Where Many Economists Err - Lead Instead of Blood!

One of my long held beefs with most economists is they only have lead in their pencils when in fact a little blood might help. What I mean by this is most economists fail to consider the impact of human behaviour on forecasts and perhaps this is why the latest economists to win the Nobel Prize were not from the Keynes school of martinet thinking.

Consequently, when Romney and Cain talk about getting our nation back on track they understand the crippling effect of Obama's rules and regulations. They understand the dispirited impact uncertainty and Obama's class warfare has on those with an entrepreneurial spirit. They understand the downer of tax laws that penalize in their attempt to raise money which is then wasted on social programs that have proven unworkable and ineffective.

Romney and Cain have ideas how to unburden the private sector but the question is can they, if elected, break through D.C's love affair with inertia? A rock at rest can be hard to move and particularly so when it means goring pet programs and entitlements fostered upon society by narrow vested interests. Time will tell.

If they cannot, then the removal of Obama will be seriously diluted by the entrenched and our nation's future will continue rocky.
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LLoyd Marcus my kind of guy!

A Romney-Cain ticket is what the Republicans need to present because:

Romney is not as solid in his convictions and as formed in his philosophical dedication as Cain who would serve as a practical anchor full of sound, rational ideas. Cain can attract black voters because he tells it like it is and many understand though they cannot admit it because of the abuse they would get from their 'slave to Democrat Party brethren' (See 1 below.)


Meanwhile, Monty Pelerin explains why Obama was a fluke, now a failure and will not be re-elected.

I too believe Obama is unlikely to be re-elected but there is always that outside chance that there are enough dependent,mentally deranged souls who are zombie like in their voting patterns. (See 1a below.)

Obama's presidency and the way it was sold and bought by the clueless reminds me of Gershwin's magnificent song from Porgy and Bess -"It Ain't Necessarily So." (See 1b below.)

Finally, the Iranian Mullahs are disconnected enough from reality but clever enough to influence our election and concerned about their own internal disunity. So an overt Iranian provocation could force Obama to respond and provide the perfect opportunity for him to demonstrate masochism - something he woefully lacks because he presents himself as cerebral and has that Nobel Peace Prize to uphold.

Meanwhile, Netanyahu's 'premature' release of the Shalit deal could be de-railed. (See 1c below.)
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Eye witness account of Egyptian riots and presented through Stratfor. (See 2 below.)

Also, keep your eye on Cyprus. (See 2a below.)
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A little Brit 'funnies' from my British friend and fellow memo reader who has a mordant sense of humor:

Dear Phil
I left home for work last week and after less than a mile my car stalled and wouldn't start.
I walked back to my house and found my husband in bed with our 19 year old babysitter.
They announced that the affair had been going on for two years.
Can you help me…I'm desperate.
Dear Reader
The most common cause of vehicles breaking down in the first mile is dirt in the fuel lines.
Hope this helps.
Phil.
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After both suffering from depression for a while, me and the wife were
going to commit suicide yesterday. But strangely enough…once she
killed herself I started to feel a lot better.

---

I woke up this morning at 8 and could smell something was wrong. I got
downstairs and found the wife face down on the kitchen floor, not breathing!

I panicked. I didn't know what to do. Then I remembered Wetherspoons serves breakfast until 11.30.

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News just in. There is a female ref for the United v City match. The kick
off has been put back an hour so she can park her car.


But the funniest thing of all comes from America and pertains to politicians who blame everything they cause on everything and everyone else. (See 3 below.)
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Finally,I am not a conspiratorialist by nature but this was sent by a friend and fellow memo reader. I have listened to it before but this time thought it worth posting.

His comment was: "If you want to watch a very interesting video on how the destruction of American has been planned for years by the communist, Marxist elements of our nation, take the time to see how accurately their goals are being accomplished in today's society.

http://www.therightscoop.com/open-thread-grinding-america-down/"
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Dick
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1)Arrogant White Liberal Tells Herman Cain How to Be Black
By Lloyd Marcus

This article is for my black brother, a community leader and little-league football coach who gets his news solely from the liberal mainstream media. Hopefully it will help him to understand why I, his big brother, am working with those white Tea Party people against his beloved black president.


This article is also for my black relatives who gave me a chilly reception at my grandmother's 100th birthday party. I learned through the family grapevine they resent my involvement in the Tea Party and consider me an embarrassment to the family.


Well, I say to my embarrassed relatives, blame my instincts on the mentoring and leadership of my dad. My dad has been a Christian man of character and honor all of my life. So when I see a characterless liberal political hack occupying my beloved country's Oval Office, I refuse to join the flock of black sheep worshiping him because we share the same skin color.


To my relatives who have thrown their Christian values, principles, and brains out the window to give their black idol a pass, you guys are the ones who should be ashamed of yourselves. Marcus family tradition has drilled into us that it means something to be a Marcus: an adherence to a higher standard. Your selling out to skin color embarrasses me! If you detect a bit of anger, you are correct.


Watching white MSNBC host Lawrence O'Donnell chastising black presidential candidate Herman Cain for not participating in the 1960s civil rights movement infuriated me. O'Donnell accused Cain of sitting on the sidelines like a coward while blacks and whites marched and protested for black civil rights. How dare this white guy who does not have a clue what it was like to be black in America in the 1960s attack a black person for not responding to racism the way he thinks he should have responded?


