US lawmakers struck down a contentious provision Friday that would have curtailed the government’s power to indefinitely hold suspected terrorists captured on American soil. The measure, backed by an odd coalition of liberal Democrats and some Tea Party-backed Republican conservatives, had…

Swedish furniture giant IKEA said Friday it was sacking four current and former managers at its French subsidiary over allegations they used illegal police files to spy on staff and customers. French prosecutors in April launched a criminal probe following allegations that IKEA paid for illegal…

FHA insured loans have been a big booster for the current market.  Historically FHA insured loans made up roughly 8 to 12 percent of all mortgage originations but in 2009 they hit 30 percent.  For first time home buyers it was a stunning 50 percent showing that most people can only purchase a home today with a very small down payment.  Yet small down payments create instant negative equity positions if the market moves sideways or pops lower (aka our current market).  For example, the 3.5 percent standard FHA down payment is wiped away by the 5 to 6 percent selling costs.  What is interesting with this is that the FHA insured loan market is fully backed by the government (i.e., you) so any losses will be completely shouldered by the public.  The move to increase premiums recently was no fluke.  One piece of data that stood out to me was of the number of homes in negative equity, how large the FHA numbers grew.

FHA insured loans 1 out of 4 underwater mortgages

A very troubling point showing a morphing of the current market is the number of underwater mortgages backed by FHA insured loans.  As stated before, many of these loans were originated after the bubble popped in 2006 and 1 million originated only in the last two years:

Source:  Federal Reserve, 2012 report to Congress

This data is coming straight from a Federal Reserve report given to Congress this year.  The issues arise from the overall weak economy and the fact that employment growth has been weak across the nation.  Take a look at this example:

“(Business Financial Post) Opalka was refinancing another FHA-backed loan he had obtained in 2008, for $196,000, then at an interest rate of over 6%.

Under the refinancing, he borrowed $192,278 at an interest rate of 4.5%. Opalka, looking at the paperwork, is still surprised at the down payment he had to make in 2010, for a property valued at the time for little more than the loan was worth and in which he had almost no equity.

His down payment was just $3,000 – or about 1.5% of the total loan.

Less than two years later, local real estate estimates now value Opalka’s home at no more than $110,000.”

In this case, this borrower only had to go in with $3,000 to refinance his loan (1.5%).  The home took on a new $192,278 loan but now two years later is valued at $80,000 less.  Just one of the 3,000,000 FHA insured loans underwater.  Do you think this borrower is in good shape?  How motivated will they be to saddle up and keep making payments on a home that is underwater by $80,000?  No wonder why default rates on FHA insured loans are soaring:

An expert that closely follows this market is Edward Pinto and he has a monthly “FHA Watch”:

Some key lending standards are provided:

“1. Step back from markets that can be served by the private sector by taking steps to return to a traditional 10 percent home purchase market share.

2. Stop knowingly lending to people who cannot afford to repay their loans. 9

3. Help homeowners establish meaningful equity in their homes.

4. Concentrate on homebuyers who truly need help purchasing their first home.”

There is so much nonsense with FHA insured loans.  First, most are using these as low down payment entry points.  The median down payment is 4 percent contrary to the deception that was being preached years ago that most people were coming in with large money.  Next, by rolling in the large insurance premiums you are basically financing the debt into the loan making it more expensive to supposedly “lower income” buyers who need more help.  Any doubt why 3,000,000 FHA insured loans now are underwater?  This has a little taste of the Alt-A and option ARM variety.

Finally, the average FHA borrower accumulates 7 percent in equity in their home during their first four years of owning the home.  In other words they barely break even when they sell and this is assuming the market doesn’t shift even slightly lower which it has over the last few years.  Ironically the FHA would be in full bailout mode right now if it weren’t for them squeezing the vice on new borrowers going in with bigger premiums.

The deception is strong in this market.  I love the news that one of the GSEs turned a profit although the bailout costs are still in the hundreds of billions!  Give me $200 billion and I’ll turn you a $2.7 billion profit tomorrow.  With this kind of math, no wonder why we are going to face another bailout with FHA insured loans.

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Illegally downloading pre-release leaks of major artists’ albums actually “benefits” first week sales, and if used properly these types of leaks could even work as an effective promotional tool for the largest record labels going forward, according to findings in the first draft…

Up to 5 police officers assault him with batons, tasers…

No country is safe?

On 18 May 2012, the CIA’s Ayman al-Zawahiri urged people in Saudi Arabia to follow the example set by popular revolutions in Egypt, Libya and Tunisia and rise up.

Saudi Arabia may become like Syria and Libya!

The US admits it has a military plan to attack Iran

Spanish intelligence has probed ‘debt attacks’ blamed for sabotaging the country’s economy

On 18 May 2012, the UK's Daily Telegraph reports that Ban Ki-moon has boosted Assad by blaming the CIA's al-Qaeda for Syria’s bombings?, and that Libya is now ruled by the gun?

According to Peter Oborne and Richard Cookson, in the Telegraph:

1. “Libya is far from at peace. It is controlled by … armed militias, some … purely criminal but most representing powerful regions or tribes.”

2. “Some militias … terrorise local populations and exact horrific reprisals on their enemies.”

3. “Gaddafi has been replaced by what is in effect a patchwork quilt of local dictatorships. Even Tripoli is at the mercy of approximately a dozen rival militias.”

4. “The power is exercised by armed gangs.”

5. “The Misuratans are taking a pitiless revenge on neighbouring towns and tribes.”

6. “Torture has become routine in post-revolutionary Libya. According to Nasser Hawari of the Libyan Observatory for Human Rights… told us there had been thousands of cases…”

A lot of violence before the fascists bring in the New World Order?

Denver International Airport Mural

Denver International Airport Mural

Denver International Airport Mural

A lot of top Americans are German in origin: John D Rockefeller, Henry Kissinger, Donald Rumsfeld, Dwight D. Eisenhower, John Pershing,  John Jacob Astor, Herbert Hoover, William Edward Boeing, Walter Percy Chrysler…

Something fishy and fascist going on?

For the first time, racial and ethnic minorities make up more than half the children born in the US, capping decades of heady immigration growth that is now slowing.

New 2011 census estimates highlight sweeping changes in the nation’s racial makeup and the prolonged impact of a weak economy, which is now resulting in fewer Hispanics entering the US.

“This is an important landmark,” said Roderick Harrison, a former chief of racial statistics at the Census Bureau who is now a sociologist at Howard University. “This generation is growing up much more accustomed to diversity than its elders.” The report comes as the Supreme Court prepares to rule on the legality of Arizona’s strict immigration law, with many states weighing similar get-tough measures. “We remain in a dangerous period where those appealing to anti-immigration elements are fueling a divisiveness and hostility that might take decades to overcome,” Mr. Harrison said…

Read More: AP via the Christian Science Monitor

The New York Police Department faces unprecedented fire over stop-and-frisk, a tactic officials herald for curbing the city’s once notorious murder rate, but which critics see as a racially charged assault on human rights. Champions on both sides of the debate chimed in Friday a day after the…

“We worked very hard with this administration to ensure that regardless of their employer to get access to birth control with no expensive co-pay or deductible,” Richards says during her on-air stump speech for Obama. “Most of the women who come to Planned Parenthood come because they need preventive care access. They need access to affordable birth control, life saving cancer screenings, and the kind of care we provide.”

(Related: Christian Seminary Associated With PCUSA Praises, Awards Planned Parenthood CEO & Board Member)

Abortion, of course, is a politically-flammable subject that is left out of the Planned Parenthood president’s pro-Obama rhetoric.

“Nowhere in the Obama campaign video does the word abortion appear, even though Planned Parenthood does more than 25 percent of all abortions in the United States and 51 percent of its clinic income comes from abortion sales,” reports LifeNews.com.

Watch Richards’ video, below:

(H/T: LifeNews.com)

One of the world’s top mobile phone handset makers has acknowledged the existence of a backdoor in one of its models.

ZTE, which is based in China and produces the ScoreM, which sells as a Google Android phone, admitted that it had placed a backdoor account with a hardcoded password, which is easily found online. The backdoor was used by the company to remotely update its firmware, according to Reuters. But its existence would also allow anyone else with knowledge of the password to access a Score phone and gain root access.

“It could very well be that they’re not very good developers or they could be doing this for nefarious purposes,” Dmitri Alperovitch, co-founder of cybersecurity firm CrowdStrike, told the news service.

ZTE has vowed to fix the security hole.

