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Wednesday, August 31, 2011

The Billion Prices Project @ MIT


US Daily Index

These indexes are designed to provide real-time information on major inflation trends, not to forecast official inflation announcements. We are constantly adding new categories of goods, but we do not cover 100% of CPI goods and services. The price of services, in particular, are not easy to find online and therefore are not included in our statistics.



DAILY ONLINE PRICE INDEX







ANNUAL INFLATION

(last 365 days)





MONTHLY INFLATION

(last 30 days)





Note: This Content may be used for non-commercial purposes only.





Methodology
Data collection: our data are collected every day from online retailers using a software that scans the underlying code in public webpages and stores the relevant price information in a database. The resulting dataset contains daily prices on the full array of products sold by these retailers. Our data include information on product descriptions, package sizes, brands, special characteristics (e.g. “organic”), and whether the item is on sale or price control.
Daily Online Price Index Computation: The daily online index is an average of individual price changes across multiple categories and retailers. The index uses a basket of goods that changes over time as products appear and disappear from a retailer’s webpage. It is updated on a daily basis and leveraged to estimate annual and monthly inflation. This index is not designed to forecast official inflation announcements, but to provide real-time information on major inflation trends.
Monthly Inflation: The monthly inflation rate is the percentage change between the average of the daily online price index of the last 30 days and the average of the previous month. For example, on the last day of September 2010, we compared the average of the daily index between September 1st and September 30th to the average of the daily index between August 1st and August 31st. On the last day of each month, the value of our monthly inflation is equivalent to the monthly statistic reported by official offices.
Annual Inflation: The annual inflation rate is the percentage change between the average of the daily online price index of the last 30 days and the average for the same period a year ago. For example, on the last day of September 2010, we compare the average of the daily index between September 1st and September 30th 2010 to the average of the daily index between September 1st and September 30th 2009. On the last day of each month, the value of our annual inflation is equivalent to the annual (year-to-year) statistic reported by official offices.

Tuesday, August 30, 2011

Eau Rouge

...on the heels of this past weekend's F1 Grand Prix of Belgium at the classic Spa race track...2Slow sent the following video comparison of the speed differences between GT class race cars and Formula 1 race cars slammin' through the famous Eau Rouge complex...the course turns left, goes down hill, bottoming out with tremendous vertical g-force, then back up hill and turning right, all maxed out - F1 cars in excess of 300 kph... 



...with sound and from a different perspective...


Seventy-two years ago, it no doubt seemed like an innocuous change to speed up the circuit layout. When the teams arrived for the 1939 Belgian Grand Prix at the end of the June, the fiddly Virage de l'Ancienne Douane (Customs House Hairpin) early in the lap had been bypassed with a new, steep uphill section linking to the long straight towards Les Combes. The new section probably merited little special consideration in comparison with the rest of the 14-kilometre circuit, which included sections like Burnenville, the Masta Kink and the run from Stavelot to La Source.
The old Spa disappeared from the calendar in 1970, to return in 1983 using a layout that was half the length and had been made significantly safer in order to meet the needs of modern motor racing. But that piece of tarmac, Le Raidillon de l'Eau Rouge, remained and is now taken flat-out in a Formula One car. Furthermore, it has also come to symbolise the unique, majestic challenge of one of the last remaining classic road circuits in the sport: Spa-Francorchamps. The Mercedes team explain its unique characteristics…
Q: What are the key numbers to describe the challenge of Eau Rouge and the Raidillon?
A: Le Raidillon de l'Eau Rouge is reduced to three simple corner numbers on the official map of the Spa-Francorchamps circuit: Turns Two, Three and Four. Turn Two, the left-hand kink which crosses the bridge over the creek named Eau Rouge, is taken at 306 km/h, with a lateral G-force of 2.4G; Turn Three, the right-handed uphill sweep, at 303 km/h with a lateral G-force of 4G; and Turn Five, the left-hander over the crest, at 296 km/h with a lateral G-force of 2G. The cars also undergo significant vertical loadings through this section: a vertical force of -1.7G in the compression at the bottom of the hill and +1G over the crest. Although the section is taken flat-out, the cars lose approximately 10 km/h through the sequence. The series of corners is 535 m long (7.6 percent of the lap distance) and is negotiated in 6.4 s (6.1 percent of the 2010 pole time). The sequence from La Source to Les Combes, including the Raidillon, lasts for 23.5 s and is the longest full throttle sequence of the entire season.
Do the vertical accelerations present any particular challenges?
A: This upward vertical acceleration of 1G effectively means the car is weightless as it goes over the crest; contact with the road is therefore assured by downforce alone, and not the weight of the car. However, at such speeds, the downforce generated is approximately 2.5 times car weight. The high levels of vertical acceleration could also compromise engine and gearbox reliability if not accounted for in system designs and installations. The pick-up points in the oil tank must be accurately placed to ensure the pumps are continuously primed during these phases.
Which other significant high-speed corners are there on the circuit?
A: The other major high-speed challenges are Blanchimont (Turn 17), which is taken flat-out at over 300 km/h; and the double left-hander at Pouhon (Turns 10 and 11), which are taken in fifth gear at 240 km/h, with a lateral G-force of 3.75G. Pouhon is the longest corner on the circuit, lasting for a total of 7.8 seconds.
The circuit presents contrasting sector profiles. How different are they?
A: There is a marked contrast between the profiles of Sectors One and Three, and the profile of Sector Two. Sector One features just one braking event (for Turn One) and the rest is spent flat-out: of the 2205 m in this sector, 2050 m (93 percent) are spent at full throttle. Sector Three is similar: of its 2080 m, 1750 m (84 percent) are spent at full throttle, and the only braking event is for the chicane at the end of the lap (Turns 18 and 19). In contrast, Sector Two contains nine of the circuit's 19 corners and features six braking events, with just 60 percent of the sector spent at full throttle. By way of comparison, last year's pole position time was set at an average speed of 238 km/h: the average speed in Sectors One and Three was 259 km/h and 262 km/h respectively, while the average in Sector Two was 211 km/h.
How important will DRS be during the weekend in Spa?
A: Of the circuit's total lap distance of 7,004 m, drivers will be able to use the DRS system during practice and qualifying for 4,400 m - equivalent to 63 percent of the lap distance. Only Monza features a higher potential usage of the system, at 74 percent of the lap distance. DRS is likely to eliminate some of the need to find a set-up compromise between low drag for Sectors One and Three, and higher downforce for Sector Two, as it will offer the best of both worlds for qualifying - and enable teams to run higher downforce levels for the race, which will help to protect the tyres.