In the '60s, most blacks did not march or protest in the streets, but they fought for freedom in their own private ways; entrepreneurship, prayer, striving for excellence, etc. A black buddy of mine who went from being incarcerated as a teenager to becoming an art director in a prominent advertising agency attributes his success to a black high school art teacher, Lindy Jordan. Mr. Jordan mentored so many black youths that a scholarship was founded in his honor. Mr. Jordan was never seen in the streets protesting for civil rights. I submit that Mr. Jordan fought for black liberation and equality in the best way he knew how: by mentoring black youths.


But leave it to the probably former-hippie, spoiled-brat O'Donnell to think that all blacks who did not march in the streets must have been Uncle Toms. O'Donnell's liberal arrogance is off the chain. In my opinion, Lawrence O'Donnell owes Mr. Jordan and other black American civil rights pioneers an apology.


O'Donnell is yet another white racist arrogant liberal attempting to dictate what is and is not acceptable black behavior. White liberal actress Janeane Garofalo displayed the same racist arrogance when she proclaimed black Republicans Michael Steele and Herman Cain to be suffering from Stockholm Syndrome.


Listen up, O'Donnell, Garofalo, and all you other pompous liberal plantation slave massas. By the Grace of God, we black Americans are free -- free to be successful entrepreneurs such as Herman Cain and countless other blacks rather than government-dependent welfare recipients.


We blacks are free to live outside your liberal stereotypical dictates. I prefer sushi over fried chicken. Does that make me "less" black? Probably, in the minds of arrogant liberal racists.


O'Donnell followed up his program in which he spanked Cain for not being black enough with analysis from liberal plantation black overseer Rev. Al Sharpton. As expected, Sharpton further trashed Cain.


Based on Sharpton's betrayal of black America and his racially divisive and evil Tawana Brawley scandal, Al Sharpton is not worthy even to shine Herman Cain's shoes. And yet, this is the guy the left has appointed "spokesperson" for black America, again confirming their arrogance. Herman Cain's story is one of inspiration, courage, and honor, which epitomizes the American Dream.


If these paragons of tolerance and compassion on the left such as O'Donnell and Sharpton truly cared about black America, they would herald Herman Cain as a hero. They would celebrate Cain as a shining example for black youths, illustrating the limitless success which can be achieved via education, hard work, and character.


Sadly, inspiring black youths to pursue their dreams is not the intention of O'Donnell, Sharpton, and the left. Their intention is to create another generation of Americans dependent on big government for survival. With Obama leading the campaign, they seek to create dumbed-down Democrat voters who view themselves as victims and hate everything which has made America great, including capitalism and individual freedom.


O'Donnell's question to Cain about his lack of involvement is the 1960s civil rights movement was meant to portray Cain as an Uncle Tom. It was despicable. So every time I hear these creeps on the left pontificate about their compassion for blacks, it turns my stomach.


The left views and values blacks only as pawns in a quest to portray America as the greatest source of evil in the world. The left deems happy, America-loving blacks who have achieved success via traditional routes such as education and hard work "paradigm breakers" who must be destroyed.


So please forgive my lack of respect for my white liberal would-be slave massas and their traitorous black overseers. These people are evil and must be defeated.


Lloyd Marcus, proud unhyphenated American is the chairman of The Campaign to Defeat Barack Obama. Please help Lloyd spread his message by joining his Liberty Network. Lloyd is singer/songwriter of the American Tea Party Anthem and author of Confessions of a Black Conservative, foreword by Michelle Malkin.


1a)The Obama Problem
By Monty Pelerin

The Obama Problem is simple to explain but impossible to solve. The problem is Obama himself, and most people not named Barack or Michelle understand that.

President Obama's political career is in free-fall. He will not be reelected. Many Democrats and media personalities now understand what appeared impossible even mere months ago.

Mr. Obama burst onto the political scene as a relatively unknown wunderkind. He could read a mean teleprompter and did so with fanfare at the 2004 Democrat Convention. He had good speechwriters, an intelligent and disciplined campaign strategy, a carefully crafted biography, and a highly compliant media. He was charismatic and eloquent. Joe Biden awkwardly described him as "the first mainstream African-American who is articulate and bright and clean and a nice-looking guy."

The Perfect Storm

The 2008 election was the political equivalent of a perfect storm." Two factors were key to Obama's election:

1.Americans were disgusted with Washington, and especially with George Bush. The media anointed Obama as their man. They publicized his strengths and hid his weaknesses. They painted him as an outsider, someone who could bridge the gap between political parties and make Washington function. The media engineered Obama into the nomination and threw Hillary Clinton overboard in the primary process.

2.The Republicans chose a sure loser to run -- shopworn Washington-establishment figure Senator John McCain. McCain offered nothing that had not already been rejected by the public. He was little more than an elderly George W. Bush who carried the additional baggage of a Washington insider. It is likely that any Democrat would have easily beaten McCain.
When the perfect storm cleared, Obama was president.

No president in recent history began his term with higher expectations and goodwill than Barack Obama, but the promise and exhilaration that accompanied his election was short-lived. In less than three years, Obama plummeted from the heights (his "Messiah" entry) to the depths (a "worse than Jimmy Carter" figure).

