions and raise taxes. “We are really committed to meet our targets,” he said. “I think we deserve that the market gives us the chance to show that.”

The bureaucratic machinations in Brussels highlight one of the main concerns that grew out of the establishment earlier this year of a rescue fund of 500 billion euros (about $680 billion at today’s exchange rate) by the European Union after the Greek budget crisis: What happens if, in the next crisis, multiple countries need aid at the same time?

Months later, it remains unclear how, in practice, countries like Ireland and Portugal would tap the rescue money.

Of paramount concern to policy makers in Europe is Spain, which is struggling to close its own deficit of 9 percent of G.D.P. at a time when unemployment is more than 20 percent and the economy is failing to grow.

Just as the growing inability to get a precise reading on Ireland’s banking losses has propelled the Irish crisis, the extent of Spain’s own banking vulnerabilities — which, like Ireland’s, originate from a real estate boom and bust — remain unclear.

Until now, a series of austerity measures has allowed Spain to escape investor scrutiny. But late last week the spread, or risk premium, between Spanish and German bonds widened to a record high of 2.3 percentage points, underscoring investor fears.

Worries about the banks have peaked recently in light of data showing that distressed loans are now 5.6 percent of total Spanish bank loans — the highest level since 1996.

In Ireland, banking troubles lie at the root of what many in Europe are now calling a solvency crisis, reflecting long-term concern over Ireland’s ability to repay its debts, as opposed to the lack of short-term funds that forced the Greek rescue last spring.

“This policy of saving banks at the cost of breaking the back of entire countries is a disaster,” said Daniel Gros, director for the Center for European Policy Studies in Brussels. “Ireland is beyond fiscal plans as long as one cannot see the bottom of the losses in the banking sector,” he said. The only way to “stop the rot,” he added, “would be to let the Irish banks go under” and then use the European funds to “tide over the government until markets and the economy recover.”

Ireland is unlikely to let its banks fail, but it has been unable to accurately forecast its banking losses — or say whether bondholders will pay part of the bill.

Irish banking losses are estimated at up to 80 billion euros ($109 billion), depending on the forecast used, or 50 percent of the economy. As long as housing prices continue to fall, these losses cannot be capped.

Landon Thomas Jr. reported from London and James Kanter from Brussels. Stephen Castle contributed reporting from Brussels, Jack Ewing from Frankfurt and Raphael Minder from Geneva.

New York Times


  1. House Ethics Tightrope

    Office of Congressional Ethics...

    Under Wise, the OCE has looked into 69 complaints and recommended action on 13 of them. It has operated as an inspector general of sorts and has won praise for reviving the House's notoriously moribund and secretive ethics process. Among others cases, the office brought to light allegations of wrongdoing by Rep. Charles Rangel, D-N.Y., who is now on trial in the House on charges related to fundraising, financial-disclosure, and tax irregularities.

    Asked about the OCE, Buck said that Boehner will "take a look at current ethics rules" but that ethics "has really not been the focus of our transition efforts." GOP leaders probably won't vote publicly to kill the OCE but will simply quietly defund it next year, said John Wonderlich, policy director of the Sunlight Foundation. The foundation has been working with GOP transition leaders on their transparency agenda and has lobbied for the OCE’s preservation.

    "The kind of support that brought the Republicans back to power is somewhat anti-Washington; it's somewhat anti-establishment," Wonderlich said. "It's a somewhat populist tone that Speaker Boehner is going to have to strike to deal with this new crop of freshman members.”

    That could be a tough balancing act, as the recent GOP tug-of-war over earmarks illustrates. The Tea Party Patriots recently sent out a memo complaining bitterly that a conservative group known as the Claremont Institute had scheduled a freshman orientation "coordinated by lobbyists and campaign consultants," for the same day and at the same time that tea party organizers had planned to hold a similar orientation with Rep. John Shadegg, R-Ariz.

    "D.C. insiders, the RNC, and lobbyists are already trying to push the tea party aside and co-opt the incoming congressmen," the memo charged.

  2. Interesting that the stated Fed policy with QE2 is to take treasuries out of circulation forcing investors into other assets.

    They finally figured that out. What do they think happened when they allowed China and other trade surplus markets buy and hold US sovereign debts?

    We see the same thing happening with South Korea. Obama can't understand why they are playing so hard on resisting US imports. They resist because they can. They can sell in the US without buying in the US.

    That is not trade, let alone free trade.

    Stop allowing foreign nations to hold US government debt. They then have to actually trade with the US. What else can they do with their dollars?

  3. Why does that video look so familiar?

  4. Remember the saying, "Beware of Greeks bearing gifts"? Now you have to be aware of Greeks accepting gifts:

    Greece's prime minister lashed out Monday at Germany—its chief euro-zone benefactor—for tough talk on government-debt defaults, making clear the widening strains inside the 16-member euro-zone as the currency bloc wrestles with a teeming sovereign-debt crisis.

    Greek Prime Minister George Papandreou said the spiral of higher interest rates could 'force economies toward bankruptcy.'

    Addressing reporters in Paris, George Papandreou said the Germans' view—long-held, but recently reiterated—that private bondholders could suffer losses as part of a future bailout was intensifying government-debt woes.

    The German position "created a spiral of higher interest rates for countries that seemed to be in a difficult position, such as Ireland or Portugal," Mr. Papandreou said. He added that the spiral could "break backs" and "force economies toward bankruptcy."

  5. Funny stuff, Charlie walks out of the ethics committee hearing.

    The Story of "o" rails against historical accuracy, as it helps to form opinions, claiming prejudice is king. Then will tell us about dual standards, being applied to Israel.
    By everyone other than him.