Monday, August 29, 2011

...from Dr. John

...the writing has been on the wall, a continued (or in some minds, a double-dip) recession is in the cards.  To the extent that the stock market is a reflection of the economy, the rolling over of the markets, despite the recent bounce, is suggestive of continued recessionary pressures...Dr John quantifies the current economic situation and summarizes his conclusions in the following excerpt from today's "Weekly Commentary"...

"It is now urgent for investors to recognize that the set of economic evidence we observe reflects a unique signature of recessions comprising deterioration in financial and economic measures that isalways and only observed during or immediately prior to U.S. recessions. These include a widening of credit spreads on corporate debt versus 6 months prior, the S&P 500 below its level of 6 months prior, the Treasury yield curve flatter than 2.5% (10-year minus 3-month), year-over-year GDP growth below 2%, ISM Purchasing Managers Index below 54, year-over-year growth in total nonfarm payrolls below 1%, as well as important corroborating indicators such as plunging consumer confidence. There are certainly a great number of opinions about the prospect of recession, but the evidence we observe at present has 100% sensitivity (these conditions havealways been observed during or just prior to each U.S. recession) and 100% specificity (the onlytime we observe the full set of these conditions is during or just prior to U.S. recessions). This doesn't mean that the U.S. economy cannot possibly avoid a recession, but to expect that outcome relies on the hope that "this time is different."

While the reduced set of options for monetary policy action may seem unfortunate, it is important to observe that each time the Fed has attempted to "backstop" the financial markets by distorting the set of investment opportunities that are available, the Fed has bought a temporary reprieve only at the cost of amplifying the later fallout.

Recall how the housing bubble started. Back in 2002-2003, Alan Greenspan held short term interest rates at such low levels that investors felt forced to "reach for yield" - and they found that extra yield in mortgage securities, which up until then had never experienced major credit difficulties. Wall Street quickly got a whiff of that, and realized that it could earn enormous fees by cranking out more "product" to satisfy investor demand. Soon, a flood of mortgage securities was created featuring increasingly complex structures (in order to maintain "AAA" status) while the proceeds from issuing these securities were offered to borrowers who were less and less creditworthy. As long as a willing borrower could be found - however unable to actually pay off the mortgage, and as long as a willing lender could be found - pressed to reach for yield by the Fed's distortive low interest rate policies, Wall Street and the banking system got them together, and obscured the gaping chasm between actual and perceived credit risk through "financial engineering" that created slice-and-dice securities with mind-numbing complexity.

Once the housing bubble collapsed, the Fed again responded with policies aimed primarily at distorting the set of investment opportunities through zero interest rates, preserving the misallocation of capital toward speculative investments (on Bernanke's misguided and empirically unsupported belief that consumers spend out of speculative gains). Yet the underlying debt burdens have not been restructured, so consumers - particularly homeowners - continue to pare back spending in order to reduce those debt burdens. As a result, there is little expectation of significant growth in demand, and companies therefore have little reason to hire new employees - all of which reinforces a "low level equilibrium" in the economy.

