Russia and Syria 10 Wimps/Syrians 0! (See 2 below.)
The rug in the Oval Office is getting lumpier and lumpier these days because Obama is sweeping anything controversial and/or requiring a decision under it until after the election. Then after he wins or steals the election, Obama will draw out his long knives and start attacking a whole host of old/new pinatas including our Constitution which, after all, is simply outdated meaningless words on some old parchment.
Obama has been advised, by his 'handlers,' pander, project a visage of reason, keep ducking hard balls and only hit the soft ones provided by the adoring media and news sycophants.
From a loyal memo reader:" Richard
My husband told me about an article than ran in the New York Times about Romneys close relationship with Bibi. I'm at our lake house in the Ozarks and cant always get the internet so havent read it, but it sounded like Romney and Bibi go way back and although the Times probably ran it as a negative for Romney, I think it's a great endorsement for how Romney will treat Israel. Did you put this article in your email yet? If not I think those like me who cancelled The Times years ago would like to hear the backstory on their long time friendship.
Keep up the good work Richard I feel such a kinship with you. I really appreciate all you do. I'm a Jew long departed from Birmingham, but always look forward to your email and the concise way you present the best articles. I'm sick of all the media
I responded I would check the Romney and Bibi connection and that Kim Strassel and her husband and their three delightful kids had just departed on their way home with an overnight stop in Raleigh at the famous Umstead Hotel and Spa.
Lots of fun having them and getting a chance to chat. Both she and Matthew have great futures.
Mauldin on jobs! (See 3 below.)
And with an election coming up and the slowdown in employment The Fed, according to this analyst, will have to engage in more QE's. (See 3a below.)
1)Two Cheers for the Hoodie
By Ed Kaitz
I remember reading some years ago that despite the claims of Western feminists, many women in the Muslim world prefer to wear the burka for several reasons, especially at work and in public. One of the arguments is straightforward and simple: when a woman's body is completely covered, men are forced to use their reason to evaluate only a woman's objective qualities, performance, and talents.
In other words, solving the problem of male self-control, which became the central focus of thousands of years of moral philosophy, is as simple as a short trip to the closet. In addition, as F.A. Hayek noted, "it is not irrelevant to recall that to the ancients blindness was an attribute of their deity of justice." And although Hayek was trying to defend reason, justice, and the free market in the face of socialism's tendency to go outside the law and promote visible favorites, the burka is the kind of drapery that can represent a somber but nevetheless useful concession to our fallen nature.
In short, our failure to live up to the ancient standard of justice doesn't mean there aren't other options when reason, self-control, and objective appraisal fail us moderns. Instead of mastering our perception in order to detect the deep content of someone's character, we can do the next-best thing and simply cover up, American style. And since the White House, members of Congress, civil rights leaders, and others are now promoting the "hoodie," it's worth taking some time to consider its advantages in these rather uncertain, tribal, and thoroughly pedestrian times.
Just think of the possibilities. We could finally achieve Martin Luther King's dream of being judged by the content of our character rather than by the color of our skin. Diversity officers along with their entire overbearing multimillion-dollar bureaucracies would vanish on college campuses, and student tuition would plunge. Affirmative action would end, thus promoting more intellectual diversity on campus instead of various "diverse" populations in most cases feeling compelled to promote the identical leftist tune. And instead of the resentment that affirmative action fosters, the hoodies would bring us closer as a nation, as Hayek presciently observed:
Inequality is undoubtedly more readily borne, and affects the dignity of the person much less, if it is determined by impersonal forces [i.e., competitive market] than when it is due to design [i.e., government engineering].
Hoodies would give tribalist groups like the Black Panthers, La Raza, Aryan Nations, and various racialist demagogues little reason to exist. Hoodies would compel the liberal media to at last lend an ear to brilliant, positive, self-reliant, and grateful (hooded, of course) individuals like Allen West, Star Parker, Nikki Haley, Susana Martinez, Bobby Jindal, Walter Williams, Ben Chavis, Thomas Sowell, and so many other typically ignored spokespersons for the American dream.
