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October 26th, 2016

Here are some links that may cause yearning for pre-internet reality, and some other things as well. Mostly unpleasant BTW. This, this, this, thi$, this?, and this. Have a nice day — if you dare!

Something’s got to give, and it will

October 25th, 2016


Last year’s 12% increase in homicides reported to the FBI is the largest one-year homicide increase in nearly half a century. The primary victims have been black. An additional 900 black males were killed last year compared with the previous year, resulting in a homicide victimization rate that is now nine times greater for black males than for white males. The brutality of these killings can be shocking. Over the weekend of Sept. 16, a 15-year-old boy in Chicago was burned alive in a dumpster.

More police are being killed this year too. Gun murders of police officers are up 47% nationally through Oct. 21, compared with the same period the previous year. In Chicago gun assaults on officers are up 100%. In New York City attacks on officers are up 23%. In the last two weeks, four California officers have been deliberately murdered.

Gangbanger John Felix prepared for his lethal attack on two Palm Springs officers on Oct. 8 by setting a trap and ambushing them as they stood outside his door. Two days earlier, parolee Trenton Trevon Lovell shot Los Angeles Sheriff’s Sgt. Steve Owen in the face as he investigated a burglary call. Lovell then stood over Sgt. Owen and fired four additional rounds into his body. A planned assassination of two officers on coffee break in Vallejo, Calif., on Oct. 17 failed only when the assault rifle used in the attack jammed. In Indianapolis on Oct. 13, police headquarters were sprayed with bullets by a car that then fled, echoing a similar attack on Oct. 4 against the same police station.

This can’t end well for the systemics, since at least 67-80% of all Americans of every shape and hue have a great deal of respect for the police, and trashing police has the worst consequences in the worst naighborhoods. Common sense among the common folks.

We’ll make a couple of related comments about common sense. 29% of the country thinks we’re going in the right direction. Common sense says that incumbents don’t get re-elected when there is a 29% approval rating and we’ve seen this 29% before. Guys from places like Flint, Michigan know this in their bones, even guys like Michael Moore. So if the election is stolen, and we have little doubt that it can be, there will be hell to pay. The media can try to spin things of course, but even half of D’s don’t trust them, so it’s not going to work.

(Final note: it’s been a few months since we heard from Steven Den Beste, and we just learned that he passed away. RIP.)

Pages 6 and 15

October 24th, 2016

Chart on the left on page 6: Stalin wasn’t all that bad, dude. Page 15: fewer. The slide continues. HT: PJ

$7,000,000,000,000 really is a lot of money

October 23rd, 2016

Governments at all levels in the US spend about $7,000,000,000,000 a year, an amount about equal to the total incomes of US households in 2007. Unbelievable.

There’s a lot of skim to scam in all those trillions. First, you have to figure out how to get on the gravy train, and then you have to figure out how never to get off — and feel good about yourself while committing larceny. One way is first get elected and then glom onto some feel-good nonsense like global warming. Hey, that should be good for $100 million or more. Or billions if you’re a university. And then there’s the collusion to avoid the collision, if you choose the corporate ladder. If you’re a $160,000,000,000 revenue media company company that’s regulated by the government, what’s a few bucks to keep things running smoothly? (What kind of employees do they attract by the way?) Or a church for that matter in the same situation? Talk about a deal with the devil. Final point in collusion-collision: it’d be a shame if something were to happen to that nice $40,000,000,000 tax exempt foundation of yours. So play ball! Yes sir. Yes ma’am.

Let’s try a thought experiment: suppose you propose to shrink regulations, put limits on revolving door lobbying, freeze government employment, defund the CAGW scam, limit judicial activism, and so forth; just what kind of reaction would you get from the powers that be? Mencken was right.

Update: as we were just saying

Final tiny humor: what’s the big deal? Doesn’t the Constitution spell out the remunerated powers of the government?


October 22nd, 2016

QED. As we discussed yesterday. There is no rational discussion to be had with these religious nuts.

