FACTS NOT PROPAGANDA
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My Israeli Arab journalist friend writes about Jordan becoming a Palestinian State. A large majority of the Jordanian population are Palestinians.
But what about Palestinians in Gaza becoming part of Egypt and those in the West Bank becoming citizens of Jordan? You decide. (See 1 below.)
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Sanctimonious Liberal labor leader leaves New York to avoid paying taxes. More hypocrisy. (See 2 below.)
Then we have more hypocrisy by Obama who takes money from a foul mouthed Bill Maher and says nothing and then we witness equal vulgarity by the rapper at the Atlanta Fund raiser and more Obama silence.Yet, the president comes down on Rush for his vulgarity because he avers he wants to protect his two daughters but clams up when Republican women (Palin, her daughters etc.) are attacked and demeaned by these same people.
Just additional evidence this president, who set up the birth control issue as a way of appearing to defend women in order to get their vote, is two faced. What a fraud! (See 3 below.)
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I still maintain Obama can and will be beaten by his own words and failed policies.
Obama's money raising efforts are faltering, the economic recovery is anemic relative to history, debt is exploding and gas prices are rising. 'President Algae's' comments that drivers should be inflating their tires and tuning up their motor as an energy policy is laughable
On the foreign front, N Korea continues to go its own merry way, Putin continues to supply Syria and Iran in defiance of our own wishes as well as the U.N.'s, and Iran continues to move forward towards its pursuit of nuclear status. The Afghanistan War is becoming an albatross and Obama is stuck with his own premature announcement he is pulling out without any hope of accomplishing his previously stated objective.
The need for Obama to bow and scrape to the far left members of his party has caused him to take irrational measures to appease them and these will also come back to haunt him.
Obviously, events can prove me wrong but I believe Obama's position is weakening with the passing of each day and that bumper stick "Anyone Else" will prove to be correct..(See 3a, 3b and 3c below.)
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A liberal Israel paper warns Netanyahu should he attack Iran and not allow sanctions more time to be effective will preside over the demise of Israel. (See 4 below.)
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Bill Fleckenstein is a successful Wall Street Trader and he believes we are experiencing a fairy tale rally. (See 5 below.)
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A friedn and fellow conservative sentthis to me from one of his friends who he forwarded one of my memos to: "Don’t get your head all swelled, he’s just a retired eye surgeon from Long Island, and what does he know?
I don’t know who your friend is, but he’s a clear analytical thinker who has nailed down the essence of the greatness of the USA as well as the despicable essence of the current occupant of the White House.
We hope you and Ann come north this summer
Ed"
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Dick
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1)Should Jordan Be a Palestinian State?
The talk about "Jordan is Palestine" only plays into the hands of those who seek to turn the kingdom into a radical state that would most probably be affiliated with Iran or the Muslim Brotherhood.
Those who support the idea of turning Jordan into a Palestinian state need to be think carefully about the consequences of such a move.
A Palestinian state in Jordan would only be a source of even further instability and tension in the Middle East.
The royal family in Jordan has always been friendly to Israel and the West. Like his father, the late King Hussein, King Abdullah II is probably Israel's best friend and ally in the Arab and Islamic world.
The long border between Israel and Jordan has been relatively quiet over the past few decades -- thanks to the Jordanian authorities' tremendous efforts to prevent terror attacks from their territories.
Turning Jordan into Palestine would mean the loss of a moderate and rational Arab leader at a time when Islamists are rising to power in Egypt, Tunisia, Morocco and Libya.
It would mean the creation of a third state for the Palestinians, who already have two entities - one in the West Bank and another in the Gaza Strip.
A Palestinian state in Jordan would be run by either Hamas or Fatah -- the two parties that have failed their people again and again in the past few decades. In any event, whoever replaces the royal family in Jordan would not be as moderate, pragmatic and open-minded as the Hashemites.
The Jordanian monarch has displayed courage by resisting pressure from wealthy Arab countries like Qatar to allow Hamas, after it was thrown out of Syria, to establish its headquarters in Amman.
King Abdullah II, who since the beginning of the "Arab Spring" has been forced to tackle growing unrest in his kingdom, should also be commended for resisting immense pressure from Muslim Brotherhood and many Jordanians and Palestinians to cut off diplomatic ties with Israel.
