Germany To Leave The Euro?

The Market Ticker ®
VERBATIM POST
=====================

I don't usually write on rumors, but this one simply will not go away.

Germany is rumored to have ordered printing plates to resume printing Marks, and is intending to walk. This does make sense, although the Germans would have to find a way to shield their banks from the impact of a massive shift off the Euro and into the Mark by Germans, which would spike the Mark higher and positively trash the Euro's value.

The usual answer to "why they won't" is that the Mark would become ridiculously strong and that would kill Germany's export industry, which being goods based (rather than the faux "export industry" that is often mostly services) would get plastered. The core of most commentators' thesis is that this fact would preclude Germany from doing it.

But here's the problem - playing the bailout game is a tax exactly identical to the impact of that stronger currency, and the bailout game costs you the decision-making power you retain when you are the one in control of your own destiny.

The German people are tired of the crap and with good reason. They should not have bailed out Greece in the first place; they effectively rewarded cheating, as Greece was caught cooking the books. Rather than prosecute the banks involved and yanking their charters, along with saying "No Mas!" they knelt down and performed an obscene act - more than once. There is a political limit to how far you can go with these acts before the people act in whatever manner is necessary to put a stop to it, and the Germans have a long and painful history of what popular tolerance of political stupidity leads to.

I think there's at least some credibility to this rumor. I can't put a percentage on the bet, but it's not pure tinfoil nonsense. Whether Germany actually goes ahead and does it likely depends on whether there is a further contagion - and I think there will be. In fact, as I noted yesterday in an interview (to be published as a podcast next week) I have a nasty suspicion that Europe will ultimately "resolve" this problem the way Europe has in the past - via the business end of a bunch of hot lead-chuckers.

That would be disastrous but not surprising, given historical precedent.

Here's the problem, when you get down to it - there comes a point where further bailouts have to be refused, simply because there's no money to fund them. I don't know exactly where that line is, but I do know it exists. Believing it doesn't is the stuff of fantasy, and yet that's exactly what the "Troika", the IMF and others are all running.

The market says "BS!" to all of this; the sell-off in the equity markets is bad, but the implied forward view looking at high yield credit is far worse, and that looking at credit-default spreads is even worse than that. The latter on a number of institutions are showing the sorts of numbers that immediately preceded Lehman's failure, implying the potential for a "no-notice" liquidity seizure.

If it happens, and if it does it is likely to come almost without warning if not literally without warning, Germany would find it very expedient to leave the Euro.

Note that the treaties that formed the Euro left no means to expel a misbehaving "member." But there's no way to restrain a nation from deciding to quit as opposed to being expelled.

Many believe that Greece will leave instead. They may, but only when it's clear that there will be no more "bailouts" forthcoming. Their departure would destroy their banks instantly, unless it was coupled with a simultaneous "by declaration" re-denomination at par of all Euro-denominated debts in the nation into the Drachma.

That, incidentally, is not beyond the realm of possibility. What other nations in the Euro would think of it, and the sort of tectonic reaction it would generate, is another thing entirely.

I think we're weeks to months away from a catastrophic failure somewhere in Europe, and the slowdown in Asia is much worse than is being reported. Any belief that we're going to avoid the repercussions of these events is pure folly.

That is a light you see down the tunnel, now that we have walked in well over a mile from the mouth.

Unfortunately that light it is a train and there is no chance we can run the other way fast enough to avoid being flattened.

National Police Misconduct NewsFeed Daily Recap 09-29-11

VERBATIM POST
Injustice Everywhere
=========================

Before we start I wanted to mention some rumors I’ve seen alleging YouTube is working with law enforcement agencies to remove police misconduct videos. Whether it’s true or not it is certain that police misconduct videos disappear from YouTube regularly and that articles about misconduct also go away fairly regularly from many sites. The problem is growing more urgent for our project and I need to find a way to store reports and videos relating to misconduct to address this problem. Storage and hosting isn’t cheap but if anyone has ideas to address the problem without risking litigation for copyright issues please let me know. Thanks!