The turnaround was astonishing in its speed and magnitude. To put matters in perspective, it took George Bush almost eight years to hit bottom. And Bush always had little support from the media, a force that continues to protect Obama.

How Things Went So Wrong So Quickly

To understand Obama's loss in popularity, it is necessary to recognize that Barack Obama was a fluke. He was an unlikely candidate, pushed to his party's nomination as a result of the media. His election was another quirk, more aberration than achievement. The perfect storm virtually ensured that the Democrat candidate would win in 2008. It is not a strain to conclude that the mainstream media, rather than the electorate, put Obama into the highest office in the land.

In hindsight, a great mistake was made. Even the fawning media and the Democrat establishment now recognize that, although are unwilling to publicly admit it. Their behavior is analogous to refusing to discuss a friend's terminal illness in the hope that it will somehow go away.

The media and the Democratic Party are at risk if the tragedy they foisted on the nation continues. Their future is intertwined with the Obama Problem. Both sponsored him, and both may ultimately be held accountable. The battle so easily won in 2008 may cost them subsequent battles, if not the war itself.

Both know the risk. They just have no easy way of solving the problem.

Opinions regarding the factors responsible for Mr. Obama's political demise abound. A full menu is available -- the economy, broken promises, cronyism, socialism, bailouts, corruption, disillusionment, inexperience, incompetence, Chicago-style politics, etc. Pundits have a target-rich environment from which to approach the failure of the Obama presidency.

The factors above are relevant but one level removed from the root cause. The real problem is that there never was any substance to Obama. He was the political equivalent of a Potemkin village. There was nothing behind the façade. There was no "there" there. All of the problems arise from this obvious flaw.

President Obama is little more than a run-of-the-mill Hollywood extra hired to play president of the United States. A brilliant marketing campaign coupled with the perfect storm put him in office. The marketing campaign was so good that it merits a case study for the Harvard Business School.


The "man with no past" and a Hollywood veneer turned out to be a perfect candidate. "Sizzle" rather than substance was sold. Little was known about Obama and his past, allowing David Axelrod to market the political equivalent of a Rorschach blot.

Voters saw in Obama whatever they desired in a candidate. To some, Obama was a breath of fresh air, a man of principles. To others he was an outsider, not a crass politician. Others saw him as a chance to prove that they were not racists. Still others saw him as the reincarnation of Roosevelt or whomever else they admired.

Obama was a blank slate to be imagined or drawn upon by the voters. He was their chameleon, and each voter could use his or her imagination to create the ideal candidate. Not surprisingly, voters bought this product that existed only in their minds. They elected Chauncey Gardiner. Unfortunately, this fraud did not come with Peter Sellers' range or abilities.

A brilliant marketing strategy can make a first sale, but performance and satisfaction are required for the second. Axelrod's skill in marketing had no counterparty in production. No one seemed to be concerned about delivering a product that actually worked.

Obama entered office unorganized and unstructured. Nothing in his background suggested that he knew anything about management, organization, or leadership. Nor did anyone see the need for bringing in talent with these skills. As a result, the Hollywood mannequin was almost immediately exposed as nothing but flair, hype, and hot air. The public had bought a product that did not perform.

Marketing can do many things, but it cannot sell a product that people have tried and rejected. That is Obama's reelection problem. At the risk of being unsophisticated and abusing the concept of Occam's Razor, Obama's reelection problem can be expressed in one simple sentence: "Now, too many people know him."

Obama's only strength was Axelrod's ability to play on the imagination of voters. That strength no longer exists. People now know the product and have rejected it. They did not get even Chauncey Gardiner. Embarrassed and angry, the public is stuck with Chance the Gardener.

The irony is that Mr. Obama has not changed. He is the same man who was elected. His problem is not communicating, Republicans, George Bush, tsunamis, or anything else. His problem is the man in the mirror. There is no more there than an image.

Obama was all hype and no substance. That realization has dawned on voters, resulting in horrendous polling. Richard Nixon was never liked, but he was at least thought competent. Obama was liked but never competent. Now Obama is living proof of the old adage that familiarity breeds contempt. He is neither liked nor competent.

Even the hapless Jimmy Carter did not attain that status.


1b)Reverse Racism
By Thomas Sowell

Among those who have been disappointed by President Barack Obama, none is likely to end up so painfully disappointed as those who saw his election as being, in itself and in its consequences, a movement toward a "post-racial society."

Like so many other expectations that so many people projected onto this little-known man who suddenly burst onto the political scene, the expectation of movement toward a post-racial society had no speck of hard evidence behind it -- and all too many ignored indications of the very opposite, including his two decades of association with the egregious Reverend Jeremiah Wright.


Those people of good will who want to replace the racism of the past with a post-racial society have too often overlooked the fact that there are others who instead want to put racism under new management, to have reverse discrimination as racial payback for past injustices.

Attorney General Eric Holder became a key figure epitomizing the view that government's role in racial matters was not to be an impartial dispenser of equal justice for all, but to be a racial partisan and an organ of racial payback. He has been too politically savvy to say that in so many words, but his actions have spoken far louder than any words.

