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Thursday, July 31, 2014


"I have a million dollars in the stock market, because if I lose a million dollars, I don't personally care."
-Suze Orman

There was a time in the past when one of the finest indicators of not only the mood of businesses in America but the general economic health was the stock market.  If it boomed then people were confident and the economy was doing well.  If it plunged, the opposite was true.
That hasn't been true for a while.  In fact, the stock market seems just about useless as an indicator except in extreme disaster.  If the market crashes massively as it has every decade or so lately, you know something awful has happened, such as the banking crisis of 2007.  But instead of being an early indicator of trouble or a metric of business mood, the market seems random and unrelated to the economy most of the time.
Recently its been booming, with a new record high set last month in several sectors.  But the economy is doing badly.  Inflation continues to plague sectors people are most affected by (energy and food), unemployment is still high even by the official numbers, the number of people out of the job market is horrific, and the last quarter showed contraction, not growth.
So why is the stock market doing so well?  What on earth is going on here?  Well as I wrote a while back, two factors stand out.  First, Quantitative Easing has been making huge loans available at very low interest rates, which are meant to help the economy.  The problem is that they're primarily being used not for building and expanding business - because businesses are very leery of doing any sort of expansion right now - but to gamble in the stock market.
QE makes more money available for loans at lower interest rates so that people can use it to invest.  It has no effect on you and me unless those people invest in hiring and expansion of business.  But in this economy and with the uncertainty of the future with the ACA ("Obamacare") looming over all business, hiring and expansion is the last thing on most businesses' minds.

But with that cheap money out there to play with, investment is a great scheme.  Basically QE has flooded the nation with super cheap loans that only the very richest can really take advantage of, and they are doing so not in ways that create jobs or boost the economy, but in ways that make them rich.
Big time investors and corporations love this stuff, because its cheap money to play with.  That's where the huge spike came in June that gave us the new record high:
The central bank said Wednesday that interest rates aren't expected to rise until 2015.

Investors love that message. The S&P 500 closed at a record high of 1,957 while the Dow jumped almost 100 points (0.58%). The Nasdaq also bounced to finish at its highest level in 14 years. Stocks were down most of the day prior to the Fed news.
OK so far, so good, but there's more to it.  For example, the oil boom has made a lot of people really rich - and in my opinion has gone a long ways to preventing the bad economy from being a total crash.  There's one sector that's been doing well and propping up the nearly-collapsed tent, and that's fracking and oil business in the US.  Mind you environmentalists have done everything they can think of to destroy that, but its still going on, probably in large part due to the White House realizing that its the only thing between now and a depression that makes the one in the 30s look like a slow day at Taco Bell.
Another factor is the use of microtransactions.  As I noted in the previous article, these are computer-driven super fast purchases and sales done on stocks other people buy and sell.  Basically when you log on and tell a site you want to buy 50 shares of ACME Coyote Supplies, these microtransaction programs see that and react to it with either buying or selling that stock based on your actions and other trends.  Hundreds of them can be going off between you saying "I want this" and confirming it.
Now, this means the price of what you try to buy is different than what you get by the time the payment goes through because its been affected by possibly hundreds of these little transactions.
But there's another factor.  Pam Martens recently wrote in Wall Street On Parade of a lawsuit against the Chicago Mercantile Exchange, the Chicago Board of Trade and other individuals involved in leadership roles at the CME Group.
The most stunning allegation in the lawsuit is that an estimated 50 percent of all trading on the Chicago Mercantile Exchange is derived from illegal wash trades.