    Ms Palin has not yet been cut from "Dancing with the Stars", though her dancing abilities are not up to snuff. Understandably so, given her lack of training and prior experience. Her success due to her mothers' popularity, seems to me.

    The Russian arms dealer, Viktor Bout, was extradited to the US, from Thailand, as Mr Putin objects.

    Sen. Lisa Murkowski has more votes than Republican Joe Miller as the count of write-in ballots continue. Ms Murkowski remains critical of ex-Alaska governor Sarah Palin, saying that Palin lacks "intellectual curiosity" to be a good president.

    I do not know the depth of Mrs Palin's intellectual curiosity, though her lack of responsibility the inability to fulfill her term of service, not finishing what she started, that is fully evident. It completely disqualifies her for higher elected office.

  6. Someone needs to explain to the latest of the dreadful Papandreou's that is what happens when you let someone else print your money.

    They loved it when the Germans were building Greek roads and doing for the Greeks what the Greeks were unable or unwilling to do for themselves.

  7. You got it right about Dancing With Stars. Bristol's good, but deserved to be cut a couple of episodes ago.
    She's still in there because Palin supporters are voting for her en masse, or some fix is in. It's the former I think. Sarah Palin's reality tv show is said to be a big hit. Politics isn't exactly played the way it used to be. Murkowski seems to be loved by the native Alaskans, probably earmarked for them. Alaska is big on the federal tit.

  8. There you go, again. bob

    Always looking to classify people by category, putting them into one group or another.

    There are voters and nonvoters, in Alaska.

    The voters have put Ms Murkowski in the lead.

    That even more of Alaska is Federal than either Idaho or Arizona, just an interesting aside, as the Federals from DC save our American Heritage, from capitalist contamination.

  9. Washington DC, saving America from "the rich".

    More funny stuff.

  10. I thought Sarah Palin resented the intrusion of her privacy when a reporter moved next door. Didn't the Palin's erect an Alaskan sized fence to protect their privacy?

    How does a nationally broadcast reality show help achieve their stated cause for privacy?

    Is the dancing Palin the same gal as the marrying/not-marrying "one in the same"?

    I don't know Bob, she does have great looking legs and a foxy looking face, but I think I would prefer her in the Lincoln Bedroom rather than the Oval Office.

  11. Good on 'em for saving our heritage.

    Palin, A Danger To The America

    Back to bed, it's only 5:30 here.

    The weather service called one right last night. Hell of a big wind storm, warnings sent out. Arrived right on time. The trees will look bare of leaves, when the sun comes up.

  12. She wants her privacy when she wants it, and her popularity when she can use it.

    One and the same gal, Dancing With Stars.

    Don't make me drool, thinking about the Lincoln Bedroom.

    Then she'd go to the Oval office, and make a stunning speech to the Nation.

    All in a day's work for the Force of Nature.

  13. Exporting the U.S. housing bubble – Japan and China real estate bubbles provide a fascinating example of what occurs with currency intervention and quantitative easing.

    If Ireland implodes with a similar U.S. housing market what does that mean domestically?

    One of the arguments made about quantitative easing is that it will somehow cause strong inflation and thus cause home prices to move up.

    The argument follows the logic that the roundabout way the Federal Reserve is printing money will somehow result in consumer inflation and thus push home values up as well. To that, we can point to quantitative easing part one (QEI) and see that U.S. property values clearly did not appreciate with $1.75 trillion of Fed intervention.

    Why are we to believe another $600 billion will do anything different from the first round?
    People will say that all this money had to go somewhere and that is true. Much of it went to repair the balance sheet of insolvent banks but has also become hot money around the world. Just because the housing bubble has popped here doesn’t mean it isn’t raging elsewhere in the world.

    The housing bubbles of Japan in the 1980s and the current China housing bubble give us an interesting look at the aftermath of bursting bubbles, currency intervention, and quantitative easing.

  14. Obama and Palin have both been seduced by the money and the attention that comes with American politics.

    Do we have a third choice? We don't need another Bush or another Clinton do we? Is that all there is?

  15. Sorry to have rattled your timbers so close to going to bed.

  16. Deuce said...


    ...must have missed something.

  17. Caller from AK explained Alaska to us puzzeled folk that thot it was populated mostly by risk-taking adventurers.

    Reminded us of all the little garbage dumps sprinkled across the state, consuming and discarding the DC largese.
    Who better to bring it home than well connected Mrs M?

    Alaska as 'Rat's Federal Territory


    Bob's Alaska.

    I mean,

    Sarah Palin's Alaska, of course.

  18. The one thing the government knows for sure when they take your money:

    They've got your money.

  19. People Don’t Live In Delaware. But They Keep Their Money There.

    Its beaches don’t compare with those of Bermuda or the Cayman Islands. You can’t ski there. But the most boring state in the union is best damned tax shelter on earth.
    The First State is finally first at something else, according to the Tax Justice Network.

    It’s the best place for non-Americans to hide from their taxmen, earning the august moniker, “most secretive financial jurisdiction.”

    The equally insignificant Grand Duchy of Luxembourg placed in tax-haven sweepstakes, with odds-on favorite Switzerland finishing a distant third. The Cayman Islands and the U.K. followed the Swiss.

  20. Thanks for that last link, Doug.

  21. No the one before the last link! The housing bubble one.

  22. Rep. Charles Rangel (D., N.Y.) has walked out on the first day of his own ethics trial, complaining that he hasn’t had the time or money to replace the team of lawyers that recently parted ways with him over worries that he couldn’t pay his $2 million-and-counting in legal fees. Rangel said he would be unwise to represent himself, and asked the adjudicatory to postpone his trial.