The case that first gave the general public a glimpse of Attorney General Holder's views and values was one in which young black thugs outside a voting site in Philadelphia were televised intimidating white voters. When this episode was broadcast, it produced public outrage.

Although the Department of Justice's prosecution of these thugs began in the last days of the Bush administration, and the defendants had offered no legal defense, the case was dropped by the Justice Department after Eric Holder took over. One of the lawyers who were prosecuting that case resigned in protest.

That lawyer -- J. Christian Adams -- has now written a book, titled "Injustice: Exposing the Racial Agenda of the Obama Justice Department." It is a thought-provoking book and a shocking book in what it reveals about the inner workings of the Department of Justice's civil rights division.

Bad as the Justice Department's decision was to drop that particular case, which it had already won in court, this book makes painfully clear that this was just the proverbial tip of the iceberg.

Despite the efforts of some in the media and in politics to depict the voter intimidation in Philadelphia as just an isolated incident involving a few thugs at one voting place, former U.S. Attorney Adams shows that these thugs were in fact part of a nationwide organization doing similar things elsewhere.

Moreover, the civil rights division of the Justice Department has turned the same blind eye to similar voter intimidation and corruption of the voting process by other people and other organizations in other cities and states -- so long as those being victimized were white and the victimizers were black.

This is all spelled out in detail, naming names and naming places, not only among those in the country at large, but also among those officials of the Justice Department who turned its role of protecting the civil rights of all Americans into a policy of racial partisanship and racial payback.

The widespread, organized and systematic corruption of the voting process revealed by the author of "Injustice" is on a scale that can swing not only local but national elections, including the 2012 elections. The Department of Justice under Attorney General Eric Holder has not only turned a blind eye to blatant evidence of voter fraud, it has actively suppressed those U.S. Attorneys in its own ranks who have tried to stop that fraud.

Even in counties where the number of votes cast exceeds the number of people legally entitled to vote, Eric Holder's Justice Department sees no evil, hears no evil and speaks no evil -- if the end result is the election of black Democrats.

This is an enormously eye-opening book which makes painfully clear that, where racial issues are concerned, the Department of Justice has become the Department of Payback. A post-racial society is the last thing that Holder and Obama are pursuing.



1c)US on global alert for Iranian reprisal that may jeopardize Shalit release

Washington published a worldwide travel advisory warning US citizens to beware of Iranian-instigated terrorist attacks following the uncovering of an Iran-directed plot to assassinate Saudi Arabian ambassador Adel Al-Jubeir and bomb the Saudi and Israeli embassies.

The US holds Iran accountable for its actions, said Attorney General Eric Holder, following which Tehran turned to the UN Secretary General to accuse the US of warmongering.

US officials are deeply concerned Tehran may not take lying down Washington's charge that the Revolutionary Guards' Al Qods Brigades were complicit in the assassination plot or the success of a prisoner exchange deal releasing the Israeli soldier Gilad Shalit from Hamas captivity.

After being caught, Iran is behaving as though it is under threat of war, its fury fueled by the US-Egyptian-Israeli-Hamas prisoner deal which threatens to cut the Islamic Republic out of Palestinian affairs and curtail its influence in the Gaza Strip, an important outpost.

The Washington advisory issued Wednesday said: "The US government assesses this Iranian-backed plan to assassinate the Saudi ambassador may indicate a more aggressive focus by the Iranian government on terrorist activity against diplomats from certain countries, to include possible attacks in the United States."

With a valuable Middle East holding about to be lost, Iran is capable of unleashing terrorists for acts that would force the hands of the United States and Israel. By drawing Hamas into such operations, Tehran would seek to torpedo the Shalit deal a moment before its consummation.

Sources in Washington therefore criticized Prime Minister Binyamin Netanyahu for jumping the gun by his announcing the deal Tuesday for domestic political kudos. "Prisoner swaps are counted successful only after or during the fact," said one official.

Other Western intelligence sources commented that by letting the cat out of the bag a week in advance, Israel gave Iran and Hizballah time to sabotage it. Both maintain a strong presence of undercover agents in the Gaza Strip who are fully capable of blowing away the deal Hamas political leader Khaled Meshaal struck with Israel in the framework of an accord with the United States for packing up his Hamas bureau and command centers and moving them out of Damascus.

As Israelis joyously celebrated news of the forthcoming release of their soldier from five years in Hamas captivity, US officials in Washington released details of the plot instigated by Iran to murder Saudi ambassador Al-Jubeir, one of King Abdullah's closest advisers.

US Attorney General Holder and FBI Director Robert Mueller named Iranian-American Mansour Arbabsiar, 56,and a second man, Gohlam Shakuri, an Iranian official, in a five-count criminal complaint filed Tuesday afternoon in the federal court in New York. It included counts of conspiracy to kill a foreign official and conspiracy to use a weapon of mass destruction, a bomb.

Shakuri is still at large in Iran. Holder identified him as an Iran-based member of the Al Qods force.

The complaint described a conversation in which Arbabsiar was allegedly directing the informant to kill the Saudi ambassador and said the assassination could take place at a restaurant. When the informant feigned concern about Americans who also eat at the restaurant, Arbabsiar said he preferred if bystanders weren't killed but, "Sometimes, you know, you have no choice, is that right?"

