Saturday, May 15, 2010

Myth of the Moderate Muslim

David Horowitz is a Jew and former communist who today speaks and writes about the threat of Islamic extremism, not just abroad but on American campuses. A few days ago he was confronted by an American Muslim student whose answer to a question he poses is both chilling and clarifying. It certainly shows that some people who look moderate and sound moderate are in their hearts just as murderous as any terrorist who blows up school busses in Israel:

There is a myth that has gained currency in this country, especially among liberals, that holds that the overwhelming number of Muslims are peace-loving folk who condemn terrorism, Hezbollah, and Hamas. I say it is a myth because although I believe that such Muslims probably exist, and certainly hope that they do, it's very difficult to actually find one of them. It's especially hard to find them on our university campuses.

Check out Horowitz's website FrontPage Mag where he documents many of his encounters with Muslim students, and you'll understand what I mean.


Looting the World

Bill adds a very important observation to our post titled Death Spiral:

On your Death Spiral post, I just wanted to mention that while all of what you wrote is probably true, you may have missed a not so insignificant fact. The bail out of Greece is not actually a bail out of "Greece" rather it's a bailout of the banks, primarily in Germany and France, that have leant Greece money by buying Greek bonds.

It's no different than what happened in this country. For example AIG had insured investments that Goldman Sachs had made and when those investments went bust, AIG couldn't pay so the taxpayer footed the bill. Tens of billions of dollars of the bailout to AIG went directly to GS. GS didn't lose a penny. The interesting thing about this is that when the bonds from a company go bad (AIG), the bond holders (GS) ALWAYS take a haircut by negotiating for some percentage of pennies on the dollar. Not so in this case, and the banks were made completely whole as the US Treasury and the Fed didn't even attempt to negotiate a settlement.

The same thing is happening with Greece. The moral hazard has gone over the top. The banks know that they can make whatever investments they choose and all losses will be paid for by the public. The big banks have firmly fixed the IV into the arm of the public and will slowly suck out every drop of blood. Unfortunately, nobody seems interested in doing anything about this.

Sadly, these bailouts don't fix anything, rather they simply kick the debt can down the road for a couple of years and the same thing or worse will happen again. If Greece was ready to default today, what are they going to do that will enable them to pay off their present debt (that they can't pay today) along with an additional hundreds of billions that will come due in two years? Giving them the loans just enables them to continue to be grasshoppers.

All that had to be done was for Greece to default and leave the ECU and the Euro until they got their fiscal house in order at which time they could rejoin the union. Greece would have been better off, the ECU and the Euro would have been better off, but the banks would have lost some money. Guess we can't have that now, can we?

The ECU really screwed up because they have sent the message to the world that they aren't really serious about a solid Euro currency. It's just another fiat currency with no discipline...just like the dollar. The Euro price is dropping like a rock as people are bailing out, and that's primarily why the price of gold is going up.

Further, look what's happening every Friday afternoon on the FDIC website where they announce the closing of banks for the week. It doesn't take much to figure out that the assets of the closed banks are being assumed by other banks with the FDIC assuming the garbage assets that aren't wanted.

So what we're getting is more and more banks growing bigger and bigger as the smaller ones go under. The big fish are eating the little fish. At some point all of them will be too big to fail.

The banks are looting the world...

Meanwhile the president, all his tough talk notwithstanding, does nothing to stanch the looting, which isn't surprising given the number of former Goldman Sachs bigwigs with which he has stocked his administration.