China business blah-blah

October 21st, 2016


Mr. Xi has a daunting problem on his hands: The consumer economy isn’t expanding fast enough to make up for lost manufacturing. GDP growth has been slowing every year since 2011. E-commerce may be booming, but bricks-and-mortar shops are shedding staff. Mass layoffs loom in “zombie” ?state enterprises that crank out products in massive oversupply, like steel rods and cement, and survive only on government-directed handouts.

The slowdown threatens a cherished Communist Party goal of doubling per capita GDP by 2020, a year ahead of the centenary of the party’s founding, compared with its level in 2010. For that to happen, growth must not fall below 6.5%. Last year, it was 6.9%. Yet economists question whether this growth is real or merely an artifice of state planning. Bank loans build airports that land few flights and roads with sparse traffic.

Premier Li Keqiang is pumping money into high-tech manufacturing, like semiconductors, while promoting “mass entrepreneurship and innovation” to create jobs; 4.4 million startups got off the ground last year, with generous government help.

At stake is the legitimacy of the Communist Party, rooted as it is in delivering economic performance. Driven by fears of his party’s demise, Mr. Xi has conjured forth a whole new rationale for Communist rule based not on ever-growing prosperity but on nationalism and military prowess.

The reason we post this is to avoid opining on the issues of the day, namely the deep corruption in the west and the equally deep craziness. Let Mark Steyn do that. Oh yeah, and what about the fulsome media? Down there in the corruption swamp. How did everything get so disgusting so fast? Actually, we know a little of the answer.

When the establishment types take enough leave of their senses that their clique believes in utter nonsense like global warming, sanity, truth, and rationality have left the room. Narrative replaces truth, and the self-aggrandizing “elite” requires a large group of people to look down upon. Obviously whatever the hoi polloi believe is by definition wrong, for they are not the pneumatikoi. Leftism in the west is the most powerful religion, openly so now since the end of the Cold War. It’s a widening gyre, and requires harsh, maybe even catastrophic events to force reality down everybody’s throat. Don’t worry, they’re coming.

What’s happening here and there?

October 20th, 2016


The Kremlin is sending the full might of its Northern Fleet and part of the Baltic Fleet to reinforce a final assault on the city of Aleppo in a fortnight. “They are deploying all of the Northern Fleet and much of the Baltic Fleet in the largest surface deployment since the end of the Cold War,” the diplomat said. “This is not a friendly port call. In two weeks, we will see a crescendo of air attacks on Aleppo as part of Russia’s strategy to declare victory there.” The additional military firepower is designed to drive out or destroy the 8,000 rebels in Aleppo, the only large city still in opposition hands, and to allow Vladimir Putin, the Russian president, to start a withdrawal. An intensified air campaign in eastern Aleppo, where 275,000 people are trapped, would further worsen ties between Moscow and the West


“In this venue, your honors, in this venue, I announce my separation from the United States,” Duterte told Chinese and Philippine business people, to applause, at a forum in the Great Hall of the People attended by Chinese Vice Premier Zhang Gaoli. “Both in military, not maybe social, but economics also. America has lost.” Duterte’s efforts to engage China, months after a tribunal in the Hague ruled that Beijing did not have historic rights to the South China Sea in a case brought by the previous administration in Manila, marks a reversal in foreign policy since the 71-year-old former mayor took office on June 30. His trade secretary, Ramon Lopez, said $13.5 billion in deals would be signed during the China trip. “I’ve realigned myself in your ideological flow and maybe I will also go to Russia to talk to Putin and tell him that there are three of us against the world – China, Philippines and Russia. It’s the only way,” Duterte told his Beijing audience.

Stay tuned. More to come.


October 19th, 2016


Terra Firma Capital Partners Ltd., which manages about $12.07 billion, aims to sell AWAS Aviation Capital Ltd. in January or February next year and has hired an investment bank to advise on the process, according to the people familiar with the plan. Terra Firma is the majority owner of AWAS, while Canada Pension Plan Investment Board, Canada’s biggest pension fund, holds a minority stake. CPPIB supports the sale plan, the people said.