Here are the 17 reports of police misconduct tracked in our National Police Misconduct News Feed for this Thursday, September 29, 2011:

• Detroit MI police are the subject of a 2nd lawsuit alleging an act of excessive force was caught on video at a local casino. This time from a man who claims he was choked & beaten with a baton without cause. [3] http://t.co/4lrhL6tO

• Glouster OH settles suit for $16k to man claiming cops used excessive force when he complained about an illegal serach of his car without permission or warrant [0] http://t.co/ici3hjFv

• Westfield IN cop is on leave while under investigation after a fellow officer reported him for using excessive force when he allegedly pistolwhipped an alleged shoplifter and threatened his mother with a gun. [0] http://t.co/uqDa5YDc

• Fullerton CA has entered into a tentative settlement agreement in a lawsuit filed by 2 women alleging the department failed to discipline, and thus encouraged, a cop to continue sexually abusing women despite a history of 12 sexual assault complaints that were bolstered by the fact that he would violate policy by turning off his audio recorder during each alleged incident. The department only gave him a reprimand for turning off the recorder during stops involving women. [3] http://t.co/IkcZJU3r

• Berwyn IL police are being sued by man claiming cops needlessly beat, tasered & falsely arrested him during a raid on his sister’s home where he was staying. While the reasons for the raid weren’t disclosed in the filing, the charges against him were dropped afterward. [3] http://t.co/GMgAY6at

• Lee Co FL sheriff is part of a lawsuit filed by pawn brokers alleging the department encouraged a rogue deputy to continually harass pawn brokers and to falsely arrest them [3] http://t.co/VH839aRs

• Slaton TX cop assigned to local schools has taken a plea deal for receiving child pornography after an investigation by the DHS. [0] http://t.co/lUZp6THC

• Nampa ID police sued by 2 internal affairs officers & the wife of one of the officers alleging whistleblower retaliation after they tried to report misconduct and then writing to city officials when the department refused to act. [3] http://t.co/rPdi1SOD

• Los Angeles CA police detective was arrested for domestic violence, false imprisonment & threats against his live-in girlfriend [0] http://t.co/8tu6Qfe2

• Bucks Co PA deputy suspended while authorities confiscated his home computer & police equipment as part of an unspecified investigation [2] http://t.co/IUxlHHEo

• Midland MI cop gets probation & community service in a plea deal for possessing a stolen Rent-A-Center flat screen TV [0] http://t.co/In2Lo4iV

• Spokane Co WA deputy resigns & expected to take plea deal over housing fraud involving an “Officer Next Door” program that gives cops half off of houses. [0] http://t.co/e4zJowSH

• Fort Worth TX cop fired on allegations she falsified timesheets & used patrol car as her personal vehicle [0] http://t.co/d1bdgb1u

• Ferndale MI police are refusing to criminally investigate a police chaplain even after he admitted to doing meth with a man who died from an overdose. [0] http://t.co/Ao2QJNeh

• Orlando FL cop was suspended 30 days after caught selling stolen theme park tickets, a scheme that earned him $15k a year. [0] http://t.co/4OYswBbd

• Stockton CA police sgt is on leave after arrested on child endangerment & drunk driving charges. [0] http://t.co/Gz1CuwGX

• Winsooki VT cop gets probation in plea to DUI after found unresponsive behind wheel of his truck with a .429 BAC. As one commenter on Twitter noted, he’s lucky he’s still alive with a BAC like that. [0] http://t.co/nl1KN3Qx

That’s it for today, stay safe out there.

Future California home invasion

Via California Tree of Liberty

Flower Child

Oleg Volk
================

HERE

Re-post: The Calamity of Appomattox by H.L. Mencken

[From the American Mercury, Sept., 1930, pp. 29-31]

No American historian, so far as I know, has ever tried to work out the probable consequences if Grant instead of Lee had been on the hot spot at Appamattox. How long would the victorious Confederacy have endured? Could it have surmounted the difficulties inherent in the doctrine of States’ Rights, so often inconvenient and even paralyzing to it during the war? Could it have remedied its plain economic deficiencies, and become a self-sustaining nation? How would it have protected itself against such war heroes as Beauregard and Longstreet, Joe Wheeler and Nathan D. Forrest? And what would have been its relations to the United States, socially, economically, spiritually and politically?

