Contradictions in Pakistan’s Counterterrorism Strategy Leading to Security Collapse
By: Arif Jamal
Few in Pakistan doubt that the United States and Pakistan are headed for a total divorce, at least on the question of Pakistan’s counterterrorism strategy in the near future. A strongly-worded press release issued by the Pakistani military’s Inter-Service Public Relations (ISPR) after the 139th Corps Commanders Conference on June 9 seems to have finally sealed the fate of the deteriorating Pakistan-U.S. relations on the question of how to carry out the war on terror in the future. [1] If the ISPR press release is any guide, the Corps Commanders’ Conference devoted most of its time to Pakistani-U.S. relations and domestic issues arising out of Pakistan’s relations with the United States and its conduct of war on terror. A much smaller passage focused on the sacrifices the Pakistani armed forces have made in the war on terror.
Most importantly, the Corps Commanders Conference decided to stop accepting financial assistance from the United States in the future. Announcing this politely but in no ambiguous way, the ISPR statement asked the Pakistani government to divert “the U.S. funds meant for military assistance to [the] Army to economic aid to Pakistan, which can be used for reducing the burden on the common man.” The statement seems to be politically motivated as U.S. military assistance may not be converted into civilian aid. The ISPR statement also made a controversial claim about the Coalition Support Funds (CSF) that is likely to raise controversy in the coming days. The CSF was created after 9/11 to compensate certain U.S. allies for their assistance in waging the War on Terrorism. Rising demands from Pakistan for greater CSF payments have created problems since 2008.
The statement claimed the United States had provided only a total of $8.6 billion to Pakistan, of which the Army received only $1.4 billion while the Pakistan Navy and the Pakistan Air Force received still less. The total amount of CSF received was far less than the expected $13 billion. The Pakistan government had used approximately $6 billion of the amount received for budgetary support. Moreover, the statement denied that the Pakistani military had ever received any training assistance from the United States, “except for training on the newly inducted weapons and some training assistance for the Frontier Corps." This seems to be a questionable claim as a number of officers from the Pakistani military, including Chief of Army Staff General Ashfaq Pervez Kayani, have studied in the United States military schools.
The Corps Commanders Conference also decided to limit intelligence sharing with the United States and “share intelligence strictly on the basis of reciprocity and complete transparency.” This appeared to refer to the killing of Osama bin Laden in the garrison city of Abbottabad on May 2, an incident in which the Pakistani military was caught unaware. In very clear terms, the Corps Commanders Conference came out in opposition to the U.S. drone attacks in northwest Pakistan. The ISPR statement said, “[The] Army has repeatedly conveyed to all concerned that these [drone attacks] are not acceptable under any circumstances. There is no room for ambiguity in this regard. [The] Government is making necessary efforts in this direction.” At the same time, the military commanders made it clear that there would be no military operation in the North Waziristan Agency in the near future. Meetings between CIA chief Leon Panetta and General Kayani and Inter-Services Intelligence (ISI) chief Lieutenant General Ahmad Shuja Pasha the day after the conference failed to bridge the widening gulf between the United States and the Pakistani military. The CIA chief was visibly given the cold shoulder during his visit, as there were no customary courtesy calls from President Asif Ali Zardari and Prime Minister Yousaf Raza Gillani (Dawn [Karachi] June 12).
Pakistan - A Reluctant Partner in the Global War on Terror
Pakistan was a reluctant partner in the U.S.-led war on terror from the very beginning. Between October 12, 1999 and September 11, 2001, the regime of General Pervez Musharraf (1999-2007) had given unprecedented freedom to jihadi groups in Pakistan. The regime had to change its tactics in the wake of the 9/11 terrorist attacks as India openly offered the United States all possible help to carry out strikes on al-Qaeda and the Taliban. Justifying his decision to join the U.S.-led coalition in his address to the nation on September 19, 2001, General Musharraf said that by doing so, he was safeguarding Pakistan’s four key interests; the security of the country, the revival of the national economy, control of Pakistan’s strategic nuclear and missile assets, and the Kashmir cause. [2]
The Pakistani army had had no experience with counterterrorism or even a sense of counterterrorism strategy until it joined the U.S.-led war on terror in the wake of the 9/11 terrorist attacks. However, Pakistan had wide experience in fomenting insurgencies. It had been doing just that in the Indian-controlled Jammu and Kashmir region from the very beginning of the dispute over this region began in 1947. [3] In 1980, with the help of a number of other countries, it started fomenting another huge insurgency in Afghanistan. [4] Joining the U.S.-led coalition was a tough decision for the Pakistani military, and it did so only under unbearable pressure from the Western world. However, the Pakistani army played a double game and selectively targeted the terrorists. It did help the Americans to nab some al-Qaeda militants but at the same time it helped save the Afghan Taliban and several other militant groups. Jihadi groups operating in Kashmir were allowed to operate relatively openly although the Army command curbed their infiltration into Indian-controlled Kashmir. It was around 2005-2006 when the West started becoming aware of the double game the Pakistani army was playing and started asking Pakistan to take more concrete action against terrorism.
Pakistan Starts Reversing Its Counterterrorist Strategy
Pakistani-American relations started deteriorating in the latter half of the 2000s. By the end of 2010, bilateral relations had nose-dived and it had become clear that the Pakistan army was reversing its counterterrorism strategy. The most important aspect of the new strategy was the distancing of the Pakistan Army from American strategy. One way of demonstrating this distance was withdrawing its support to the CIA-operated drone campaign, which was taking out terrorists in the tribal zone of Pakistan. On December 13, Kareem Khan, a resident of Mir Ali, North Waziristan, asked the Islamabad police to register a case against Jonathan Banks, the Islamabad CIA station chief, for running a “clandestine spying operation” in Pakistan. Kareem Khan had lost his brother and a son in a drone attack nearly a year ago (The News [Islamabad], December14, 2010).
The CIA official had to immediately leave the country as his life was in danger after his cover was blown. It was widely believed that the Pakistani military had passed the name of the CIA officer to the complainant. Kareem Khan also led several sit-ins in Islamabad to stop the drone attacks, which were attended by other residents of the tribal areas (Dawn, December 14, 2010). The Pakistani press intensified the well-planned campaign against the drone attacks and fighting what it described as “America’s war”. Islamist leaders and ex-servicemen were at the forefront of this anti-U.S. campaign.
Pakistani-American relations further deteriorated when another CIA employee, Raymond Davis, killed two young men on January 27 in Lahore (Express News [Karachi] January 28). The two were apparently working for the ISI and found the CIA operative’s activities “detrimental to our national security,” according to a Pakistani defense official (Express Tribune [Karachi], February 7).
The Pakistani media and Islamists intensified their anti-U.S. campaign and demanded a break in relations with the United States. When Davis was released in an apparent deal between the ISI and the CIA, the Pakistani military had to face unprecedented criticism from the same press and Islamists who were previously supporting the Pakistani army (The News [Islamabad], March17; Dawn [Karachi], March 18). Although the military managed to control the criticism, the image of the Army and the ISI had suffered beyond repair. To repair its image, the military continuously stressed that it was downgrading its links with the United States. It publicly asked for and received a reduction in the number of CIA staff stationed in Pakistan (Dawn, April 12). As the two countries struggled to repair their relations and restore Pakistani cooperation with the United States in counterterrorism efforts, Pakistan was caught off guard when the Americans killed and removed Bin Laden from a mansion in the garrison city of Abbottabad on May 1 (Express Tribune May 2). This proved to be last nail in the coffin of Pakistan-U.S. counterterrorism cooperation.
Conclusion
It seemed that Pakistan-U.S. relations were starting to normalize in the wake of Senator John Kerry’s visit to Islamabad in the third week of May. Despite some continuing irritants, Pakistan seemed ready to pursue a counterterrorism strategy with American help.
It was commonly believed that Pakistan’s demand to reduce the number of U.S. military trainers in Pakistan was more symbolic than real, but on May 8, a day before the Corps Commanders Conference, the military announced that it had “expelled” 90 out of 135 U.S. military trainers in Pakistan (Daily Times [Lahore] May 9). The decisions made at the Corps Commanders Conference have brought Pakistani-American cooperation on counterterrorism to its lowest point in nearly a decade. It seems unlikely these relations can be repaired in the near future.
The inherent contradictions in Pakistan’s counterinsurgency strategy have finally taken their toll. Pakistan’s military doctrines are highly India-centric and are based primarily on fomenting insurgencies. It was for these reasons that, in the wake of the 9/11 attacks, Pakistan decided to join the U.S.-led coalition. Pakistan feared at that time that India’s alliance with the United States would be harmful for Pakistan’s long term military strategy, but the nation could keep the United States from greater cooperation with India by joining the U.S.-led coalition. However, the utility of this unnatural alliance has worn thin with the passage of time. A large part of the Army’s jihadist assets have spun out of the ISI’s control and are now attacking the armed forces themselves. Assaults on military facilities such as the October 10, 2009 attack on the Army General Headquarters in Rawalpindi and the recent May 23 attack on the Mehran naval base in Karachi clearly pose a significant threat to the armed forces as well as the country.
After near nearly a decade of counterterrorism cooperation, Pakistan’s army has again faced a dilemma in choosing its strategic course. In the words of a senior Pakistani official, the Army “has chosen the old path of using jihad as an instrument of its defense policy against its enemies. The Pakistani army thinks that this is the only way to neutralize the Islamist extremists who are targeting the Pakistan army and stop more jihadists from spinning out of its control.” [5]
1. Available at: ispr.gov.pk/front/main.asp.
2. General Pervez Musharraf’s address is available at: web.archive.org/web/20080511213354/http://www.americanrhetoric.com/speeches/pakistanpresident.htm.
3. For a detailed account of Pakistan’s strategy of fomenting insurgency in Indian-controlled Kashmir, see Arif Jamal, Shadow War –The Untold Story of Jihad in Kashmir, Melville House, New York, May 2009.
4. For a detailed account of Pakistan’s strategy of fomenting insurgency in Afghanistan, see Mohammed Yousaf and Mark Adkin, The Bear Trap: Afghanistan’s Untold Story, L. Cooper, London, 1992. See also John K Cooley, Unholy Wars –Afghanistan, America and International Terrorism, Pluto Press, London, 1999.
5. Author’s interview with a senior Pakistani official who requested anonymity, June 2011.
TM_009_60.pdf
Sunday, June 19, 2011
Wise up [It's not going to stop]
Aimee Mann - Wise up [It's not going to stop]
An excellent, meaningful song!
An excellent, meaningful song!
How to waste your money – let us count the ways
How to waste your money – let us count the ways
- Henry Lamb
The hot topic in DC these days is cutting spending. Everybody is talking about it, but Rep. Cynthia Lummis from Wyoming is doing something about it. She has introduced a bill (HR1996) to end wasteful spending that should have been stopped years ago. The Government Litigation Savings Act will put an end to some of the ridiculous payments made to GAGs (Green Advocacy Groups) for far too many years.
Here is a summary of legal fees paid to GAGs from your tax dollars: (source)
2003 – 10,595 individual payments totaling $1,081,328,420.00
2004 – 8,161 individual payments totaling $800,450,029.00
2005 – 7,794 individual payments totaling $1,074,131,007.00
2006 – 8,736 individual payments totaling $697,968,132.00
2007 – (first six months only) 6,595 individual payments totaling $1,062,387,142.00
Grand total: 41,881 individual payments totaling $4,716,264,730.00
This outrageous total reflects only the legal fees paid to a handful of GAGs, many of which also receive grants from federal agencies now managed by people who once were executives of GAGs. What a racket. This short video (4:36)(below) barely scratches the surface of the massive “legal” thievery perpetrated by GAGs every day.
These payments to attorneys and grants to GAGs should be stopped immediately.
With all the talk about cutting spending, it would seem that every Congressman would jump at the chance to co-sponsor this bill, and proudly brag to his constituents that he is doing something about the out-of-control federal spending. But alas, there are only 25 co-sponsors as of this date.
Turn now to federal subsidies, especially green subsidies. Not only are these subsidies absolutely wasteful, they are an attempt to manage what should be a fee market in energy. But even worse, these subsidies are a breeding ground for corruption. Cathy Zoi, Obama’s choice as assistant secretary for energy efficiency and renewable energy, is married to Robin Roy, an executive at Serious Materials. When President Obama and Joe Biden visited the Serious Materials factories, and promoted their products, stock value of the company soared, as did the wealth of Ms Zoi and her husband. This company received a green subsidy amount to $584,000.
Spain has spent $32 billion in solar subsidies since 2002. For every new “green” job created, the rest of the economy lost 2.2 jobs. Spain is now ending this waste, as are Germany and France. David Kreutzer, research fellow in energy economics and climate change at The Heritage Foundation, says: “They’re [green subsidies} just so expensive. It also becomes very clear in economic tough times that this fallacy about creating green jobs with huge subsidies is just not true,” According to the Energy Information Administration, subsidies to wind and solar costs the taxpayer $24 per megawatt hour.
These green subsidies should be stopped immediately.
Big black hole called the United Nations
Another waste of your tax dollars is the big black hole called the United Nations. It is common knowledge that the United States pays 22 percent of the U.N. budget. And 25 percent of the Peacekeeping costs. It is not widely understood that this is only the tip of the iceberg. The U.N. consists of more than 1300 organizations, agencies, commissions, conventions, and other excuses to drain U.S. tax dollars. The U.S. pays at least 22 percent of the budget of any of these organizations to which it also belongs. UNESCO, for example, which President Bush rejoined, and the Framework Convention on Climate Change, and all of the hundreds of other U.N. organizations of which the U.S. is a member.
It is nearly impossible to discover the total amount of your money that ends up in a U.N. bank account. Payments to subsidiary organizations are hidden deeply in the budges of obscure federal agencies. The reported amount assessed and voluntary payments to the U.N. for 2011 amounted to more than $4 billion dollars.
These payments to the U.N. should be stopped immediately.
Interest payments on the national debt
The granddaddy of waste is the interest payments on the national debt. Interest payments are a pain in the pocketbook of every person who has ever had to finance a purchase. Multiply that pain by the population of the United States, multiplied by the $14 trillion dollar national debt, and the economic suffering accrues at a rate faster than the nation can long endure.
What was the amount paid by the U.S. in 2010 on the principle and interest on the national debt?
We asked Colleen Murray at the U.S. Treasury press center this question – three times by phone and twice by email. She has answered neither the calls nor the emails after more than two weeks of waiting. The Treasury Department was asked the same question by a staffer from Rep. Stephen Fincher’s office. Within two hours came the reply:
Total amount paid on principle: $ 14,025,215,000,000.00 ($14 Trillion)
Total interest paid on debt: $ 413,954,825,362.17 ($413 Billion)
Hmmmmm. What’s wrong with these numbers? Total U.S. revenue for 2010 was only $2.162 trillion. How could we pay $14 trillion on principle, and $413 billion in interest from only $2 trillion in revenue? Obviously, the Treasury Department’s numbers are meaningless, even when reported to a Congressman. A great project for every person would be to try to find an answer to this question. The frustration you will experience will elevate your determination to replace the current administration with people determined to end the waste of your tax dollars.
- Henry Lamb
The hot topic in DC these days is cutting spending. Everybody is talking about it, but Rep. Cynthia Lummis from Wyoming is doing something about it. She has introduced a bill (HR1996) to end wasteful spending that should have been stopped years ago. The Government Litigation Savings Act will put an end to some of the ridiculous payments made to GAGs (Green Advocacy Groups) for far too many years.
Here is a summary of legal fees paid to GAGs from your tax dollars: (source)
2003 – 10,595 individual payments totaling $1,081,328,420.00
2004 – 8,161 individual payments totaling $800,450,029.00
2005 – 7,794 individual payments totaling $1,074,131,007.00
2006 – 8,736 individual payments totaling $697,968,132.00
2007 – (first six months only) 6,595 individual payments totaling $1,062,387,142.00
Grand total: 41,881 individual payments totaling $4,716,264,730.00
This outrageous total reflects only the legal fees paid to a handful of GAGs, many of which also receive grants from federal agencies now managed by people who once were executives of GAGs. What a racket. This short video (4:36)(below) barely scratches the surface of the massive “legal” thievery perpetrated by GAGs every day.
These payments to attorneys and grants to GAGs should be stopped immediately.
With all the talk about cutting spending, it would seem that every Congressman would jump at the chance to co-sponsor this bill, and proudly brag to his constituents that he is doing something about the out-of-control federal spending. But alas, there are only 25 co-sponsors as of this date.
Turn now to federal subsidies, especially green subsidies. Not only are these subsidies absolutely wasteful, they are an attempt to manage what should be a fee market in energy. But even worse, these subsidies are a breeding ground for corruption. Cathy Zoi, Obama’s choice as assistant secretary for energy efficiency and renewable energy, is married to Robin Roy, an executive at Serious Materials. When President Obama and Joe Biden visited the Serious Materials factories, and promoted their products, stock value of the company soared, as did the wealth of Ms Zoi and her husband. This company received a green subsidy amount to $584,000.