Hoodies would have prevented Attorney General Eric Holder from deriding America as a "nation of cowards." Holder would on the contrary find it pleasingly natural to refer to all citizens as "Americans" rather than to a portion of them as "my people."
With hoodies, President Obama's official "Obama for America" campaign team could spend their precious time organizing and preparing a reasonable and logical outline of the president's apparent belief system rather than defending his statist proclivities simply by multiplying the number (currently ten) of pressure groups that claim to support him: African-Americans for Obama, Asian-Americans & Pacific Islanders for Obama, Jewish Americans for Obama, Latino-Americans for Obama, LGBT for Obama, Nurses for Obama, People of Faith for Obama, Veterans and Military Families for Obama, Women for Obama, and Young Americans for Obama.
Also, instead of the ten "diverse" opinions officially sanctioned by Obama's campaign team (i.e., each "unique" opinion representing each of his supporting groups) America would benefit by having the kind of real, magnificent, intellectual diversity promised by James Madison as essential to protecting America from tyranny.
In addition, think of the confusion hoodies could prevent for the president himself. According to the New York Times definition of George Zimmerman ("white Hispanic"), President Obama would therefore qualify as a white African-American. But White People for Obama curiously doesn't exist yet, so until it does, the president would seem to be partly against his own re-election, since he's too old for Young Americans for Obama (age 40 and under), and People of Faith for Obama is currently enduring a distressing "Catholics Against Obama and for Religious Freedom" uprising.
In Hoodie Nation, Hillary Clinton campaign adviser Geraldine Ferraro would have had no reason to say in 2008 that "if Obama was a white man, he would not be in this position. And if he was a woman (of any color) he would not be in this position. He happens to be very lucky to be who he is. And the country is caught up in the concept." In other words, Mr. Obama could have been vetted properly on his experience, his college transcripts, his voting record, his merits, his past associations, his arguments, and his policies, without having to deal with that nagging skin color issue.
In his "Letter From The Birmingham City Jail," Martin Luther King wrote about the possibility of transcending -- at least in one respect -- our fallen, race-conscious nature:
Just as Socrates felt that it was necessary to create a tension in the mind so that individuals could rise from the bondage of myths and half-truths to the unfettered realm of creative analysis and objective appraisal, we must see the need of having nonviolent gadflies to create the kind of tension in society that will help men rise from the dark depths of prejudice and racism to the majestic heights of understanding and brotherhood.
What's heartbreaking about all of this is that King's reference to the unfettered, Socratic realm of "creative analysis and objective appraisal" represents a world beyond the hoodie. It's a world where intelligent Americans reasonably and objectively appraise their wonderfully unique fellow citizens in the spirit of the ancient deity of justice.
Back in 1993, Duke professor Stanley Fish implied, however, that the ancient deity of justice herself might be racist:
Individualism, fairness, merit -- these three words are continually in the mouths of our up to date, newly respectable bigots who have learned that they need not put on a white hood or bar access to the ballot box in order to secure their ends.
Be careful, in other words, about the color of your hoodie -- it might just reveal the color of your thoughts.
2)Russian radar in Armenia to block an US/Israeli strike on Iran from the north
Russia's S-400 Triumf missiles posted in Kaliningrad
Moscow has stepped into the vacuum created by US President Barack Obama’s decision to stay out of any potentially incendiary Middle East involvement while campaigning for a second term. After blocking the way to direct Western and Arab military intervention in Syria through the Mediterranean, Russia sent its Foreign Minister Sergey Lavrov last week on a round trip to the capitals of Armenia, Azerbaijan, Kazakhstan, Kyrgyzstan and Uzbekistan – an expedition designed to secure Iran against a potential US/Israeli attack via its northern and eastern neighbors, military sources report.
On his return to Moscow, April 6, the Russian army let it be known that highly-advanced mobile S-400 surface-to-air missiles had been moved into Kaliningrad, the Baltic enclave bordered by Poland and Lithuania, its response to US plans for an anti-Iran missile shield system in Europe and the Middle East.