Security cooperation between Israel and Jordan has always been strong: the two countries face the same challenges, threats and enemies.
King Abdullah II and his father have prevented Hamas from establishing terror bases in the kingdom.
In 1999, King Hussein did not hesitate to expel Hamas leaders after closing down their offices in Amman.
A few years later, the Jordanians thwarted plans by Hamas to smuggle weapons into the kingdom for the purpose of launching terror attacks against Israel.
The king already has too many problems at home. The talk about "Jordan is Palestine" and "Palestine is Jordan" only aggravates these problems and plays into the hands of those who would turn the kingdom into a radical state that would probably be afflicted with Iran or the Muslim Brotherhood.
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2)Top New York Labor Leader Moves To Long Island, Saves $30,000 in City Income Taxes
By IRA STOLL, Special to the Sun | March 19, 2012
One of America’s most powerful labor leaders, teachers union president Randi Weingarten, has quietly moved out of New York City, a decision that saved her from paying more than $30,000 in city income taxes that she would have owed if she had stayed.
Discussion of people fleeing New York City in part because of high income tax rates has mostly focused on high-powered conservative commentators and billionaire hedge-fund managers. Glenn Beck moved to Dallas, and Rush Limbaugh sold his New York apartment and announced he was vacating the city. An article in last week’s New Yorker discussed the case of hedge fund manager Julian Robertson, who went to court to prove he was not in New York City for more than the 183 days that is the threshold for tax purposes.
No one, until now, has mentioned the president of the American Federation of Teachers, Ms. Weingarten, in that group. But sure enough, her biography on the AFT Web site states, “Weingarten now resides on Long Island and in Washington, D.C.”
Such a move would have been well timed for saving on taxes. In 2010 Ms. Weingarten reportedly received a $194,188 payout for unused sick days and vacation days during her time at the United Federation of Teachers, the AFT’s New York City local, where she had been president before being elevated to the national presidency. That brought her total union compensation in 2010 to more than $600,000. Union disclosure forms on file with the Department of Labor show her gross salary for 2011 was $407,323, well above what she had been making when she lived in New York City as the UFT president.
The $600,000 in 2010 would have put Ms. Weingarten in New York City’s top tax bracket, hitting her with a 3.876% marginal rate on top of the top New York State income tax rate of 8.97%. The 2011 pay, because it was below the $500,000 threshold, would have been subject to a 3.648% tax rate on top of the 7.85% state tax. By avoiding a city income tax of more than 3% on about $1 million of income, Ms. Weingarten would, perfectly legally, have saved herself more than $30,000. That’s money that she gets to keep and decide for herself how to use if she lives outside of New York City, but money that, had she stayed in the five boroughs, would have gone to Mayor Bloomberg and the City Council to spend.
In a telephone call, Ms. Weingarten told me that the reason for her November 2009 move was that she thought it was important for her successor at the United Federation of Teachers not to have her around. “It had nothing to do with taxes. I didn’t even think about it,” Ms. Weingarten said. “I’m sure there are people who do stuff for tax reasons,” she said, but she said she wasn’t one of them: “I think we should be paying taxes, and I pay a lot of them.”
In any event, public records — and even a release from President Obama’s White House — confirm that Ms. Weingarten did move out of New York City and join the other high-income individuals in saying “no thank you” to the New York City tax man.
•State campaign finance records indicate that in 2007 and 2009, Ms. Weingarten donated to state and local candidates using the address of an apartment on South End Avenue in Lower Manhattan’s Battery Park City neighborhood. The last contribution from her using that address was on September 13, 2009. Beginning August 26, 2010, and continuing through 2011 and 2012, she started making campaign contributions using as her address a house on Ocean Parkway in East Hampton, New York — all the way out on Suffolk County at the East End of Long Island.
•State voter registration records indicate that Ms. Weingarten last voted using the New York City address in the November 2009 general election. She started voting from the East Hampton address in the November 2010 election.
•Finally, the White House-provided guest list for last week’s state dinner for the prime minister of Great Britain, David Cameron, listed “Ms. Randi Weingarten, President, American Federation of Teachers, East Hampton, NY.”