The Attorney General said that the plan was "conceived, sponsored and was directed from Iran" by a faction of the government and called it a "flagrant" violation of U.S. and international law. "The US is committed to holding Iran accountable for its actions," Holder said.

US officials disclosed that Arbabsiar met twice in July with a DEA informant in the northern Mexico city of Reynosa, and negotiated a $1.5 million payment for the assassination of the Saudi ambassador. As a down payment, officials said Arbabsiar wired two amounts of $49,960 on Aug. 1 and Aug. 9 to an FBI undercover bank account after he had returned to Iran.

Those officials stressed that had the plotters succeeded in assassinating a foreign diplomat on US soil, it would have been deemed an act of war. Its actual planning too was an act of Iranian aggression against the United States.
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2) I witnessed the riots in Cairo
By Reva Bhalla of Stratfor


Why Sunday's street violence was more than just "clashes"

The last time I visited Cairo, prior to the ouster of then-Egyptian President Hosni Mubarak, a feeling of helplessness pervaded the streets. Young Egyptian men spent the hot afternoons in shisha cafes complaining about not being able to get married because there were no jobs available. Members of the Egyptian Muslim Brotherhood would shuffle from apartment to apartment in the poorer districts of Cairo trying to dodge arrest while stressing to me in the privacy of their offices that patience was their best weapon against the regime. The Brotherhood, Egypt's largest Islamist organization, could be seen in places where the government was glaringly absent in providing basic services, consciously using these small openings to build up support among the populace in anticipation of the day that a power vacuum would emerge in Cairo for them to fill. Meanwhile the Copts, comprising some 10 percent of Egypt's 83 million people, stuck tightly together, proudly brandishing the crosses tattooed on their inner wrists in solidarity against their Muslim countrymen. Each of these fault lines was plainly visible to any outsider willing to venture beyond the many five-star hotels dotting Cairo's Nile Corniche or the expatriate-filled island of Zamalek, but any prediction on when these would rupture was obscured by the omnipresence and effectiveness of the Egyptian security apparatus.

When I returned to Cairo the weekend of Oct. 9, I caught a firsthand glimpse of the rupture. The feeling of helplessness on the streets that I had witnessed a short time before had been replaced with an aggressive sense of self-entitlement. Scores of political groupings, spread across a wide spectrum of ideologies with wildly different agendas, are desperately clinging to an expectation that elections, scheduled to begin in November, will compensate them for their sacrifices. Many groups also believe that they now have history on their side and the momentum to challenge any obstacles in their way - including Egypt's still-powerful security apparatus. The sectarian rioting that broke out Oct. 9 was a display of how those assumptions are grinding against reality.

THE SUNDAY RIOTS
Sunday, Oct. 9, began calmly in Cairo. Though Egyptian opposition forces are growing more vocal in their discontent with Egypt's interim military government, the Supreme Council of the Armed Forces (SCAF), the main demonstrations have been taking place a few hours after Friday prayers - and declining in size with each passing week. People spent Sunday afternoon going about their daily business as remnants of previous demonstrations lay strewn on the sidewalks. I noticed graffiti spray-painted on the walls encircling Tahrir Square that depicted SCAF leader Field Marshal Mohamed Hussein Tantawi with lines struck across his face. The top-selling items for Tahrir Square sidewalk vendors were Arab Spring memorabilia, from flags to armbands to anti-Mubarak stickers. Frustrated merchants meanwhile looked on from their empty shops, visibly hurting from the drastic reduction in tourist traffic since the demonstrations began in January.

A friend was scheduled to pick me up from my hotel near Tahrir Square on Sunday evening, but he called to tell me he would be late because of a major traffic jam on the October 6 Bridge between my hotel and the Maspero district, northwest of Tahrir Square. I received another call 20 minutes later telling me that Coptic demonstrations at the state television and radio station in Maspero had spiraled out of control and that elements within the demonstration had begun firing at soldiers patrolling the area.

This was highly unusual. While Copts have organized several demonstrations at the Maspero station to express their frustration at the state for allegedly ignoring increasing attacks on their churches, these have been mostly nonviolent. Most alarming, however, was that elements within the demonstrations were targeting army soldiers. It is still unknown whether the armed perpetrators were Copts themselves or elements of some other faction, but the incident escalated a routine Coptic demonstration into full-scale sectarian riots.

I left my hotel and headed for Maspero.

As I made my way out to the October 6 Bridge, at least a dozen armored personnel carriers and buses full of soldiers whizzed past me toward Maspero. By then, word had spread near Tahrir Square that riots had broken out, prompting mostly young men to come out to the square, gather their friends, hang Egyptian flags from the trees and prepare for the unrest to make it to the city center. I convinced a taxi driver to get me close to Maspero and saw, from a mile away, flames and smoke emanating from cars and armored vehicles that demonstrators had set ablaze. As I neared the crowd, scores of mostly young Muslim men pushed their way past me carrying large wooden sticks and whatever rudimentary weapons they could fashion out of household kitchen items. Walking in groups of three or more with a confident swagger, they told everyone along the way that Copts were killing Muslims and soldiers and called on others to take revenge. The reality at this point did not matter; the mere perception that Copts were killing soldiers and Muslims was all that was needed for Muslim mobs to rally. While this was happening, state media was broadcasting messages portraying the Copts as the main perpetrators.

