What will the Year of the Metal Rabbit bring?

A diptych showing a rabbit chastising a monkey who has assaulted a toad

2011 is the Chinese Year of the Metal Rabbit, but the Year of the Metal Tiger is not over. The Year of the Metal Tiger was certainly one for the bold, what with the flash crash and the political upheaval that has placed extremely unpredictable characters at the helm. And metals certainly were the most astonishing of all tigers, with gold up almost 30% and silver up 80%. The rare earth miner Molycorp was up almost 300%… in half a year!

My predictions for last year were better hedged than my portfolio, so I underperformed the market. My worst decision for the year was selling SLV after a 94% gain. Had I held, that would have been a 160% gain. It was also definitely not a good a year to employ stop losses. The market bounced around so wildly that stop losses (i.e., sales) were triggered on stocks/options that then quickly recovered. Even if you bought back in before the rise, you paid the taxes. One stop loss was triggered by a lull in trading on a security that some clever person had arranged to put in a buy for at about one-third market value, sort of a mini-flash crash. I am still beating the S&P by about two points per year over a ten year span, but this year certainly chastened me.

The economic predictions for the upcoming year are pretty clear. For ordinary Americans and southern Europeans (and Ireland), it will be rotten. (Roubini says unemployment stays above 9%, growth an anemic 2.7%, inflation a very tame 1.4%, home prices continue to fall)

For corporations, the wealthy, northern Europe, and probably Asia, 2011 will probably be great. Corporations will doubtless engage in mergers and acquisitions to be followed by layoffs and even worse service. But there are still a lot of potential wild cards that could make this less fun a ride for the wealthy and corporations than they imagine.

A lot depends on how serious congressional Republican radicals are. If they refuse to raise the debt ceiling, make major budget cuts, or if they force major states into bankruptcy or radical cuts in services, then it’s Katie bar the door. We could easily end up on the road to a very long Depression. They could just revert to looting the country through reckless tax cuts and rampant corruption, as happened from 2001-5, which would be less damaging in the short-term, but very damaging in the long term. Or there might be stalemate, as the lust for re-election trumps the desire to p—s off liberals, which seems to be the sole guiding principle of Republican policy. By the time that the Year of the Rabbit makes its entrance, a lot of this residual uncertainty will be resolved.

The mortgage revolt will probably be squashed by compliant courts. The Supreme Court is a reliable defender of wealth and can probably be trusted to invent whatever law is necessary to prevent home owners from gaining justice. When it comes to money issues, even the liberals on the court aren’t. The Congress can of course legislate, but that begins to look like ex post facto law, which even the courts are nervous about, since it intrudes on their powers (not to mention, is unconstitutional).

The Chinese say that the Year of the Rabbit “signifies calm, diplomacy, sensitivity and consideration for others.” and Metal signifies “unyieldingness, rigidity, persistence, strength and determination.” If this were interpreted as financial advice (which I decidedly do not give), that equates to “alertly stand pat.”

For what they’re worth, my predictions are as follows:

• US markets have a decent first half and a bad second half. Financials, fixed income, and consumer stocks do the worst and hard assets (but not oil) do the best. Even among the hard assets, the metals have run too far, and should correct. Healthcare companies continue to mint money. By the end of the year, unless the Republicans fall to looting, a second Great Depression looks very possible.
• Europe has a serious scare, including financial panics on the periphery. That may force serious reforms, though whether of purely the impoverish-the-middle-class or the let-countries-float-their-currency variety is unclear. If there are no serious reforms, expect the Eurozone to fragment in the medium-to-long term; a new wave of radicalism, both left and right, could also emerge. The Russian and Germany economies do the best, but there’s enough ugly everywhere to meet any appetite. Bonds and financials lead the way down.
• Latin America and Asia have the best time of it, but even there, it’s a nervous time, with volatility especially high in Asia. Both Brazil and China emerge as clear world leaders as US influence in Asia declines. Japan gets extremely nervous; it’s possible ultranationalism re-emerges as a serious force.