One doesn’t have to doubt Ms. Weingarten’s word that her move had nothing to do with taxes to note that there’s a certain irony to the fact that she absented herself from the city during two peak earning years. It’s Ms. Weingarten, after all, who, more than probably just about anyone else, is responsible for the tremendous increase in spending on New York City schools over the past decade.
From 1998, when Ms. Weingarten took over as president of the UFT, to 2009, when she stepped down, per pupil spending soared to $19,789 from $8,944, according to the city’s Independent Budget Office. That is a 121% increase, driven largely by increased wages and benefits for increasing numbers of unionized teachers. And most of it is funded not by the state or federal government but by New York City taxpayers.
For ten years she also served as chairman of New York City’s Municipal Labor Committee, which drove up wages and benefits for the rest of the city’s employees.
Not all of us city taxpayers are lucky enough to have homes in East Hampton to escape to in years when we would have big tax bills. But Ms. Weingarten didn’t earn her reputation as a shrewd and intelligent labor leader for nothing. And prepare yourselves, New Yorkers: she tells me she’s thinking about moving back.
Mr. Stoll, editor of FutureOfCapitalism.com, is the author of “Samuel Adams: A Life.”
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3)Obama versus the Democrats
By Kevin JacksonAs the election of 2012 approaches, the left becomes more desperate. For the first time in his adult life, Barack Obama has to deal with the reality that he's Barack Obama. And being Barack Obama has created a real conundrum for the Democrats.
Obama wanted to play president, not be president. And the real Barack Obama is anything but a confident, competent winner.
Some of those who did not support Obama tried to sound the warning bell about Obama's severe lack of...well, everything necessary for a president to succeed. Obama lacked experience, and he continues to lack character, integrity, and a love of the America that has taken over 200 years to build.
Now Democrats must face the reality of their creation, just as I did when I found out that Fonzi is not the cool Italian of Happy Days, but instead is a whiny Jewish guy named Winkler. Obama v2.0 doesn't just reveal his vulnerabilities; he exposes the abject lunacy of the left.
The scary thing for Democrats is they went all in on Obama. They spent so much time propping up their puppet, believing that style would prevail over substance. But Obama failed miserably, and the Democrats have no succession planning.
Hillary can't run this election unless they abandon the "not so golden boy." I suspect that Hillary is smart enough not to want to run this election anyway, unless she has a defense to combat Obama's and the Democrats' scorched-earth project.
The sad truth is that Hillary has two chances for a run in 2016: slim and none. Despite all the tolerance that Democrats supposedly have, they will not elect an old "rode hard put up wet" white woman to the presidency. Don't believe me; it already happened...in 2008.
Recall that Hillary had all the buzz in 2008...that is, until the Democrats found an "articulate and clean" candidate with "no Negro dialect." The Democrats dated Hillary until they found somebody they deemed cuter.
Obama was perfect for the rebirth of radical Regressivism, sure to continue punishing minorities.
"We will have them n*ggers voting Democrats for 200 years!" - LBJ.
But the strategy backfired, because Obama was supposed to be at the very least "okay." Obama is okay, if you like that America is now fighting for third-world status.
The walls surrounding Obama are crumbling from within. Right-wing conspirators need not apply, and the Republican machine has been switched off. It's the Democrats who are destroying Obama, which is one reason why the Obama administration is panicked.
Who leaked the recent story that Barack Obama was raised by a gay, transsexual prostitute nanny, affectionately called "Tranny Nanny" by the media? Republicans didn't have a clue, or they would have brought up Tranny Nanny in 2008.
And if that's not bad enough for Obama, the media -- repeat, the media ran with the story. It appears that in 2012, the media love a salacious story about Obama's past more than they love Obama. The idea that Obama might be just a bit mixed up in the cabeza has been allowed to float in "the cloud." God forbid we actually get to see Obama's grades or a new and improved birth certificate.
A recent poll has Obama dropping by 12 points with women -- repeat, women! The same women who wanted to take Obama home to daddy are now abandoning Obama like last year's fashions.
It doesn't take a psychic to see the future for Obama. He sees it, and you can bet he's throwing hissy fits all over the White House as he contemplates updating his resume. Obama is so desperate to keep his position[1] that he recently made a Truth Team declaration that he has drilled for more oil than any other president. Obama wants America to believe that he is the Fossil Fuel President.