The crowd in Maspero was only about 1,500 people by my estimation, but a growing Muslim mob was pushing it deeper into downtown toward Tahrir Square. From where I and several other observers were standing, many of the Muslim rioters at first seemed able to pass through the military barricade to confront the Copts without much trouble. After some time had passed and the army reinforcements arrived, the military started playing a more active role in trying to contain the clashes, with some footage showing an armored vehicle plowing through the crowd. Some rioters claimed that Salafists from a nearby district had arrived and were chanting, "Islamiyyah, Islamiyyah," while others parroted state media claims about "foreign elements" being mixed in with the demonstrators. As the night wore on, the scene of the riots split into roughly three sections: the Muslims on one side, the military in the middle and the Copts on the other.

This was not the best environment for a woman, especially one without an Egyptian ID card. A member of the security forces put a gun to the chest of a young, Egyptian-born female reporter, accusing her of being a foreign spy, before a group of young men came between her and her assailant, pulling her back and insisting she was Egyptian. The Muslim mob badly beat at least two young Coptic women in the crowd, after which throngs of young Coptic men gathered to take revenge. A Copt alone on the wrong side of the army barricade became an immediate target, and I watched as scores of Muslim men carried one Coptic man after another into dark alleyways. These men likely contributed most to the final civilian death count. Cars with crosses hanging from their rearview mirrors were attacked with incendiary devices, their windows smashed.

Not everyone in the area had subscribed to the mob mentality, however. On a number of occasions, I saw groups of young men trying to pull women back from the crowd, warning them of the consequences if they ventured any deeper into the mob. I saw one Coptic woman fighting off a large group of men twice her size that was trying to prevent her from going into the crowd. As she fought them off one by one, the crowd around her gave up; she was determined to join the demonstration at any cost.

The sectarian clashes continued through the night as the army tried to impose a curfew and restore order to the streets. By the end of the night, most reports claimed that three soldiers and 22 civilians had been killed, in addition to scores of injuries.

The next day was eerily quiet in normally bustling downtown Cairo. Many people, fearing a repeat of the previous night's rioting, stayed home, reducing traffic to a trickle. The frames of burnt cars remained in the streets through the evening. However, all was not quiet; Central Security Forces deployed to predominantly Coptic areas of Cairo to contain clashes that had already begun to break out between Muslims and Copts who were leading processions to transfer the bodies from the hospital to the morgue.

THE MILITARY'S ROLE
What struck me most about the riots was the polarization on the streets when it came to the general perception of the military. On the one hand, I saw crowds along the street cheering in support of the army as armored vehicles and buses filled with soldiers made their way to the scene of the conflict. For many in Egypt, the army is still viewed as the guarantor of stability and the most promising path toward the level of calm needed in the streets to bring the country back to health after months of upheaval. However, various opposition groups in Cairo, increasingly disillusioned with the military's crackdowns since Mubarak's ouster, have been vocally accusing the SCAF of impeding Egypt's so-called democratic transition. Even the waiter at my hotel that night was complaining to me that Egypt is the "only country in the world that doesn't protect its people." The rhetoric against the military has been increasing, but it was not until the night of Oct. 9 that the military itself became a target of attacks by demonstrators. Oct. 9 was also the first time there had been reports of firearms used by demonstrators against the military. Regardless of the identity of the shooters in the crowd, what sect they belonged to and on whose behalf they were working, the riots revealed how the military was being stripped of its image as a neutral arbiter in Egypt's political crisis.

What most of the media have failed to discern in covering the Egyptian uprising is the centrality of the military in the conflict. With or without Mubarak in the picture, the military in Egypt has long been the true mainstay and vanguard of the regime. When Egyptians took to the streets at the start of the year, they did so with a common purpose: to oust a leader who symbolized the root of their grievances. What many didn't realize at the time was that the military elite quietly shared the goal of dislodging the Egyptian leader and in fact used the demonstrations to destroy Mubarak's succession plans. Throughout the demonstrations, the military took great care to avoid becoming the target of the protesters' wrath, instead presenting itself as the only real vehicle toward political change and the champion of stability in a post-Mubarak Egypt.

Where the opposition and military diverged was in the expectation that the removal of Mubarak would lead to fundamental changes in how Egypt is run. In the SCAF's view, the main purpose of the upcoming elections is to merely give the impression of a transition to democracy. While the military regime would prefer to leave the headaches of day-to-day governance to a civilian government, no member of the SCAF is prepared to take orders from a civilian leader. More important, the military is not prepared to hold the door open for political rivals, particularly Islamists, who are hoping to gradually displace the old guard.

The next several weeks therefore will be crucial to watch in Egypt. The military is caught between needing to give the impression that it is willingly transferring power to a democratically elected civilian government while doing everything it can to keep the opposition sufficiently weak and divided. The military is not alone in this objective; there is still a sizable constituency in the country, particularly among the economic elite, that views the opposition with deep disdain and distrust.