Terra Firma appears to be betting it will have more success this time finding a buyer following CIT Group Inc. ’s deal earlier this month to sell its commercial air-leasing business to Chinese conglomerate HNA Group’s Avolon unit for $4 billion. Ahead of the deal, CIT, a U.S. lender, attracted other bidders such as China’s Ping An Insurance (Group) Co., and Japan’s Century Tokyo Leasing Corp, The Wall Street Journal reported in August. The appetite for aircraft leasing companies among Chinese buyers comes as increasing air travel from China boosts aircraft demand. Through the CIT transaction, HNA acquired 350 jets.

Based in Dublin, AWAS oversees a portfolio of 240 Airbus and Boeing commercial aircraft. It has 90 airline customers including Japan’s All Nippon Airways and Russia’s Aeroflot

Transactions like this are worth watching as Chinese firms seek dollar denominated revenue, indicating potential anticipated further weakening of the yuan over time.

And humble too

October 18th, 2016

The media. HT: BOTW and by the way, crazy is breaking out all over. Fun bonus: another home run from VDH.

What are they learning in schools today? This and this. And they sure know a lot when they get out of school. Help!!!

Hey Australia, what’s up?

October 17th, 2016


the Australian Navy won’t conduct freedom-of-navigation patrols in the international waters of the South China Sea, giving China’s bid to dominate the strategic area a boost. Such patrols are a basic requirement for the rules-based global order that Australia says it is committed to upholding. An international tribunal ruled in July that China’s bid to claim most of the sea violates international law. But the verdict will be rendered moot unless law-abiding states are willing to push back. That would give Beijing effective control over the 60% of Australian trade that transits the sea. Naval patrols within 12 miles of Chinese-claimed features would “escalate tensions,” said Foreign Minister Julie Bishop, echoing language often used by Chinese officials. The Liberals’ climbdown is particularly damaging because it follows a long campaign of bullying from Chinese officials and state media. “Australia is not a party to the South China Sea issue” and must “carefully talk and cautiously behave,” Beijing’s Foreign Ministry warned after Aussie officials praised the tribunal verdict in July. The state-run Global Times threatened, “If Australia steps into the South China Sea waters, it will be an ideal target for China to warn and strike.” Canberra’s decision can’t be separated from Washington’s ambivalence.

Meanwhile, freedom of speech died in Australia. This is why we need a loudmouth in America, so that the freedom to think can survive. Hey, maybe we’re over-reacting — it’s not like there are any real problems out there that cry out for solution.

Depressing reading from VDH

October 16th, 2016

Here you go:

Given the hardship and sacrifice that would have been required to change the late Byzantine mindset, most residents of Constantinople plodded on to their rendezvous with oblivion in 1453.

We seem to be reaching that point of stasis in postmodern America. Once simple and logical solutions to our fiscal and social problems are now seen as too radical even to discuss. Consider the $20-trillion national debt. Most Americans accept that current annual $500 billion budget deficits are not sustainable—but they also see them as less extreme than the recently more normal $1 trillion in annual red ink. Americans also accept that the Obama administration doubled the national debt on the expectation of permanent near-zero interest rates, which cannot continue. When interest rates return to more normal historical levels of 4-5% per annum, the costs of servicing the debt—along with unsustainable Social Security and Medicare entitlement costs—will begin to undermine the entire budget.

Count up current local, state and federal income taxes, payroll taxes, property and sales taxes, and new health care taxes, and it will be hard to find the necessary additional revenue from a strapped and overtaxed middle class, much less from the forty-seven percent of Americans who currently pay no federal income taxes. The Obama administration has tried to reduce the budget by issuing defense cuts and tax hikes—but it has refused to touch entitlement spending, where the real gains could be made. The result is more debt, even as, paradoxically, our military was weakened, taxes rose, revenue increased, and economic growth remained anemic at well below 2% per annum.

Illegal immigration poses a similar dilemma. No nation can remain stable when 10-20 million foreign nationals have crashed through what has become an open border and reside unlawfully in the United States—any more than a homeowner can have neighbors traipsing through and camping in his unfenced yard.

Likewise, there are few multiracial societies of the past that have avoided descending into destructive ethnic chauvinism and tribalism once assimilation and integration were replaced by salad-bowl identity politics. Common words and phrases such as “illegal alien” or “deportation” are now considered taboo, while “sanctuary city” is a euphemism for a neo-Confederate nullification of federal immigration laws by renegade states and municipalities.