The way to get out of this is to abandon the misguided belief that economic prosperity can be obtained by encouraging speculation and distorting the set of investment opportunities. Rather, we will eventually find, as was eventually also discovered in the post-Depression stagnation of the 1930's, that the way to get the economy moving again is to restructure hopelessly burdensome debt obligations.

Of course, this same story is playing out on a global scale. It is worth noting that the yield on 1-year Greek government debt surged to 55% last week. At present, the global bond market is expressing a 100% expectation that this debt will default. The only question now is what the recovery rate will be.

Over the past three years, Wall Street and the banking system have enjoyed enormous fiscal and monetary concessions on the self-serving assertion that the global financial system will "implode" if anyone who made a bad loan might actually experience a loss. Because reversing this mantra is so difficult, policy makers are likely to continue fitful efforts to "rescue" this debt for the sake of bondholders, through mechanisms that are increasingly distasteful to the broader population. The justification for those policies will therefore have to be coupled with rhetoric that institutions holding these securities are too "systemically important" to suffer losses.

On this note, it is critical to remember that nearly all financial institutions have enough capital and obligations to their own bondholders to completely absorb restructuring losses without customers or counterparties bearing any loss at all. So keep in mind that the debate here is not about protecting customers or counterparties - it is really about whether the stockholders and bondholders of banks and other financial institutions should bear a loss. The "failure" of a bank only means that existing stockholders and bondholders are disenfranchised - the company simply takes on a new life under new ownership. Existing stockholders lose everything, unsecured bondholders typically lose something, and senior bondholders get any residual obtained as a result of the sale or transfer of the company. If the global economy is fortunate, the financial system two or three years from now will look much the same as it does today, but the ownership and capital structure will have changed almost entirely. A major restructuring of debt is the clearest path to long-term economic recovery, and the accompanying losses to those who recklessly made bad loans would be the highest realization of Schumpeter's idea of "creative destruction."

From that perspective, Warren Buffett's $5 billion investment in Bank of America preferred stock last week was essentially a defense of the old guard. Buffet observed, "It's a vote of confidence, not only in Bank of America, but also in the country."

Yes - to be specific, it's a vote of confidence that the country will bail out Bank of America in any future crisis. We should all hope that Buffett's investment is successful - provided there is no future crisis - and we should equally hope that Buffett loses the entire investment otherwise."

...for the rest of the story, follow this link - http://www.hussman.net/wmc/wmc110829.htm