I am inclined, on all these counts, to be optimistic. The chief evils in the Federal victory lay in the fact, from which we still suffer abominably, that it was a victory of what we now call Babbitts over what used to be called gentlemen. I am not arguing here, of course, that the whole Confederate army was composed of gentlemen; on the contrary, it was chiefly made up, like the Federal army, of innocent and unwashed peasants, and not a few of them got into its corps of officers. But the impulse behind it, as everyone knows, was essentially aristocratic, and that aristocratic impulse would have fashioned the Confederacy if the fortunes of war had run the other way. Whatever the defects of the new commonwealth below the Potomac, it would have at least been a commonwealth founded upon a concept of human inequality, and with a superior minority at the helm. It might not have produced any more Washingtons, Madisons, Jeffersons, Calhouns and Randolphs of Roanoke, but it would certainly not have yielded itself to the Heflins, Caraways, Bilbos and Tillmans.

The rise of such bounders was a natural and inevitable consequence of the military disaster. That disaster left the Southern gentry deflated and almost helpless. Thousands of the best young men among them had been killed, and thousands of those who survived came North. They commonly did well in the North, and were good citizens. My own native town of Baltimore was greatly enriched by their immigration, both culturally and materially; if it is less corrupt today than most other large American cities, then the credit belongs largely to Virginians, many of whom arrived with no baggage save good manners and empty bellies. Back home they were sorely missed. First the carpetbaggers ravaged the land, and then it fell into the hands of the native white trash, already so poor that war and Reconstruction could not make them any poorer. When things began to improve they seized whatever was seizable, and their heirs and assigns, now poor no longer, hold it to this day. A raw plutocracy owns and operates the New South, with no challenge save from a proletariat, white and black, that is still three-fourths peasant, and hence too stupid to be dangerous. The aristocracy is almost extinct, at least as a force in government. It may survive in backwaters and on puerile levels, but of the men who run the South today, and represent it at Washington, not 5%, by any Southern standard, are gentlemen.

If the war had gone with the Confederates no such vermin would be in the saddle, nor would there be any sign below the Potomac of their chief contributions to American Kultur—Ku Kluxry, political ecclesiasticism, nigger-baiting, and the more homicidal variety of wowserism. Such things might have arisen in America, but they would not have arisen in the South. The old aristocracy, however degenerate it might have become, would have at least retained sufficient decency to see to that. New Orleans, today, would still be a highly charming and civilized (if perhaps somewhat zymotic) city, with a touch of Paris and another of Port Said. Charleston, which evn now sprouts lady authors, would also sprout political philosophers. The University of Virginia would be what Jefferson intended it to be, and no shouting Methodist would haunt its campus. Richmond would be, not the dull suburb of nothing that it is now, but a beautiful and consoling second-rate capital, comparable to Budapest, Brussels, Stockholm or The Hague. And all of us, with the Middle West pumping its revolting silo juices into the East and West alike, would be making frequent leaps over the Potomac, to drink the sound red wine there and breathe the free air.

My guess is that the two Republics would be getting on pretty amicably. Perhaps they’d have come to terms as early as 1898, and fought the Spanish-American War together. In 1917 the confiding North might have gone out to save the world for democracy, but the South, vaccinated against both Wall Street and the Liberal whim-wham, would have kept aloof—and maybe rolled up a couple of billions of profit from the holy crusade. It would probably be far richer today, independent, than it is with the clutch of the Yankee mortgage-shark still on its collar. It would be getting and using his money just the same, but his toll would be less. As things stand, he not only exploits the South economically; he also pollutes and debases it spiritually. It suffers damnably from low wages, but it suffers even more from the Chamber of Commerce metaphysic.

