Greece's New Trojan Horse, And What It Means To America

The Greeks, faced with what amounted to an ultimatum from the EU rejected further austerity measures and decided yesterday not to accept the EU's proposal by a whopping 61%. It's not hard to see why.

Greece's debt now exceeds 177% of their GDP.They owe massive amounts to their bondholders and other creditors, whom already took a huge haircut for the last bailout. In order to pay the next payment due on what they already owe, they needed yet another bailout and what Greek's left wing PM Alexis Tsipras called 'debt relief.' That essentially means they want EU nations like Germany to pay off part of Greece's debt.

In response,the EU, led by German Chancellor Angela Merkel offered a take or leave it proposal that would have given Greece enough money to pay off the IMF, which will then give them the money to pay the European Central Bank, and so on and so on. But the EU also demanded severe austerity measures to do it, including spending cuts, reforms to Greece's expansive pension and social welfare system and 'labor reform', which means more cuts in civil service jobs. That's what the EU wanted in exchange for yet another 240 billion euro ($262.7 billion) bailout.

To add an additional bit of arm twisting,the European Central Bank (ECB)took the step of cutting of all cash to Greece's banks, which are dependent on it since they were connected to the system. The banks are now closed, with ATM deposits limited to 60 euros (about $66) per day if you can find an ATM that still dispenses cash. Greeks are reverting to barter to purchase food and ordinary household supplies, and Greek banks are forecast to run out of money totally sometime this week.

What's really going on is sheer politics. Greece's debt is never going to be paid off, ever. And the EU knows it. What they're really after is damage control, AKA a modicum of control over Greek fiscal policy to limit the fallout.

The EU is in something of a bind. If they cut Greece some slack, other countries with major debt problems like Portugal, Spain and Italy who received bail outs but are making their payments and coping with austerity are very likely to reconsider making their own payments. After all, if Greece can get away with this, why not them? And there's also the factor of someone like Merkel having to face angry German taxpayers if Greece slides away from its obligation and they have to pick up the slack once more.

By the same token, if Greece is forced out of the Eurozone, it sets a precedent for others to do the same thing and have the whole over-leveraged structure topple over.

So the result of this Sunday's referendum means there's going to be one of two outcomes.

Either the EU will cave in and make a better offer, which is exactly the argument PM Alexis Tsipras used to urge Greeks to vote no. Or the EU will decide it's had enough of Greece, and Greece exits the euro.

From Greece's point of view, either way works, really.Again, here's why, in a nutshell..



Whatever happens, Greece is in for some pain, but I think they'd probably be better off simply dropping the Euro, which is exactly what I wrote in 2012.

Dumping the euro and adopting the Greek drachma, which would of course devalue naturally would have several salutary effects once the initial chaos subsided. Greece would no longer be locked into a fixed exchange rate, which would make its exports more affordable and undoubtedly create a boom in tourism, one of Greece's chief industries. Plus, let's face it, no one is going to lend the Greeks money or buy their debt for some time to come at anything like decent rates, so they might be better off just wiping the slate clean with a bankruptcy and starting fresh.

Not only that, but if the Greeks are smart, they will institute their own form of austerity reforms. The costs of government is nearly half of Greece's GDP right now (49.3%). A great deal of money could be saved simply be revaluing civil service salaries and pensions in drachmas instead of euros at a government set exchange rate that could be far less than the actual market rate.

There's an interesting lesson to be learned here, with an example from the other side of the Mediterranean.

In 2004, Israel was faced with a similar financial debacle, made even worse by the high cost of Israel's defense needs. At that time, Greece actually had a higher per capita GDP than Israel did and was arguably in much better financial shape overall.

Over the last ten years, the story has changed considerably.Greece's per capita GDP has actually shrunk in terms of 2004 dollars, while Israel's has grown by a whopping 50%. Unemployment in Greece more than tripled, from 8.4% in 2002 to 26.5% in 2014, while unemployment in Israel dropped by more than half from 12.8% in 2002 to 5% in 2015.

In 2004, both countries had a similar proportion of their GDP needed to service their debts, around 94%. Since then, however, Greece's has shot up to 177.2%, while Israel's fell to 68.8% and dropping in the same period of time. Israel's current credit rating is A+ with S&P, with no credit rating company rating them below A. Investors are flocking to invest in Israel, and the country's economy is projected to grow this year by over 3%.

Greece's credit is rated by all credit rating companies at CCC- by Standard and Poors, the lowest possible rating, with no credit rating higher than CCC. Foreign investment is negligible, and the economy is actually shrinking.

So what happened? It's simple, really.

Between 2002-2007, Greece borrowed lavishly on its EU credit card and used the money to increase government size and expenditures (at one point, it seemed like almost everybody worked for the government). They 'invested' in building projects fronted by the well connected and bought votes in the form of more social welfare "benefits" for the public they couldn't afford, like those famous pensions from the age of 57. Meanwhile, raising taxes and producing red tape to try and match expenditures with income and add more revenue made Greece a poor place to invest and do business in. Greece was rated 84th in the world in the most recent Economic Freedom of the World Index. Greece, to put it bluntly, is a prime example of why the EU is eventually going to come apart at the seams.

Without access to rich Uncle IMF or the ECB, Israel solved its situation by doing exactly the opposite Greece did, with self-imposed austerity programs, privatization, cutting government red tape to encourage Israeli entrepreneurs and cuts in government spending.Many of these reforms were carried out under the present Prime Minister, Benyamin Netanyahu when he was Israel's finance minister. Essentially, these reforms got Israel out of its financial mess by weaning Israelis away from the quasi-socialist system that created the mess in the first place.

So how is what's going on in Greece relevant to America? As a warning.

The United States isn't in Greece's position, at least not yet. But we're traveling on the same road...just give us time. Right now, our debt to GDP ratio is 101% and increasing. Growth is stagnant, inspite of thefairy tales being spun in Washington. Moreover, we also have a metastasizing government, and billions in unfunded social welfare mandates and pension obligations...and to the aggravate the situation, the Obama Administration no longer enforces our borders and is allowing millions of people to come here and stay illegally to add to those unfunded, budget busting social welfare mandates. As Europe has discovered, the majority of these migrants will be tax dollar recipients rather than tax paying contributors.

Like Greece, we also have a government that likewise strangles entrepreneurship with high taxation, arcane and costly regulations, red tape and diktats.

And the reckoning could be closer than we think. What if foreigners stop buying our debt, or demand a higher interest rates because our debt lowers our credit rating again? Suppose China or the Arabs decide they need a few billion to spend at home or that America simply isn't the investment they thought it was and engage in a massive sell off? What if a major American bank goes under because a Chinese or EU bank whose paper they hold had a major stake in Greece or derivatives based on those securities? Given what's been going on lately with the Chinese stock market, that's hardly an unlikely scenario.

Even if nothing like this happens, one thing is certain. It's only a matter of time until we run out of running room and other people's money. We're not too big to fail, and if we continue on this road, we will eventually get into Greek territory.And there's no one to bail America out, at any price.

The old saying from Homer's Odyssey is 'Beware of Greeks bearing gifts.' In this case,the warning we ought to take from Greece is no Trojan Horse, but a gift we shouldn't refuse.

Intel Bets On Israel - Invests $6B To Upgrade Facilities

Intel, the leading chip, microprocessor and computer hardware manufacturer has decided to spend $6 billion to upgrade its Kiryat Gat chip manufacturing plant, in one of the biggest single investments ever by a foreign company in Israel. The deal is expected to generate thousands of jobs.