Sunday, August 28, 2011

Obama Goes All Out For Dirty Banker Deal


by
matt Taibbi

POSTED: 
A power play is underway in the foreclosure arena, according to theNew York Times.
On the one side is Eric Schneiderman, the New York Attorney General, who is conducting his own investigation into the era of securitizations – the practice of chopping up assets like mortgages and converting them into saleable securities – that led up to the financial crisis of 2007-2008.
On the other side is the Obama administration, the banks, and all the other state attorneys general.
This second camp has cooked up a deal that would allow the banks to walk away with just a seriously discounted fine from a generation of fraud that led to millions of people losing their homes.
The idea behind this federally-guided “settlement” is to concentrate and centralize all the legal exposure accrued by this generation of grotesque banker corruption in one place, put one single price tag on it that everyone can live with, and then stuff the details into a titanium canister before shooting it into deep space.
This is all about protecting the banks from future enforcement actions on both the civil and criminal sides. The plan is to provide year-after-year, repeat-offending banks like Bank of America with cost certainty, so that they know exactly how much they’ll have to pay in fines (trust me, it will end up being a tiny fraction of what they made off the fraudulent practices) and will also get to know for sure that there are no more criminal investigations in the pipeline.  
This deal will also submarine efforts by both defrauded investors in MBS and unfairly foreclosed-upon homeowners and borrowers to obtain any kind of relief in the civil court system. The AGs initially talked about $20 billion as a settlement number, money that would “toward loan modifications and possibly counseling for homeowners,” as Gretchen Morgenson reported the other day.
The banks, however, apparently “balked” at paying that sum, and no doubt it will end up being a lesser amount when the deal is finally done.
To give you an indication of how absurdly small a number even $20 billion is relative to the sums of money the banks made unloading worthless crap subprime assets on foreigners, pension funds and other unsuspecting suckers around the world, consider this: in 2008 alone, the state pension fund of Florida, all by itself, lost more than three times that amount ($62 billion) thanks in significant part to investments in these deadly MBS. 
So this deal being cooked up is the ultimate Papal indulgence. By the time that $20 billion (if it even ends up being that high) gets divvied up between all the major players, the broadest and most destructive fraud scheme in American history, one that makes the S&L crisis look like a cheap liquor store holdup, will be safely reduced to a single painful but eminently survivable one-time line item for all the major perpetrators.
But Schneiderman, who earlier this year launched an investigation into the securitization practices of Goldman, Morgan Stanley, Bank of America and other companies, is screwing up this whole arrangement. Until he lies down, the banks don’t have a deal. They need the certainty of having all 50 states and the federal government on board, or else it’s not worth paying anybody off. To quote the immortal Tony Montana, “How do I know you’re the last cop I’m gonna have to grease?” They need all the dirty cops on board, or else the whole enterprise is FUBAR. 
In addition to the global settlement, Schneiderman is also blocking an individual $8.5 billion settlement for Countrywide investors. He has sued to stop that deal, claiming it could “compromise investors’ claims in exchange for a payment representing a fraction of the losses.”
If Schneiderman thinks $8.5 billion is an insufficient, fractional payoff just for defrauded Countrywide investors, then you can imagine how bad a $20 billion settlement for the entire industry would be for the victims.
In that particular Countrywide settlement deal, it looks like Bank of New York Mellon, the New York Fed, Pimco and other players negotiated on behalf of defrauded investors. They told the Times they were happy with the deal, but investors outside the talks told Gretchen they weren’t happy with the settlement.  
Schneiderman apparently listened to those voices instead of the Mellon-Fed-BofA crowd, which infuriated the insiders who struck the actual deal. In a remarkable quote given to theTimes, Kathryn Wylde, the Fed board member who ostensibly represents the public, said the following about Schneiderman:
It is of concern to the industry that instead of trying to facilitate resolving these issues, you seem to be throwing a wrench into it. Wall Street is our Main Street — love ’em or hate ’em. They are important and we have to make sure we are doing everything we can to support them unless they are doing something indefensible.
This, again, is coming not from a Bank of America attorney, but from the person on the Fed board who is supposedly representing the public!
This quote leads one to wonder just what Wylde would consider “indefensible,” given thatstealing is pretty much the worst thing that a bank can do — and these banks just finished the longest and most orgiastic campaign of stealing in the history of money. Is Wylde waiting for Goldman and Citi to blow up a skyscraper? Dump dioxin into an orphanage? It’s really an incredible quote.
The banks are going to claim that all they’re guilty of is bad paperwork. But while the banks are indeed being investigated for "paperwork" offenses like mass tax evasion (by failing to pay fees associated with mortgage registrations and deed transfers) and mass perjury (a la the “robo-signing” practices), their real crime, the one Schneiderman is interested in, is even more serious.
The issue goes beyond fraudulent paperwork to an intentional, far-reaching theft scheme designed to take junk subprime loans and disguise them as AAA-rated investments. The banks lent money to corrupt companies like Countrywide, who made masses of bad loans and immediately sold them back to the banks.
The banks in turn hid the crappiness of these loans via certain poorly-understood nuances in the securitization process – this is almost certainly where Scheniderman’s investigators are doing their digging – before hawking the resultant securities as AAA-rated gold to fools in places like the Florida state pension fund.
They did this for years, systematically, working hand in hand in a wink-nudge arrangement with clearly criminal enterprises like Countrywide and New Century. The victims were millions of investors worldwide (like the pensioners who saw their funds drop in value) and hundreds of thousands of individual homeowners, who were often sold trick loans and hustled into foreclosure when unexpected rate hikes kicked in.
In a larger sense, even the (often irresponsible) people who simply bought more house than they could afford were victims of this scam. That's because in many of these cases, credit simply would not have been available to those people had the banks not first discovered a way to raise vast sums of money dumping crap loans on an unsuspecting market.
In other words: if Bank of America hadn’t found a way to sell worthless subprime loans as AAA paper to the Chinese and the Scandavians in May, you can be sure that it wouldn’t be going back to Countrywide in June to lend out more money for more subprime loans.
And Countrywide, in turn, wouldn’t then have been sending masses of reps out into the ghettoes to offer juicy home loans to undocumented immigrants and refis to confused old ladies on social security.
This is as bad as white-collar crime gets. But to Wylde, it doesn’t rise to the level of being “indefensible.” Until they do something worse than this, we apparently should support the banks, and make sure they don’t have to pay more than a fraction of what they made off of this kind of crime.
What is most amazing about Wylde’s quote is the clear implication that even a law enforcement official like Schneiderman should view it as his job to “do everything we can to support” Wall Street. That would be astonishing interpretation of what a prosecutor's duties are, were it not for the fact that 49 other Attorneys General apparently agree with her.
In Schneiderman we have at least one honest investigator who doesn’t agree, which is to his great credit. But everyone else is on Wylde’s side now. The Times story claims that HUD Secretary Shaun Donovan and various Justice Department officials have been leaning on the New York AG to cave, which tells you that reining in this last rogue cop is now an urgent priority for Barack Obama.
Why? My theory is that the Obama administration is trying to secure its 2012 campaign war chest with this settlement deal. If Barry can make this foreclosure thing go away for the banks, you can bet he’ll win the contributions battle against the Republicans next summer.
Which is good for him, I guess. But it seems to me that it might be time to wonder if is this the most disappointing president we’ve ever had.

