Wall Street in Wonderland


An article in today's Wall Street Journal indicates
growing international concern over the nature of the global upturn.
The article is reproduced in the next posting.

It contains the following paragraphs:

Originally Posted by Wall Street Journal, 1/22/04, p. A10

The questions now: Will the deficit financing -- which consists
mainly of Asian central banks buying dollars to keep their
currencies competitive against the falling dollar -- continue?
Will the imbalances unwind rapidly, entailing a crash in the
dollar? How much longer will U.S. consumers continue to borrow and
spend, given their debt and lack of job growth?

The answers have "profound implications for the rest of the
world," said Ms. Tyson of the London Business School. "Millions of
jobs in China and around the world are being held up by the
profligate U.S. consumer."

Here's what's happening: A stock market bubble is like a pyramid
scheme. If you've never seen a pyramid scheme before, then a pyramid
scheme looks pretty good. Apply that to a whole 80-year generational
cycle, and you can have an entire generation buying into a pyramid
scheme in the stock market. In the end, that's what happened just
before 1772, 1857 and 1929, and in the 1990s. A pyramid scheme can't
be legislated against because it's a feeling, a state of mind, a loss
of control by a whole generation. People who live through that kind
of pyramid scheme remember the feeling, and they don't let it happen
again. It's only when that generation dies that it happens again.

A pyramid scheme crashes when it runs out of people or money. Alan
Greenspan's near-zero interest rate policy has had the effect of
pouring tens or hundreds of billions of dollars more money into the
1990s stock market bubble pyramid scheme, thus keeping it going for a
few more years. Consumer and business debt has been growing
exponentially, and the dollar has been falling dramatically for two
years. Sooner or later it has to collapse -- tomorrow, next month,
next year, but not much longer after that.

I've been writing about this subject for two years now, and I won't
repeat most of the analytic arguments, but I'll just mention one
thing: The S&P 500 Price/Earnings ratio is around 30. HELLO
PEOPLE!! That means you pay $30 for a share of stock earning only
$1 per year. That doesn't make sense. Anyone who believes that this
can continue for long is truly in Wonderland. Say hello to Alice for
me.

Sincerely,

John

John J. Xenakis
E-mail: john@GenerationalDynamics.com
Web site: http://www.GenerationalDynamics.com

U.S. Role in Global Upturn Generates Growing Unease


World Economists Ponder Sustainability of Recovery Built on Ballooning
Deficits

Wall Street Journal, 1/22/04, p. A10

The very things that are driving the global economic recovery are now
prompting growing concern: the U.S.'s widening budget and trade
deficits and the ballooning debt they entail.

Buoyant economic growth in the U.S., signs of recovery in Japan after
a decade of stagnation, and improved business confidence in Germany
and other parts of Europe suggest the world economy has started to
shake off three years of economic torpor. Rising stock markets in many
countries underscore the view that better times are ahead.

By Christopher Rhoads and Bob Davis in Davos, Switzerland, Rebecca
Buckman in Hong Kong and Sebastian Moffett in Tokyo

Yet there is unease over the imbalances that underlie this picture,
raising questions about how the U.S. is driving that growth, whether a
debt-fueled recovery is sustainable and how long it can run. The
uncertainty, voiced by many business and government leaders gathered
this week at the World Economic Forum in Davos, Switzerland, could
undermine confidence and the strength of the recovery.

"It's a strange phenomenon," says Bertrand Collomb, chairman of French
construction company Lafarge SA. "All indications point to a recovery,
but people are worried about these imbalances." For Lafarge, this
uncertainty contributes to its commitment to improve its balance
sheet, before looking for takeover targets. "There is a belief that
the U.S. is living on borrowed time and money," Mr. Collomb says. "And
if you think that, then you cannot be confident the recovery will
continue."

South Korea is expected to grow by 5% this year, but companies there
remain cautious, says Tae-Shin Kwon, a deputy minister for
international affairs in South Korea's Ministry of Finance and
Economy. Domestic business investment last year was "not good," Mr.
Kwon says, though he says things are starting to look up.

The problem is that, at the moment, there are no alternatives to this
sort of U.S.-generated growth. "We can bash the U.S. government for
its unsustainable economic policies," said Laura Tyson, dean of the
London Business School and a chairman of the White House Council of
Economic Advisers under former U.S. President Bill Clinton. "But it is
the economy that is pulling the world economy along, and I don't see
where else this would come from."

