New War Lord

General Petraeus took over US Central Command and now has responsibility for the wars in Iraq and Afghanistan. He must deal with the threat that Iranian pursuit of nuclear weapons poses to the region and world. He also must deal with an unstable government in Pakistan. The Central Command reaches from Kazakhstan to Yemen and Egypt to Kyrgyzstan.

Tremble, Oh Evildoers! Pray and prepare your defense before the Judge of Above!

Makhteshim´s Bigger Optimist

Mr Bigger is the genius in charge of Makhteshim Agan agricultural chemicals company. Why has the stock fallen 50% in the last month? He says: The sharp falls are out of step with fundamentals and result from considerations of liquidity. Investors want to increase liquidity and are therefore selling shares for which there is still a demand. "Much of our investors are mutual funds, ETFs and hedge funds, which are forced to increase their liquidity and have to sell stock."

Makhteshim Agan posted a record $160 million profit for the first half of 2008, 30% growth compared with the first half of 2007, despite the rise in oil prices and the strengthening of the shekel. The engine driving the strong figures is the agricultural commodities sector, which over the past two years has seen an unprecedented boom. Global grain inventories are at record lows, and demand for agricultural inputs are on the rise.

"Our business model is quite simple: There are more people who want more food, and they are moving towards protein rich diets, which has triggered an increase in demand for grain. Land is limited. The area of cultivated land is seen growing at a rate of 0.2% a year, and the growth in consumption is more than ten times this. The result is that, while normally the world had 150 days grain inventory, now it is just 60 days. Even if the increase in demand comes to a standstill, inventory levels will only return to normal levels within two to three years. Moreover, at the current inventory levels, a local drought would be enough to cause agricultural prices to rocket. "In China and India, there is no free-for-all when it comes to the environment. They have the same high standards as in the rest of the world, but the authorities are consistent in their handling of the issue, and you can predict what will happen in these countries five years from today. We also produce in Brazil and in Europe, which are no less stringent, but you don't have the fuss there that the chemical industry in Israel has to cope with. We have a constructive dialogue with regulators in the rest of the world, but in Israel we're constantly at loggerheads with them. In the next three years we will invest close to $100 million in the environment. The pics shows the new Cotnion plant.

Bizarre Wedding

Two white supremacists were arrested in Tennessee over plans to go on a killing spree that would culminate in the assassination of Democratic Presidential candidate Barack Obama. Daniel Cowart and Paul Schlesselman met on the Internet about a month ago and had planned to decapitate 14 African Americans and otherwise kill another 88. The letter H is the eighth letter in the alphabet and “88″ is a greeting amongst racist Nazis that represents “Heil Hitler.” The 14 beheadings are a reference to the 14-word slogan: “We must secure the existence of our people and a future for white children” coined by David Lane, founding member of The Order who died in jail recently while serving a 190 year sentence his involvement in the death of radio talk show host Alan Berg.

The men planned to wear white tuxedos and top hats during the assassination attempt, which would have involved driving as fast as they could toward Obama and shooting him from the windows of the car.

Huh?? Two hot young guys from rural Tennessee, who met on the Internet and who planned on being killed together in a blaze of glory, while wearing white tuxedos and top hats. White tuxedos and top hats are usually worn at uh… weddings. That’s right. Daniel Cowart and Paul Schlesselman (see pic. The hat was added by Jewlicious) were in love with each other and planned to make a decent man of each other by formalizing their love in a bizarre marriage ceremony.

Hungarian Interior Decoration

Gordon Bajnai, the Finance Minister, speaks in the Hungarian Parliament. Judging from the decoration, Hungary has not only rejected the socialist style but has adopted what to me seems fake medieval feudal imaginery.

Steve Sailer Writes a Book

Steve Sailer, one of my favorite bloggers, has posted online his entire 264 page book, America's Half-Blood Prince: Barack Obama's Story of Race and Inheritance. The book will soon be sold in paperback for $29.95. I would think that giving it away free on the internet sabotages the sales of his printed book, but apparently he thinks that it promotes sales. I hope next year he will tell us, his readers, how this strategy worked out.

For the readers of his blog, the book brings no new insights. During this year, Steve has made a complete literary analysis of Barak Obama´s writings, and of his wife and of his mother too. Obama as a child was a pitiable creature, abandoned by his father and dumped by his Tercermundista mother on his old grandmother. Through his merits, Obama got into Harvard and then jumped from black neighborhood politics to Senator and Democratic candidate to the presidency. Steve´s point is that Obama is a very different person from his public image. He appears as the healer of racial divisions of America, while he is a man totally absorbed in the issue of race, his race, poignantly striving to be a true African. Once Sailer explained his discovery, Obama became coherent and understandable, and the fact that his public and private personalities are opposite became obvious to me. Apparently Steve thinks that it not obvious to most Americans, and the revelation that Obama is not the person they think may come as a surprise for them.

On the other hand (I do have too many hands), a week before the elections, about 70% of the White public rejects Obama while 95% of the Africans favour him, means that Americans ARE well aware and can discriminate between the true and the fake Obama, and Whites as well as Africans HAVE perceived the nature of this charismatic leader. If so, Steve´s book only articulates what every walking moron already feels in his bones.

Steve´s book was a disappointment for me, because it avoids discussing the Third World economic ideas of Obama and what it will mean if he and his inner circle takes over American government. He stops at the psychological analysis of Obama´s soul, and he makes a delightful literary criticism of Obama´s melliflous writing style. Well, Steve IS a drama critic, so I should not expect something else from him. But, on the other hand, Steve has made a quantitative analysis of California´s distressed educational system, and has discovered the demographic concept of ¨family formation¨ and its relation with voting patterns. He is one of the few who has read the 800 pages thesis of Obama´s mother on Indonesian village blacksmiths, and he knows the World Bank style artesanal economy, the "appropriate technology" mindset of Black neighborhood activists. I am worried that such an extreme leftist and anti-development person may lead America, a country that already is in deep trouble forced to compete against technology and science crazy Chinese and Koreans, a country that is de-industrializing and fast losing its lead in everything dependent on science education. Steve knows all that, but he avoids even mentioning it, restricting his critique to the literary sphere alone.

As an Israeli, I am also worried about Obama's third world mentality. In our days, paradoxically, the right is pro-Israeli to the point that Sara Palin, the Governor of Alaska, has two flags in his office: USA and Israel. Antisemitism and anti-Israeli sentiment survives in the far left, in the Black Muslim movement, in the anti-globalization current and of course the Third World pro-South Africa, pro-Cuba and pro-Palestinian internationalists. These are Obama's most fervent followers. I know that the Democratic Party is so huge and diverse that is able to assimilate and dissolve its extremists, but I have a bad feeling about their being in the center of power. The fact that Soros and other capitalists are funding Obama adds to my worries, because Jewish capitalists are historically known to have financed their worst enemies, and I am talking about the Nazi party.