Spain has spent $32 billion in solar subsidies since 2002. For every new “green” job created, the rest of the economy lost 2.2 jobs. Spain is now ending this waste, as are Germany and France. David Kreutzer, research fellow in energy economics and climate change at The Heritage Foundation, says: “They’re [green subsidies} just so expensive. It also becomes very clear in economic tough times that this fallacy about creating green jobs with huge subsidies is just not true,” According to the Energy Information Administration, subsidies to wind and solar costs the taxpayer $24 per megawatt hour.
These green subsidies should be stopped immediately.
Big black hole called the United Nations
Another waste of your tax dollars is the big black hole called the United Nations. It is common knowledge that the United States pays 22 percent of the U.N. budget. And 25 percent of the Peacekeeping costs. It is not widely understood that this is only the tip of the iceberg. The U.N. consists of more than 1300 organizations, agencies, commissions, conventions, and other excuses to drain U.S. tax dollars. The U.S. pays at least 22 percent of the budget of any of these organizations to which it also belongs. UNESCO, for example, which President Bush rejoined, and the Framework Convention on Climate Change, and all of the hundreds of other U.N. organizations of which the U.S. is a member.
It is nearly impossible to discover the total amount of your money that ends up in a U.N. bank account. Payments to subsidiary organizations are hidden deeply in the budges of obscure federal agencies. The reported amount assessed and voluntary payments to the U.N. for 2011 amounted to more than $4 billion dollars.
These payments to the U.N. should be stopped immediately.
Interest payments on the national debt
The granddaddy of waste is the interest payments on the national debt. Interest payments are a pain in the pocketbook of every person who has ever had to finance a purchase. Multiply that pain by the population of the United States, multiplied by the $14 trillion dollar national debt, and the economic suffering accrues at a rate faster than the nation can long endure.
What was the amount paid by the U.S. in 2010 on the principle and interest on the national debt?
We asked Colleen Murray at the U.S. Treasury press center this question – three times by phone and twice by email. She has answered neither the calls nor the emails after more than two weeks of waiting. The Treasury Department was asked the same question by a staffer from Rep. Stephen Fincher’s office. Within two hours came the reply:
Total amount paid on principle: $ 14,025,215,000,000.00 ($14 Trillion)
Total interest paid on debt: $ 413,954,825,362.17 ($413 Billion)
Hmmmmm. What’s wrong with these numbers? Total U.S. revenue for 2010 was only $2.162 trillion. How could we pay $14 trillion on principle, and $413 billion in interest from only $2 trillion in revenue? Obviously, the Treasury Department’s numbers are meaningless, even when reported to a Congressman. A great project for every person would be to try to find an answer to this question. The frustration you will experience will elevate your determination to replace the current administration with people determined to end the waste of your tax dollars.
Deadly Regulations
Deadly Regulations
“How many of you have not been able to get a drug you needed to properly deliver anesthesia to a patient?” I asked.
Every hand in the room went up.
“How did that affect your patients?” I asked. “Two of our patients died,” one woman answered.
I was speaking to a group of nurse anesthetists, enrolled in a business management program at Marshall University in West Virginia. I wish I could say their experience is unusual. It isn’t.
About 90 percent of all the anesthesiologists in the country reportthey are experiencing a shortage of at least one anesthetic. Drug shortages are also endangering cancer patients, heart attack victims, accident survivors and a host of other ill people. The vast majority involve injectable medications used mostly by medical centers, in emergency rooms, ICUs and cancer wards. Currently, there are about 246 drugs that are in short supply and the number has been growing for some time.
A new report from the Premier healthcare alliance that found that drug shortages have risen to “critical levels,” endangering the public’s health. Hospitals are scrambling to make up the shortfall, in some cases rationing medications, postponing surgeries and using alternative drugs.
So what’s going on?
Industry insiders point to numerous causes of the problem, including the fact that the generic drug market may be inherently more volatile than the market for brand-name drugs. Others point to supply chain problems. Then there is government regulatory policy.
Output Controls. The Federal Food and Drug Administration (FDA) has been stepping up its quality enforcement efforts — levying fines and forcing manufacturers to retool their facilities both here and abroad. Not only has this more rigorous regulatory oversight slowed down production, the FDA’s “zero tolerance” regime is forcing manufacturers to abide by rules that are rigid, inflexible and unforgiving. For example, a drug manufacturer must get approval for how much of a drug it plans to produce, as well as the timeframe. If a shortage develops (because, say, the FDA shuts down a competitor’s plant), a drug manufacturer cannot increase its output of that drug without another round of approvals. Nor can it alter its timetable production (producing a shortage drug earlier than planned) without FDA approval.
Even the Drug Enforcement Agency (DEA) has a role — because minute quantities of controlled substances are often used to make other drugs. This is the apparent reason for a nationwide shortage of ADHD drugs, for example, including the generic version of Ritalin. And like the FDA, DEA regulations are rigid and inflexible. For example, if a shortage develops and the manufacturers have reached their preauthorized production cap, a manufacturer cannot respond by increasing output without going back to the DEA for approval.
Price Controls. Also contributing to the problems of many facilities is a little known program that forces drug manufacturers to give discounts to certain end users. The federal 340B drug rebate program was created in 1992 to provide discounted drugs to hospitals and clinics that treat a high number of indigent patients, clinics treating patients on Medicaid, hospitals and clinics in the Public Health Service and certain Federally Qualified Health Centers (more listed here).Currently, the law requires drug companies to provide rebates of 23.1 percent for brand drugs; and 13 percent for generic drugs off of their average manufacturer’s price on qualifying outpatient drug use. States have the right to negotiate further discounts and actual rebates negotiated are typically much steeper than the federal requirement.
This state of affairs did not start with the Affordable Care Act (ObamaCare). By expanding the number of hospitals and clinics that are allowed to participate in the program, however, the Affordable Care Act will make things worse. In 2002, about 8,000 hospitals and clinics were in the program. By 2010 more than 14,457 were participating. The total number of eligible hospitals and clinics is now estimated at nearly 20,000.
Economics teaches that when prices are kept artificially low, shortages develop. People respond to persistent shortages by doing things that invariably make the problem worse.
Buying organizations will typically respond by trying to stockpile quantities of drugs where supply is uncertain. That is, they will try to hoard more of the drugs than they ordinarily would keep in inventory in order to try to make sure they are available when needed. As the Healthcare Alliance Report explains, “drug shortages have been exacerbated by stockpiling on the part of providers,” who are trying to “protect themselves from the instability of the drug supply chain by placing orders that exceed normal requirements.”
Black (or gray) markets develop, where price gougers buy up quantities of a drug in short supply and sell it for a much higher price — even higher than would have been charged if the government had simply left the market alone. Members of the Premier healthcare alliance report paying “gray market” prices as much as 335 percent above the approved rate.
Solutions. Up till now, the Obama administration’s preference for regulation rather than market forces to solve safety problems is making the entire health care system less safe than it otherwise would have been.
Cass Sunstein, President Obama’s regulatory czar, announced last week that the administration intends to repeal cost-increasing, unnecessary regulations from 30 different agencies. If the administration is serious in this effort, a good place to start is with a web of regulations that are preventing life saving drugs from reaching the patients who need them.
“How many of you have not been able to get a drug you needed to properly deliver anesthesia to a patient?” I asked.
Every hand in the room went up.
“How did that affect your patients?” I asked. “Two of our patients died,” one woman answered.
I was speaking to a group of nurse anesthetists, enrolled in a business management program at Marshall University in West Virginia. I wish I could say their experience is unusual. It isn’t.
About 90 percent of all the anesthesiologists in the country reportthey are experiencing a shortage of at least one anesthetic. Drug shortages are also endangering cancer patients, heart attack victims, accident survivors and a host of other ill people. The vast majority involve injectable medications used mostly by medical centers, in emergency rooms, ICUs and cancer wards. Currently, there are about 246 drugs that are in short supply and the number has been growing for some time.
A new report from the Premier healthcare alliance that found that drug shortages have risen to “critical levels,” endangering the public’s health. Hospitals are scrambling to make up the shortfall, in some cases rationing medications, postponing surgeries and using alternative drugs.
So what’s going on?
Industry insiders point to numerous causes of the problem, including the fact that the generic drug market may be inherently more volatile than the market for brand-name drugs. Others point to supply chain problems. Then there is government regulatory policy.
Output Controls. The Federal Food and Drug Administration (FDA) has been stepping up its quality enforcement efforts — levying fines and forcing manufacturers to retool their facilities both here and abroad. Not only has this more rigorous regulatory oversight slowed down production, the FDA’s “zero tolerance” regime is forcing manufacturers to abide by rules that are rigid, inflexible and unforgiving. For example, a drug manufacturer must get approval for how much of a drug it plans to produce, as well as the timeframe. If a shortage develops (because, say, the FDA shuts down a competitor’s plant), a drug manufacturer cannot increase its output of that drug without another round of approvals. Nor can it alter its timetable production (producing a shortage drug earlier than planned) without FDA approval.
Even the Drug Enforcement Agency (DEA) has a role — because minute quantities of controlled substances are often used to make other drugs. This is the apparent reason for a nationwide shortage of ADHD drugs, for example, including the generic version of Ritalin. And like the FDA, DEA regulations are rigid and inflexible. For example, if a shortage develops and the manufacturers have reached their preauthorized production cap, a manufacturer cannot respond by increasing output without going back to the DEA for approval.
Price Controls. Also contributing to the problems of many facilities is a little known program that forces drug manufacturers to give discounts to certain end users. The federal 340B drug rebate program was created in 1992 to provide discounted drugs to hospitals and clinics that treat a high number of indigent patients, clinics treating patients on Medicaid, hospitals and clinics in the Public Health Service and certain Federally Qualified Health Centers (more listed here).Currently, the law requires drug companies to provide rebates of 23.1 percent for brand drugs; and 13 percent for generic drugs off of their average manufacturer’s price on qualifying outpatient drug use. States have the right to negotiate further discounts and actual rebates negotiated are typically much steeper than the federal requirement.
This state of affairs did not start with the Affordable Care Act (ObamaCare). By expanding the number of hospitals and clinics that are allowed to participate in the program, however, the Affordable Care Act will make things worse. In 2002, about 8,000 hospitals and clinics were in the program. By 2010 more than 14,457 were participating. The total number of eligible hospitals and clinics is now estimated at nearly 20,000.
Economics teaches that when prices are kept artificially low, shortages develop. People respond to persistent shortages by doing things that invariably make the problem worse.
Buying organizations will typically respond by trying to stockpile quantities of drugs where supply is uncertain. That is, they will try to hoard more of the drugs than they ordinarily would keep in inventory in order to try to make sure they are available when needed. As the Healthcare Alliance Report explains, “drug shortages have been exacerbated by stockpiling on the part of providers,” who are trying to “protect themselves from the instability of the drug supply chain by placing orders that exceed normal requirements.”
Black (or gray) markets develop, where price gougers buy up quantities of a drug in short supply and sell it for a much higher price — even higher than would have been charged if the government had simply left the market alone. Members of the Premier healthcare alliance report paying “gray market” prices as much as 335 percent above the approved rate.
Solutions. Up till now, the Obama administration’s preference for regulation rather than market forces to solve safety problems is making the entire health care system less safe than it otherwise would have been.
Cass Sunstein, President Obama’s regulatory czar, announced last week that the administration intends to repeal cost-increasing, unnecessary regulations from 30 different agencies. If the administration is serious in this effort, a good place to start is with a web of regulations that are preventing life saving drugs from reaching the patients who need them.
Government looks to past, free enterprise to future
Government looks to past, free enterprise to future
By: Michael Barone 06/18/11 8:05 PM
Two years ago, in June 2009, the American economy emerged from recession, according to the National Bureau of Economic Research. But as this week's Economist noted, with typical British understatement, "The recovery has been a disappointment."
And maybe not a recovery for long. Robert Shiller, the economist who first identified the housing bubble, said last week that we may be headed for recession again. "Whether we call it a double dip or not," he told Reuters, "there is a risk."
His Case/Shiller housing price index indicated that home prices in March slumped to levels not seen since March 2003, and Shiller says they may keep falling for 20 years.
As I look back on these years of economic tumult, I sometimes think of an off-the-record session arranged by National Review with Treasury Secretary Henry Paulson back in the fall of 2007.
I asked Paulson when the government was going to change the Securities and Exchange Commission regulation under which the credit rating agencies were paid by the sellers rather than the buyers of securities. That arrangement gave the credit agencies an incentive to give high ratings to the mortgage-backed securities that later turned sour.
Oh, we'll get to that, Paulson said, when we get through the rough stuff we face right now. Of course he had not yet gotten to the stuff that was so rough that, as he wrote in his memoir, he had to leave meetings to throw up.
With the benefit of hindsight, it seems that our leaders, in both the Bush and the Obama administrations, responded to crises and challenges all too often with measures that attempted to revive the old pre-financial crisis economy rather than with policies that would allow a new economy to grow.
As in Paulson's comment, the thinking seems to have been that if we can just get things back in place then we can attack the underlying problems.
Such was the theory behind the now seemingly puny stimulus package agreed to by George W. Bush and Democratic congressional leaders in early 2008. And behind the Federal Reserve's rescue package for Bear Stearns in March 2008.
It was behind the argument that Paulson used to persuade Congress to pass the $700 billion Troubled Asset Relief Program package in October 2008. He said he'd use the money to buy toxic mortgage-backed securities from the banks, but then decided to lend the banks tranches of $25 billion instead.
The Obama Democrats' February 2009 stimulus package doled out one-third of its $787 billion to state and local governments so that public-sector employees (and union members) would not lose their jobs as so many private-sector employees were. That worked for a while but did not prevent painful cuts and layoffs later.
Then there were the various mortgage forbearance programs, designed to prevent foreclosures. Precious few homeowners took advantage of them, and many who did ended up losing their houses anyway.
And of course there was cash for clunkers, which increased car sales in the summer only to see them decline in the fall. Hundreds of millions were spent, but with no permanent effect except to increase used-car prices because clunkers traded in had to be junked.
Decision makers have responded as if they were facing liquidity crises (we don't have enough cash to pay off debts immediately) instead of solvency crises (we will never be able to pay off these debts). Too often pain has not been prevented, but just postponed -- and prolonged.
In retrospect much of the pain could not be avoided. As economist Tyler Cowen has put it, we were not as rich as we thought we were. Housing bubble prices did not turn out to be real wealth, unless you sold out at the peak and moved to a cave.
Trying to put everyone back in the position they once thought they were in simply won't work. But it does sound attractive politically. People can remember what life was like in the past.
We don't, however, know what it will be like in the future. Republicans want less government spending and more leeway for entrepreneurs to create new businesses and jobs. No one knows what innovative products and services will emerge.
That's the beauty of free enterprise, but it also makes it a hard sell politically. Unless voters have figured out no amount of government spending is going to restore the old status quo.
Michael Barone,The Examiner's senior political analyst, can be contacted at mbarone@washingtonexaminer.com. His column appears Wednesday and Sunday, and his stories and blog posts appear on ExaminerPolitics.com.
By: Michael Barone 06/18/11 8:05 PM
Two years ago, in June 2009, the American economy emerged from recession, according to the National Bureau of Economic Research. But as this week's Economist noted, with typical British understatement, "The recovery has been a disappointment."
And maybe not a recovery for long. Robert Shiller, the economist who first identified the housing bubble, said last week that we may be headed for recession again. "Whether we call it a double dip or not," he told Reuters, "there is a risk."
His Case/Shiller housing price index indicated that home prices in March slumped to levels not seen since March 2003, and Shiller says they may keep falling for 20 years.
As I look back on these years of economic tumult, I sometimes think of an off-the-record session arranged by National Review with Treasury Secretary Henry Paulson back in the fall of 2007.
I asked Paulson when the government was going to change the Securities and Exchange Commission regulation under which the credit rating agencies were paid by the sellers rather than the buyers of securities. That arrangement gave the credit agencies an incentive to give high ratings to the mortgage-backed securities that later turned sour.
Oh, we'll get to that, Paulson said, when we get through the rough stuff we face right now. Of course he had not yet gotten to the stuff that was so rough that, as he wrote in his memoir, he had to leave meetings to throw up.
With the benefit of hindsight, it seems that our leaders, in both the Bush and the Obama administrations, responded to crises and challenges all too often with measures that attempted to revive the old pre-financial crisis economy rather than with policies that would allow a new economy to grow.
As in Paulson's comment, the thinking seems to have been that if we can just get things back in place then we can attack the underlying problems.
Such was the theory behind the now seemingly puny stimulus package agreed to by George W. Bush and Democratic congressional leaders in early 2008. And behind the Federal Reserve's rescue package for Bear Stearns in March 2008.
It was behind the argument that Paulson used to persuade Congress to pass the $700 billion Troubled Asset Relief Program package in October 2008. He said he'd use the money to buy toxic mortgage-backed securities from the banks, but then decided to lend the banks tranches of $25 billion instead.
The Obama Democrats' February 2009 stimulus package doled out one-third of its $787 billion to state and local governments so that public-sector employees (and union members) would not lose their jobs as so many private-sector employees were. That worked for a while but did not prevent painful cuts and layoffs later.