Forget that Obama has said publicly that he wants to destroy the coal industry. He publicly battles with "Big Oil" dirty revenue, and he wouldn't allow the Keystone Pipeline to happen or allow drilling on federal land -- but he's now the Fossil Fuel president.
Meanwhile, back at the algae farm, Obama discussed removing oil company "subsidies" (the same tax deductions allowed other companies) as he doubled down on failed green energy failures, boondoggles, and payola to same.
Instead of forming African-Americans for Obama, Obama should have formed "White People Please Give Me One More Chance!"
Obama is reneging on his declaration that if he didn't have things on track in three years, he should be a one-term president. No sane people expected an incompetent megalomaniac to really live up to that declaration, now did we?
Two things have saved Obama to date: the media and Obama's "blackness." Had it not been for either, Obama's choices would have been impeachment or resignation. Wait, there is a third choice...jail.
America has become so politically correct that despite the president being "black," he can still run on the "I'm a victim of racism" ticket. But that's changing, and it vexes the left.
America finally got a recognized black president, and America is worse off; we are all victims of Obama. Obama owns whatever America has become, because leaders must take credit or blame, regardless of the circumstances. Obama can't admit he is not a leader over the worst America in decades. That is the Democrats' conundrum.
Kevin Jackson is the National Spokesman for TheTeaParty.net, as well as an Amazon best-selling author.
3a)Assad to Anan: Syrian missiles will pre-empt any military intervention
Talking about war
While not mentioning them by name, the Syrian ruler was referring to Britain, France, Norway, Holland and Italy whose navies and air forces were last week drawn up ready for action in positions in the eastern Mediterranean and bases in the Middle East, including the Royal Air Force Akrotiri facility in Cyprus.
A Western military source reported European forces were standing ready to cordon off certain Syrian regions and cities as “security zones” off limits to Syrian units including its air force.
Cruising opposite the Syrian coast are the USS Enterprise and the French Charles de Gaulle, both aircraft carriers. They are part of the combat disposition the West has arrayed against Iran and from their Mediterranean posts would take part in a military confrontation erupting in the Persian Gulf.
In his conversation with Annan,Turkey was the only foe Assad named specifically as his first target for a pre-emptive missile assault. He stressed he would have no qualms about attacking Turkey.
Turkish Prime Minister Tayyep Erdogan is due to set out next week on a visit to Seoul where he will rendezvous with US President Barack Obama, possibly on March 28, for policy alignment on the Iranian nuclear threat and the year-old Syrian crisis. Our Washington sources report that Obama has set aside six hours for his conversation with Erdogan.
From the South Korean capital, the Turkish leader is scheduled to fly straight to Tehran. The primary Middle East issues, a nuclear Iran and the Syrian impasse. are therefore destined to reach a critical point in the coming days.
This may partly explain the announcement from, Russian Black Sea headquarters at Sevastopol Monday that two Russian naval vessels had put into the Syrian port of Tartus. The vessels’ mission and names were not disclosed, excepting that one carried a unit of “anti-terrorist marines” and the other was a military tanker which joined a Russian naval reconnaissance and surveillance ship already tied up in Tartus.
3b)'Fast and Furious' caught top suspect, let him go
By Richard A. Serrano
Federal agents stopped the main target of the ill-fated operation in May 2010. After they questioned him, he disappeared back into Mexico, and the program went on to spiral out of control
Seven months after federal agents began the ill-fated Fast and Furious gun-tracking operation, they stumbled upon their main suspect in a remote Arizona outpost on the Mexican border, driving an old BMW with 74 rounds of ammunition and nine cellphones hidden inside.
Detained for questioning that day in May 2010, Manuel Fabian Celis-Acosta described to agents from theBureau of Alcohol, Tobacco, Firearms and Explosiveshis close association with a top Mexican drug cartel member, according to documents obtained this weekend by the Times/Tribune Washington Bureau.
The top Fast and Furious investigator, Special Agent Hope MacAllister, scribbled her phone number on a $10 bill after he pledged to cooperate and keep in touch with investigators.
Then Celis-Acosta disappeared into Mexico. He never called.
