Timidity, Defection, Assassinations and Market Direction!

Quick humor:

My wife and I had words,  But I didn't get to use mine.  ~~~~~  Frustration is trying to find your glasses without your glasses.  ~~~~~  God made man before woman so as to give him time  to think of an answer for her first question.

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Many months ago I wrote it might be time to start asking what could go right to move the market direction upward.

After the first of the year tax selling abates and reinvestment funds from IRA's, pensions and bonuses have a positive impact on the market.  January is historically an up month and particularly so if the previous fourth quarter was upbeat and Christmas results were deemed positive.

We still have a high degree of uncertainty regarding Europe and the Euro, and we still have a president who has no regard for deficit spending because he is returning to his 'populist roots' in order to win re-election. Finally, corporate earnings should not experience the same percentage of increase in 2012 as they have  in the past several years.

Technically speaking, key charts suggest higher levels near term but I continue to believe we have many negative headwinds that can and will restrain any significant rise.

The economic mess we are in is not PNF/F's doing nor GW's.  Yes, they both contributed but it has been long in coming because of social and fiscal policies begun as far back as when Wilson was president.  The belief that you can spread wealth through social programs and never pay for them ultimately catches up and then the physical principle of what goes up comes down takes over and that is where we are.

Until politicians bite the bullet and voters demand they do we are simply driving our economy over a cliff and the markets will continue to be impacted by this fact.

That said, Laslo Birinyi has a different viewpoint. (See 1 below.)

Soros does not buy what Birinyi espouses. (See 2 below)

Gary Shilling's thinking:

Dan Ferris' thoughts:

" It Might Not Feel Like It, But Things Are Going Our Way By Dan Ferris, editor, The 12% Letter

Last year was the perfect example of something I've been talking about since 2009. Stocks ratcheted wildly up and down. And it probably felt pretty bad to be a long-term investor. But once you understand what was really happening… you're going to feel better. Let me show you why… In 2011, the market value of U.S. stocks went nowhere from the first trading day, January 3, to the last trading day, December 30. And I mean absolutely nowhere. The S&P 500 started the year at 1,257.62 and ended the year at 1,257.60. I'm sure I'm not the first person who's pointed that out to you. But you might not have heard a much more important piece of news… While the market value of the S&P 500 was going absolutely nowhere, its valuation was plummeting. S&P 500 trailing 12-month earnings (through September 30, 2010) started last year at $79 a share and ended the year at $94.64 per share (through September 30, 2011). That's 20% earnings growth. So it would make sense for the index's valuation to at least stay the same if not rise, wouldn't it? But that's not what happened.  U.S. stocks started the year at 15.9 times earnings, and ended it at – are you ready for this? – just 13.3 times earnings. That's 20% earnings growth simultaneously with a valuation plunge of 16%.  Think about that. Investors were so mesmerized by the European crisis, the Japanese tsunami and ensuing nuclear disaster, and other bad news, they weren't paying the least bit of attention to what was really happening to the companies they were selling. The European crisis meant absolutely nothing to the real world results of American businesses. The Japanese tsunami barely registered in U.S. public companies' results. Nothing prevented U.S. companies from growing earnings 20%, on average. But Mr. Market decided stocks were worth 16% LESS. I believe this is how it'll be for the next several years. It's part of the "sideways market" I've been constantly writing about for years. Since 1900, there have been three sideways markets: January 1906 through July 1924, March 1937 through January 1950, and January 1966 through October 1982. A fourth sideways market has been underway since March 2000.  Since then, stocks have ratcheted up and down, with deep bear market dives and soaring bull market recoveries. Over the last 12 years, the overall market has gone nowhere, peaking twice – in March 2000 and again in October 2007 – and hitting two major lows – in October 2002 and March 2009. And since March 2000, the overall valuation has plummeted, from around 40 times earnings to today's level at 13.3 times earnings. What's happening in the stock market may feel bad. But it is good for long-term value investors. We want the sideways market to keep making stocks cheaper. We want those 22% drops, like we saw this year, to create new bargains for us. I'm using these crisis periods to tell my readers to load up on stocks. All through August, September, and October, I was highlighting the best values in our model portfolios… like buying Microsoft for less than 10 times earnings. For the sideways market, I particularly like buying cheap, dominant dividend growers. These companies weather tough times better than their competitors do. And if you can't depend on a big upswing in the market to make money, you need to make sure you're getting paid through dividends and dividend growth. During this sideways market, we're going to see plenty of opportunities to load up on these companies. Stocks will swing up and down. Every so often, the downswings will make high-quality stocks reasonably cheap – as they are today. Folks like me will buy. And then the bargains will disappear and make you wealthier as the market recovers. It might not feel like it, but things are going our way. All you have to do is know the value of great businesses, stay patient, and buy them when Mr. Market goes into panic mode. Their steady cash flows and dividend growth will take care of the rest. Good investing, Dan Ferris

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This is why I lean right: ""This is sheer genius."