    Works for me. Delay the trial until the new Republican House can be seated.

  23. My pleasure Selah.

    Do you think it has affected the Phillipine Real Estate Market also?

  24. A nice brand new two-story house in a gated neighborhood with a large lot runs about $50 K. When I retire in about a decade, I will do okay here, but in the Philippines with my pension and 401-K and social security, I will be literally rich, with my own driver and massuese.

    We completely overhauled Miss Fely's parent's home, I figure about $150,000 of work here Stateside, ran about $10,000 all said and done. Master carpenter worked for $6 a day.

    Jay's (Fely's brother) house started about the size of a doghouse and is now a sweatshop employing seven people; himself, wife, and five neighbors. Probably cost us $3,000 including the addition of five new sewing machines.

  25. 5. blert

    The Fed is the lineal successor to J.P. Morgan and his Money Trust.

    You remember J.P.?

    Founder of Chase.

    Banker to the President ( Cleveland )

    The ultimate banker’s banker.


    Plainly, it is evident that the true essence of the Fed must be brought out.

    Originally conceived to replace Morgan’s role…

    The Fed has morphed into CENTRAL PLANNING.

    J.P. must surely be spinning like a lathe in his grave.


    One hundred years ago, the essence of a ‘City Bank’ was to be a hyper liquid vault of cash able to staunch bank runs — especially in the hustings.

    Quite famously, Morgan, back in the day ( 110 years ago… ) staunched a bank PANIC in upstate New York. The ‘runnee’ slow paid all THURSDAY…

    Comes the morn…

    By overnight hyper-express out of NY City Morgan shunted millions in gold bullion, specie, and drafts. ( Truly massive depositors were assured that Morgan would cover their entire account, PERSONALLY. In relative terms, Morgan was 50 times as wealthy as Warren Buffett.)

    The express train was assembled and paid for by Morgan – -with guards out the ear. Additional guards were assigned to the dependent bank — in as much as the bullion was stacked visibly in view from the cashiers station — with heaps of specie piled over it like Santa Claus had hit town.

    Unlike Thursday, Friday was a day of ultra rapid payout. All retail depositors being given gold and minor change in silver.

    Now, imagine the reaction to the assembled crowd as the word gets out. NO ONE has ever seen that much gold. There is so damn much gold it’s ridiculous.

    Bank security offers to escort the ex-depositors… They’ve got so much gold that it is plain that they are now at extreme risk of robbers. Their withdrawals are so heavy that even in gold they limp along.

    It didn’t take too long: the run was crushed. Once Morgan established that this was a Morgan protected bank the bank panic collapsed.

    The message went out to all the other farm banks: get inside the Morgan system or get screwed.

    His word would/ could and did stop a bank panic literally overnight.


    Morgan’s terms to get under his umbrella are identical to the Federal Reserve System. A Morgan correspondent bank had to leave — in GOLD or US TREASURIES x percentage of their deposits at all times. For this they would receive absolutely NOTHING. Instead they would have Morgan’s backstop. IF and only IF a correspondent bank was in good standing then Morgan would back them to the limit.

    When you consider that Morgan could PERSONALLY cover half of Cleveland’s cash/gold crisis — and get the rest from Europe based upon his connections…. Morgan was the FDIC before the FDIC.


    It is IMPOSSIBLE to understand the Fed without the history of Morgan and why Wilson gave in to the money trust.

  26. :)

    jeez, that's a little like a combo of dancing, acrobatics, and soft porn.

  27. And no, she can't dance like that.

    A prude would say, nor should she. :)

  28. PETA never sleeps- my early morning message from PETA -

    Dear Friend,

    By coming to a PETA Web site, you have taken the first step in your journey toward making a difference for animals—thank you for taking that step. PETA is the largest animal rights organization in the world and is made up of 2 million caring people just like you.

    Are you ready to change the world? Become a part
    of PETA's life changing work!
    Together, we work tirelessly to help suffering animals around the world. We speak up for, among others, rabbits and foxes who are skinned alive for the fur trade, chickens and cows who suffer hellish conditions on factory farms just to end up on someone's dinner plate, and the dogs who should be treated as part of the family but are relegated to a lonely life on the end of a chain. PETA is the voice for animals who have none.

    Thanks to the hard work of our members and activists, we've had numerous victories over the years. Millions of animals have been spared from torturous experiments in laboratories, popular clothing lines have had a change of heart and ended their sales of fur, and slaughterhouse workers—for the first time in history—have been convicted for cruelty. PETA's impact each year is extraordinary—and each year, it continues to grow. Click here to explore our interactive map of accomplishments from the past year.

    We couldn't have accomplished any of these groundbreaking achievements for animals alone. Making a difference involves each person putting their heart and soul into action and striding toward something greater.

    To help you get started, visit our online community center, where you can connect with PETA through social networking sites and be able to help animals with just the push of a button from wherever you are. PETA's blog, The PETA Files, can help to keep you informed with up-to-the-minute information and breaking news from PETA.

    I also think it'd be beneficial for you to consider signing up for PETA E-News. You might find it easy to stay updated with our bi-weekly e-newsletter, PETA E-News, which will give you the latest news on our campaigns, celebrity ads, contests, PETA Mall offers, and more. You can sign up here.

    Getting involved on a local level is easy. Join PETA's Action Team and get tips on how to help animals in your part of the world. You'll also receive e-mail alerts when our demonstrations are coming your way. You can join today by filling out the form here.

    I hope that you have been inspired to start helping animals today. We are here for support, should you need to contact us at any point along the way.

    Thank you for all you have already done and will do in behalf of animals.

    Very truly yours,

    Ingrid E. Newkirk

    Our lone cat would be happy to know all this, how I care for her, if she wouldn't land on my head at night, when she jumps through the window.