Had they arrested him red-handed trying to smuggle ammunition into Mexico, Fast and Furious might have ended quickly. Instead, the program dragged on for another eight months, spiraling out of control.
Celis-Acosta continued slipping back and forth across the border, authorities say, illegally purchasing more U.S. weapons and financing others. He was not arrested until February 2011, a month after Fast and Furious closed down.
The operation, run by the ATF's Phoenix field office, allowed illegal gun purchases in Arizona in hopes of tracking the weapons to Mexican drug cartel leaders. Instead, about 1,700 guns vanished, and scores turned up at crime scenes in Mexico. Two were found south of Tucson where U.S. Border Patrol agent Brian Terry was shot to death in December 2010.
Why ATF agents did not arrest Celis-Acosta immediately is not clear. He was their prime suspect and the subject of secret wiretaps approved by the Justice Department.
3c) The U.S. Cruises Toward a 2013 Fiscal Cliff
As tax cuts expire and spending falls, the economy will be hit with a 3.5% decline in gross
By ALAN S. BLINDER
At some point, the spectacle America is now calling a presidential campaign will turn away from comedy and start focusing on things that really matter—such as the "fiscal cliff" our federal government is rapidly approaching.
The what? A cliff is something from which you don't want to fall. But as I'll explain shortly, a number of decisions to kick the budgetary can down the road have conspired to place a remarkably large fiscal contraction on the calendar for January 2013—unless Congress takes action to avoid it.
Well, that gives Congress plenty of time, right? Yes. But if you're like me, the phrase "unless Congress takes action" sends a chill down your spine—especially since the cliff came about because of Congress's past inability to agree.
Remember the political donnybrook we had last month over extending the Bush tax cuts, the two-point reduction in the payroll tax, and long-term unemployment benefits? That debate was an echo of the even bigger donnybrook our elected representatives had just two months earlier—and which they "solved" at the last moment by kicking the can two months down the road. And that one, you may recall, came about because they were unable to reach agreement on these matters in December 2010. At that time, President Obama and the Republicans kicked one can down the road 12 months (the payroll tax) and another 24 months (the Bush tax cuts).
The result of all this can kicking is that Congress must make all those decisions by January 2013—or defer them yet again. If the House and Senate don't act in time, a list of things will happen that are anathema either to Republicans or Democrats or both. The Bush tax cuts will expire. The temporary payroll tax cut will end. Unemployment benefits will be severely curtailed. And all on Jan. 1, 2013. Happy New Year!
There's more. As part of the deal ending the acrimonious debate over raising the national debt ceiling last August, the president and Congress created the bipartisan Joint Select Committee on Deficit Reduction, commonly known as the "super committee." It was charged with finding ways to trim at least $1.5 trillion from projected deficits over 10 years. Mindful that the committee might not prove to be that super, Congress stipulated that formulaic spending cuts of $1.2 trillion would kick in automatically if the committee failed.
Sure enough, it failed. So those automatic cuts are headed our way starting Jan. 15, 2013. To make this would-be sword of Damocles more frightening, the formula Congress adopted aimed half the cuts straight at the Pentagon.
Now, you don't really believe the defense budget will be cut that much, do you? Probably the rest won't happen, either. But if it all did, the resulting fiscal contraction—consisting of both tax increases and spending cuts—would be in the neighborhood of 3.5% of gross domestic product, depending on exactly how you count certain items, all at once. That's a big fiscal hit, roughly as big as what a number of European countries are trying to do right now, though with limited success and with notable collateral damage to their economies. An abrupt fiscal contraction of 3.5% of GDP would be a disaster for the United States, highly likely to stifle the recovery.
At this point, you are probably thinking: Well, of course Congress will find ways to wriggle out of its self-imposed budgetary corset. I agree. But the invisible hand won't do it; someone needs to figure out how.
It is next to certain that nothing will be done about the fiscal cliff during the election season. In fact, some Republicans are now threatening to renege on the spending cap for fiscal year 2013 that they agreed to last summer. In the absence of progress between now and Election Day, Congress will have about eight weeks left—including Sundays, Thanksgiving, Christmas and New Year's Eve—to either (a) find a solution to the long-running fiscal battle or (b) kick the can down the road again.