Having obeyed the internet law that all debates end by mentioning the nazis, hereby I end this already too long and boring note.

Long Life to Steve Sailer !

How to lose money

TSEM investors know how to lose money. From 2$ a share it fell to 0.2$ today. 90% of their savings are gone. TSEM, if someone has been following it, is an Israeli chip foundry, with an excellent management, many contracts and innovative products, and an unstoppable bleeding of money. On the other hand, low tech companies like Strauss, a chocolate and instant coffee outfit, is growing into a profitable global corporation. לך תדע meaning I understand nothing.

Best Tuches

Two contestants pose in front of the judges at the Dutch Best Bottom Contest in Amsterdam, capital city of the Netherlands, October 27, 2008.

Distiller Stocks Incredibly Cheap

It is crazy what is going on with oil distillers. Tesoro and Valero are selling at 3 or 4 times yearly dividend. Seeking Alpha writes:

It is pretty easy to find ridiculously low stock valuations in today's market, but here's an example of the value present in the current bear market. Valero Energy (VLO) yesterday morning reported third quarter earnings of $1.86 per share, well above estimates. The stock closed Monday at $15 per share, which gives it a P/E ratio of 8 based solely on one quarter's worth of earnings!Insane.

Fallujah, Iraq: Failed Sewage Project

The NYT reports that the US Engineering Corps sewage project in Fallujah, Iraq, is costing by now more than 100 million dollars and is two years behind schedule. This is an area that the Americans used to be Number One and I still am using American textbooks on the subject. Just yesterday used the Hill equation for calculating safe yield. After Katrina hurricane, where the levees failed, I am starting to qualify my admiration for American civil engineering. NYT writes that at the earliest, the project will be partly operational by next April. And while the original plan called for the plant to cover the entire city, it has since been downsized to serve at most one-third of the population, or about 9,300 homes.

That means the project would end up costing more than $10,000 per home. But even at that price — and even if additional financing can be found to connect the houses to the sewer lines — the wastewater treatment plant may never operate. An investigation revealed that the manholes and control valves had been padlocked on a principal sewer line by an irate contractor who had not been paid for a small part of the work that was supposed to have been financed by the Iraqi government.

Kever Benjamin City Sued for 100,000,000 $

The El Ram Gardens neighborhood (in the center of Kever Benjamin) has submitted a judicial demand of 100 million US dollar damages from the Municipality because of the ineffable sewage odors that are turning their life, so they say, into living hell. The nuisance started two years ago in the Golda School, and according to the people living in the neighborhood, the City has done nothing to improve the situation. The Major has issued a public communique stating that the El Ram Garden´s demand was a political act timed just before the elections, and that the El Ram people are irrationally obsessed with a non existent problem and with him personally, and also they were defaming the honest and capable public servants of Kever Benjamin City. The issue will be processed in Petach Tikva.


From the professional point of view, the odor problem is caused by the central chamber situated near the Golda School, which is situated in the highest topographic point of the city. Kever Benjamin is built on rolling sandstone hills running more or less North to South parallel to the sea shore. The sewage pumping stations from the Western part of the city pump to the quieting chamber in the highest topographic point, which happens to be in the Golda School in the El Ram neighborhood. From this chamber the pressure flow becomes gravitational and proceeds to the WasteWater Treatment Plant in Gil Amal neighborhood near the Hadass River. Each time that the main Western pumping Station (the newest one is called the Al Bar Pumping Station, there are others) starts pumping, the column of contaminated air is pushed uphill and escapes into the atmosphere in Golda. In quiet summer nights, with little wind, the bad air is expulsed and rises causing disconfort to the people. The El Ram neighborhood has about ten high rise apartment buildings in a dense 4,000 square meter park, which practically trap the bad hot air. The solution proposed by the experts is to avoid pumping raw sewage through the center of the town and to build a new main pipe directly from Al Bar to the Wastewater Treatment Plant. It would be an extreemly expensive project, requiring extensive civil works in a densely built urban area. It is a nightmare only to think about it. Another solution may be to build an aireation chimney on the Golda chamber, extract the air and purify it by means of a biological air purifying bed or activated coal filter or electrostatic organic matter high tension zapper (an Israeli invention) or ozonization or some other method. For some reason the City is doing nothing. Maybe they dont want to aknowledge the fact that the Al Bar pumping station (renewed not long ago, and a second one built 100 m north of it at a cost of about 2 million US$) is a tremendous engineering failure. May be the hot potato should be thrown into hands of the design firm, Balassa Jalon, from Haifa. I dont know, sueing engineering firms is a highly technical undertaking, the City lawyers are sure to lose. But now that the sides are committed to the battle, something will certainly happen, and I think there is place for the expert opinion of the ever-learning Israeli Water Engineer. Already I talked with my friend in the City but had no time for the necessary follow up. And by now it is not a technical issue, it is a hot political fight, which I dont want to involve myself.

PS The whole thing started a few years ago. The western side of Kever Benjamin drained by gravity to Raanana, and the two cities were of different political opinion. Raanana, the City of the Phoenician Glass Factory, refused to receive Kever Banjamin´s sewage and treat it in its own WWTP. The dispute went to mediation and Mr Shaul .. decided that each city should be independent and separate from the sewage point of view. A new pumping station was built which pumped the sewage to the center of the town, in the Golda School, from where it continued by gravity flow to local WWTP.

Anna Zaikin

A typical Israeli girl.

You dont believe me?

Come to Tel Aviv and see with your own eyes.

If you can keep them in their orbits.

Iraq´s Agriculture in Crisis

In 2007, average rainfall was just 40 percent of the normal level in Iraq, severely affecting crop production," said Agriculture Minister Ali al-Bahadli. Iraq expects to import 2.8 million tonnes of wheat in 2008/09, up 40 percent from the previous year. Wheat production is expected to drop 27 percent to 1.6 million tonnes.

Only the introduction of efficient irrigation methods can help the Middle East. Like those we have. I wonder if I¨ll ever see times like the nineteen thirties, when a Palestinian (Israelis were called that then) could take the train in Yaffo and arrive to Bagdad or El Cairo or Beirut, without passports. Oh, those were the wonderful times of colonialism...

The pic shows a kibbutz Yakum field irrigated with recycled wastewater.