So, there are basically two scenarios. First, if nothing bad happens, then anyone invested in the market makes money, but especially in Asia. The world economy gradually recovers. Bonds fall. Commodities continue to be a good investment.

Or, if a lot of bad things happen, depression and deflation become the big concern. Bonds continue to rise. Most commodities fall, though some hard assets maybe not. Asia gets hurt, especially export-dependent countries.

The usual thing to do is to say, well, it will be a little bit of bad and some good. But I don’t think so. I think that there are enough hidden landmines that if one big one goes off, there will be widespread damage. On the other hand, the landmines have been hidden in order to allow the real economy to grow its way out of depression. So, if no big landmines are triggered, we get into safer and safer territory.

There. I’ve laid my marker, and now it’s time to calmly and diplomatically hop away.

Friday Cat Blogging

Alex seems comfortable as the only cat in the household. I’m relieved and a little sad about that.

She’s lucky he didn’t turn her gay & Judith Miller jumps to new smacks

Some silly stories/bright shiny objects just have to be commented upon. This is often the case with Michelle Bachmann:

From a speech in Troy, MI, 12/28/10, transcribed by Alex Pareene of Salon (to which, in ellipses, I added a bit from the earlier part of her remarks):

I was a Democrat when I grew up…I was a reasonable, fair-minded Democrat…we worked on Jimmy Carter’s [inaudible]…Until I was reading this snotty novel called ‘Burr,’ by Gore Vidal, and read how he mocked our Founding Fathers. And as a reasonable, decent, fair-minded person who happened to be a Democrat, I thought, ‘You know what? What he’s [Gore Vidal is] writing about, this mocking of people that I revere, and the country that I love, and that I would lay my life down to defend — just like every one of you in this room would, and as many of you in this room have when you wore the uniform of this great country — I knew that that was not representative of my country.

Gore Vidal.

Brrr.

She’s lucky he didn’t turn her gay.

As a bonus, also from Pareene:

Judith Miller used to be a superstar. She was a major reporter at the New York Times for decades — at the DC bureau, in Cairo, in Paris, special correspondent to the Persian Gulf, embedded with a special unit in Iraq. She had the best sources. She had amazing scoops. Now she’s writing — on contract, not full-time — for Newsmax…

From The New York Times to Newsmax.

Well, the gulf has narrowed quite a bit in recent years.

The enemy within

FAIR has offered its P.U.litzer Prizes for the worst journalism of the year. While their choices definitely deserved prizes, they should have just offered the entire American media the Vidkun Quisling Award.  Really, we’re down to maybe a dozen people doing something that can be called journalism, and one of them is Jon Stewart.

Some of FAIR’s picks:

• A reporter calling an annual income of $250,000 “middle class.”
• David Broder saying that Barack Obama could salvage his presidency by bombing Iran, and then saying, “I am not suggesting, of course, that the president incite a war to get reelected”
• The Washington Post “balancing out” a Dan Savage chat on preventing suicides among gay teens with a column by Tony Perkins of the faux-Christian hate group, The Family Research Counsel
• The New York Times pimping for war against Iran on the basis of a claim that Iran possesses a missile which probably doesn’t even exist
• Juan Williams calling his firing by NPR over anti-Muslim statements he made worse than Nixon… who, after all, tried to <em>kill</em> a journalist that crossed him
• David Gregory declining to fact check the BS that gets pumped out on Meet the Press
• Fareed Zakariah’s program on Restoring the American Dream… which included only CEOs

As is often the case, I don’t agree that much with FAIR. These prizes are supposed to be for journalism, but FAIR included Rush Limbaugh (for his saying that the union at the Upper Big Branch mine of West Virginia should have prevented the accident that killed 29 miners; the mine, of course, had no union). Limbaugh is not a journalist.  What would state the situation accurately is that what is called journalism has become Rush Limbaugh.