Wash trades were a practice by the Wall Street pool operators that rigged the late 1920s stock market, leading to the great stock market crash from 1929 through 1932 and the Great Depression. Wash trades occur when the same beneficial owner is both the buyer and the seller.  Wash trades are banned under United States law because they can falsely suggest volume and price movement.
I know what you're thinking: there's no way such fine, upstanding paragons such as big business owners and stock market traders would ever engage in such a dishonest thing.  I'm joking, of course you believe this is at least possible, if not plausible.  There are billions to be made, and any time there's that kind of power and wealth available, there are men and women who would line up to be a part of it.
Terrence Duffy, the Executive Chairman and President of the CME Group has already been called before congress to testify about his business and the Chicago stock market so its obvious someone is seeing smoke somewhere.  Whether there's fire or not to me is a question of how widespread, not if.  Someone suspects this is happening in Chicago, and that makes me wonder where else it might be or is happening?
The thing is, all this adds up to something very, very ugly.  The last time these wash trades were going on was... right before the big crash in the 20s.  The stock market is flooding very rich people with huge sums of cash, which they are thoughtfully recycling a portion of back to campaign funds of politicians to keep that gravy train coming and look the other way.
But this is not sustainable.  I keep thinking back to sitting on a friend's porch on the fourth of July 2006 watching fireworks in the city below and talking about how the housing system could not keep going.  How little did we know that it was coming to an end so soon.

Wednesday, July 30, 2014


"Don't look for big things, just do small things with great love."
-Mother Theresa

Yesterday I wrote a big post on an excellent article I hope people are reading by a woman who explained why she was no longer a leftist.  That post got linked by American Digest, which I appreciate, and comments were left at that site as well as at my article.
I didn't do a very good job, I fear, making my final main point because the piece was getting a bit long, I kept being distracted, and I really wanted to mostly focus on Danusha V. Goska's article.  But because of that, some misunderstood what I meant to say.
My primary argument was not that if we're nice enough hordes of people will abandon leftist ideology and we'll all win in a big rainbow-arched parade of joy and utopia.  I think we're headed to a very dark and difficult time in the very near future.  I think the left has won in America and the republic as we knew it is in its last stages.
My point was rather to note that Goska's reaction to the left and right tells us something not just about how we should behave, but how we can behave.  Because the bitterness, anger, hate, and strident outrage she saw in her leftist friends and colleagues drove her away, toward the love and genuine good will of those she knew on the right.
See, the point isn't that this will be some massive flood of converts because of behavior, but that it tells us what we ought to avoid.  When I wrote this:
There's only so much reactive bitterness and hateful destructive fury people can take. Yes, the left's unrestrained, insane fury helped get President Obama and a commanding majority in congress elected, but that kind of thing has no legs, it cannot last. And in the end, while you can get attention and some power by being such a monster, people tire of it and begin looking for someone who smiles once in a while in a non-ironic, non-smug manner.
I did not mean to say that we'll win in the end because the left is being such jerks.  What I meant was that when people see enough of this, they get sick of it and it stops working.  That means the left has to (and will) do something else.
As long as they control the bulk of the media, entertainment, education, and popular culture in the west, they can always depict the right as being far worse and that will be enough to keep and expand their power.  That's the hidden lesson in the upcoming election I fear too many are not thinking about.  Yes, people are very upset with and annoyed at Democrats.  That doesn't translate into voting for Republicans because the left has been so good at making the GOP seem worse than anything they Democrats do, no matter what they do.
In any case, there was a line in Goska's 10 reasons that says what I mean quite well:
I volunteered with the Sisters of Charity. For them, I pumped cold water from a well and washed lice out of homeless people's clothing. The sisters did not want to save the world. Someone already had.
See, the left has no choice but to eventually slide into frustrated, furious anger.  Their worldview backs them into a corner where they get more and more bitter and confused.  They believe that through right effort, program, and proper education, they can create a wonderful utopian dream world where war ends, racism vanishes, crime disappears, and everyone lives in love, doing good for other people spontaneously.  That's the entire concept of Communism: that if we just set things up right, it will be paradise on earth and all will work for the greater good without needing that awful greed.
And when the world continually and stubbornly refuses to go along, when reality keeps conflicting with their dreams, when their policies continually make things worse, they crash into this over and over again with increasing confusion and frustration.  They begin to blame others and everything except their basic idea.  They can't be wrong about this, so it has to be something else.
And that something else is inevitably those who disagree with them.  And who could disagree with this beautiful glorious dream of utopia but evil monsters?  And its not just okay to hate such a person, but morally proper.  You must hate someone who blocks this beautiful dream.
Contrast that with what Goska wrote above.  Someone has already saved the world.  We don't have to, and ultimately, cannot.  Right thinking, education, policies, and efforts are good and laudable.  We should strive to do better and improve the world.  But we aren't going to make paradise on earth by doing so.  Its not going to happen.
People on the right shouldn't be the torch-bearing pitchfork-wielding mob of outraged fury like the left because its ugly and awful and destructive.  The left is correct when they say hate is awful and wrong.  But its always awful and wrong to hate people, even if they disagree with you politically.  The right shouldn't make up ugly names about the president and scream hatred at political opponents because its counterproductive and drives people away. 
The contrast between a group of shrill tooth-gnashing people filled with hate and sadistic rhetoric against their opponents... and people with hope and genuine smiles doing good for those around them is a very, very powerful cultural force.  The hippies knew this, even if they weren't consciously aware of it.
And the right doesn't need to be so filled with rancor and desperate fury like the left is because we have something better to offer and aren't driven by emotion and continual cognative dissonance.  We aren't thwarted by reality's constant refusal to go along with the plan.
We aren't relying on our efforts to save everything and bring about paradise, because we know that's not possible.  Communism requires people to change their very nature, to lose all greed, selfishness, laziness, and sin.  Mankind cannot make that happen no matter what government program or education system we develop.  Capitalism shapes those evils into the most productive manner possible.  Its a sort of economic Aikido: using the strength of the enemy against its self, rather than trying to just delete it.
We don't have to be as angry and frustrated as the left because we aren't up against an impossible goal.  Our beliefs do not require reality to change or a fundamental factor of human nature to be eliminated magically.  We aren't raging against the night, we're lighting a candle to see the way through.
So the point isn't "everything will be great!" but rather "we should avoid the furious hate and bitterness of the left and our ideas don't require it."