TAHAL Still Cannot Keep An Appointment

The Israeli government received only one bid in the tender to build a liquid natural gas (LNG) terminal, one of the country's largest infrastructure products, after Tahal Group missed the tender deadline by 20 minutes and was disqualified. The tender includes finding a suitable site for the LNG tender, submitting detailed planning documents, certification to the Israeli standard, and operating the facility for 20-25 years. The estimated cost of the project is $500-700 million.

In view of the project's importance, Tahal had asked the Ministry of National Infrastructures to cancel the disqualification on the grounds of force majeure. Tahal submitted an affidavit from Israel National Roads Company Ltd., which stated that road work on the Jerusalem-Tel Aviv highway caused unexpected heavy traffic on the date of the tender deadline, delaying Tahal's representative.

I remember the last minute hysterical running in my times in TAHAL. I never missed a tender, but others did. But those were international tenders and air connexions were unreliable to say the lest. But to arrive twenty minutes late from Tel Aviv to Jerusalem...

SILENCE SILENCE SILENCE

Pronounced with French accent, it means that all radio transmission have to be stopped. And that is what, apparently, is happening in the world media. Lately I cannot find any serious comment on what is going on in the financial markets, in interbanking operations, in country budget balances. There is, I presume, a coordinated effort of muting out all communiques, trying to avoid exciting and feeding the ongoing panic. This morning, for example, the DAX is in free fall and not a word of online analysis can be heard. The once unstoppable instant media experts are all silent like fish.

I for one strengthened my position in the POT (fertilizer) sector. In Israel, it is the only green spot in a field of titillating red flowers.

Weapons of Bala Boluk

The Pentagon site reports of weapons captured in Bala Boluk, Afganistan. What this strange weapon may be?

PS. Thanks to Anonymous´s comment, it appears that the weapon captured is a Finnish Lahti model 39 anti tank rifle. It is based on the Lahti aircraft cannon of 1937 with few modifications as possible to produce a ground gun. A pistol grip and trigger mechanism were made; a muzzle brake, shoulder pad, sights and a bipod were fitted. Of course it must have been quite inoffensive for Russian tanks and armored vehicles. It is a veritable museum piece, apparently in just out of the box condition.

Wiki adds: Several of the rifles remained in service after World War II even serving as an anti-helicopter weapon, while many others were sold to collectors, mostly in the United States. Today the rifles, especially those in working condition, are quite rare and highly sought after. Some deactivated (a steel bar welded into the chamber) weapons have been reactivated due to their value. Ammunition is rarely even available, and costs around 80 dollars for each round when sold ( 2008 price ).

Kiyora Concept Car

It's about Mazda's Kiyora concept car. The car’s roof has water channels that collect rain and send it through an activated carbon filter. This removes all waterborne pathogens and other pollutants right down to the molecular level. Bacteria and viruses are intercepted without the use of chemicals. Then the pure, clean drinking water pours into a vessel specially designed for Mazda by Lifesaver Systems, which calls it the Bottle Citi. This receptacle is positioned between the front seats, so any occupant can get to it easily.

The Japanese are destroying American car industry with these touches. It cannot be dismissed. I have to meditate on this concept. Collecting rainwater on the road and producing drinking water for the passangers. A great conversational subject, extreemely "green" and earth friendly. If someone buys things thinking on saving the Earth, like minimal emmissions or an electric car, this concept will fascinate him/her. Japanese are amoral, practical and have no prejudices.

China on the Road of Thailand

China has seen what is going on in Thailand and has decided that it is good. The Government is allowing its people to have some fun and get what they want. I found the above pic of a trans-sexual beauty contest in a Chinese paper. Forgotten are the times of Mao's puritan cadres re-educating Shanghai's prostitutes. China is coming back to its true nature.

Ecuador on the Road to Insolvency

The aggressive attitude against foreign companies adopted by Correa, Ecuador´s President, brought about an increase of Ecuador´s Country Risk from 614 points in 2007 to the incredible 3,000 points today. It means that foreign banks think that they need 30% additional interest to cover the risk that Ecuador will not pay back its debt. A country that has to pay such high interest rates will end, in no time, working only to pay the interest on its debt. Ecuador and Bolivia must be the worst governed nations on Earth. The pic show a Colorado Indian plastering his hair with a reddish mixture based on achiote (American pepper) and leche de árbol, some kind of vegetal milky latex. When I consulted in Santo Domingo de los Colorados with Jaim Ben Ezra, in the seventies, we met these indians coming down from the selva to the town´s market. They were of rather small stature and fat, and quite curious and friendly (they spoke little Spanish). Now they are totally commercial and fake.

In Memoriam Radnoti

Miklós Radnóti, birth name Miklós Glatter (May 5, 1909, Budapest, Austria-Hungary – November 10, 1944, near Abda, Hungary) was a Hungarian poet who lived through the war in the same group of Hungarian Jews with my father, they knew each other, and was beated to death by drunken Hungarian gendarmes a few weeks before Liberation. He was one of the thousands of assimilated Hungarian Jews who had rejected Judaism and had convinced themselves of being Hungarians, more Hungarians in fact than the mixed Slavish - German peasantry around them. Radnoti found himself violently ejected by the Hungarian nation and forced to share the fate of all Jews under the Holocaust. My father, who was a provincial Orthodox Jew, did not like assimilated Budapest litterateurs who had adopted fake Hungarian names like Radnoti. His destiny is singularly poignant, a lyric poet genius beated to death by a drunken, brute Hungarian guard.

In the early forties, he was conscripted by the Hungarian Army, but being a Jew, he was assigned to a weaponless support battalion (munkaszolgálat) in the Ukrainian front. My Father was in the same batallion. In May of 1944, the defeated Hungarian Army retreated and Radnóti's labor battalion was assigned to Bor, the Serbian copper mines (Lager Heidenau). In August of 1944, as consequence of Tito's advance, Radnóti's group of 3200 Hungarian Jews was force-marched to Central Hungary, which very few reached alive. Radnóti was fated not to be among them. The poem below (in Hungarian) describes the premonition of his own death. Throughout these last months of his life, he continued to write poems in a little notebook he kept with him. According to witnesses, in early November of 1944, Radnóti was severely beaten by a drunken militiaman, who had been tormenting him for "scribbling". Too weak to continue, he was shot into a mass grave near the village of Abda in Northwestern Hungary.

Mellézuhantam, átfordult a teste
s feszes volt már, mint húr, ha pattan.
Tarkólövés. – Így végzed hát te is, -
súgtam magamnak, – csak feküdj nyugodtan.
Halált virágzik most a türelem. -
Der springt noch auf, – hangzott fölöttem.
Sárral kevert vér száradt fülemen.
(Szentkirályszabadja, 1944. október 31.)