Intel will get a grant from the Israeli government of $300 million over a five year period, and be eligible for a significant reduction in corporate tax rates over a ten year period. Intel will also guarantee to hire at least 1,000 workers, and to spend hundreds of millions of shekels on products and services in Israel. In addition, under the agreement Israeli contractors and workers will get priority on the upgrade work.

This is nothing new for Intel, which is by far the largest international firm operating in Israel and knows a win-win when it sees one. Over the past 40 years, the company has invested over $10 billion in in Israel, and employs some 10,000 people directly, as well as indirectly employing about 30,000 Israelis whom work for subcontractors and other Israeli companies that do business with Intel.

This comes on the heel of other good news. Standard and Poors, the international ratings agency reaffirmed its high 'A+/A-1' rating for Israel's bonds and sovereign debt, making it a better bet for investment than many EU countries.

S&P's forecast for Israel? :

"In our view, the recent Gaza conflict will lead to only a modest weakening of Israel's fiscal trajectory,” the agency wrote in its report. “Although Israel may temporarily reverse its fiscal consolidation, we expect its gross general government debt ratio to remain largely flat in the next three years.”

"Although the recent fighting in Gaza is a reminder of the long-term threat posed by geopolitical risks, we consider that in the short term, the effect will only be to accentuate the economic slowdown and modestly weaken the fiscal account,” the report continued. “The fighting has not changed our view of Israel's core credit strengths, such as its prosperous and diverse economy, the contribution of natural gas production to a healthy external balance, and its relatively flexible monetary framework,” it added.

The BDS freaks that demand their institutions  and pension funds divest from the booming Israeli economy are not only revealing their inherent anti-semitism - they're cutting off their noses to spite their faces.

This Story Could Affect You More Than Anything You'll Read Today

 

The most important and far reaching story out there today is naturally the one you're not hearing about. And it has the potential to affect you personally a great deal more than 90% of what's in the headlines.

Russian President Vladimir Putin has scored a major win.He has finally succeeded in making a large deal with China to supply the Chinese with natural gas and oil - in a non-dollar contract.

As part of the agreement, the Bank of China (BOC) just signed a non-dollar agreement with VTB, one of Russia’s largest commercial bank to allow VTB and BOC to pay each in their domestic currency, removing the need for energy trading to be conducted in US dollars and a big step towards undermining the dollar's status as the world's reserve currency, something that's been true since the post WWII Bretton-Woods Agreement.

Putin's deal with China was held up for a long time simply because of price haggling.Gazprom, Russia's nationally owned energy company is anticipating that its average export price on gas this year will be around $10.62 per million Btu. The Chinese will be getting it at a substantial discount, around $10 per million Btu. Since the gas China now imports from Myanmar and Central Asia costs the Chinese about $10.15 per million Btu,the deal makes sense for them. In fact, it makes so much sense for them that they're willing to invest an estimated $25 billion to finance infrastructure costs to take in the estimated 38 billion cubic meters per year the Chinese have contracted to import from Russia, 20% of Russia's total output.The pipelines involved are scheduled to be completed by 2018.

And they'll be dealing in rubles and renminbi, not dollars...which makes the deal sanctions-proof, gives Russia a badly needed dose of hard currency, and allows Putin to thumb his nose at any EU threats of finding other sources of energy as a result of the Situation in Ukraine. And when it goes through, it accomplishes something Putin has been working to accomplish for years, bypassing the U.S. dollar as the medium for energy trades.

How does this effect you? Let's look at what that last sentence really means.

Because the U.S. dollar is the medium in which energy trades are calculated, the price of these commodities is linked to the value of the dollar, and the oil producing countries in essence import our inflation...they simply raise their prices to cover it, which also affects the prices of other commodities they import, like foodstuffs and western manufactured goods. The secret behind our relationship with the Saudis and the Gulf Emirates is that for years, they have successfully fended off efforts by Russia, Venezuela and the Iranians to ditch this arrangement.

While it's not entirely ditched yet, this is a major breach, and a lot of other OPEC members and customers will probably gleefully walk through it, depending on the strength of their currency and their need to import energy.

Since the value of anything depends on demand, how much people want or need to own it, the potential loss of the dollar's status as the world's reserve currency weakens the dollar. As this trend continues, the inflation we've been importing will now start to come home to roost as foreign manufactured items like the cheap goods we've learned to love made in China are going to cost more. So will food, and interest rates.

Your paycheck and your retirement dollars will not stretch as far either, your savings and 401Ks will be negatively impacted and travel will be likely more expensive than it already is.

This was probably inevitable, given the ridiculous policy of 'quantitative easing' and the huge amount of the $18 trillion debt and climbing President Obama and his team have run up. There's a part of me that thinks this might have been deliberate on the Obama Regime's part, seeking to weaken our currency deliberately to pay back these funds in cheaper dollar. No nation in history has ever managed it, and the ones that have tried did damage to their economy and their standard of living it took decades to recover from,if they were able to recover at all. Ask the Argentinians some time about how well that worked out for them.

Finally, if more countries abandon the dollar as a reserve currency, the U.S. will have lost a huge weapon, one we used successfully on al-Qaeda during the Bush Administration. No longer will we be able to say to foreign countries that if they do business with terrorist groups or a country we wish to impose sanctions on that U.S. banks will be barred from doing business with them,honoring letters of credit or handing their transactions.

That will still mean something because of the size of the American market, but nowhere near as much as it does with the dollar as the world's reserve currency. And losing that strategic weapon could affect Americans in a negative way in the future as well.

Turkey's Economic Bubble Begins To Burst

 

Turkey's Lira is dropping like a stone.

This is a sign that Turkey's huge credit bubble may be on the verge on bursting.

The Central Bank of the Republic of Turkey (CBRT) has already intervened in the foreign exchange market six times today to try prop up the value of the Turkish lira, and hasn't succeded.

The the central bank has flooded the market with $1.4 billion in hard currency in order to boost the lira against the dollar but in spite of all of the dollars being sold into the market by the CBRT, the lira keeps weakening against the dollar.

The rising price of oil and inflation on basic staples is one factor, as is the current political climate in Turkey.

Turkey's economy seems robust, but it actually isn't at all. Inflation is at 6.5% and rising, food prices are soaring, the official unemployment rate is at 9.5% (which means the real rate is closer to 13 or 14%) and there is a major imploding domestic credit bubble in consumer loans, which Turkey's banks are slamming out at 30% interest and up.Meanwhile exports continue to decline and Turkey's current account deficit is running at about $70 billion a year.

Like many Islamists. Erdogan has tried to camoflauge Turkey's economic woes with government subsidies...but that's a tough act to pull off when you don't have oil wealth to draw on. Just ask Basher Assad or Hosni Mubarak.

Stay tuned...the unrest in Turkey might end up getting a whole lot worse in a little while.

The New Egypt's Choice - Bankruptcy or Bread Riots

 

Egypt is finding out that Islamist government has its limitations.

Ideology is all very well, but the central problem of Egypt hasn't changed - a population of 80 million people it's unable to feed, educate or provide for.

In fact, the sharia-fueled constitution, the Islamist crackdown and the highly publicized violence of the Arab Spring have made the problem even worse.

I've been over this ground before..with the exception of Libya (where tribalism was the main factor) the Arab Spring was not about democracy, but about one four letter word - f-o-o-d.

In Egypt, in Syria, in Jordan, in Tunisia, the Arab autocrats survived by providing subsidies to their populations for food, cooking oil and other staples.Last year, when the price of cereal grains and other staples almost doubled, the subsidies simply weren't affordable any more.

When this happened in the past, the brunt was born by Asians in places like India and China. Now, with those economies expanding rapidly, the Arabs are simply being outbid and are the lowest on the food chain.

