Pretty big week if you are paying attention to the Supreme Court. A conservatively tipped Supreme Court that gave the country Bush v Gore and Citizens United under Chief Justice Rehnquist; was replaced by John Roberts. That should have been on paper a safe substitution. But just this week, the Supreme Court upheld ObamaCare and gay marriage.
The reason? A wild card to the Supreme Court, was when GWB nominated a young John Roberts as Chief Justice of the Supreme Court.
His nomination - historically nominations based on past judicial history are not an exact predictor of future Supreme Court votes - ensured that the Supreme Court was going to be run by someone who, by definition, knew he had over a quarter century to shape the law of the land.
Or said another way, Roberts is less concerned with being ideological, and more concerned with a legacy of moderating a Supreme Court that had lost control of the country's middle-of-the road confidence in the institution itself.
And expect him to remain the wild card for another 20+ years. Because if the Supreme Court gets out of balance again - lets say it becomes more liberal - he will balance it with a more conservative vote.
Roberts is playing the long-game. It is clear he wants to become the next great Chief Justice of the Supreme Court. He has the time to do it. And the pragmatism to accomplish it.
June 27, 2015
There has always been one big concern for US and Nato towards Russia: maintaining insecure Russia leadership stability.
History now tells us that JFK let Khrushchev build the Berlin Wall. He knew that East Germany was losing its professional elite; rendering it as future possible failed state. Khrushchev and his insecurities were allayed by being allowed to build the Berlin Wall. It worked until the Berlin Wall fell.
Then a bunch of Western economists and consultants preached Milton Friedman's "shock economics" to Yeltsin: devaluing Russia's currency - which wiped out Russian's savings - and privatized of all the Russia's state's assets to a chosen few.
That predictably lined Western advisers pockets and destabilized Russian society.
This led to Putin being installed as Yeltsin's successor in a bloodless coup. Under Putin, taxes on Russian energy companies were used to satiate the average Russian citizens. And in one great head fake, Putin jailed Russian's original oligarchs with ex-KGB oligarchs.
This all worked while oil and natural gas prices were high. Then as the world was flooded by supply; oil and natural gas prices plummeted and so did the goodwill of the average Russian citizen.
Putin's only option was to keep his ex-KGB oligarchs happy while whipping up nationalism/rallying around the flag to satiate the average Russian citizen. He manufactured a crisis in the Ukraine not so much because Ukraine is strategic; but because Ukraine was so inherently fragmented and it didn't require a lot of matches to start a fire.
Now the US and Nato are responding by deploying tanks and advanced fighter aircraft.
The Cold War and the Berlin Wall - just as JFK envisioned it - stabilized Europe for more than a quarter of a century. But there is no such tripwire today. That is why I was more scared - despite being happy for Eastern Europe - when the Berlin Wall fell. And why we all should be scared today.
There is no such thing as a good or evil Russian leader. For a Russian leader there is only a difference between staying in power and being deposed. With energy prices remaining low; Putin must maintain a state of war footing to stay in power. He has to keep the average Russian citizen at bay, while keeping his ex-KGB oligarchs happy, by not overtaxing them, which will only exacerbate the affects of Western economic sanctions.
So it is now back to the future. In part, Western foreign policy must - as it has been historically - remain based on maintaining insecure Russia leadership stability. We need to give Putin the wiggle room to survive. If not, the consequences may be too scary to contemplate.
June 25, 2015
There are of course a lot of reasons for gun violence today.
But one reason is the absence of natural conflict management of a generation removed from my childhood.
I grew up with gangs. I also grew up at a time when parents told their children to walk to school.
In order to to get to school and back I would have to confront gangs. Gangs demand respect; and you would only know that if you were exposed to them. Back in the day they would regularly make me play "chicken". Playing "chicken" involved a gang member throwing his knife at my feet and making sure I didn't flinch. I never flinched. Then one day, the knife went through my foot. I pulled it out and kept walking. I never had a problem with gangs again.
I also grew up at a time when parents told their children to get out of the house and play.
In the summer we would play baseball from sun up to sun down. Inevitably - in the absence of adult umpires - every day there was a fight based on whether some pitch was a ball or a strike. Or whether a hit was fair or foul. These fights were between friends. The fight would last about 5 minutes. And then we would make up as if nothing ever happened.
The same for football in the fall and winter.
Fights just happened every day. It was just young people engaging in conflict management without parental supervision. As we got older, the more and more we realized that the fights we stupid, and the more and more we engaged in verbal arguments/talked people out of fighting.