The countries in the euro zone and Japan are expected to grow by 2% or
less this year, an improvement from last year, but hardly enough to
drive global growth. China should continue its ferocious pace of
economic growth -- 9.1% last year -- but the economy remains too small
to replace the U.S. as the locomotive for the global economy.

The U.S. grew at an annual rate of 8.2% in the third quarter -- a
phenomenal rate that began to breathe life into other economies. That
surge was achieved, in part, by huge federal tax cuts and spending
increases that have driven the U.S. government budget to a deficit of
about 4.5% of gross domestic product, from a surplus of nearly 3% of
GDP as recently as three years ago, according to Dutch bank ING. GDP
measures the total value of goods and services produced in a nation.



The tax cuts have encouraged U.S. consumers to continue to borrow and
buy, pushing household debt to more than 80% of GDP and the trade
deficit ever wider, according to ING. The U.S. current account -- a
broad measure of trade, investment and savings -- averaged a deficit
of $530 billion (?421.77 billion) through the first nine months of
last year, or a record 5% of GDP. The gap has narrowed slightly in
recent months.

"This cannot go on forever," says Guillermo Ortiz, governor of the
Central Bank of Mexico. "It's pretty obvious that there is restraint"
in the economic recovery, as a result of this sort of concern.

The questions now: Will the deficit financing -- which consists mainly
of Asian central banks buying dollars to keep their currencies
competitive against the falling dollar -- continue? Will the
imbalances unwind rapidly, entailing a crash in the dollar? How much
longer will U.S. consumers continue to borrow and spend, given their
debt and lack of job growth?

The answers have "profound implications for the rest of the world,"
said Ms. Tyson of the London Business School. "Millions of jobs in
China and around the world are being held up by the profligate U.S.
consumer."

These imbalances could well worsen before they improve. With the
presidential campaign begun, the Bush administration will be focused
on re-election, rather than on reining in deficits or trying to curb
the fall of the dollar. A weaker dollar benefits U.S. manufacturers by
making their products relatively cheaper overseas.

The Democratic Party's contenders for the presidential nomination have
harshly criticized Mr. Bush for running up the deficit, and the flak
seems to be having some impact on administration rhetoric. The
Treasury Department recently said it would crack down on corporate tax
shelters, which could result in tens of billions of dollars in
additional revenue. The administration has dropped its rhetoric that
deficits don't matter and aims to narrow the budget deficit from about
4.5% of GDP this year to around 2% in five years, said White House
chief economist Greg Mankiw.

But few observers expect the White House to make the changes that
would have the biggest impact on the deficit, such as delaying tax
cuts or reducing government payouts for the Medicare health-care
program of the elderly and disabled or the Social Security retirement
system.

Tom Gallagher, an analyst at International Strategy and Investment, a
Washington market-research firm, said he expects the Bush White House
to look for mostly symbolic measures to demonstrate that it cares
about the deficit, perhaps by threatening vetoes of spending on
highways and other legislative favorites. "They're fighting for some
demonstrations of fiscal restraint," he said.

Mr. Bush is planning to campaign on a platform that would make his tax
cuts permanent and would push for new tax breaks to encourage savings.
While the tax breaks won't have much budget impact in the short term,
they would cost tens of billions of dollars in the next decade.

None of the Democratic candidates has put out a detailed
budget-balancing plan, but they all favor repealing at least part of
Mr. Bush's tax cuts, which would raise revenue.

Because of their larger trade exposure, Asian economies are most
vulnerable to the U.S.'s predicament. The region, excluding Japan,
accounts for 48% of the trade deficit of the U.S., which means that
any unwinding of the U.S.'s trade imbalance will have the largest
impact on Asia.

While growth is picking up across Asia, the figures mask the lack of
domestic activity in many of the economies. Nearly all the growth
comes from exports, mainly to the U.S. and China. Domestic demand
hasn't reached the point where companies feel confident enough to
start spending and hiring again.

Even though its net income soared by 47% in the first nine months of
last year, Siam Cement PCL of Thailand is still putting off
investment. If demand for the company's cement products continues to
grow at its current pace, it would probably take three or four years
for Siam Cement to significantly step up investment, says Vice
President Kan Trakulhoon, citing its excess capacity. Employment has
remained roughly constant at 17,000 workers for the past few years.

