Soros predicts Tsuris!

Below is an article documenting the "change" sweeping our nation that Sen. Obama's candidacy has either unleashed and or exposed. There is an undercurrent that emanates from certain ministers in the Black community that is unhealthy, destructive, racially divisive and bigoted.

No, Sen. Obama cannot be held accountable for the venom of these preachers but he can be held accountable for sticking it out for twenty years and hoping he could run an evasive campaign and escape its poisonous effect. (See 1 Below.)

The IMF's outlook is for a world wide slowing but also is concerned if the financial meltdown spreads and mutates problems could worsen. It further fears that Central Bank policies world wide could overshoot in their supply of money and cause greater inflationary problems. the report concludes that no one really knows. The IMF and the World Bank, policies have a history of doing more harm than good but their analysis is often worth reading. Below is a precis of a recent report. (See 2 below.)

Iran's long range missile development site revealed by satellite photos. While the world sits and observes the Ayatollah's continue developing nuclear weapons and the capability of delivering them. What reason would a nation like Iran have for this other than fear of being attacked because of its oil reserves or a desire to dominate the region in which it lives in order to strangle the world for the purpose of re-introducing Sharia? Based on pronouncements, one would hope, the feckless and cowering West should conclude the latter but like when Hitler began his ravings Iran's bellicosity falls on deaf ears. (See 3 below.)

Krauthammer writes about Iran and concludes GW and Europe's containment of Iran's nuclear program has failed and the consequences will present ominous choices for GW's successor. (See 4 below.)

Our son, who studied in Israel some 5 or so years ago, returned for the first time and was awed by the nation's economic progress, development and construction. The article below seems to verify his view. (See 5 below.)

At a recent meeting George Soros gave his economic forecast - the world is facing a sustained period of tsuris! Louise Story writes a fawning review of this meeting and Soros' desire to be known as a brilliant skeptic. Certainly he has the courage of his convictions and I believe he is closer to being right than wrong. Many see him as the Rasputin of economics and in many ways he probably is.(See 6 below.)

On that note, have a nice weekend.

Dick




1)On April 4, 2008, at a Los Angeles event commemorating the assassination of Martin Luther King, the African-American fraternity Kappa Alpha Psi gave Israeli-American Daphna Ziman its Tom Bradley Award for community service. Then the event's keynote speaker, Reverend Eric Lee, turned to Ms. Ziman and launched an anti-Semitic diatribe. Roger L. Simon interviewed Ms. Ziman.


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A Los Angeles event held by Kappa Alpha Psi—the national African-American fraternity—on April 4, the fortieth anniversary of Martin Luther King’s assassination, was reportedly marred by a disturbing incident of anti-Semitism by its keynote speaker – Reverend Eric Lee.

With Mayor Antonio Villaraigosa, City Councilman Bernard Parks, State Senator Mark Ridley Thomas and Assemblyman Mike Davis in attendance (and also winning awards in some instances) at the Marriott Hotel conference, the fraternity had just given its Tom Bradley Award—named for the esteemed former Los Angeles mayor—to Israeli-American Daphna Ziman.

Ziman is the founder and volunteer chairwoman of Children Uniting Nations—an organization devoted to the rights of children. CUN has helped children from Kosovo to the American inner cities, focusing especially on mentoring programs for children from Los Angeles broken homes. Ziman has also been a fundraiser and donor to the Hillary Clinton campaign.

After Ziman received her award, Reverend Lee, who is the President/CEO of the Los Angeles branch of Dr. King’s Southern Christian Leadership Conference, began his keynote speech. In the midst of this, after praising Malcolm X, he started staring directly at Ziman, according to an email she sent.

Ziman’s email states “[Lee] started talking about the African American children who are suffering because of the Jews that have featured them as rapists and murderers. He spoke of a Jewish Rabbi, and then corrected himself to say ‘What other kind of Rabbis are there, but Jews.’ He told how this Rabbi came to him to say that he would like to bring the AA [African-American] community and the Jewish community together. ‘NO, NO, NO!!!!’ he shouted into the crowd, ‘we are not going to come together. The Jews have made money on us in the music business and we are the entertainers, and they are economically enslaving us.’”