Tuesday, July 29, 2014


"In a slum an exploiter is better than a Santa Claus… An exploiter forces you to react, whereas a Santa Claus demobilizes you."
Dominique LaPierre, White Guilt

A while back, in the late 80s, I stopped being a leftist.  I grew up afraid of nuclear war but mostly non-political until I got to junior high school age when I began reading the copies of Newsweek and US News & World Report in social studies classes.  I also began to listen to NPR's nightly All Things Considered radio show while I washed dishes.
The show was engaging and interesting, and I learned a lot, but I also was steadily tilted against Republicans, conservatism, and toward leftist ideology by my teachers and reading as well as NPR.  I already was certain Reagan would destroy us all in a nuclear war but I was beginning to believe that heroic Democrats were waging a fight to save the little guy from draconic cuts by the cruel white house.
Thanks to the careful massaging of the news, heart-tugging man on the street interviews, touching vignettes read by caring voices of the downtrodden, and news reports of the terrible plague of the homeless on the streets,  I began to buy into all this stuff.  It wasn't hard; being young I was more inclined to think with my heart - what I wished to be true - than my head - what I knew.  When people noted that the count of the homeless was much lower than advocates claimed, I cried "lies!" without bothering to think about it.
What changed me was a clash between what I knew to be true and what I wanted to be.  I was never in support of abortion, because killing babies is a horrific, ghastly act no matter what age they happen to be.  This was something I knew to be true, regardless of the emotional arguments I heard.  I began to understand economics better as I entered the job market, and by the end of the first gulf war I'd come to see that America wasn't a force for evil and that the military was not an awful group of possibly psychotic hicks.
Books such as Brennan's War taught me about Vietnam from the inside rather than from people who stayed home and protested.  Rush Limbaugh's radio show taught me much about economics.  Study of the Soviet Union taught me about the consequences and end result of their ideology.  And in time I came to understand that NPR had not been telling me the whole story, and what's worse, they held back key information on purpose.  I always liked the radio shows afterward better anyway - I heard each episode of The Hitchhiker's Guide to the Galaxy in its original US radio broadcast, right after All Things Considered.
This road is not unusual.  Many people who were once left leaning grew out of it over time.  Some find a shocking event pushes them away such as the terrorist attacks on 9/11 - the proverbial "mugging" that turns a leftist into a conservative.  For some, such as Charles Johnson at Little Green Footballs, the conversion didn't last.  For others, it is life changing.
There's an article at American Thinker by a former hard leftist about why she left the movement.  Here's how she puts it:
How far left was I? So far left my beloved uncle was a card-carrying member of the Communist Party in a Communist country. When I returned to his Slovak village to buy him a mass card, the priest refused to sell me one. So far left that a self-identified terrorist proposed marriage to me. So far left I was a two-time Peace Corps volunteer and I have a degree from UC Berkeley. So far left that my Teamster mother used to tell anyone who would listen that she voted for Gus Hall, Communist Party chairman, for president. I wore a button saying "Eat the Rich." To me it wasn't a metaphor.