Then there were the various mortgage forbearance programs, designed to prevent foreclosures. Precious few homeowners took advantage of them, and many who did ended up losing their houses anyway.
And of course there was cash for clunkers, which increased car sales in the summer only to see them decline in the fall. Hundreds of millions were spent, but with no permanent effect except to increase used-car prices because clunkers traded in had to be junked.
Decision makers have responded as if they were facing liquidity crises (we don't have enough cash to pay off debts immediately) instead of solvency crises (we will never be able to pay off these debts). Too often pain has not been prevented, but just postponed -- and prolonged.
In retrospect much of the pain could not be avoided. As economist Tyler Cowen has put it, we were not as rich as we thought we were. Housing bubble prices did not turn out to be real wealth, unless you sold out at the peak and moved to a cave.
Trying to put everyone back in the position they once thought they were in simply won't work. But it does sound attractive politically. People can remember what life was like in the past.
We don't, however, know what it will be like in the future. Republicans want less government spending and more leeway for entrepreneurs to create new businesses and jobs. No one knows what innovative products and services will emerge.
That's the beauty of free enterprise, but it also makes it a hard sell politically. Unless voters have figured out no amount of government spending is going to restore the old status quo.
Michael Barone,The Examiner's senior political analyst, can be contacted at mbarone@washingtonexaminer.com. His column appears Wednesday and Sunday, and his stories and blog posts appear on ExaminerPolitics.com.
Prepare to Have Your Email Read by the NSA
Prepare to Have Your Email Read by the NSA
Adam Clark Estes
With a new major hacking incident seemingly daily, the Department of Defense is scrambling to find the right shield against future for attacks. But why hide behind a shield when you can charge onto the battlefield underneath the invisible but ironclad cloak of the National Security Agency? That's exactly how the DoD is mounting it's first strike back at the hackers--a preemptive strike that will increase online surveillance at defense contractors by partnering with internet service providers for privileged access to the rivers of data flowing through their cables. AT&T, Verizon and CenturyLink are all on board.
Giving the NSA more access to the same internet tubes that power your Gmail account sounds a little invasive. At least that's what James X. Dempsey, vice president for public policy at the civil liberties watchdog group the Center for Democracy and Technology. "We wouldn’t want this to become a backdoor form of surveillance," Dempsey told The Washington Post, referring to the pilot program that DoD insists will remain limited to the contractors working closely with the government.
"The U.S. government will not be monitoring, intercepting or storing any private-sector communications," Deputy Secretary William J. Lynn III said Thursday at a global security conference in Paris. However, he added, "We hope the … cyber pilot can be the beginning of something bigger. It could serve as a model that can be transported to other critical infrastructure sectors, under the leadership of the Department of Homeland Security.”
Citing recent attacks on government contractors like Lockheed Martin, Lynn is taking a defensive stance on the privacy issue--pun intended. In other words, the NSA program will test out what some would call surveillance techniques on outside parties, and when the program is ready, it's not out of the question that the government would move it to the private sector. It makes sense that the DoD is being aggressive. As Reuters reports, the government is getting pretty desperate:
Terabytes of data are flying out the door, and billions of dollars are lost in remediation costs and reputational harm, government and private security experts said in interviews. The head of the U.S. military's Cyber Command, General Keith Alexander, has estimated that Pentagon computer systems are probed by would-be assailants 250,000 times each hour.
Cyber intrusions are now a fact of life, and a widely accepted cost of doing business.
"We don't treat it as if it's here today, gone tomorrow," said Jay Opperman, Comcast Corp.'s senior director of security and privacy. "It's like an insect infestation. Once you've got it, you never get rid of it."
We all saw Men in Black. And Hackers. And The Matrix. Sometimes, in the face of an invasion, the government ought to protect itself and its citizens from danger. That's basically why an institution like the Department of Defense exists--nobody will argue with that.
But another sort of danger is the fact that, in the context of cybercrime, the public understands so very little about the terms of the government's efforts. Poll Middle America about what "DDoS attack" or "Stuxnet-like weapons" are. Even the term "fingerprints of malicious code" from The Washington Post coverage of the NSA surveillance program leaves lots of leeway for better informed officials to define the rules of engagement. By its very nature a virtual attack is much harder to visualize than a missile heading to Washington DC. Apologies for the Cold War-style reference, but the Pentagon seems as confused now as they did then about how to balance the actual defense against cyber attackers and the propaganda campaign to win the public's support.
Which brings us to the mixed messages problem. The other line of narrative around the internet and government protecting the people is a presumably more docile one: the struggle for privacy in the age of Facebook. As enterprising Senators go head to head with the social network and the Google and everyone, lambasting them for deceitfully monitoring American citizens with their confusing privacy policies and location tracking programs, news of a clandestine agreement between internet service providers and the NSA, the most secret of the secret agencies, feels kind of icky. Like a hypocritical bed bug invasion or something.
SourcesNSA allies with Internet carriers to thwart cyber attacks against defense firms, Ellen Nakashima, Washington Post
U.S. Government In Cyber Fight But Can't Keep Up, Phil Stewart, Diane Bartz, Jim Wolf and Jeff Mason, Reuters
Adam Clark Estes
With a new major hacking incident seemingly daily, the Department of Defense is scrambling to find the right shield against future for attacks. But why hide behind a shield when you can charge onto the battlefield underneath the invisible but ironclad cloak of the National Security Agency? That's exactly how the DoD is mounting it's first strike back at the hackers--a preemptive strike that will increase online surveillance at defense contractors by partnering with internet service providers for privileged access to the rivers of data flowing through their cables. AT&T, Verizon and CenturyLink are all on board.
Giving the NSA more access to the same internet tubes that power your Gmail account sounds a little invasive. At least that's what James X. Dempsey, vice president for public policy at the civil liberties watchdog group the Center for Democracy and Technology. "We wouldn’t want this to become a backdoor form of surveillance," Dempsey told The Washington Post, referring to the pilot program that DoD insists will remain limited to the contractors working closely with the government.
"The U.S. government will not be monitoring, intercepting or storing any private-sector communications," Deputy Secretary William J. Lynn III said Thursday at a global security conference in Paris. However, he added, "We hope the … cyber pilot can be the beginning of something bigger. It could serve as a model that can be transported to other critical infrastructure sectors, under the leadership of the Department of Homeland Security.”
Citing recent attacks on government contractors like Lockheed Martin, Lynn is taking a defensive stance on the privacy issue--pun intended. In other words, the NSA program will test out what some would call surveillance techniques on outside parties, and when the program is ready, it's not out of the question that the government would move it to the private sector. It makes sense that the DoD is being aggressive. As Reuters reports, the government is getting pretty desperate:
Terabytes of data are flying out the door, and billions of dollars are lost in remediation costs and reputational harm, government and private security experts said in interviews. The head of the U.S. military's Cyber Command, General Keith Alexander, has estimated that Pentagon computer systems are probed by would-be assailants 250,000 times each hour.
Cyber intrusions are now a fact of life, and a widely accepted cost of doing business.
"We don't treat it as if it's here today, gone tomorrow," said Jay Opperman, Comcast Corp.'s senior director of security and privacy. "It's like an insect infestation. Once you've got it, you never get rid of it."
We all saw Men in Black. And Hackers. And The Matrix. Sometimes, in the face of an invasion, the government ought to protect itself and its citizens from danger. That's basically why an institution like the Department of Defense exists--nobody will argue with that.
But another sort of danger is the fact that, in the context of cybercrime, the public understands so very little about the terms of the government's efforts. Poll Middle America about what "DDoS attack" or "Stuxnet-like weapons" are. Even the term "fingerprints of malicious code" from The Washington Post coverage of the NSA surveillance program leaves lots of leeway for better informed officials to define the rules of engagement. By its very nature a virtual attack is much harder to visualize than a missile heading to Washington DC. Apologies for the Cold War-style reference, but the Pentagon seems as confused now as they did then about how to balance the actual defense against cyber attackers and the propaganda campaign to win the public's support.
Which brings us to the mixed messages problem. The other line of narrative around the internet and government protecting the people is a presumably more docile one: the struggle for privacy in the age of Facebook. As enterprising Senators go head to head with the social network and the Google and everyone, lambasting them for deceitfully monitoring American citizens with their confusing privacy policies and location tracking programs, news of a clandestine agreement between internet service providers and the NSA, the most secret of the secret agencies, feels kind of icky. Like a hypocritical bed bug invasion or something.
SourcesNSA allies with Internet carriers to thwart cyber attacks against defense firms, Ellen Nakashima, Washington Post
U.S. Government In Cyber Fight But Can't Keep Up, Phil Stewart, Diane Bartz, Jim Wolf and Jeff Mason, Reuters
Union Targets Target and Misses
Union Targets Target and Misses
The United Food & Commercial Workers, following years of failed efforts at unionized mega-retailer Wal-Mart, grocer Whole Foods and seeing some of its unionized employers like A&P file for bankruptcy, had set its sights on a new target: Target.
On Friday, the National Labor Relations Board conducted a secret-ballot election in Valley Stream, NY at one of Target’s approximately 1750 U.S. stores. If the union won, it would have been the first-ever unionized Target in the nation. Ultimately, the union failed.
After the employees cast their secret ballot and the NLRB counted the ballots, the union lost 137-85.
The union, of course, is displeased with the employees choice and is blaming the retailer for its loss.
“Target did everything they could to deny these workers a chance at the American Dream,” said Bruce W. Both, president of United and Commercial Workers Union Local 1500, in a statement. “However, the workers’ pursuit of a better life and the ability to house and feed their families is proving more powerful. These workers are not backing down from this fight. They are demanding another election.”
Blaming the company is, of course, the easiest thing to do for a union like the UFCW. Assigning blame is, for the UFCW, than admitting it is possible that the majority of the Target employees realized that the UFCW’s hypocritical history, its brushes with corruption, history of lengthy strikes (including the current threat to have 62,000 UFCW members in Southern California out on strike any day) may not be a suitable version of the ‘American Dream.’
Of course, there are those (somewhere) who may appreciate UFCW bosses.
“I bring reason to your ears, and, in language as plain as ABC, hold up truth to your eyes.” Thomas Paine, December 23, 1776
The United Food & Commercial Workers, following years of failed efforts at unionized mega-retailer Wal-Mart, grocer Whole Foods and seeing some of its unionized employers like A&P file for bankruptcy, had set its sights on a new target: Target.
On Friday, the National Labor Relations Board conducted a secret-ballot election in Valley Stream, NY at one of Target’s approximately 1750 U.S. stores. If the union won, it would have been the first-ever unionized Target in the nation. Ultimately, the union failed.
After the employees cast their secret ballot and the NLRB counted the ballots, the union lost 137-85.
The union, of course, is displeased with the employees choice and is blaming the retailer for its loss.
“Target did everything they could to deny these workers a chance at the American Dream,” said Bruce W. Both, president of United and Commercial Workers Union Local 1500, in a statement. “However, the workers’ pursuit of a better life and the ability to house and feed their families is proving more powerful. These workers are not backing down from this fight. They are demanding another election.”
Blaming the company is, of course, the easiest thing to do for a union like the UFCW. Assigning blame is, for the UFCW, than admitting it is possible that the majority of the Target employees realized that the UFCW’s hypocritical history, its brushes with corruption, history of lengthy strikes (including the current threat to have 62,000 UFCW members in Southern California out on strike any day) may not be a suitable version of the ‘American Dream.’
Of course, there are those (somewhere) who may appreciate UFCW bosses.
“I bring reason to your ears, and, in language as plain as ABC, hold up truth to your eyes.” Thomas Paine, December 23, 1776
The Coming Crime Wave
The Coming Crime Wave
Caution: this is not a snarky post. Zero-percent snark. I want to connect a few dots for you. Additional caution: you may want to sit down.
* * * * * * * * *
1 USA Today headline: Record number in government anti-poverty programs
Government anti-poverty programs... now serve a record one in six Americans and are continuing to expand... More than 50 million Americans are on Medicaid, the federal-state program aimed principally at the poor...
...More than 40 million people get food stamps, an increase of nearly 50% during the economic downturn, according to government data through May. The program has grown steadily for three years...
...Close to 10 million receive unemployment insurance, nearly four times the number from 2007. Benefits have been extended by Congress eight times beyond the basic 26-week program, enabling the long-term unemployed to get up to 99 weeks of benefits. Caseloads peaked at nearly 12 million in January — "the highest numbers on record," says Christine Riordan of the National Employment Law Project, which advocates for low-wage workers.
More than 4.4 million people are on welfare, an 18% increase during the recession...
In February 2009 Robert Rector, quoted in the London Sunday Times, predicted that the Obama Democrats' expansion of welfare, food stamps and unemployment would be disastrous.
One of the few undisputed triumphs of American government of the past 20 years – the sweeping welfare reform programme that sent millions of dole claimants back to work – has been plunged into jeopardy by billions of dollars in state handouts included in the president’s controversial economic stimulus package...
...Robert Rector, a prominent welfare researcher who was one of the architects of Clinton's 1996 reform bill, warned last week that Obama’s stimulus plan was a “welfare spendathon” that would amount to the largest one-year increase in government handouts in American history... Despite dire warnings that reduced benefits for single mothers and deadlines on entitlement would create a social calamity – one liberal senator warned at the time that children would be “sleeping on grates” – the 1996 reforms cut welfare rolls from more than 5m families in 1995 to below 2m a decade later without a discernible increase in hardship.
In other words, the Obama 'Stimulus' program was intended to massively expand the welfare state. But wait! There's more!
* * * * * * * * *
2 Increasing welfare and food stamps leads to more kids born to unwed mothers
The statistical link between the availability of welfare and out-of-wedlock births is conclusive. There have been dozens of studies that link the availability of welfare benefits to out-of-wedlock births.
One study found that a 50 percent increase in the value of AFDC and foodstamp payments led to a 43 percent increase in the number of out-of-wedlock births.
A 1996 paper describes the correlation in ominous terms.
...Out-of-wedlock births are strongly related to welfare dependency. A 1 percent increase in the welfare dependent population in a state increases the number of births to single mothers by about 0.5 percent...
...Welfare dependency reduces employment. A 1 percent increase in the dependent population increases the number who are not employed by about 0.1 percent... An increase in welfare benefits reduces employment by increasing the number of welfare dependents. An increase in AFDC benefits by 1 percent of average income increases the number who are not employed by about 0.5.
In other words, if you ratchet up welfare benefits, you get reduced employment and more single-parent families.
Now, why am I telling you this?
* * * * * * * * *
3 Single-parent families correlate to higher crime rates
In 1995, Dr. Patrick Fagan wrote a seminal summary of the situation: "Over the past thirty years, the rise in violent crime parallels the rise in families abandoned by fathers... High-crime neighborhoods are characterized by high concentrations of families abandoned by fathers... The rate of violent teenage crime corresponds with the number of families abandoned by fathers...
"Neighborhoods with a high degree of religious practice are not high-crime neighborhoods... Even in high-crime inner-city neighborhoods, well over 90 percent of children from safe, stable homes do not become delinquents. By contrast only 10 percent of children from unsafe, unstable homes in these neighborhoods avoid crime... Criminals capable of sustaining marriage gradually move away from a life of crime after they get married."
Of 23 peer-reviewed U.S. studies since 2000, 20 found that family structure directly affects crime and/or delinquency.
"[R]esearch strongly suggests both that young adults and teens raised in single-parent homes are more likely to commit crimes, and that communities with high rates of family fragmentation (especially unwed childbearing) suffer higher crime rates as a result."
For example, a 23-year study found that nearly 90% of the change in violent crime rates can be attributed to the change in percentages of out-of-wedlock births (divorce rates, on the other hand, had no relationship with crime).
In The Atlantic Monthly, Barbara Dafoe Whitehead noted that the "relationship [between single-parent families and crime] is so strong that controlling for family configuration erases the relationship between race and crime and between low income and crime. This conclusion shows up time and again in the literature. The nation's mayors, as well as police officers, social workers, probation officers, and court officials, consistently point to family break up as the most important source of rising rates of crime."
Let me repeat the most important statement -- "controlling for family configuration erases the relationship between race and crime and between low income and crime."
Single-parent families generally lead to increased levels of crime; and there are no significant differences between blacks, whites, or any other race when it comes to this simple fact.
* * * * * * * * *
4 Recap:
• Fact: There are a record number of Americans dependent upon government anti-poverty programs thanks to the Obama Democrats
• Fact: Expanded access to welfare and food stamps greatly increases the number of children born to unwed mothers
• Fact: Single-parent families correlate to higher crime rates
• Conclusion: with the unprecedented increase in welfare, food stamps and unemployment, we will also see an unparalleled increase in violent crime within the next dozen or so years.
Obama and his Democrats sycophants in Congress will have created hundreds of thousands of single-parent families. These kids, born out-of-wedlock, will find themselves trapped in lives of criminality at far higher rates than kids from two-parent families.
Fast forward a dozen years, give or take a couple, and we will see a true Obama Crime Wave. I predict that we will see an unprecedented increase in crime. In fact, you could call it historic.