Similarly, South Korea is expected to grow by 5% this year, but
companies there remain cautious, said Tae Shin Kwon, a deputy minister
for international affairs in South Korea's Finance Ministry. Domestic
business investment last year was "not good," Mr. Kwon said.

KT Corp., South Korea's former national telephone monopoly, won't ramp
up investment and hiring until it sees a rebound in demand. "We are
not seeing that yet," says Lee Yong Kyung, the company's chief
executive. Sales nudged up 1% last year. As a result, the company
intends to keep capital expenditure at the same level as in 2003, he
says. Last year, it cut its work force 13%. "We will not see a massive
hiring cycle this year," Mr. Lee says.

Ultimately, narrowing the trade gap could involve painful adjustments
for Asian nations, such as allowing their currencies to appreciate
more agains the dollar. But despite pleas from U.S. and European
economic officials, Japan and other Asian countries don't appear
willing to let that happen. Japan spent nearly $200 billion on
currency-market intervention in 2003, restraining the yen's rise
against the dollar to 11%, compared with the euro's 20% rise against
the dollar. This year, Japan has continued to intervene aggressively.

Japanese companies have said their profits would evaporate if the
Japanese central bank stops intervening to keep the yen down. In a
survey of 77 major manufacturers released last week by the Ministry of
Economy, Trade and Industry, about 80% said their corporate profits
and capital investment would suffer if the yen stays long term in a
range of ?100 to ?105 to the dollar. Earlier this month, Akio Mimura,
president of Nippon Steel Corp., told a panel discussion: "With the
yen at ?105 per dollar, we're about ready to scream."

At a meeting of finance ministers from the Group of Seven leading
industrial nations to be held in Florida early next month, European
officials are expected to ask for some sort of joint statement for
keeping the euro from rising further against the dollar. The euro
zone's currency has jumped by more than 50% against the dollar, from
its lows a couple of years ago, raising worries that it may snuff out
Europe's fledgling economic recovery. Since the European Central Bank
isn't intervening to keep the euro down -- unlike the Asian central
banks -- the common currency has borne the brunt of the dollar's
fall.

Few economists expect the U.S. to go along with such a plan. Outright
intervention, which some European policy makers have hinted at, is
even less likely. The weakening dollar, after all, is just what is
needed to rectify the trade deficit, by driving up U.S. exports and
lowering U.S. imports.

"I'd be very surprised if the U.S. were to agree to actively engage in
a joint intervention," to lift the dollar, says former Treasury chief
economist Richard Clarida. "Interventions aren't likely to have a
sustained impact on currencies without corresponding policies to back
them up. In the U.S. that would be a tightening of monetary policy,
which isn't on the horizon."

While a growing number of economists think the U.S.'s imbalances pose
a major risk, both to the U.S. and to the world, one important one,
U.S. Federal Reserve Chairman Alan Greenspan, appears to remain
sanguine about it. In recent speeches, Mr. Greenspan has said the
market should correct the problems. "If no measures are taken to
adjust the current-account deficit, the market will do it," he said
following a recent speech in Berlin. "It is only if there is the
perception that rigidities in the systems would prevent an adjustment,
then actions should be taken."

Write to Christopher Rhoads at christopher.rhoads@wsj.com4, Bob Davis
at bob.davis@wsj.com5, Rebecca Buckman at rebecca.buckman@wsj.com6 and
Sebastian Moffett at sebastian.moffett@wsj.com7

URL for this article:
http://online.wsj.com/article/0,,SB1...307969,00.html


Hyperlinks in this Article:
(1) http://online.wsj.com/page/0,,2_1066,00.html
(2) http://online.wsj.com/page/0,,2_1066,00.html
(3) http://www.weforum.org/site/homepubl...l+Meeting+2004
(4) christopher.rhoads@wsj.com
(5) bob.davis@wsj.com
(6) rebecca.buckman@wsj.com
(7) sebastian.moffett@wsj.com

Updated January 22, 2004

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Wall Street Spin Doctors at Work
January 20, 2006

For Discussion Only
Peter Schiff is C.E.O. and Chief Global Strategist at Euro Pacific Capital, Inc.
http://www.prudentbear.com/internationalperspective.asp


When it comes to spin, Washington is no match for Wall Street.