New Mikveh in Budapest

Hungarian Jewry, long thought of as dying or dead, is giving signs of life. They have built a new ritual bath, a mikveh, under the direction of a strictly Orthodox New York contractor. He directed the work during the week, and each Thursday returned to New York to spend the Shabbath with his family. The water for the ritual bath comes from a rainwater collector pool on the building´s roof, and a new well dug in the garden. The underground water had to be koshered (turned ritually pure) by spilling 1,000 liters of red kosher wine into it, and pumping it out. When the water became wine-less, it was considered a new well and its water pure. The ritual correctness of the mikveh was certified by the Chief Rabbi of Vienna and other famed Jewish religious authorities.

OPEC is no friend

Stung by what it called “a dramatic collapse” in crude prices, the OPEC cartel said on Friday that it would reduce output by a steeper-than-expected 1.5 million barrels a day.(NYT)

The unanimous opinion held by the media only a month ago was that OPEC would not let price to increase too much because they dont want a recession and they want to avoid demand destruction.

I think that was demonstrated as nonsense when the price reached 140 dollar per barrel of oil and OPEC did nothing. It did not increase production as promised.

Now that the price is collapsing because of golbal recession, OPEC is restricting production. They could not care less about the West being in crisis or recession, they care about their profits alone.

They are no friends, they are an exploitative horde of competing parasites. Each one, individually, could not care about the effect of its bloodsucking on its victim.

NYT's Floyd Norris Looks at the Numbers

Here are some October performances, through a few minutes ago. In each case, I took a major index from the country in question. All figures are in U.S. dollarchiks.

U.S., down 26%
Canada. down 37%
Mexico, down 44%
Argentina, down 43%
Brazil, down 48%
Chile, down 30%
Peru, down 42%
Britain, down 31%
Germany, down 35%
France, down 31%
Switzerland, down 20%
Italy, down 30%
Ireland, down 35%
Iceland,down 83%
Netherlands, down 35%
Belgium, down 37%
Denmark, down 35%
Finland, down 26%
Greece, down 45%
Poland, down 46%
Czech Republic, down 45%
Russia, down 53%
Hungary, down 50%
Lithuania,down 37%
Turkey, down 50%
South Africa, down 42%
Israel, down 22%
Japan, down 23%
Hong Kong, down 30%
China, down 21%
Taiwan, down 23%
South Korea, down 46%
Australia, down 34%
New Zealand, down 25%
India, down 36%
Singapore, down 35%

You will note that the United States is among
the best performers. Don’t you feel better now?

J adds: You will also note that ISRAEL is the BEST performer (with China). Dont you feel better now?

No.

Fire Sale

The Fire Sale of financial assets is proceeding ahead all over the world. Even Japan´s Nikkei fell 10% today. Panic is everywhere, big investors are selling and putting their money in government paper.

Tesoro Refineries is under 10 $ and the whole outfit worth less than 1 Billion. With 200 M someone could grab that corporation. But Bloomberg informs that some U.S. refiners may be forced to shut plants and go out of business in coming months as declining demand aggravates narrowing fuel-production margins.

``There will be some real fire sales,'' said G. from SunCor the world's second-largest oil-sands producer. ``We should actually see some U.S. refiners shut down. Some of the weaker refiners should go out of business.'' I wonder if at current oil prices that Canadian oil-sands producers are making profit. It is starting to be a real balagan.

The American Advantage

This is an interesting photo of the flight deck group planning its daily schedule. Lt. Ronald Rancourt, flight deck officer aboard the aircraft carrier USS Theodore Roosevelt (CVN 71), discusses the day's flight operations with aircraft handlers in Flight Deck Control. I tried to hold these morning planning sessions in my plants and they failed miserably. Israelis want to be told what to do, and they love to avoid responsability. "You are the boss" attitude prevails. May be I was unfit to manage these sessions. I just read that the USA is the most competitive producer in advanced industries, that in spite of the severe financial panic we are having. They have a different culture.

Eshet Hail (A Good Woman)

The Bible sings about Eshet Hail, the Good Woman or Good Wife, who can find her? She is worth more than rubies. (Proverbs, Chapter 31). Apparently Madonna was no such God abiding virtuous wife, because her strict exercise regime meant that her husband had to go without sex for months. The London Daily Mail reports:

When they did find time to make love, it was like ‘cuddling up to a piece of gristle’, Ritchie is said to have told friends… ‘All the soft feminine tones have been replaced by the build of an athlete.’

The Kabbalah Center Rabbis didn’t help things much either. Ritchie reportedly walked out of a marriage counseling meeting with rabbis after they suggested that a husband should always be subordinate to his wife’s wishes. Apparently the Kabbalah Center has introduced some innovations to Judaism that I’ve never heard about before. Well, in America everything is possible.

Monstrous Correction

Commodity equities have been anything but safe lately, as these sectors have been taken to the cleaners. This monstrous correction comes as no surprise to Rogers, legendary co-founder of the Quantum Fund. In Jim's words:

We have had eight or nine periods of forced liquidation over the past 100 to 150 years wherein everything was liquidated without regard to fundamentals. This is such a period. ... Historically, the things which have come out best on the other side are things where the fundamentals have been unimpaired. Commodities are the only thing I know with unimpaired fundamentals.

Commodities are gold, silver, platina and so on. We are living very difficult times, of worldwide massive forced liquidation of assets. And we are in peacetime, after sixty years of peace in fact.

Argentina Broke (Again)

It costs $3.118 million to protect $10 million of the country's debt from default. In September 2006, it cost just $244,000 as record exports of wheat, soybeans and corn fueled economic growth and swelled government coffers.

Que Pais Barbaro

Jean-Marie Gustave Le Clézio Who?

This year's Nobel Prize in Literature. Never heard of him. It seems that you have to hate America is you want to get the Prize. Mr. Engdahl, head of the committee charged with awarding the Nobel Prize for literature, says: “The U.S. is too isolated, too insular. They don’t translate enough and don’t really participate in the big dialogue of literature. That ignorance is restraining.”

Doris Lessing is the most recent anti-American winner. Two years before her prize, the winner was Harold Pinter, a leftist amongst leftists, who has called George Bush a “mass murderer.” He was preceded by Elfriede Jelinek, another European Communist who deeply hates America. This year’s winner, Jean-Marie Gustave Le Clézio, has not (yet) ascended to the ranks of rabid America haters, but his general theme seems to be a disdain for all things Western. Work your way past the prize committee’s incomprehensible praise for him as an “explorer of a humanity beyond and below the reigning civilization,” and you can find the meat of his writing, which one reviewer explains the Third World as “a utopian antithesis to the ugliness and brutality of European society.”