Consider the flagrant lies told by the Republican radicals to seize control of the Congress, lies that the media refused to call out. “Death panels,” for heavens sake. Claims that Obama raised taxes. Claims that the stimulus had not saved jobs. The lies blaming the financial crisis on the poor, and the constant conflation of Bush’s TARP with Obama’s stimulus bill. The rotting,  zombie lie that cutting taxes raises revenues. The evil, ugly Big Lie that global warming is just a theory, rather than the consensus of every major scientific organization in the world.

Consider the lies of omission, the stories not told. The failure of the American economy to create high wage jobs. The rotting infrastructure. Schools demoralized by constant attacks by the right, textbooks written for ideological rather than pedagogical purposes, cutbacks and attacks on pension funds. The Big Lie of not covering America’s wars all over the world. The Big Lie of failing to report on American interventions in places like Honduras. (One could go on indefinitely).

The American media represent the unelected government: the corporate lobbies, the phony think tanks, white collar criminals at investment banks and hedge funds, despoilers of the environment, the private pleaders among the ultra-rich, union busters, haters of the New Deal, crackpot xenophobes and others who want to divide American from American. The unelected government is destroying this country and, indeed, this world. By the time most Americans figure this out, it will be far too late to prevent disaster.

I’m sure that many–most– people working in journalism would say that they’re not like that, that they’re just trying to do their job and report the news. But journalists need to take a look at the situation from a decent distance. Their perhaps well-meaning “balanced” work serves to preserve the illusions that hold this rotten mess together. If they had any self-respect, they’d sell their bodies rather than their souls.

The enemy within not the human beings, however much they have given themselves over to doing evil. The enemy within is all these lies. Lord, please bring us a Jubilee of truth.

Typical Teabaggery

One of the things Big Tobacco’s favorite congresscritter is doing as a sop to the Koch Tea Party wing of the GOP: having readings of the Constitution and making sure each new bill has a cite of the requisite Constitutional authority.

So what do actual constitutional scholars think?

Akhil Reed Amar, a constitutional scholar at Yale Law School, said he supports the reading. “I like the Constitution,” said Amar, author of “America’s Constitution: A Biography.” “Heck, I’ll do them one better. Why only once in January? Why not once every week?”

But he added: “My disagreement is when we actually read the Constitution as a whole, it doesn’t say what the tea party folks think it says.”

Amar argues that the Constitution charters a “very broad federal power” and is not the narrow states’ rights document that tea party activists present it as.

No kidding. What the teabaggers really think they want isn’t the Constitution, but the Articles of Confederation.

Glenn Greenwald, Evan Hansen, And Slut-Shaming

I suppose it’s a sign of a sort of twisted progress that men’s sexual activity is (as least when politically helpful to the powers that be) questioned the way women’s sexual activity is and has always been questioned. Still, I would rather that nobody be slut-shamed in this day and age, particularly as a way from distracting from the issues at hand:

Assange was asked in a BBC interview questions such as “how many women have you slept with?”  When Assange refused to answer, many WikiLeaks critics pointed to this as hypocrisy — oh, see, he doesn’t believe in transparency for himself — and my tweet pointed out the obvious fallacy of that claim:  there is nothing inconsistent about demanding transparency for governments while insisting upon personal privacy.

Moreover, the question Assange refused to answer — “how many women have you slept with?” — is relevant to absolutely nothing of public interest, including the rape accusation.  By stark contrast, the information Wired is concealing — whether Lamo is telling the truth about his various claims — goes to the heart of one of the most significant political controversies in the world.

If this had been about a Julia Assange who was just some random person and was accused of raping two of her lovers, you can bet there’d be a huge (and justly so!) hue and cry about how this was unfair to imply that the number of sexual encounters a person had somehow any bearing on their guilt or innocence of a particular crime. But since this is about a man who various people, including several prominent US politicians, want dead because he and his group released information that pulled back the curtain on how the powerful people operate (and more importantly showed them to be utter hypocrites), only someone like Glenn Greenwald notices, much less complains.