  29. Obama is spending 3 billion a week in Afpak..

    Changed the rules to ensure American troops will die rather than offend the locals..

    Meanwhile Obama plays star wars using predator drones killing wedding parties and all you can eat goat buffets...


    Rat defends Soros as a Good Jew...

    Well we all know rat is sensitive about the Holocaust, after all his father died in it...

    Fell from a guard tower don't ya know...

  30. Looks like the 3 billion dollar airplane gift is all hot air...

    and Israel finally learned not to trust Obama..

    remember obama the poser in chief?

    ripped up signed agreements with israel that were the basis for israel trading lands for peace?

    remember the f22?

    promised to israel under bush? then thrown into the trash can under obumbler?

    yep it's not the 1st time America has screwed an ally..

    Just ask Georgia, Poland, Japan, Columbia to name a few..

    But if your Iran, Hezbollah, Syria, Mexico, China?

    you are thrilled about a USA president that is intent on teaching America NOT to be exceptional.

    Now I wonder I obama actually trying to destroy not just the USA's economy but rather then entire western world?

  31. The issue aint taxes...

    The issue is spending...

    Cut off all economic aid and military aid to all enemies at once.

    Any and all aid to allies should be given a public vote in Congress.

    Start charging OPEC fees for protecting the sea lanes.

  32. I posted that "inflation explained" link two days ago, Doug.


  33. Indicators are Turning Down.

    Empire State Manufacturing Index "tanked."

    PPI, minus Energy, "Down" 0.8%.

    Iron ore shipments into China "Down" about 10%.

    Europe "Unraveling," again!

    Gasoline Prices back to where the last slowdown occurred (May, '10)

  34. "remember the f22?"

    Yes, we do and when you remind us twice a day for the next six weeks we'll remember then, too.

  35. MeLoDy said...
    "remember the f22?"

    Yes, we do and when you remind us twice a day for the next six weeks we'll remember then, too.

    Wow! that was pithy....

    Take you all day to come back with that retort?

    In all seriousness..

    The F22 and it's trashing IS a major issue.

    The F35 is way more money and does no do the same job.

    Maybe you should do us or all a favor and do a tread, the f22 verses the f35...

  36. A strange thing happened to me on the way to 2012.

    Much to my surprise, when I went to take the poll over at Hotair I ended up voting for Bobby Jindall.

    I thought I would vote for Tim Pawlenty, but when it came time to click my little pointer went to Jindall, and I couldn't pry it loose.

    I had, honestly, never considered that possibility.

  37. Nope…fifteen minutes and 22 seconds.

  38. The Jerusalem Post is standing by their story:

    "...But when quizzed about the weapons offer, State Department spokesman P.J. Crowley said, “We are committed to maintaining Israel’s qualitative edge in the region – but beyond that, I’m not going to comment."

    "I would just always caution that any time you have reports about specific things, some details may be right, some details may be wrong,” Crowley said.

    Earlier in the day, Defense Minister Ehud Barak told Army Radio that the US had made such an offer.

    These jets, Barak said, have more long-term significance than the temporary friction, which exists between Netanyahu and the politicians in his party who oppose the deal.

    In past talks with the US, Barak said, Israel had wanted to purchase 40 of them planes, but due to budget cuts could only afford 20.

    The US is now offering to give us the additional 20 planes in exchange for the 90-day freeze, Barak said.'

  39. Maybe you should go watch Bristol Palin dance while the boss ruffles up a new thread on the f22 verses the f35..

  40. Just feeling a little snarky on this fine afternoon…

  41. I hate it when two people I like argue.

    Got my driver's license renewed. Why is it most people don't like their driver's license pictures? I read an article about this. It's because everyone thinks they are better looking than they really are, and when faced with the reality......

    Mine was better than last time around, anyway.

  42. We got a new Sheriff's Office here, and jail, across the river. Fancy stuff, but right by Eco, which is a big compost pile, and the recycling center, which stinks like hell too. Fancy digs, if your olfactory cells are dead.
    Which mine aren't, I almost dropped over.

  43. There's a proverb in the Bible about how you shouldn't get between two people arguing - it is likened to picking a dog up by the ears. You know what happens when you pick a dog up by the ears.....you are going to get bit. By one or the other, maybe both. My pastor made a passable sermon out of this once.

    I'm heading to Cd'A, to my daughter's.

  44. Re: Jindall for 2012.

    This country has to get over it's addiction to rock stars first.

    A lingering remnant of the Kennedy legacy.

  45. Thank God the Kennedy's are gone.

  46. A House panel on Tuesday found Representative Charles B. Rangel guilty of 11 counts of ethical violations...

    Obviously the House Panel is racist.

  47. The punishment?
    Reprimand, censure, or a few other equally bland "punishments."

    Jailtime for you and me.

    Under Holder?
    Not a chance for Charlie.

  48. .
    The $3 billion for the jets is troubling; however, hardly surprising. When the government is used to handing out trillions, a few billion is just walking around money, monololy money if you like. Deuce pointed out where $3 billion could be used here in the US, but don't expect those in D.C. to recognize that fact.

    All that being said, if $3 billion could buy peace in the Middle East it would be a cheap price to pay. The problem is the money goes regardless. There are no guarantees for the U.S. effort. While the administration professes optimism, I know of no one who really believes an extra 90 days will make a difference.

    So an interesting question becomes why is the Obama administration doing this? I have my own opinions on that. However, there is also an even more interesting aspect of this whole affair (at least to me).