Chinese Suffering from Oedipus Complex

Four days a week, Zheng Yu, the Chengdu therapist, lies down on a couch in his office and uses Skype to call his own psychoanalyst 12 time zones away in New York, a routine he began in 2005. Zheng, 38, is oriented personally and professionally toward the long-term analysis developed by Sigmund Freud in early 20th-century Vienna.

He says Freud's theory of family dynamics -- based symbolically on the Greek myth of Oedipus, who killed his father and married his mother -- dovetails with the problems of clients who are only-children struggling to gain independence from overprotective parents. (Bloomberg)

Brainswave, a Stock to Watch

Brainswave is an Israeli startup with one product: a transcranial magnetic antidepressant. I ridiculed the idea before because it seemed to me another pseudomedical instrument based on an old, discredit idea, but it is not. Earlier this month, the Food and Drug Administration approved the first TMS system, called NeuroStar, made by Neuronetics Inc. of Malvern, Pa., to treat patients who haven't responded to at least one antidepressant. Roughly 5% of U.S. adults suffer from major depression in a given year, and as many as 40% of them don't get adequate relief from psychotherapy or drugs.

For those who have failed other therapy, TMS is still no panacea. In a clinical trial of 325 patients at 23 sites in the U.S., Canada and Australia, only 24% improved on TMS, but that was twice the response to the placebo. Side effects were mild -- mostly scalp irritation and headaches -- and there was no weight gain or sexual side effects as with some antidepressants. And unlike electroconvulsive therapy (ECT), also used to treat severe depression, patients remain awake and don't need anesthesia. There's no confusion or memory loss as sometimes happens with ECT.

CM4140

Orckit started to sell its new box (pic). I hope its share price will rise. Currently is 5$, very low. I hold some stock, hoping for an outbreak.

Tammuz

I watched the film "Tammuz" on TV. It describes the Israeli operation that destroyed Saddam Husssein's Nuclear Reactor just before it was started up. Iran is in its way of producing atomic bombs by uranium enrichment in Natanz (pic). Ahmedenijad´s speech in the United Nations, last September, was of a spiritual nature. Thus spoke Ahmedenijad:

Dear Friends and Colleagues,

"From the beginning of time, humanity has longed for the day when justice, peace, equality and compassion envelop the world. All of us can contribute to the establishment of such a world. When that day comes, the ultimate promise of all Divine religions will be fulfilled with the emergence of a perfect human being who is heir to all prophets and pious men. He will lead the world to justice and absolute peace.

"O mighty Lord, I pray to you to hasten the emergence of your last repository, the promised one, that perfect and pure human being, the one that will fill this world with justice and peace.

Heterosis

Kostolany, the Tőzsdeguru

In the gallery of Hungarian Jewish stock exchange people we have Andre Kostolany, a Tőzsdeguru (stock exchange guru in Hungarian) and Spekuláns (speculator) who made the bulk of his fortune investing heavily in post-war German industry. He wrote many books on the stock exchange business, mostly in German.

Project with a View to Ma'asiyahu Prison

I was invited to survey an unoccupied building in Lod, Central Israel. A local businessman wants to buy or rent the upper floor to make a large office and a 1,000 sq.m. sports center. My mission: to write a bill of quantities of the installation, fire fighting (sprinkler system) and miscellaneous requirements. Later, if the man decides to go ahead, I shall work with the architect designing these aspects and getting the appropriate permits. It is a rather low-brow professional job for me, but money is money and already I got an advance. The place has a wonderful view of the famous Ma'asiyahu Prison (pic). Bored office secretaries will have the chance to observe the goings-on within the prison.

KOOR Saga: 3 Days, 45%

This man Nochi Dankner is playing with Credit Suisse and already made something like a billion shekels. Now he owns 3% of the bank and is the third largest shareholder. It seems that us the Koor public will share something of his winnings.

A Twin Blog

http://kosherpower.blogspot.com/

A blog totally dedicated to the glorification of Hungarian Jews.

French Saving Bank´s Wrong Bet

The "incident" is worth of registering in my memory. A French Saving Bank, the Caisse d’Epargne, has been speculating with people's money and lost a billion. A team of four equity derivatives traders in the savings bank’s tiny proprietary division apparently ignored instructions to limit risk and overran trading limits. Believing the worst of the credit crisis was over, they placed bets on a rise in financial markets, according to someone familiar with the situation. Once the markets crashed in the week beginning October 6, they were left with positions that they were unable to unwind.

The €600m loss is all the more galling for Caisse d’Epargne, since it had already decided to pull out of proprietary trading altogether and was liquidating the department. Following the decision made in June, team heads had been instructed to limit exposures and trade cautiously.

Garden Greywater Reuse

The idea is starting to get traction in Israel. The pic shows the DIY system. There is a lot of chatting around on the Hebrew language internet.

Summer Salmonella Outbreak: It was the Water

Peppers were apparently the perps in the salmonella outbreak that sickened some 1,300 people in the U.S. and Canada since April. The Food and Drug Administration (FDA) announced that it traced the responsible bacterial strain—Salmonella Saintpaul—to a Serrano pepper grown on a Mexican farm that irrigated its fields with water contaminated with it. The farm is located in Nuevo Leon, in northeastern Mexico, about 100 miles southwest of McAllen, Tex., where authorities last week found a salmonella-tainted jalapeño at a packing plant owned by Agricola Zarigosa. It traced that pepper back to a farm in Mexican state of Tamaulipas."We have a smoking gun, it appears," an official at the Centers for Disease Control and Prevention (CDC) told the Associated Press.Government officials warned consumers last week not to eat fresh jalapeños and are now saying to nix related Serranos—but the advisory only covers peppers grown in Mexico.

This is quite strange because some crops are irrigated in Mexico with less than purified waters, even with raw sewage, yet there has been no Salmonella outbreaks. It is possible that a more agressive line has appeared, or that American stomachs are used to sterile food and lost their tolerance to Mexican salads. Anyway, not a positive development for the water reuse trade.

Singapur chooses to drink NEWater

A Singapur Government has completed its evaluation of the Expert Panel's report and accepted the proposal to use NEWater for indirect potable use in Sep 2002. This means mixing and blending NEWater with raw water in the reservoirs before undergoing conventional treatment at the waterworks for supply to the public for potable use. PUB has introduced 3 mgd of NEWater (about 1% of total daily water consumption) into Singapur´s raw water reservoirs. The amount will be increased progressively to about 2.5% of total daily water consumption by 2011.