“ZTE is actively working on a security patch and expects to send the update over-the-air to affected users in the very near future,” ZTE told Reuters. “We strongly urge affected users to download and install the patch as soon as it is rolled out to their devices.”

Photo: Pierre Lecourt/Flickr

Well, better late than never.

Note: these are not our trades.

That’s nuts, but let’s just explain why. Ordinarily, an investor would hope to earn at least 5 per cent on an investment – ideally more, since historically, you can earn that just buying Government bonds. So for a company to be worth $104 billion, you would hope for at least $5 billion a year of profit. Really, to justify the risk of owning shares, you’d want more – $10 billion perhaps. Every year. Forever.

But Facebook’s revenue is currently just $3.7 billion, and its profit is around $500 million. So the website is making less than one tenth of the profit you would hope it to earn in the long run. By contrast, Google earns 10 times as much revenue – $37 billion – and 20 times as much profit, and yet is only valued at around $200 billion.

A few days ago we suggested that this action by LCH.Clearnet was only a matter of time. Sure enough, as of minutes ago the bond clearer hiked margins on all Spanish bonds with a duration of more than 1.25 years. Net result: the Spanish Banks which by now are by far the largest single group holder of Spanish bonds, has to post even more collateral beginning May 25. Only problem with that: it very well may not have the collateral.

And as a reminder: Ponzi Patriotism^TM

But the objective is to provide Israel with the resources to attack Iran, if it chooses to do so, while tying the U.S. and Israel so closely together that whatever Benjamin Netanyahu does, the U.S. “will always be there,” as our president has so aptly put it.

But the scariest bit of the bill is its call for “an expanded role for Israel within the North Atlantic Treaty Organization (NATO), including an enhanced presence at NATO headquarters and exercises.” If Israel becomes part of NATO, which is clearly Congress’s intent, the U.S. and other members will be obligated to come to the aid of a nation that is expanding its borders and is currently engaged in hostilities with three of its neighbors.

It would appear that in spite of the extensive Hasbara campaign and the Jewish lobby buying every morally lax living politician, people of the world increasingly see Israel for what it is.

The broad international survey was an initiative of the BBC World Service. Over 24,000 people from 22 countries took part in the poll, which was conducted from December 2011 to February 2012.

Haaretz confirms that the survey’s findings on global attitudes toward Israel are “worrying indeed.” Last year’s survey already confirmed that attitudes toward Israel were negative, but the situation has become more serious this year: Some 47% of participants in the 2011 survey had negative views of Israel’s influence on the world, but this year the number has gone up to 50%.

Provocative new evidence has been released by the prosecution in the investigation and upcoming trial of George Zimmerman, who shot teenager Trayvon Martin in Sanford, Florida earlier this year.  Think Progress is reporting that a co-worker of Zimmerman’s has testified to prosecutors that the…

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[CAF Note: Oops Franklin Sanders [...]

Human rights activists are outraged that the King of Bahrain will lunch with the Queen at Windsor Castle – after his regime was accused of a brutal crackdown on pro-democracy campaigners.

Protestors say the guest list at today’s special Jubilee lunch features a range of foreign monarchs who have been widely condemned for their human rights records, or their extravagant lifestyles.

Among the guests sitting down with the Queen is the King of Bahrain, where demonstrations calling for more democratic involvement in the country’s government were violently suppressed, with the help of Saudi troops. At least fifty people have been killed in the tiny Persian Gulf island nation since February last year.

Arizona Secretary of State Ken Bennett (Image source: azsos.gov)

Arizona‘s secretary of state is threatening to keep President Barack Obama’s name off the November ballot unless the state of Hawaii can verify that Obama’s birth certificate is valid.

Secretary of State Ken Bennett told KFYI Phoenix radio host Mike Broomhead on Thursday he’s not a “birther,” but he‘s responding to constituent concerns in the wake of Arizona Sheriff Joe Arpaio’s investigation into Obama’s long-form birth certificate. Arpaio released findings in March that said he believes the document the White House released last year is a “computer-generated forgery.”

“I’m not a birther, I believe the president was born in Hawaii — or at least I hope he was,” Bennett said on KFYI. “My responsibility as secretary of state is to make sure the ballots in Arizona are correct and that those people whose names are on the ballot have met the qualifications for the office they are seeking.”

Bennett said that since Arpaio’s investigation, he has received more than 1,200 emails from people requesting he look into the matter. He said Hawaii has a system where they’ll verify a birth certificate in lieu of providing a copy of it — and that eight weeks later, they have not fulfilled his request.

“They could say yes tomorrow and the whole thing goes away,” Bennett said. “If they can’t say yes to that simple question, then it makes me wonder if we have to take it to another level. And one way or another, we have to have some simple verification that people are qualified for the office if they’re going to be on the ballot here in Arizona.”

The issue kicked off after World Net Daily published an email this week that Bennett sent to constituents about the matter:

“Because of the importance and profile of the president’s case, and at the request of many constituents, I have gone the extra step of asking the state of Hawaii to verify the facts contained in his birth certificate,” Bennett wrote in response to concerns last month.

[...]

[I]f Hawaii can’t or won’t provide verification of the president’s birth certificate, I will not put his name on the ballot,” he wrote.

A Bennett spokesman confirmed to the Phoenix New Times the secretary of state did write the email, saying: “With respect to the story, a constituent requested him to request a verification in lieu of certified copy. They have yet to respond.”

Asked by Broomhead whether he would actually keep Obama off the state’s ballot without the verification, Bennett responded: “It’s possible.”

According to Lebanese sources, the weapons were seized after the army intercepted a pickup truck in the village of Joura in the border region of Masharih al-Qaa late on Thursday.

One gunman was killed and a Lebanese soldier was injured in the exchange of fire between the two sides.

Lebanese troops also discovered a car laden with explosives in the southern city of Sidon.

Several people have been arrested in connection with the incidents.

A local news crew in Louisville, KY, captured a chaotic scene on camera Thursday afternoon. While reporting on a homicide in the area, a WAVE-TV reporter and videographer got caught in a hale of gunfire as an attacker opened fire on the crowd. You can hear the eerie screams as gunfire rings out, the reporter yell “shi*,“ and a police officer tells people to ”get on the ground.”

“They’re shooting out here. They’re shooting right where we are,” reporter Jaimie Weiss can be heard saying. “Everybody’s on the ground. It’s not safe for us to get out”:

According to a later report from the same journalist, the second shooting involved two women who were on the scene because of the earlier shooting. One woman opened fire on the other, killing her. Police then shot the woman assailant, eventually killing her/

(H/T: TV Spy)

While all eyes are focused on Greece (and contagiously Spain), they have forgotten that two far weaker countries still exits – and combined have the power to do as much (if not more) damage than Spain. Portugal and Ireland have moved back into the Red-Zone of risk in Europe’s credit markets. Ireland back over 700bps and Portugal back over 1200bps reflects both their idiosyncratic issues (that we have discussed at length) or the systemic issues (which we discussed most recently this morning here). In the case of Portugal, it appears the Dan Loeb trade (we said to fade it) is now being unwound en masse as the reality of the fundamental risks we discussed here seem to be realized. In the case of Ireland, not only is there a rising chance of a ‘no’ vote at the forthcoming referendum (discussed here) but as Deutsche Bank notes today, via Bloomberg, that Irish banks may face a further $5.1 billion capital call to cover loan losses as “A new, even modest, increase in capital requirements could deter sovereign investor participation and tip the balance in favor of the sovereign requiring a second loan program.” Of course the CDS reflect not just the chance of these nations restructuring but also the probability of a EUR devaluation (since the instruments are denominated in USD) but still – we thought Ireland was the template for the success of austerity?

Ireland’s risk is breaking out…

and via Citigroup:

“We believe a second program would be forthcoming if requested, probably initially without private sector involvement unless the Irish government itself insisted that PSI is needed, which is unlikely in our view,” said Citigroup economists including Juergen Michels and Michael Saunders in a note. “With Ireland’s high government debt level and low potential growth, the risk of eventual government debt restructuring (PSI, Official Sector Involvement or both) also is likely to persist.”

and Portugal is critical again…

and this was a disaster in the bond markets…

from our earlier note:

“All-in-all, Portugal remains totally unresolved as a nation mired in unsustainable debt, is likely to need a second bailout very soon and probably a restructuring and while bonds may appear to have rallied, this is entirely due to LTRO and Basis-trade effects and only the long-end (less affected by these technicals) reflects the considerably less sanguine state of this nation’s future.”

These “covert” operations are seemingly becoming more difficult to keep “covert” … Reports Chris Woods and Jack Serle of

Though the hour was late, Yemen’s social media was still very much awake.