At this point, it is unclear whether the military regime is prepared to see the election cycle all the way through. Parliamentary elections are set to begin Nov. 28, but with the security situation as it is, it would not be a surprise if the military decided that a delay was needed. There has been no talk of this yet, but it has only been two days since the violence at Maspero. At this point, one can expect Egypt's factions to be making serious preparations for their worst-case scenarios. The SCAF is trying to determine the level of violence that would need to take place in the streets to impose emergency rule and suspend the elections. Some segments within the opposition, feeling entitled to a share of Egypt's political power and distrustful of the army's intentions, could meanwhile be contemplating the merits of armed revolt against the military regime if they are denied their political opening.

This is why the Oct. 9 riots mattered a great deal. The image of demonstrators shooting at soldiers against a backdrop of sectarian riots is one that will stick in the minds of many Egyptians. If that scenario is repeated enough times, the military could find the justification it needs to put off Egypt's democratic experiment, perhaps indefinitely. Such a move would not be free of consequences, but then again, the military was prepared to absorb the consequences when it allowed the initial demonstrations in Tahrir Square to gain momentum. The key to knowing what comes next lies in finding out who actually pulled the trigger against those soldiers in Maspero on Sunday.



2a)Cyprus on the World Stage
By Daniel Pipes

http://www.meforum.org/pipes/10222/cyprus-on-the-world-stage


Cyprus, an island near Turkey and Syria of roughly 1.3 million inhabitants, finds itself on the cusp of momentous change. As it belatedly makes its grand debut on the world stage after domestic Greek-Turkish communal issues have consumed its first 51 years of independence, it faces both great opportunity and great danger.

That communal problem originated in 1570, when the Ottoman Empire conquered the island and its almost entirely Greek-speaking Orthodox Christian population. Over the next three centuries, immigration from Anatolia created a Turkish-speaking Muslim minority. British rule between 1878 and 1960 left this situation basically unchanged. At the time of Cypriot independence in 1960, Turks constituted one-sixth of the population.

Cyprus was hardly the only territory rife with ethnic tensions that London eventually abandoned in frustration – think of India, Iraq, Palestine, and Sudan – but it was the only one where it retained a permanent role for itself and brought in patron states, namely Turkey and Greece, as guarantors of the newly-independent state.

This mischievous arrangement heightened tensions between both the two island's two communities and their patron states. Those tensions boiled over in 1974 when Athens attempted to annex the whole of Cyprus and Ankara responded by invading the island, seizing the northern 37 percent of the island's territory. Greek annexation fizzled but the invasion led to the establishment of a nominal "Turkish Republic of Northern Cyprus" (TRNC), which is maintained today by some 40,000 troops from the Republic of Turkey. Hundreds of thousands of settlers have since emigrated from Turkey, fundamentally altering the island's demography.

Cyprus remained thus for 35 years, divided, deadlocked, and largely ignored by the outside world, until two recent developments upended the island's obscure if unhappy status quo.


First, the AK Party came to power in Turkey in 2002 with an aggressive program of regional domination. It initially kept this ambition in check but with a heady electoral success in June 2011, followed immediately by its seizure of political control over the Turkish military, this intent emerged in full blossom. The drive to regional domination takes many forms – from escalating tensions with Israel to the prime minister's triumphal tour of North Africa – but with a specific focus on increasing Turkish power in the eastern Mediterranean. AKP ambitions have thus transformed the Turkish occupation of Cyprus from a sui generis problem into one aspect of a larger issue.

Second, the June 2010 discovery of gas and oil reserves ("Leviathan") in Israel's Mediterranean Sea exclusive economic zone, right near the Cypriot EEZ, suddenly made Cyprus a player in the world energy market. Cypriots talk of 300 trillion cubic feet worth US$4 trillion. Such numbers attract covetous gazes, especially from Ankara, which demands (via the TRNC) its share of future gas income. Further, the AKP's escalating anti-Zionism combined with Foreign Minister Ahmet Davutoğlu's strategic ambitions suggest Turkish claims extending to Israeli-controlled waters.

In conjunction, these two developments – growing Turkish ambitions and possible gas deposits in the trillions – link Cyprus and Israel in self-defense. Leading Greek Cypriot figures in the government, the media, and business told me during a just-concluded trip to the island about their urgent wish to build economic and security relations with Israel.


In the economic realm, a ranking government official proposes five projects: a joint pipeline from the gas fields to Cyprus, followed by a liquidification plant, a methanol plant, a 1,000 megawatt electricity plan, and a strategic reserve, all located in Cyprus. A media tycoon suggests selling the gas reserves to Israel and letting its companies bear responsibility.

In the security realm, several interlocutors proposed a full-on alliance with Israel. Cyprus would gain from Israel's much greater military, economic, and diplomatic prowess. Israel, which has already made protective efforts on behalf of Cyprus, would benefit from access to an airbase at Paphos, 185 miles (300 kilometers) from its shore, belonging to a European Union member.

Such an alliance would terminate the Cypriot legacy of non-alignment and low-key diplomacy designed to convince governments not to recognize the TRNC, though that strategy, arguably, has not brought it much benefit.

In the face of an over-confident and possibly messianic Turkish leadership that increasingly betrays rogue attributes, Washington, Brussels, Athens, and Moscow have important roles to play in encouraging Cypriot-Israeli relations and thereby diminishing the likelihood of AKP-led Turkish aggression.