(An attempt to revive the “Black-Jewish Connection” is currently underway in Los Angeles, according to the L. A. Watts Times.)

Lee continued with his anti-Semitic diatribe, according to Ziman, at which time she could no longer tolerate it and left the room, where she broke into tears.

Most of the dignitaries had also left the room by the time of Lee’s speech but Assemblyman Mike Davis was still there. He told Ziman that he “did not hear” Lee’s words because he was engaged in another conversation. Mr. Davis did not return a call from Pajamas Media, seeking comment. Calls to organizers of the event were also not returned.

An African-American attorney who works in the area of foster care and was in the audience did speak with Pajamas Media. The attorney, who preferred not to be quoted by name, basically corroborated Ziman’s account, saying that Lee’s remarks were in essence racist and inappropriate to the occasion, even more so since Ziman was receiving an award from the fraternity.

Daphna Ziman has asked for Reverend Lee to make a public apology to the Jewish community.

Roger Simon is an Academy Award Screen Writer.

2) IMF's World Economic Outlook
By James Picerno






the International Monetary Fund [IMF] announced that global economic growth
is slowing.

The WEO advised that:

The global expansion is losing speed in the face of a major financial crisis.

The report says that, thanks to the correction in the housing market, the
leading offender is the U.S.

The emerging and developing economies have so far been less affected by
financial market turbulence and have continued to grow at a rapid pace, led
by China and India, although activity is beginning to moderate in some
countries.

How bad will it get? Judging by the IMF's estimates, the outlook is more
about a slowdown rather than an outright contraction. According to the IMF,
last year, global GDP rose by 4.9%. The projection for 2008 is 3.7% growth,
followed by 3.8% in 2009.

If the prediction proves accurate, the deceleration will still bring pain to
various segments of the world economy. Then again, world GDP rising by 3.7%
is hardly a disaster. Indeed, 3.7% growth is the upper range that's
prevailed since 1970.


But no one should ignore the other risks bubbling that aren't obvious in
estimates for GDP. Inflation remains a threat, for example, particularly in
the developing world (see chart below). The trend threatens the ability of
the developing world to export disinflation to the U.S. and the developed
world generally, as has been the case in past years. At some point, if
prices keep rising, might the emerging markets export inflation? In fact,
that seems to be the case now for certain items, starting with oil which on
Wednesday touched another new record high of $112 a barrel in New York. The
U.S. is the world's biggest consumer of oil, and more than half of its crude
is imported, much of it from the developing world.


Meanwhile, monetary policy threatens to fan inflation's fire. According to
the IMF, real short-term interest rates have turned negative in the U.S.,
Europe and Japan.

Of course, the argument for such a loose monetary policy is that the global
economy needs an antidote to the deleveraging that's sweeping financial
systems from New York to London to Tokyo. The IMF report warns that:

A further broad erosion of financial capital in a climate of uncertainty and
caution could cause the present credit squeeze to mutate into a full-blown
credit crunch, an event in which the supply of financing is severely
constrained across the system.

In fact, one could argue that a fair degree of the global economy's future
path over the next year or so is tied to whether or not the credit crunch
mutates into something worse from this point onward. The challenge for
policy makers is that addressing each scenario requires different medicine.
If greater liquidity troubles are coming, central banks may feel compelled
to act by effectively printing more money than is otherwise prudent. The
danger is that the liquidity injections turn out to be unnecessary, in which
case inflationary pressures will be that much more troublesome and difficult
to control. If, and when that becomes the leading issue for central banks,
the easy money party will end, perhaps for an extended period.

The IMF report leans toward the conclusion that the credit crunch may yet
get worse before it gets better. Unfortunately, no one really knows and so
the risk of dispensing the wrong policy medicine remains higher than usual
at the moment. Risk, in short, is still with us even if the world economy is
set for modest growth.