In a bid to stem taxpayer losses for bad loans guaranteed by federal housing agencies Fanny Mae and Freddy Mac, Senator Bob Corker (R-Tenn.)proposed that borrowers be required to make a 5% down payment in order to qualify for a home loan.

His proposal was rejected 57-42 on a party-line vote because, as Senator Chris Dodd (D-Conn) explained, "Passage of such a requirement would restrict home ownership to only those who can afford it."

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Bret hits the nail on the head.  (See 3 below.)

The Republican 'losers' have taken a scorched earth approach.  It is as if they are intent on sending the enemy signals as to where the troops are stationed.  

Gingrich's anger is understandable because he feels he has been fragged but his petulant response demeans him the the eyes of voters and will prove a self destruct tactic.

I have never run for anything though I have been appointed to some interesting  positions. Were I a campaigning  politician, I would hope I would remain focused on my opponent, be objective and factual in my comments and leave the bomb throwing to the lesser beings.  (See 3a below.)

But then, the Obama crowd also knows how to apparently cut their opponents off at the legs. (See 3b below.)

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I constantly hear about the poor Republican candidates running from my Liberal friends, including my brother in law.  I agree there are some candidates who are not running who I wish were but I believe my friends are engaged in two bits of chicanery and self-delusion:

a) They want to draw attention away from 'PNF/F'  and b) they are desperately engaged in deflection and are trying to justify their decision to stay on the Democrat Plantation.  (See 4 below.)

What Republicans must do is not be timid. They must espouse reasonable goals and be bold. If they do not then voters have every right to conclude they do not have faith in their own proposals.

'PNF/F' is not timid about expressing himself.  He believes in Socialism as the cure for our ills which, of course, are largely because many who went before him also believed in Socialism and fiscal irresponsibility. (See 4a below.)
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More effective assassinations of key Iranian scientists.  This could not be accomplished without help from within Iran.  I invite you to come hear a Middle East update Jan 26th at 7:30PM with Maj. Elliot Chodoff, IDF Ret. (See 5 below.)
Dick
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1)Bull Market Defying Strategists Seen Continuing

By   LASZLO BIRINYI      |

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Laszlo Birinyi, whose prediction the bull market would weather a five-month retreat came true in October when the Standard & Poor’s 500 Index rallied 11 percent, says stocks will keep climbing in 2012.

Equities will gain at least 8 percent as improving corporate profits force bears to capitulate, according to Birinyi, who manages $400 million in Westport, Connecticut. Forecasts for declines from economists Gary Shilling and Nouriel Roubini were repudiated in 2011 as the benchmark gauge for American equities erased a 13 percent drop.

Birinyi, who advised holding stocks in August as the U.S. government was stripped of its AAA credit rating and strategists cut forecasts faster than any time since the credit crisis, said shares will climb for years to come if history is any guide. Shilling, president of A. Gary Shilling & Co., predicts equity investors will lose money in 2012 as consumer spending drops.

“Many concerns are opinions, but not necessarily facts,” Birinyi, president of Birinyi Associates Inc., said in a telephone interview on Jan. 4. “Later in the year, things will get a little bit better and sentiment will change, and we end up at the last leg where we’ve got the last-guy-in-the-pool scenario.”

Annual 28% Returns

The S&P 500 has risen 89 percent since March 2009, returning 28 percent a year to investors including dividends as U.S. gross domestic product expanded at an average rate of 2.4 percent over nine quarters. After ending 2011 virtually unchanged, the index gained 1.6 percent to 1,277.81 last week, the biggest rally to start a year since 2006. Futures on the S&P 500 advanced 0.8 percent at 10:07 a.m. in London today.

While U.S. stocks avoided a bear market in 2011, they posted their biggest decline since 2008, falling 19.4 percent between April and October. Investors outside the U.S. suffered bigger losses, with the Stoxx Europe 600 plunging 26 percent and China’s Shanghai Stock Exchange Composite Index tumbling about 30 percent. About $6 trillion was erased from global equity values last year, the second annual decline since 2002.

The Chicago Board Options Exchange Volatility Index, a gauge of investor concern derived from equity derivatives, averaged 24.2 in 2011, the third-highest level in the last nine years behind 2008 and 2009, data compiled by Bloomberg show. It reached a 29-month high of 48 on Aug. 8. The Dow Jones Industrial Average swung 400 points for four straight days for the first time ever in August.

Strategists Cut

The average S&P 500 estimate from 13 Wall Street strategists tracked by Bloomberg fell more than 9 percent from May through November, the most since 2009. Their forecast for a 6.4 percent increase in 2012 at the start of this year was the most conservative since 2005, Bloomberg data show.

“Even though we were basically flat, this was a really volatile year,” Peter Sorrentino, a senior fund manager at Huntington Asset Advisors in Cincinnati, who helps oversee $14.5 billion, said in a Jan. 5 phone interview. “Negative sentiment is what trapped the U.S. market and then we got range bound because the fear that if Europe slips into a major recession, it takes us with them.”