Friday, August 26, 2011

...from Stratfor - Libya After Gadhafi: Transitioning from Rebellion to Rule | STRATFOR

By Scott Stewart

With the end of the Gadhafi regime seemingly in sight, it is an opportune time to step back and revisit one of the themes we discussed at the beginning of the crisis: What comes after the Gadhafi regime?

As the experiences of recent years in Iraq and Afghanistan have vividly illustrated, it is far easier to depose a regime than it is to govern a country. It has also proved to be very difficult to build a stable government from the remnants of a long-established dictatorial regime. History is replete with examples of coalition fronts that united to overthrow an oppressive regime but then splintered and fell into internal fighting once the regime they fought against was toppled. In some cases, the power struggle resulted in a civil war more brutal than the one that brought down the regime. In other cases, this factional strife resulted in anarchy that lasted for years as the iron fist that kept ethnic and sectarian tensions in check was suddenly removed, allowing those issues to re-emerge.

As Libya enters this critical juncture and the National Transitional Council (NTC) transitions from breaking things to building things and running a country, there will be important fault lines to watch in order to envision what Libya will become.

Divisions

One of the biggest problems that will confront the Libyan rebels as they make the transition from rebels to rulers are the country’s historic ethnic, tribal and regional splits. While the Libyan people are almost entirely Muslim and predominately Arab, there are several divisions among them. These include ethnic differences in the form of Berbers in the Nafusa Mountains, Tuaregs in the southwestern desert region of Fezzan and Toubou in the Cyrenaican portion of the Sahara Desert. Among the Arabs who form the bulk of the Libyan population, there are also hundreds of different tribes and multiple dialects of spoken Arabic.

Perhaps most prominent of these fault lines is the one that exists between the ancient regions of Tripolitania and Cyrenaica. The Cyrenaica region has a long and rich history, dating back to the 7th century B.C. The region has seen many rulers, including Greeks, Romans, Arabs, Ottomans, Italians and the British. Cyrenaica has long been at odds with the rival province of Tripolitania, which was founded by the Phoenicians but later conquered by Greeks from Cyrenaica. This duality was highlighted by the fact that from the time of Libya’s independence through the reign of King Idris I (1951-1969), Libya effectively had two capitals. While Tripoli was the official capital in the west, Benghazi, King Idris’ power base, was the de facto capital in the east. It was only after the 1969 military coup that brought Col. Moammar Gadhafi to power that Tripoli was firmly established as the seat of power over all of Libya. Interestingly, the fighting on the eastern front in the Libyan civil war had been stalled for several months in the approximate area of the divide between Cyrenaica and Tripolitania.






After the 1969 coup, Gadhafi not only established Tripoli as the capital of Libya and subjugated Benghazi, he also used his authoritarian regime and the country’s oil revenues to control or co-opt Libya’s estimated 140 tribes, many members of which are also members of Libya’s minority Berber, Tuareg and Toubou ethnic groups.

It is no mistake that the Libyan revolution began in Cyrenaica, which has long bridled under Gadhafi’s control and has been the scene of several smaller and unsuccessful uprisings. The jihadist Libyan Islamic Fighting Group (LIFG) has also traditionally been based in eastern Cyrenaican cities such as Darnah and Benghazi, where anti-Gadhafi sentiment and economic hardship marked by high levels of unemployment provided a fertile recruiting ground. Many of these jihadists have joined the anti-Gadhafi rebels fighting on the eastern front.

But the rebels were by no means confined to Cyrenaica. Anti-Gadhafi rebels in Misurata waged a long and bloody fight against government forces to gain control of the city, and while the Cyrenaican rebels were bogged down in the Ajdabiya/Marsa el Brega area, Berber guerrillas based in the Nafusa Mountains applied steady pressure to the Libyan forces in the west and eventually marched on Tripoli with Arab rebels from coastal towns such as Zawiya, where earlier uprisings in February were brutally defeated by the regime prior to the NATO intervention.

These groups of armed rebels have fought independently on different fronts during the civil war and have had varying degrees of success. The different roles these groups have played and, more important, their perceptions of those roles will likely create friction when it comes time to allocate the spoils of the Libyan war and delineate the power structure that will control Libya going forward.

Fractured Alliances

While the NTC is an umbrella group comprising most of the groups that oppose Gadhafi, the bulk of the NTC leadership hails from Cyrenaica. In its present state, the NTC faces a difficult task in balancing all the demands and interests of the various factions that have combined their efforts to oust the Gadhafi regime. Many past revolutions have reached a precarious situation once the main unifying goal has been achieved: With the regime overthrown, the various factions involved in the revolution begin to pursue their own interests and objectives, which often run contrary to those of other factions.