I think that in production costs, NEWater is more expensive than desalinated sea water. But they have chosen this way.

The Chapter of the Week

We Jews follow a one year Bible study cycle, during which we complete the reading of all the chapters. This week´s chapter deals with the creation of the universe, which is described as having been structured in several successive stages. After each stage, God stopped and analysed if the thing was to his taste. At several stages, he arrived to the conclusion that the whole enterprise had been a mistake and started undoing it. Then, for one reason or another, he let it go on running a little more, and his recurring vacillations show that his decision was never final. At last, Noah succeeded in squeezing out from him a guarantee that there will be no other universal flood and he will let humanity live. Later, Abraham succeeded in making him sign a pact or contract regulating his relations with the Jewish people. The image we get is a God who is rather sceptical regarding humanity, I could even say that he frankly dislikes us. In this week´s chapter I cannot find the God of the Christians, the God who loves us and cares for us, on the contrary, this week´s God seems to suffer us only because he had signed pacts with our representatives. Not that he has to respect these agreement, not at all. That´s why Jewish conversations with God (prayers) always remind him of this pacts and call him to keep them, because we know how shaky is humanity´s survival vis-a-vis God.

This chapter can also be interpreted as humanity finding itself living in a silent and indifferent universe, under permanent threat of extintion and death. The story in the chapter tries to put some order and sequence in the universe, and then, it tries to elaborate some kind of legal guarantee that the world will not suddenly end.

In one word, pathetic.

-------

On the other hand (I always have another hand), I am reminded of Pope Retzinger´s comment: Without God, you have nothing.

Nothing here, nothing there.

Samaritan Succoth Feast

We are celebrating the Feast of Succoth, succah being originally a temporary hut in the field, erected for the harried harvest season that has to be completed before the starting of the rainy season. It is a celebration linked to the agricultural calendar of the Eastern Mediterranean. The Samaritan community in Nablus (Shchem) also celebrated Succoth but they have different traditions (see pic) from us the Jews, and in many ways they are more close to the original tradition. They are a people linked to their holy mountain, Mount Gerizim, while we have been dispersed and invented ways of being Jews in the Diaspora. They didnt and never left their mountain. It is a pity that all the municipalities and institutions I work with in the area are now closed for the two week long holiday, and I have no work reason to ramble around. My family is utterly uninterested in touring the West Bank, so I am missing this fascinating ancient ceremony.

About POT

POT is the world's largest producer of the fertilizer potash and a major producer of phosphate- and nitrogen-based fertilizers as well. Based on POT's sorry stock price - its shares have sunk from $240 to $69 since June - you'd think that fertilizer prices had cratered too. But they haven't. The price of potash, for instance, remains at record levels: about $1,000 a metric ton, triple where it was in early 2007.

Even after paring his estimates to account for the global recession, fertilizer analyst Keith Carpenter of Canaccord Adams still expects Potash Corp. to earn $11.75 a share in 2008 (triple what it earned last year) and $21.76 in 2009. Based on his '09 earnings estimate, the stock has a P/E of just 3. (From Fortune)

The commenters on POT boards disagree. They say farmers cannot go on paying such high fertilizer prices. Demand will tank, and so prices. I dont know. Pic shows a plant with unsufficient potassium.

California = Paraguay

In preparation of my mission to Baja California, I am studying its history. It strikes me that California is, like Paraguay, a land of the Jesuits. Also in Paraguay the first Europeans were the Jesuits, who established a chain of missions till the Spanish forbid their presence in their Empire. Most interesting that the Jesuits's missionary effort was in fact financed by the Crown, and in California, by the Mexican Vicerrey. In Spanish:

Desde la epoca de Cortez hasta la de Otondo, de 1535 a 1683, los muchos esfuerzos para ocupar la península occidental habían sido tan caros y muy infructuosos, que el gobierno había determinado no equipar más tales expediciones. Aún era lo más deseable, debido a la posición importante geográfica del territorio, que debería estar bajo el dominio español. Por lo tanto, contando con la firmeza del espíritu misionero, el consejo se reunió para considerar esta pregunta, ofreciendole a la Compañía de Jesús una subvención de 40,000 dólares por año como un incentivo para emprender la misión de California. La orden rehusó la oferta con motivo de la desgana de participar en las preocupaciones temporales implicadas en la empresa.

While Paraguay became an almost white country and very Catholic, California seem to have lost its missionary character. Pic: A ruined Jesuit mission in Southern Brazil (Paraguay).

Hungarian Traditions

Bullying is an ancestral Hungarian custom. My Father suffered it for four years in the Hungarian Army's forced labor corps. Sixty years later, ten freshman (known in Hungarian as "gólyák" or "storks") at the József Eötvös school iended up in the hospital last month after being fed a variety of kotyvalékok (unidentified barf-inducing liquids) by senior students. Not that this is all bad. School is supposed to prepare for life after graduation, and in Hungary this inevitably means being forced to eat revolting crap by sadistic people upper than you in the organization.

Warren Buffet on his Best Friend

¨Bad news is an investor’s best friend. It lets you buy a slice of America’s future at a marked-down price.¨

Toowoomba Opts Against Recycling Water

TOOWOOMBA town in Australia is losing its drinking water resources and one of the proposals was to recycle wastewater. The proposal, it seems, was defeated and the people opted for mining fossil water.

Toowoomba will then become the first large urban centre in Australia to draw its town water from the Great Artesian Basin, with more than 400 megalitres a month to be extracted to meet the needs of the drought-ravaged city on Queensland's Darling Downs.

A $17million project is under way to drill bores to meet Toowoomba's requirements as experts warned that water levels in the 1.7 million sqkm basin were falling sharply from overuse.
A referendum to pump recycled waste water to shrinking storages in Toowoomba, Australia's biggest inland city with a population of 120,000, was defeated in a 2006 referendum, with 62 per cent of residents voting no.

Toowoomba will be connected to southeast Queensland's $9 billion water grid in 2010, when it will receive water from the Wivenhoe Dam, but with city dam levels at 9.5per cent capacity yesterday -- half what they were at the time of the referendum -- alternative water sources are needed.

"Our water will run out if it doesn't rain and we don't do something," said Toowoomba Regional Council water services director Kevin Flanagan.

"The last time we had run-off into our dams was in 1999. We've got kids born in this town who've never seen it rain properly."

The Great Artesian Basin covers 20per cent of the Australian land mass. About 500,000megalitres of water a year are extracted annually from the basin, primarily for grazing and mining.