At this point, Egypt is almost bankrupt.

Tourism, once a major source of income is severely curtailed after the reports on rapes and assaults of both locals and foreigners in places like Tahrir Square.The new Egyptian law that allows 'citizen's arrests' of foreigners is killing most of what's left.

The only part of the tourist trade that survives is sex tourism from the Arab world. That's not an attraction for westerners in view of the other risks involved in simply visiting a country that the World Economic Forum ranked lowest out of 140 countries for safety and security.Nor does it provide anything like the old revenues.

Egyptian cotton is being underbid on the world markets by countries in Central, South and East Asia, foreign investment is almost non-existent, and the gas Israel used to buy from Egypt is no longer in the picture because of sabotage of the pipeline and public outrage in Egypt against any trade at all with the Jews. Foreign aid and the fees Egypt gets from use of the Suez Canal aren't enough to make the nut.

The Islamist government had been basing its hopes on a desperately needed International Monetary Fund (IMF)loan, which would allow the Muslim Brotherhood government to pay subsidies again and give it some breathing space to get from point A to point B. Unfortunately, the IMF has other fish to fry at the moment, and is insisting on austerity cuts including cuts in the subsidies. At a time when EU countries are chafing under austerity cuts, it's politically difficult for the IMF to do anything else. And if Egypt agrees to that, they'll be facing massive civil disorder, as well as a major loss in credibility.

You see, the Islamist argument (and not just in Egypt) was always that secular nationalism had failed, and that the solution to  all problems was to get back to that Ol' Time Religion - namely hard line Islamism and sharia rule.

That sounded plausible to people when it was promises coming from the Muslim Brotherhood personnel running the movement's soup kitchens, schools,  clinics and other charitable institutions. But actually governing a country once you have the power is very different, as Mohammed Morsi and company are finding out.You have to deliver, at least to some extent.

In another piece of bad luck,  the Jews aren't available as a scapegoat anymore. The Egyptians ethnically cleansed them back in the 1950's after stealing everything they owned.

Of course, the Egyptians could totally revise their hideous anti-Semitic stance, perhaps even apologize for the past. Instead of spending their money on weaponry and war games where Israel is labeled 'enemy number one', they could reach out to Israel with a real peace instead of a cold, hostile armistice and take advantage of the Israeli's expertise in things like agriculture, energy, irrigation, high tech and medicine. The Israelis would bend over backwards to help,  Egypt's unemployed labor would be a natural fit for Israeli manufacturing, and both countries would benefit.

Unfortunately, that's not the Muslim Brotherhood's agenda, or Islam's. So it won't happen.

The best scenario, of course is that the Islamists are totally discredited and thrown out of power by a popular revolt just as Mubarak was. But that might conflict with the world view of a certain president and his key cabinet members.

So we'll see, insh'allah.

Obamacare's Projected Premium Increases By State

At this point, you may remember with a grim chuckle the promises that were made about how ObamaCare was going to decrease your health insurance premiums and ' “cut the cost of a typical family’s premium by up to $2,500 a year”. BAout how if you liked your current health plan, you'd be able to keep it.


As I reported previously, over 7 million Americans are likely to lose their employer provided health care because complying with all the new regulations make it cheaper for many employers to pay the mandated penalty rather than pay the increasing health premiums and administrative costs.

The cost for a family of five, two adults and three children, the lowest level of coverage, the Bronze, is going to cost - wait for it - $20,000.

And if you're middle class and don't qualify for the ObamaCare subsidies your tax dollars are paying for, guess what? Your choices are to either cough up the $20,000 (or more if you need better coverage) per year or pay the IRS mandated penalty, capped at 2.5 percent of taxable income, or a minimum of $2,085.00 per family by 2016.

As the Heritage Foundation reveals, the news gets even grimmer if you manage to retain your employer provided healthcare. The new regulations and rules mandated by ObamaCare mean that your premiums will skyrocket.

According to a study by the House Energy and Commerce Committee, here are the projected increases, by state:

 

But what about the ObamaCare subsidies?

If you earn a middle class income - something like $100-200K in a state like California or New York,a lot less elsewhere - you're 'rich' and won't qualify, You'll be the cash cow for everyone else. Because the money for the subsidies for people whom the government deems deserve it more than you and your family has to come from tax dollars. Or as Democrats like to call them, 'revenues'.

Obamacare’s  subsidies are estimated by the Congressional Budget Office to cost over $1.2 trillion over 10 years. And considering that the new CBO estimate is much higher than originally anticipated and that the Obama Administration wants to add millions of undocumented aliens to the rolls - all of whom will need to be covered and almost all who will qualify for the subsidy - expect that estimate to skyrocket as well. I've seen projections of up to $5 trillion, especially as more and more people are forced into one size fits all ObamaCare.

It is nothing less than a transfer of wealth and a  rape of America's middle class.

And believe it or not, there are still  people who see President Obama as the 'middle class warrior' he painted himself as during the election, someone  the exit polls showed  these people think 'cares about people like me.'

Over the next few years, these people are going to find out what a horrible mistake in judgment that was.

Sequestration Blues...

Well, President Obama's Sequestration is going into effect.

As I said at the time, it was a stupid deal for Republicans or anyone in either party who actually cared about any notion of fiscal responsibility.

To get the obvious ObamaLie ™ out of the way, yes, as Bob Woodward has documented, it was President Obama who torpedoed a budget deal  at the last minute by hitting Speaker John Boehner with a huge additional $400 billion tax  increase after Boehner stupidly thought he and  the GOP caucus had a deal.

If it was me, I would have called a press conference, hammered the president for his duplicity and bad faith and let the government shut down. But John Boehner is, um, different. He agreed to a temporary increase in Obama's credit card limit  and a plan the president put forward for automatic cuts in the Federal budget. Again, as I pointed out at the time, it was a deal only  someone with the testicles and common sense of a gnat would have agreed to .

 it's important to remember that there's no incentive for President Obama to make any compromises. He wants to raise taxes anyway, many of the mandated cuts will come out of our military budget which he also wants to slash to the bone and best of all, he feels he can blame Republicans for it. This makes absolutely no common sense but the way the president sees it, it makes political sense and he sees it as a win-win situation: either they'll knuckle under and give him what he wants, or they won't, and he'll make political capital out of while getting some things he wants anyway.

Simple truth. This president and his minions were always going to raise taxes and refuse to cut any spending except when it comes to strangling the defense budget. It's who they are.

Just to show you how wacked out this is, here's an example from Los Angeles,but it could just as easily be your town, and when I describe it, I'm positive you'll recognize the same scam having been pulled locally.

The city elections are tomorrow and on the ballot is Proposition A,yet another half per cent sales tax increase. And how is it being sold? Constant scare ads, paid for of course by the Democrats and the public employee unions. According to them, if Prop A doesn't pass,the police and Fire Departments won't be able to respond to emergencies, school teachers will be laid off by the busload, school lunch programs will be cut, street maintenance will suffer, the sky will fall...

If this sounds familiar, it's because it's a tried and tested formula that's always used when 'progressives' want more of your money. It's always 'pay up, or else' and the cuts are always targeted at things designed to frighten the average person into giving up the money. They're never targeted at things government could make cuts in without affecting public welfare, quality of life or safety.

For instance, this citywide sales tax hike is the brainchild of City Council President Herb Wesson, who makes $178,789 per year in salary, more than a member of the U.S. Congress. Given that he also gets a free car, a driver, excellent health care, pension benefits and other perks the average citizen wouldn't even get within spitting distance of, could he and the other Council members manage to struggle by with a 15% or 20% salary cut? Could they make do with a couple less staff members, or at least furlough them a couple of days each month? How many police officers would that keep on the job?