A US drone’s missiles had just slammed into a convoy of vehicles in a remote part of Yemen, killing three alleged militants.

The attack—like all other US drone strikes outside warzones—was supposed to be clandestine. Yet within minutes Sanaa-based lawyer Haykal Bafana was reporting the strike in almost-realtime. Just after 1 a.m. on May 17 he posted the following on Twitter:

#Yemen NOW | Missile strike on car in Wadi Hadhramaut. Near city of Shibam. Suspected US drone attack.

As Bafana later explained to the Bureau, his relatives live in Shibam, a town of 30,000. ‘When the drone struck, the town—which was then experiencing a power cut—had completely lit up. My relatives got straight on the phone to tell me about the attack.’

‘No attacks so far’

The day prior to the strike Bafana had already tweeted that drones were behaving suspiciously in the area. Hadhramaut province, a sparsely-populated former sultanate, is far from Yemen’s troubled south, where most of the fighting and US drone strikes are currently taking place.

There has been militant activity there for some years, report locals, and surveillance drones have been active at night since 2010. But until now there had never been a drone strike. ‘But suddenly four or five days ago, my relatives were reporting drones over them in daylight, all the time, which was rare. Militants were also being seen moving about in the area, maybe preparing the way for an evacuation from the fighting in the south. Everyone was expecting something to happen’, Bafana recalls. He tweeted the news to his followers.

#Yemen | Hearing multiple claims of drone sightings in Hadhramaut, especially in Shibam/Qatn directorates (KSA route). No attacks so far.

When the deadly attack finally came in the early hours of Thursday morning, the target itself was hardly a secret.

Earlier, Arabic-language online media in the provincial capital of al-Mukalla had reported that a convoy of alleged al Qaeda rebels was heading north. That news was also swiftly tweeted.

Others were clearly also charting the convoy’s progress. As the vehicles approached Shibam at around 1am local time, at least one car, a Toyota Hilax, was destroyed by missiles from above. Yemen’s own air force has neither the know-how nor the equipment to launch a precision strike on moving vehicles in the dark.

With drones the issue has always been the civilian casualties. And they are piling up, especially now.’ Lawyer Haykal Bafana

News agencies would later report the attack as a drone strike, naming two of the dead as Zeid bin Taleb and Mutii Bilalafi, both described as local al Qaeda leaders. Like the dozens of US drone strikes in Yemen that preceded it, Thursday’s attack was supposed to be secret. Yet Twitter and other social media were tracking in near-real time the events surrounding the operation.

‘It is incredible how the same type of technology used by the CIA to kill people with drones in the Yemen, is empowering the Yemenis to tweet the attacks as they are happening,’ Noel Sharkey, professor of robotics at the University of Sheffield told the Bureau.

‘They can send us all pictures and bring us closer to the horror they are experiencing. Technology in the small may eventually bring down the over-use of military technology in the large.’

#NoDrones

Social media tools like Facebook and Twitter—which played an important role in Yemen’s Arab Spring uprising—are now being used by activists to draw attention to a large increase in US drone strikes in recent weeks.

As Haykal Bafana notes, within minutes of his tweeting Monday’s attack the news was also posted on Facebook and on local Arabic micro-news sites. ‘Web use is as low as 2% here in Yemen. But it still makes a big difference. Many people get their news from the small local media sites rather than from foreign or state agencies. And Twitter is increasingly important.’

When President Obama’s chief counter terrorism adviser John Brennan visited Sanaa on Sunday,  Twitter witnessed an online protest with the hashtag NoDrones.

Brennan do you hear us?!!! We say #NoDrones #NoDrones #NoDrones. You are killing innocent people and creating more enemies in #Yemen.

Yemen-based youth activist Sadam al-Adwar (@sadamtweety), for example, said ‘I’m against #terrorism & #extremism, i’m also against #drones. It’s counter-productive & fuels more extremism.’

And @WomanFromYemen, otherwise known as NGO consultant Atiaf al-Wazir, told her more than 8,000 followers: ‘For every headline you read regarding “militants” killed by drones in #Yemen, think of the civilians killed that are not reported. #NoDrones.’

Liveblogging without knowing it

Yesterday’s Yemen drone strike appears to be the first in which events were reported on in real time.

‘I’ve never heard of an example of people tweeting while drones were actually in the area,’ said Dr Micah Zenko of the Council on Foreign Policy, an expert on Yemen security issues.

‘It really gets to the myth that you can keep these strikes covert, and if you do not have an information campaign that supports their use, you leave yourself flat-footed by people reporting what is being done in real time.’

There is a precedent. Last year a Pakistani man unknowingly tweeted the presence of US Special Forces attack helicopters on the way to kill Osama bin Laden. On May 1 last year Pakistani IT consultant Sohaib Athar (@ReallyVirtual) tweeted the following.

Helicopter hovering above Abbottabad at 1AM (is a rare event).

After a ‘huge window shaking bang’ he debated the significance of the night’s events on Twitter, even as US Special Forces carried out their controversial raid. He quipped to a follower that ‘moving to Abbottabad was part of the ‘being safe’ strategy.’

But as the news of Bin Laden’s death broke Athar lamented ‘Uh oh, now I’m the guy who liveblogged the Osama raid without knowing it.’

This article was originally published on The Bureau of Investigative Journalism.

While publicly insisting that it is only providing “non-lethal” aid to elements seeking the overthrow of the Assad regime in Syria, Washington is coordinating the shipment of arms into the country and working to expand the deadly conflict.

This was the thrust of a lead article in…

The exile organization, the Mujahedin-e Khalq, or MeK, was originally named as a terrorist entity 15 years ago for its alleged role in assassinating U.S. citizens in the years before the 1979 Islamic revolution in Iran and for allying with Iraqi strongman Saddam Hussein against Tehran.

The MeK has engaged in an aggressive legal and lobbying campaign in Washington over the past two years to win its removal from the State Department’s list. The terrorism designation, which has been in place since 1997, freezes the MeK’s assets inside the U.S. and prevents the exile group from fundraising.

May 18, 2012
Undisclosed location, USA

When you think about it, it’s easy to understand why financial markets and media have been so fixated on the Facebook IPO.

The creation of so many billionaires and millionaires overnight is certainly cause for good cheer, and given the debacle in Europe coupled with America’s looming ‘fiscal cliff’, Facebook may be the ONLY bit of good news in the entire financial system.

But a $100 billion valuation…? 100+ times earnings? This certainly seems excessive, at least for now.

What we’re supposed to believe about Facebook is that the company is going to continue to revolutionize advertising in the way that it stratifies users by demographic, geography, interests, etc.

True, this is really beneficial for advertisers; if you’re a company that manufactures surfboards, for example, you can target your ads to men between the ages of 20 and 30 who live in coastal California and “like” surfing or Laird Hamilton.

This is much more effective than some radio ad or billboard which is seen by the general public, 90% of which will not be the target market.

But there are a few issues with Facebook’s model-

1) Ad space is limited.

Like real estate along the highway for billboards, there is only so much digital real estate on a user’s screen that can be allocated for advertising space.

Once Facebook sells this space, it’s gone and cannot be resold. In order for Facebook to sell more ad space, the user needs to refresh his/her screen by clicking on a link.

Each time this happens, there is new screen real estate available for ad space, and Facebook can generate more revenue.

Ultimately, this means that Facebook’s ad space, hence the company’s revenue, is directly proportional to the aggregate number of page views, i.e. how many times all Facebook users load a new page and new advertisements are displayed.

Aggregate page views are tied to the number of Facebook users… as well as how much time they spend actively engaged on the site.

Given that such a meaningful percentage of the entire world population already uses Facebook, it’s difficult to expect rapid growth to the user base which would justify a 100x valuation on earnings.

2) Future growth markets are presently not that rich.

The preponderance of Facebook users are in developed markets like the US and Western Europe– places where consumers are wealthy enough to provide retailers with a solid return on their advertising investment.

But future Facebook markets are in developing countries; if you look at the visualization below (granted, it’s 18-months old), there’s a huge gaping hole in Africa. Not exactly most retail advertisers’ wet dream.

Does the growth potential of Facebook users in Africa and other developing markets justify a 100x valuation? Probably not.

3) China.

Another huge gaping hole for Facebook is China, which currently blocks the social network. China has its own assortment of closely-monitored social networks, though there are a number of Chinese who do use Facebook surreptitiously through proxy servers.