Illegal immigration, like the deficits, must cease, but stopping it would be too politically incorrect and painful even to ponder. The mess in Europe—millions of indigent and illegal immigrants who have fled their own failed states to become dependent on the largess of their generous adopted countries, but without any desire to embrace their hosts’ culture—is apparently America’s future.

Race relations pose comparable paradoxes. Inner-city Chicago has turned into a war zone with over 500 murders so far this year alone. As tragic as occasional police shootings are of African-American suspects, they do not occur at an incidence higher than the percentage of African-Americans who come into contact with law enforcement or who commit violent crimes. Yet when an African-American officer, in a department overseen by an African-American police chief, shoots an uncompliant but armed African-American suspect, a full-scale urban riot ensues, well beyond the ability of police to control.

No one would object that Americans need to be engaged in helping the inner-city poor—nor would anyone deny the moral importance of evaluating others by the content of their character, and not by the color of their skin. But Americans also accept society’s obligations to maintain law and order in communities racked by gang violence. The African-American community must, in the fashion of other ethnic communities in the United States, change its cultural norms around masculinity. It should define maleness in terms of a two-parent household and a father’s daily guidance and support of his own children. In a larger sense, the misogynist, anti-police, violent, and often racist lyrics of rap music should be as ostracized as Jim Crow-era stereotypes of blacks eventually were.

The cures for the maladies of the inner city are civic reengagement, honest talk, economic entrepreneurship, self-help, and self-reliance in the black community. Liberal elites who avoid the inner city and send their children to mostly white and Asian prep schools fear honest talk as intensely as they mouth off about racism. But because we do not wish to talk honestly about the absence of parity in racial relations, and the causes for it, we plod on ahead, struggling with a slow wasting away malady rather than the chemotherapy of tough and honest solutions.

Donald Trump, in supposedly reckless fashion, questioned the present status of the seven-decade-old North Atlantic Treaty Organization, the cornerstone of Western collective security that deterred 500 divisions of the Soviet Red Army from overrunning Europe west of the Elbe River. Trump blasted away at our European Union allies in NATO, the vast majority of which do not contribute their fair share to the alliance. Most forget that the sole obstacle to an outlaw world led by Vladimir Putin’s Russia, Iran, ISIS, China, and North Korea is the deterrent ability of the United States.

Few openly doubt NATO’s pretenses that it is willing and able to deter Vladimir Putin from swallowing the Ukraine or the Baltic states. But, on the other hand, no one wants to sit down with the Europeans and demand that they help turn the somnolent alliance into a real league for the collective defense of Western democracies. As a result, we fear the remedy more than the malady, and do nothing, in expectation that some miracle—or simple ennui—will convince our enemies that NATO is not a Potemkin Alliance.

The same lose/lose dilemmas plague current foreign policy. Under the Obama administration, the old postwar order led by the security guarantees of the United States abruptly ended—the vacuum filled by ascendant regional (and often nuclear) hegemons. Russia is expanding control, or at least influence, over the old Soviet republics and Eastern Europe. China carves out a new version of the old Japanese Greater East Asia Co-Prosperity Sphere at the expense of the democracies in Taiwan, Japan, South Korea, the Philippines, and Australia. Iran is on the path to be the nuclear adjudicator of the Persian Gulf’s oil

So VDH thinks it’s 1453. Meanwhile, ZH thinks it’s 1788. Either way, there’s big trouble ahead.

Some villains

October 15th, 2016

There was that Scorpio fellow in Dirty Harry who was pretty scary; things worked out okay for the actor. Then there was that fellow in Silence of the Lambs; again things worked out okay. Now there’s a new villain, and it’s far from clear how things will work out. No, we’re not talking about the guy with the orange hair, rather the media. They make Pennywise look charming by comparison.

Bub, Bub, Bubble — pop!!