No doubt the Confederates, victorious, would have abolished slavery by the middle of the 80s. They were headed that way before the war, and the more sagacious of them were all in favor of it. But they were in favor of it on sound economic grounds, and not on the brummagem moral grounds which persuaded the North. The difference here is immense. In human history a moral victory is always a disaster, for it debauches and degrades both the victor and the vanquished. The triumph of sin in 1865 would have stimulated and helped to civilize both sides.

Today the way out looks painful and hazardous. Civilization in the United States survives only in the big cities, and many of them—notably Boston and Philadelphia—seem to be sliding down to the cow country level. No doubt this standardization will go on until a few of the more resolute towns, headed by New York, take to open revolt, and try to break out of the Union. Already, indeed, it is talked of. But it will be hard to accomplish, for the tradition that the Union is indissoluble is now firmly established. If it had been broken in 1865, life would be far pleasanter today for every American of any noticable decency. There are, to be sure, advantages in Union for everyone, but it must be manifest that they are greatest for the worst kinds of people. All the benefit that a New Yorker gets out of Kansas is no more than what he might get out of Saskatchewan, the Argentine pampas, or Siberia. But New York to a Kansan is not only a place where he may get drunk, look at dirty shows and buy bogus antiques; it is also a place where he may enforce his dunghill ideas upon his betters.

========

The Calamity Of Appomattox By H.L. Mencken

Taking Cain Seriously

Via Billy

You hear the same thing said about Herman Cain all the time: Herman Cain has some really interesting ideas, but . . .

I love Herman Cain, but . . .

But what?

But he can't win.

Why not?

At best, the answer has to do with that cloudy word "electability." Or that Mr. Cain has never held elected political office.

In 2004, Mr. Cain ran for the GOP's U.S. Senate nomination in Georgia. He lost to Johnny Isakson. Last weekend, Mr. Cain ran away with the Florida straw poll vote, winning with 37%. He torched both the "Southern" candidate, Rick Perry of Texas, who worked hard to win the vote, and Mitt Romney, who in 2008 campaigned everywhere in Florida.

The time is overdue to plumb the mystery of Herman Cain's "interesting, but" candidacy. Let's start at the top—in the top-tier candidacy of Mitt Romney.

Though he's got the governorship credential, Mr. Romney's emphasis in this campaign is on his private-sector experience. It's good, despite the knock on Bain Capital's business model. But measured by résumés, Herman Cain's looks deeper in terms of working on the private sector's front lines.

The details of his career path are worth knowing.

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Compassionate Islam: Iranian Pastor Sentenced to Death

Iranian Pastor Youcef Nadarkhani, who is facing the death penalty, again refused to convert to Islam to save his life.

Nadarkhani was arrested in 2009 for the crime of apostasy because he allegedly abandoned Islam for Christianity. As a pastor, Iranian clerics believe that Nadarkhani was preaching in order to convert Muslims.

Before his last hearing Wednesday, Nadarkhani had been given three previous chances to repent, and all three times he has refused. After his final refusal Wednesday, no verdict has been announced, but many expect that he could be put to death as soon as Friday.

The case has slowly garnered international attention, and there are a number of Christian rights groups advocating for his release.

U.S. House Speaker John Boehner also has spoken out against Iran. "While Iran's government claims to promote tolerance, it continues to imprison many of its people because of their faith. This goes beyond the law to an issue of fundamental respect for human dignity. I urge Iran's leaders to abandon this dark path, spare [Nadarkhani's] life, and grant him a full and unconditional release," said Boehner.

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“This is the way the world ends/Not with a bang but a whimper.”

As Greece lurches on the precipice of default on its sovereign debt, a default that could bring down banks across Europe and precipitate a global financial panic, a consensus is building that there is but one way out.

First, a structured default on the Greek debt, giving creditors a major haircut, but compensating them with eurobonds of half the face value of the Greek bonds, guaranteed by the European Central Bank.