Birinyi, an equity trader at Salomon Brothers Inc. in the 1980s, was one of the first investors to recommend buying when stocks bottomed in 2009. He stayed bullish through the S&P 500’s decline of 16 percent in 2010 and last year’s tumble to 1,099.23 on Oct. 3 from 1,363.61 on April 29.

‘We Were Uncomfortable’

“Quite frankly, when the market got down 19 percent, we were uncomfortable,” he said in a Jan. 4 phone interview. “But we were uncomfortable in 2010 when the market went down 15 percent, and it ended up recovering.”

U.S. equities are in the third of four bull market stages, in which investors accept the rally that gathered momentum in the first two, according to Birinyi’s analysis. He said this phase, which started around July, should end in 2012 with a gain of at least 8 percent. The bull market’s final phase of “exuberance” has lifted the S&P 500 an average of 39 percent in the five advances since 1962, he said.

S&P 500 earnings have beaten estimates for the past 11 quarters and are forecast to climb above $100 a share in 2012, according to analyst projections compiled by Bloomberg. A ratio of debt to assets for S&P 500 companies reached its lowest point since at least 2002 in the third quarter, Bloomberg data show.

Bulls Under Pressure

Bulls such as Birinyi came under pressure in the second half of 2011 as the S&P 500 tumbled 5.7 percent in August and 7.2 percent in September. It lost 4.5 percent on Aug. 18 when the Federal Reserve said factory production in the Philadelphia region reached a 29-month low. The index lost more than 5 percent over two days twice before bottoming on Oct. 3, the first time after the Fed cited risks to the economy on Sept. 21, the second after consumer spending slowed on Sept. 30.

Stock swings increased as economists cut their forecast for 2012 GDP growth from 3.3 percent in February to 2 percent in October. Roubini, the co-founder and chairman of Roubini Global Economics LLC in New York, put chances of a contraction in developed economies at 60 percent and said investment gains would prove temporary. The S&P 500 is up 4.5 percent since he spoke Oct. 18 at an Asset Allocation Summit in London. Roubini declined to comment on his outlook.

Shilling said in September that equities were likely to drop and that earnings would fall short of estimates. He predicted in August that the U.S. would enter a recession this year. While he missed the 17 percent rally that began Oct. 3, he’s betting on a retreat as consumers save, the economy shrinks and profits fall.

‘Tough-Going’

“It’s probably tough-going for the equity markets this year because the expectations are that economy is going to be strong and corporate profits are going up,” Shilling, who contributes to Bloomberg View, said in a Jan. 4 phone interview. “I don’t think that’s realistic. I think we’ll probably have a decline in earnings, which feeds off the forecast of a moderate recession.”

Michael Shaoul told clients of Marketfield Asset Management on Sept. 14 and Sept. 23 to hold stocks because the decline wouldn’t last. While investors were right to be wary of Europe’s debt crisis, calls for a U.S. recession were unwarranted, according to Shaoul, who helps oversee $1 billion in New York.

‘Violent Market’

“This was a particularly violent market,” Shaoul said in a Jan. 5 phone interview. “At some point in time those negative things are going to matter a great deal, but not at this point in the cycle. It still looks to me that the U.S. equity market should be able to surpass that 2011 high.”

The S&P 500 has risen about 7.1 percent during the third year of a bull market and the price-earnings ratio increases 6.3 percent, according to Bloomberg data dating back to 1960. The index is trading at 13.5 times reported earnings, compared with 15.8 in February and about 18 percent below the 16.4 average since 1954, data compiled by Bloomberg show.

Alcoa Inc. was the first Dow company to report earnings for the last three months of 2011 yesterday when the largest U.S. aluminum producer posted its first quarterly loss in more than two years. Fastenal Co. and eBay Inc. are among the companies scheduled to report in the next 10 days that analysts forecast will see an increase in earnings, according to estimates compiled by Bloomberg.

“What we can see is that companies are still in business, balance sheets are good, earnings are still there and the negative case continues to be somewhat sketchy,” Birinyi said. “The potential for surprise does exist.”

2a)Soros told an audience in Bangalore, India today, "The crisis in Europe is more serious than the crash of 2008." He believes the world faces the possibility of a "vicious circle" of deflation.

And how is Soros protecting himself? By buying gold. According to Securities and Exchange Commission filings, Soros Fund Management sold almost all its shares in SPDR Gold Trust (GLD) and iShares Gold Trust (IAU) in the first quarter of 2011. His timing was solid, as gold dropped from its highs and the dollar rallied. But Soros started buying again in late 2011, according to financial news site Emerging Money.

Soros seems to be anticipating that a spasm of global deflation will send the central bankers running for the printing press… sending more money to "solve" the problem. So perhaps he's betting on another round of quantitative easing. We are…

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3)

Obama 'Retrenches'—America Retreats

Spending less on defense means squandering the money elsewhere.