3) Report: Secret Iranian missile site revealed in new spy photos


A series of recently released spy photos have uncovered the secret lcoation where Iran has allegedly been developing long-range ballistic missiles capable of striking Europe.

The satellite pictures pinpoint the facility where Iran launched its Kavoshgar 1 "research" rocket in February, according to the report. Iran has claimed that rocket was tested as part of its space program.

Analysis of the Digital Globe QuickBird satellite taken just days after the launch show details indicating that the site of the research rocket is the same location where Iran is preparing a ballistic missile with a range of 6,000 kilometers, the report said.

The site is located about 230 kilometers southeast of Tehran. The connection between the research rocket and Iran's long-range program was exposed by Jane's Intelligence Review following an analysis of the photos by a former Iraqi weapons inspector, said The Times.

Analysis of the photos suggest that Iran is pursuing a space program similar to that being developed in North Korea, with a focus on long-range missile technology, according to the report.

An analyst at the Institute of Technology, Geoffrey Forden, said that a structure on the Iranian site - roughly 40 meters in length - closely resembled a Taepodong long-range missile assembly facility in North Korea, The Times reported.

The editor of Janes's Proliferation has said that based on examination of the Iranian site, Tehran may be just five years away from developing the long-range missile, according to the report.

4) The Holocaust Declaration
By Charles Krauthammer

WASHINGTON -- On Tuesday, Iran announced it was installing 6,000 more centrifuges -- they produce enriched uranium, the key ingredient of a nuclear weapon -- in addition to the 3,000 already operating. The world yawned.

It is time to admit the truth: The Bush administration's attempt to halt Iran's nuclear program has failed. Utterly. The latest round of U.N. Security Council sanctions, which took a year to achieve, is comically weak. It represents the end of the sanctions road.

The president is going to hand over to his successor an Iran on the verge of going nuclear. This will deeply destabilize the Middle East, threaten the moderate Arabs with Iranian hegemony and leave Israel on hair-trigger alert.

This failure can, however, be mitigated. Since there will apparently be no disarming of Iran by pre-emption or by sanctions, we shall have to rely on deterrence to prevent the mullahs, some of whom are apocalyptic and messianic, from using nuclear weapons.

During the Cold War, we prevented an attack not only on the U.S. but also on America's allies by extending the American nuclear umbrella -- i.e., declaring that any attack on our allies would be considered an attack on the United States.

Such a threat is never 100 percent credible. Nonetheless, it made the Soviets think twice about attacking our European allies. It kept the peace.

We should do the same to keep nuclear peace in the Middle East. It would be infinitely less dangerous (and therefore more credible) than Cold War deterrence because there will be no threat from Iran of the annihilation of the United States. Iran, unlike the Soviet Union, would have a relatively tiny arsenal incapable of reaching the U.S.

How to create deterrence? The way John Kennedy did during the Cuban missile crisis. President Bush should issue the following declaration, adopting Kennedy's language while changing the names of the miscreants:

It shall be the policy of this nation to regard any nuclear attack upon Israel by Iran, or originating in Iran, as an attack by Iran on the United States, requiring a full retaliatory response upon Iran.

This should be followed with a simple explanation: "As a beacon of tolerance and as leader of the free world, the United States will not permit a second Holocaust to be perpetrated upon the Jewish people."

This policy -- the Holocaust Declaration -- would establish a firm benchmark that would outlive this administration. Every future president -- and every serious presidential candidate -- would have to publicly state whether or not he supports the Holocaust Declaration.

It is an important question to ask because it will not be uncontroversial. It will be argued that the Holocaust Declaration is either redundant or, at the other extreme, provocative.

Redundant, it will be said, because Israel could retaliate on its own. The problem is that Israel is a very small country with a small nuclear arsenal that could be destroyed in a first strike. During the Cold War, both the U.S. and the U.S.S.R. created vast and invulnerable submarine fleets to ensure a retaliatory strike and, thus, deterrence. The invulnerability and unimaginably massive size of this American nuclear arsenal would make a U.S. deterrent far more potent and reliable than any Israeli facsimile -- and thus far more likely to keep the peace.