A prime example of the fracturing of a rebel coalition occurred after the fall of the Najibullah regime in Afghanistan in 1992, when the various warlords involved in overthrowing the regime became locked in a struggle for power that plunged the country into a period of destructive anarchy. While much of Afghanistan was eventually conquered by the Taliban movement — seen by many terrorized civilians as the country’s salvation — the Taliban were still at war with the Northern Alliance when the United States invaded the country in October 2001.

A similar descent into anarchy followed the 1991 overthrow of Somali dictator Mohamed Said Barre. The fractious nature of Somali regional and clan interests combined with international meddling has made it impossible for any power to assert control over the country. Even the jihadist group al Shabaab has been wracked by Somali divisiveness.

But this dynamic does not happen only in countries with strong clan or tribal structures. It was also clearly demonstrated following the 1979 broad-based revolution in Nicaragua, when the Sandinista National Liberation Front turned on its former partners and seized power. Some of those former partners, such as revolutionary hero Eden Pastora, would go on to join the “contras” and fight a civil war against the Sandinistas that wracked Nicaragua until a 1988 cease-fire.

In most of these past cases, including Afghanistan, Somalia and Nicaragua, the internal fault lines were seized upon by outside powers, which then attempted to manipulate one of the factions in order to gain influence in the country. In Afghanistan, for example, warlords backed by Pakistan, Iran, Russia and India were all vying for control of the country. In Somalia, the Ethiopians, Eritreans and Kenyans have been heavily involved, and in Nicaragua, contra groups backed by the United States opposed the Cuban- and Soviet-backed Sandinistas.

Outside influence exploiting regional and tribal fault lines is also a potential danger in Libya. Egypt is a relatively powerful neighbor that has long tried to meddle in Libya and has long coveted its energy wealth. While Egypt is currently focused on its own internal issues as well as the Israel/Palestinian issue, its attention could very well return to Libya in the future. Italy, the United Kingdom and France also have a history of involvement in Libya. Its provinces were Italian colonies from 1911 until they were conquered by allied troops in the North African campaign in 1943. The British then controlled Tripolitania and Cyrenaica and the French controlled Fezzan province until Libyan independence in 1951. It is no accident that France and the United Kingdom led the calls for NATO intervention in Libya following the February uprising, and the Italians became very involved once they jumped on the bandwagon. It is believed that oil companies from these countries as well as the United States and Canada will be in a prime position to continue to work Libya’s oil fields. Qatar, Turkey and the United Arab Emirates also played important roles in supporting the rebels, and it is believed they will continue to have influence with the rebel leadership.

Following the discovery of oil in Libya in 1959, British, American and Italian oil companies were very involved in developing the Libyan oil industry. In response to this involvement, anti-Western sentiment emerged as a significant part of Gadhafi’s Nasserite ideology and rhetoric, and there has been near-constant friction between Gadhafi and the West. Due to this friction, Gadhafi has long enjoyed a close relationship with the Soviet Union and later Russia, which has supplied him with the bulk of his weaponry. It is believed that Russia, which seemed to place its bet on Gadhafi’s survival and has not recognized the NTC, will be among the big losers of influence in Libya once the rebels assume power. However, it must be remembered that the Russians are quite adept at human intelligence and they maintain varying degrees of contact with some of the former Gadhafi officials who have defected to the rebel side. Hence, the Russians cannot be completely dismissed.

China also has long been interested in the resources of Africa and North Africa, and Gadhafi has resisted what he considers Chinese economic imperialism in the region. That said, China has a lot of cash to throw around, and while it has no substantial stake in Libya’s oil fields, it reportedly has invested some $20 billion in Libya’s energy sector, and large Chinese engineering firms have been involved in construction and oil infrastructure projects in the country. China remains heavily dependent on foreign oil, most of which comes from the Middle East, so it has an interest in seeing the political stability in Libya that will allow the oil to flow. Chinese cash could also look very appealing to a rebel government seeking to rebuild — especially during a period of economic austerity in Europe and the United States, and the Chinese have already made inroads with the NTC by providing monetary aid to Benghazi.

The outside actors seeking to take advantage of Libya’s fault lines do not necessarily need to be nation-states. It is clear that jihadist groups such as the Libyan Islamic Fighting Group and al Qaeda in the Islamic Maghreb see the tumult in Libya as a huge opportunity. The iron fist that crushed Libyan jihadists for so long has been destroyed and the government that replaces the Gadhafi regime is likely to be weaker and less capable of stamping down the flames of jihadist ideology.