By Bret Stephens

It's never entirely easy to distinguish between retrenchment and retreat.

For three years, the Obama administration has followed what it believes is a strategy of retrenchment—withdrawing from Iraq, setting a deadline for Afghanistan, calling off further expansion of NATO, signing arms-control treaties, asking the Europeans to take the lead in Libya, preferring sanctions to military strike sits ambitions to its means, and pursue a "sustainable" foreign policy.

The only problem is, the theory is wrong. What the administration would like to have you believe is a matter of vision is seen by others as a function of weakness.

Consider the Strait of Hormuz, 2012 edition. The administration kicks the year off by imposing sanctions on Iran's oil trade and persuading the Europeans to follow suit. The Iranians conduct military drills and warn the U.S. not to send an aircraft carrier back to the Persian Gulf. Then a potential diplomatic deus ex machina appears in the form of the USS Kidd's high-profile rescue of some Iranian sailors from their pirate captors. Iran repays the gesture by sentencing to death 28-year-old Amir Mirzaei Hekmati, an American citizen of Iranian descent.

The lesson of this parable is that you don't get more by doing less. The administration's policy toward Iran amounts to avoiding direct confrontation at all costs on the view that the last thing the U.S. needs is another war in the Middle East. But the result is that Iran is more truculent than ever (and much closer to a bomb), while our allies are more skittish than ever about the strength of U.S. commitments.

Sooner or later, the U.S. will have to prove the worth of those commitments in the face of an adversary that's more likely to test them. How sustainable is that?

This scenario has been playing itself out with depressing regularity since Mr. Obama came to office. About Iraq, Hillary Clinton said in October that the U.S. would not tolerate Iranian meddling. Yet the likelihood that the promise will be tested is far greater now than when we had a residual force in the country, even as the prospective cost of honoring the promise has become almost unaffordable. About Afghanistan, we surged our forces but attached a deadline. The upshot is the U.S. expending itself on temporary triumphs over the Taliban as Pakistan waits and plans a pro-Taliban end game.

Or consider Mr. Obama's favorite subject, nuclear proliferation. In April 2009, he gave a speech in Prague dreaming of a nuclear-free world. Almost immediately, North Korea tested a weapon, Pakistan expanded its arsenal, Iran moved ahead with its illicit programs, and China and Russia undertook extensive nuclear modernization schemes.

Enlarge Image

Associated Press

President Barack Obama speaks at Hradcany square in Prague in 2009.

Now the president wants a retrenched military, on the three-part theory that "the tide of war is receding," that America needs to get its financial house in order, and that the risk is minimal because the U.S. will continue to spend more on its military than the rest of the world combined.

Unfortunately for the president, the tide of war does not ebb or flow according to his wishes—unless he refuses to meet any provocation with force as a matter of principle. Our financial disorders are not the result of excess military spending but of entitlement programs Mr. Obama refuses to touch and has done much to expand.

And because we spend so much on personnel and weapons-development costs, our military budgets are heavier on tail than on tooth. Today's military has half as many ships and nearly 600,000 fewer active duty troops than it did at the end of the Cold War. Whatever else he's doing, Mr. Obama is not taking his budget knife to a bloated force.

In the history of any great power, there is always a point when the downward trend becomes unmistakable and irreversible. For France it was 1940; for Britain 1947; for the Soviet Union 1989. A case may soon be made that for the European Union the year was 2011.

It would be silly to suggest that the U.S. is anywhere near that type of inflection point. It has suffered no comparable military or economic disaster; the wars in Iraq and Afghanistan were a sneeze compared to World War II. The current vogue in declinism confuses the failures of (and disappointments in) an administration with the health of the country as a whole.

But like yesteryear hypochondriacs who convinced themselves they had tuberculosis—then took themselves to sanitoriums where they got it—acting on a belief in decline ultimately produces decline. We will not husband our resources by spending less on defense: We'll just squander the money elsewhere, probably less productively. We will not lessen tensions overseas by diminishing our military footprint: We'll just create vacuums into which others rush and to which we'll eventually return, at a cost.

That's the Obama administration's foreign policy legacy in a nutshell. Perhaps its failures don't seem clear enough for the Republicans to run right against them. But they are becoming clearer by the day to U.S. allies and adversaries alike. Eventually Americans will get the picture, too

3b)

Romney Derangement Syndrome

In the rush to criticize Mitt Romney, the other candidates aren't doing much to shore up their own free-market credentials.

By KIM STRASSEL

To listen to Mitt Romney's Republican rivals, the former Massachusetts governor isn't a true enough conservative to deserve the GOP nomination. But in their rush to criticize Mr. Romney, the other candidates aren't doing much to shore up their own free-market credentials.

With Mr. Romney now leading by double-digits in both New Hampshire and South Carolina, his opponents have taken off the gloves -- and wrapped their bare hands around the front-runner's time at Bain Capital. Newt Gingrich, Rick Perry and Jon Huntsman are trashing Mr. Romney for leading the sort of company that is at the heart of a risk-taking, free-market, America, and for daring to make a lot of money. Close your eyes and most of these complaints could be coming straight from the mouth of Barack Obama.