Would such a declaration be provocative? On the contrary. Deterrence is the least provocative of all policies. That is why it is the favored alternative of those who oppose a pre-emptive attack on Iran. What the Holocaust Declaration does is turn deterrence from a slogan into a policy.

It is, of course, hardly certain that deterrence would work on Iranian President Mahmoud Ahmadinejad and other jihadists. But deterrence would encourage rational Iranian actors, of whom there are many, to restrain or even depose leaders like Ahmadinejad who might sacrifice Iran's existence as a nation in order to vindicate their divine obligation to exterminate the "filthy bacteria" of the Jewish state, "this disgraceful stain (on) the Islamic world."

For the first time since the time of Jesus, Israel is the home of the world's largest Jewish community. An implacable enemy has openly declared genocidal intentions against it -- in clear violation of the U.N. charter -- and is pursuing the means to carry out that intent. The world does nothing. Some, like the Russians, are literally providing fuel for the fire.

For those who believe that America stands for something in the world -- that the nation that has liberated more peoples than any other has even the most minimal moral vocation -- there can be no more pressing cause than preventing the nuclear annihilation of an allied democracy, the last refuge and hope of an ancient people openly threatened with the final Final Solution.


5) Cheer up, 'Economist'


If Israeli political morale has waned since the botched war against Hizbullah in south Lebanon in 2006, the country's economic self-confidence would seem healthier than ever.

But according to a special report in this week's edition of The Economist, Israelis ought to reappraise even that sunny patch of optimism. Citing the country's aggressive unions, over-dependence on the high-tech sector, widening wealth gaps, a faltering education system, low workforce participation and a public sector paralyzed by bureaucratic red tape, the esteemed British magazine claims that "the engines of growth are punier than they look."

The report argues that "beneath its gleaming high-tech skin, the body of Israel's economy is slightly worn…. much of the country's traditional industry (e.g., machinery, chemicals, clothing and food), which accounts for more than half of its jobs, is lackluster…. Moreover, Israel's ability to capitalize on the internet boom was a lucky one-off."

The conclusion: "The country's greatest vulnerability is not military but economic."

THERE ARE, to be sure, economic indicators which ought to cause worry and spur much-needed reforms. Over-centralization, a legacy of Israel's socialist past, stunts growth. The country's wealth is indeed too highly concentrated in the hands of the few. Israel's income inequality rate is one of the highest in the developed world. The percentage of Israeli children living below the poverty line has grown, reaching 36 percent last year. And the country's knowledge-based economy renders it especially vulnerable to ever poorer educational performance.

Yet The Economist's bleak tone, unwarranted in itself, becomes disturbing when it steps from economics to politics, and generalizes this gloom into a discussion of the fraying of Zionism. Israel's future, the magazine pronounces, is "as uncertain as at any time in its 60 years of history."

This wouldn't be the first time The Economist offered a tendentious reading of Israel's political landscape. In an editorial last year marking the 40th anniversary of the Six Day War, the magazine called that confrontation a "Pyrrhic victory" and "a calamity for the Jewish state no less than for its neighbors." Israel, wrote The Economist, "embarked on its hubristic folly of annexing the Arab half of Jerusalem and - in defiance of law, demography and common sense - planting Jewish settlements in all the occupied territories to secure a Greater Israel."

IN THE present case, the facts, some cited by The Economist itself, lend themselves to a rather different interpretation. Israel enjoys one of the fastest growing emerging markets in the world. Israel's gross domestic product (GDP) per capita growth is robust, having remained above 3 percent for the past four years. (GDP is projected to rise 3.8 percent this year, according to the International Monetary Fund.) Israel leads the world in research and development spending as a proportion of GDP.

The country hosts the greatest number of NASDAQ-listed companies after the US and Canada. It is home to Teva, the world's largest maker of generic drugs, to telecommunications software firms like Amdocs, to world-class biotech research at the Technion and to Intel's advanced chip production facilities. Silicon Wadi, in fact, is the world's second most important technology cluster. In 2007, venture-capital firms invested $1.76 billion here.