Instead of furloughing teachers, could we furlough or even eliminate some of the top heavy administrative positions in th escholl district? Could we privatize the L.A. Zoo, the convention center, or some of the other city-owned facilities? Could we eliminate some of the wasteful 'cultural affairs' and other frivolous and frequently duplicated city programs?

Needless to say, this isn't what's being discussed.Instead, the Fear is being shoved down people's throats 24-7. Recognize it now?

That's exactly the sort of protection racket President Obama is running now. It's the same old dishonest political ploy, just targeted towards a bigger audience. Rather than cut spending on wasteful government programs, he's deliberately taking it out on border patrol agents,social welfare programs for people who really need them, Pentagon and Defense Department employees, and members of the active duty military...and blaming the GOP House members for a scenario he engineered!

How many of these people could avoid being thrown out of the service or 'furloughed' for what it cost the country for the separate vacations the president and his wife just took? Would it have been better to spend that money elsewhere rather than on the President's lavish golf weekend and the First Lady's skiing jaunt at an exclusive Aspen Resort?

Oh yes, I forgot. They're the defenders of the middle class.

The reality is that the sequester is barely a slow down in out of control spending. We borrow that much every 28 days.

Federal spending has gone from a $2 trillion budget in 2002 to a $3.5 trillion budget in 2012, and there's no sign of a slowdown...not with this president. He's run up over $6 trillion in new debt. Any wonder that it's been almost four years since the Democrat run Senate has passed a budget?

That's the Sequestration Blues, folks. We've got a hard driven' free spending big legged guv'mint hellhound on our trail that eats money, and the harder we work, the faster our money goes and the more we go under.

Muddy, Memphis Slim, Willie Dixon or Robert Johnson could have made a song out of it.

The Media Isn't Talking, But Europe Continues To Implode Economically

 

The media hasn't been talking much about the European financial crisis, and is giving the impression that all's well. It isn't.

The ever prolific Tyler Durden over at Zero Hedge has a must read piece on the subject...must read because it's a red flag alert as to where America is headed if we continue on the path we're on:

The economic situation in Europe is far worse than it was a year ago, and it is going to continue to get worse as austerity continues to take a huge toll on the economies of the eurozone.

It would be hard to understate how bad things have gotten – particularly in southern Europe. The truth is that most of southern Europe is experiencing a full-blown economic depression right now. Sadly, most Americans are paying very little attention to what is going on across the Atlantic. But they should be watching, because this is what happens when nations accumulate too much debt. The United States has the biggest debt burden of all, and eventually what is happening over in Spain, France, Italy, Portugal and Greece is going to happen over here as well.

The following are 20 facts about the collapse of Europe that everyone should know...

#1 10 Months: Manufacturing activity in both France and Germany has contracted for 10 months in a row.

#2 11.8 Percent: The unemployment rate in the eurozone has now risen to 11.8 percent – a brand new all-time high.

#3 17 Months: In November, Italy experienced the sharpest decline in retail sales that it had experienced in 17 months.

#4 20 Months: Manufacturing activity in Spain has contracted for 20 months in a row.

#5 20 Percent: It is estimated that bad loans now make up approximately 20 percent of all domestic loans in the Greek banking system at this point.

#6 22 Percent: A whopping 22 percent of the entire population of Ireland lives in jobless households.

#7 26 Percent: The unemployment rate in Greece is now 26 percent. A year ago it was only 18.9 percent.

#8 26.6 Percent: The unemployment rate in Spain has risen to an astounding 26.6 percent.

#9 27.0 Percent: The unemployment rate for workers under the age of 25 in Cyprus. Back in 2008, this number was well below 10 percent.

#10 28 Percent: Sales of French-made vehicles in November were down 28 percent compared to a year earlier.

#11 36 Percent: Today, the poverty rate in Greece is 36 percent. Back in 2009 it was only about 20 percent.

#12 37.1 Percent: The unemployment rate for workers under the age of 25 in Italy – a brand new all-time high.

#13 44 Percent: An astounding 44 percent of the entire population of Bulgaria is facing “severe material deprivation”.

#14 56.5 Percent: The unemployment rate for workers under the age of 25 in Spain – a brand new all-time high.

#15 57.6 Percent: The unemployment rate for workers under the age of 25 in Greece – a brand new all-time high.

The problems with the entire EU project stemmed from a number of really bad ideas.

The idea that you could cram people from very diverse cultures into a common financial union was flawed from the start, as was the idea that you can have a welfare society and an immigration society at the same time. As America is also starting to find out, you can have one or the other, but not both for very obvious reasons.

Another problem with a socialist nanny state nirvana that ultimately dooms it is the fact that people don't have children. After all, if you're essentially secular or even agnostic and your entire society is focused on cradle to grave management of all your affairs, children really just become a drain on your own hedonistic lifestyle, so why bother? In that kind of society, there's no point unless you love being a parent for its own sake. Certainly you likely won't have the pleasure of seeing them grow up to attain more than you did in life.

Lest you think this is strictly a European problem, keep in mind that one of the hallmarks of the age of Obama is a sharply lowered U.S. birth rate,coupled with an abortion rate of 337,000 last year by Planned Parenthood alone - about one every 94 seconds.

The European leftist elite figured that Muslim immigration would pick up the slack and pay for the party but as it turned out most of those immigrants ended up costing more in social welfare benefits than they provided in tax revenues. And the culture they brought with them involved incurring a number of uncomfortable and costly side effects as well.

The Europeans, especially countries in southern Europe then tried to finesse the gap between what they were spending and what was coming in by simply running huge deficits, with the obvious end results.

The sheer misery many of the people in Europe are suffering today amounts to more than just mere numbers and will effect them deeply for a long time to come. But they have one advantage over us.

Europe still has NATO and an American commitment to defend them - for now.Since the beginning of the Cold War, they have been able to avoid spending much on defending themselves because America cheerfully picked up the bill, not that we got much gratitude for it.

If America continues along the path we're headed on, we will eventually experience what Europe is going through now..except there's no one to farm out America's defense to.

A Hard Rain's Gonna Fall

The election is over, and President Barack Hussein Obama has won re-election.

There are some political, strategic reasons why I and so many others got this so wrong, but rather than go into details and analyze them here, I'd prefer to deal with the big picture issues. They're far more important.

Mitt Romney and Paul Ryan represented the old, traditional culture of America, that built the country and preserved our Republic these 236 years. They represented an opportunity to retrace our steps and return to the traditions of that democratic republic.

They were, essentially, decent and patriotic men who were rejected by just over half of the electorate in favor of someone with a demonstrated record of failure who concentrated on exacerbating the divisions in the country in order to retain power. The ironic joke is that Barack Obama has managed indeed to retain that power, but in a manner that so alienated half the country that he will be unable to govern effectively by mandate, or indeed in any other way.

What that really means will be a lot clearer, even to those celebrating the president's re-election tonight in about two years or so. The proof of that is that according to all the exit polls, the number one concern of the vast majority of voters was the economy, most of them said it was getting worse, not better and fully seventy-seven percent of voters called the economy not so good or poor.

Yet half of them voted against an experienced business man with a history of success in meeting difficult challenges and turning around failing enterprises in favor of someone whose only offer was more of the same.Essentially, half of America voted for the status quo.

That course is unsustainable, and raising taxes on 'the rich' this president successfully demonized to enough of the country to win tonight will simply grease the skids.