I voted Republican in the last presidential election.
For Danusha V. Goska, the change was not due to learning the things she'd been told were lies and distortions, but instead a growing realization of what she was aligned to in her political stance.  She lists 10 reasons why she left the left, ten things she came to realize as she was in the university and teaching.
  • Perpetual Outrage
  • Selective Outrage
  • Symbolism over Substance
  • Spite Toward Blue Collar America
  • Spite Toward Faith
  • Straw Men Attacks
  • Moral Pragmatism
  • It Doesn't Work
  • Other Approaches Do
  • Hate
Read more »

Monday, July 28, 2014


"They take aim at the law abiding citizen, instead of the criminal"
-Sir Mixalot, "No Holds Barred"

Welcome to Legal Insurrection readers, a blog I enjoy and read daily as well.  I'm Christopher Taylor not Talbot but who am I to complain, contributor Andrew Branca didn't need to mention me at all.  His post on gun control brought to mind a recent bit I saw at American Digest.  Gerard Vanderleun there quotes from a 1994 column on gun control in the Orlando Sentinel by Charley Reese:
The government trusted me with a M-48 tank and assorted small arms when it claimed to have need of my services. It trusts common Americans with all kinds of arms when it wants them to go kill foreigners somewhere — usually for the financial benefit of some corporations.  But when the men and women take off their uniforms and return to their homes and assume responsibility for their own and their families’ safety, suddenly the politicians don’t trust them to own a gun. This is pure elitism. … Gun control is not about guns or crime. It is about an elite that fears and despises the common people.
While a bit cynical about war and the eeevil corporation, he has a point.  Its the same argument that was used to push the voting age down to 18, and it is the same argument used for lowering the drinking age to 18.  If I can be trusted to die for my country, why can't I be trusted to do these things?
Now, obviously a soldier is under close scrutiny and careful discipline.  They are taught how to use a weapon, when to use it, and given orders.  Yet even in this case, now, soldiers can't even carry a weapon while on base.  Disarmed and stripped of the ability to fight back if, say, a lone gunman stalks them as in Fort Hood or the Washington Navy Yard shooter, they are not even trusted as soldiers any more.And there are arguments for why a 18 year old soldier ought to be able to shoot to kill but not drink.  Its one thing to be under careful direct supervision and rigid discipline to act at 18 and another to be free in the civilian world.
But those arguments for lowering the voting and drinking age both have a pretty impressive level of resonance, don't they?  Trusting someone to defend the nation's freedom at the cost of their own bodies and lives surely shows that we can trust someone that age with greater responsibility.
And at the same time, if you can trust a soldier with a tank, a sailor with a battleship, a pilot with an F-15E or a marine with a drone, then you can trust them with a pistol, it seems to me
Yet advocates of gun control such as those the courts have to keep shooting down over and over in Washington DC don't even make that distinction.  At least some probably figure anyone who served in the military is a sub-IQ dropout as John Kerry suggested in the 2004 presidential campaign, or that a soldier back in civilian life is one flashback away from shooting up a shopping mall.  But they don't even think about soldiers being perhaps allowed an exemption from gun control.  They want no one to have weapons to defend themselves with.
And while the proposals are inevitably presented with the best possible wrappings and bows, inside the package is an innate distrust of the American public, a presumption that right policies can make utopia by taking away bad influences from innately good people, and a need to control.