There are some who have posited that the Arab Spring has destroyed the ideology of jihadism, but that is far from the case. Even had the Arab Spring ushered in substantial change in the Arab World — and we believe it has resulted in far less change than many have ascribed to it — it is difficult to destroy an ideology overnight. Jihadism will continue to affect the world for years to come, even if it does begin to decline in popularity. Also, it is important to remember that the Arab Spring movement may limit the spread of jihadist ideology in situations where people believe they have more freedom and economic opportunity after the Arab Spring uprisings. But in places where people perceive their conditions have worsened, or where the Arab Spring brought little or no change to their conditions, their disillusionment could create a ripe recruitment opportunity for jihadists.

The jihadist ideology has indeed fallen on hard times in recent years, but there remain many hardcore, committed jihadists who will not easily abandon their beliefs. And it is interesting to note that a surprisingly large number of Libyans have long been in senior al Qaeda positions, and in places like Iraq, Libyans provided a disproportionate number of foreign fighters to jihadist groups.

It is unlikely that such individuals will abandon their beliefs, and these beliefs dictate that they will become disenchanted with the NTC leadership if it opts for anything short of a government based on a strict interpretation of Shariah. This jihadist element of the rebel coalition appears to have reared its head recently with the assassination of former NTC military head Abdel Fattah Younis in late July (though we have yet to see solid, confirmed reporting of the circumstances surrounding his death).

Between the seizure of former Gadhafi arms depots and the arms provided to the rebels by outside powers, Libya is awash with weapons. If the NTC fractures like past rebel coalitions, it could set the stage for a long and bloody civil war — and provide an excellent opportunity to jihadist elements. At present, however, it is too soon to forecast exactly what will happen once the rebels assume power. The key thing to watch for now is pressure along the fault lines where Libya’s future will likely be decided.

Thursday, August 25, 2011

Houston's Own U23 Cyclist Lawson Craddock

Tour de Guadeloupe

where...


what...



...and...in the spirit of this years Tour de France...Lawson's stage victory celebration "enhanced" by interaction with motorized vehicle


Saturday, August 20, 2011

Waiting for De Gaulle

Editorial of The New York Sun | August 19, 2011



Governor Perry’s remarks on Chairman Bernanke’s debasement of the dollar were greeted with widespread complaints owing to the governor’s raucous tone. So how could he have better made his case? For an example, we commend none other than Charles De Gaulle. We comprehend that the general-turned-president of Free France is renowned for his haughtiness and, for that matter, his mixed view, to put it mildly, of America. Let’s lay that aside for the moment and feature the prophetic remarks he made in February 1965, warning of the incipient monetary crisis that would, absent a return to gold-backed money, engulf the world. When these columns speak of our hope that some leader of our time will address this issue, this is the kind of talk for which we are hankering.




De Gaulle didn’t fool around when he wanted to make a statement. He gathered 1,000 journalists in the salon de fetes of the Elysee Palace, where, according to the dispatch by Richard Mooney of the New York Times, he seated them in gilded chairs. The president of the Fifth Republic sat himself at a cloth-covered table in front of them and spoke for 20 minutes in language that was slow, didactic, profound. He warned that the dollar had lost its transcendent value and called for a return to, in the gold standard, a system that was not particular to any one country but imposed the same measure of value and thus of discipline on all of them. “In truth,” he declared, “one does not see how one could really have any standard criterion other than gold.”

His remarks caused an immediate stir. “Perhaps never before,” rumbled Time magazine, “had a chief of state launched such an open assault on the monetary power of a friendly nation.” It called De Gaulle’s remarks “a particularly nettling irritant” coming, as they did, “just as the U.S. was deeply involved in making some hard decisions about its monetary policy.” President Johnson, pursuing his course of guns in Vietnam and butter at home, was facing a balance of payments crisis. But this did not prevent the more serious commentators from recognizing both the importance and the wisdom of De Gaulle’s demarche. These included, most notably, the Wall Street Journal, which issued an editorial upbraiding the American Treasury for denouncing the French president.

The Journal’s editorial, a classic, was called “A Gold Star for De Gaulle.” It noted that De Gaulle was not recommending an immediate return to a true gold standard from the so-called gold exchange standard that had been set up at Bretton Woods in the closing months of World War II. It acknowledged all the difficult questions of what it called “mechanics.” But it insisted that such issues did not mean that the French president was talking nonsense. It praised his adviser, the economist Jacques Rueff. And it said that it was “a splendid commentary on the quality of financial thinking when a man is bitterly resented for stripping off the mask of illusion and talking sense about money.”

In addition, the Journal rolled out two columns by its famed editor at the time, Vermont Connecticut Royster, praising De Gaulle’s demarche. The first one quoted Scartlett O’Hara’s remark as Rhett Butler rode into the sunset, “I’ll think about that tomorrow.” In the second, Royster responded to President Johnson’s petulant attack De Gaulle, criticizing LBJ for buying into the notion that the gold standard had caused the Great Depression. The column ran under the headline “Muddling History.” Royster didn’t gainsay the monetary system’s role in precipitating the Depression, but said the system was very like the one we had then under Bretton Woods. “General De Gaulle is better on history,” he concluded.

