The Pentagong Show

The Pentagong Show
United State of Terror: Is Drone War Fair?

Thursday, February 26, 2009

And they all fall Down.

Japanese exports fell by 45.7% in January from a year ago - the steepest decline since 1957 - as exports to three of Japan's biggest overseas markets fell by record levels. Exports to the United States fell by 52.9%, exports to Europe declined by 47.4%, and exports to Asia dropped by 46.7%, Japan's Ministry of Finance reported.

Ambac Financial Group Inc. (ABK) posted a $2.34 billion, or $8.14 a share,
fourth-quarter loss. General Motors Corp., surviving on $13.4 billion in U.S. aid, reported a $9.6 billion fourth- quarter loss.

The fundamental position of Monthly is that the price of Oil will steadily gain influence over all areas of investment from this point forward and that professionals will need to incorporate this view more habitually into their strategy.

The Royal Bank of Scotland has posted the largest annual loss in British corporate history: $34.4 billion for 2008.

The economic contraction has only curbed demand for crude oil by 300,000 barrels/day in 2008 during one of the worst global recessions in decades.

Peter Schif says "The government should enforce the integrity of free markets, not manipulate them", completely ignoring the fact that the free-for-all market HAS no integrity. It's quite literally a conspiracy of the haves against the have-nots. They pretend openness while myriad shenanigans and tom-foolery goes on behind the scenes to manipulate prices, as well as the books, elevate value, and lie brazenly to the public. Just watch a car ad, like an adult for a change; actually looking to get data for the investment of time it demands. You'll get none. You'll get a car zipping along a mountain road, or a thunderous tank-like vehicle plowing through a rocky stream, and allow yourself to be manipulated by adolescent angst, even in your fifties.

Icecaps around the North and South Poles are melting faster and in a more widespread
manner than expected, raising sea levels and fueling climate change, and the melting of Greenland's ice cover is accelerating. The land-based ice sheets of Greenland and the Antarctic hold the bulk of the world's freshwater reserves and can generate sea level changes of global scale as they melt.

Really makes you hope we can get this carbon-spewing war-machine economy back on track, eh? Let's see? Deal with climate change or starve? hmmmmm. Meanwhile the Pakistan Taliban are mysteriously well-armed, even as more than a third of the military's arms in Afghanistan have inexplicably disappeared.

About 4,000 years ago our ancestors cut down the forests of the Fertile Crescent and turned the whole region into a desert. It worked so well that Indonesia is trying to repeat the feat with the world's third largest rain forest before the Brazilians can with the Amazon. Buy yo fuel now.

S&P: Ukraine's long-term foreign currency rating was lowered to ‘CCC+’, seven levels below investment grade, making Ukraine’s rating the lowest in Europe and on a par with Pakistan.

Gary Gensler, the nominee to head the Commodity Futures Trading Commission and
former Goldman Sachs partner, is the latest from the firm of criminals to join
government to keep the inside traders at GS informed of pending government actions:
keep those shredders ready.

U.S. driving and fuel usage are up, despite the recession.

I want don’t want to believe that things are going to turn out the way they probably will… but policy makers and forecasters who see a recovery next year are probably lying to boost public confidence ... that's their job. But of course this isn't a recession. This is something really quite different in character from anything we've experienced in the postwar era. So many of the benefits of the boom went to the elites. If you have a lost decade plus redistribution, it may not be that dramatic a change for many, many people. People just have to get over the fact that their wealth wasn't worth what they thought it was in 2006. Whether it's their stock
market portfolio or their housing, (or their children's future). If we simply go back to where we were, in 2005, that's surely not the worst thing that could happen to us.”

That's Niall Ferguson, that. Remember those words, you'll think of them with a cynical sneer some day.

Saturday, February 14, 2009

"Michelle Obama's Hairstyles, a Retrospective".

At the bottom of an article on, under the rubric "More in Politics", I saw a link to "Michelle Obama's Hairstyles, a Retrospective". Thank God, some serious discussion about...oh yeah... nothing.

World oil production peaked in 2005, the financial debacle we're in right now is a direct result of that fact, as an endlessly expanding credit bubble cannot be maintained with a constrained energy supply, and with 20% of the usage here,in the US, whose main exports are $'s, weaponry and War, the answer lies here. But without asking the questions, what chance is there that we'll arrive at a satisfactory one?

How can a stimulus package in the economy that burns the most coal, per capita, that's dependent on another economy, China, that burns the most coal period, do anything but accelerate climate change and result in a worse economic, now to be coupled with environmental, meltdown?

Christophe de Margerie, CEO of French petroleum giant Total, says that the ability of the industry to increase future production will be below 90 million barrels a day. "The capacity that the oil industry has to go to 93-95 million barrels per day is already over."

Climate-warming atmospheric CO2 has now reached 392ppm, the highest level in the last 800,000 years. The larger portion of this gas will remain in the atmosphere, warming the earth, for well over a century.

In an attempt to level the playing field, the US military has let a third of the quarter million weapons given to the Afghan government to go AWOL - most likely to the Taliban.

On a list of the 25 people to blame for this mess, not including Mr. Peak Oil is strange. Did not the high prices of 2008 and the leveling off of production not have a great deal to do with the collapse? If petroleum availability has stopped growing, so too must economies.

Fully 33% of the 2009/2010 US corn crop will go to make ethanol.