Last Thursday, Wall Street celebrated the narrowing of America's gargantuan $68.1 billion October trade deficit to a somewhat less horrific $64.2 billion in November. The dip was a whopping $2 billion more than consensus expectations. Ignored was the fact that November’s deficit was still the third largest monthly deficit ever, and regardless of expectations, an unmitigated economic disaster. Such a "celebration" is akin to a student celebrating an “F” on his report card, as it represents an improvement on the “F-“ earned the prior semester.



There was also no shortage of pundits applying the now routine spin that America’s large trade deficit results from its superior economic growth. Since deficits are now regarded as a sign of economic strength, surpluses must evidence the opposite. This is akin to our student instead attempting to convince his parents that the “F” on his report card actually stands for fabulous.



The obfuscation continued last Friday with the release of a sharp 0.9% increase in December producer prices. Conned by Wall Street spin doctors, the media again focused on the meaningless 0.1% rise in the so called “core” rate, and expressed relief that higher energy prices did not “bleed into the core.” Who cares if one highly manipulated subset of the PPI did not rise if overall prices rose sharply? All the while Wall Street ignored the best indicator of resurgent inflation; gold prices surging to a new twenty-five year high.



Wednesday, the spin doctors demonstrated their dexterity by spinning two balls simultaneously. First they celebrated the benign 0.1% decline in December consumer prices, while ignoring the fact that the decline resulted from falling energy prices that have recently reversed course, surging by 15% in the past two weeks. Also unnoticed was the obvious double standard in that last Thursday’s big increase in the headline PPI was downplayed as being meaningless, while yesterday’s benign increase in headline CPI was cheered as great news. That’s Wall Street’s equivalent of “heads I win, tails you lose.”



Later that morning news that foreigners purchased a record $54.6 billion in Treasury debt in November was heralded as still more good news. The spin was that this unprecedented increase in foreign lending indicates growing foreign confidence in America. This is analogous to a credit card junkie celebrating a record month of charging as as proof of continued bank confidence in his creditworthiness.



The only “good’ news is that the absence of strong foreign demand for Treasuries would be an even bigger short-term disaster. With little in the way of domestic savings to pick up the slack, waning foreign demand would cause treasury prices to collapse, sending interest rates soaring, asset prices tumbling, and the U.S. economy into a severe recession. Yesterday’s news that foreigners continued to spike America’s punch bowl merely assures that our ultimate financial hangover will be that much more debilitating.



The bottom line is that accumulating record amounts of foreign debt to finance consumption is an economic fiasco that can only lead to a substantial reduction in America’s future standard of living. Celebrating our increasing debt will ultimately prove to be nothing more than a bit of comic relief in the final chapter of this developing American economic tragedy.

Wall Street Spin Doctors at Work
January 20, 2006

For Discussion Only
Peter Schiff is C.E.O. and Chief Global Strategist at Euro Pacific Capital, Inc.
http://www.prudentbear.com/internationalperspective.asp


When it comes to spin, Washington is no match for Wall Street.



Last Thursday, Wall Street celebrated the narrowing of America's gargantuan $68.1 billion October trade deficit to a somewhat less horrific $64.2 billion in November. The dip was a whopping $2 billion more than consensus expectations. Ignored was the fact that November’s deficit was still the third largest monthly deficit ever, and regardless of expectations, an unmitigated economic disaster. Such a "celebration" is akin to a student celebrating an “F” on his report card, as it represents an improvement on the “F-“ earned the prior semester.



There was also no shortage of pundits applying the now routine spin that America’s large trade deficit results from its superior economic growth. Since deficits are now regarded as a sign of economic strength, surpluses must evidence the opposite. This is akin to our student instead attempting to convince his parents that the “F” on his report card actually stands for fabulous.



The obfuscation continued last Friday with the release of a sharp 0.9% increase in December producer prices. Conned by Wall Street spin doctors, the media again focused on the meaningless 0.1% rise in the so called “core” rate, and expressed relief that higher energy prices did not “bleed into the core.” Who cares if one highly manipulated subset of the PPI did not rise if overall prices rose sharply? All the while Wall Street ignored the best indicator of resurgent inflation; gold prices surging to a new twenty-five year high.



Wednesday, the spin doctors demonstrated their dexterity by spinning two balls simultaneously. First they celebrated the benign 0.1% decline in December consumer prices, while ignoring the fact that the decline resulted from falling energy prices that have recently reversed course, surging by 15% in the past two weeks. Also unnoticed was the obvious double standard in that last Thursday’s big increase in the headline PPI was downplayed as being meaningless, while yesterday’s benign increase in headline CPI was cheered as great news. That’s Wall Street’s equivalent of “heads I win, tails you lose.”



