Last week I predicted volatility would return in March. Here it is. I'm very excited, I don't call them correctly very often. Anyway, stocks have been dropping for a week and are likely to continue to drop for a few more days. There's no particular reason for it of which I'm aware, they're just dropping because they can. Next week I expect they'll rebound, again because they can.
The Euro, worth $1.40 just a year ago, is $1.08 and dropping like a rock. This is the lowest it's been in ten years. At current rates it will hit $1 sometime in April. Of course this is exactly the point of Super Mario's QE, to drop the value of the Euro thus boosting exports and jobs at the cost of imports and our jobs. Will we react? I find this an interesting question. Germany's five year bonds fell to a record low of -0.118% - people are now paying the German government to hold their money. Meanwhile start planning your suddenly 30% cheaper European vacation.
Greece continues to negotiate with Europe over their "bailout" - meaning the terms they must obey so that Europe will continue to buy Greek bonds from German and French banks and throw the Greeks a bone from time to time. Meanwhile Greece appears to be sliding back into recession, a recession far worse than the US experienced in the Great Depression. Greece's greatest critics have emerged to be not the Germans, who are intensely skeptical of the Greek work ethic, but rather the "centrist" and corrupt governments of Portugal, Spain and Italy, who fear the example of Syriza succeeding in Greece would further fuel the leftist parties in their countries who are equally tired of unemployment, declining property values and continued bank bailouts. The other Mediterranean governments see themselves as having a vested interest in Greece failing.
China has property developers going bankrupt as property values drop and China's anti-corruption program proceeds. It's starting to look a lot like a major property value crash over there. Development has been one of their major suppliers of jobs; this will have a huge impact on employment, investments, and the security of the government. I'm enjoying watching this develop.
The world is experiencing a period of great immigration. Who's gaining and who's losing people? It turns out it's a rather curious list:
Apparently the Ayatollah Ali Khamenei, Iran's Supreme Leader, has died after undergoing surgery for cancer. IMHO, he's learning right now that Allah is not who he thinks. . . Meanwhile, it's now entirely unclear with whom Obama is negotiating.
Obama is negotiating a deal with Iraq. Bibi Netenyahu, the prime minister of Israel, spoke this week before the US congress saying "This is a bad deal." The deal is not complete, but as it stands right now Iran is allowed to keep 6,500 centrifuges, enough to make a bomb in about a year starting from scratch. They're not starting from scratch, of course - they have lots of enriched uranium laying around, Allah alone knows how much and how enriched. Furthermore, since they're jointly developing the bomb with N.Korea,and since N.Korea has about ten bombs we can safely assume five of those belong to Iran. Obama says the point of the "treaty" is to keep Iran perpetually, or at least until 2025 when the "treaty" expires, one year away from having a bomb. Iran looks like a country deeply invested in becoming nuclear with facilities spread all over the country, apparently to make them harder to bomb.
Saudi Arabia just this week called the Pakistani ambassador in to renew Pakistan's vows to supply Saudi Arabia with nukes if Iran gets them. Saudi Arabia will not tolerate a nuclear Iran. The UAE has similar plans. Pakistan insists its weapons are safe, but the outside world cannot shake the fear that they may fall into the hands of Islamic terrorists, or even religious zealots within its own armed forces. When history catches up with North Korea's Kim dynasty, as sooner or later it must, nobody knows what will happen to its nukes--whether they might be inherited, sold, eliminated or, in a last futile gesture, detonated. Russia has started to wield nuclear threats as an offensive weapon in its strategy of intimidation. Its military exercises routinely stage dummy nuclear attacks on such capitals as Warsaw and Stockholm. Mr Putin's speeches contain veiled nuclear threats. Dmitry Kiselev, one of the Kremlin's mouthpieces, has declared with relish that Russian nuclear forces could turn America into "radioactive ash". In addition Japan, seeing China's conventional military strength, may feel it can no longer rely on America for protection. If so, Japan and South Korea could go for the bomb, creating, with North Korea, another petrifying regional stand-off. We're looking at a major nuclear proliferation, and all the guess work and crisis management that goes with it. Curiously Obama has presided over treaties with Russia to limit US warheads from the current 4,800 to 1,550 by 2018, in accord with his promise in 2009 to rid the world of nuclear weapons, but under Obama we have at least two new nuclear states, and Russia's defense spending is up a bit over 50% since 2007, a third of that devoted to nuclear weapons. I can't say it's a win for the US, but apparently Obama enjoys unilateral disarmament.