The stimulus package the U.S. Congress is completing would raise the government’s commitment to solving the financial crisis to $9.7 trillion, enough to pay off more than 90% of the nation’s home mortgages.

March Natural Gas, a cleaner alternative to coal, dropped 6.8% (down 21% y-t-d).

“China plans to invest more than 600 billion yuan ($88 billion) in the nation’s
telecommunications and electronics industries, the 21st Century Business Herald reported…”, while we continue to pour trillions, that we don't have, into the failed financial industry. The US role as world leader in technology and innovation is finished. We have consciously transformed our economy into a Militaristic War Machine and the plaything of the Rich so we could indulge in puerile fantasies of unfettered wealth that are naught but a mirage. This is apparently the best that American Democracy can offer its tragically deluded masses. No wonder we need to foist it onto others at the point of a gun.

Monday, February 9, 2009

The end of Prosperity.

A mob attack on women drinking in a college-town bar is laying bare the limits of freedom for young Indian women. This is where IBM cynically tells its employees is a swell place to move to: thanks a lot, punk.

Not one Republican voted for the House version of the stimulus plan.

Companies in Europe and the Middle East are planning to slash capital expenditure this year by a third on average, dealing a blow to wider economic activity, according to a report by Fitch Ratings. This was because they were conserving cash to preserve their credit rating and control their borrowing costs. Many were also finding they simply could not borrow funds.

During nearly two decades, Japan accumulated the largest public debt in the developed world — totaling 180 percent of its $5.5 trillion economy — while failing to generate a convincing recovery. The only thing that let Japan escape from its trap was a global boom that boosted the nation’s exports. Who will rescue America from a similar trap now that the whole world is slumping at the same time?
Bushenomix stoked inflationary forces purposely. Why? Who benefits from inflation? The answer is government, banks, and the already wealthy, because they are first in line to receive money. Everyone else is screwed. Inflation is theft from the middle and lower classes for the benefit of government, specifically the military, and the wealthy. This is why liberal Democrats and their pundits are so dangerous, the "Conscience of a Liberal" tag Paul Krugman champions is openly supporting policies that continue to destroy middle class America, while pretending otherwise. At least the policies advocated by the Hannity insanity and Mad Rush Limbaugh are truthful about their intentions to crush the proles under the Jackboot of the ruling class, for whom they are the unapologetic, simpering fauns. Whereas Krugman and his ilk pretend to be fighting for the downtrodden, they advocate policies that will ultimately leave them further debauched and crushed under an even more unpayable burden of debt.

Over 30 million Americans are on food stamps (SNAP!)

IMF managing director Dominique Strauss-Kahn said last week that advanced economies are already in a depression.

The US Treasury alone needs to raise $2 trillion in 2009.

German orders fells 25pc year-on-year in December. French house prices collapsed 9.9pc in the fourth quarter, the steepest since data began in 1936....Polish homeowners have had the shock from Hell. Some 60pc of mortgages are in Swiss francs. The zloty has halved against the franc since July.

Wednesday, February 4, 2009

Summary of the day.

Bloomberg's reporting: Record 19 Million U.S. Homes Stood Vacant in 2008

Panasonic warns of $4.2 billion loss, to cut 15,000 jobs.

After years of blistering growth, installation of wind and solar power is plummeting due to the credit crisis and the broader economic downturn.

Eastern Europe tops the list of emerging market regions susceptible to a full-blown financial crisis. Unlike emerging markets elsewhere, Eastern European economies are heavily dependent on external financing and current account deficits have been the norm. So, the sharp drop-off in capital inflows - expected in 2009 - will not only be a major blow to growth, but it could also potentially trigger a regional financial crisis. The Baltics, Bulgaria, Romania and Hungary stand out as particularly vulnerable but a crisis in one country could trigger a regional domino effect.

“The present system has been broken; it’s failed the test of the marketplace,” former Federal Reserve Chairman PaulVolcker said Jan. 15 in New York in calling for strengthening regulation.

"Coal is 80 percent of the planet's problems," Dr Hansen maintains. "You have to keep your eye on the ball and not waste your efforts. The No. 1 enemy is coal and we should not forget that." All fossil fuels are a problem, of course, but a coal-fired plant emits twice as much carbon dioxide as a gas-fired plant producing the same amount of electricity.

There is a history of earthquakes triggered by dams, including several caused by the construction of the Hoover dam in the US, but none of such a magnitude (as the 7.9 one in Sichuan possibly causwed by construction and filling of the Zipingpu dam).

The Obama Administration is as obviously and fully hostage to the interests of the financial services industry as the Bush crowd was.

Let's turn to a study by the IMF of 124 banking crises. Their conclusion:

Existing empirical research has shown that providing assistance to banks and their borrowers can be counterproductive, resulting in increased losses to banks, which often abuse forbearance to take unproductive risks at government expense. The typical result of forbearance is a deeper hole in the net worth of banks, crippling tax burdens to finance bank bailouts, and even more severe credit supply contraction and economic decline than would have occurred in the absence of forbearance.

So we the taxpayers are going to eat a ton of bank losses that should instead be borne first by stockholders and bondholders This program should be labeled the Pimco bailout plan, since the giant bond fund holds a lot of bank debt. That show what a fiction Obama's populism is. It's mere posturing and empty phrases. Look at where the dough goes, and it is going first and foremost to the big money end of town. Cui bono, eh?