Now children are sheltered from gangs and aren't allowed to "play" with their friends unless it is a parentally supervised activity.
Hence children today don't grow up learning how to deal with natural or gang conflict management.
Show me a kid that carries a gun today - for protection or for violence - and I will tell you, that kid has never been in a fight and is just a gun-armed coward.
It is tougher and more personal to fight with your fists and take a punch. While it is easy and less personal is to shoot somebody. It's as if today's children play only violent video games in their homes and when they leave their homes, guns are just a "gutless" extension of a virtual world.
Take all the guns away and just see how "tough" gun-totting kids are. They would all be cowards and would probably run the other way if someone made them play "chicken".
We all know what the problem is. It's the parents that insulate their children and buy guns to protect them. It's the parents who don't support gun control. It's the parents who take their child to an artificially safe gun range; and then wonder why their children buy or take their parents guns when they leave the confines of their house and video games.
Back in the 1970's we all lived in a real world. We navigated the world of bad guys and the maturation of conflict management.
Now children grow up in a virtual world. They don't understand how to navigate bad guys and they never have been given a chance to naturally mature though conflict management.
Carrying and using a gun is for cowards. And somehow an entire generation of cowards was created because parents have tried too hard to shelter their children.
June 23, 2015
"The Child Whisperer"
I know it is not fashionable to laud President Obama right now. But this independent voter voted for him twice and was a financial supporter.
His lasting legacy -
1. From every color and race, Obama will never be forgotten by children. He will never be forgotten by teens and adults for the changes he has made to make school tuition loans more affordable. And he will never be forgotten by young adults and their parents for extending health care to age 26.
2. When he was elected, the Dow Jones was 7,949. After 7 years in office, the Dow Jones is 18,049, as of this writing. A rise of 107%.
3. He was the first president that was elected twice by electoral landslides since Eisenhower.
4. He has wound down two dumb wars. One can argue that it has just led to more instability. But here is one thing I do know. Our brave men and women - who serve our country - appreciate not dying and being maimed, for wars that didn't make sense. And our brave men and women appreciate him and his wife not forgetting military veterans.
5. Despite a secret service that has been in a decline since he took office; he has bravely exposed himself/his family and never once blamed the people who were supposed to serve him without lapse.
6. He and his family have NEVER shamed the White House by petty deeds nor scandals.
7. With his eulogy of Joe Biden's son - Beau - with emotion on his sleeve and his heart hugging Joe and Beau's daughter - he able to take tragedy and turn it into a modern day "Brian Piccolo" teaching moment.
I know there will be a new president in 2017. And I know people will run away from him. But when history judges him, years from now, his presidency will viewed as a time when we had a steady and smart hand on the wheel.
And some of the young people he has touched - will be helping to write his history - and rightfully so will be biased.
June 20, 2015
The shooting at Emanuel AME Church in Charleston, South Carolina, that left six women and three men dead, including its politically active Honorable Rev. Clementa Pinckney - by Dylann Roof, 21 - is yet another sign that the US doesn't really understand national security.
Every year about 15,000 people are killed by homicide in the US. Or about 7 times the amount of people that were killed on 9/11.
It's a tragic juxtaposition that we are fighting "a war on terror", thousands of miles away in the Middle East, when our largest security risk is ourselves.
African-Americans share the brunt of this security risk. While shootings by whites are well-publicized in South Carolina, Baltimore, Florida and Ferguson; the combination of too many guns, poverty and gangs have created the most dangerous apartheid system in the world.
Everyone will write how tragic the shootings were in South Carolina - just as they did after Sandy Hook; but the national grief will only last through a single new cycle.
For every family like mine that has raised children who are color blind and have as many African-American friends as they do white friends; the vast majority of American families continue the long legacy of teaching their children to be racist and to segregate.
There are exceptions, but all of this gets down to income level. Wealthier white families have transcended racism. Poorer white families have not. Wealthier African Americans have transcended racism by moving to affluent suburbs. While the vast majority of African-Americans are left behind in our inner cities and are dying with no fanfare.
President Obama is calling for a national reckoning. While well-intentioned, a national dialog isn't going to fix the systemic problem.
The real war on terror should be fought in the US and not in the Middle East. This war has to be fought by gun control and greater economic opportunity for both poorer white and African-Americans. This war has to be fought by shifting our "troops" to police our inner cities.