Iran has angered all their arabian neighbors with their support of Hamas, Hezbollah, groups in Yemen, Syria, Iraq and Bahrain, to the point that when Netanyahu spoke poorly of Obama's deal he was given editorial support by commentators on arabian TV stations all over - Saudi, Jordanian, Palestinian - all telling Obama to listen to Netanyahu. Netanyahu argues that removing the sanctions on Iran should include not just controls on their developing a bomb, but Iran withdrawing their support for terrorist organizations all over the arab world. The Sunni arabs want no part of living in a world with a shi'ite bomb and don't like Iran's support for anti-sunni organizations. You have to admire Obama for this: for my entire adult life presidents have attempted to forge a peace between Israel and the arabs, and Obama has actually succeeded in uniting them on some major issues. Including both their mistrust of Iran and their mistrust of Obama. On our side, reports are that Obama sent a message to Israel that the US air force would defend Iran from an Israeli attack and would shoot down Israeli aircraft flying towards Iran. The arabs are equally against the lifting of Iran sanctions, as they think letting Iran return to a fully functioning economy would just lead to more sponsorship of adventurism and terrorism.
Obama is not negotiating a treaty. A formal treaty requires approval of 67 US senators, and that's simply not happening in the current political environment. Obama plans to do a deal with Iran by executive order. Senate republicans sent a letter to Iran warning them that our constitution placed firm limits on Obama making a deal without the consent of the senate; that any such deal would likely be negated by Obama's successor, and that congress can pass laws to modify the agreement terms at any time. Bills are already floating around the senate to require Obama to submit his deal to the senate, where it would be flogged and tortured. Since any executive deal cannot override the current senate approved sanctions against Iran, it's unclear what Obama has to offer. On Iran's part, an executive deal does not carry the legal weight of a treaty and cannot be enforced in world courts or the UN. Of course if Iran were to sign a deal then find Obama could not lift the sanctions, it's likely they would refuse to give up their 12,000 excess centrifuges. All things considered, I can't see right now how this multi-year negotiation is going to end on a positive note.
ISIL, in their continuing goal of destroying all history before mohammed, has bulldozed the 3500+ year old city of Nimrud. Again, I see this as both part of the history of Iraq and world civilization, and I'm simply appalled at these microcephalic congenital muslim idiots.
China has a new law that technology firms that produce encryption devices - this includes smart phones - must hand over all encryption keys to the Chinese government and install backdoors so that Chinese security can get in. Several Chinese firms like Xiaomi are making clones of the iPhone and Samsung android phones that they sell for about $100 - now those will not appear in the US any time soon. Xiaomi is the largest smart phone manufacturer in the world. I wonder how countries like India and Brazil will react to this.
UC President Janet Napolitano announced that non-resident enrollment at UCLA and Berkeley will be capped at current levels, about 20% of all students. She's caught in some competing trends - non-state students (read: Chinese) pay fill tuition and are a big help to her budget; however that doesn't leave enough slots to fill up with illegal aliens, as of course the future of science and business are completely dependent on diversity. If Einstein lived today he would obviously be unable to work without an attendant committee or 20 or so, carefully chosen to reflect his social matrix and diversity goals. California governor Brown has told her that she will not get increased funding if she raises tuition. Unspoken here is that it's illegal to use quotas to guarantee diversity, and the locals are now so packed with the children of illegals that they are unable to effectively compete against the best out of state students. I've said earlier that the UC system, once probably the world's best public universities, are in decline. This will not slow that trend.
Volvo has a new automatic braking system for semis that does collision avoidance. Everyone else is working on this too; Mercedes has an experimental truck that you drive with an ipad. I don't imagine my readers include a lot of truck drivers, but if you're a driver your days are numbered.
Russia's surgeon general Gennady Onishchenko said of McDonalds and Coca Cola "The aggressive marketing they carry out - which has nothing to do with our culinary traditions - is comparable to a war against our people." Senior Russian lawmaker Alexei Pushkov tweeted, "Don't McDonald's and Coca-Cola want to support Obama's sanctions and rid us of their products? They would stick to principles and we would be healthier." I agree with this.
New York public schools will begin closing to observe two Muslim holidays beginning next school year, Mayor Bill de Blasio announced on Wednesday. The city's public school system is the largest in the country with 1.1 million students; Muslim students make up approximately 12% of the population. The move fulfills a promise de Blasio made to the Muslim community during the 2013 campaign that made him the first Democrat to run City Hall in 20 years. "Eid al-Adha, which will be observed Sept. 24 this year, commemorates Abraham's willingness to sacrifice his son for God. Eid al-Fitr, which will occur in July 2016, marks the end of the holy month of fasting known as Ramadan." The New York Times described the decision as "a watershed moment for a group that has endured suspicion and hostility since the Sept. 11 attacks."
We've reached an important milestone in the US - in January, for the first time ever, food sales at restaurants and bars exceeded sales at grocery stores. It appears this trend will only continue as there's few left in this country who know how to cook.