Mr. Gingrich accused Mr. Romney of "bankrupting companies and laying off employees." A pro-Gingrich Super PAC is meanwhile gearing up to release a 27-minute video that highlights workers who lost their jobs after being restructured by Bain. The PAC has also created an anti-Romney website devoted to the topic: www.kingofbain.com. Mr. Perry, desperate to jumpstart his flailing campaign in South Carolina, said the only time Mr. Romney had ever worried about a pink slip was "whether he was going to have enough of them to hand out." Even Mr. Huntsman, who likes to pitch himself as another candidate-manager, snapped that "What is clear is [Mr. Romney] likes firing people. I like creating jobs."

Actually, the only thing that is clear is that the GOP field is ditching first principles in a desperate attempt to stop the Romney locomotive. The candidates say that the attacks on Mr. Romney aren't a criticism of the free market. Their spin is that Bain was capitalism-gone-wrong, a firm that existed to strip wealth from companies and funnel it to "raiders" like Mr. Romney. Mr. Gingrich, for instance, explained that "those of us who believe in free markets . . . would find it pretty hard to justify rich people figuring out clever, legal ways to loot out a company." Mr. Perry said "there is something inherently wrong when getting rich off failure and sticking it to someone else is how you do your business."

There's something more wrong, at least for many conservative voters, with demonstrating a poor grasp of the fundamentals of the free market. Bain cut jobs. It also created jobs. It made money. It also lost money. This is what happens in business, and there is no version of it that is warm and fuzzy, and where everyone wins. To beat on Bain -- and its business of taking big risks, restructuring firms, making bets -- is to beat on every other investment firm, private-equity group, and hedge fund in America. The voters understand this, too, which is why Mr. Gingrich reaped a backlash in December, the first time he took a shot at Mr. Romney's business record. He found out then how difficult it is to hit Mr. Romney on this issue without also leaving voters with doubts as to his own beliefs in the basics of capitalism.

What voters might resent more is the lazy nature of the attacks. Mr. Romney isn't lacking in liabilities with a conservative base -- from his Massachusetts health-care experiment to his uninspired tax plans to his former positions on all manner of issues. Voters would no doubt prefer to hear his rivals making sharp contrasts with Mr. Romney over these flashpoints. Instead, they're getting a earful of cheap shots about his time making money.

3b)

Nader:Obama Bullied Democrats Not to Run Against Him in 2012 Primaries

Ben Johnson,The White House Watch

Ralph Nader said the Obama administration “jumped like a cat” to crush anyone who threatened to run against their boss for the Democratic Party presidential nomination in 2012. “The retaliation is incredible,”he said.

Last April,the consumer advocate and four-time presidential candidate vowed to organize a slate of 2012 Democratic primary challengers against Barack Obama. Nader hoped as many as half-a-dozen candidates would challenge Obama in the intraparty contests,each raising a separate issue on which the Left feels it has been betrayed. He told The Hill newspaper the Obama administration saw to it that did not happen.

“I hate to say but it’s over,”he told the newspaper. “The minute any name was mentioned…they made the calls.”Nader did not elaborate on the pressure the White House exerted on those who threatened to run against Obama in the primaries.

Currently,the only presidential hopeful following Nader’s model —running against Obama to raise a single issue —is pro-life activist Randall Terry,who is running for president as a Democrat.

Nader,an honest gadfly,stated forthrightly that“Obama should be impeached” in March 2011. Six months later,he reiterated “the only remedy left”for Obama’s violations of the Constitution “is…impeachment.”

However,he is far from the only left-wing partisan who is disappointed with Obama. Last March,Sen. Bernie Sanders of Vermont,an avowed socialist,said a “progressive”rival would “enliven the debate.”Congressmen Pete DeFazio and Dennis Kucinich agreed a political challenge would strengthen the party’s liberal base.

On the other side of the party’s spectrum,Democratic pollsters Doug Schoen and Pat Caddell have called on Obama to step aside and allow Hillary Clinton to run for president in 2012.

A growing number of Democratic voters favor measures that would effectively guarantee Obama’s defeat – as well as the removal from party leadership of this ObamAlbatross. An Associated Press-Knowledge Networks poll last year found that 47 percent of Democrats “said Obama should be challenged for the 2012 nomination,” although no modern president who faced a primary challenge has been re-elected. That number includes 29 percent of voters who supported Obama during the 2008 primaries. An October WND/Wenzel Poll has found more than one-third of voters on the Left would like to see someone else as their standard bearer in the 2012 presidential election.

Obama’s re-election effort,like the economy,is a media Potemkin village. He faces no primary rivals because his thuggish tactics and political threats crushed the opposition behind the scenes. The unemployed rate has “plummeted”to 8.5 percent,because Obama has shrunken the pool of workers. Everywhere,Obama is keeping up appearances that everything is well,and no one is fooled.