October 14th, 2016


Seeking to quell worries that China’s home-finance market has gotten out of hand, a banking regulator disclosed this week that the loan-to-value ratio in the housing market, or the ratio of the value of mortgage loans to the value of underlying property, was on average 55%. UBS estimates the LTV of new-home purchases is closer to 70%, having surged from 15% in 2012.

mortgages accounted for more than 70% of all new lending in recent months, up from an average 33% last year.

Because so many of China’s mortgages are of recent vintage, the value side of their LTV calculation rests on the most recent surge in prices. Simplistically, should prices correct 20%, LTVs would suddenly on average be at 70%. That doesn’t take into account individual markets where leverage and price increases might be higher. Nor does it factor in the vast market for shadow lending, which anecdotally has been helping buyers fund down payments, heaping leverage on top of leverage.

As a comparison, U.S. mortgages before the housing bubble burst had a LTV ratio of less than 60%, even if this figure obscured second mortgages and lines of credit. In any event, that basic number very quickly rose to over 90% when the bubble popped

Hmmm. Okay, so let’s take the Shenzhen example of a place that cost $455K last year and is now $800. If you borrowed 70%, your loan is $616 — a heck of a lot more than the property was worth just last year. Did we just hear a bub bub bubble getting ready to pop? Oops!

Not just real estate

October 13th, 2016


Government tax breaks and dealer discounts helped fuel a 29% jump in China car sales last month for the biggest gain since January 2013. Foreign and domestic auto makers shipped 2.27 million cars—including sedans, crossovers and minivans—to dealers last month, the China Association of Automobile Manufacturers said Wednesday, up from 1.75 million in September 2015. So far this year, China’s new-car sales are at 16.75 million vehicles, a 15% increase

China’s central government in October 2015 halved the 10% purchase tax on vehicles with 1.6-liter engines or smaller. Sales have since rebounded strongly. More than 70% of cars sold in China qualify for the incentive, which helps consumers save up to 10,000 yuan, or about $1,500, when buying a new vehicle. The tax break is scheduled to expire Dec. 31

“We expect the growth will drop to single-digit rates in the fourth quarter. If Beijing doesn’t extend the tax break, we are afraid the growth will be zero next year,” said Lin Huaibin, an analyst at IHS. Crossovers remained the brightest spot in the month. More than 879,000 sport-utility vehicles and crossovers combined were sold in China, 54% more than a year earlier

What’s next? How about spending on bank IPO’s? “Bank of Shanghai plans to raise as much as 10.7 billion yuan ($1.6 billion) in an initial public offering, joining a swath of local lenders to tap into the equity market.” Hmmm. Maybe not such a good idea.

More housing numbers

October 12th, 2016


Starting in September 2014, the central bank relaxed mortgage restrictions on second-home buyers by easing down payments and mortgage rates. Foreign nationals working and living in China and overseas’ companies China-based units were permitted to purchase properties in August 2015. The next month, the People’s Bank of China went on to reduce down payment requirements for first-time home buyers from 30% to 25%. Down payments for both first and second home purchases were further reduced to 20% this past February.

New home prices rose on average 9.2% year-on-year across China’s 70 major cities, according to the National Bureau of Statistics. Home prices in Shanghai have risen 31.2% year-on-year, while those in second-tier city Xiamen have risen 43.8% in the past year.

Beijing, Shenzhen, Suzhou and other cities have increased down payment requirements for purchases of homes by varying amounts, up to 35% for first homes and 70% for second homes. Guangdong cities Zhuhai, Dongguan and Fuzhou have limited home purchases to a maximum of two homes. Hefei in Anhui province has stated that property prices may not change for six months after registration. Tianjin, Zhenzhou, Chengdu, Jinan, Wuxi, Nanchang, Nanning, Guangzhou, Xiamen and Wuhan have also put in place measures to cool the property market, such as higher down payments and reducing the number of homes residents can purchase.

The money supply, or M2, has been steadily increasing, especially after the global financial crisis took hold in 2008/09. Funds were first pumped into the shadow banking sector to finance the real estate sector and infrastructure investment, then into the stock market, the corporate bond market, and then back into the real estate sector. All of these asset price bubbles were accompanied by corresponding crashes, in which asset prices unwound rapidly and the government stepped in with regulations or capital injections to put a floor on the decline of affected markets. This is what is happening today in China’s housing market

“Many Chinese returned from a weeklong national holiday to discover that they could no longer purchase real estate, as local governments imposed restrictions intended to control massive asset bubbles.” Squirrelly.