Guns and income disparity just continue to increase. And if we don't fight these factors by a real war on terror, we should expect violence to continue to spiral out of control until it rips this nation apart.
As Abraham Lincoln said 150 years ago -
“From whence shall we expect the approach of danger? Shall some trans-Atlantic military giant step the earth and crush us at a blow? Never. All the armies of Europe and Asia...could not by force take a drink from the Ohio River or make a track on the Blue Ridge in the trial of a thousand years. No, if destruction be our lot we must ourselves be its author and finisher. As a nation of free men we will live forever or die by suicide.”
Substitute Al Qaeda and ISIS for trans-Atlantic military; and Lincoln's words still powerfully resonate today.
In the meantime, the events in Charleston, make me sick to my stomach. They leave me less proud to be an American. And the only way to honor the dead of yesterday and times before; is to end our continuing death by suicide.
June 19, 2015
All of this talk about whether the Fed is going to drive interest rates higher has nothing to do with reality. Especially now that banks don't loan money as much as they should.
When the Fed talks about raising "interest rates" they are talking about overnight borrowing between banks facilitated by the Fed. Why would a bank need overnight borrowing? Only if their loans exceed capital requirements.
Remember a bank - to make the math easy, let's set the reserve rate at 10% - must maintain $9.9 million in cash for $99 million in loans. This is how money is really created. (We could start a new bank can start with $X million and loan out $XX million).
With banks not going anywhere near their reserve requirements - because they are not loaning out anywhere near as much money as they should - overnight loans are much less likely.
Corporate interest rates and US treasury rates are decided by investors; not the Fed.
Investors focus on two variables to determine price. Expected future inflation and risk.
The US has enjoyed historically low corporate and treasury interest rates because investors have discounted inflation fears since the Great Recession AND risk is relative. Cash needs to be parked somewhere. And the safest place to park it is in the US.
Don't pay attention to the Fed. Simply go to this site everyday -
The Fed left "interest rates" unchanged yesterday; but stated that improving U.S. economic growth is likely to warrant one or two interest rate increases before the end of the year.
How did the treasury market react? Check on the link above. Unchanged.
June 18, 2015
The chart above is the GDP growth per year per person for Greece, Italy, Portugal and Spain before and after the Euro.
GDP per year per person is the only objective way of measuring relative GDP in a Europe due the skewing of aging demographics.
As I have continually posted, Germany depends on an artificially weak Euro vs Deutsche Mark to drive its export-led economy.
What Germany really fears is that if Greece exits the Euro; Greece's Dashma will be devalued and that will lead to better economics for Greece.
And that will open the flood gates for Italy, Portugal, and Spain to follow suit.
This is most likely how the Euro will die.
June 16, 2015
In the early years of my professional career, the meme was Japan would eclipse the US economy. They were buying up US real estate. Their economy was rapidly growing.
But all of that went away from 1990 to the present. As Japan's "lost decade" has morphed into a "lost quarter century".
Now the same meme is being touted about China. Rapid growing economy. Hot stock market. AND even perhaps the next world currency?
But when you peel back the layers, China is only a paper tiger.
1. It may have a rapid growing economy, but a staggering 15% of China's GDP is spent on interest payments to banks. No new debt is being issued. It's just constantly being restructured. Compare that to the US; where total asset value has reached $100 trillion from $70 trillion with little new debt post 2008.
2. China has a hot stock market? Yes. But it just experienced the largest outflows of foreign investor funds from their stock market in the last 15 years. Most likely because China has overbuilt and placated it's citizens with easy credit. It's not sustainable. And unlike the US - which went through a painful Great Recession where debt has been driven down - China's communist government can't guarantee that the same kind of belt tightening will not lead to social instability.
3. The Chinese Yuan is still pegged to the dollar. Do you know that the People’s Bank of China doesn’t issue currency notes larger than 100 yuan ($16)? Why? They still fear capital flight from their citizens. A country that fears capital flight doesn't exactly inspire the world to make it a world currency.
Also forget the meme that the US depends on China to fund US sovereign debt. US sovereign debt is $16 trillion; but China only makes up about $1 trillion. If and when China tilts; it shouldn't have an affect on US Treasuries. And because China is a net exporter and not a US net importer - in any way shape or form - a Chinese economy going bust will not affect the US economy.
Before 1990, the argument that Japan would eclipse the US economy was based on their high savings rate. But it ignored its aging demographics.
