Markets dropped a bit this week on news that Romney had pulled roughly even with Obama. Apparently the markets don't like Romney so well.
S&P downgraded Spain's bonds to BBB-, the lowest level above junk grade, citing increased domestic political uncertainty and policy uncertainty at the euro-area level. They also put them on a negative watch, meaning they expect more downgrades in the future. Greece and Spain are in a race, both with rising unemployment, both with unemployment above 25%, both with youth unemployment (15-24 year olds) above 50%. Expect funds to start dumping Spanish debt, Spanish interest rates to rise, and another mini-crisis ending when Spain formally asks for an ECB / IMF bailout.
The House Intelligence Committee says US regulators should block mergers and acquisitions in this country by Huawei Technologies Ltd and ZTE Corp, among the world's leading suppliers of telecommunications gear and mobile phones. It's believed that phones and components from these Chinese companies have back doors that let China spy on us. Reflecting US concern over cyber-attacks traced to China, the report also recommends that U.S. government computer systems not include any components from the two firms because that could pose an espionage risk. Huawei is a private company founded by a former Chinese military engineer, and has grown rapidly to become the world's second largest supplier of telecommunications network gear, operating in more than 140 countries. ZTE Corp is the world's fourth largest mobile phone manufacturer, with 90,000 employees worldwide.
Food prices continue to rise, and the current projection is that food will be 15% more expensive by next June. About half of all people in the world spend two-thirds or more of their income on food, so this is a big deal for them. The last time food prices jumped up, we got the Arab Spring and revolts in the Philippines. Where will things be worst? Orange and red in the map below.
Egypt would be considered one of Obama's early foreign policy successes - it's his plan to have "daylight" between the US and Israel, and to encourage "democratic" movements in muslim countries. Obama's withdrawal of support for Mubarak was one of the primary catalysts in the Egyptian version of the Arab Spring. How's that working out? The Egypt constitutional committee just released their first draft. It contains such enlightened phrases as "the state shall take all measures to establish the equality of women and men in the areas of political, cultural, economic, and social life, as well as all other areas, insofar as this does not conflict with the rulings of Islamic sharia." Women who want to see Egypt: go soon. Very, very soon. Or not at all. Wear long sleeves, ankle length dresses, and keep a scarf on.
Are you wealthy? There are about 4.5 billion adults in the world. If your total worth (savings + house) less your debt (mortgage, credit cards) is over $4,200 you're in the top half of the world population. $82,000 gets you into the top 10%. $712,000 is top 1%. The bottom half of the world population owns about 1% of the world's wealth in total; the top 10% owns 84%, and the top 1% owns 44%. Mae West once said, "Honey, I've been rich and I've been poor, and let me tell you, rich is better." It's mildly interesting to compare the world wealth map below with the world food risk map above.
Los Angeles mayor Antonio Villaraigosa is pushing a plan to create an official city photo identification card that could double as a prepaid ATM card and help immigrants get access to banking services. A handful of cities, including San Francisco and Oakland, issue identification cards to anyone who can prove residency, regardless of immigration status. Villaraigosa said it's time that Los Angeles - home to an estimated 4.3 million immigrants - joined them. "It will be an official ID," Villaraigosa said in a recent interview. "It will be as strong an effort as San Francisco's." Earlier this month, LA Police Chief Charlie Beck announced that hundreds of undocumented immigrants arrested by his officers each year in low-level crimes would no longer be turned over to federal authorities for deportation. And in February, LAPD officers were given new guidelines allowing greater discretion when deciding whether to impound cars of unlicensed drivers, including illegal immigrants. Alexandra Suh, executive director of the Koreatown Immigrant Workers Alliance, said immigrant rights organizations strongly support a city ID card. "An ID that recognizes residents as Angelenos with access to all city agencies would be a great benefit for all of us," she said."Things like the ability to check out a library book, to access health services, to enroll our kids in school, why should this depend on immigration status?"
Gas prices are going up in the US, especially in the west. Californians aren't supposed to drive, we're supposed to use our gas money to help pay for the 4.3 million illegals in Los Angeles.
Election Watch: Obama's poor performance in the debate has proven very costly for him. At this instant he leads in the electoral college by a very thin margin - if Ohio and Virginia slip to Romney, Obama is losing. The popular vote is similarly very close. There are persistent feelings that Romney's supporters are more likely to be fired up and to vote than Obama's, and the polls overstate Obama's support. All I know is that Obama's arrogance in refusing to prepare for his debate, and indeed thinking he'd won the debate immediately afterwards, has nearly cost him this election at this instant. There's still a month to go and a lot can happen.
Paranoia Department: In the last 12 months, the Department of Homeland Security (KGB in Russian) has purchased 1.4 billion rounds of
.223, .357 and .40 hollow point ammunition - about 5 bullets for each American man, woman and child. Our military forces in Iraq used about
70 million rounds per year, so if DHS was supplying the Iraq war this is a 20 year supply of bullets. Except hollow point ammunition is a
violation of the Geneva Convention and could not be used by our military. Military ammunition must be "full metal jacket," which makes a
small hole going in and leaves about a thumb-sized hole going out. Hollow point makes a small hole going in and leaves a grapefruit to
cantaloupe sized hole going out. Mostly hollow point leaves things dead. Recently they also put out for bids for 40,000 rounds of long-
range sniper ammunition (.308 hollow point boat tail), and another 25,000 rounds for training purposes (.308 blanks). A good marksman can
kill at 1000 to 1500 feet with a decent .308 rifle. The
KGB DHS says the sniper rounds are for "preemptive crowd control." If that
doesn't make you shiver I think maybe you're cold-blooded. More ammunition ordered this year includes the FBI (100 million rounds hollow
point, enough to run the war in Iraq for 18 months); Social Security (174,000 rounds .357 hollow point); the Forestry service (272,000
rounds mostly .223 soft point for their AR-15 assault rifles); the National Oceanic and Atmospheric Administration Fisheries Office of Law
Enforcement (76,000 rounds .40 S&W jacketed hollow point). Terrorist fish? Terrorist schools of fish? We now have internet connected
cameras with face and license plate recognition all over every city, the NSA is apparently storing away all our emails, and new FAA rules
to allow thousands of spy drones to fly in the US. Seriously, this country is getting a little scary.