More on inflation in China’s real estate

October 11th, 2016

Via Seeking Alpha:

I have a Chinese friend who used to teach in a university in China. He reads news from home that doesn’t make it into the US media. He told me recently the Chinese media reported that total value of real estate in the top three cities, Beijing, Shanghai and Shenzhen, is priced more than all of the real estate in the US. Apartments with a thousand square feet in those cities sell for several million dollars.

China doesn’t have a property tax and just recently added a deduction for mortgage interest in order to encourage more speculation. He said the government wants prices to continue to rise because the state owns most of the land, so it reaps huge rewards when prices rise. One story that he told of several families and their friends pooling their savings, so they could afford the 20% down payment on a small apartment. No one needed the apartment. They were just speculating

“Chris Watling of Longview Economics compares China’s property market today to the Dutch tulip mania that peaked in 1637. He points out that property prices in Shenzhen, in particular, jumped 76% since the start of 2015, bringing a typical home to $800,000″

A few months ago we quoted an article in the WSJ that noted re China that “the amount of unsold residential real estate is the equivalent of seven Manhattan islands.” With the prices in 100 China cities up at an annual inflation rate of 20%, and the pace of this feverish activity, we see a situation which really could spiral out of control, particularly since, as opposed to the stock market, the investors in real estate tend to be individuals.


October 10th, 2016

As predicted, the international mischief, defined as warlike or semi-warlike acts to which no one in the smart set pays attention, continues apace.


October 10th, 2016

Guys like Roger Simon are former left-liberals of the old school who migrated over a fairly long period of time. He uses some colorful adjectives, but mostly not that colorful. The decades of migration mean that he’s not stuck in a narrow ideological tunnel, and that shows. By contrast we see MSM and some rightward writers sounding like they are writing ads for Airplane! or Sharknado 12. Both of these latter groups indeed have things at stake that they risk losing shortly, which explains, but does not excuse, the overwrought language. Grab your popcorn; more entertainment likely lies ahead shortly.

14.9% inflation in 9 months

October 9th, 2016

China Daily:

China’s new yuan-denominated lending in August more than doubled from a month ago to 948.7 billion yuan (about 145.95 billion U.S. dollars), with mortgages representing 55.7 percent of the 529 billion yuan in household loans, PBOC data showed. Chang Yong Rhee, Director of IMF’s Asia and Pacific Department, advised China to advance structural reform as China’s credit grows at twice the speed of the economy, mainly driven by demand from the property market rather than enterprises. Zhou also noted that the Chinese government is very concerned about the recent rise in home prices and will take active measures to regulate the market. His remarks came amid tougher regulations in the housing markets of both first-tier cities such as Beijing and Shenzhen as well as smaller second- and third-tier cities. Prices in 100 major Chinese cities rose 14.9 percent in the first nine months of 2016, with August and September seeing record month-on-month growth of more than 2 percent

What can’t go on forever won’t. However, a 20% annual inflation rate is disturbing.

Your government at work

October 8th, 2016


Climate change is the biggest threat to our national parks. It’s not just a future threat — we’re seeing the impacts right now at national parks and other public lands across the country. We must #ActOnClimate to ensure that current and future generations can enjoy America’s most treasured places. If we don’t, we will have to say goodbye to these iconic views. One of the most recognizable statues in the world could someday be underwater. Sea-level rise and an increase in storm surges are putting the Statue of Liberty at risk — in 2012, Hurricane Sandy inundated the statue’s island in water, causing it to close for nearly eight months of repairs. The Statue of Liberty isn’t alone in the the threat of sea-level rise. A 2015 National Park Service study found that 118 parks are vulnerable to sea-level rise from climbing global temperatures.

The study referred to says this: “A 1 m rise in sea level can be expected to occur in the next 100 to 150 years.” Ban argon! BTW, every person associated with the study or the piece above should be out of a job. Talk about wasteful government spending.