    From the previous stream,

    According to diplomats familiar with the incentives, they include asking Congress to approve supplying Israel with 20 advanced fighter jets worth about $3 billion and a U.S. commitment to oppose moves at the U.N. and other international bodies to impose terms of a peace agreement on Israel and to delegitimize it or deny its right to self-defense...

    All the talk has been about the $3 billion offer, gift, bribe, payoff, or whatever you want to call it. I find the second half of the statement more interesting. It seems that I saw an article that stated the guarantee about supporting Israel in the UN was time-limited in the agreement to one year. I've been unable to locate where I saw that. If it's true it raises questions.

    Concurrent whith the negotiations (or lack of them) between Israel and the Palestinians, Salaam Fayyad has launched the West Bank on a process to statehood. His announced plan is to form a de-facto state in the West Bank with all the necessary infrastructure of a state, functioning government, a single security force, a stock market, etc. He plans to have this de-facto state in place by August, 2011. At that point, rather than 'declare' a Palestinean State he believes world opinion will focus pressure on Israel to negotiate a peace agreement.

    A number of people in Israel are taking this threat seriously.

    The U.S. agreeing to support Israel in the U.N. and other international forums is important. If Fayyad is correct, the decision could put the U.
    S. at odds with much of the world.

    Likewise, if the guarantee was time-limited, what does that mean?


  49. They can fly unobserved to Saudi airspace, refuel in-air, do their work in Iran, and fly home.

    Explains the money given to the Sauds' chilluns, the Palestinians, a few days ago.

  50. More than One Way to "skin a nuke weapons program."

  51. catsick said...

    The thing I would stress is although they have had 20 years of deflation and on paper its a train wreck, Tokyo is a much much much nicer place to live now than 20 years ago , the quality of life for most citizens is actually much higher in terms of what you can enjoy now, it used to be unthinkable for ordinary people to play a round of golf, it would be a weeks earnings and a massive day out, now hop in your car and drive out and the courses are full of people enjoying a leisure time they never could before, food is of the highest quality of any city in the world period ! you average Tokyo citizen will brobably eat out, excellent food 3-4 times a week . I bought a nice 200 sqm unit in one of the most upmarket parts of tokyo 1.75 m us , yes a lot of money but when mortgages are 1.25% its affordable to many couples on ok salary, when built in 1988 the unit was over 10 million usd and interest rates were 6% , impossible to own by anyone but the most elite ….

    education and civic services provided in tokyo are also excellent and no crime there is no price for the personal safety that one can always enjoy !

    Doc Housing Bubble Blog

  52. RE: Mel's linked dance routines.

    Since this site is all about standards, Mel's point is well taken. DWTS is cut-rate discount, common-as-an-old-shoe, garden variety advanced walking compared to the artistry of the choreography and the physicality of the dancers in the two clips. The choreography was better in the first link, the guy being very talented in his precision and movement control; the second link being all about the hot, with the girl the better dancer, or possibly intentionally favored by the choreographer.** But both were entertaining - as hell. Great stuff.

    Soft porn? Need to get out of the mountain states, Bob. I recall Led Zeppelin, hell, Rolling Stones, being degrees raunchier than the dance routines in the links.

    **The peanut gallery wants to know how the girls can move like than in stilettos. Actually a serious question. I assume they train to execute on their toes, like professional ballerinas, which makes their performances even more impressive.

  53. The Fed has morphed into CENTRAL PLANNING.

    And it was expected to do what, in the absence of credible and responsible fiscal management by the federal government?

    There's more than one player on stage.

    Bernanke should probably get a medal when it's all over.

  54. .
    Costa Rica to seek OAS meeting in Nicaragua spat

    Costa Rica says it will seek a meeting of the Organization of American States' commission of foreign ministers to discuss its border dispute with Nicaragua.

    The neigboring nations are fighting over a bit of territory along the San Juan border river. Nicaragua sent troops to the area last month, angering Costa Rica...

    Google Cedes Disputed Area by Mistake

    We live in a world where a mistake by Google Maps can lead to an international confrontation. At least Bing got it right.

    One wonders if Google had those cars with the satellite dishes and GPS running along the Costa Rican/Nicaragua border?


  55. That is a great Link T. It will be real interesting if it spills into Spain. Spain is a huge investor in Latin America.

    An abrupt withdrawal would have to hurt or if Spain is lucky, maybe it would offset domestic losses.

  56. .
    Bernanke should probably get a medal when it's all over...

    Remains to be seen.

    When it comes to the FED I don't know enough to comment on the value of their recent policies. One hopes they work.

    However, right now you have at least as many people panning the Fed actions as applauding them.


  57. Yes, good link, T. Mr. Matthew Lind is, absolutely, positively, 100% Right.

    The weak countries are saddled with a "too strong" currency, that isn't responsive to their needs. They need their currency to weaken. That would discourage so many German imports, and put more of their population back to work. Germany should have a "Stronger" Currency. That would allow their citizens to buy more goods, and services from the weaker countries and, thus, enjoy a higher standard of living. It's Bonkers.

    Ireland, and the other piigs, is in the same boat with Germany that WE are in with China. The only "Good News" for us is we "Might" be able to threaten, jawbone, cajole China into raising the value of the Yuan a little bit.

    The PIIGS are tied up to Germany in perpetuity (or, until they escape the Euro.)

  58. However, right now you have at least as many people panning the Fed actions as applauding them.

    I noticed that as well.

  59. "The beauty of art is that there are no rules…" ~ Mia Michaels

    Thanks CL.

  60. We had a hell of a wind storm, 85mph. Highway 95 was closed, trees and power lines down, had to go back roads.

    What do you mean there are no rules in art? There are all sorts of rules, with good artists you just don't notice them.