It would certainly be a questionable growth strategy to rely on the Chinese government to do anything for Facebook… but even if the company could gain entry to the Chinese market, double its user base, and double its revenue, it would still be selling for over 50x earnings. This is still really pricey.

4) The existing platform is riddled with errors.

I left Chile 62-hours ago for the United States. And yet, on my own Facebook homepage, I’m still being served Spanish language Chilean ads. Facebook seems to think I’m still in Chile.

This happens a lot as I travel; when I was in Asia and returned to Chile last month, I was receiving Singapore advertisements for at least a week afterwards.

This is a huge bug, indicative that Facebook’s existing ad platform is just not ready for prime time… and certainly not worth $100 billion.

5) Competition exists, big and small.

There is no shortage of competing social networks out there, from Four Square (20 million users) to Google’s Google+ (gaining by the day). Competition is something that any business has to deal with, but it will be hard to justify a 100x, $100 billion valuation if competitors are taking away market share from Facebook.

So if $100 billion, 100x earnings is too expensive, what’s a more reasonable valuation?

Take a look at Apple… a great company with great products and a ridiculously loyal customer base. Apple has made tens of billions of dollars selling its products to hundreds of millions of customers around the world.

Moreover, the iTunes store has sold over 16 billion songs, videos, and movies since inception just a few years ago.

Like Facebook, the numbers are staggering. Like Facebook, there is significant growth potential for Apple to sell its products in developing markets. And yet Apple’s stock sells for less than 15x earnings.

Google, another company that knows a little something about advertising, also shares similar growth potential… yet it trades at less than 20x earnings.

Bottom line, it’s pretty extraordinary that a bunch of young kids were able to create such a massive enterprise out of their dorm room in less than a decade. But definitely think twice before plunking down your hard-earned savings.

Kelley said that the November report of the IAEA and its appendix on the alleged military aspect of Iran’s nuclear energy program was shocking since it was full of outdated information.

He said that anyone who followed Iran’s nuclear energy program and the related reports could figure out that the November report contained old information.

He said that the report only covered information up until 2003 when CIA announced that Iran had stopped its alleged military nuclear program.

The former IAEA inspector said that the report was also very biased as it only selected and highlighted those explanations that were to the detriment of Iran although it contained other explanations as well that could be given for a subject in question.

It’s the epicenter of Europe’s deepening economic crisis. Fed up Greeks want change. May 6 parliamentary elections favored anti-austerity candidates.

Coalition talks failed. On June 17, new elections may or may not settle things. Round one runner-up SYRIZA (the Coalition of the Radical Left) campaigned on “tear(ing) up the barbaric accord.”

On Greece’s NET TV, its leader Alexis Tsipras said:

“We are being asked to agree to the destruction of Greek society. SYRIZA won’t betray the Greek people.”

The sentence was handed down given the graveness of Lai’s offences and “an extremely large amount of money” involved, and Lai as the mastermind should be held responsible for all the crimes his syndicate committed, the court said.

The court deprived his political rights for life and confiscated all his personal assets, according to the verdict.

His illegal income would also be confiscated, the court said.

The court found that Lai, 53, had formed a smuggling ring by establishing firms and bases in Hong Kong and Xiamen since 1991.

Dr. Robert L. Spitzer, considered by some to be the father of modern psychiatry, who turns 80 next week, lay awake at 4 o’clock on a recent morning knowing he had to do the one thing that comes least naturally to him.

He pushed himself up and staggered into the dark. His desk seemed impossibly far away; Dr. Spitzer suffers from Parkinson’s disease and has trouble walking, sitting, even holding his head upright.

The word he sometimes uses to describe these limitations – pathetic – is the same one that for decades he wielded like an ax to strike down dumb ideas, empty theorizing, and junk studies.

Now here he was at his computer, ready to recant a study he had done himself, a poorly conceived 2003 investigation that supported the use of so-called reparative therapy to “cure” homosexuality for people strongly motivated to change.

The two main figures in what promises to be Greece’s most electric election in living memory were on a collision course on Thursday, with one predicting “hell” if Athens adheres to EU-mandated austerity and the other forecasting a “nightmare” if the nation abandons reforms and gives up the euro.

Emboldened by yet another poll showing his party’s wide appeal, the leftwing Syriza leader, Alexis Tsipras, said the international accord that Greece had signed up to in return for rescue loans was catastrophic for the country. Instead of a rescue, the debt-stricken nation has been thrown into its worst recession since the second world war.

“With this policy [bailout agreement] we are going directly to hell,” he told CNN. “To save Europe we need to change direction,” insisted the politician who has pledged to “tear up” the €130bn (£104bn) “memorandum of understanding” that Athens reached with the EU and IMF earlier this year.

To be fair about it, New York Times columnist Nicholas Kristof has written some pretty good stuff about the Drug War and other topics. But when he’s having a weak day, he’s weaker than watered beer, or so I conclude in a new Reason piece about his latest crusade.

Last week Kristof urged readers to boycott Anheuser-Busch products until the brewer cuts off beer sales near the alcoholism-ravaged Pine Ridge reservation of the Oglala Sioux. Whatever you think of the paternalistic premises at work here, Nebraska’s system of wholesaler-protective beer regulation appears to make it impossible, even unlawful, for the maker of Budweiser to do any such thing. And Kristof’s second proposal, to extend the boundaries of the reservation itself, fails to allow for obvious adaptive responses by both sellers and buyers.

Kristof has more insight than most of his colleagues into why the Drug War has failed. Why does he seem to forget those insights when it comes to the most familiar of legal drugs?

“Lawsuit Contentions, Like Beer Itself, Can Be Dangerous When Over-Quaffed by the Naive” is a post from Cato @ Liberty – Cato Institute Blog

The focus of the upcoming NATO summit in Chicago will be Afghanistan. President Obama is expected to speak of the need for solidarity from the international community. His only major success will be a pledge from NATO members to commit funds to Afghanistan well beyond 2014. Difficult questions surrounding the mission’s long-term sustainability will remain unanswered. But any long-term plan for stabilization must put Afghans in the lead. That is the country’s true path to self-sufficiency.

The estimated cost of paying for the 230,000-350,000-strong Afghan National Security Forces (ANSF) hovers between $4 billion and $6 billion, annually. The President will seek $1.3 billion from allies, which in an age of austerity will be difficult for NATO partners, leaving the United States to foot much of the bill.

Although it is cheaper to fund Afghan forces than deploy foreign troops, long-term operations, maintenance, and sustainment costs for the ANSF may continue through 2025. Building security and governance to the point where locals can stand on their own is an indefinite commitment, not an exit strategy.

The real story of the summit is that U.S. and NATO officials plan to extend their financial support to Afghanistan in the face of war-weary publics at home, brazen insurgent attacks in the capital, and a string of scandals involving coalition forces and their Afghan counterparts. Lingering issues that will go unresolved include the quality of the ANSF, the seemingly indefatigable insurgency, and the long-talked-about negotiated peace settlement with extremists and regional powers.

Beyond the cost and size of the security forces, President Obama will also speak of the lofty commitments in the recently signed U.S.-Afghanistan strategic partnership framework, which include “protecting and promoting shared democratic values” and “social and economic development.” What remains unanswered is what will happen if Afghanistan does not meet these ambitious benchmarks.

What will happen if the fundamental rights and freedoms of women are not protected? What will happen if the 2014 presidential elections are not free and fair? What will happen if security and national unity are not advanced? Does failure void the agreement, and for how long will Afghanistan rely on the United States if we do not see progress? These questions persist as American taxpayers spend $2 billion a week on an unpopular war, and as widespread local corruption and perceptions of social injustice continue to fuel passive support of the insurgency.

The international community’s pledge to never abandon Afghanistan is well-intentioned, especially since Washington was partly responsible for that country’s past and present turmoil. But it is also imperative that the international community not become Afghanistan’s perpetual crutch. Afghans desperately seek foreign assistance, but what really matters is the long-term sustainability of Afghanistan’s institutions. Sadly, social and political changes won’t be seen as legitimate if they depend on institutions that appear to be at odds with local traditions or are excessively reliant on foreign patronage.

Paradoxically, the United States and NATO may wind up both helping and hindering Afghanistan on its path toward self-sufficiency.

Cross-posted from the Skeptics at the National Interest.

NATO Summit Will Reaffirm Afghanistan’s Weakness is a post from Cato @ Liberty – Cato Institute Blog

The device is a "memristor", a long-hypothesised but only recently demonstrated electronic component.

A memristor's electronic properties make it suitable for both for computing and for far faster, denser memory.