That's fairly similar to what happened to George W. Bush in 2004. People were afraid to change horses in midstream, especially for someone as eminently unlikeable as John Kerry. So they gave the incumbent a chance to follow through on his policies and perform. Remember 'I have political capital and I intend to spend it'?

The only difference is that President Bush had an actual mandate, and control of congress for two years of his second term. President Obama doesn't even have that much,(a few thousand votes in some of the strategic battleground states would have changed things entirely) and he's conducted himself in such a way that his fall from grace will be even more precipitous than President Bush's was.

The economy is not going to get better.

President Obama and the people around him still have the exact same attitude towards oil, coal and gas and skyrocketing energy prices are going to become the new normal.That will add up not only to higher prices at the pump but increased prices for food and goods.

In two years, about the time of the next midterms, we will almost certainly be facing stagflation and the harsh reality of the fiscal debacle this president created will be readily apparent even to many of the True Believers. As ObamaCare kicks in, Americans will be stunned at the taxes they incur and the bureaucracy they're going have to cope with. People used to being able to get care on demand are going to be shocked at how long they need to wait for a procedure, and they'll have to cope with a major shortage of doctors as fewer and fewer physicians will either go elsewhere or simply do something else because they won't be able to accept what ObamaCare offers them for their services without going bankrupt. Seniors will discover to their horror that everything they were told about rationed care is absolutely true.

The disillusionment will be fierce.

And on top of all that, the major scandals that began during the first Obama Administration will almost certainly burst into flame midway into the second. Benghazi, the Green energy scandals and Fast and Furious aren't going to go away, Darrel Issa is still going to be chairman of the oversight committee with subpoena power and the GOP dominated House is not going to be in a conciliatory mood.

The House may even put their collective foot down and refuse to raise the debt ceiling without quid pro quo cuts in spending the president will be unwilling to give them, and will almost certainly fight the president's continued hollowing out of our military tooth and nail. And in spite of tonight's disappointing showing, there are still enough Republicans in the Senate to filibuster., even if they need to be leaned on to do so.So we may even see gridlock similar to what's occurring today.

These things will all come to a head midway through this president's second term and it won't be pretty. Remember you heard it here first.

For now, what's apparent that whether they realize it or not, half of America apparently voted to emulate European socialism when the evidence of how well that's working is right before their eyes. They will experience exactly what they voted for now now to to the point where it sickens them, and they will either pull the reins and change or change will come to them as a natural consequence, because that's how it works. Ask the Greeks or the Spaniards.

It will be a harsher lesson than it needed to be, but perhaps a better one because of it.

For the rest of us, the ones on the other side of the divide, the question we must ask ourselves is different. We need to ask ourselves, what did tonight teach us about our half of the country? About the other half? And how can we use that knowledge to our benefit? Focus. This is a chance for new strategies and a brand new start, and it is eminently doable because no matter what, Obama and the Democrats are going to own what happens in the next four years.

And by the way, opting out is not an option. There are no bolt holes, not really. Flee history and politics and they have a horrible way of catching up with you in spite of your best efforts. Choices you refuse to make get made for you.

Unfortunately, in the meantime this is going to be a hard rain indeed that falls.How hard depends on us and how we embrace what could actually be a gift of fortune, depending on what we make of it.

Societies either embrace real change or they decay and decline. Decay and decline is a possibility, but in our case, rather than simply declining, we are a lot more likely to do what the Romans did in a similar situation. They decided this democracy stuff was too much trouble and dangerous to their physical security and survival. So they abandoned their republic and their traditional liberties altogether to become empire.

We have a chance to embrace real change, freed of a great deal of baggage if that is how we decide to make use of it.

A hard rain doesn't just storm and thunder. It washes away the old detritus. It cleanses.


-Selah-

President Obama's Insulting '2nd Term Agenda' Booklet

 

One thing about President Obama I've always disliked is a characteristic he shares with much of the left - the belief that everyone's stupid but themselves.

The president recently published a twenty page booklet outlining his agenda for a second term with lots of pictures for whom he obviously considers as the knuckle draggers in flyover country. It's insulting and absurd.

This is the president's 'New Economic Patriotism' he keeps jabbering about...you know, everybody pays more taxes, especially 'the rich'. Except the Obamas and their cronies, that is.

Last year, the taxpayers of the United States spent $1.4 billion solely to maintain the Obamas in the lifestyle they've become accustomed to. This includes the five star vacations, the president's incessant rounds of golf, the numerous parties and junkets, the fees paid to the entertainers at the White House, the inflated staff's salaries, the whole enchilada. By contrast, Britain maintained its entire Royal Family for a mere $57.8 million during the same period. Apparently for President Obama. 'Economic Patriotism' doesn't begin at home.

The president's 7 point plan basically promises more of what we've had during the last four years, except more of it.

He wants to pad the public employee union rolls by several hundred thousand, the better to finance future Democrats.

He spends a lot of time talking about outsourcing while saying nothing about changing the high taxes and stifling government regulations that guarantee it will continue, and even repeats the lie about how he's going to 'end tax deductions for outsourcing' when no such tax deduction exists except in his universe.

He brags about how he's reduced demand for imported foreign oil without mentioning that his economic policies have raised priced to the sky and kept demand low, along with demand for a lot of other things.People out of work in a stagnant economy don't usually fill up their gas tanks with cheerful abandon at $4.50 a gallon.

He claims he wants to invest in wind, solar, and clean coal to reduce demand further, but since we don't yet have sun powered cars or ones with sails, something is apparently lost in translation.

The only thing on the list that could be used to make oil is the coal, and we all know how this president feels about the coal industry.

Meanwhile, oil production on Federal land is declining, lots of our off shore drilling is blocked and the president's EPA is straining at the leash to go after fracking and shut down energy booms like the one in North Dakota if this president is re-elected.

The president little tract also makes much of his bailing out of GM and Chrysler. That gift to his union supporters at the taxpayer's expense cost us over $85 billion that will never be recovered, including a $45.4 billion special tax break for GM the president sneaked through by executive order.

He claims he wants to cut corporate tax rates, cut spending and reduce the deficit. He could have cut corporate taxes a long time ago, cutting spending has not been a hallmark of the Obama Administration to say the least and I seem to recall some verbiage by the president about cutting the deficit some time ago.

Odd how that turned out.In fact, President Obama even disregarded the recommendations of his own deficit-reduction commission!

No matter though. The booklet is saturated with pictures of President Obama beaming down at workers, children and peasants in true Dear Leader style. In fact that's really the booklet's focus,Obama as our feudal Lord and Dear Leader.

Anyone who's reasonably well informed would consider the whole thing a gross insult, but then, that's not the audience it's geared towards.

It says a great deal about President Obama and his contempt for much of the electorate - especially his supporters - that he would issue something like this with an election two weeks off and expect it to fly.

Israel To Go To New Elections As Netanyahu Dissolves Knesset

 

Israeli PM Bibi Netanyahu has called for the Israeli government to be dissolved in order to go to early elections.The vote will likely be held in late January or early February, with the earliest date being January 15th, 90 days from the opening of the next Knesset session on November 15th.

The chief reason is that elements of Netanyahu's coalition disagree on elements of a new budget.

So far,Israel has largely avoided the global financial slowdown but it must cut its budget by $4.3 billion to stay within the fiscal limits established by Stanley Fischer, the governor of the Bank of Israel back in August of this year.Where the cuts are going to come from is the chief matter of disagreement, although the fact that the campaign will come at the height of speculation and discussion over Iran's nuclear threat means that national security will also be an issue.

Netanyahu said that he has reached the conclusion that a responsible state budget cannot be passed.