Bet on (b). Also bet that the agreement will come just before the bubbly flows on New Year's Eve. An outcome like that is far more likely than falling off the fiscal cliff. But my point is that finding a clever way to kick the can down the road again is becoming a bigger and bigger challenge. And Congress has barely coped with previous such challenges.
Fast forward to December 2012. The lame duck Congress will have on its plate all the issues it had to deal with in the December 2010, August 2011, December 2011, and February 2012 budget battles, plus the automatic cuts mandated by the failure of the super committee, plus the legacy of whatever claims and promises are made during the campaign. We may also be bumping up against the national debt ceiling again. And who will have to sort it all out? A Congress whose days are numbered and whose complexion may have been altered dramatically by the election.
The current betting odds say that President Obama will be re-elected in November, with Republicans controlling both the House and the Senate. Does anyone think a mix like that will be less contentious than the one we have now? And does anyone think that Republicans, seeing control of both houses of Congress on the horizon, will be more compromising in the lame duck than they have been in the recent past?
In sum, while we probably will not fall off the fiscal cliff in January 2013, there are ample opportunities for stumbles and slips between now and then. So wouldn't it be nice if the two parties engaged on this issue prior to Election Day?
Mr. Blinder, a professor of economics and public affairs at Princeton University, is a former vice chairman of the Federal Reserve.
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4)Iran strike a death wish
Op-ed: Israeli strike on Iran’s nuke program would mark first step towards State of Israel’s demise
By Yakir Elkariv
The sanctions against Iran may accelerate the Ayatollah regime’s end. Once the economic pressure grows heavier, social unrest would grow and may develop into a popular uprising.
However, such processes take time, and it’s uncertain whether officials around here would have the patience to wait.
Iran Threat
Prime Minister Benjamin Netanyahu – with the encouragement of loyal journalists – is determined to enter the annals of history as the leader who saw farther than anyone else and saved Israel from the Iranian nuclear threat. However, his eagerness may turn out to be fateful.
In my view, an Israeli strike in Iran would mark the beginning of the end for the State of Israel. There is no doubt that the Iranians would respond with force. A missile barrage directed at our unprotected home front may kill hundreds of thousands of civilians in central Israel.
The Iron Dome missile defense system, which everyone takes great pride in, is capable of intercepting several missiles, but it is doubtful whether it would bring any benefit in the face of hundreds of missiles fired at once. After all, we did not even get a full solution against the rockets of Jihad gangs in Gaza, with southern Israel paralyzed only last week.
The Iranians will continue to fire missiles in the days after an Israeli strike. Hundreds of thousands of Israelis would be hurt and thousands more will remain homeless. In the weeks to follow, hundreds of thousands of Israelis – in fact, anyone who can afford it – would leave Israel to never go back. This alone would constitute a blow to our morale and economy that will wholly change the face of Israel, making a recovery highly doubtful.
No urgency to strike
Moreover, the urgency of an Israeli strike is unclear. Firstly, the Iranians still have no bomb. Secondly, the great powers – the United States and the USSR – went through the entire second half of the 20th Century engaged in what became known as a “balance of terror,” with nuclear missiles aimed at each other’s capital.
No missile was ultimately fired, even without a pre-emptive strike, and today this era is at most a historical curiosity.
At this time there is no choice but to endorse the sanctions. These would seep through slowly, until they tilt the balance within Iran. Western leaders, who support these sanctions despite the rise in oil prices, are risking their political future. Meanwhile, for the time being, PM Netanyahu is doing what he does best: Nothing.
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5)A rally built on fairy tales
As stock bulls hold out for 'happily ever after,' the setup for precious metals and miners could lead them into promising 'just right' trading territory.
By Bill Fleckenstein
We appear to have finally reached the end of the latest chapter of the Greek debt-restructuring saga. The news on March 9 was that Greece had managed to reduce its obligations and extend its term structure via the proposed debt exchange, which obviously reduces short-term pressures and fears of a "messy" default.
That news, however, was sort of a nonevent for European debt and equity markets, while our stock market was boosted by the March 9 jobs number, which, at 227,000 jobs added, was about 17,000 higher than expected. In addition, January's total was revised upward by about 41,000 jobs.