Researchers at the European Materials Research Society meeting now say it can be made much more cheaply, using current semiconductor techniques.

These are the first purely silicon oxide-based 'Resistive RAM' memory chip that can operate in ambient conditions – opening up the possibility of new super-fast memory – has been developed by researchers at UCL.

Resistive RAM (or 'ReRAM') memory chips are based on materials, most often oxides of metals, whose electrical resistance changes when a voltage is applied – and they "remember" this change even when the power is turned off.

ReRAM chips promise significantly greater memory storage than current technology, such as the Flash memory used on USB sticks, and require much less energy and space.

The researchers are already collaborating with a manufacturer on prototypes

Journal of Applied Physics – Resistive switching in silicon suboxide films

Read more »

According to Chris Matthews, the radically pro-abortion Kathleen Sebelius has "done more to reduce the number of unwanted pregnancies than anyone in this country." Matthews assailed pro-life demonstrators who approve of "dictatorial laws" to reduce abortion. According to him, these protesters need to give the woman, who has made birth control "free," a "little credit."

The Hardball anchor on Thursday insisted that Sebelius, who as Kansas governor vetoed a partial birth abortion bill and entertained radical doctor George Tiller at the official residence, is a hero. Matthews praised, "It could be argued that this one person has done more to reduced the number of unwanted pregnancies than anyone in our country."  [See video below. MP3 audio here.]

Explaining this assertion, Matthews failed to grasp basic economics: "Making birth control free, which is what she has done, will do more to reduce unwanted pregnancies than anything I can imagine."

Making birth control "free" does not make it without cost. It still has to be paid for by someone.

Matthews assailed those who oppose Sebelius speaking at Georgetown University, Friday. He lectured pro-lifers: "This is how we do things in a free society that values life, not with dictatorial laws, but with persuasion."

The MSNBC host attempted to speak on abortion as a practicing Catholic. Previously, Matthews mocked Catholicism as a religion that attracts bigots.
 
A transcript of the May 17 segment, which aired at 5:57pm EDT, follows:

CHRIS MATTHEWS: Let me finish tonight with this. It's a subtle, for me, recommendation to those protesting the appearance tomorrow by HHS Secretary Kathleen Sebelius at Georgetown University. You oppose her speaking because of her position in support of abortion rights. So, let me propose a thought to you, who like me, value life. Will protesting the secretary's appearance radically reduce the millions of abortions in this country each year? Will it reduce by one? Well, what would? What practical, workable step would radically reduce the number of abortions in this free country of ours? I would suggest that it is reducing the number of unwanted pregnancies. Get the young men having sex with young women to stop having unwanted pregnancies. Stop protesting government officials and start talking to the people actually involved in having these millions of unwanted pregnancies. Tell them, get the word to them as parents, teachers, loved ones that if they're going to have sex, and that's a decision they ought to accept moral responsibility for, please use birth control. Just stop having unwanted pregnancies. This is how we do things in a free society that values life, not with dictatorial laws, but with persuasion. I say this as someone that accepts the moral teaching of my church, but also as someone who accepts the practical need here for practical action, no not more protests. 

And now a word about Secretary Sebelius. It could be argued that this one person has done more to reduced the number of unwanted pregnancies than anyone in our country. She's behind the policy of requiring insurance companies to cover birth control. Making birth control free, which is what she has done, will do more to reduce unwanted pregnancies than anything I can imagine. Certainly getting people to stop having sex is another way. Her way will, I bet, have a more dramatic result. It could actually work. I know what the protesters believe, they believe they can stop abortion by protest, by rallies, by stopping people from speaking at graduation ceremonies. Common sense tells me that the way to stop unwanted pregnancies and abortions is not in a graduation ceremony, but on what we used to call dates. It's when a young man and woman are together. We can argue against them having sex, we can also suggest that when relationships become close and respectful, birth control is far better than an unwanted pregnancy. So, here in my role as a secular adviser, I suggest those of us that think that this country would be better off with radically fewer abortions actually begin doing something about it. Kathleen Sebelius deserves credit. Again. Again. It could certainly be argued for her doing her part. Rather than protesting what she's doing, pro-lifers and pro-choicers might think about giving her a little credit, or at least let her speak.

—James Madison, Federalist No. 39

An international team of researchers from NASA's Ames Research Center in Moffett Field, Calif., and the National Nanofab Center in Korea have combined the best traits of both technologies by making a tiny version of vacuum tubes that could be incorporated into circuits. Their prototype, a vacuum channel transistor, is just 150 nanometers long and was made using conventional semiconductor fabrication methods. Its small size allows it to operate at fewer than 10 volts, much less than a retro vacuum tube requires; with further work, the device could be made to use about 1 volt, which would make it competitive with modern semiconductor technology.

In a paper accepted to the American Institute of Physics' (AIP) journal Applied Physics Letters, the authors write that such a transistor could be useful for applications in hazardous chemical sensing, noninvasive medical diagnostics, and high-speed telecommunications, as well as in so-called "extreme environment" applications for military and space.

Article: "Vacuum nanoelectronics: back to the future? – gate insulated nanoscale vacuum channel transistor," is accepted to Applied Physics Letters.

Read more »

The Mineta Transportation Institute has released its newest peer-reviewed research report, which describes the modeling, calibration, and validation of a multi-modal traffic-flow simulation of the San Jose CA, downtown network.

read more

Many Wall Street figures had expected shares to rise sharply on their first day of trading, following in the steps of recent tech debuts — like LinkedIn and Groupon — that saw success on their first day of trading.

But investors apparently cooled off after shares hit the market, fearing the creation of a tech bubble.

He explained that West Virginia actually got a good deal. “Had they tried to determine the individual router capacity,” he said, “they felt that they would end up spending more money” thanks to Cisco’s package discount. The gear is future-proofed, and it’s also easier for techs to deal with the same router across the state.

“This was the most economical way forward,” Strickling said.

Walden wasn’t buying it, but his time had expired.

So stepping aside from the biggest aggregator of private data for a few minutes, and focusing on what actually matters, here is Citigroup telling our European readers who have those fancy multi-colored bills in their wallets, that they are in deep trouble.

To summarize from Citi:

• There are many scenarios for a Greek exit;  almost all of them are likely to be EUR negative for an extended period
• Some scenarios could be positive in equilibrium but the run-up to the new equilibrium could be nasty, brutal and long 
• The positive scenarios for the euro involve aggressive reduction of tail risk; none of these seem likely
• It is unlikely that central banks busily substitute EUR for USD in their portfolios during periods of intense political uncertainty.

Full note from Stephen Englander

Many clients are asking us to analyze the currency implications of alternative scenarios with respect to one of more countries exiting the euro. Below we run through some of the main issues that are being discussed. We are uncomfortable with the extent to which the most likely scenarios play out negatively for the EUR, but the euro upside scenarios depend on euro zone policymaker assertiveness that has scarcely been visible recently.

Scenario 1: Managed Greek exit; no contagion or financial market disorder

This is the most benign scenario with respect to a Greek exit, assuming away the major contagion risk. There is likely to be short term euro weakness, but a sharp initial sell-off would be deceptive and the weakness would be relatively brief once the contagion fears wore off. 

Some argue that the euro would rally strongly off this development, arguing that the euro ex-Greece would be much stronger than the euro with Greece. This positive scenario would be a world in which the risk premium on other euro countries has been largely determined by the fear of contagion from a GREXIT, not issues related to other peripherals themselves. Once GREXIT occurred without damage, whether on its own or because of policy commitments, spreads would narrow and the euro would rally.

Absent such an unwinding of knock-on risk on other peripherals, the arithmetic of the euro zone divesting itself of the Greek 2% of the euro zone facing a major depreciation is not very exciting. If the new Greek currency depreciated 50% (a very round number), the implied boost to the surviving EUR with its stronger components would be about 1%, basically it’s overnight move.

The above is a very optimistic reading of what is driving peripheral spreads in other euro zone countries. If the concerns reflect risk associated with national debt in other peripheral countries, not primarily Greek contagion fears, then even if the fears abate, the fiscal concerns on remaining peripherals would prevent a major appreciation. So this benign scenario does not seem the most likely scenario by any means, nor is it likely that the euro’s problems are as Greece-centric as needed to make the euro outcome play out as described. That said, if the benign scenario plays out, EURUSD could rally significantly from current levels, trading closer to 1.45 or higher, but it just doesn’t seem very likely. 