"An election year is approaching, and in such years it is difficult for parties to put the national interest ahead of the party's interest," he said. "The consequence could… massively increase the deficit, which can impair our economy… I won't let that happen here."

Interestingly enough, the consensus among Israel's political parties both left and right was that the Prime Minister had made the right decision, and early elections were indispensable.

The key dissenter within Netanyahu's coalition over the new proposed budget is said to be Eli Yishai, Israel's interior minister and head of the Shas Party, who objected to a series of budget cuts.

Labor Chairwoman Yachimovich responded to the announcement with class warfare rhetoric that sounds like it was copied from a certain U.S. president's re-election campaign:

"The public must remember that Netanyhau is going to election so he could pass a harsh budget following election – a budget that may harm the lives of almost every citizen in the country, except the richest. The public must choose one of two approaches – Netanyahu's and mine. The election will determine whether we will have a violent jungle economy or a fair economy and social justice. The Labor party is ready for election, both ideologically and strategically."

How Obama Fudged The Jobs Numbers After His Lousy Debate Performance

Obama and his people really will do or say anything to get re-elected.Even the ObamaBots at MSNBC had trouble swallowing this.

What they're puzzled over is this. Today, the Wall Street Journal reported the following:

"U.S. payrolls, obtained in a separate survey of employers, increased by a seasonally adjusted 114,000 jobs last month, the Labor Department said Friday. Economists surveyed by Dow Jones Newswires expected a gain of 118,000 in payrolls and an 8.1% jobless rate."

So, let me see...a gain of 118,000 would have resulted in an 8.1% rate but a gain of 114,000 resulted in a 7.8% rate? How do fewer jobs actually result in a lower unemployment rate?

Let's dig a bit deeper.

President Obama turns in the worst debate performance of any candidate,let alone a sitting president in modern history and lo and behold!

Just like magic, the Labor Department announces the new jobs report and there's suddenly 114,000 new jobs out of nowhere and a new official unemployment rate of 7.8%, a major drop.

Former GE CEO Jack Welch was just one of the observers who called this totally bogus and tweeted,“Unbelievable jobs numbers..these Chicago guys will do anything..can’t debate so change numbers.”

Let's look at what the Labor Department actually had to say. According to them, job growth rose by 114,000, and the unemployment rate fell to 7.8%. For the sake of argument, let's take those figures as a given, remembering that they're frequently 're-adjusted' later to reflect reality.

But here's the funny thing. The rate the Labor Department is trumpeting is the bogus U-3 rate, which deals strictly with unemployment claims. The more realistic U-6 rate, which takes into account part-time workers who want full-time work,people who are unemployed but not covered by unemployment insurance, like independent contractors or the business person who owned the little store on the main street of your town who just went belly up and closed their doors and lots of discouraged workers who’ve given up looking for work remained exactly the same...at 14.7%.

If the U-3 rate went down, shouldn't the U-6?

Ah, but when you look at the internals you find that the 'job growth' is due to a mysterious surge of 582,000 part-time jobs...and that those numbers were obtained by a phone survey rather than actual payroll data. Now, if the economy was at, say, a 5% growth rate,that would be understandable. In September, people go back to school, some jobs open up. But at a 1.2 growth rate? Something smells.

Even if the numbers are accurate as far as they go, they're obviously being manipulated for the president's political benefit. Even by artificially shrinking the labor force, there are still about 23 million Americans out of work, growth is stagnant, real income is declining and the economy is worsening, not getting better.

Here's a number to chew over.The employment-population ratio shows how many people have jobs as a share of the civilian population. According to the Bureau of Labor Statistics, that number is now 58.7%. In June 2009, when the recession officially ended, it was 59.4%. Before the downturn it was 63%.

This is a recovery only in the unicorn world of President Obama...even using his own Labor Department's numbers.

The August Jobs Report - Awful!

President Obama got a real life rebuke the day after his abysmal acceptance speech in the form of a toxic August jobs report.

As Mitt Romney aptly put it, if yesterday was the party for the Democrats, today is the hangover.

Unemployment remains at 8.1%, and remember, that''s the cooked 'official' U-3 unemployment rate. It accounts only for the people who are receiving or have applied for unemployment benefits and are actively seeking work.

The U-6 rate, which government never trumpets is a lot closer to reality. It includes people no longer actively seeking employment, people who are not covered by unemployment, like people hired as independent contractors or the owner of the small dry cleaning business or restaurant that closed its doors in your neighborhood last week or people let go with not enough quarters of employment to qualify for benefits or from part time and seasonal jobs. That rate as of August 31 2012 is a whopping 14.7 %!

Not only that, but the rate is artificially low because of the historic drop in labor force participation AKA thenumber of people available toworkif the jobs are available. Simply put, if you have a certain amount of water in a glass and then just transfer the water to a smaller glass, the portion of the glass that's filled seems bigger, even if it really isn't.

368,000 Americans dropped out of the labor force last month, which brings the number of Americans the U.S. Department of Labor counts as part of the labor force - those people if they are at least 16, are not in the military or an institution such as a prison, mental hospital or nursing home, and whom either do have a job or have actively looked for one in the last four weeks - to an historic record of 88,921,000 Americans, with a net 119,000 fewer peopl employed in August than in July. If the lqabor force partivcipation had stayed the same instead of falling of precipitously, the cooked U-3 unemployment rate would have been 8.4 %.

Even worse, the Labor Department also revised the employment numbers for June and July admitting that 41,000 fewer jobs were created in than they previously reported.
This isn't as picture of even a mild recovery no matter what the spin dopctors at the White House tell you. It's a portrait of a stagnant economy going nowhere with the wheels starting to come off.

And President Obama wants to cripple it even further by assessing more taxes - ooops, sorry, 'new revenues' - implementing the tax increases inherent in ObamaCare and borrowing more money for green energy scams run by his donor cronies.

If America was a corporation, it would already be in receivership, and this president would have been fired a long time ago for gross misconduct and willful negligence, not to mention being sued in civil court for damages.

Mitt Romney: What I Learned At Bain Capital

An interesting op-ed by Governor Romney in today's Wall Street Journal well worth reading. Here's a slice:

The back-to-school season is here, and as parents take their children to shop for school supplies, I suspect that many of them will be visiting a Staples store. I'm very familiar with those stores because Staples is one of many businesses we helped create and expand at Bain Capital, a firm that my colleagues and I built. The firm succeeded by growing and fixing companies.

The lessons I learned over my 15 years at Bain Capital were valuable in helping me turn around the 2002 Winter Olympics in Salt Lake City. They also helped me as governor of Massachusetts to turn a budget deficit into a surplus and reduce our unemployment rate to 4.7%. The lessons from that time would help me as president to fix our economy, create jobs and get things done in Washington.

A broad message emerges from my Bain Capital days: A good idea is not enough for a business to succeed. It requires a talented team, a good business plan and capital to execute it. That was true of companies we helped start, like Staples and the Bright Horizons child-care provider, and several of the struggling companies we helped turn around, like the Brookstone retailer and the contact-lens maker Wesley Jessen.

My presidency would make it easier for entrepreneurs and small businesses to get the investment dollars they need to grow, by reducing and simplifying taxes; replacing Obamacare with real health-care reform that contains costs and improves care; and by stemming the flood of new regulations that are tying small businesses in knots.

My business experience confirmed my belief in empowering people. For example, at Bain Capital we bought Accuride, a company that made truck rims and wheels, because we saw untapped potential there. We instituted performance bonuses for the management team, which had a dramatic impact. The managers made the plants more productive, and the company started growing, adding 300 jobs while Bain was involved. My faith in people, not government, is at the foundation of my plan to strengthen America's middle class.