In Yerevan, the Russian minister finalized a deal for the establishment of an advanced Russian radar station in the Armenian mountains to counter the US radar set up at the Turkish Kurecik air base, our sources disclose.
Just as the Turkish station (notwithstanding Ankara’s denials) will trade data on incoming Iranian missiles with the US station in the Israeli Negev, the Russian station in Armenia will share input with Tehran.
Moscow remains deeply preoccupied in Syria, successfully fending off Western and Arab pressure against its ruler Bashar Assad. Sources believe Assad will not meet the April 10 deadline for moving his heavy armor and battalions out of Syrian cities. Monday, April 8, he sent his foreign minister Walid Moallem to Moscow for instructions for getting him off the hook of failing to comply with his commitment to the UN envoy Kofi Annan’s peace plan, starting with a truce.
Lavrov, rather than US Secretary of State, Hillary Clinton is evidently regarded these days as the senior Middle East power broker. In a thumbs-down on Russia’s deepening footstep in the region, the London-based Saudi Sharq al Awsat captioned a Sunday op-ed item, “Nor do we want a ‘Sheikh’ Lavrov.”
For the first time since the Cold War ended, the management of a major world crisis has passed into the hands of the Kremlin in Moscow and the UN Secretariat in New York.
Weeping crocodile tears, UN Secretary General Ban Ki-moon said Saturday that the April 10 date for a Syrian truce “was not an excuse for continued killing” by the Syrian regime, ignoring the fact that “the continued killing” could have been avoided were it not for the strategy pursued by Kofi Annan, the special envoy he shares with the Arab League, with Moscow’s back-stage wire-pulling.
This is because President Barak Obama is advised by his campaign strategists that the way to the American voter’s heart in November is through burnishing his image as a “balanced and responsible” multinational diplomat, in contrast with his Republican rivals’ hawkish support of an Israeli attack on Iran’s nuclear program.
In the case of Syria, the White House finds itself on the same side as the UN and the Kremlin. They all share the common goal of obstructing Western and Arab military intervention in Syria at all costs.
Hundreds of Syrian protesters are still paying the price in blood - although its dimensions of the butchery are frequently exaggerate by the opposition. After brutalizing his population for thirteen months, Bashar Assad is more or less on top of the revolt in Syria’s main cities, excepting the Idlib province and one or two pockets in and around Homs. He used the extra days afforded him by Kofi Annan’s deadline for the ruthless purge of the last remnants of resistance in small towns and villages, cetain that Moscow, the UN secretary - and Washington, by default - would do nothing to stop him.
Should current circumstances shoot off in unforeseen directions – for instance, a Syrian government poison chemical or biological weapon attack causing hundreds of dead, over and above the 9,000 confirmed by UN figures – Obama might be forced to resort to limited military action, pulling in the Turkish army. This has not yet happened.
That the Russians are not letting the grass grow under their feet, turning Middle East bushfires to their advantage and closing one American Middle East option after another, appears to be a minor consideration in Washington up until November.
3)It’s All About Jobs
By John Mauldin
Today's employment numbers were decidedly soft, but the unemployment rate went down anyway, and that is about the best you can say. And this being a holiday weekend, it provides us an opportunity to look deep into the employment numbers, while we put off thinking about Spain for at least a week. And who knew that being an unmarried Asian-American in the US was a risk for unemployment? Plus a few other interesting items will make for an interesting letter.
March saw "only" 120,000 jobs created. Expectations were for 200,000 new jobs. It wasn't all that long ago that any positive number would have been seen as good, but with the last six months averaging 200,000 jobs, this was disappointing. It gives force to the worry that once again we could see the employment numbers get soft during the spring and summer. And adding to interest in the topic, the employment numbers will take on a decidedly political tone this summer, as every poll shows that jobs and the economy is the #1 thing on voter's minds. This will be underscored only four days before the presidential election on Tuesday, November 6, as the jobs report for October is scheduled to be released on Friday, November 2. Think that one won't be analyzed more than usual? I keep writing that the current release is adjusted so often that it is hard to see more than a trend in the actual monthly releases, but that will not keep pundits from using the release to support their candidate with all the spin they can muster.