Scenario 2: Greece exits, contagion spreads to other peripherals

Greece repudiates the austerity of bailout #2 and exits the euro zone. Contagion spreads to other peripherals.
This scenario entails months of profound economic and financial confusion during which the euro would be under constant pressure in our view. How the euro evolves depends on how euro zone policymakers deal with contagion risk and that depends on the post-departure policies that are followed.

Substantial euro downside could emerge from investor fears that other peripheral countries in the euro zone would drop out, raising the risk premium on their debt, and making it even less possible to hit fiscal and economic growth targets. A Greek dropout could be viewed as unfortunate but manageable, if the euro zone disintegration was viewed as stopping there at Greece, but the risk is that investors come to expect that other countries will follow. Such countries would experience the worst of all worlds, austerity, a risk premium that now builds in additional currency risk, but no control of exchange rate or monetary policy and no growth. Investors in that case would speculate that the cost of staying in the euro was too high for other countries as well.

The way to avoid this contagion and downward pressure on the euro would be to provide an absolute, non-conditional guarantee that no other country would drop out. This would be a spectacular transformation — an ECB that is unwilling to act like the Fed morphs into the SNB.

Moreover, some clients have raised the possibility that investors would not believe even such a guarantee – at least not initially. They would argue that the example of Greek depreciation would induce even Mom and Pop in other peripheral countries to shift their deposits to Germany, the UK, the US or Switzerland because the downside from doing so if other peripherals do not drop out is low, and the downside from not doing so if there are further dropouts is tremendous. At a minimum this provides a big hole in peripheral banking systems that would have to be filled by the ECB – probably involving the ECB in far more open-ended risk than they have shown a willingness to take. It is unlikely that all the deposits would go to Frankfurt, so there is probably some direct downward pressure on the euro involved. The final element of the argument is that investors and residents will fear that the ECB can not bring itself to make such a permanent and potentially very expensive contingent commitment.

The EUR could begin to rally if the euro zone manages to ring-fence the other peripherals but so much damage will have been done by then that the EUR would begin its rally from a much lower level and probably not be anywhere close to the current level at the end of the year.

The optimistic view on contagion is that the ECB would not actually have to take on the risk if the commitment was ironclad enough. But if there is any degree of skepticism or if the ECB showed any hesitation, the risk-return would be in favor of capital flight and the euro would fall sharply and the ECB would face additional balance sheet risk. 

This is the problem that the euro faces on any dropout scenario, Even a small country dropout that has limited direct financial and economic implications for the euro zone could raise the stakes enormously with respect to other countries. Whether the euro goes up or down depends on whether the euro zone policymakers can bring themselves to make the needed open-ended commitment and convince the market that they will stick to it thick and thin even if the price tag rises. Given their inability to achieve timely consensus on policies that would have averted the pressures and been much cheaper, investors are likely to sell euros until fully convinced of policymaker resolve.

Scenario 3: Multiple peripheral countries exit, core remains

Our economists do not see this as a high probability scenario, but it is certainly discussed by FX investors. This is the scenario in which the likely dynamics of exit conflict the most with the long-term equilibrium. Define the long term as the point at which economies and exchange rates have moved back to their long-term equilibrium path. The euro of the surviving core will likely be stronger than its predecessor euro was. Consider that the deficit, debt and external balances will be much stronger than with the current euro. So one can make the case that the long term equilibrium value of this ‘core’ euro is much stronger, possibly even at the highs that were seen in 2008.

However, the short and medium term may last for an extremely long time and the dynamics over that period are very negative, not just for the peripherals that drop out but for the core that remains in. Consider that the peripheral countries are likely to drop out one by one, probably accompanied by economic and financial disruption. The impact will be felt on core economies and financial institutions as well, so whatever the long-term equilibrium, the path there will likely be accompanied by economic weakness at least until a stable core is formed and a path to recovery is envisioned – this can take a very long time and is probably well beyond an investible horizon. The high cost to both the dropouts and the remaining core countries is one reason that this is considered such an unlikely scenario. 

Scenarios that boost the euro.

Only the first scenario above has a euro positive component relatively quickly after the Greek exit is realized and the probability is low that investors will look as benignly on the event as the scenario implies. 

The characteristics  that each of the euro-negative scenarios share is that each reflects an augmentation of euro zone risk. Even if the risk is accompanied by a relatively hawkish ECB perspective, the euro falls because investors are focused on the deep risks associated with euro breakup rather than marginal, and probably unsustainable, gains from a hawkish ECB.. The argument we would make is that global investors will cut the euro a lot of slack if extreme tail risk can be eliminated, even if the outcome involves a bigger balance sheet or other unorthodox policies.

Scenario 4: New Greek government embraces austerity plan

We are not so naïve as to think they would actually embrace austerity, but by accepting the plan, they would relieve investors of concern in the short term of a messy default, bank runs and immediate financial crisis. Investors would not necessarily view this as a good outcome objectively, but as a better and much cheaper outcome than the alternative of messy default and Greek euro zone withdrawal. Essentially a continuation of the status quo, the question is how long a period of tranquility such a compromise would buy. If investors are jaded and view it as a very short term patch before renewed strife the bounceback in the euro would be limited.

Scenario 5: ECB bond buying or Eurobond

Both of these take a step towards resolving what is a major failure of monetary policy in the euro zone — Interest rates are simply too high. A GDP –weighted average 10year yields of non-program euro zone countries is more than 150bps higher than in the US or UK. This effective tightness of monetary policy is hardly justified by upward inflation or growth risks.

Were the ECB to buy bonds aggressively it is unlikely that investors would fight the ECB. Were the fiscal authorities to jointly issue an Eurobond, it is likely that core yields would go up and peripheral yields down – exactly the rate redistribution required to stimulate activity in the periphery and support their asset markets. This is likely to reduce tail risk and support the euro.
Looking at these two scenarios, it seems far more likely that the SMP buying will be renewed than the governments coming together and issuing an euro bond in the near term. It seems far more likely that the trillion EUR balance expansion of the ECB since mid-2011 would have been more effective buying cash bonds than operating through the LTRO.

Having put forward these proposals, we have to admit that they seem less likely than the ECB making an effort at reviving confidence by a bog standard rate cut or an additional LTRO. The political opposition to these measures means that even though they are likely to be the most effective in resolving the crisis, they are unlikely to be the first (or second) applied.

Scenario 6: LTRO or rate cuts

It seems unlikely to us that the euro zone’s underlying problem is that the refi rate is 1% rather than 0.5%, or 1.5% for that matter. A rate cut could be seen by the market as some sort of signal that further aggressive easing was coming, but by itself it seems more likely to stimulate activity in Germany than Spain. Nevertheless, it is possible that the cut could come and that the euro could even rally if the cut was viewed as complementary to other policy actions that euro zone policymakers were planning. If the cut was viewed as a substitute for more effective measures, the euro would probably resume its fall, possibly even accelerating in its decline. To paraphrase Crosby, Stills, Nash and Young – if you can’t use the policy that works, work with the policies you have. But the euro is hardly likely to respond positively.

Similarly, a third LTRO would tread a familiar path. So far, the two earlier LTROs have eased borrowing costs at the short end and led to a shortening of duration by peripheral issuers. An LTRO with a significantly longer maturity might encourage euro zone financial institutions to buy longer dated government bonds and bring down long term interest rates.  The first two helped stabilize and reduce bond yields temporarily but now they are back to where they were in the bad old days of November 2011, although not at the very peak of the crisis.

One reason the first two LTROs did not trigger a sustained drop in peripheral funding costs was the intensifying deposit flight which added to banks’ funding issues. We suspect that a pan-euro zone deposit guarantee, funded by the EFSF or ESM, could enhance the effectiveness of any future bouts of ECB lending as it will limit the outflow of bank resources. That being said, however, so far there is not much appetite for a Europe-wide safety net with the countries of the core reluctant to bankroll bank liabilities in the periphery. Moreover, the potential losses are extremely high if any country were to leave the euro zone and any country left out would almost be guaranteed to experience significant capital flight. If it could be implemented credibly (say with an ECB backstop) then the effectiveness of LTROs would not be undermined by deposit flight and banks might become more aggressive bidders for their sovereign’s debt.

Potentially this could ease strains within the euro zone and generate both a global and euro zone risk rally, but to be implemented credibly would require a similar open-ended commitment to those discussed above, and such commitment have been hard to extract from euro zone policymakers.

Concluding remarks

Approaching a second round of Greek elections potential scenarios leave the balance of risks pointing towards a weaker EUR. In the long run, while there may be more favorable equilibriums, the path there we suspect will be very painful. At this stage a mixture between scenarios 2 and 6 seems most likely, with 1 a possibility on the outside – not very promising for the EUR unless policymakers surprise with decisiveness.