* * *

Who is going to be the De Gaulle of our time? Who can gather 1,000 journalists in a room, sit them in gilded chairs, park himself or herself before a baize-covered table and talk to them seriously about the monetary crisis? We are there now, with the value of the dollar having collapsed to less than an 1,800th of an ounce of gold. It is hard to imagine President Obama rising to this task. Or, for that matter, Prime Minister Cameron or President Sarkozy. The Chinese party boss has an over-hang on his economy (we speak of slave labor) worse than the monetary overhang that bedevils us. Chairman Bernanke doesn’t believe in it; worse, he confides — if that is the word — to Congress he is mystified by the gold price. Angela Merkel? Stephen Harper? Our guess is that the leadership here is going to have to come from the individual who emerges as the Republican nominee. For our part, we don’t have the slightest doubt that the American public is fully capable of digesting the warning that De Gaulle sounded and that our leaders brushed aside half a century ago. Since then there’s been a lot of history from which to learn.

Vuelta starts today - follow on SteepHill.tv























Sunday, September 4th - the finish at the top of Agrilu - ouch

Friday, August 19, 2011

Chavez Preparing Government Takeover of Venezuela's Gold Mining Industry


...the scramble begins
By Nathan Crooks and Corina Rodriguez Pons
Bloomberg News
Wednesday, August 17, 2011
CARACAS -- Venezuelan President Hugo Chavez ordered his government to repatriate $11 billion in gold held in banks abroad to safeguard the country from the economic crisis and said heĆ¢€™ll nationalize the local gold industry.
Venezuela has about 211 tons of its 365 tons of gold reserves held abroad at institutions including the Bank of England, JPMorgan Chase & Co., Barclays Plc, Standard Chartered Plc, and the Bank of Nova Scotia, according to a government document.
"We've held 99 tons of gold at the Bank of England since 1980. I agree with bringing that home," Chavez said today on state television. "It's a healthy decision."
Chavez, who has said he wants to eliminate the "dictatorship" of the U.S. dollar, has called on Venezuela's central bank to diversify its $28.7 billion in reserves away from U.S. institutions. Some cash reserves, which total $6.3 billion, will be shifted into currencies from emerging markets, including China, Russia, Brazil, and India, central bank President Nelson Merentes said today at a news conference.
Earlier today Chavez said he plans to take control of the country's gold industry to halt illegal mining and boost reserves.
The government is preparing a decree to stop illegal miners exploiting deposits of gold and coltan, an ore containing tantalum, used in mobile phones and video-game consoles, he said.
Venezuela faces international arbitration over nationalized gold assets from three companies including Crystallex International Corp., a Canadian gold producer whose Las Cristinas mine was taken over by the government in February. Chavez has increased state control over the economy since 2006 by nationalizing companies in the oil, petrochemicals, cement, metal, mining, and telecommunications industries.
"Venezuela has established its position as a brutal place to do business," Tom Winmill, who manages the Midas Fund in New York, said today in a telephone interview. "Whether it's a small cap like Crystallex or a large cap like Barrick or Anglo Gold, it doesn't really make any difference because no one is going to put another nickel into that country."
The South American country, in an effort to boost stalled production and take advantage of rising prices, last year relaxed restrictions on gold exports to allow some companies and joint ventures with the government to send as much as 50 percent of their output abroad.
Venezuela state gold producer Minerven has been shut for 15 days amid a strike, newspaper El Mundo reported today, citing company President Luis Herrera.
"The area is run by the mafia," Chavez said of the gold industry today. "We're going to nationalize gold. We can't keep allowing them to take it away."
Rusoro Mining Ltd., the only publicly traded gold miner still in Venezuela, is in talks with the government to increase gold exports, Chief Executive Officer Andre Agapov said today in a telephone interview.
"We can sell gold in the local market, but we want to sell as much gold as possible at international prices," Agapov said. He said he didn't have any information on a possible nationalization.
The company's stock fell 17 percent to 12.5 Canadian cents on the Toronto Stock Exchange today. It has fallen 69 percent this year.
Venezuela produces 11 metric tons of gold a year, and illegal miners extract an additional 10 to 11 tons a year, Chavez said in May.
Venezuela's National Guard seized control of the Las Cristinas mine, which has reserves of about 27 million ounces, in November 2001 from Canada's Vanessa Ventures.
Venezuela's 365.8 metric tons of gold reserves makes it the 15th-largest holder of the precious metal in the world, according to an August report from the World Gold Council. Venezuela's gold holdings accounted for about 61 percent of the nation's international reserves, according to the report.
Gold futures for December delivery rose $8.80, or 0.5 percent, to $1,793.80 an ounce on the Comex in New York. Prices touched a record $1,817.60 on Aug. 11.