I continue to believe that the employment data look better than the underlying reality, thanks to the fact that the seasonal adjustments can't possibly capture this winter's weird (and warmer) weather. That is in addition, of course, to the usual questionable assumptions that the Bureau of Labor Statistics uses in its calculations.
Sine of things to come?
Some of that "underlying reality" came to light the night before (March 8), when Texas Instruments (TXN +2.48%, news) lowered its guidance, although the market completely ignored that. It is just one company, but I bring it up because I think it demonstrates that expectations are too high. I would not be surprised to see other companies forced down the same path, and I have a hard time believing that stocks have discounted that eventuality.
This week brought more optimism, with a liquidity-fueled, momentum-driven romp in the U.S. stock market on Tuesday. The only skunk at the garden party was China, as its equities were clipped for 3% or so on Wednesday after Premier Wen Jiabao offered comments following the annual National People's Congress. Wen made it sound like there would be no additional easing anytime soon -- which is preposterous. As soon as we see any material weakness in China, there will be plenty of money printing and reserve requirement cuts, but the day's focus was on the lack of Chinese liquidity.
However, commodity markets bore the brunt of the reaction during Wednesday's session, as equities are in "see no evil" mode. That is quite a contrast to August, when folks were terrified. I remember at the time trying to figure out some way to actually get long the Standard & Poor's 500 Index ($INX +0.40%) for a trade, because I felt folks thought the world would end in Europe, while I believed the European Central Bank's long-term refinancing operations were the functional equivalent of money printing. I never could find a way to capture that idea, even though it turned out that LTROs obviously are money printing.
Swinging for the fences
I bring that up to show just how fast (i.e., six months) sentiment can swing, and how far, because I don't think we are past the point of seeing people panic about the problems we all know still exist. Those who find themselves superbullish on the U.S. need to consider what the economy and bonds are going to look like when interest rates start to rise as the bond market takes the printing press away from the Federal Reserve (i.e., we experience a funding crisis and have trouble financing U.S. deficits).
Granted, that is not today's business. Even though the bond market is acting like it actually may have made a peak, stock bulls are clearly focused on "Goldilocks" once again -- the idea of a "not too strong, not too weak" economy -- as they seem not to have learned that that story is a child's fairy tale, not economic reality.
Looking for a moment to be shortsighted
In a column about a month ago, I noted my concerns regarding the bond market. In the intervening weeks I have wanted to add to my small-bond short position, but I was afraid the stock market was ready for a tumble and wanted to see how bonds behaved in the wake of that. Obviously, stocks have not tumbled, so by being wrong about the near-term direction of equities, I not only cost myself a modest amount of money (with a failed S&P short), but I missed adding to my bond short.
At some point, the stock market will be under pressure and it will be important to see how far bonds can rally. I am really looking to press my bond short now. As a resident of this country with young adult daughters, I can't root for the funding crisis hard enough, since it will finally put the idiot central bankers in a straitjacket and force us to deal with our problems like grownups .
Gonna take a sentimental journey
The metals markets were tagged again this week, and gold stocks were even weaker. I believe we are near a moment in time where the metals and the miners will set up for a decent upside trade, just as we saw in December. Sentiment is back to about those levels, and I suspect the futures market liquidations have been of a similar size (though we won't have those data for some time). Ideally, we would like to see some sort of reversal in the metals and miners where they move up in unison.
In talking with my friend, the always insightful Fred Hickey, on Wednesday, I learned that he had recently sold a bunch of mining stocks. But based on the sentiment and data currently available, he felt he couldn't afford not to add back a chunk of what he had sold, which he did. He plans to buy more into any further weakness.
His feeling is that we have seen a large degree of giving up, leaving sentiment near where it needs to be to replace his holdings.
As for me, I haven't added to my positions just yet, but I am likely to do so shortly. Certainly, days like Tuesday and Wednesday are frustrating for gold bulls, when the world seems to say, "Who needs gold? We have Goldilocks." Even though believing in fairy tales is an absurd and failed investment strategy.
At the time of publication, Bill Fleckenstein owned gold.
This column is a synopsis of Bill Fleckenstein's daily column on his website, FleckensteinCapital.com, which he's been writing on the Internet since 1996. Click here to find Fleckenstein's most recent articles.
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