Mr. Pipes (www.DanielPipes.org), president of the Middle East Forum and Taube distinguished visiting fellow at the Hoover Institution, recently visited Cyprus to deliver the Thoukidides Think Tank's inaugural lecture. © 2011 by Daniel Pipes. All rights reserved.
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3)Wall Street's Gullible Occupiers
The protesters have been sold a bill of goods. Reckless government policies, not private greed, brought about the housing bubble and resulting financial crisis.
By PETER J. WALLISON
There is no mystery where the Occupy Wall Street movement came from: It is an offspring of the same false narrative about the causes of the financial crisis that exculpated the government and brought us the Dodd-Frank Act. According to this story, the financial crisis and ensuing deep recession was caused by a reckless private sector driven by greed and insufficiently regulated. It is no wonder that people who hear this tale repeated endlessly in the media turn on Wall Street to express their frustration with the current conditions in the economy.

Their anger should be directed at those who developed and supported the federal government's housing policies that were responsible for the financial crisis.


Mary O'Grady and Mary Kissel on how New York's economy and budget depend on Wall Street.

Beginning in 1992, the government required Fannie Mae and Freddie Mac to direct a substantial portion of their mortgage financing to borrowers who were at or below the median income in their communities. The original legislative quota was 30%. But the Department of Housing and Urban Development was given authority to adjust it, and through the Bill Clinton and George W. Bush administrations HUD raised the quota to 50% by 2000 and 55% by 2007.

It is certainly possible to find prime borrowers among people with incomes below the median. But when more than half of the mortgages Fannie and Freddie were required to buy were required to have that characteristic, these two government-sponsored enterprises had to significantly reduce their underwriting standards.

Fannie and Freddie were not the only government-backed or government-controlled organizations that were enlisted in this process. The Federal Housing Administration was competing with Fannie and Freddie for the same mortgages. And thanks to rules adopted in 1995 under the Community Reinvestment Act, regulated banks as well as savings and loan associations had to make a certain number of loans to borrowers who were at or below 80% of the median income in the areas they served.

Research by Edward Pinto, a former chief credit officer of Fannie Mae (now a colleague of mine at the American Enterprise Institute) has shown that 27 million loans—half of all mortgages in the U.S.—were subprime or otherwise weak by 2008. That is, the loans were made to borrowers with blemished credit, or were loans with no or low down payments, no documentation, or required only interest payments.

Of these, over 70% were held or guaranteed by Fannie and Freddie or some other government agency or government-regulated institution. Thus it is clear where the demand for these deficient mortgages came from.

The huge government investment in subprime mortgages achieved its purpose. Home ownership in the U.S. increased to 69% from 65% (where it had been for 30 years). But it also led to the biggest housing bubble in American history. This bubble, which lasted from 1997 to 2007, also created a huge private market for mortgage-backed securities (MBS) based on pools of subprime loans.

As housing bubbles grow, rising prices suppress delinquencies and defaults. People who could not meet their mortgage obligations could refinance or sell, because their houses were now worth more.



Associated Press
Millionaire rap mogul Russell Simmons (center) joins the anti-Wall Street protests.

Accordingly, by the mid-2000s, investors had begun to notice that securities based on subprime mortgages were producing the high yields, but not showing the large number of defaults, that are usually associated with subprime loans. This triggered strong investor demand for these securities, causing the growth of the first significant private market for MBS based on subprime and other risky mortgages.

By 2008, Mr. Pinto has shown, this market consisted of about 7.8 million subprime loans, somewhat less than one-third of the 27 million that were then outstanding. The private financial sector must certainly share some blame for the financial crisis, but it cannot fairly be accused of causing that crisis when only a small minority of subprime and other risky mortgages outstanding in 2008 were the result of that private activity.

When the bubble deflated in 2007, an unprecedented number of weak mortgages went into default, driving down housing prices throughout the U.S. and throwing Fannie and Freddie into insolvency. Seeing these sudden losses, investors fled from the market for privately issued MBS, and mark-to-market accounting required banks and others to write down the value of their mortgage-backed assets to the distress levels in a market that now had few buyers. This raised questions about the solvency and liquidity of the largest financial institutions and began a period of great investor anxiety.

The government's rescue of Bear Stearns in March 2008 temporarily calmed the market. But it created significant moral hazard: Market participants were led to believe that the government would rescue all large financial institutions. When Lehman Brothers was allowed to fail in September, investors panicked. They withdrew their funds from the institutions that held large amounts of privately issued MBS, causing banks and others—such as investment banks, finance companies and insurers—to hoard cash against the risk of further withdrawals. Their refusal to lend to one another in these conditions froze credit markets, bringing on what we now call the financial crisis.

The narrative that came out of these events—largely propagated by government officials and accepted by a credulous media—was that the private sector's greed and risk-taking caused the financial crisis and the government's policies were not responsible. This narrative stimulated the punitive Dodd-Frank Act—fittingly named after Congress's two key supporters of the government's destructive housing policies. It also gave us the occupiers of Wall Street.

Mr. Wallison is a senior fellow at the American Enterprise Institute. He was a member Financial Crisis Inquiry Commission and dissented from the majority's report.
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