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4)The Myth of Bad Republican Candidates

By Selwyn Duke

Repeat a big Democrat talking point often enough, and it becomes the truth.  There is a certain liberal narrative that has recently filtered down to many independents and even some conservatives: the idea that the current crop of Republican candidates is weak, wanting, and worrisome.  The lament is, "Hell's bells, the guy in the White House is out of his depth, but what alternatives does the GOP offer?"  The idea, I suppose, is that we might as well just re-elect Barack Obama.  At least he has four years of golfing, government-growing, and greenback-gobbling experience. 

This characterization of the Republican field much reminds me of the gratuitous criticism of the U.S. by the hate-America-first crowd.  Okay, you say America is a bad country.  Compared to what?  Some imaginary Utopia that will never exist?  Because in the real world, the U.S. has been besting her competition for a long time.

Many repeat the statist talking point about the GOP contenders' alleged ineptitude simply because of media spin and the branding iron of repetition.  Yet others do, in fact, have unrealistic expectations.  They have in mind an ideal, a utopia of a politician -- a person who agrees with them on every major issue, possesses eloquence and decent looks, and has never strayed from ideological purity.  And when this imaginary figure doesn't appear, they ask, "Is this the best our political class has to offer?!"

Yet to what are we comparing these candidates?  And are we being mindful of Bismarck's sage observation that "[p]olitics is the art of the possible"?  For even insofar as a true traditionalist's ideal candidate does exist -- and this is important to understand -- he could not win election given the current state of our culture.

So there is something I'll now say.  And I must preface this by stating that, although no conventional label adequately describes my ideology, I have what many would call unassailable paleo-con credentials.  My ideal presidential candidate is Selwyn Duke (I agree with myself almost 100 percent of the time); my second choice would be someone such as Alan Keyes.  My vision for civilization is something akin to the Middle Ages meets Mayberry, with modern technology, the best virtues from every age, and medieval piety.  And when I apply my merciless standard, all our politicians look like Lilliputians.  But I also live in the real world, and when I judge them under its light, something seems plain.

The current GOP hopefuls are the best group of presidential contenders we've had in a very long time.

Yes, you read that right.

Do you doubt this?  If so, let's look at what the real world has given us, taking both major parties into consideration.

I'll start in 1972.  That year, the Democratic nominee was George McGovern, the ultra-lethargic ultra-liberal.  He was trounced in the general by sitting President Richard Nixon, who was no great shakes himself.  With policy as wanting as his persona, he gave us wage-and-price controls, the EPA, and Title IX, among his statist triumphs.  With Nixon's resignation, the GOP would be represented four years later by Gerald Ford, who, being bald in a television age, wouldn't have had the looks to win even if he hadn't been a button-down-shirt, country-club Republican who pardoned his old boss.  He was vanquished by peanut farmer Jimmy Carter -- 'nough said.  Nineteen-eighty gave us Reagan, a once-in-a-lifetime figure who has become the almost mythological gold standard by which contemporary Republicans have the misfortune of being measured.  In 1984 his opponent would be banal Minnesotan Walter Mondale, a fitting sacrificial lamb whose promise to raise taxes helped lower his vote count and author the worst Democratic electoral defeat in history.  It would have been a neat trick, finding someone who made Mondale look charismatic, but that's exactly what the Democrats did with Ma. governor Michael Dukakis in '88.  He lost to George H.W. Bush, a Ford-like politician whose major selling point was his status as Reagan's vice president.  This wasn't enough to carry the latter through four years later, however, when he lost to slick but soulless Bill Clinton.  In '96 it was the Republicans' turn to offer up the economics teacher from Ferris Bueller's Day Off in the person of Bob Dole, whose candidacy was described by Pat Buchanan as "the bland leading the bland."  This brings us to the third millennium and George W. Bush, the big-spending, "misunderestimated" statist, and his 2000 and 2004 opponents, Plastic Man Al Gore and the quite stuck-up John Kerry.  And then in 2008 we had John McCain, who never saw an amnesty plan he didn't like.  

The above paragraph is what's known as perspective.  Most Republicans currently running for president are superior to every major-party nominee of the last 40 years except for Reagan, especially when factoring in both substance and style.  All the candidates exude passion, most have some charisma and are at least relatively articulate (except for Perry, although he has been better of late), and most are more ideologically sound than everyone above except, again, for Reagan.  More significantly, today's contenders are actually talking about what should be central to American governance: adherence to our founding document, the Constitution.  They've also been talking about fundamentally changing the tax code and eliminating federal agencies.  Of course, it's easier and more advantageous to do this today, as the Tea Party movement and unprecedented federal-government usurpation of power have made constitutionalism and proposals to cage the Big Brother beast fashionable.  But this is the point.  Sure, Machiavellian politicians will preach whatever is in style, but another factor is that our more constitutionally aware GOP electorate has allowed constitutionally oriented candidates to finally have what will at least be their 15 minutes of fame -- and hopefully their day in the sun. 