Later that morning news that foreigners purchased a record $54.6 billion in Treasury debt in November was heralded as still more good news. The spin was that this unprecedented increase in foreign lending indicates growing foreign confidence in America. This is analogous to a credit card junkie celebrating a record month of charging as as proof of continued bank confidence in his creditworthiness.



The only “good’ news is that the absence of strong foreign demand for Treasuries would be an even bigger short-term disaster. With little in the way of domestic savings to pick up the slack, waning foreign demand would cause treasury prices to collapse, sending interest rates soaring, asset prices tumbling, and the U.S. economy into a severe recession. Yesterday’s news that foreigners continued to spike America’s punch bowl merely assures that our ultimate financial hangover will be that much more debilitating.



The bottom line is that accumulating record amounts of foreign debt to finance consumption is an economic fiasco that can only lead to a substantial reduction in America’s future standard of living. Celebrating our increasing debt will ultimately prove to be nothing more than a bit of comic relief in the final chapter of this developing American economic tragedy.

And what about the fact that first-time jobless claims reached their lowest level since Clinton was still in the White House in Thursday morning's report, which also showed the four-week moving average of claims (which smooths out volatile week-to-week fluctuations) at their lowest figure since 2000, albeit a somewhat later date in 2000 than for the weekly number?

Maybe G-d is a Republican after all!

And what about the fact that first-time jobless claims reached their lowest level since Clinton was still in the White House in Thursday morning's report, which also showed the four-week moving average of claims (which smooths out volatile week-to-week fluctuations) at their lowest figure since 2000, albeit a somewhat later date in 2000 than for the weekly number?

Maybe G-d is a Republican after all!

Originally Posted by Mystic 1

Though I agree we are in trouble, I find your points a little alarmist.

Point #1 The U.S., Great Britain and Israel are preparing to attack Iran. As it appears the main reason for invading Iraq was to stop it from selling oil in Euros, likewise Iran has plans to dump the dollar come March 2006.

The Save the Dollar theory is one legitimate theory of several explaining this administration's behavior. I am not sure it's the only game in town though. In retrospect, we'll know more.

Originally Posted by Mystic 1

Point #2 U.S. Treasury Secretary John Snow issued a warning recently that the U.S. Government is on the verge of collapse - as the statutory debt limit imposed by Congress of $8.184 trillion dollars would be reached in mid-February - the government would then be unable to continue its normal operations. Considering the current total U.S. debt stands at $8.162 trillion dollars, once the official debt ceiling ($8.184 trillion) is reached, the U.S. government’s credit abroad (its borrowing power) is gone. Those countries (mainly China) who presently keep America afloat by holding U.S. Treasury Notes, will most likely no longer continue doing so.

The debt ceiling, in and of itself, is a non-issue, since it can be raised very easily on our end. The Shakespearean rub is the willingness of the Chinese to keep forking over money for the Treasuries. THAT is indeed a giant variable.

Originally Posted by Mystic 1

Point #3 Bank Of America and Compass Bank managers (probably all other U.S. banks too) have been instructing their employees in the last few weeks on how to respond to customer demands in the event of a collapse of the U.S. economy - specifically telling the employees that only agents from the Department Of Homeland Security will have authority to decide what belongings customers may have from their safe deposit boxes - and that precious metals and other valuables will not be released to U.S. citizens. The bank employees have been strictly prohibited from revealing the banks’ new "guidelines" to anyone. (however, employees have been talking to friends and family)

The next time you visit your bank, ask them about it - then ask yourself, why is this information being kept secret from customers and the public - what’s really going on?

I have a friend in the banking industry. I will ask her about this.

Originally Posted by Mystic 1

Point #4 FEMA has activated and is currently staffing its vast network of empty internment camps with armed military personnel - unknown to most Americans, these large federal facilities are strategically positioned across the U.S. landscape to "manage" the population in the event of a "terrorist" attack, a civilian uprising, large-scale dissent ,or an insurrection against the government. Some of these razor-wired facilities have the capacity of detaining a million people.

This sounds a little tin-foil hattish. First, FEMA can't seem to do anything right, so how could they pull this off? Second, do you have any other sources besides the, er, interesting one you supplied?