The most important question is not whether it will happen. The question is how bad it will get.
Caution: this is not a snarky post. Zero-percent snark. I want to connect a few dots for you. Additional caution: you may want to sit down.
* * * * * * * * *
1 USA Today headline: Record number in government anti-poverty programs
...More than 40 million people get food stamps, an increase of nearly 50% during the economic downturn, according to government data through May. The program has grown steadily for three years...
...Close to 10 million receive unemployment insurance, nearly four times the number from 2007. Benefits have been extended by Congress eight times beyond the basic 26-week program, enabling the long-term unemployed to get up to 99 weeks of benefits. Caseloads peaked at nearly 12 million in January — "the highest numbers on record," says Christine Riordan of the National Employment Law Project, which advocates for low-wage workers.
More than 4.4 million people are on welfare, an 18% increase during the recession...
In February 2009 Robert Rector, quoted in the London Sunday Times, predicted that the Obama Democrats' expansion of welfare, food stamps and unemployment would be disastrous.
One of the few undisputed triumphs of American government of the past 20 years – the sweeping welfare reform programme that sent millions of dole claimants back to work – has been plunged into jeopardy by billions of dollars in state handouts included in the president’s controversial economic stimulus package...
...Robert Rector, a prominent welfare researcher who was one of the architects of Clinton's 1996 reform bill, warned last week that Obama’s stimulus plan was a “welfare spendathon” that would amount to the largest one-year increase in government handouts in American history... Despite dire warnings that reduced benefits for single mothers and deadlines on entitlement would create a social calamity – one liberal senator warned at the time that children would be “sleeping on grates” – the 1996 reforms cut welfare rolls from more than 5m families in 1995 to below 2m a decade later without a discernible increase in hardship.
In other words, the Obama 'Stimulus' program was intended to massively expand the welfare state. But wait! There's more!
* * * * * * * * *
2 Increasing welfare and food stamps leads to more kids born to unwed mothers
The statistical link between the availability of welfare and out-of-wedlock births is conclusive. There have been dozens of studies that link the availability of welfare benefits to out-of-wedlock births.
A 1996 paper describes the correlation in ominous terms.
...Out-of-wedlock births are strongly related to welfare dependency. A 1 percent increase in the welfare dependent population in a state increases the number of births to single mothers by about 0.5 percent...
...Welfare dependency reduces employment. A 1 percent increase in the dependent population increases the number who are not employed by about 0.1 percent... An increase in welfare benefits reduces employment by increasing the number of welfare dependents. An increase in AFDC benefits by 1 percent of average income increases the number who are not employed by about 0.5.
In other words, if you ratchet up welfare benefits, you get reduced employment and more single-parent families.
Now, why am I telling you this?
* * * * * * * * *
3 Single-parent families correlate to higher crime rates
In 1995, Dr. Patrick Fagan wrote a seminal summary of the situation: "Over the past thirty years, the rise in violent crime parallels the rise in families abandoned by fathers... High-crime neighborhoods are characterized by high concentrations of families abandoned by fathers... The rate of violent teenage crime corresponds with the number of families abandoned by fathers...
"Neighborhoods with a high degree of religious practice are not high-crime neighborhoods... Even in high-crime inner-city neighborhoods, well over 90 percent of children from safe, stable homes do not become delinquents. By contrast only 10 percent of children from unsafe, unstable homes in these neighborhoods avoid crime... Criminals capable of sustaining marriage gradually move away from a life of crime after they get married."
Of 23 peer-reviewed U.S. studies since 2000, 20 found that family structure directly affects crime and/or delinquency.
"[R]esearch strongly suggests both that young adults and teens raised in single-parent homes are more likely to commit crimes, and that communities with high rates of family fragmentation (especially unwed childbearing) suffer higher crime rates as a result."
For example, a 23-year study found that nearly 90% of the change in violent crime rates can be attributed to the change in percentages of out-of-wedlock births (divorce rates, on the other hand, had no relationship with crime).
In The Atlantic Monthly, Barbara Dafoe Whitehead noted that the "relationship [between single-parent families and crime] is so strong that controlling for family configuration erases the relationship between race and crime and between low income and crime. This conclusion shows up time and again in the literature. The nation's mayors, as well as police officers, social workers, probation officers, and court officials, consistently point to family break up as the most important source of rising rates of crime."
Let me repeat the most important statement -- "controlling for family configuration erases the relationship between race and crime and between low income and crime."
Single-parent families generally lead to increased levels of crime; and there are no significant differences between blacks, whites, or any other race when it comes to this simple fact.
* * * * * * * * *
4 Recap:
• Fact: There are a record number of Americans dependent upon government anti-poverty programs thanks to the Obama Democrats
• Fact: Expanded access to welfare and food stamps greatly increases the number of children born to unwed mothers
• Fact: Single-parent families correlate to higher crime rates
• Conclusion: with the unprecedented increase in welfare, food stamps and unemployment, we will also see an unparalleled increase in violent crime within the next dozen or so years.
Obama and his Democrats sycophants in Congress will have created hundreds of thousands of single-parent families. These kids, born out-of-wedlock, will find themselves trapped in lives of criminality at far higher rates than kids from two-parent families.
Fast forward a dozen years, give or take a couple, and we will see a true Obama Crime Wave. I predict that we will see an unprecedented increase in crime. In fact, you could call it historic.
The most important question is not whether it will happen. The question is how bad it will get.
The Communist Economy: Castro’s Daughter Expands Cuba’s Child Sex Tourism
The Communist Economy: Castro’s Daughter Expands Cuba’s Child Sex Tourism
American leftists love to fantasize and wear trendy T-shirts about Cuba, the Castro brothers, and communism, and how wonderful it all is. There are some startling stories out of Cuba this weekend that strip all petals from that idealist Marxist rose. Is there a connection to California?
Fausta’s blog has two updates from the failed Marxist island, one of which causes me great alarm about something that has just occurred here in the San Francisco bay area, that may “tie in” to the Cuban sex tourism business.
First: There is much discussion why Venezuelan strong-man Hugo Chavez chose to have his mysterious “pelvic” surgery in Cuba instead of in his own nation, and why his recovery is taking so long, and how much he is governing his very troubled economy from……afar. Very odd.
Second: A very inconvenient fact that anti-capitalists in America will ignore: Dictator Fidel’s daughter, Mariela, is now expanding the Cuban “sex tourism” industry:
“In a Communist country, with sex tourism, and where your children belong to the state, the dictator’s daughter talks about the latest plan (h/t Gates of Vienna),
Cuba embraces Dutch-style sex education
Cuba can learn a thing or two from Dutch-styled sex education. That’s the view of Mariele Castro EspÃn, daughter of Cuban President Raúl Castro, espoused in an interview with Radio Netherlands Worldwide.
Mariela Castro is director of the Cuban National Center for Sex Education, a government-funded body, whose aim is the development of the development of a culture of sexuality that is “full, pleasurable and responsible, as well as to promote the full exercise of sexual rights.” She will travel to the Netherlands in the near future to for discussions with institutions and government bodies related to sex education.”
Before you read more than ever wanted to know about Cuban sex tourism below, review my story from last week, in which I was trying to figure out what government agency, vote, or fiat had facilitated new, direct flights from Oakland, California airport to Havana. The only thing that is obvious, is that the flights were requested by communist-Castro-loving Oakland Congresswoman Barbara Lee (D- but you could guess that.)
Oakland, California’s economy is an example of 40 years of failed liberal, Democrat corruptocracy. The city is mired in debt, and laying off teachers and cops, while ignoring meaningful pension reform.
Oakland has been most notable in recent months for what I call the “astro-turf- “riots-of-convenience.” Hordes of angry black people who never knew Oscar Grant, have “expressed their sympathy” for his accidental shooting by a transit cop by busting up the downtown stores a several times and stealing Nikes. It’s so bad that merchants are hiring their own cops. [read about the Oakland riots here.]
Also, the Oakland Public Schools recently made national news when they began a new program teaching “genderless sex education” to K-6 students: Contractors came in with books, videos and demonstrations to teach kids that you can choose to be a boy, or a girl or neither and be something else tomorrow. The drop-out rate in Oakland public schools is 40%, but the LGBT community demands class time to teach children about anal sex and confusing their genders.
Bottom line is Oakland, California is a city devolved into social, moral, economic chaos. Idealogues and crooks are in charge, and all of them are Democrats.
So is it any surprise that prostitution, especially child prostitution, is a HUGE problem in Oakland, California?
Read the article below to learn that young Afro-Cuban boys and girls are the most-requested items in the Cuban sex industry “buffet.” We have no way of knowing, and no one in the bay area seems to be asking Congresswoman Lee the hard questions about who will be on these direct flights between Oakland and Cuba, or why, and how much screening or security will be required of passengers. Trust me, there is NO GOOD REASON why a Marxist-sympathizer like Rep. Lee has organized these flights. The fact that Castro’s daughter is travelling the world to pimp her pimps and Cuban children should serve as a warning to anyone who thinks a communistic economy works.
Cuba is enslaving its children to pay the bills. Is it also going to tap into Oakland, California’s “talent pool” of young needy blacks from broken families? Oakland police, if any are left to investigate……do we have a problem?
Source: "Prostitucion-CUBA documentary"
More links to information on Cuban sex tourism, including why President Bush restricted travel to Cuba to curtail the sex slavery industry.
Read all of it here. Here is an excerpt. It is sickening:
“Tourism is Cuba’s most important moneymaker, generating almost $2 billion last year. In Spain alone, twenty flights leave for Havana every week, carrying to the Caribbean island a yearly total of some 200,000 single male tourists, all in search of cut-price sex. (Tunku Varadarajan, “Time-bomb that Flies in From Havana,” The Times, July 10, 1996. Lexis-Nexis document.)
Most tourists come from Canada, Spain and Italy. Tourism has recently replaced sugar as the single most important export in the economy. Much of this tourism, however, centers on travel for sex. Foreign tour companies use code words such as “Cuba Amor” to advertise package tours. At least one Spanish travel company offers a catalogue of Cuban women who would serve as companions during a tourist’s stay. (Adams, p. 1A).
By 1995 the Italian travel magazine Viaggiare recognized Cuba as the “paradise of sexual tourism,” awarding it five stars for its “general erotic level.” According to the magazine, Cuba beat out such competitors as Brazil and Thailand. (Adams, p. 1A; Dalia Acosta, Culture Tourism: Cuba Brushes up its Tourist Image, Interpress Service, Sept. 19, 1997. Lexis-Nexis).
Some reports suggest girls will sell sex acts for less than $10 and sometimes for as little as $3. Inexperienced women and girls can be persuaded and/or tricked into spending a whole night with a client for the cost of a meal, a few drinks or small gift. “Habitual sex tourists state that it costs them less to spend two weeks indulging themselves in Cuba than it does in other centers of sex tourism, such as the Philippines and Thailand. (O’Connell Davidson, p.41).
Sex tourism is often a means to satisfy very specific sexual preferences. Many men choose to travel to particular destinations because they know that it is possible to pursue their tastes more cheaply and safely. Pedophiles are an obvious example of this type of sex tourist, but more common are men who have a preference for experiencing multiple, anonymous sexual encounters with teenagers and women in their early 20s.
Sexual access to girls between the ages of 14 and 16 is not difficult to attain, and girls between the ages of 16 and 18 are very accessible. More disturbing still, such tourists are paying older Cuban women and men, often prostitutes themselves, to procure 14 and 15-year old boys and girls for them.
Sex tourists are also frequently drawn to Cuba because of the prospect of exotic encounters that contain a racial component. This is especially the case for those consumers who find it difficult to satisfy racialized fantasies at home.
As is the case elsewhere in Latin America, sex tourists view Cuban women as caliente–hot. In addition Davidson reports than many sex tourists are either openly racist and/or fascinated with Black sexuality, which they imagine to be untamed and uninhibited. (O’Connell Davidson, p. 46) Interestingly, the government of Cuba uses racial stereotypes “showcasing ‘traditional’ Afro-Cuban religious rituals and art, ‘traditional’ Afro-Cuban music, and of course, Afro-Cuban women (Fusco, p. 67). in conjunction with other images of Cuba as tropical, exotic and full of scantily clad native women.
These same stereotypes carry over to the sex tourism industry and feed into the sexual fantasies of the male tourist. As Davidson notes, many more jineteras are Afro-Cuban as opposed to mixed race or white. (O’Connell Davidson, p. 45. See also Fusco, p. 64).
The explosive growth of sex tourism in Cuba in the 1990s has coincided with the island becoming a major destination for international tourists. The Cuban government began to emphasize foreign tourism as a development tool in the 1980s, in part as a response to a stagnant economy. (Espino, p. 153; 158). Said one foreign diplomat of the boom in prostitution, “the decline and fall of Cuba’s economy and the turn to attracting foreigners has made it inevitable. The only way for most of these kids to survive is to sell themselves. (Freed, p 1).”
Child prostitution in Oakland, CA
Child prostitution in Cuba in Spanish
American leftists love to fantasize and wear trendy T-shirts about Cuba, the Castro brothers, and communism, and how wonderful it all is. There are some startling stories out of Cuba this weekend that strip all petals from that idealist Marxist rose. Is there a connection to California?
Fausta’s blog has two updates from the failed Marxist island, one of which causes me great alarm about something that has just occurred here in the San Francisco bay area, that may “tie in” to the Cuban sex tourism business.
First: There is much discussion why Venezuelan strong-man Hugo Chavez chose to have his mysterious “pelvic” surgery in Cuba instead of in his own nation, and why his recovery is taking so long, and how much he is governing his very troubled economy from……afar. Very odd.
Second: A very inconvenient fact that anti-capitalists in America will ignore: Dictator Fidel’s daughter, Mariela, is now expanding the Cuban “sex tourism” industry:
“In a Communist country, with sex tourism, and where your children belong to the state, the dictator’s daughter talks about the latest plan (h/t Gates of Vienna),
Cuba embraces Dutch-style sex education
Cuba can learn a thing or two from Dutch-styled sex education. That’s the view of Mariele Castro EspÃn, daughter of Cuban President Raúl Castro, espoused in an interview with Radio Netherlands Worldwide.
Mariela Castro is director of the Cuban National Center for Sex Education, a government-funded body, whose aim is the development of the development of a culture of sexuality that is “full, pleasurable and responsible, as well as to promote the full exercise of sexual rights.” She will travel to the Netherlands in the near future to for discussions with institutions and government bodies related to sex education.”
Before you read more than ever wanted to know about Cuban sex tourism below, review my story from last week, in which I was trying to figure out what government agency, vote, or fiat had facilitated new, direct flights from Oakland, California airport to Havana. The only thing that is obvious, is that the flights were requested by communist-Castro-loving Oakland Congresswoman Barbara Lee (D- but you could guess that.)
Oakland, California’s economy is an example of 40 years of failed liberal, Democrat corruptocracy. The city is mired in debt, and laying off teachers and cops, while ignoring meaningful pension reform.
Oakland has been most notable in recent months for what I call the “astro-turf- “riots-of-convenience.” Hordes of angry black people who never knew Oscar Grant, have “expressed their sympathy” for his accidental shooting by a transit cop by busting up the downtown stores a several times and stealing Nikes. It’s so bad that merchants are hiring their own cops. [read about the Oakland riots here.]
Also, the Oakland Public Schools recently made national news when they began a new program teaching “genderless sex education” to K-6 students: Contractors came in with books, videos and demonstrations to teach kids that you can choose to be a boy, or a girl or neither and be something else tomorrow. The drop-out rate in Oakland public schools is 40%, but the LGBT community demands class time to teach children about anal sex and confusing their genders.
Bottom line is Oakland, California is a city devolved into social, moral, economic chaos. Idealogues and crooks are in charge, and all of them are Democrats.
So is it any surprise that prostitution, especially child prostitution, is a HUGE problem in Oakland, California?
Read the article below to learn that young Afro-Cuban boys and girls are the most-requested items in the Cuban sex industry “buffet.” We have no way of knowing, and no one in the bay area seems to be asking Congresswoman Lee the hard questions about who will be on these direct flights between Oakland and Cuba, or why, and how much screening or security will be required of passengers. Trust me, there is NO GOOD REASON why a Marxist-sympathizer like Rep. Lee has organized these flights. The fact that Castro’s daughter is travelling the world to pimp her pimps and Cuban children should serve as a warning to anyone who thinks a communistic economy works.
Cuba is enslaving its children to pay the bills. Is it also going to tap into Oakland, California’s “talent pool” of young needy blacks from broken families? Oakland police, if any are left to investigate……do we have a problem?
More links to information on Cuban sex tourism, including why President Bush restricted travel to Cuba to curtail the sex slavery industry.
Read all of it here. Here is an excerpt. It is sickening:
“Tourism is Cuba’s most important moneymaker, generating almost $2 billion last year. In Spain alone, twenty flights leave for Havana every week, carrying to the Caribbean island a yearly total of some 200,000 single male tourists, all in search of cut-price sex. (Tunku Varadarajan, “Time-bomb that Flies in From Havana,” The Times, July 10, 1996. Lexis-Nexis document.)