Lesser quantities are used for irrigation and to supplement supplies in small inland towns, mainly in western Queensland.

Toowoomba's dam supply was being supplemented by groundwater from the local Main Range Volcanics Aquifer, but its level has dropped so low that irrigators had allocations slashed last month.

Five bores to tap the Great Artesian Basin are now being drilled. One basin bore is supplying 5per cent of Toowoomba's water. By early next year, more than half the city's supply will come from the basin, with a weekly volume equivalent to 50 Olympic swimming pools.
"There were no other options on the table," said Toowoomba Deputy Mayor Paul Antonio.
"We will stop using water from the bores as soon as we can."

CSIRO groundwater expert Andrew Herczeg said programs were under way to reduce water extraction from the Great Artesian Basin, particularly in western Queensland.
"There has been overuse and over-exploitation in parts of the basin so there needs to be a cautious approach to the use of its water," Dr Herczeg said.
"Water in the Great Artesian Basin that was once close to the surface is now 100 metres underground."
NSW University of Technology water expert Stuart White said the tapping of the basin to meet Toowoomba's water needs was avoidable.
"It's a great pity the waste water issue was put to a referendum in the first place," Professor White said. "All that did was to create a politically polarised row, when there should have been a reasoned community debate about options."

Magyar Horde in Bactria

Hungarian Military in Afganistan, within the framework of NATO. I dont see weapons. One at the left holds a football. Are they playing football with "shahpatzim" (heavy defense vests)? This a PR pic from the Hungarian Armed Forces PR office.

FOREX Speculation Opportunities

Central banks across Latin America already are using reserves to defend their weakening currencies. Mexico's central bank sold $8.9 billion of its $84 billion foreign reserves last week as the peso plunged 16.3 percent against the dollar. The bank sold another $400 million in reserves yesterday.

Peru's central bank has sold $2.4 billion in reserves since Sept. 29 to support the sol. Chile's central bank, which on Sept. 30 said it would offer currency swaps on a weekly basis for a month to increase the supply of dollars, last week extended the program to six months and said it would offer up to $5 billion for the operations.

As is well known, defending sinking currencies is a waste of money. They will be soon devalued.

I really dont know if the future is deflation or inflation.

Textbook on Water Reuse

I am preparing my mission to Baja California, Mexico, where I shall teach a seminar on commercial water recycling. To be used as teaching aid, I have translated my book on Water Reuse in Agriculture into Spanish and am selling it through Bubok Library (Spain). It can be seen and bought in:


http://www.bubok.com/libros/4119/Tratamiento-de-Aguas-Residuales-y-su-Reuso-en-el-Agro

The summary (in Spanish):

Israel, como muchas otras zonas semiáridas del planeta, se halla atravesando una severa y crecientemente crítica sequía, tornando impracticable la agricultura de secano. En consecuencia, prácticamente toda la agricultura israelí es regada – con aguas recicladas .

Pese y como respuesta a estas condiciones climáticas cada vez mas hostiles, Israel ha desarrollado una "industria" del agua que posibilita no sólo mantener una población de las mas densas del planeta sino también una floreciente agricultura de exportación.

El objetivo de este libro es, entonces, ofrecer al profesional del agua hispanoparlante la vasta experiencia del autor, que refleja lo logrado por la ingeniería del agua israelí en los últimos decenios. El libro traduce y detalla asimismo las normas y los reglamentos israelíes, que son poco conocidos en el exterior por las dificultades del idioma hebreo.

Buying Options / OPCIONES DE COMPRA

Purchase: 12.00€ Impuestos y envío no incluidos

Download: 3.00€

People is retiring savings from Israel's financial system

Today about 250 million shekel was retired by savers from mutual funds, which had to sell shares on TASE. Share prices fell (except KOOR). This vicious circle will be very difficult to break. All this talk about worldwide crisis is putting fear in people's hearts. No good.

SNMG2 policing the Gulf

1. It has gone unnoticed that NATO is not only a working military alliance, but under the innocent alibi of protecting the food aid to starving Africans, it has assumed worldwide policing powers. Its SNMG2 group currently comprises ships from Germany, Greece, Italy, Turkey, United Kingdom and United States. Command of SNMG2 is assumed on rotation by contributing nations and currently is Rear Admiral Giovanni Gumiero, Italian Navy. SNMG2 currently comprises:
   ITS Durand de la Penne (flagship, destroyer D560, Italy)
   FGS Karlsruhe (frigate F212, Germany)
   FGS Rhön (auxiliary A1443, Germany)
   HS Themistokles (frigate F465, Greece)
   TCG Gokova (frigate G496, Turkey)
   HMS Cumberland (frigate F85, United Kingdom)
   USS The Sullivans (destroyer DDG 68, USA)
2. As NATO's anti-piracy effort is formalised, the Alliance will continue to coordinate its assistance with the World Food Program, the European Union and the US Led Operation Enduring Freedom who are all involved in this humanitarian and security effort.
3. Operation Enduring Freedom (OEF) is the official name used by the U.S. Government for its contribution to the War in Afghanistan under the umbrella of its Global War on Terrorism (GWOT).
4. Coincidentally, NATO is a military alliance composed by White Nations alone.

Koor increases Credit Suisse stake

The purchases amount to 3% of the Swiss bank's share capital.

Koor Industries Ltd. (TASE:KOR) today announced that it bought 34 million shares in Credit Suisse Group (NYSE: CS; SWX: CSGN; XETRA: CSGZ) at CHF 35 per share for CHF 1.2 billion on Monday. The purchases amount to 3% of the Swiss bank's share capital.

Koor said that the purchase was made at Credit Suisse's closing price on the New York Stock Exchange on Friday.

Koor´s shares jumped 25% on TASE.

TSO up 23%! Thus Fortunes Are Made!

• The Company announced that Bruce Smith, its Chairman, President and CEO, will file a Form 4 with the Securities and Exchange Commission reporting that
  Goldman Sachs sold 251,100 shares of Tesoro stock owned by him. The shares were
  sold in accordance with an existing margin agreement to meet a margin call. Depending on the direction of Tesoro’s common stock price, further sales may be
  required.

I do pity him, a little, not much. He was sold at the bottom.

Paul Krugman

He deserves the Nobel Prize. I can compare his way of thinking only to Richard Feinstein´s, a genius. He thinks clearly where we all just muddle in the fog. I want to record his article here:

Twenty years ago I read a story that changed my life. I think about that story often; it helps me to stay calm in the face of crisis, to remain hopeful in times of depression, and to resist the pull of fatalism and pessimism. At this gloomy moment, when Asia's woes seem to threaten the world economy as a whole, the lessons of that inspirational tale are more important than ever.