Originally Posted by Mystic 1

Point #5 The Patriot Act and the US Senate’s vote to ban habeas corpus (Nov 14th) - along with George W. Bush having signed executive orders giving him sole authority to impose martial law, suspend habeas corpus and ignore the Posse Comitatus Act, have together pretty much destroyed any notions of freedom and justice for Americans.

This line of concern is the most worrisome of them all. What is really worrying is how relatively unconcerned the majority of American people are in these developments.

Originally Posted by Mystic 1

Summary: The U.S. economy is broken, the United States is bankrupt . . .

What irony I would not like to see develop would be our economic ruin and political disintergration, not only because it would be catastrophic by itself, but because Osama will take credit for it just as he did the fall of the Soviet Union. Could you imagine how emboldened the Jihadis would be then?!?

Originally Posted by Mystic 1

. . . I’d say there’s a stinking rat in the woodpile ...can you smell it too?

There's been one of those for a while. But is the whole colony of rodents about to stink?

Originally Posted by Mystic 1

Though I agree we are in trouble, I find your points a little alarmist.

Point #1 The U.S., Great Britain and Israel are preparing to attack Iran. As it appears the main reason for invading Iraq was to stop it from selling oil in Euros, likewise Iran has plans to dump the dollar come March 2006.

The Save the Dollar theory is one legitimate theory of several explaining this administration's behavior. I am not sure it's the only game in town though. In retrospect, we'll know more.

Originally Posted by Mystic 1

Point #2 U.S. Treasury Secretary John Snow issued a warning recently that the U.S. Government is on the verge of collapse - as the statutory debt limit imposed by Congress of $8.184 trillion dollars would be reached in mid-February - the government would then be unable to continue its normal operations. Considering the current total U.S. debt stands at $8.162 trillion dollars, once the official debt ceiling ($8.184 trillion) is reached, the U.S. government’s credit abroad (its borrowing power) is gone. Those countries (mainly China) who presently keep America afloat by holding U.S. Treasury Notes, will most likely no longer continue doing so.

The debt ceiling, in and of itself, is a non-issue, since it can be raised very easily on our end. The Shakespearean rub is the willingness of the Chinese to keep forking over money for the Treasuries. THAT is indeed a giant variable.

Originally Posted by Mystic 1

Point #3 Bank Of America and Compass Bank managers (probably all other U.S. banks too) have been instructing their employees in the last few weeks on how to respond to customer demands in the event of a collapse of the U.S. economy - specifically telling the employees that only agents from the Department Of Homeland Security will have authority to decide what belongings customers may have from their safe deposit boxes - and that precious metals and other valuables will not be released to U.S. citizens. The bank employees have been strictly prohibited from revealing the banks’ new "guidelines" to anyone. (however, employees have been talking to friends and family)

The next time you visit your bank, ask them about it - then ask yourself, why is this information being kept secret from customers and the public - what’s really going on?

I have a friend in the banking industry. I will ask her about this.

Originally Posted by Mystic 1

Point #4 FEMA has activated and is currently staffing its vast network of empty internment camps with armed military personnel - unknown to most Americans, these large federal facilities are strategically positioned across the U.S. landscape to "manage" the population in the event of a "terrorist" attack, a civilian uprising, large-scale dissent ,or an insurrection against the government. Some of these razor-wired facilities have the capacity of detaining a million people.

This sounds a little tin-foil hattish. First, FEMA can't seem to do anything right, so how could they pull this off? Second, do you have any other sources besides the, er, interesting one you supplied?

Originally Posted by Mystic 1

Point #5 The Patriot Act and the US Senate’s vote to ban habeas corpus (Nov 14th) - along with George W. Bush having signed executive orders giving him sole authority to impose martial law, suspend habeas corpus and ignore the Posse Comitatus Act, have together pretty much destroyed any notions of freedom and justice for Americans.

This line of concern is the most worrisome of them all. What is really worrying is how relatively unconcerned the majority of American people are in these developments.

Originally Posted by Mystic 1

Summary: The U.S. economy is broken, the United States is bankrupt . . .

What irony I would not like to see develop would be our economic ruin and political disintergration, not only because it would be catastrophic by itself, but because Osama will take credit for it just as he did the fall of the Soviet Union. Could you imagine how emboldened the Jihadis would be then?!?

Originally Posted by Mystic 1

. . . I’d say there’s a stinking rat in the woodpile ...can you smell it too?

There's been one of those for a while. But is the whole colony of rodents about to stink?