Export earnings are up. Tourism is up. So are property prices. Just this month, Forbes magazine rated Israel as the world's most "up-and-coming" real-estate market. Last year Israel was invited to join the Organization for Economic Cooperation and Development (OECD).

Nor is this impressive growth showing signs of abating. Privatization, deregulation and capital-markets reform continue to gain momentum, as does the high-tech boom itself. Fiscal management is improving, and with it the credibility of the Bank of Israel, now guided by Stanley Fischer's steady hand. The result is a good forecast: Israel will continue to export start-ups and attract foreign investment. Deficits and inflation will remain under control.

Without slipping into complacency, Israel can take pride in its economic accomplishments. Despite wars and intifadas, and in a relatively short time, it has managed to build an economy that is both well-cushioned against political instability, and well-positioned to lead the nation into greater prosperity.

6) The Face of a Prophet
By LOUISE STORY


George Soros wants to make a lasting contribution to economic understanding.


Robert Soros, never shared the enthusiasm of his father George, for following the markets. Robert is one of five Soros children.

At the age of 77, Mr. Soros, one the world’s most successful investors and richest men, leapt out of retirement last summer to safeguard his fortune and legacy. Alarmed by the unfolding crisis in the financial markets, he once again began trading for his giant hedge fund — and won big while so many others lost.

Mr. Soros has always been a controversial figure. But he is becoming more so with a new, dire forecast for the world economy. Last week he rushed out a book, his 10th, warning that the financial pain has only just begun.

“I consider this the biggest financial crisis of my lifetime,” Mr. Soros said during an interview Monday in his office overlooking Central Park. A “superbubble” that has been swelling for a quarter of a century is finally bursting, he said.

Mr. Soros, whose daring, controversial trades came to symbolize global capitalism in the 1990s, is now busy promoting his book, “The New Paradigm for Financial Markets,” which goes on sale next month.

And yet this is not the first time that Mr. Soros has prophesied doom. In 1998, he published a book predicting a global economic collapse that never came.

Mr. Soros thinks that this time he is right. Now in his eighth decade, he yearns to be remembered not only as a great trader but also as a great thinker. The market theory he has promoted for two decades and espoused most of his life — something he calls “reflexivity” — is still dismissed by many economists. The idea is that people’s biases and actions can affect the direction of the underlying economy, undermining the conventional theory that markets tend toward some sort of equilibrium.

Mr. Soros said all aspects of his life — finance, philanthropy, even politics — are driven by reflexivity, which has to do with the feedback loop between people’s understanding of reality and their own actions. Society as a whole could learn from his theory, he said. “To make a contribution to our understanding of reality would be my greatest accomplishment,” he said.

Mr. Soros has been worrying about the fragile state of the markets for years. But last summer, at a luncheon at his home in Southampton with 20 prominent financiers, he struck an unusually bearish note.

“The mood of the group was generally gloomy, but George said we were going into a serious recession,” said Byron Wien, the chief investment strategist of Pequot Capital, a hedge fund.

Mr. Soros was one of only two people there who predicted the American economy was headed for a recession, he said.

Shortly after that luncheon Mr. Soros began meeting with hedge fund managers like John Paulson, who was early to predict a crisis in the housing market. He interrogated his portfolio managers and external hedge funds that manage his fund’s money, and he took on new positions to hedge where they might have gone wrong. His last-minute strategies contributed to a 32 percent return — or roughly $4 billion for the year.

The more Mr. Soros learned about the crisis, the more certain he became that he should rebroadcast his theories. In the book, Mr. Soros, a fierce critic of the Bush administration, faults regulators for allowing the buildup of the housing and mortgage bubbles. He envisions a time, not so distant, when the dollar is no longer the world’s main currency and people will have a harder time borrowing money.