I also saw firsthand through these investments how energy costs impact the ability of a business to grow. Today, energy costs are weighing on job creators across America because President Obama has limited energy exploration and restricted development in ways that sap economic performance, curtail growth, and kill jobs. I will take a sensible approach to tapping our energy resources, which will both create jobs and make energy more affordable for every sector of our economy.

In the 1990s, when the "old-technology" steel industry in the U.S. was failing, Bain Capital helped build a new steel company, Steel Dynamics, which has grown into one of the largest steel producers in America today, holding its own against Chinese producers. The key to its success? State-of-the-art new technology.

Here are two lessons from the Steel Dynamics story: First, innovation is essential to the competitiveness of U.S. manufacturing. We are the most innovative, entrepreneurial nation in the world. To maintain that lead, we must give people the skills to succeed. My plan for a stronger middle class includes policies to give every family access to great schools and quality teachers, to improve access to higher education, and to attract and retain the best talent from around the world.

The second lesson is that we must have a level playing field in international trade. As president, I will challenge unfair trade practices that are harming American workers. {...}

That will be my approach to our federal budget problem. I am committed to capping federal spending below 20% of GDP and reducing nondefense discretionary spending by 5%. This will surely result in much wailing and gnashing of teeth in Washington. But a failure of leadership has created our debt crisis, and ducking responsibility will only cripple the economy and smother opportunity for our children and grandchildren.

Worth reading it all...

Egypt: Islamist President Morsi Orders Head Of Military Council Tantawi To Resign

A major power play took place in Egypt today as Muslim Brotherhood President Mohammed Morsi ordered the 'retirement' of several chief members of the Supreme Council of the Armed Forces(SCAF) the military junta that had been the de facto ruler of Egypt since the overthrow of Egyptian leader Hosni Mubarak.

"Field Marshal Hussein Tantawi has been transferred into retirement from today," presidential spokesman Yasser Ali said in a statement. Gen Abdel-Fattah al-Sisi, ( who just happens to be a Muslim Brotherhood member) was named to replace Field Marshal Tantawi as both armed forces chief and defense minister.

Also 'retired' were the army chief of staff, Sami Anan and the commanders of the Navy, Air Force and air defense. Annan and Tantawi supposedly retained as 'advisers' and were given Egypt's highest state honour, the Grand Collar of the Nile as a face saving gesture.

This is either a major overreach by Morsi and the Islamists or a signal that they have power well in hand. The key signal will be whether Tantawi, Assad and the others go quietly.

If they don't it will be because they have the rank and file military behind them, If they do, it will be because they're unable to get the troops to follow them against the Brotherhood.
Again, this is exactly what happened in Iran. Once Khomeini took over, he made a deal with the Iranian military to preserve some of their perks and power in exchange for them acquiescing to the Islamist Revolution. As soon as Khomeini felt he was strong enough. he purged the military.

As with most of these things, money is a major factor. What happens with the military and which way they jump will depend a great deal on economics.

Egypt's foreign currency reserves are disappearing steadily ( down to $5.8 billion in July, the last time I checked). Farmers are protesting ( and not peaceably) over water shortages. land taxes and the high cost of fertilizer, prices on staples continue to rise, and tourism is mordant, especially from western countries. Egypt's trade deficit is around $36 billion, the income from the canal brings in $5 billion or so a year, and they might net another $10-12 billion from taxes, cotton, what's left of the tourist industry and other miscellaneous sources, not including the $1.5 billion they get from the US, mainly military aid. An IMF loan is in the works, but hasn't materialized yet.

The country is notoriously corrupt, has very little foreign investment and a population of 80 million it's unable to feed.

In short, economically, Egypt is circling the drain.

The military might very well be taking a wait and see attitude, with the idea of putting together a coup later after an economic collapse that can be conveniently blamed on the Brotherhood.

So the big question that remains is whether the new Muslim Brotherhood-ruled Egypt is going to get a new 'sponsor.'

The main candidates are the Obama Administration, The Saudis and GCC countries and even, perhaps, Iran.

The Obama Administration has obviously made a few promises to Morsi and the Brotherhood about funding, and while President Obama hearts the Muslim Brotherhood, the money still has to go through Congress, and that becomes politically problematical, especially in an election year. Frankly, the U.S. and the EU have their own more pressing problems, which is also one of the holdups on the IMF loan.

Iran frankly lacks the amount of money the Egyptians need, but it might provide a few billion or so. I would expect the Muslim Brotherhood to flirt with Tehran in order to frighten their real target, the Saudis and GCC countries.

The Saudis haven't put much into Egypt yet ( they're not stupid) because the political situation is still very volatile. But if Morsi can goose the House of Saud along by flirting with the Iranians, there's a chance he might get them to play along.

Stay tuned...

Where Does Barack Obama Rank Among US Presidents On Jobs And Unemployment?

Now, here's an interesting idea, courtesy of the whizkid at Political Math: using Bureaus Of Labor Statistics figures, where does President Obama rank among modern U.S. presidents on job creation and unemployment?

(hat tip, Ace's place)

I'll let the whiz kid describe his work and the various caveats:

Recently President Obama’s team has felt that attacking Romney’s jobs record in Massachusetts tests well in the sample group.

These attacks got me thinking about executive job records. “Where” I asked myself “would President Obama place in a ranking of US Presidents in terms of job creation?”

Is this a fair comparison? Yes and no. Part of the Goose/Gander series is that I create a provocative visual and then explain in more details what is fair and isn’t fair about it.

This Isn’t Fair

President Obama hasn’t had a full term yet

This puts him at a distinct disadvantage to everyone else (except John F Kennedy) because he hasn’t had the same amount of time to grow jobs. However it also seems pretty obvious that he’s not going to get out of last place before January 2013. That would require 300K new jobs per month every month from now until then.

President Obama came into office in the middle of a recession

In fact, he came in the middle of a recession that was worse in terms of job loss than anything any other president in this chart had to deal with. Now, he did split those job losses about half-and-half with George W Bush, so it’s not as bad as it could have been for him.

Presidents only have a certain amount of control over job growth

Actually presidents (and executives in general) only have a certain amount of control over the economy, so this entire exercise is kind of tainted by that fact. But this is the part where we point out that Obama did start this by attacking Mitt Romney’s job record in a similar way.

This Is Fair

The data Is Unassailable

I’m using the Employment table from the BLS A Tables. This is not the one that most Obama proponents prefer to use. They prefer using the BLS B Tables because they give numbers that are kinder to Obama. But the B Tables undercount employment (they only count payrolls) and everyone knows this.

I counted January-January (or whenever the president left office) for each president. I did this not because it was particularly fair but because I wanted to match how Obama has assigned himself and Romney jobs responsibility. I’m following his lead to show that, if we take him at his word, he doesn’t stand up to his own standard.

If we’re going to play the presidential job visuals game…

… this is a totally fair visual to keep in mind. Depending on the metric, Obama talks about jobs in different ways. When talking raw numbers, he likes to talk about the “last 22 months” or however gets us to the low point in the recession. When talking about month-to-month change, he likes to talk about when he came into office which was the worst point of job loss in the recession, so everything else looks good in comparison.

Fairly or unfairly, Presidents and jobs are commonly linked. It’s only fair to give a proper representation of that information.

In other words, when it comes to modern presidents, Barack Obama is dead last in job creation and Numero Uno in the unemployment rate under his watch.

I would also add that part of the George W. Bush numbers occurred during the period of January 2007 to January 2009, when the Democrats, including Senator Barack Obama controlled Congress and voted for the very policies President Obama constantly blames President George W. Bush for.