There is reason to believe that today's lower number was partially due to the weather being so good in the earlier part of the year, so that what is usually seasonal employment started earlier than is typical; so it might be better to average the last two months, which is still disappointing in that it barely stays ahead of population growth. At this rate it will be another three years before we get back to new employment highs, and that does not factor in any population growth. And it also assumes there is no recession in the meantime. Given that the US must start at some point to get its budget balanced, there is little hope that more government spending (aka stimulus) is on the way.
The Bureau of Labor Statistics churns out a massive amount of data each month. Let's look at one table and then discuss what we see. This is Employment Situation Summary Table A of the Household Data report, seasonally adjusted.
First, the unemployment rate fell by 0.1%, to 8.2%. But we see that the number of people who are actually employed dropped by 31,000, so how can the unemployment rate fall? Because the number of people looking for a job dropped by 164,000. If you aren't looking for a job, you are not considered unemployed. Thus the participation rate, or the number of adults either working or looking for work, dropped by 0.1% to 63.8%.
Note that this table shows 133,000 new jobs. This is the HOUSEHOLD report, which is the report created from a survey of households. The 120,000 new jobs number is from the ESTABLISHMENT report, which is a survey of established businesses, plus a guess as to the number of jobs created from new businesses that have been born in the last month, also known as the birth/death ratio. This month the birth/death number added 90,000 new jobs to the total number. The B/D ratio is a very volatile number. It is based on data from the last five years and is projected forward. Again, the unemployment number is taken from the household survey, and the new jobs number is taken from the establishment survey. While you can get a new jobs number from the household survey, it is notoriously volatile and essentially useless as a month to month indicator. As an example, it was 428,000 in February. Variations can run in the high hundreds of thousands month to month.
But over time the household survey gives a pretty good picture and eventually comes quite close to the establishment survey, although there are often some major adjustments after a year or more that help bring the numbers into alignment with the actual numbers that come in from tax data.
Now, let's look at a few other items. You can find employment by age, race, education, and gender. This page has a summary, although you can get very detailed data if you want to. For instance, this month we find that those with a college degree have a 4.2% unemployment rate, while 12.6% of those who did not finish high school did not have a job. Teenagers have a 25% unemployment rate. That number falls with each ten-year increase in age, until we get to those who are over 55, who are down to only 6.2% unemployed. Women have a lower unemployment rate than men at all ages.
Married men and women (spouse present) seem to fare better, with an average unemployment rate of 5.2%. The graph below shows us that married men tend to lose jobs faster during a recession but also get back to work quicker. I guess it helps you find a job if you have someone reminding you to go to work every morning.
If you had never been married you had a 12.5% chance of being out of work in March. For what it's worth, Asian-Ameroicans seem to do slightly better in most categories than whites, while African-Americans have almost twice the unemployment levels. Hispanics are about halfway between whites and blacks across the board. One odd thing that stuck out was that married white couples have a lower rate (5.3%) than Asian couples (6.2%) while never-married whites are unemployed at 10.5% and Asians at 9.2%. I am sure my readers, both Asian and white will have all sorts of anecdotal reasons for this, but even though I have Asian daughters and black sons (adopted, for those who wonder how), I don't get that one. You can find more data than you want to think about at http://www.bls.gov/web/empsit/cpseea10.htm .
Earlier we talked about the "labor-force participation rate." TThis is the percentage of working-age persons in an economy who are employed or are unemployed but looking for a job. Typically "working-age persons" is defined as people between the ages of 16-64. People in those age groups who are not counted as participating in the labor force are typically students, homemakers, and people under the age of 64 who are retired.
Let's look at three graphs from the St. Louis Fed FRED database. The first is the participation rate of men since the late '40s, and the second is the participation rate of women.
The first graph shows the participation rate of men falling consistently since the 1950s and then plunging since 2007. This is a 20% drop overall. Contrast that with the significant rise of women in the labor force until about 1995 and the gradual decline since 2008. In the United States the average labor-force participation rate was usually around 67% (since 1990) until the recent recession.