One reason why the media want to portray the GOP hopefuls as inept and insane is obvious: the myth of Obama as Superman long ago was shattered.  Thus, there's only so much they can build the president up -- they also must tear his opposition down.  Yet another reason is something that vindicates my assessment of the Republican candidates: the leftists in the media really do see adherence to a two-hundred-year-old document as crazy.  They actually do consider efforts to upend the statist status quo, disempower Washington, and uphold states' rights as radical.  They truly do view traditional virtues as troglodytic.  Remember, these are the folks who thought Reagan was a dolt and McCain a delight.  If they don't like you, you must be doing something right.

The reality is that, on balance, the GOP has the best set of contenders it has had in a very long time.  The best of them outshine all presidential nominees (except you-know-who) of the last many decades, and whoever the Republican standard-bearer will be, he'll compare favorably to anyone in that group (except you know who). 

Most significant, though, is this: consider all the individuals I've mentioned, past and present, and then pick the worst of them.  Then realize that even he is better than the crypto-Marxist in the White House.

4a)GOP Timidity Is a Path to Defeat

By Joseph M. Koenig

The blinding speed with which the country has veered left under Obama has left Republicans desperate to find a way to take back the steering wheel.  With that in mind, it is impossible to turn on the television and see any political analysis of the GOP presidential nomination process that doesn't inevitably turn to the question of which of the candidates can beat Obama in the general election.  As many of the polls reflect, most such discussions come to the conclusion that Mitt Romney is the safest choice.  However, this argument from electability is based in fear and defeatism, and it produces candidates who fail to energize the voting public enough to win elections, much less edge the direction of the country back to a rightward trajectory.  The nomination of John McCain in 2008 is only the latest example.

According to the polls, Ron Paul has been garnering roughly 20% support from GOP primary- and caucus-goers, even though many of his views are considered my most Republicans to be farther left than Obama's, not to mention dangerous for America and her allies.  At the same time, the political class continues to argue the GOP nominee should be Romney, even though he failed to excite voters in 2008 and continues to prove he can't catch fire four years later.

The American people in general, and the Republican rank and file in particular, are fed up, angry, worried, and supremely frustrated.  Yet they are being told, once again, that we'd better not nominate anyone who is very conservative, or that person will get clobbered in the press and repel independents.  This strategy comes from a purely defensive posture, and as such, it is doomed to failure from an ideological perspective even if it succeeds electorally.

If establishment Republicans, through punditry and analysis echoed throughout the mainstream media, select a candidate who, even if he wins, will not effect the kind of serious change the American people are craving, these Republicans will have served only to slow the steady progression of the nation to the left, and to further estrange themselves from the American people.  This estrangement could then end up pushing many conservative voters toward a third party, making even a centrist candidate a probable loser against a united left.

Ron Paul, for his part, is doing as well as he is for one principal reason.  He takes the spending, deficit, and debt problem seriously, and people are so fed up with politicians looking only after their own interests that they will glom onto just about anyone who seems to understand and actually care about the problem.  People believe that Paul, of all the choices available, is the one candidate who might actually do something if given the chance.  He excites people.  He empathizes, and taps into that vast reservoir of disappointment and frustration the country feels.  Is this not what Obama did in 2008, while promulgating his vague promises of hope and change?  

This may come as a surprise to those timid folks in the Republican elite, but the candidate who can win is the candidate who can not only excite, but also harness and focus the immense dissatisfaction and frustration felt not just among Republicans, but also among voters across the political spectrum.  As kooky as Ron Paul is on many issues, when it comes to spending and debt, he harnesses that dissatisfaction.  If the Republican establishment cannot see how Romney simply doesn't manage the same feat, then we're in for another dismal election result in 2012.

This timidity on the right is understandable, but it nevertheless results in a well-worn path to defeat.  In nearly every political fight, be it over raising the debt limit, fixing Social Security, extending the payroll tax for longer than two months, or just about anything else, Republicans come out as public relations losers.  The primary reason for this is obviously the demagoguery of the left, with the willing aid of the liberal mainstream media, but the answer is not to tuck your tail between your legs and choose a candidate you believe is somehow safer, and therefore more immune to such tactics.

The Republican party cannot continue to walk on eggshells out of fear of being portrayed badly in the press.  By choosing a candidate in an effort to appease the liberal media, the right will once again push a candidate who excites few, has no appreciable mandate, and amounts to little more than a Democrat-lite.  Once elected, this type of candidate may slow the progression of the country to the left, but he will do little to create the kind of change the American people are ready to fight vociferously for, if they only had a leader they believed might actually fight with them and follow through on his promises.

Obama got elected not because he won the intellectual debate on the issues.  He won because he was able to tap into the frustration of the American people, provide optimism, and stir a passion and excitement in them from the perception that he was really going to change things for the better.