Most tourists come from Canada, Spain and Italy. Tourism has recently replaced sugar as the single most important export in the economy. Much of this tourism, however, centers on travel for sex. Foreign tour companies use code words such as “Cuba Amor” to advertise package tours. At least one Spanish travel company offers a catalogue of Cuban women who would serve as companions during a tourist’s stay. (Adams, p. 1A).
By 1995 the Italian travel magazine Viaggiare recognized Cuba as the “paradise of sexual tourism,” awarding it five stars for its “general erotic level.” According to the magazine, Cuba beat out such competitors as Brazil and Thailand. (Adams, p. 1A; Dalia Acosta, Culture Tourism: Cuba Brushes up its Tourist Image, Interpress Service, Sept. 19, 1997. Lexis-Nexis).
Some reports suggest girls will sell sex acts for less than $10 and sometimes for as little as $3. Inexperienced women and girls can be persuaded and/or tricked into spending a whole night with a client for the cost of a meal, a few drinks or small gift. “Habitual sex tourists state that it costs them less to spend two weeks indulging themselves in Cuba than it does in other centers of sex tourism, such as the Philippines and Thailand. (O’Connell Davidson, p.41).
Sex tourism is often a means to satisfy very specific sexual preferences. Many men choose to travel to particular destinations because they know that it is possible to pursue their tastes more cheaply and safely. Pedophiles are an obvious example of this type of sex tourist, but more common are men who have a preference for experiencing multiple, anonymous sexual encounters with teenagers and women in their early 20s.
Sexual access to girls between the ages of 14 and 16 is not difficult to attain, and girls between the ages of 16 and 18 are very accessible. More disturbing still, such tourists are paying older Cuban women and men, often prostitutes themselves, to procure 14 and 15-year old boys and girls for them.
Sex tourists are also frequently drawn to Cuba because of the prospect of exotic encounters that contain a racial component. This is especially the case for those consumers who find it difficult to satisfy racialized fantasies at home.
As is the case elsewhere in Latin America, sex tourists view Cuban women as caliente–hot. In addition Davidson reports than many sex tourists are either openly racist and/or fascinated with Black sexuality, which they imagine to be untamed and uninhibited. (O’Connell Davidson, p. 46) Interestingly, the government of Cuba uses racial stereotypes “showcasing ‘traditional’ Afro-Cuban religious rituals and art, ‘traditional’ Afro-Cuban music, and of course, Afro-Cuban women (Fusco, p. 67). in conjunction with other images of Cuba as tropical, exotic and full of scantily clad native women.
These same stereotypes carry over to the sex tourism industry and feed into the sexual fantasies of the male tourist. As Davidson notes, many more jineteras are Afro-Cuban as opposed to mixed race or white. (O’Connell Davidson, p. 45. See also Fusco, p. 64).
The explosive growth of sex tourism in Cuba in the 1990s has coincided with the island becoming a major destination for international tourists. The Cuban government began to emphasize foreign tourism as a development tool in the 1980s, in part as a response to a stagnant economy. (Espino, p. 153; 158). Said one foreign diplomat of the boom in prostitution, “the decline and fall of Cuba’s economy and the turn to attracting foreigners has made it inevitable. The only way for most of these kids to survive is to sell themselves. (Freed, p 1).”
Child prostitution in Oakland, CA
Child prostitution in Cuba in Spanish
Trading Of Over The Counter Gold And Silver To Be Illegal Beginning July 15
Trading Of Over The Counter Gold And Silver To Be Illegal Beginning July 15
Submitted by Tyler Durden on 06/18/2011 13:23 -0400
One small step toward Executive Order 6102 part 2, and one giant leap for corruptcongressmankind.
From: FOREX.com
Date: Fri, Jun 17, 2011 at 6:11 PM
Subject: Important Account Notice Re: Metals Trading
To: xxx
Important Account Notice Re: Metals Trading
We wanted to make you aware of some upcoming changes to FOREX.com’s product offering. As a result of the Dodd-Frank Act enacted by US Congress, a new regulation prohibiting US residents from trading over the counter precious metals, including gold and silver, will go into effect on Friday, July 15, 2011.
In conjunction with this new regulation, FOREX.com must discontinue metals trading for US residents on Friday, July 15, 2011 at the close of trading at 5pm ET. As a result, all open metals positions must be closed by July 15, 2011 at 5pm ET.
We encourage you to wind down your trading activity in these products over the next month in anticipation of the new rule, as any open XAU or XAG positions that remain open prior to July 15, 2011 at approximately 5:00 pm ET will be automatically liquidated.
We sincerely regret any inconvenience complying with the new U.S. regulation may cause you. Should you have any questions, please feel free to contact our customer service team.
Sincerely,
The Team at FOREX.com
So far we have only received this warning from Forex.com. We are waiting to see which other dealers inform their customers that trading gold and silver over the counter will soon be illegal.
It appears that Forex.com's interpretation of the law stems primarily from Section 742(a) of the Dodd-Frank act which "prohibits any person [which again includes companies]from entering into, or offering to enter into, a transaction in any commodity with a person that is not an eligible contract participant or an eligible commercial entity, on a leveraged or margined basis."
Some prehistory from Hedge Fund Law Blog:
The Dodd-Frank Wall Street Reform and Consumer Protection Act (“Act”) has changed a number of laws in all of the securities acts including the Commodity Exchange Act. Two specific changes deal with certain transactions in commodities on the spot market. Specifically, Section 742 of the Act deals with retail commodity transactions. In this section, the text of the Commodity Exchange Act is amended to include new Section 2(c)(2)(D) (dealing with retail commodity transactions) and new Section 2(c)(2)(E) (prohibiting trading in spot forex with retail investors unless the trader is subject to regulations by a Federal regulatory agency, i.e. CFTC, SEC, etc.). According to a congressional rulemaking spreadsheet, these are effective 180 days from the date of enactment.
We provide an overview of the new sections and have reprinted them in full below.
New CEA Section 2(c)(2)(D) – Concerning Spot Commodities (Metals)
The central import of new CEA Section 2(c)(2)(D) is to broaden the CFTC’s power with respect to retail commodity transactions. Essentially any spot commodities transaction (i.e. spot metals) will be subject to CFTC jurisdiction and rulemaking authority. There is an exemption for commodities which are actually delivered within 28 days. While the CFTC wanted an exemption in which commodities would need to be delivered within 2 days, various coin collectors were able to lobby congress for a longer delivery period (see here).
It is likely we will see the CFTC propose regulations under this new section and we will keep you updated on any regulatory pronouncements with respect to this new section.
It is likely we will see the CFTC propose regulations under this new section and we will keep you updated on any regulatory pronouncements with respect to this new section.
New CEA Section 2(c)(2)(E) – Concerning Spot Forex
The central import of new CEA Section 2(c)(2)(E) is to regulate the spot forex markets. While the section requires the CFTC to finalize regulations with respect to spot forex (which were proposed earlier in January), it also, interestingly, provides oversight of the markets to other federal regulatory agencies such as the CFTC. This means that in the future, different market participants may be subject to different regulatory regimes with respect to trading in same underlying instruments. A Wall Street Journal article discusses the impact of this with respect to firms which engage in other activities in addition to retail forex transactions. The CFTC’s proposed rules establish certain compliance parameters for retail forex transactions, requires registration of retail forex managers and requires such managers to pass a new regulatory exam called the Series 34 exam. We do not yet know whether the other regulatory agencies will adopt rules similar to the CFTC or if they will write rules from scratch.
Next, from Henderson & Lyman:
The prohibition of Section 742(a) does not apply, however, if such a transaction results in actual delivery within 28 days, or creates an enforceable obligation to deliver between a seller and a buyer that have the ability to deliver, and accept delivery of, the commodity in connection with their lines of business. This may be problematic as in most spot metals trading virtually all contracts fail to meet these requirements. As a result, although the courts’ interpretation of Section 742(a) is unknown, Section 742(a) is likely to have a significantly negative impact on the OTC cash precious metals industry. Here too, it is essential that those who offer to be a counterparty to OTC metals transactions seek professional help to discuss possible operational and regulatory contingency plans.
The actual rule language exempts a transaction if it "results in actual delivery within 28 days or such other longer period as the Commission may determine by rule or regulation based upon the typical commercial practice in cash or spot markets for the commodity involved;" Alas, the commission has decided not to intervene and keep the exemption status window so small as to affect virtually all exchanges which transact in the gold and silver spot market.
More here:
Elimination of OTC Forex
Effective 90 days from its inception, the Dodd-Frank Act bans most retail OTC forex transactions. Section 742(c) of the Act states as follows:
…A person [which includes companies] shall not offer to, or enter into with, a person that is not an eligible contract participant, any agreement, contract, or transaction in foreign currency except pursuant to a rule or regulation of a Federal regulatory agency allowing the agreement, contract, or transaction under such terms and conditions as the Federal regulatory agency shall prescribe…
This provision will not come into effect, however, if the CFTC or another eligible federal body issues guidelines relating to the regulation of foreign currency within 90 days of its enactment. Registrants and the public are currently being encouraged by the CFTC to provide insight into how the Act should be enforced. See CFTC Rulemakings regarding OTC Derivatives located at the following website address, under Section XX – Foreign Currency (Retail Off Exchange). It is essential that OTC forex participants seek professional help to discuss possible operational and regulatory contingency plans.
Elimination of OTC Metals
As for OTC precious metals such as gold or silver, Section 742(a) of the Act prohibits any person [which again includes companies]from entering into, or offering to enter into, a transaction in any commodity with a person that is not an eligible contract participant or an eligible commercial entity, on a leveraged or margined basis. This provision intends to expand the narrow so called “Zelener fix” in the Farm Bill previously ratified by congress in 2008. The Farm Bill empowered the CFTC to pursue anti-fraud actions involving rolling spot transactions and/or other leveraged forex transactions without the need to prove that they are futures contracts. The Dodd-Frank Act now expands this authority to include virtually all retail cash commodity market products that involve leverage or margin – in other words OTC precious metals.
The prohibition of Section 742(a) does not apply, however, if such a transaction results in actual delivery within 28 days, or creates an enforceable obligation to deliver between a seller and a buyer that have the ability to deliver, and accept delivery of, the commodity in connection with their lines of business. This may be problematic as in most spot metals trading virtually all contracts fail to meet these requirements. As a result, although the courts’ interpretation of Section 742(a) is unknown, Section 742(a) is likely to have a significantly negative impact on the OTC cash precious metals industry. Here too, it is essential that those who offer to be a counterparty to OTC metals transactions seek professional help to discuss possible operational and regulatory contingency plans.
Small Pool Exemption Eliminated
Pursuant to Section 403 of Act, the “privateadviser” exemption, namelySection 203(b)(3) of the Investment Advisers Act of 1940 (“Advisers Act”), will be eliminated within one year of the Act’s effective date (July 21, 2011). Historically, many unregistered U.S. fund managers had relied on this exemption to avoid registration where they:
(1) had fewer than 15 clients in the past 12 months;
(2) do not hold themselves out generally to the public as investment advisers; and
(3) do not act as investment advisers to a registered investment company or business development company.
At present, advisers can treat the unregistered funds that they advise, rather than the investors in those funds, as their clients for purposes of this exemption. A common practice has thus evolved whereby certain advisers manage up to 14 unregistered funds without having to register under the Advisers Act. Accordingly, the removal of this exemption represents a significant shift in the regulatory landscape, as this practice will no longer be allowable in approximately one year.
Also an important consideration, the Dodd-Frank Act mandates new federal registration and regulation thresholds based on the amount of assets a manager has under management ("AUM"). Although not yet underway, it is possible that various states may enact legislation designed to create a similar registration framework for managers whose AUM fall beneath the new federal levels.
Accredited Investor Qualifications
Section 413(a) of the Act alters the financial qualifications of who can be considered an accredited investor, and thus a qualified as eligible participant (“QEP”). Specifically, the revised accredited investor standard includes only the following types of individuals:
1) A natural person whose individual net worth, or joint net worth with spouse, is at least $1,000,000, excluding the value of such investor's primary residence;
2) A natural person who had individual income in excess of $200,000 in each of the two most recent years or joint income with spouse in excess of $300,000 in each of those years and a reasonable expectation of reaching the same income level in the current year; or
3) A director, executive officer, or general partner of the issuer of the securities being offered or sold, or a director, executive officer, or general partner of a general partner of that issuer.
Based on this language, it is important to note that the revised accredited investor standard only applies to new investors and does not cover existing investors. However, additional subscriptions from existing investors are generally treated as requiring confirmation of continuing investor eligibility.
On July 27th, 2010, the SEC provided additional clarity regarding the valuation of an individual’s primary residence when calculating net worth. In particular, the SEC has interpreted this provision as follows:
Section 413(a) of the Dodd-Frank Act does not define the term “value,” nor does it address the treatment of mortgage and other indebtedness secured by the residence for purposes of the net worth calculation…Pending implementation of the changes to the Commission’s rules required by the Act, the related amount of indebtedness secured by the primary residence up to its fair market value may also be excluded. Indebtedness secured by the residence in excess of the value of the home should be considered a liability and deducted from the investor’s net worth.
h/t Ryan
Submitted by Tyler Durden on 06/18/2011 13:23 -0400
One small step toward Executive Order 6102 part 2, and one giant leap for corruptcongressmankind.
From: FOREX.com
Date: Fri, Jun 17, 2011 at 6:11 PM
Subject: Important Account Notice Re: Metals Trading
To: xxx
Important Account Notice Re: Metals Trading
We wanted to make you aware of some upcoming changes to FOREX.com’s product offering. As a result of the Dodd-Frank Act enacted by US Congress, a new regulation prohibiting US residents from trading over the counter precious metals, including gold and silver, will go into effect on Friday, July 15, 2011.
In conjunction with this new regulation, FOREX.com must discontinue metals trading for US residents on Friday, July 15, 2011 at the close of trading at 5pm ET. As a result, all open metals positions must be closed by July 15, 2011 at 5pm ET.
We encourage you to wind down your trading activity in these products over the next month in anticipation of the new rule, as any open XAU or XAG positions that remain open prior to July 15, 2011 at approximately 5:00 pm ET will be automatically liquidated.
We sincerely regret any inconvenience complying with the new U.S. regulation may cause you. Should you have any questions, please feel free to contact our customer service team.
Sincerely,
The Team at FOREX.com
So far we have only received this warning from Forex.com. We are waiting to see which other dealers inform their customers that trading gold and silver over the counter will soon be illegal.
It appears that Forex.com's interpretation of the law stems primarily from Section 742(a) of the Dodd-Frank act which "prohibits any person [which again includes companies]from entering into, or offering to enter into, a transaction in any commodity with a person that is not an eligible contract participant or an eligible commercial entity, on a leveraged or margined basis."
Some prehistory from Hedge Fund Law Blog:
The Dodd-Frank Wall Street Reform and Consumer Protection Act (“Act”) has changed a number of laws in all of the securities acts including the Commodity Exchange Act. Two specific changes deal with certain transactions in commodities on the spot market. Specifically, Section 742 of the Act deals with retail commodity transactions. In this section, the text of the Commodity Exchange Act is amended to include new Section 2(c)(2)(D) (dealing with retail commodity transactions) and new Section 2(c)(2)(E) (prohibiting trading in spot forex with retail investors unless the trader is subject to regulations by a Federal regulatory agency, i.e. CFTC, SEC, etc.). According to a congressional rulemaking spreadsheet, these are effective 180 days from the date of enactment.
We provide an overview of the new sections and have reprinted them in full below.
New CEA Section 2(c)(2)(D) – Concerning Spot Commodities (Metals)
The central import of new CEA Section 2(c)(2)(D) is to broaden the CFTC’s power with respect to retail commodity transactions. Essentially any spot commodities transaction (i.e. spot metals) will be subject to CFTC jurisdiction and rulemaking authority. There is an exemption for commodities which are actually delivered within 28 days. While the CFTC wanted an exemption in which commodities would need to be delivered within 2 days, various coin collectors were able to lobby congress for a longer delivery period (see here).
It is likely we will see the CFTC propose regulations under this new section and we will keep you updated on any regulatory pronouncements with respect to this new section.
It is likely we will see the CFTC propose regulations under this new section and we will keep you updated on any regulatory pronouncements with respect to this new section.
New CEA Section 2(c)(2)(E) – Concerning Spot Forex
The central import of new CEA Section 2(c)(2)(E) is to regulate the spot forex markets. While the section requires the CFTC to finalize regulations with respect to spot forex (which were proposed earlier in January), it also, interestingly, provides oversight of the markets to other federal regulatory agencies such as the CFTC. This means that in the future, different market participants may be subject to different regulatory regimes with respect to trading in same underlying instruments. A Wall Street Journal article discusses the impact of this with respect to firms which engage in other activities in addition to retail forex transactions. The CFTC’s proposed rules establish certain compliance parameters for retail forex transactions, requires registration of retail forex managers and requires such managers to pass a new regulatory exam called the Series 34 exam. We do not yet know whether the other regulatory agencies will adopt rules similar to the CFTC or if they will write rules from scratch.