By the way: The rest of Greenwald’s piece is well worth reading, particularly in his utter demolishment of Evan Hansen and Kevin Poulsen, and Poulsen’s efforts to mischaracterize his connection with Adrian Lamo.

Want To Know Why We’re So Messed Up?

This transcript of a talk by John Pilger is a good place to start.

You really should read the whole thing, but here’s a taste:

One of my favorite stories about the Cold War concerns a group of Russian journalists who were touring the United States. On the final day of their visit, they were asked by the host for their impressions. “I have to tell you,” said the spokesman, “that we were astonished to find after reading all the newspapers and watching TV day after day that all the opinions on all the vital issues are the same. To get that result in our country we send journalists to the gulag. We even tear out their fingernails. Here you don’t have to do any of that. What is the secret?”

Pilger then goes on to explain the secret. (Hint: Edward Bernays plays a leading role.)

Guest Post At RenPost: “It’s OK (But Only) If You’re A Republican”

Hey folks! A quick announcement.

Neil Haugerud, a buddy of mine, has a blog and he’s not afraid to use it. Even more frightening, he’s not afraid to let me take the wheel every once in a while. Here’s the result. (While you’re there, check out some fine posts by the chief cook and bottle-washer himself.)

This has been a public service announcement of Mercury Rising.

Lula’s Legacy

Before Luis Inacio Lula da Silva — far better known simply as “Lula” — became Brazil’s president in 2002, there was effectively no middle class, just a tiny rich minority walling itself off from the vast dirt-poor majority. Instead of building common infrastructure that all could use and working to improve everyone’s lot, the wealthier few preferred (and to this day many still prefer) instead to literally “rise above” their problems in helicopters or small jets to go from one small island of prosperity to another.

After eight years of Lula, things have substantially changed for the better:

Silva, 65, leaves a nation transformed from a perennial underachiever into one with economic and political clout, model social programs and a swagger as it prepares to host the 2014 World Cup and the 2016 Olympics.

Since Silva’s first election in 2002, the middle class has grown by 29 million people — more than the population of Texas — creating a powerful new domestic consumer market. Another 20 million people — as many as in New York state — were pulled from poverty. The country that received a record $30 billion bailout from the International Monetary Fund as it neared economic collapse in 2002 now lends money to the IMF, making up to $5 billion available for loans to other nations.

The value of Brazil’s currency has more than doubled against the U.S. dollar. Inequality has been reduced, as the income of the poorest 10 percent of the population has grown five times faster than that of the richest 10 percent. Inflation has been tamed, unemployment is at a record low and illiteracy has dropped. By the time Brazil hosts the Olympics, it is forecast to be the globe’s fifth-largest economy, surpassing Italy, Britain and France.

[…]

But Silva’s legacy goes beyond figures. It’s caught in the glint of an eye of a slum dweller such as Lima, who sees herself in Silva’s impoverished roots, and feels pride that it was a man from the poor masses who finally delivered on the promise of Brazil.

“For decades I lived in a shack where sewage seeped in every time it rained,” Lima said, as four grandchildren bounced around her new two-bedroom apartment in the Paraisopolis slum. “There were no windows, which made my bronchitis worse. Now look at this. I’ve got concrete floors, not sewage. Windows that let air flow through — you feel that breeze? My health is better. It’s because of Lula.”

That devotion is repeated across Brazil, giving Silva nearly unparalleled popularity.

According to Gallup polling, former U.S. President Harry Truman had an approval rating matching Silva’s 87 percent — about three weeks after Allied forces accepted the surrender of Nazi Germany in World War II. He ended his presidency with a 32 percent rating. George W. Bush saw 90 percent approval 10 days after the 9/11 terrorist attacks — the highest recorded by Gallup for a U.S. leader. His ratings dropped quickly and he left office with 34 percent approval.

Lula is Brazil’s FDR. He took a stumbling, poverty-shackled nation and turned it into an economic powerhouse and did so without screwing over the poor.

Inedible

I am unable to eat this chocolate mouse.

Any volunteers?