  61. The insanity continues:

    WASHINGTON (AFP) – The United States's top creditor China increased its stockpile of American debt in September, official figures showed on Tuesday, even as other nations slashed their holdings.

    Both China and Japan bucked the trend of foreign investors cutting their exposure of US assets.

    Overall holdings -- known as net long-term capital inflows in financial jargon -- fell 37 percent from elevated levels in August

    They simply do not want to buy our products and we give them a way to get away with it.

  62. I see Charlie is guilty.

    Who would have thought it.

  63. My daughter is watching 'Boardwalk Empire', some tv show.

    "I'm gonna cut your fucking pecker off."

    Right after the little kids get out of school.

  64. It is a rough program but damn is it good. It is on HBO and that should be blocked for children.

  65. I see the Story of "o" is back to libel, once again. Playing true to his form.

    If he had a brain, he'd be dangerous.

  66. I did notice, through the course of the day that the Irish Government saying that it had no need for a "bail out". But that if anyone wanted to "bail out" any of the Irish banks, they'd be free to do so.

    Did not seem to be any takers, on that offer.

  67. They're gonna bump off, I think, the mayor of Atlantic City cause he won't cooperate on the smuggling of the whiskey.

  68. Get the hell out or do something memorable.

  69. The true American Heritage calls for TV to be censured, Deuce. Parents are not competent to maintain our Heritage, or their posterity, adequately.

    bob knows best, for all of US.

    Even if he may agree that PA is a Nanny State gone bonkers.

    Just another of his oxymoronic positions, as fitting a Federal Socialist "conservative".

  70. Must be good cause she's glued to it.

    "Give me my bra."

    "Want some wine?"

    "You're hurting me!"

  71. Do something memorable, or get the hell out.

    Art Bell knows.

    Actually it was Deuce said it should be blocked for children, and with that I agree.

  72. "fuckin' twat"

    Somebody got coffee thrown on 'em.

  73. There's some corrupt Jew named Rothstein, rat, you better start watching.

  74. I tell ya, whole thing makes farm life look attractive. Less chance of going to hell after you die. Not a certainty, just less chance.

  75. "Shut up and give him a drink."

    "You look like shit"

    "Fucking democrats"

    "We're in trouble."

    "What do I do about Eli?"

    "Lose him too."

    I want to go to Wal-Mart.

  76. After the drubbing Democrats received at the polls on Nov. 2, President Barack Obama may find it much harder to deliver on his promise to reset his country's relationship with Russia.


    President Obama will have to secure the support of at least eight Senate Republicans if he wants to see the New START Treaty ratified before the year's end. If he fails, he will have to win over a full 14 Republican Senators in the new Congress to reach the magic number of 67.


    President Obama is making every argument in favor of ratification in the hopes of pressuring the Senate to act. Obama has warned that Russia could further limit the amount of supplies it allows to pass through its territory en route to Afghanistan.

    Obama's Reset?

  77. Ah I see, this thing is kinda like a soap opera, this episode is over.

    Now she'll bankrupt me at Wal-Mart.

  78. This comment has been removed by the author.

  79. Deuce wrote:

    "The insanity continues:

    WASHINGTON (AFP) – The United States's top creditor China increased its stockpile of American debt in September..."

    It is funny, this whole 'don't let China buy American debt' meme of yours Deuce is that governments live in mortal fear of others (anyone) buying up their debt issues. That is what is driving the whole PIIGS fiasco and keeps the FED and other US government folk up at night - the fear that people won't buy the debt at a 'reasonable' price. To limit the buyers, especially in such a climate as we are currently in, is, well, laughable.


    Usually our first section covers the stock market, but recent volatility emphasizes that the swings in most aspects of the financial markets are tied to the US dollar.

    A critical part of this is that the Fed's ability to depreciate the dollar needs rising asset prices. Otherwise, it is the old "pushing on a string" story.


    The DX registered a Downside Capitulation in early October which suggested a possible low by the middle of the month. However, this was not accompanied by the Sequential Buy pattern and the bottoming process had to wait until that was registered on Friday.

    Bearish sentiment became extreme.


    Modest steepening since early October has recently become outstanding. This has been prompted by the street buying the ten-year in anticipation of aggressive Fed buying.

    The success of this in boosting the economy is doubtful and should be considered as helping out Wall Street as well as the forces of big government. Also, it should be considered as a desperate attempt to prove that interventionist theories and practice really work.

    Pivotal Events

  81. It is funny, this whole 'don't let China buy American debt' meme of yours Deuce is that governments live in mortal fear of others (anyone) buying up their debt issues. That is what is driving the whole PIIGS fiasco and keeps the FED and other US government folk up at night - the fear that people won't buy the debt at a 'reasonable' price. To limit the buyers, especially in such a climate as we are currently in, is, well, laughable.

    Awful isn't it, like withholding heroin from an addict.

  82. .
    Bristol Palin moves on.

    Sarah Palin's unfavorable rating drops to 58%


  83. I have little interest in soap operas, bob. Not fictional ones on television, anyway. Especially those that revolve around glamorizing scum bottom feeders.

    I get my entertainment kicks watching the Charlie Rangels of the whirled.

    Hollywood hasn't got a thing on real life. They don't know drama, extortion and power politics, in Hollyweird, not like they do in DC and NYCity.

    Your fictional "Rothstein", he doesn't hold a candle to Bernie Madoff.

    Real life is so much more entertaining than fiction, really.

  84. Watching Ms Palin advance on "reality" television, on the strength of her momma's popularity, a fascinating case study in popular culture.

  85. Has Bristol moved on tonight? We don't get it here. She got low ratings from the judges, but the popular jury hadn't checked in. I think it's on tonight, and I figured she'd get bumped. Certainly not up there in the Melody class.