Now in 2015, the argument that China will eclipse the US economy is based on demographics. Surely one billion people is a core strength right? Wrong. It is a core weakness. Placating one billion people through towering skyscrapers and debt is China's achilles heal.
China is simply a disaster waiting to happen and is nothing short of a paper tiger or an emperor with no clothes.
June 15, 2015
I have spent many years of my life trying to (a) find out if Jesus was real, (b) what his agenda was and (c) how a faith evolved.
The only three sources that exist to deconstruct (a) and (b) are anthropology, the writings of the first century Jewish historian Josephus and the earliest Gospel of Thomas found near Nag Hammadi, Egypt, in December 1945
Anthropology. The first three decades of AD in Galilee were marked by agrarian commercialization under Roman occupation. Jewish law held that land was a sacred gift from God. Under Roman occupation, agrarian commercialization led to the confiscation of land for productivity reasons. This was not only a sacred slap in the face to early first century Judaism; but the creation of a separation of aristocracy from the peasants. Meaning one should expect there to be all forms of violent and non-violent resistance.
Gospel Of Thomas. Most historians agree that this gospel was written by Jesus' disciple Philip. So they must predate the letters of Paul. The Gospel of Thomas avoids any divinity story of Jesus. Rather it records what he said and not what he did. What he said later went into the four canonical Gospels and thus are assumed to be the source material or the so called "Q" source. What Jesus said can be condensed into (a) non-violent resistance to Roman law and (b) a way to - through communal sharing of food - form "heaven" on earth. The later is a very Jewish concept; as Judaism doesn't focus on non-earthly heaven and hell, but on the here and now. Hence "Jesus" was one of many Jewish protest movements. But completely Jewish in all forms.
Josephus. The first century Jewish historian, in a short passage of Antiquities of the Jews, mentioned Jesus being crucified by Pilate. Since his book - Antiquities of the Jews - doesn't line up with Christianity and is all Jewish in nature. scholars agree that Jesus was real.
Jesus' divinity wasn't proved by a "resurrection". Rather it is rabbinical in nature. There are two Old Testament passages that speak to "Resurrection of the Dead".
The first is: “Thy dead shall live, my dead bodies shall arise, awake and sing, ye that dwell in the dust, for thy dew is as the dew of light, and the earth shall bring to life the shades” (Isaiah 26:19); and the second: “And many of them that sleep in the dust of the earth shall awake, some to everlasting life, and some to reproaches and everlasting abhorrence” (Daniel 12:2).
To sum up the History of Christianity Part I - The Historical Jesus - Jesus was not a "Christian" but a Jewish rabbi who was part of a multifaceted and natural/organic resistance to Roman occupation and the commercialization of sacred agrarian land. He was real. And what he said - non-violence and communal living - led to a sustainable movement.
Nothing more and nothing less.
So when some preachers of all Christian religions, talk show hosts and politicians bring up "Christianity"; it is simply an inconvenient truth that the real Jesus they praise, was really a Jewish rebel against the establishment and someone who found income disparity unacceptable.
June 14, 2015
Reverend Franklin Graham announced last Friday that he was pulling the $128 million account for his nonprofit organization after Wells Fargo ran an ad that featured a lesbian couple.
This "Christian" minister must have not read the New Testament nor the historical Jesus.
First a little about the development of the Gospels and the historical Jesus. The Gospel of Mark was copied and embellished by Matthew and Luke. And John copied and embellished the previous three. Matthew, then Luke, and then John kept moving the story from a great Jewish prophet to a less-Jewish deity (I could fill an entire blog on this subject alone).
There is almost a 100% consensus amongst theologians that the common thread of the gospels is called "Q" or "source".
Regardless, the historical Jesus sent his disciples to live and preach with people shunned by society. He sent them without a knapsack and a staff. The latter was to teach everyone to share food and the former was non-violent resistance (a staff in the old world was not for walking - like a cane - but a defense against Romans and wild animals).
(Also by the time the Gospels end ... the disciples had staffs)
So what to make of Billy Graham's son?
1. He doesn't exactly not carry a knapsack. Rather, he carries an entire warehouse. Not exactly Jesus.
2. He doesn't exactly follow Jesus's compassion for the dispossessed. Rather he shuns them. Not exactly Jesus.
3. He didn't do his homework. Where did he move his money as an anti-gay preacher? BB&T. Who are they? I have no idea. But they have had a long-term association with Miami's Gay Pride. Oops.
June 11, 2015