A former Roman Catholic priest was found guilty on Thursday of hiring a hit man to kill a boy who had accused him of sexual abuse. John Fiala, 53, showed no emotion as a Dallas jury found him guilty of plotting to kill the boy, according to The Dallas Morning News. He faces a possible sentence of…

[...]
People in Honduras have burned down government offices and demanded U.S. drug agents leave the area after news got out that American and Honduran forces shot and killed up to six innocent Hondurans.

Deep in Siberia’s Taiga forest is Vissarion, a cult leader who looks like Jesus and claims to be the voice of God. He’s known as “the Teacher” to his 4,000 followers…who [possess an] unflinching belief in UFOs and the Earth’s imminent demise.

By Kim Barker ProPublica When MaryAnn Nellis tried to pay for groceries on April 14, her credit card was declined. Later, she said, she found out why: Her credit card company, Capital One, had flagged an earlier purchase as potentially fraudulent. The problem? A $5 donation to Friends of Scott…

New York Times legal reporter Charlie Savage showed his usual labeling blindness in Friday's piece on strange political bedfellows that oppose indefinite detention: "House to Consider Proposal to Bar Indefinite Detention After Arrests on U.S. Soil."

Savage again showed himself unwilling to label far-left figures like Noam Chomsky as far-left, but has no problem calling the Tea Party "conservative." In the past he has termed the far-left Center for Constitutional Rights "civil libertarians" and "a group of human rights lawyers." Friday he wrote:

The House is preparing to vote again on an unresolved legal controversy: whether the military may imprison terrorism suspects captured on United States soil without trial. The renewed debate comes as a federal judge has enjoined the government from enforcing a statute codifying the government’s powers of indefinite detention.

Lawmakers are considering amendments to the National Defense Authorization Act. One of them, sponsored by Representative Adam Smith of Washington, a Democrat, and Representative Justin Amash of Michigan, a Republican, would scale back a highly contested provision about indefinite detention created in last year’s version of the law, by saying it does not apply to domestic arrests.

….

It is uncertain whether there is enough support to enact the Smith-Amash amendment, which would also have to clear the Senate. The debate last year prompted an ideologically diverse outcry against the possibility of using indefinite detention on American soil, fueled in part by Tea Party conservatives. And this week a court ruling called the indefinite detention provision into question.

….

On Wednesday, Judge Katherine B. Forrest of the Southern District of New York issued a preliminary injunction blocking the government from enforcing the provision. She said the vagueness of the statute — including what counts as the kind of “support” that could lead someone to be detained — probably violated First and Fifth Amendment rights.

The plaintiffs included Chris Hedges, a journalist who writes extensively about terrorism issues and interacts with terrorists as part of his reporting. Other plaintiffs included the dissident thinker Noam Chomsky and several supporters of WikiLeaks.

Judge Forrest, whom Mr. Obama appointed last year, noted that Justice Department lawyers repeatedly declined to say that the plaintiffs’ conduct would not make them subject to being detained. Her ruling was celebrated by civil liberties advocates as an unexpected victory for individual rights in an era in which courts have largely acquiesced to sweeping claims of national security powers by the government.

Hedges is a former Times reporter whose anti-American ranting got him unplugged from a commencement address in 2003. He now writes for the far-left Truthdig website, while Noam Chomsky's anti-Americanism and notorious denial of mass genocide by the Communist Khmer Rouge in Cambodia are well known. Yet to Savage Hedges is merely a journalist, and Chomsky a "dissident thinker" – one of those "dissident thinkers" long-admired by vast numbers of university professors and students.
 

Remember there is no short-selling – only long-adds and long-exits. Syndicate fall back…26.7mm shares at $38.00, 9mm shares at $39.00, and 42mm at $40.00 – leaves a VWAP (or average price at which everyone is in Facebook) at $40.36 (green arrow) with over $10.5b billion traded so far as over 60% of the float has ‘turned-over’ this morning.

Why? It was apparently deemed “too political.”

“It is astounding how significantly one idea can shape a society and its policies. Consider this one,” Hanauer said, “If taxes on the rich go up, job creation will go down. This idea is an article of faith for republicans and seldom challenged by democrats and has shaped much of today’s economic landscape.”

“But sometimes the ideas that we know to be true are dead wrong. For thousands of years people were sure that earth was at the center of the universe.  It’s not, and an astronomer who still believed that it was, would do some lousy astronomy,” he added.

“In the same way, a policy maker who believed that the rich and businesses are ‘job creators’ and therefore should not be taxed, would make equally bad policy.

TED has since backed down and published the video of his talk, which you can see here:

An attempt to strike down any provisions allowing for the US military to indefinitely detain American citizens without charge from next year’s National Defense Authorization Act was shot down Friday morning in the House of Representatives.

Its banks have lent billions of euros they might never get back and this has made investors very nervous.

On 18 May, credit ratings agency Moody’s cut its ratings for 16 Spanish banks, reflecting the heightened risk of them suffering huge losses if property loans are not repaid.

The Spanish government has had to part-nationalise one of its banks and may have to bail out more.

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All Hail to the great Moolaram
He`s leading the world`s biggest scam
This demon of money
Makes things appear sunny
By printing when we`re in a jam

The Limerick King

Throughout the text, Ballard contends that America‘s founding fathers had a profound understanding of God’s grace and the importance of a covenant with the Almighty to ensure continued growth and success.

In assembling “The Covenant,” Ballard sifted through the country’s robust history. In the end, he discovered what he believes is evidence that God explicitly participated in and oversaw the manifestation of the U.S. Through inspiring narrative, the author hopes to instill a profound love for the homeland and a deep appreciation for the covenant that played such a prominent role in America’s creation.

An official description of “The Covenant” explains more about the author’s intentions:

Why did Christopher Columbus assert that he was “guided by an angel” at the moments of greatest distress? What prompted the original colonists to embrace the idea that the land of America was “New Israel” to them? What power urged Washington and his rag-tag army to successfully conquer the greatest military power on earth? What brought about the terrible national crisis that left our nation grieving, humbled and repentant after the desolation of Civil War? [...]

The answers to these, and many other questions relating to America’s real national treasure are found in the pages of THE COVENANT.

In his new book, author Timothy Ballard answers both HOW and WHY the America’s very existence stands in fulfillment of ancient biblical prophecy.

The Blaze spoke with Ballard about this intriguing book on Thursday. During the interview, he explained the 10-year journey that he embarked on to complete the project. While working at his day job, the author — and father of six children — would carve out three hours every morning (from 3 a.m. to 6 a.m.) to delve deeply into the words he hopes will better frame America’s past — and future.

“Initially I thought, ‘I’ll start on a chapter or two about the founding fathers.’ I didn’t think I was going to say anything that hadn’t been said 100 times before,” Ballard said, noting that he inevitably proved himself wrong. “It ended up being an entire book on where the power of good is derived from.”

Ballard contends that America’s founding fathers tapped into an ancient power to build the nation — a feat they accomplished against all odds. The founders, being well-versed in Biblical understanding, believed that the U.S. was a new Israel of sorts, birthed out of a relationship and a covenant with the Almighty. Ballard maintains that, in contemporary times, the nation risks losing its blessings if individuals don’t recognize the importance of the covenant and an ongoing relationship with God.

“Those who understand the covenant feel an affinity to Israel,” Ballard explained. “The covenant is a promise between God and his people and the relationship is one of mutual action – God will deliver if we do what he tells us to do — if, as a nation, we strive to live worthy of it. It has nothing to do with denominations. I don’t care what faith you are – as long as you’re believing in God.”

So, what are these blessings, you ask? According to Ballard, they are liberty, protection and prosperity — all elements that the U.S. has traditionally enjoyed. Each, of course, provides substantial benefits to individual citizens and the nation’s survival as a whole. When the “mutual action” that Ballard spoke about is engaged, he claims that “there’s a response from heaven again and again.”

On radio yesterday, Glenn Beck spoke with him in-depth about “The Covenant”:

For those who would dismiss the author’s views, he posed some interesting questions. To begin, he pondered how America’s founding — her transformation from an infant nation with little resources and ability to history’s most profound mega-force — would be possible without God’s intervention.

Historically, he says, the covenant has been able to help American leaders defy the odds. Ballard maintains that both George Washington and Abraham Lincoln, based on the difficult times during which they lived, relied upon covenants between themselves and the Lord.