Next, from Henderson & Lyman:
The prohibition of Section 742(a) does not apply, however, if such a transaction results in actual delivery within 28 days, or creates an enforceable obligation to deliver between a seller and a buyer that have the ability to deliver, and accept delivery of, the commodity in connection with their lines of business. This may be problematic as in most spot metals trading virtually all contracts fail to meet these requirements. As a result, although the courts’ interpretation of Section 742(a) is unknown, Section 742(a) is likely to have a significantly negative impact on the OTC cash precious metals industry. Here too, it is essential that those who offer to be a counterparty to OTC metals transactions seek professional help to discuss possible operational and regulatory contingency plans.
The actual rule language exempts a transaction if it "results in actual delivery within 28 days or such other longer period as the Commission may determine by rule or regulation based upon the typical commercial practice in cash or spot markets for the commodity involved;" Alas, the commission has decided not to intervene and keep the exemption status window so small as to affect virtually all exchanges which transact in the gold and silver spot market.
More here:
Elimination of OTC Forex
Effective 90 days from its inception, the Dodd-Frank Act bans most retail OTC forex transactions. Section 742(c) of the Act states as follows:
…A person [which includes companies] shall not offer to, or enter into with, a person that is not an eligible contract participant, any agreement, contract, or transaction in foreign currency except pursuant to a rule or regulation of a Federal regulatory agency allowing the agreement, contract, or transaction under such terms and conditions as the Federal regulatory agency shall prescribe…
This provision will not come into effect, however, if the CFTC or another eligible federal body issues guidelines relating to the regulation of foreign currency within 90 days of its enactment. Registrants and the public are currently being encouraged by the CFTC to provide insight into how the Act should be enforced. See CFTC Rulemakings regarding OTC Derivatives located at the following website address, under Section XX – Foreign Currency (Retail Off Exchange). It is essential that OTC forex participants seek professional help to discuss possible operational and regulatory contingency plans.
Elimination of OTC Metals
As for OTC precious metals such as gold or silver, Section 742(a) of the Act prohibits any person [which again includes companies]from entering into, or offering to enter into, a transaction in any commodity with a person that is not an eligible contract participant or an eligible commercial entity, on a leveraged or margined basis. This provision intends to expand the narrow so called “Zelener fix” in the Farm Bill previously ratified by congress in 2008. The Farm Bill empowered the CFTC to pursue anti-fraud actions involving rolling spot transactions and/or other leveraged forex transactions without the need to prove that they are futures contracts. The Dodd-Frank Act now expands this authority to include virtually all retail cash commodity market products that involve leverage or margin – in other words OTC precious metals.
The prohibition of Section 742(a) does not apply, however, if such a transaction results in actual delivery within 28 days, or creates an enforceable obligation to deliver between a seller and a buyer that have the ability to deliver, and accept delivery of, the commodity in connection with their lines of business. This may be problematic as in most spot metals trading virtually all contracts fail to meet these requirements. As a result, although the courts’ interpretation of Section 742(a) is unknown, Section 742(a) is likely to have a significantly negative impact on the OTC cash precious metals industry. Here too, it is essential that those who offer to be a counterparty to OTC metals transactions seek professional help to discuss possible operational and regulatory contingency plans.
Small Pool Exemption Eliminated
Pursuant to Section 403 of Act, the “privateadviser” exemption, namelySection 203(b)(3) of the Investment Advisers Act of 1940 (“Advisers Act”), will be eliminated within one year of the Act’s effective date (July 21, 2011). Historically, many unregistered U.S. fund managers had relied on this exemption to avoid registration where they:
(1) had fewer than 15 clients in the past 12 months;
(2) do not hold themselves out generally to the public as investment advisers; and
(3) do not act as investment advisers to a registered investment company or business development company.
At present, advisers can treat the unregistered funds that they advise, rather than the investors in those funds, as their clients for purposes of this exemption. A common practice has thus evolved whereby certain advisers manage up to 14 unregistered funds without having to register under the Advisers Act. Accordingly, the removal of this exemption represents a significant shift in the regulatory landscape, as this practice will no longer be allowable in approximately one year.
Also an important consideration, the Dodd-Frank Act mandates new federal registration and regulation thresholds based on the amount of assets a manager has under management ("AUM"). Although not yet underway, it is possible that various states may enact legislation designed to create a similar registration framework for managers whose AUM fall beneath the new federal levels.
Accredited Investor Qualifications
Section 413(a) of the Act alters the financial qualifications of who can be considered an accredited investor, and thus a qualified as eligible participant (“QEP”). Specifically, the revised accredited investor standard includes only the following types of individuals:
1) A natural person whose individual net worth, or joint net worth with spouse, is at least $1,000,000, excluding the value of such investor's primary residence;
2) A natural person who had individual income in excess of $200,000 in each of the two most recent years or joint income with spouse in excess of $300,000 in each of those years and a reasonable expectation of reaching the same income level in the current year; or
3) A director, executive officer, or general partner of the issuer of the securities being offered or sold, or a director, executive officer, or general partner of a general partner of that issuer.
Based on this language, it is important to note that the revised accredited investor standard only applies to new investors and does not cover existing investors. However, additional subscriptions from existing investors are generally treated as requiring confirmation of continuing investor eligibility.
On July 27th, 2010, the SEC provided additional clarity regarding the valuation of an individual’s primary residence when calculating net worth. In particular, the SEC has interpreted this provision as follows:
Section 413(a) of the Dodd-Frank Act does not define the term “value,” nor does it address the treatment of mortgage and other indebtedness secured by the residence for purposes of the net worth calculation…Pending implementation of the changes to the Commission’s rules required by the Act, the related amount of indebtedness secured by the primary residence up to its fair market value may also be excluded. Indebtedness secured by the residence in excess of the value of the home should be considered a liability and deducted from the investor’s net worth.
h/t Ryan
"No Knock Raid" - a Song About the Drug War's Deadliest Tactic
Reason.tv Replay: Lindy "No Knock Raid" - a Song About the Drug War's Deadliest Tactic
Original release date: June 15, 2011
Note: This video contains graphic images of violence and mature language. Viewer discretion is advised.
"No Knock Raid," written and performed by Toronto-based musician Lindy, is a searing indictment of one of the most aggressive, ubiquitous, and mistaken tactics in the War on Drugs.
Consider only the most recent raid to cause a national outrage: On May 5, 2011, 26-year-old Jose Guerena, who survived two tours in the Iraq War, was shot and killed during a raid on his house by a Pima County, Arizona SWAT team that fired dozens of bullets through his front door. Guerena, married and a father of two, had just finished a 12-hour shift at a local mine. Law enforcement sources claim he was involved in narco-trafficking but have yet to produce any evidence supporting that claim. Officers involved in the death have been cleared of wrongdoing.
Guerena's death is not an isolated incident. As USA Today reports, an astonishing 70,000 to 80,000 militarized police raids take place on a annual basis in America, many of them on mistaken suspects and many of them ending with injury or death for police and citizens alike.
As Reason Contributing Editor Radley Balko and others have documented, the militarization of standard police practice is a direct consequence of the modern-day War on Drugs, started 40 years ago by President Richard Nixon - and perpetuated by every administration since. (For a comprehensive report on the failure of the drug war to achieve any of its stated goals, read "Ending the Drug War: A Dream Deferred," by Law Enforcement Against Prohibition.)
"No Knock Raid" written and performed by Lindy.
Produced and directed by Hawk Jensen.
Performance footage directed by Victor Tavares and Zachary Koski.
Go to Reason.tv for downloadable versions of our videos. And subscribe to our YouTube channel to get automatic notification when new material goes live.
Original release date: June 15, 2011
Note: This video contains graphic images of violence and mature language. Viewer discretion is advised.
"No Knock Raid," written and performed by Toronto-based musician Lindy, is a searing indictment of one of the most aggressive, ubiquitous, and mistaken tactics in the War on Drugs.
Consider only the most recent raid to cause a national outrage: On May 5, 2011, 26-year-old Jose Guerena, who survived two tours in the Iraq War, was shot and killed during a raid on his house by a Pima County, Arizona SWAT team that fired dozens of bullets through his front door. Guerena, married and a father of two, had just finished a 12-hour shift at a local mine. Law enforcement sources claim he was involved in narco-trafficking but have yet to produce any evidence supporting that claim. Officers involved in the death have been cleared of wrongdoing.
Guerena's death is not an isolated incident. As USA Today reports, an astonishing 70,000 to 80,000 militarized police raids take place on a annual basis in America, many of them on mistaken suspects and many of them ending with injury or death for police and citizens alike.
As Reason Contributing Editor Radley Balko and others have documented, the militarization of standard police practice is a direct consequence of the modern-day War on Drugs, started 40 years ago by President Richard Nixon - and perpetuated by every administration since. (For a comprehensive report on the failure of the drug war to achieve any of its stated goals, read "Ending the Drug War: A Dream Deferred," by Law Enforcement Against Prohibition.)
"No Knock Raid" written and performed by Lindy.
Produced and directed by Hawk Jensen.
Performance footage directed by Victor Tavares and Zachary Koski.
Go to Reason.tv for downloadable versions of our videos. And subscribe to our YouTube channel to get automatic notification when new material goes live.
Click, Clack, Click: The Sound of Falling Dominoes Behind The Door of the Eurocalypse!
Click, Clack, Click: The Sound of Falling Dominoes Behind The Door of the Eurocalypse!
Submitted by Reggie Middleton on 06/19/2011 06:05 -0400
I have decried the virtual collapse of the EU banking system beginning in 2009, and through 2010 and 2011. I have even delivered keynote speeches at EU banks on the very same topic...
The points made in this video are, in my oh so not so humble opinion, incontrovertbe. As a matter of fact the farce, the political fame being played in the hold to maturity accounting arean is enough to spark both a bank run and a resulting banking collapse. I know my proclamations sounded rather bombastic when I first made them. They sounded sensationalist last year. Well, pray tell, how do they sound now?
UK banks abandon eurozone over Greek default fears
UK banks have pulled billions of pounds of funding from the eurozone as fears grow about the impact of a “Lehman-style” event connected to a Greek default.
Senior sources have revealed that leading banks, including Barclays and Standard Chartered, have radically reduced the amount of unsecured lending they are prepared to make available to eurozone banks, raising the prospect of a new credit crunch for the European banking system.
Standard Chartered is understood to have withdrawn tens of billions of pounds from the eurozone inter-bank lending market in recent months and cut its overall exposure by two-thirds in the past few weeks as it has become increasingly worried about the finances of other European banks.
Barclays has also cut its exposure in recent months as senior managers have become increasingly concerned about developments among banks with large exposures to the troubled European countries Greece, Ireland, Spain, Italy and Portugal.
In its interim management statement, published in April, Barclays reported a wholesale exposure to Spain of £6.4bn, compared with £7.2bn last June, while its exposure to Italy has fallen by more than £100m.
One source said it was “inevitable” that British banks would look to minimise their potential losses in the event the eurozone crisis were to get worse. “Everyone wants to ensure that they are not badly affected by the crisis,” said one bank executive.
Moves by stronger banks to cut back their lending to weaker banks is reminiscent of the build-up to the financial crisis in 2008, when the refusal of banks to lend to one another led to a
seizing-up of the markets that eventually led to the collapse of several major banks and taxpayer bail-outs of many more.
Eurocalypse Cometh! Principal Haircuts, Serial Bailouts, ECB Insolvent! Disruptive Sound Of Dominoes In Background Going "Click, Clack"! BoomBustBloggers Instructed To Line Up Bearish Positions Again!
If one were to even come close to marking the EU banks books to reality, market prices, or anything in between, the Lehman situation would look tame in comparison!
As excerpted from the subscriber document: The Inevitability of Another Bank Crisis
It Should Be Obvious To Many That The Risk Of Defaulting Sovereign Bonds Can Spark A European Banking Crisis
For Those Who Failed To Heed My Warnings On Portugal, Visualize The Contagion That Causes European Bank Failure!!!
Is Another Banking Crisis Inevitable?
Bloomberg reports that Goldman Sachs Turns Bullish on Europe Banks as Debt Risk Eases.The report goes on to state:
The U.S. bank that makes the most revenue from trading advised investors to take an “overweight” position on banks, raising its previous “neutral” recommendation, according to a group of equity strategists led Peter Oppenheimer. Investors should pay for the trade by lowering holdings of consumer shares, he wrote.
“For financials the narrowing of sovereign spreads in peripheral eurozone, which our economists expect to continue, is a clear positive,” London-based Oppenheimer wrote in the report dated Feb. 3. “Banks are one of the least expensive sectors in the market and the trade-off between their growth prospects and earnings in the next few years looks especially attractive.”
Unfortunately, the risks of this particular trade were not articulated, and I feel that the risks are material. Far be it for me to disagree with the "U.S. bank that makes the most revenue from trading", but they have been wrong before - many times before. Reference Is It Now Common Knowledge That Goldman’s Investment Advice Sucks??? or Did Reggie Middleton, a Blogger at BoomBustBlog, Best Wall Streets Best of the Best? for more on this topic...
Banks NPAs to total loans (Source: IMF, Boombust research and analytics)
Euro banks remain weak as compared to their US counterparts
Health of European banks is weaker when compared to US banks. European banks are highly leveraged compared to their US counterparts (11.1x versus 4.1x) and are undercapitalized with core capital ratio of 6.5x vs. 8.5x. Also, the profitability of European banks is lower with net interest margin of 1.2% compared with 3.3%. However, non-performing loans-to-total loans for European banks are slightly better off when compared to US with NPL/loans at 4.9% vs. 5.6%. Nonetheless, considering the backdrop of high exposure to sovereign debt in Euro peripheral countries, we could see substantial write-downs for Euro banks AFS and HTM portfolio, which would more than offsets the relative strength of loan portfolio.
EURO Stress Test Rebuffed, Again
The OECD working paper “The EU stress test and sovereign debt exposures” by Adrian Blundell-Wignall and Patrick Slovik rebuffs the EU stress test, as we have several times in the past. The argument in the white paper echoes BoomBustBlog view that accounting policies allows banks and financial institutions to mask their true economic health. An asset that has declined in value leads to economic loss irrespective of its classification as held-to-maturity or held-for-trading, but accounting policies allow banks to mark down only their trading portfolio to the current market value while leaving a large chunk of held-to-maturity at book value even if said asset loses 50% in value that would take years to recover, or the bank could be presented with the very distinct possibility that there may be no recovery of said value loss. The former event (of recovering back to book value) would mask the true economic picture at a given snap shot of time while the latter (no recovery) is more of time shifting distortion wherein current profits are inflated for future losses.
Coming back to the EU stress test, the paper contends that by focusing only on the trading book exposures, the EU stress test gave a rosy picture of banks true health.
• Sovereign bond haircuts were applied only on the trading book holdings with implicit assumption that bonds held to maturity will receive 100 cents in the euro. This assumption severely understates the banks losses as 83% of banks investment portfolio is in banking books in form of held-to-maturity assets while only 17% of assets are held in trading portfolio. In case of sovereign default, the distinction between the banking book and the trading book simply disappears. By considering only a smaller component of banks investment books, EU stress tests have severely undermined the estimated write-downs on banks books and have given rosy picture about banks true health. The logic of said methodology is that with the EU/ECB/ EFSF SPV (basically, a giant new European CDO) backing, no sovereign state will be allowed to default.
• Second, and more importantly, the market is not prepared to give a zero probability to debt restructurings beyond the period of the stress test and/or the period after which the role of the EFSF SPV comes to an end.
o The assumption of no default over 2010-2012 appears reasonable given that the EFSF is made up of a €720bn lending facility (€220bn from the IMF; €60bn from the EU; and the SPV can build exposures for 3 years to the limit of €440bn for the 16 Euro area countries) which provides a guarantee of funding for any countries facing financing pressures, certainly for the next 3 years.
o However, the concerns in the market beyond 2012 are: the longer-run fiscal sustainability problem; and the difficulty of achieving structural adjustments in labor and pension markets and ability to achieve a sustainable growth in a period of budget restraint. The fear is that this will not be resolved by the time the support packages run out, and hence the probability of restructuring may not be put at zero by portfolio managers. Angela Merkel has recently announced her willingness to spearhead several common nation reforms to put the EU block of nations on heterogeneous footing in regards to regulation, debt management etc. This will go a long way to solving the problem at hand, but will also put significant strain on several of the weaker nations, again exacerbating the probability for restructuring to bring said nations in line with their stronger counterparts.
Impact of bank’s banking books on haircuts
EU banking book sovereign exposures are about five times larger than trading book. The table below gives sovereign exposure of major European countries for both trading and banking book. The EU trading book has €335bn of exposure while banking book has €1.7t exposure towards sovereign defaults. EU stress test estimated total write-down’s of €26bn as it only considered banks trading portfolio. This equated to implied haircut of 7.9% on trading portfolio with losses equating to 2.4% of Tier 1 capital. However, if the same haircuts (7.9% weighted average haircut) are applied to banking book then the loss would amount to €153bn equating to 13.8% of Tier 1 capital.