Mr. Soros hopes his theories will finally win the respect he craves. But, ever the trader, he hedges his bets. “I may well be proven wrong,” he said. “I would say that I’m the boy who cried wolf three times.”

Many of the people Mr. Soros wants to influence may view him with skepticism, in part because of how he made his fortune. In 1992, his fund famously bet against the British pound and helped force the British government to devalue the currency. Five years later, he bet — correctly — that Thailand would be forced to devalue its currency, the baht. The resulting bitterness toward him among Thais was such that Mr. Soros canceled a trip to the country in 2001, fearing for his safety.

Asked if it bothers him that people accuse him of causing economic pain, his blue eyes dart around the room. “Yes, it does, actually yes,” he said.

Asked if those people are right to blame him, he says, “Well no, not entirely.”

No single investor can move a currency, he said. “Markets move currencies, so what happened with the British pound would have happened whether I was born or not, so therefore I take no responsibility.”

Mr. Soros, came of age in Nazi-occupied Hungary and has for decades longed to write a masterpiece that might put him among thinkers like Hegel or Keynes, said Michael T. Kaufman, who wrote a book about Mr. Soros. “He spent years writing papers and letters to people, but everyone ignored him,” Mr. Kaufman said.

But when Mr. Soros became rich, people began listening. He also started giving large sums to charities, and in Eastern Europe, as the Soviet Union crumbled, he distributed copy machines to encourage free speech in his native Hungary. So generous was Mr. Soros with his money that “Sorosovat” became a new verb in Russian, loosely meaning to apply for a grant.

He continues to be one of the top givers to charities around the world, and has given more than $5 billion away through his foundations.

Yet even Mr. Soros acknowledges that many economists still slight his theories.

“I am known as a hedge fund manager and I am known as a philanthropist, and it’s very hard for, say, academics to accept that a hedge fund manager may actually have something to say about economics,” Mr. Soros said. “So that has been difficult for me to overcome.”

But Joseph E. Stiglitz, a professor at Columbia who won the Nobel for economics in 2001, said Mr. Soros might still meet success. “With a slightly different vocabulary these ideas, I think, are going to become more and more part of the center,” said Mr. Stiglitz, a longtime friend of Mr. Soros.

Mr. Soros’s firm, Soros Fund Management, has been through several turbulent years. Stanley Druckenmiller, his longtime No. 2, left in 2000, in part because he was tired of the constant media attention Mr. Soros attracted. (Mr. Soros credits Mr. Druckenmiller for the winning gamble on the British pound, saying he added the encouragement to bet more money on the trade.)

Several outside investors also left, and Mr. Soros overhauled the company as more of a wealth management tool for his own family and related charities. Mr. Soros said in 2000 that he no longer desired returns like the 30.5 percent his fund returned on average, after management fees, from 1969 to 2000.

In 2004, Mr. Soros tapped his oldest son, Robert, to become the chief investment officer, despite Robert’s reluctance.

At that time, Mr. Soros, was busy trying to turn public opinion against President Bush. He donated $27 million to anti-Bush organizations and traveled the country speaking out against the president. This time around, he is less involved. He endorsed Senator Barack Obama but kept his distance from the campaign trail.

Robert Soros, 44, who once claimed his father based his trades not on grand theories like reflexivity but rather on his back pain, never shared his father’s enthusiasm for the markets. “When you’re a billionaire’s son, you’re less hungry than when you’re a Hungarian immigrant,” one former Soros Fund Management executive said.

Even so, the Soros fund performed well under the younger Soros, and as recently as last June, it was up 10 percent for the year, according to a letter to investors. At the end of July, Robert stepped down from his head investment role, just before his father returned to trading. Robert and his brother Jonathan remain deputy co-chairmen, under their father, the chairman of the fund.

This week, Mr. Wien illustrated the knack of Mr. Soros for timing with an old story. In 1995, Mr. Soros asked Mr. Wien why he bothered going to work every day. Why not go to work only on days when there is something to do?

“I said, ‘George, one of the differences between you and me is you know when those days are, and I don’t,’” Mr. Wien said.