    The Ben Bernanke doesn't have to worry about the deflation, from the prices I just paid at The Wal-Mart.
    $238 bucks worth of stuff, heavy on shampoo, body wash, etc. Very light on the meats, just some sliced turkey, heavy on the veggies.

    I'm gonna have a bowl of peaches.

    I'm recruiting her for PETA.

    You should consider joining PETA, Quirk. Great organization. I've already had three e-mails.

  86. She's moved on then? Unbelievable.

    I've been bitching about this travesty for a month or more.

  87. Even the Team Coco Late Night drama is more interesting, for me, than serialized television soap operas.

    That Leno's numbers are in the basement, after all the tribulation, another interesting aside. Carson leaving a hole in televised culture that no one was able to fill. Fully evident now, after all these years.

    Most of the decision makers, in Hollyweird, seem pretty disconnected from their audiences, based upon performance.

  88. THANK YOU for posting this! I'm glad I found your blog!!

    common cents

  89. Television is about audience, bob.
    Ms Palin was NEVER a "Star", not of any type or caliber.
    Not in her own right.

    If not for being a proxy for her momma, Bristol would never have qualified for inclusion.

    That she draws audience participation, that's the name of the game. It is not a travesty, it is American entertainment at its best. Keeping audience participation high, keeping the discussion going, on the blogs.

    It is a wonderful thing to study, manipulation of the mass market, when it works.
    Keep those rating up!

  90. Yeah, but I want the best dancer to win, and she's not it.

  91. desert rat said...
    I see the Story of "o" is back to libel, once again. Playing true to his form.

    If he had a brain, he'd be dangerous.

    Did someone of worth say something?



    Dont feed the trolls...

  92. Our resident Cliff Clavin talks of every under the sun, he is an expert at all....

    No doubt that is why he is a defender of Soros as a GOOD Jew..

    Let's not be to harsh on the rodent about the holocaust.

    Remember, his father died in the holocaust, fell from a guard tower....

    yuck yuck...

    the self admitted murderer, hack and all around anti-semite, israel hater got pissy with Glenn beck for telling the truth about soros...


  93. "Dancing With the Stars," with a median audience age of 60, is the most popular series on ABC's schedule.

    Television is aging, the youthful audience is not watching, not like "back in the day"

    Reality series typically draw a younger crowd than either, with the exception of game shows and Dancing With the Stars, ABC's oldest-skewing show. And long-running series tend to gain an older profile as their viewers age along with them.

    Fox's decision to air more conventional dramas last season contributed to its aging profile. Vanished and Justice, both canceled, had the network's oldest viewers; 24 was not far behind. And American Idol's only growth last season was among viewers 55 and older.

    Other findings:

    •The audience for NBC's Saturday Night Live had a median age of 45, way up from 39 four years earlier. Conan O'Brien's was at 44, David Letterman's 51 and Jay Leno's 52.

    •Cable networks Fox News, Hallmark, CNN and GSN had the oldest viewership, each with a median age of more than 60 in prime time.

    •Viewers of Tyra Banks and Maury Povich were the youngest among syndicated talk shows with a median age of 40. Audiences for Martha Stewart and Chris Matthews were oldest at 57.

    "In other words, roughly half of its average audience is now older than what it still claims as its core audience," says the report's author, analyst Steve Sternberg.

    Television is yesterday's news.
    20th century.

  94. We fought WWII, ran deficits of 14.5% in 1942, 31.1% in 1943, 23.6% in 1944, and 22.4% in 1945. The government financed the war by issuing bonds t the American public.

    The output was obviously war material, not for private consumption, but we were a nation fully employed and saving money by buying government bonds.

    The existing model of consuming more than you produce, wrecking domestic industry and running massive trade deficits is only possible by the surplus trading nations buying debt rather than products.

    What part of that are you having problems understanding? Take debt out of the picture and China would have to buy American products or invest in the US. What else would they do with their currency?

  95. Damn phone rang again. I was just falling to sleep, now I'll be doing the midnight shift, again.

  96. I quote Jewish writers about current affairs in mass media, and the Story of "o" gets his panties in a wad.

    Guess the truth is more than he can bear.

    If we are to consider Mr Soros an anti-Semite, comparable to a NAZI, as Mr Beck said, in code words, it just goes to show where the Story of "o" resides, on the ideological and religious spectrum.

    One of the Looters at the Gate, that's fer sure.

  97. I've learned to just turn my cell phone off, and do the messages in the morning. In my world, nothing there is that can't wait till the morrow.

  98. The Story of "o" wants to discuss Mr Obama's payback to Mr Lester Crown, past CEO of General Dynamics, by eliminating the F22 project from Lockheed Martin.

    That backstory another that is more interesting than fiction. How General Dynamics was "eased out" of the program, by Lockheed Martin, and how Lester got 'em paid back for their efforts.

    Only cost him $3.2 million, paid in advance to Mr Obama for those unwritten books.

    Cheap at twice the price, for old Lester to savior his revenge, which we all know, is best served cold.

  99. Now she's watching "The Walking Dead" - something about zombies - and I'm going to curl up on the couch, and plug my ears.

    She got a perfect score on her test on "Othello", so she's entitled.

  100. Guess Mr Soros is not "o"s kind of Jew.

    Just an Eastern Europeon, from Hungary, that evaded real NAZIs, not the ones that reside solely in "o"s imagination.

  101. .
    Real life is so much more entertaining than fiction, really.

    I disagree.

    Watching Rangel and the rest has become banal. Is anyone surprised anymore? Is anything new? We get the same stuff day in and day out. What satisfaction can one take in seeing the same ol sam ol day in and day out?