We have also presented an alternative scenario since we believe that EU stress test had failed not only to include banks HTM books but also the loss estimates were highly optimistic, as has much of the economic and financial forecasting that has come from the EU. It is highly recommended that readers review Lies, Damn Lies, and Sovereign Truths: Why the Euro is Destined to Collapse! for a detailed view of a long pattern of unrealistically optimistic forecasting. Here's and example...
Revisions-R-US!
In an alternative scenario, we have assumed weighted average haircut of 10% (exposure, haircut assumptions and writedowns for individual countries are presented in detail in the tables below) and have applied writedowns on both banking and trading books with the results available in the subscription document The Inevitability of Another Bank Crisis? Individual and more explicit haircut calculations are available for the following nations for professional and institutional subscribers:
Greek Default Restructuring Scenario Analysis
Greek Default Restructuring Scenario Analysis with Sustainable Debt/GDP Limits and Haircuts
Portugal’s Debt Ridden Finances: An Analysis of Haircuts, Restructuring and Strategy – Professional Analysis
The Spain Sovereign Debt Haircut Analysis for Professional/Institutional Subscribers
Ireland Default Restructuring Scenario Analysis with Sustainable Debt/GDP Limits and Haircuts
Submitted by Reggie Middleton on 06/19/2011 06:05 -0400
I have decried the virtual collapse of the EU banking system beginning in 2009, and through 2010 and 2011. I have even delivered keynote speeches at EU banks on the very same topic...
The points made in this video are, in my oh so not so humble opinion, incontrovertbe. As a matter of fact the farce, the political fame being played in the hold to maturity accounting arean is enough to spark both a bank run and a resulting banking collapse. I know my proclamations sounded rather bombastic when I first made them. They sounded sensationalist last year. Well, pray tell, how do they sound now?
UK banks abandon eurozone over Greek default fears
UK banks have pulled billions of pounds of funding from the eurozone as fears grow about the impact of a “Lehman-style” event connected to a Greek default.
Senior sources have revealed that leading banks, including Barclays and Standard Chartered, have radically reduced the amount of unsecured lending they are prepared to make available to eurozone banks, raising the prospect of a new credit crunch for the European banking system.
Standard Chartered is understood to have withdrawn tens of billions of pounds from the eurozone inter-bank lending market in recent months and cut its overall exposure by two-thirds in the past few weeks as it has become increasingly worried about the finances of other European banks.
Barclays has also cut its exposure in recent months as senior managers have become increasingly concerned about developments among banks with large exposures to the troubled European countries Greece, Ireland, Spain, Italy and Portugal.
In its interim management statement, published in April, Barclays reported a wholesale exposure to Spain of £6.4bn, compared with £7.2bn last June, while its exposure to Italy has fallen by more than £100m.
One source said it was “inevitable” that British banks would look to minimise their potential losses in the event the eurozone crisis were to get worse. “Everyone wants to ensure that they are not badly affected by the crisis,” said one bank executive.
Moves by stronger banks to cut back their lending to weaker banks is reminiscent of the build-up to the financial crisis in 2008, when the refusal of banks to lend to one another led to a
seizing-up of the markets that eventually led to the collapse of several major banks and taxpayer bail-outs of many more.
Eurocalypse Cometh! Principal Haircuts, Serial Bailouts, ECB Insolvent! Disruptive Sound Of Dominoes In Background Going "Click, Clack"! BoomBustBloggers Instructed To Line Up Bearish Positions Again!
If one were to even come close to marking the EU banks books to reality, market prices, or anything in between, the Lehman situation would look tame in comparison!
As excerpted from the subscriber document: The Inevitability of Another Bank Crisis
It Should Be Obvious To Many That The Risk Of Defaulting Sovereign Bonds Can Spark A European Banking Crisis
For Those Who Failed To Heed My Warnings On Portugal, Visualize The Contagion That Causes European Bank Failure!!!
Is Another Banking Crisis Inevitable?
Bloomberg reports that Goldman Sachs Turns Bullish on Europe Banks as Debt Risk Eases.The report goes on to state:
The U.S. bank that makes the most revenue from trading advised investors to take an “overweight” position on banks, raising its previous “neutral” recommendation, according to a group of equity strategists led Peter Oppenheimer. Investors should pay for the trade by lowering holdings of consumer shares, he wrote.
“For financials the narrowing of sovereign spreads in peripheral eurozone, which our economists expect to continue, is a clear positive,” London-based Oppenheimer wrote in the report dated Feb. 3. “Banks are one of the least expensive sectors in the market and the trade-off between their growth prospects and earnings in the next few years looks especially attractive.”
Unfortunately, the risks of this particular trade were not articulated, and I feel that the risks are material. Far be it for me to disagree with the "U.S. bank that makes the most revenue from trading", but they have been wrong before - many times before. Reference Is It Now Common Knowledge That Goldman’s Investment Advice Sucks??? or Did Reggie Middleton, a Blogger at BoomBustBlog, Best Wall Streets Best of the Best? for more on this topic...
Euro banks remain weak as compared to their US counterparts
Health of European banks is weaker when compared to US banks. European banks are highly leveraged compared to their US counterparts (11.1x versus 4.1x) and are undercapitalized with core capital ratio of 6.5x vs. 8.5x. Also, the profitability of European banks is lower with net interest margin of 1.2% compared with 3.3%. However, non-performing loans-to-total loans for European banks are slightly better off when compared to US with NPL/loans at 4.9% vs. 5.6%. Nonetheless, considering the backdrop of high exposure to sovereign debt in Euro peripheral countries, we could see substantial write-downs for Euro banks AFS and HTM portfolio, which would more than offsets the relative strength of loan portfolio.
EURO Stress Test Rebuffed, Again
The OECD working paper “The EU stress test and sovereign debt exposures” by Adrian Blundell-Wignall and Patrick Slovik rebuffs the EU stress test, as we have several times in the past. The argument in the white paper echoes BoomBustBlog view that accounting policies allows banks and financial institutions to mask their true economic health. An asset that has declined in value leads to economic loss irrespective of its classification as held-to-maturity or held-for-trading, but accounting policies allow banks to mark down only their trading portfolio to the current market value while leaving a large chunk of held-to-maturity at book value even if said asset loses 50% in value that would take years to recover, or the bank could be presented with the very distinct possibility that there may be no recovery of said value loss. The former event (of recovering back to book value) would mask the true economic picture at a given snap shot of time while the latter (no recovery) is more of time shifting distortion wherein current profits are inflated for future losses.
Coming back to the EU stress test, the paper contends that by focusing only on the trading book exposures, the EU stress test gave a rosy picture of banks true health.
• Sovereign bond haircuts were applied only on the trading book holdings with implicit assumption that bonds held to maturity will receive 100 cents in the euro. This assumption severely understates the banks losses as 83% of banks investment portfolio is in banking books in form of held-to-maturity assets while only 17% of assets are held in trading portfolio. In case of sovereign default, the distinction between the banking book and the trading book simply disappears. By considering only a smaller component of banks investment books, EU stress tests have severely undermined the estimated write-downs on banks books and have given rosy picture about banks true health. The logic of said methodology is that with the EU/ECB/ EFSF SPV (basically, a giant new European CDO) backing, no sovereign state will be allowed to default.
• Second, and more importantly, the market is not prepared to give a zero probability to debt restructurings beyond the period of the stress test and/or the period after which the role of the EFSF SPV comes to an end.
o The assumption of no default over 2010-2012 appears reasonable given that the EFSF is made up of a €720bn lending facility (€220bn from the IMF; €60bn from the EU; and the SPV can build exposures for 3 years to the limit of €440bn for the 16 Euro area countries) which provides a guarantee of funding for any countries facing financing pressures, certainly for the next 3 years.
o However, the concerns in the market beyond 2012 are: the longer-run fiscal sustainability problem; and the difficulty of achieving structural adjustments in labor and pension markets and ability to achieve a sustainable growth in a period of budget restraint. The fear is that this will not be resolved by the time the support packages run out, and hence the probability of restructuring may not be put at zero by portfolio managers. Angela Merkel has recently announced her willingness to spearhead several common nation reforms to put the EU block of nations on heterogeneous footing in regards to regulation, debt management etc. This will go a long way to solving the problem at hand, but will also put significant strain on several of the weaker nations, again exacerbating the probability for restructuring to bring said nations in line with their stronger counterparts.
Impact of bank’s banking books on haircuts
EU banking book sovereign exposures are about five times larger than trading book. The table below gives sovereign exposure of major European countries for both trading and banking book. The EU trading book has €335bn of exposure while banking book has €1.7t exposure towards sovereign defaults. EU stress test estimated total write-down’s of €26bn as it only considered banks trading portfolio. This equated to implied haircut of 7.9% on trading portfolio with losses equating to 2.4% of Tier 1 capital. However, if the same haircuts (7.9% weighted average haircut) are applied to banking book then the loss would amount to €153bn equating to 13.8% of Tier 1 capital.
We have also presented an alternative scenario since we believe that EU stress test had failed not only to include banks HTM books but also the loss estimates were highly optimistic, as has much of the economic and financial forecasting that has come from the EU. It is highly recommended that readers review Lies, Damn Lies, and Sovereign Truths: Why the Euro is Destined to Collapse! for a detailed view of a long pattern of unrealistically optimistic forecasting. Here's and example...
Revisions-R-US!
In an alternative scenario, we have assumed weighted average haircut of 10% (exposure, haircut assumptions and writedowns for individual countries are presented in detail in the tables below) and have applied writedowns on both banking and trading books with the results available in the subscription document The Inevitability of Another Bank Crisis? Individual and more explicit haircut calculations are available for the following nations for professional and institutional subscribers:
Greek Default Restructuring Scenario Analysis
Greek Default Restructuring Scenario Analysis with Sustainable Debt/GDP Limits and Haircuts
Portugal’s Debt Ridden Finances: An Analysis of Haircuts, Restructuring and Strategy – Professional Analysis
The Spain Sovereign Debt Haircut Analysis for Professional/Institutional Subscribers
Ireland Default Restructuring Scenario Analysis with Sustainable Debt/GDP Limits and Haircuts
Manhattan College Picks Muslim Woman to be Director of Their Holocaust Center
Manhattan College Picks Muslim Woman to be Director of Their Holocaust Center
Critics question credibility of Manhattan College’s pick, and a change in center’s focus as supporters come to her defense.
Jonathan Mark Associate Editor
Manhattan College is revamping its Holocaust Center to include the further study of other genocides, as well as interfaith activities that would include Islam alongside Judaism and Christianity — the two religions that until now have been mostly alone at the core of Holocaust interfaith issues.
Perhaps nothing accentuates the change more than the appointment of Mehnaz Afridi, 40, to be director of what will be renamed the Holocaust, Genocide and Interfaith Education Center.
Afridi, a Pakistan-born Muslim woman, has been teaching at Antioch University, and her writings have primarily focused on Muslim identity and the intersection of Islam and the Holocaust.
Afridi is awaiting publication of her first book, “The Shoah Through Muslim Eyes.” The book, Afridi told The Jewish Week, grew out of “my frustration with the anti-Semitism within the Muslim community, its lack of education, [its] denial of the Holocaust, or those that say it wasn’t six million but two million. Negating someone’s history or someone’s truth is actually quite a huge sin.”
She added that “the uniqueness of the Holocaust is very clear in my book.”
Among her goals at the Bronx college, which is under Catholic auspices, will be “to bring more diversity and interfaith events, especially with Muslim academics and Muslims [in the] nearby community. I think this will be important to Manhattan College and it’s Lasallian [Catholic] tradition,” Afridi said.
“I want to educate people about Muslims,” she said, “but I don’t want to [always have to] defend Islam, because I don’t think it’s the greatest religion in the world. I happen to like aspects of it; I’m a liberal Muslim. When people ask me about the Five Pillars [of Islam], I say, you know, I’m kind of like a two-pillar girl.”
Afridi, who is Muslim but not Arab, tells of a well-traveled life as the daughter of an international banker, moving from Pakistan to Switzerland to Luxemburg to Dubai, and then to high school in Westchester County’s Scarsdale, before graduating the University of Syracuse where, she says, “my interest in the Holocaust truly began when I was a teaching assistant for a post-Holocaust undergraduate course.” She then earned her doctorate in religious studies at the University of South Africa.
The Center’s expansion into interfaith projects was made to better fulfill “the spirit of Nostra Aetate,” the Vatican reformation encouraging a reconciliation of the Abrahamic religions including Islam, said Jeff Horn, the outgoing director of the center, who is Jewish and will remain on the faculty as chair of the history department. He emphasized that the changes will be a “broadening” of the Center, not a dilution. Afridi, he says, will be able to “devote far more time and energy to [the Center] than I was ever able to,” because of Horn’s other academic duties, “so when we say expansion, we mean expansion.”
The expansion, however, has aroused concern from some survivors who had become informally connected to the center, and from children of survivors, such as Borough Park’s Assemblyman Dov Hikind, who worry that the centrality and Jewish specificity of the Holocaust are being diminished. At the college’s community reception for Afridi, some of the survivors privately expressed some half-embarrassed doubts about an Islamic woman leading a Holocaust program.
“I’m not surprised” at the controversy, Afridi said. “A Muslim woman to head a Holocaust center — it’s an oxymoron, in a sense. I’m not shocked.” She added, “I would be more than happy to meet Dov Hikind. I think he’s done some wonderful things, working hard [to fight] anti-Semitism. We may have more in common than he thinks.”
Before teaching in the departments of both liberal arts and theology at Antioch and National University in Los Angeles, Afridi taught at Loyola Marymount University, where she developed a friendship with fellow faculty member Michael Berenbaum, former director of the United States Holocaust Memorial Museum, and editor of the revised Encyclopedia Judaica.
“She’s a sterling human being, and I respect her as a scholar,” said Berenbaum. “She has been a guest, together with her husband, at my Shabbat table.” Additionally, she’s “an important voice within Islam for moderation.”
Aside from her academic work, Afridi has worked extensively with organizations such as the Arava Institute for Environmental Studies, “creating educational journeys,” she said, “for Palestinian, Israelis, Jordanians and Jewish-Americans, in Israel,” and the Women’s Islamic Initiative In Spirituality and Equality, a program of the American Society for Muslim Advancement.
The changes at Manhattan College prompted novelist Thane Rosenbaum, a professor at Fordham Law School and a frequent essayist on post-Holocaust themes, to wonder whether the Holocaust is becoming unmoored from its Jewish specificity.
“It hasn’t even been two generations,” said Rosenbaum, and already the message is, ‘We now have transcended the Holocaust,’ time for something else. Only with Jews, do people change the parameters like this, going from the Final Solution to exploring ‘Prejudice Around The World.’ This is Holocaust Studies for a new century: led by a Muslim, dealing with issues not exclusive or particular to the Holocaust, [issues] from Islamophobia to racism, looking for a wider appeal. They can do whatever they want, but I’m not sure that morally they have the right.”
Hikind, noting that his Brooklyn district includes “the largest contingent of Holocaust survivors,” asked Manhattan College to drop the word “Holocaust” from the center’s name because “the addition of Dr. Afridi and the expansion of the Center’s mission diminish the magnitude of the Holocaust as a defining Jewish event.”
Rabbi Yitz Greenberg, one of the pioneers in Holocaust studies in the 1970s, and the former chair of the national Holocaust Memorial Council, said that the debate over the universalistic expansion of Holocaust studies “has been an issue all along, going back decades.”
“Each case is different. In some places its worked,” protecting and underlining the distinctiveness of the Shoah, “and in other places not.”
The increased emphasis on interfaith relations is “great,” said Rabbi Greenberg. “One of the lessons of the Shoah, and part of what drove me [to Jewish-Christian] dialogue was that we have to recognize and break down the horrible poison and stereotypes [that predominated in Christian Europe] to prevent future Holocausts. That’s a legitimate application. I’m in favor of Muslim dialogue, too. The real issue is that most of the Muslim dialogue, so far, has not been very honest. That’s where the danger comes — not the concept of interfaith, but it’s how you do it, with whom, and how it’ll play out.”
Hikind’s criticism of Afridi was partially provoked by an article she wrote for Common Ground but widely circulated by the Khaleej Times (Aug. 11, 2008), an Arab newspaper. In the article, Afridi recalls an exchange at a Jerusalem bar that happened 18 years before, when she was studying archeology in Israel. An Israeli Jew at the bar, not knowing Afridi wasn’t Jewish, voiced the opinion that “surely you know, as a Jew, that this is our ancestral homeland.” She responded, “Well, no … First, I am not Jewish, and second, I am not quite sure whose land this is.”
In the Common Ground article, she goes on to write, “Jews can help Muslims navigate in a post-9/11 world by sharing with them the difficulties that they, too, faced in Europe and the United States…”
Hikind wrote to Manhattan College that Afridi’s equation was “both erroneous and offensive. It is inconceivable to me how Dr. Afridi can even begin to equate what the Jews of Europe suffered under Nazi rule with what she perceives Muslims in present-day America are enduring.”
However, in another piece, written for the Jewish Journal (Oct. 4, 2007), Afridi says that she “sympathizes with Jews and understands the need for the state of Israel,” as well as noting that her young daughter happens to share a birthday (March 30) with Maimonides.