If the American people re-elect this incompetent and his crew, they will get exactly what they deserve.

July's Job Report - Dismal

While the Obama campaign continues to rant about Mitt Romney's tax returns, the main issue on most American's minds, the dismal economy, continues to become more of a concern as it worsens under President Obama's stewardship.

The 'unemployment rate' rose to 8.3 per cent. The scare quotes are there because that's the fake U-3 figure politicians pick when they want to put a positive spin on things, based on new unemployment insurance claims.

The U-6 figure is the more accurate one that includes people who've stopped looking for work, people not covered by unemployment ( like the self-employed who've shut their doors) people in the labor force seeking their first jobs and calculates underemployment. And it doesn't allow any creative figuring that's figured prominently in the Obama Administration, like artificially lowering the number of people in the labor force to make the percentage lower.

The current U-6 real unemployment rate? 15.0 percent, as of this July.

The Administration may be attempting to put a spin on this by touting 163,000 jobs added, but because 150,000 people simply dropped out of the labor force, there was actually a decline. In June, according to Bureau of Labor Statistics, there were 142,415,000 people employed in the United States. In July, that dropped to 142,220,000. That adds up to a real decline of 195,000 jobs.

These are the real numbers, and they aren't pretty.

I'll give the president more credit than he was willing to give America's small businessmen. He and his absurd and reckless policies definitely built this.

If this trend continues - and there's no realistic chance it won't barring something crazy happening - Mitt Romney's path to winning the election becomes a lot simpler.

Any reasonably competent and experienced manager ought to be able to cut spending and increase productivity by 10 per cent in both categories, and Mitt Romney has already demonstrated he has a winning track record in that area.

All he needs to do is keep reminding the American people of that fact and let them know that this 'new normal' the Obama Administration keeps touting (shades of Jimmy Carter's 'malaise' !) isn't something they need to tacitly accept.

If the August Jobs report,which comes out directly after the Democrat's convention in September isn't substantially better, President Obama is going to be branded with an impression of being lousy on the economy, something most Americans already believe anyway.

That's not a good thing for an incumbent seeking re-election to be branded with.

And all the blather about Bain and tax returns, all the beating of the racial and class warfare drums is likely not going to be able to turn that around, all things being equal.

Israel And China Sign Major Strategic Agreement

I've mentioned before that as the Obama Administration has distanced itself from Israel, the Jewish State has been seeking new friends elsewhere.

Once country Israel has had increasingly cordial relations with is China. Business ties are extensive, culturally there is a good deal of affinity and China is a country without historic anti-semitism.

The two countries just signed an historic cooperation agreement that amounts to strategic insurance for Israel. It involves a joint venture to build a number of multi-billion dollar projects, including a major rail line from the Israeli Mediterranean ports of Ashkelon and Haifa to the Israeli Red Sea port of Eilat, along with an inland canal port north of Eilat.

The project will allow commercial shipping to detour around the Suez canal from the Mediterranean Sea to major sea lanes in the Indian Ocean and to ports of call in eastern Africa and southern Asia..including China:

Prime Minister Benjamin Netanyahu has declared the Eilat railway a national priority project, because of its strategic and policy importance. Israeli sources told "Globes" that the Chinese also consider the project to be important, as it fits in with China's global strategy to strengthen critical trade routes. The 180-kilometer line will run through the Arava Valley and Nahal Zinn. Netanyahu wants to cut travel time between Tel Aviv and Eilat to two hours.

It will be a major trade boost as cargoes from Asia will be able to dock in Eilat's state of the art port facilities and ship container cargo via the rail link directly to the Mediterranean and Europe and vice versa, eliminating time and expense and the uncertainties of dealing with a Muslim Brotherhood owned Suez Canal. And the railway will be a huge engine for increased development of Israel's Negev.

For the Israelis, aside from the obvious economic benefits, the strategic value is incalculable. The Suez Canal is taken out of the equation if Egypt decides to ignore international law again and stop Israeli ships from using the international waterway. It also might give the Egyptians pause if they decide to renege on the 1979 peace treaty between Israel and Egypt that declared that the Straits of Tiran, the vital waterway between the Gulf of Aqaba and the Red Sea were international waters open to international shipping. Nasser's blockading of the Straits was one of the direct causes of the Six Day War.

The Chinese have proposed financing part of the cost through the government-owned China Development Industrial Bank, while Israel will handle the project's operations. Chinese companies are expected to receive much of the construction contracts involved.

The Chinese, of course, also have their eye on the major finds of oil and natural gas recently discovered in Israel. As I also predicted previously, Israel's becoming an energy exporter is going to change the geopolitical facts on the ground for Israel fairly rapidly.

Israeli Minister of Transport Yisrael Katz and China's Minister of Transport Li Shenglin signed the memorandum of understanding in Beijing, followed by a banquet in the Israeli delegation's honor. The Chinese took special care to ensure that the food at the banquet was kosher.

That's a marked contrast to the way President Obama treated Israeli PM Netanyahu in Washington.

Eurozone: Dancing Downgrades!

The eurozone has been hit with a number of credit downgrades by Standard & Poor's, France and Austria both lost their AAA credit ratings and were reduced to AA+, and the credit ratings of Italy, Spain and Portugal were cut by two notches each.

Germany, the Netherlands, Finland and Luxembourg have maintained their triple A ratings for now.

In plain English, what the means is that the costs of borrowing for the countries hit with downgrades is headed upwards and they'll have to offer a higher rate on bonds to attract investors.It also means that the eurozone's rescue fund used for bailouts could also very likely have it's rating cut,ultimately meaning that the eurozone countries are going to have to pony up more cash to keep it solvent.

The current downgrade came on the heels of disappointing returns on the recent Italian bonds auction and a failure of the major banks participating in the write down of Greek debt to agree on who gets stuck for how much, thus stalling the negotiations.

On the selfishly plus side,this could spark more of an appetite among investors for non-EU debt in America, Israel, Australia, Canada, and elsewhere, because it's seen as safer.

So Now, It's 'Recovery Winter'!!

Remember 'recovery summer' and how that ultimately turned out? Well it's back,this time as 'recovery winter' . At least if you read the Soros media, outlets like the New York Times and other assorted Obamabot shills.

What they're jumping up and down about is a downtick in unemployment of a huge one tenth of a percent in December, from 8.6 to 8.5 and the 'robust' addition of 200,000 jobs.

I deconstructed this once before, but let's go over a few things again.

The percentages they're talking about are the the 'official' U-3 unemployment rate. It accounts only for the people who are receiving or have applied for unemployment benefits and are actively seeking work.

The more accurate stat is the U-6 rate, which government never trumpets but is a lot closer to reality. It includes the above plus people no longer actively seeking employment, people who are not covered by unemployment, like people hired as independent contractors or the owner of the small dry cleaning business or restaurant that closed its doors in your neighborhood last week or people let go with not enough quarters of employment to qualify for benefits or from part time and seasonal jobs. That rate fell too...from 15.6 to 15.4.

Adding 200,000 jobs during the holiday season is also not evidence of an uptick, since a number of seasonal jobs open up and then close afterwards in places like retail. Normally unemployment rates go down between 1 and 2%. A reduction of a tenth of a percent tells us things are actually getting worse. Retailers and others expected a skinny Christmas and gauged their hiring accordingly.

As Zero Hedge points out, there's also a distinct possibility that the Bureau of Labor Statistics is cooking the books by lowering the labor force participation rate to provide an artificially 'lower' unemployment rate.

The market isn't fooled either - the Dow is down almost 40%, although it may come back a bit if there are sell offs.

Look for a 'correction' in this horse manure next month.