    Boardwalk Empire is the draamatized version of the supposedly true life story of Enoch "Nucky" Johnson who was the second of three bosses of the GOP machine that ran Atlantic City during the 20's.

    Rothstein was Arnold Rothstein who ran most of New York crime at the time. He had guys like Lucky Luciano, Dutch Shultz, Meyer Lansky, and Legs Diamond working for him. I find anyone of those guys more interesting than that twerp Maddoff.

    Atmosphere, music, drama, T&A, prohibition, and a little excitement. What's not to like. I agree with Deuce. Boardwalk Empire is pretty good.


  102. .
    You should consider joining PETA, Quirk. Great organization. I've already had three e-mails.

    Hell of a way to meet chicks.


  103. .
    Has Bristol moved on tonight?

    According to my wife.

    She votes for Jennifer Grey.

    Supposedly Brandy got a 30 from the judges last night but still but got dumped with the popular vote.

    Now it's Grey, the little chubby guy, and Bristol.

    My wife is livid.


  104. ah, the old old quandary - does art imitate life, or does life imitate art?

    I'll tell you who has this deal figured out - Miss Marion, the riding instructor. Out there in the sun or rain, tough as nails, enjoying every minute of it.

    What a Lady.

    My daughter got a job shoveling horse shit, feeding the horses, etc. for some free riding time.

  105. I'm not in it for the chicks, I'm in it for the ANIMALS.

    You must be thinking of PETC.

    We've never voted DWTS.

    I don't take it that seriously. Though I admit to have been tempted, recently.

  106. .
    You must be thinking of PETC.




  107. .
    Good Eulogy On Charlie

    I kind of like ol Charlie too.

    I don't feel sorry for him. He dealt the cards himself. I'm also of the opinion he will get far less than he deserves. A slap on the wrist. Some embarrassment. Nothing serious. He's lucky to belong to a club where the ordinary rules don't apply.

    Still, I suspect there are few people in the world that you can't find something good to say about and ol Charlie is at least colorful.


  108. ethical treatment of chicks, chicks, I say

    I'm beat, this couch is feeling awfully nice, it's a nice big couch, folds out to a bed, but it's so big one person really doesn't need to


  109. .
    ethical treatment of chicks, chicks, I say


    Ethical treatment.



    Naw, that wasn't what I was thinking.



  110. .
    U.S. Combat Troops in Iraq After 2012?

    Depends on what the definition of 'is'or I mean on what the definition of 'troop' is.

    Asked by the Iraqis whether there would be US troops in Iraq in spring 2012, Talwar responded that it would "depend on the definition of a troop", according to the account of the meeting provided to IPS by the Iraqi intelligence official.

    When the Iraqi participants in the September 23 meeting asked how many troops might be left in Iraq, Talwar said preferably one brigade but that it could be two brigades. When asked how many soldiers that would mean per brigade, however, the NSC official said the number could be open-ended.

    An Iraqi military official told Talwar the military understood the minimum number of troops needed for a self-contained US combat force was 15,000 to 28,000. They asked Talwar whether the US could keep at least 15,000 in the country, and Talwar answered that it was possible...

    But I Thought All Combat Troops Would Be Out In 2011

    Who ever heard of having 15,000 troops guarding a U.S. Embassy? However, the way the country is going right now maybe we will need that many.



  111. .
    Will Bernanke's QE2 work and will the liquidity he is putting into the system actually help the U.S.?

    Those who argue against QE2 say that much of the initial investment spurred by QE1 went overseas.

    That phenomenon illustrates the challenge confronting Bernanke.

    “All the Fed can do is create liquidity,” Hoyle said. “What Fisher is saying is correct: The Fed has no control over how that liquidity is used.”

    Bernanke: Hero or Goat?


  112. Bernanke hero or goat is a non-starter.

    Goat from the giddyup.
    A hero woulda checked out on Bush.
    His replacement, to be a hero, woulda checked out on BHO.

    Both leaving the message that you cannot solve a runaway debt problem with more (bad) debt.

    Some still want to ignore the obvious fact that the same amount of resources directed to taxpayers instead of the crooks who created the problem at the behest of the Fed would have left us in a far better situation than the present.

  113. Why would a rational person expect a different result from prior efforts, or 20 years of similar mistakes by the Japanese?

    Pouring resources down the Ratholes of Zombie Banks simply results in more pain over a longer period for the taxpayers, and more money for crooked bankers and Wall Street.

  114. Ah, it is a historical docudrama!

    Which is a tad different than a soap opera. But not much.

    Were there a better class of criminals, back in the 30's?

    Does Bugsey Segal outclass Bernie Madoff, when it comes to sophistication?

    Or imagination?

    Maybe so.

    But what Q describes is historical docudrama, not a soap opera developed whole clothe from a Hollyweird imaginator. So, it could be as interesting as reality. Much as "Rome" or "Deadwood" were.

    Still the Charlie tax avoidance story is interesting, in that it is not the total story, but just another chapter in the corruption saga that is DC.

    Joe Stark had reason to feel discriminated against, in a dual standard tax & judicial system. One for the connected and one for the common folk.

    Much like that seen in "Rome".
    Not so much "Deadwood".

    That the Federals "drove" Joe Stark to become a domestic terrorist ...

    Well, there is but another example of non-Muslims attacking US, from within.

    If only Joe Stark had had Timothy Geithner's resources, he'd have just paid the bill, interest and penalties. Then it'd have been "no harm, no foul".

    Alas, poor Joe Stark only had enough money for a private plane, not enough to pay his tax bills.

    Leaving an aerial suicide attack upon the IRS in Austin, Texas as his only way out.