Let's look at one last graph of the total participation rate, but this time it will not be seasonally adjusted. Note the very large seasonal volatility in the number. This was especially true when they began collecting the data in the late '40s, but the seasonal variation has lessened with time; and since the recession it has fallen back to where it was in the late '70s. This just demonstrates in yet another way that more people want a job than can find one.
Just as disappointing as the total new jobs this month was the average work week fell, especially in manufacturing. This does not bode well for the next few months. Interestingly, the average wage for manufacturing is now 2% below the wages paid in the service industry.
Looking elsewhere, we can find some good news on employment. The polling company Gallup produces its own household survey each month. Gallup does continuous daily polling all through the month, while BLS takes a sample week in the middle of the month. While the Gallup overall unemployment number was at 8.4%, higher than that of the BLS, it did drop sharply in the last half of the month. And if they use the same seasonal adjustment the BLS uses, the number drops to 8.1%. Both are down sharply over the last month, and Gallup noted that most of that drop was in the last two weeks.
Gallup makes the following comments at the end of its release this week (http://www.gallup.com/poll/153761/Unemployment-Declines-March.aspx?ref=more):
"… The March and January rates are the two lowest since Gallup began monitoring and reporting unemployment in January 2010. They are also consistent with Gallup's other behavioral economic data for March showing a new high in Gallup's Economic Confidence Index and a post-recession high in its Job Creation Index as well as strong consumer spending.
"While the sharp drop in the U.S. unemployment rate during recent months is clearly good news, it raises some significant economic questions. Traditional economic analysis raises the question of why the unemployment rate is falling much more rapidly than can be justified by the modest pace of current economic growth. Answering this question is essential to determining the sustainability of the declining trend in unemployment.
"Federal Reserve Board Chairman Ben Bernanke made this issue the centerpiece of his recent speech to the National Association for Business Economics, noting, 'the better jobs numbers seem somewhat out of sync with the overall pace of economic expansion.' He went on to explain his hypothesis that companies shed many more jobs than necessary during the recession and financial crisis of 2008-2009, and now they are correcting their workforces for this understaffing of the past. The chairman went on to suggest that achieving further declines in the unemployment rate is likely to require a more rapid pace of economic growth going forward.
"If Bernanke is right, then the rapid decline in the unemployment rate might be approaching its end as individual businesses achieve a right-sizing of their workforces. Further, traditional economics also suggest that many people who have been sitting on the sidelines waiting for the economy to improve might decide that now is the time to seek a job, increasing the baseline figure used to calculate unemployment. In turn, this could keep the unemployment rate from decreasing or even send it higher, negatively affecting economic confidence and the overall economy – not good news for political incumbents, including the president.
"On the other hand, the economy might continue to build on the momentum indicated by the current positive trend in Gallup's behavioral economic data, or perhaps the economy is already growing faster than the current economic data suggest. Either way, if true, the unemployment rate could fall below 8.0% in the not-too-distant future – particularly if the workforce does not grow – meaning good things for the economy, incumbents, and the president's re-election effort."
Gallup had one more chart that does not bode as well for political incumbents, although even here they find a bright spot in the direction of the data. We will close with this. Gallup's US underemployment measure combines those unemployed with those working part-time but looking for full-time work. As a result of sharp declines in both of these groups, the underemployment rate, on an unadjusted basis, fell to 18.0% in March from 19.1% in February 2012. The underemployment rate declined to as low as 18.0% last July before reversing course in August; it also increased from November through January. This compares with the BLS U-6 unemployment rate of 14.5%, which is the rate of unemployed plus those who are part-time but want full-time work.