Critics question credibility of Manhattan College’s pick, and a change in center’s focus as supporters come to her defense.
Jonathan Mark Associate Editor
Manhattan College is revamping its Holocaust Center to include the further study of other genocides, as well as interfaith activities that would include Islam alongside Judaism and Christianity — the two religions that until now have been mostly alone at the core of Holocaust interfaith issues.
Perhaps nothing accentuates the change more than the appointment of Mehnaz Afridi, 40, to be director of what will be renamed the Holocaust, Genocide and Interfaith Education Center.
Afridi, a Pakistan-born Muslim woman, has been teaching at Antioch University, and her writings have primarily focused on Muslim identity and the intersection of Islam and the Holocaust.
Afridi is awaiting publication of her first book, “The Shoah Through Muslim Eyes.” The book, Afridi told The Jewish Week, grew out of “my frustration with the anti-Semitism within the Muslim community, its lack of education, [its] denial of the Holocaust, or those that say it wasn’t six million but two million. Negating someone’s history or someone’s truth is actually quite a huge sin.”
She added that “the uniqueness of the Holocaust is very clear in my book.”
Among her goals at the Bronx college, which is under Catholic auspices, will be “to bring more diversity and interfaith events, especially with Muslim academics and Muslims [in the] nearby community. I think this will be important to Manhattan College and it’s Lasallian [Catholic] tradition,” Afridi said.
“I want to educate people about Muslims,” she said, “but I don’t want to [always have to] defend Islam, because I don’t think it’s the greatest religion in the world. I happen to like aspects of it; I’m a liberal Muslim. When people ask me about the Five Pillars [of Islam], I say, you know, I’m kind of like a two-pillar girl.”
Afridi, who is Muslim but not Arab, tells of a well-traveled life as the daughter of an international banker, moving from Pakistan to Switzerland to Luxemburg to Dubai, and then to high school in Westchester County’s Scarsdale, before graduating the University of Syracuse where, she says, “my interest in the Holocaust truly began when I was a teaching assistant for a post-Holocaust undergraduate course.” She then earned her doctorate in religious studies at the University of South Africa.
The Center’s expansion into interfaith projects was made to better fulfill “the spirit of Nostra Aetate,” the Vatican reformation encouraging a reconciliation of the Abrahamic religions including Islam, said Jeff Horn, the outgoing director of the center, who is Jewish and will remain on the faculty as chair of the history department. He emphasized that the changes will be a “broadening” of the Center, not a dilution. Afridi, he says, will be able to “devote far more time and energy to [the Center] than I was ever able to,” because of Horn’s other academic duties, “so when we say expansion, we mean expansion.”
The expansion, however, has aroused concern from some survivors who had become informally connected to the center, and from children of survivors, such as Borough Park’s Assemblyman Dov Hikind, who worry that the centrality and Jewish specificity of the Holocaust are being diminished. At the college’s community reception for Afridi, some of the survivors privately expressed some half-embarrassed doubts about an Islamic woman leading a Holocaust program.
“I’m not surprised” at the controversy, Afridi said. “A Muslim woman to head a Holocaust center — it’s an oxymoron, in a sense. I’m not shocked.” She added, “I would be more than happy to meet Dov Hikind. I think he’s done some wonderful things, working hard [to fight] anti-Semitism. We may have more in common than he thinks.”
Before teaching in the departments of both liberal arts and theology at Antioch and National University in Los Angeles, Afridi taught at Loyola Marymount University, where she developed a friendship with fellow faculty member Michael Berenbaum, former director of the United States Holocaust Memorial Museum, and editor of the revised Encyclopedia Judaica.
“She’s a sterling human being, and I respect her as a scholar,” said Berenbaum. “She has been a guest, together with her husband, at my Shabbat table.” Additionally, she’s “an important voice within Islam for moderation.”
Aside from her academic work, Afridi has worked extensively with organizations such as the Arava Institute for Environmental Studies, “creating educational journeys,” she said, “for Palestinian, Israelis, Jordanians and Jewish-Americans, in Israel,” and the Women’s Islamic Initiative In Spirituality and Equality, a program of the American Society for Muslim Advancement.
The changes at Manhattan College prompted novelist Thane Rosenbaum, a professor at Fordham Law School and a frequent essayist on post-Holocaust themes, to wonder whether the Holocaust is becoming unmoored from its Jewish specificity.
“It hasn’t even been two generations,” said Rosenbaum, and already the message is, ‘We now have transcended the Holocaust,’ time for something else. Only with Jews, do people change the parameters like this, going from the Final Solution to exploring ‘Prejudice Around The World.’ This is Holocaust Studies for a new century: led by a Muslim, dealing with issues not exclusive or particular to the Holocaust, [issues] from Islamophobia to racism, looking for a wider appeal. They can do whatever they want, but I’m not sure that morally they have the right.”
Hikind, noting that his Brooklyn district includes “the largest contingent of Holocaust survivors,” asked Manhattan College to drop the word “Holocaust” from the center’s name because “the addition of Dr. Afridi and the expansion of the Center’s mission diminish the magnitude of the Holocaust as a defining Jewish event.”
Rabbi Yitz Greenberg, one of the pioneers in Holocaust studies in the 1970s, and the former chair of the national Holocaust Memorial Council, said that the debate over the universalistic expansion of Holocaust studies “has been an issue all along, going back decades.”
“Each case is different. In some places its worked,” protecting and underlining the distinctiveness of the Shoah, “and in other places not.”
The increased emphasis on interfaith relations is “great,” said Rabbi Greenberg. “One of the lessons of the Shoah, and part of what drove me [to Jewish-Christian] dialogue was that we have to recognize and break down the horrible poison and stereotypes [that predominated in Christian Europe] to prevent future Holocausts. That’s a legitimate application. I’m in favor of Muslim dialogue, too. The real issue is that most of the Muslim dialogue, so far, has not been very honest. That’s where the danger comes — not the concept of interfaith, but it’s how you do it, with whom, and how it’ll play out.”
Hikind’s criticism of Afridi was partially provoked by an article she wrote for Common Ground but widely circulated by the Khaleej Times (Aug. 11, 2008), an Arab newspaper. In the article, Afridi recalls an exchange at a Jerusalem bar that happened 18 years before, when she was studying archeology in Israel. An Israeli Jew at the bar, not knowing Afridi wasn’t Jewish, voiced the opinion that “surely you know, as a Jew, that this is our ancestral homeland.” She responded, “Well, no … First, I am not Jewish, and second, I am not quite sure whose land this is.”
In the Common Ground article, she goes on to write, “Jews can help Muslims navigate in a post-9/11 world by sharing with them the difficulties that they, too, faced in Europe and the United States…”
Hikind wrote to Manhattan College that Afridi’s equation was “both erroneous and offensive. It is inconceivable to me how Dr. Afridi can even begin to equate what the Jews of Europe suffered under Nazi rule with what she perceives Muslims in present-day America are enduring.”
However, in another piece, written for the Jewish Journal (Oct. 4, 2007), Afridi says that she “sympathizes with Jews and understands the need for the state of Israel,” as well as noting that her young daughter happens to share a birthday (March 30) with Maimonides.
House passes amendment that would defund Obama’s czars
House passes amendment that would defund Obama’s czars
There’s no earthly way, I assume, that Senate Democrats (let alone Obama) will agree to this, so it’s destined to die in conference committee after the Senate passes its own spending bill. In that case, since we’re larding up the bill with measure that are D.O.A., can we bring back the idea to cut funds for Obama’s teleprompter? That’ll end up getting chopped too, but it’d be nice to blow him a little kiss while his online minions are busy meddling in Wisconsin’s budget debate.
The amendment, offered by Rep. Steve Scalise (R-La.), specifically targets Obama’s “climate czar” by blocking funding for the assistant to the president for energy and climate change, the position’s official title. The amendment would block funding for the ‘czars’ through the end of the fiscal year, when the spending bill would run out. The underlying bill also includes a provision to block funding for the position.
“I think this sends a strong signal to the president that we are tired of him running this shadow government, where they have got these czars that are literally circumventing the accountability and scrutiny that goes with Senate confirmation,” Scalise said after the vote…
The amendment would also prohibit funding for the director of the White House Office of Health Reform; the State Department’s special envoy for climate change; the special adviser for green jobs, enterprise and innovation at the Council on Environmental Quality; the senior adviser to the secretary of the treasury assigned to the Presidential Task Force on the Auto Industry and senior counselor for manufacturing policy; the White House director of urban affairs; the special envoy to oversee the closure of Guantanamo Bay; the special master for TARP executive compensation at the Department of the Treasury; and the associate general counsel and chief diversity officer at the Federal Communications Commission.
It’ll save millions, insists Scalise, and restore a little of that Hopenchange transparency that we hear so much about but rarely experience. What’s not to love? Like Boehner says, “I don’t want anyone to lose their job, whether they’re a federal employee or not. But come on, we’re broke.” Let the sacrifice begin at the top, my friends.
While we’re on the subject of spending cuts, here’s the most shameless politician in D.C. — who squandered a huge House majority by neglecting the economy for a year so that she could focus on ObamaCare — demanding to know from the GOP where all the jobs are. No, I’m not joking. Exit question: Forget about dropping the czar amendment in conference committee. Are we going to get a final budget bill at all? Hmmmmmm.
There’s no earthly way, I assume, that Senate Democrats (let alone Obama) will agree to this, so it’s destined to die in conference committee after the Senate passes its own spending bill. In that case, since we’re larding up the bill with measure that are D.O.A., can we bring back the idea to cut funds for Obama’s teleprompter? That’ll end up getting chopped too, but it’d be nice to blow him a little kiss while his online minions are busy meddling in Wisconsin’s budget debate.
The amendment, offered by Rep. Steve Scalise (R-La.), specifically targets Obama’s “climate czar” by blocking funding for the assistant to the president for energy and climate change, the position’s official title. The amendment would block funding for the ‘czars’ through the end of the fiscal year, when the spending bill would run out. The underlying bill also includes a provision to block funding for the position.
“I think this sends a strong signal to the president that we are tired of him running this shadow government, where they have got these czars that are literally circumventing the accountability and scrutiny that goes with Senate confirmation,” Scalise said after the vote…
The amendment would also prohibit funding for the director of the White House Office of Health Reform; the State Department’s special envoy for climate change; the special adviser for green jobs, enterprise and innovation at the Council on Environmental Quality; the senior adviser to the secretary of the treasury assigned to the Presidential Task Force on the Auto Industry and senior counselor for manufacturing policy; the White House director of urban affairs; the special envoy to oversee the closure of Guantanamo Bay; the special master for TARP executive compensation at the Department of the Treasury; and the associate general counsel and chief diversity officer at the Federal Communications Commission.
It’ll save millions, insists Scalise, and restore a little of that Hopenchange transparency that we hear so much about but rarely experience. What’s not to love? Like Boehner says, “I don’t want anyone to lose their job, whether they’re a federal employee or not. But come on, we’re broke.” Let the sacrifice begin at the top, my friends.
While we’re on the subject of spending cuts, here’s the most shameless politician in D.C. — who squandered a huge House majority by neglecting the economy for a year so that she could focus on ObamaCare — demanding to know from the GOP where all the jobs are. No, I’m not joking. Exit question: Forget about dropping the czar amendment in conference committee. Are we going to get a final budget bill at all? Hmmmmmm.
Perry: Left "Never Going To Like Us, So Let's Stop Trying To Curry Favor With Them"
Perry: Left "Never Going To Like Us, So Let's Stop Trying To Curry Favor With Them"
"It saddens me when sometimes my fellow Republicans duck and cover in the face of pressure from the left. Our party cannot be all things to all people," Gov. Rick Perry (R-TX) said at a Republican party event in Louisiana today.
"Our opponents on the left are never going to like us, so let's quit trying to curry favor with them!"
Video HERE
"It saddens me when sometimes my fellow Republicans duck and cover in the face of pressure from the left. Our party cannot be all things to all people," Gov. Rick Perry (R-TX) said at a Republican party event in Louisiana today.
"Our opponents on the left are never going to like us, so let's quit trying to curry favor with them!"
Video HERE
‘Glitter Attack’ on Michele Bachmann Mostly Misses the Mark
‘Glitter Attack’ on Michele Bachmann Mostly Misses the Mark
**Written by Doug Powers
Why do this? According to the glitter thrower, who the Star Tribune identified as Rachel E.B. Lang, “it’s a really good natured, light hearted way to bring attention” to the issue of gay rights. Lang might change her tune if somebody thinks throwing stuff at her is a good natured and light hearted way to express disagreement.
Yet another well reasoned argument:
A different view here shows how far the glitter thrower missed, but close or not doesn’t matter, because she’s a bullseye when it comes to crazy.
What if a kook tried to assault a member of Congress — whether it’s by throwing glitter at Michele Bachmann or pies at Carl Levin — and the politician in question pummeled them? I’m not usually a single-issue voter, but I might consider pulling the lever for somebody who did an extemporaneous smackdown on an attacking moonbat.
(h/t Instapundit)
**Written by Doug Powers
Twitter @ThePowersThatBe
**Written by Doug Powers
Why do this? According to the glitter thrower, who the Star Tribune identified as Rachel E.B. Lang, “it’s a really good natured, light hearted way to bring attention” to the issue of gay rights. Lang might change her tune if somebody thinks throwing stuff at her is a good natured and light hearted way to express disagreement.
Yet another well reasoned argument:
A different view here shows how far the glitter thrower missed, but close or not doesn’t matter, because she’s a bullseye when it comes to crazy.
What if a kook tried to assault a member of Congress — whether it’s by throwing glitter at Michele Bachmann or pies at Carl Levin — and the politician in question pummeled them? I’m not usually a single-issue voter, but I might consider pulling the lever for somebody who did an extemporaneous smackdown on an attacking moonbat.
(h/t Instapundit)
**Written by Doug Powers
Twitter @ThePowersThatBe
President Barack Obama's Complete List of Historic Firsts
President Barack Obama's Complete List of Historic Firsts
Yes, he's historic, alright.
• First President to Violate the War Powers Act
• First President to Orchestrate the Sale of Murder Weapons to Mexican Drug Cartels
• First President to be Held in Contempt of Court for Illegally Obstructing Oil Drilling in the Gulf of Mexico
• First President to Defy a Federal Judge's Court Order to Cease Implementing the 'Health Care Reform' Law
• First President to Require All Americans to Purchase a Product From a Third Party
• First President to Spend a Trillion Dollars on 'Shovel-Ready' Jobs -- and Later Admit There Was No Such Thing as Shovel-Ready Jobs
• First President to Abrogate Bankruptcy Law to Turn Over Control of Companies to His Union Supporters
• First President to Demand a Company Hand Over $20 Billion to One of His Political Appointees
• First President to Encourage Racial Discrimination and Intimidation at Polling Places
• First President to Arbitrarily Declare an Existing Law Unconstitutional and Refuse to Enforce It
• First President to Threaten Insurance Companies if they Publicly Speak out on the Reasons for their Rate Increases
• First President to Tell a Major Manufacturing Company In Which State They Are Allowed to Locate a Factory
• First President to Withdraw an Existing Coal Permit That Had Been Properly Issued Years Ago
• First President to Fire an Inspector General of Americorps for Catching One of His Friends in a Corruption Case
• First President to Propose an Executive Order Demanding Companies Disclose Their Political Contributions to Bid on Government Contracts
• First President to Golf 73 Separate Times in His First Two-and-a-Half Years in Office
But remember: he will not rest until all Americans have jobs, affordable homes, green-energy vehicles, and the environment is repaired, etc., etc., etc.
Yes, he's historic, alright.
• First President to Violate the War Powers Act
• First President to Orchestrate the Sale of Murder Weapons to Mexican Drug Cartels
• First President to Defy a Federal Judge's Court Order to Cease Implementing the 'Health Care Reform' Law
• First President to Require All Americans to Purchase a Product From a Third Party
• First President to Spend a Trillion Dollars on 'Shovel-Ready' Jobs -- and Later Admit There Was No Such Thing as Shovel-Ready Jobs
• First President to Abrogate Bankruptcy Law to Turn Over Control of Companies to His Union Supporters
• First President to Demand a Company Hand Over $20 Billion to One of His Political Appointees
• First President to Encourage Racial Discrimination and Intimidation at Polling Places
• First President to Arbitrarily Declare an Existing Law Unconstitutional and Refuse to Enforce It
• First President to Threaten Insurance Companies if they Publicly Speak out on the Reasons for their Rate Increases
• First President to Tell a Major Manufacturing Company In Which State They Are Allowed to Locate a Factory
• First President to Withdraw an Existing Coal Permit That Had Been Properly Issued Years Ago
• First President to Fire an Inspector General of Americorps for Catching One of His Friends in a Corruption Case
• First President to Propose an Executive Order Demanding Companies Disclose Their Political Contributions to Bid on Government Contracts
• First President to Golf 73 Separate Times in His First Two-and-a-Half Years in Office
But remember: he will not rest until all Americans have jobs, affordable homes, green-energy vehicles, and the environment is repaired, etc., etc., etc.
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