Second, a huge new European Financial Stabilization Facility of trillions of euros to recapitalize stricken banks and buy up the sovereign debt of Portugal, Italy, Ireland and Spain, should private investors flee their bonds.

Such a solution, however, depends upon Germany, the richest nation in Europe and major contributor to the ECB.

Hard-money Germans, however, do not relish bailing out the deadbeat nations of Club Med who have more generous welfare states than their own.

Politically, it may not be possible to cajole or coerce the Germans, indefinitely, into saving the eurozone, the collapse of which could bring on a depression and bring down the European Union itself.

There is another reason the European Monetary Union and EU may be headed for the boneyard: demography.

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As Federal Crime List Grows, Threshold of Guilt Declines

Via Survival

For centuries, a bedrock principle of criminal law has held that people must know they are doing something wrong before they can be found guilty. The concept is known as mens rea, Latin for a "guilty mind."

This legal protection is now being eroded as the U.S. federal criminal code dramatically swells. In recent decades, Congress has repeatedly crafted laws that weaken or disregard the notion of criminal intent. Today not only are there thousands more criminal laws than before, but it is easier to fall afoul of them.

As a result, what once might have been considered simply a mistake is now sometimes punishable by jail time. When the police came to Wade Martin's home in Sitka, Alaska, in 2003, he says he had no idea why. Under an exemption to the Marine Mammal Protection Act, coastal Native Alaskans such as Mr. Martin are allowed to trap and hunt species that others can't. That included the 10 sea otters he had recently sold for $50 apiece.

Mr. Martin, 50 years old, readily admitted making the sale. "Then, they told me the buyer wasn't a native," he recalls.

The law requires that animals sold to non-Native Alaskans be converted into handicrafts. He knew the law, Mr. Martin said, and he had thought the buyer was Native Alaskan.

He pleaded guilty in 2008. The government didn't have to prove he knew his conduct was illegal, his lawyer told him. They merely had to show he had made the sale.

"I was thinking, damn, my life's over," Mr. Martin says.

Federal magistrate Judge John Roberts gave him two years' probation and a $1,000 fine. He told the trapper: "You're responsible for the actions that you take."

Mr. Martin now asks customers to prove their heritage and residency. "You get real smart after they come to your house and arrest you and make you feel like Charles Manson," he says.

The U.S. Attorney's office in Alaska didn't respond to requests for comment.

(Of course, you don't expect criminals to talk.)

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Apocalypse-Ready Motorhome

Via Survival

Could the apocalyptic looking beast, a custom order Zetros produced by Mercedes Benz, be the biggest, monster motorhome on Planet Earth?

Two businessmen friends in Ulan Bator, Mongolia who take “multiday excursions into the Altai mountains where they hunt for wolves with an eagle” decided they needed something a bit beefier for their expeditions.

The men were not identified, but Mercedes Benz says one owns Khan Bräu, a brewery that makes German beer, and the other “became wealthy as a shareholder in coal and copper mines.”

This pair took delivery of two Mercedes Benz Zetros 6×6 jumbo off-roader trucks—with more than the normal levels of luxury. The pair of Zetros came complete with gun safe, mosquito nets, and triple-action locks—as well as a fancy dinner service for eight.

The new over-the-top, six-wheel-drive vehicle shares its DNA with trucks from the Actros series, part of the Military Vehicles division of Mercedes Benz.

The custom Zetros 6×6, based on the Mercedes Benz Zetros 2733 military truck (used by the Bulgarian army, among other customers), seems perfect for a Mad Max scenario.

Power comes from a mighty 326-horsepower 7.2-liter inline-6 turbo-diesel engine. There are two transmission choices: a standard nine-speed that includes a crawler gear for those rock-hopping moments or an optional six-speed Allison 3000 automatic transmission. Three mechanical differential locks can be selected on the fly using a rotary control and offer the maximum amount of traction available.

And with two fuel tanks holding 110 gallons, you can afford to miss a fuel stop every so often.

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