Why Wait?

It seems that Christianity and Christian cults, excuse me, sects, that inhabit the U.S. are never at a loss to produce small but fanatical sub-groups who are desperate to impart to the rest of us that the end is nigh. The latest batch of (m)adherents have apparently deemed May 11 of this year as the "beginning of the end." No doubt, some loud and particularly lunatic voice among them has, by dint of some very arcane fundamentalist numerology, discerned that the aforementioned date is of special import. After all, chiliasts don't have much use for hard science, so whoever came up with May 11 must have resorted to a special brand of bible thumping bullshit to come up with their calendar date of doom.

What, particularly, is it about our society that, time and time again, over the centuries, it seems to breed what is, to me at least, a particularly annoying cadre of Good Book desperadoes desperate for the entire societal shebang to be summarily extinguished by the Sky God? My quick surmise of this phenomenon is that the U.S., peopled as it as by more than its fair share of enfeebled men and women, is simply too hostile and difficult a place to survive for some portion of its weaker and more vulnerable members. Tragically, for them, and the rest of us, slipping into group hysteria and/or psychosis becomes the most comfortable and viable option. Put another way, these disaffected and disturbed citizens are, in essence, mental and emotional drop outs waiting for a not so benevolent creator to rescue them-while punishing the rest of us- from what must certainly be a long travail of abject existential misery.

Most folks here in the U.S., and elsewhere, I imagine, just get on with our own personal misery without resorting to this sort of infantile religious lunacy, but, in The Land of The Free, perhaps as a result of Enlightenment thinking taken to its logically nutty extreme, and our very poor public educational system, one can construe any sort of self serving tripe one wants to towards whatever purpose one chooses. In the meantime, I would wish the rapturists best of luck, but I'm inclined to believe it best not to encourage them. Not that these sort require any added motivation.

Egypt

Now that Egyptian dictator Hosni Mubarak has been forced out, presumably in a military style coup that was brought on by massive civil unrest, just what are we to make of what has transpired in Egypt?

There seem to be several explanations regarding what just occurred in the land of The Pyramids. Here are the key explanations that I have encountered to date.

1.) What has transpired in Egypt is being portrayed by the U.S. mainstream media-and by a very wide margin- as nothing less than a full scale (political)revolution.

Commentary:

For that reason alone one must be deeply suspect of the idea that any sort of lasting, profound change has occurred in how Egyptian society functions. Yes, political power has been usurped, nominally new parties are seemingly, seemingly, mind you, in control of the political process. However, does this state of affairs equate to Egypt being in the midst of a process where entirely new socio-economic groups are about to redirect the energies of the nation? For the answer to that question, we will have to wait and see. In the meantime, we are left to wonder if the severe problems-high food prices and lower standards of living- that appeared to catalyze some critical number of the populace into forcefully demanding a drastic change in officialdom are going to be successfully addressed.

2.) Hosni Mubarak, a kleptocratic and somewhat decrepit despot has been ousted as the result of civil discontent that has now led to what is most likely a power vacuum that the entire region is on tenterhooks waiting to see filled. In short, there has been no revolution, but there may be a revolution as a result of Mubarak's ouster and a variety of continuing exogenous and endogenous pressures.

This explanation has the advantage of not reading too much into recent events, while not necessarily glossing over the great if unrealized potential that the aforesaid events may possess.

3.) The toppling of Hosni Mubarak was set in motion and pulled off at the behest of western elites for a variety of possible reasons listed here in no order of preference.

A.) The War on Terror is flagging and needs a boost. What better way to justify more military misadventures in the region that by destabilizing Egypt. The idea here is that long suppressed Islamic Fundamentalist elements in that nation will emerge, and, as a matter of course, will need to be "dealt" with.

B.) Mubarak was allowed to be taken down by western elites because they need someone fresh to do their bidding. Mubarak's sell by date, as it were, was long past, and a younger better despotic puppet-one who doesn't appear so obviously villainous- is required to continue the good work that Mubarak did on behalf of the west.

There is absolutely more than a kernel of truth in the notion that Mubarak was a U.S. puppet. It's, in fact, more true than untrue. However, do the western elites and their various operatives/agencies have anything like the ability to set in motion the sort of events-let alone control them-that such an explanation suggests? Highly doubtful in my view. The west's pull and influence, across all spectra, is badly waning. One could even assert that the collective pull and influence the west once enjoyed, especially in that region of the world, is in a state of terminal decline. If anything, the fall of the decrepit despot was more likely a failure of the west's resolve than anything else. On the other hand, the fall of Mubarak may simply have been the result of a kind of benign neglect on the part of Mubarak's western facilitators. In any case, it's important to remember that while both those explanations are plausible, they are, equally, like so many other things, unknowable.

The Bernank

Recently, Ben Bernanke, with what I imagine was nary a smirk on his face, asserted that his actions at The Fed have had nothing to do with the present instability in Egypt. Oh, no, The Bernank offered, it's all the growth in emerging markets that has caused agricultural commodities to double and triple in price in less than a year's time. In not so many words, The Bernank claimed that the astronomical rise in wheat prices, for example, couldn't be linked in any way to The Fed's (going on two years running) purchase of toxic bad bets, more euphemistically known as assets.

That response highlights perfectly the choice we are faced with regarding what The Bernank, as a quasi public official, must be, namely an epic scale liar or just the world's most powerful imbecile. I opt for the former, as I simply don't think it's possible that, whatever his ideological blinders may be, The Bernank actually believes what he spouts, but, instead, knows he can utter such perfidiousness with impunity as he has a free pass from those in the mainstream media who are allowed to ask questions of him. Egyptian food prices haven't gone up to levels inspiring political revolution due to, as he stated, the state of the Egyptian currency-which in the aftermath of the nation's recent instability is admittedly weaker-they've gone up because food prices everywhere have risen dramatically.

And that shitty reality has met head on with the fact that Macmoud Average, whose yearly income is some fraction of Joe Average's, must, as a result, now use a far greater portion of his meager income, just to put pita on the table.

In the meantime, the great lie, that The Bernank is at some mild pains to elide, is that the money that The Fed has exchanged for the aforementioned assets has not gone into proper bank lending, but rather into bond, equity, and commodity speculation to a degree that has had a material effect on food prices globally. The emerging markets piffle offered up by The Bernank is, just that, patent rubbish, and he must know that, but, being a Central Banker, a U.S. Central Banker in particular, he is, as his predecessor Arthur Burns observed, under no obligation to tell the truth. And so we are under no particular obligation not to see The Bernank and any number of his many fellow travelers, tarred and feathered and run out of town, as it were, on a rail.

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Rate Rises Cometh

With respect to technical analysis of markets, break outs above or below long standing (or even short term) trend lines are not to be trusted until a successful re-test of said trend line occurs, however, at present, the long bond chart has, at least by my runes, signaled a major trend change by breaking out above the upper trend line of a decades long bull market in bonds.

If one is inclined to follow the utterances of certain monetary authorities and their mainstream media minions, the action in long rates of late is the result of an expected incipient rebound in the economy. If, on the other hand, one subscribes to the well buttressed argument of persons like former Reagan budget honcho David Stockman, the implications of the recent action in the long bond are decidedly less than pleasant to put it mildly. Long (bond) story short, the ability of the U.S. government to fund its epic profligacy is going to come under considerable constraint in the not too distant future. I hasten to add that the ominous rise in rates is also a function of the market sussing out that the debt ceiling is going to be raised, yet again. In any event, the action in bonds spells trouble of the not to be deferred for much longer sort.

As the time I have to devote to this humble blog is limited presently, a further discussion of this development will have to wait until next week.