Here‘s a trailer from a documentary currently being produced surrounding Ballard’s ideals:

And when it comes to naysayers who claim that the founding fathers were irreligious or mere deists, Ballard has a stark response, calling such a notion “ridiculous.” He says that these ideas contradict Washington’s own words — words of encouragement for individuals to become more spiritually-driven. Even the Continental Congress issued calls for Americans to come back to the Lord, Ballard maintains.

“I hope they return to the covenant because it’s our only hope. I hope they read this book and understand that our history is a repeat of what happened in the Old Testament,” Ballard said of the elements he prays readers take away from the book. “In a way, we’re living scripture…it’s a choice…will we return to the covenant…or stick with the flesh? The idea is — if we want to save this nation — we need to return to the covenant.”

Ballard appeared on GBTV on Thursday evening to further discuss the importance of the covenant:

Many, though, will wonder what, exactly, this all means. Ballard had some answers, specifically when it comes to how individuals can make an impact on restoring the covenant. The author says that every citizen should go to his or her house of worship and pray that the Lord would receive America as his land. Encouraging the government to invoke God at the highest levels, he maintains, is not a violation of the First Amendment and such actions should be encouraged.

“I’m optimistic. If I had no hope, I wouldn’t have tried to put the message out,” he said, maintaining his belief that Americans will restore the covenant. “I think we can – it’s our choice. The best way to inspire those spiritual feelings that will return the nation to the covenant is to read the founders’ stories.”

Author Tim Ballard

Ballard encouraged Blaze readers to examine America’s history “prayerfully,” as he believes doing so will enable God’s spirit to reveal the true tenets associated with the founding.

Ballard’s next book, a sequel to “The Covenant,” will focus upon the Civil War and the challenges Abraham Lincoln faced as the nation was divided like never before. For more information on his book, which was released this week, click here.

Paul Krugman looks at the first-quarter growth results from some developed economies and notes Japan’s strong performance due to the post earthquake and tsunami reconstruction. He then compares it to Italy’s dismal results due to austerity measures (which, as I’ve pointed out here, consists almost exclusively of tax increases, not cuts in spending).

Krugman then says that “there seems to be some kind of lesson here about macroeconomics, but I can’t quite put my finger on it…” Is he really saying that what Europe needs to grow again is a massive earthquake and tsunami? Or maybe a nuclear accident? After all, Krugman once wrote that Fukushima’s “nuclear catastrophe could end up being expansionary” for the economy.

Speaking of economic lessons, has the good professor never heard of “the broken window fallacy”?

All Europe Needs Is a Massive Earthquake and Tsunami is a post from Cato @ Liberty – Cato Institute Blog

On Thursday's Tonight Show, NBC's Jay Leno gratuitously inserted a slam of Fox News as he poked fun of colleague Chris Matthews flunking on Jeopardy: "He [Matthews] got his ass kicked on Jeopardy. He just – he was so embarrassed. The good news: he got so many facts wrong, today, he was offered a job at Fox News."

The following morning, Friday's CBS This Morning played up the anti-Fox News clip as a lead-in to the 7:30 am Eastern half hour. Anchor Charlie Rose apparently thought it was funny, as he laughed it up after the punchline. [audio available here: video after the jump]

This isn't the first time the relatively new CBS morning show has highlighted Leno going after Republicans/conservatives. Back in February 2012, the newscast played a clip of The Tonight Show star mocking opponents of same-sex "marriage."

  The transcript of the Jay Leno clip from Thursday's Tonight Show, as featured on Friday's CBS This Morning:

JAY LENO (from NBC's "The Tonight Show"): You know, our good friend Chris Matthews on MSNBC – he does 'Hardball.' You know, real smart – you know, a political junky, clever guy. Well, he's on 'Jeopardy' the other day. (laughs) He got his ass kicked on 'Jeopardy.' (audience laughs) He just – he was so embarrassed. The good news: he got so many facts wrong, today, he was offered a job at Fox News. So that's – that's good to see. Glad to see that (audience laughs and applauds)

The situation in Europe is rapidly going from bad to worse. It is almost like watching air being let out of a balloon. The key to any financial system is confidence, and right now confidence in banks in Greece, Italy, Spain and Portugal is declining at an alarming rate.

When things hit the fan in Europe, it is going to be much safer to have your money in Swiss banks or German banks than in Greek banks, Spanish banks or Italian banks.

The events were named for the Mississippi River town of New Madrid now within Missouri. Some sections of the Mississippi River appeared to run backward for a short time during the 1811-1812 earthquakes. A request, dated January 13, 1812, by William Clark , then the governor of the Louisiana Territory, asked for expeditious federal relief for the “inhabitants of New Madrid County”.

There are estimates that the earthquakes were felt considerably over a 50,000 sq. mi. area. By comparison, the 1906 San Francisco earthquake was felt moderately over a much smaller area and a repeat event is expected soon. The New Madrid Seismic Zone consists of reactivated faults that formed when North America began to split during the breakup of a supercontinent during the Neoproterozoic Era. Faults were created along the rift and igneous rocks formed from magma which pushed multi-directionally toward the surface.

In a report filed in November 2008, the U.S. Federal Emergency Management Agency warned that a serious earthquake in the New Madrid Seismic Zone could result in “the highest economic losses due to a natural disaster in the United States,” further predicting “widespread and catastrophic” damage across Alabama, Arkansas, Illinois, Indiana, Kentucky, Mississippi, Missouri, and particularly Tennessee, where a 7.7 magnitude quake or greater would cause damage to tens of thousands of structures affecting water facilities, transportation and other vital infrastructure.

Twitter says it will honour requests from users who do not want their online behaviour tracked, the company said on Thursday, in contrast with web companies such Google and Facebook whose business models rely heavily on collecting user data. Twitter announced that it will officially support…

Time for that decision is fast running out and the mood in Jerusalem is hardening.

YouTube – TruthNeverTold

If you just submitted an order to buy FB today, and were confident the order was executed even if at market, you may be out of luck:

• NASDAQ HAS PROBLEM DELIVERING FACEBOOK TRADE EXECUTION MESSAGES

What this means is that the exchange at this point is deciding whether or not to send back late executions to all people who bought, or thought they bought. Needless to say this means that the indicated price is likely not the real price if one factors for all the latent orders, on both the bid and offer side, unless of course all those orders get cancelled, further eroding confident in the market, only this time hitting that one segment most disenchanted with the stock market – mom and pop.

Moody’s slashed the ratings of 16 Spanish banks on Thursday evening, citing the reduced ability of the Spanish government to provide support to the sector, as well as the “adverse operating conditions” characterised by a renewed recession.

The rating agency also downgraded Santander UK, although, at “A2,” it is still rated one notch above its parent bank Banco Santander. Moody’s highlighted that Santander UK has “no direct exposure to the Spanish government (or regional governments)”.

Earlier in the day, shares in Bankia, the country’s fourth biggest bank, plunged by as much as 29pc amid reports that depositors had pulled out €1bn in the past week.

~ Sura 4 (An-Nisa), ayah 145, Qur’an

A couple of months ago, one of those dubious leaks made by “unnamed US officials” caught my eye. US media did something it doesn’t often do; it publicised ‘secret’ Israeli government policy. Giving five minutes of prime time TV to Iranian scientist Mohammad Javad Larijani, brother of Ali Larijani, philosopher and chairman of the Parliament of Iran, two “senior U.S. officials” confirmed for NBC News what Mohammad Larijani was telling them: that Israel was behind the assassinations of Iranian scientists.

Specifically, the US officials stated that Israel’s Mossad was financing, training and arming an Iranian dissident group that goes by many names, but which we’ll call the People’s Mujahedin of Iran (MEK) for now. In return, the MEK is “providing Israel with information.” Speaking through NBC, these unknown officials confirmed what Larijani and the Iranian government have been saying for years: that Israel, through the MEK, carried out the attacks in which motorcycle-borne assailants attached sophisticated magnetic bombs to the exterior of the victims’ cars. The US officials further stated that the Obama administration is aware of the assassination campaign but has no direct involvement.

No sooner had the story been leaked than a series of car bombings took place outside Israeli embassies in India, Georgia and Singapore. The same types of bombs used in the assassinations of Iranian scientists were used to blow up vehicles near Israeli diplomats. The Israelis never actually intended to kill any of their own, because the Mossad warned the embassies ahead of time. Israel of course blamed Iran for the bombings. But these stunts were clearly intended to deflect attention from the US government’s confirmation that Israel is murdering Iranian scientists through its surrogate, the MEK, and, once again, portray Israel as the eternal victim.