Employment and the economy in the US are getting better, just not as fast as we would like. And the world is still vulnerable to a renewed crisis in Europe, which seems to be coming back around. David Kotok notes that Greece is "in a downward death spiral." He continues:
"The private losses on Greek debt are mostly taken. The government/institutional/official losses are in the hands of politicians and still lie ahead. The Greek economy shrinks as the debt burden grows. This perpetual subsidy from others is on an unsustainable collision course with eventual Greek financial collapse. Meanwhile, 92 members of the Greek parliament have offered amendments to water down the austerity budget (hat tip to Barclays). The Greek prime minister vows to defeat all of them. Next week Greece will announce its bank recapitalization plan. Those banks that are deemed 'viable' will be able to gain financing from the ECB. Those that are not will need to fund liquidity from the Greek central bank under the Emergency Liquidity Assistance (ELA) program (hat tip to Credit Suisse). Note that ELA lending is central bank advances with lower-grade collateral. The Greek tragedy continues.
"We are tracking ELA balances in every euro zone country. It is not easy to do. The central banks of the 17 euro zone nations do not break it out in a single available figure. They also report with a lag. There is little reporting consistency among them. Greece has only revealed its ELA balance through November. We estimate it was about 40 billion euros then, up from about 7 billion in July. We have no idea what the balance is today. The European Central Bank could separately identify each country's ELA balance but chooses not to do so. Why not? Consider this: would you deposit your money in a bank that was in a national system with rising ELA? Not if you are sane. The flip side is that Eurozone folks have to guess. So they move money faster than they otherwise might and cause a bank run and an increase in that country's ELA. It is always better to cut off a small loss and be forthright about it than to maintain a growing loss and try to hide it. But politicians do not know how to learn that lesson."
Indeed. That seems to be the one consistency across nations. Politicians never learn until it is too late, and even then…
Copyright 2012 John Mauldin. All Rights Reserved
3a)More Fed Easing – It’s Just a Matter of Time
By Ashish Advani
The U.S. stock market was down again Tuesday. All "risk" assets sold off as a result. Gold was down $25, currencies sold off, US Treasurys were up.
What was the "wall of worry" that the markets were climbing today? This time, investors were worried that the Federal Reserve minutes weren't dovish enough to declare the start of the next round of easy money that the markets are now addicted to.
Boy – this is a joke that billions of our dollars are at the mercy of the dolt traders who are always finding things to be worried about. Unfortunately, they are worried for the wrong reasons.
In my opinion, QE 3 isn't a matter of IF it will happen, but WHEN it will happen.
The markets were of the belief that the Federal Reserve will start the new round of easing in April. If they don't do that, they will have one last opportunity in June. According to them, if it doesn't happen in June, it will not happen as elections will be too close for them to do this.
That logic, in my opinion, is where they are wrong. Here is the reason why QE 3 is imminent.
We have seen a few months of reasonable jobs growth. The 250,000-plus jobs numbers that the markets are now banking on are an anomaly at best. The jobs growth is on an unsustainable path unless we see a significant spurt in the growth (read GDP) in the United States.
The recent jobs growth can be attributed to the lag effect of 2010 when businesses had held of on any hiring. The lack of any growth in payroll has taken a toll on employee and something had to give. So once we are through a spurt of growth in payrolls in the United States, we can only see sustenance of hiring if the economy is growing rapidly to support the continuation of hiring.
Call me unpatriotic, but I am not able to see any specific industry that is growing by leaps and bounds today. Yes, we aren't falling, but real sustained growth? We are far from that.
If the growth will continue to remain tepid, we will see the new hire numbers slack off and if that happens, the Federal Reserve will be compelled (misguided though) to step in and intervene with more quantitative easing.
I believe we will see the odds improve significantly if we get one bad new hire number. I do believe we will see the Federal Reserve step in by midyear to introduce a new mechanism of fresh money.
I don't buy the fact that if they miss the June deadline that the QE will be off the table for this year.
Even if we have elections at the end of this year, if the economy really takes a turn for the worse, I cannot imagine that the Fed will stand on the sidelines because of elections. They will step in and if it is not June, soon after that.
We will see more yo-yo effects in the US markets as time progresses.
Do you want to be a part of that? Or would you rather invest in markets that are clearly growing not just oscillating between worries and glee, for no rhyme or reason?
I know where I am investing.
© 2012 Moneynews. All rights reserved.