In their effort to advance a candidate safe enough not to embarrass them in the press, under the mistaken belief that only such a person can defeat the sitting president, the Republicans are poised to select another Bob Dole or John McCain.  As Republicans are embarrassed and afraid to offer a solidly conservative candidate, they only give credence to the mantra of the left that the GOP is filled with right-wing extremists.  They're acting as though they believe it themselves.

The left-leaning bias in the press cannot be changed in the short or intermediate term, nor can it be avoided by running candidates the media may find less objectionable.  The Democrat candidate will always be the hero to the GOP's villain.  Sooner or later, the GOP is going to have to muster the courage to trust the American people to see through the biased coverage, and to support a candidate who reflects the conservative values that are still generally mainstream, even if not in the dominant media.  The strategy of appeasing the left with a watered-down candidate is destined for defeat in the both long and short term.

----------------------------------------------------------------------------------------------------5)Senior Natanz executive slain in Tehran, US Navy, Air Force on Hormuz readiness 

D

Prof. Ahmadi Roshan's car

Forty-eight hours after Iran began advanced uranium enrichment in the fortified Fordo bunker near Tehran, Prof. Mostafa Ahmadi-Roshan, deputy director of the first uranium enrichment facility at Natanz, was killed early Wednesday, Jan. 11 by a sticky bomb planted on his car by two motorcyclists. It exploded near the Sharif technological university in northern Tehran.
The pair made their escape. Prof. Ahmadi-Roshan was the fourth Iranian nuclear scientist to be mysteriously assassinated in Tehran in two years. The same method of operation was used in a similar operation last year. Iran has blamed them all on Israel.

Tuesday, President Barack Obama received the Saudi foreign minister Saud al-Faisal. Their conversation was shrouded in secrecy, although no one doubts it focused on the conflict with Iran and the urgency of keeping open the main export outlet for the world's biggest oil suppliers, Saudi Arabia and the Gulf, through the Strait of Hormuz. The crisis in Syria must also have featured in their talks.

Shortly before the Saudi minister's arrival, US Navy and Air Force chiefs shed some light on preparations for an imminent operation to keep the Strait of Hormuz open to international shipping.

Washington sources report the White House is bending over backwards to convince the skeptical Saudis that the president  is wiling to use military force to keep the vital waterway open, safeguard Gulf oil installations and exports and also prevent Iran from acquiring a nuclear weapon.

The armed forces chiefs' disclosures were integral to the White House effort.

US Navy Commander Adm. Jonathan Greenert said preparations for a clash in the Strait of Hormuz (between the US and Iran) were keeping him up at night. The US Admiral added: “If you’re asking me why I’m not sleeping at night, it’s because of the Strait of Hormuz and what’s happening in the Arabian (Persian) Gulf. I’m an organizer, a trainer and equipper. I’d make sure that our people have the right equipment to do the right thing. Our folks that transit in and around that area, I want to make sure that they’re able to (deal) with the things that they need to deal with, basically self-protection, counter-swarm, ASW-anti-submarine warfare.”

Air Force Commander General Norton Schwartz said that the US air force will obviously play a role in keeping the Strait of Hormuz open.

A few days earlier, on Jan. 8, Gen. Martin Dempsey, Chairman of the Joint US Chiefs of Staff, acknowledged that Iran could close the Strait of Hormuz for a period of time, but that if it did so the US would take action to reopen the Strait.

The US has therefore made clear that it is resolved to bring all its naval and air power to bear on ensuring that the Strait of Hormuz remains open.

Riyadh, for its part, has promised to make up any shortfalls in oil sales generated by Western sanctions against Iran as its contribution to Washington's campaign to convince Asian buyers such as India, Japan, China and South Korea to cut down on their purchases from Iran.

This pledge is not entirely plain sailing. It raises the question of how quickly Saudi Arabia can up its oil production. The expert assessment is six to nine months at least. Then there is the counter-threat from Tehran: If the US continues to lean on European and Asian governments for an embargo on Iranian oil, "not a single drop" of Saudi or Gulf oil will pass through the Strait of Hormuz, say Iranian officials, thus pitting an Iranian blockade against a Western-led oil embargo.
Many Western experts treat Tehran's threat as empty rhetoric arguing that closure of the vital strait would above all impact Iran's own oil exports and slash its main source of revenue.

Iranian sources report Tehran is thinking in terms of a partial and selective closure of the Strait of Hormuz – rather than full-blown military action - in the certainty that the US and West will not  attack Iranian oil tankers or even detain them. Partial action, the Iranians believe, will be enough to trigger a major spike in world oil prices, send insurance rates for oil tankers sky high and bring the world's energy markets under intolerable pressure.


Two years ago, a Revolutionary Guards speedboat from the island of Abu Musa in the northern outlet of Hormuz damaged the Japanese oil tanker Star M carrying oil from Saudi Arabia by firing a single missile.

Washington opted to keep the findings of its inquiry under wraps so as to keep down tensions around the Gulf export route, avoid exacerbating relations with Tehran and keep a cap on oil prices.
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