The story is told in an article titled "Monetary Theory and the Great Capitol Hill Baby-Sitting Co-op Crisis." Joan and Richard Sweeney published it in the Journal of Money, Credit, and Banking in 1978. I've used their story in two of my books, Peddling Prosperity and The Accidental Theorist, but it bears retelling, this time with an Asian twist.

The Sweeneys tell the story of—you guessed it—a baby-sitting co-op, one to which they belonged in the early 1970s. Such co-ops are quite common: A group of people (in this case about 150 young couples with congressional connections) agrees to baby-sit for one another, obviating the need for cash payments to adolescents. It's a mutually beneficial arrangement: A couple that already has children around may find that watching another couple's kids for an evening is not that much of an additional burden, certainly compared with the benefit of receiving the same service some other evening. But there must be a system for making sure each couple does its fair share.

The Capitol Hill co-op adopted one fairly natural solution. It issued scrip—pieces of paper equivalent to one hour of baby-sitting time. Baby sitters would receive the appropriate number of coupons directly from the baby sittees. This made the system self-enforcing: Over time, each couple would automatically do as much baby-sitting as it received in return. As long as the people were reliable—and these young professionals certainly were—what could go wrong?

Well, it turned out that there was a small technical problem. Think about the coupon holdings of a typical couple. During periods when it had few occasions to go out, a couple would probably try to build up a reserve—then run that reserve down when the occasions arose. There would be an averaging out of these demands. One couple would be going out when another was staying at home. But since many couples would be holding reserves of coupons at any given time, the co-op needed to have a fairly large amount of scrip in circulation.

Now what happened in the Sweeneys' co-op was that, for complicated reasons involving the collection and use of dues (paid in scrip), the number of coupons in circulation became quite low. As a result, most couples were anxious to add to their reserves by baby-sitting, reluctant to run them down by going out. But one couple's decision to go out was another's chance to baby-sit; so it became difficult to earn coupons. Knowing this, couples became even more reluctant to use their reserves except on special occasions, reducing baby-sitting opportunities still further.

In short, the co-op had fallen into a recession.

Since most of the co-op's members were lawyers, it was difficult to convince them the problem was monetary. They tried to legislate recovery—passing a rule requiring each couple to go out at least twice a month. But eventually the economists prevailed. More coupons were issued, couples became more willing to go out, opportunities to baby-sit multiplied, and everyone was happy. Eventually, of course, the co-op issued too much scrip, leading to different problems ...

If you think this is a silly story, a waste of your time, shame on you. What the Capitol Hill Baby-Sitting Co-op experienced was a real recession. Its story tells you more about what economic slumps are and why they happen than you will get from reading 500 pages of William Greider and a year's worth of Wall Street Journal editorials. And if you are willing to really wrap your mind around the co-op's story, to play with it and draw out its implications, it will change the way you think about the world.

For example, suppose that the U.S. stock market was to crash, threatening to undermine consumer confidence. Would this inevitably mean a disastrous recession? Think of it this way: When consumer confidence declines, it is as if, for some reason, the typical member of the co-op had become less willing to go out, more anxious to accumulate coupons for a rainy day. This could indeed lead to a slump—but need not if the management were alert and responded by simply issuing more coupons. That is exactly what our head coupon issuer Alan Greenspan did in 1987—and what I believe he would do again. So as I said at the beginning, the story of the baby-sitting co-op helps me to remain calm in the face of crisis.

Or suppose Greenspan did not respond quickly enough and that the economy did indeed fall into a slump. Don't panic. Even if the head coupon issuer has fallen temporarily behind the curve, he can still ordinarily turn the situation around by issuing more coupons—that is, with a vigorous monetary expansion like the ones that ended the recessions of 1981-82 and 1990-91. So as I said, the story of the baby-sitting co-op helps me remain hopeful in times of depression.

Above all, the story of the co-op tells you that economic slumps are not punishments for our sins, pains that we are fated to suffer. The Capitol Hill co-op did not get into trouble because its members were bad, inefficient baby sitters; its troubles did not reveal the fundamental flaws of "Capitol Hill values" or "crony baby-sittingism." It had a technical problem—too many people chasing too little scrip—which could be, and was, solved with a little clear thinking. And so, as I said, the co-op's story helps me to resist the pull of fatalism and pessimism.

But if it's all so easy, how can a large part of the world be in the mess it's in? How, for example, can Japan be stuck in a seemingly intractable slump—one that it does not seem able to get out of simply by printing coupons? Well, if we extend the co-op's story a little bit, it is not hard to generate something that looks a lot like Japan's problems—and to see the outline of a solution.

First, we have to imagine a co-op the members of which realized there was an unnecessary inconvenience in their system. There would be occasions when a couple found itself needing to go out several times in a row, which would cause it to run out of coupons—and therefore be unable to get its babies sat—even though it was entirely willing to do lots of compensatory baby-sitting at a later date. To resolve this problem, the co-op allowed members to borrow extra coupons from the management in times of need—repaying with the coupons received from subsequent baby-sitting. To prevent members from abusing this privilege, however, the management would probably need to impose some penalty—requiring borrowers to repay more coupons than they borrowed.

Under this new system, couples would hold smaller reserves of coupons than before, knowing they could borrow more if necessary. The co-op's officers would, however, have acquired a new tool of management. If members of the co-op reported it was easy to find baby sitters and hard to find opportunities to baby-sit, the terms under which members could borrow coupons could be made more favorable, encouraging more people to go out. If baby sitters were scarce, those terms could be worsened, encouraging people to go out less.

In other words, this more sophisticated co-op would have a central bank that could stimulate a depressed economy by reducing the interest rate and cool off an overheated one by raising it.

But what about Japan—where the economy slumps despite interest rates having fallen almost to zero? Has the baby-sitting metaphor finally found a situation it cannot handle?

Well, imagine there is a seasonality in the demand and supply for baby-sitting. During the winter, when it's cold and dark, couples don't want to go out much but are quite willing to stay home and look after other people's children—thereby accumulating points they can use on balmy summer evenings. If this seasonality isn't too pronounced, the co-op could still keep the supply and demand for baby-sitting in balance by charging low interest rates in the winter months, higher rates in the summer. But suppose that the seasonality is very strong indeed. Then in the winter, even at a zero interest rate, there will be more couples seeking opportunities to baby-sit than there are couples going out, which will mean that baby-sitting opportunities will be hard to find, which means that couples seeking to build up reserves for summer fun will be even less willing to use those points in the winter, meaning even fewer opportunities to baby-sit ... and the co-op will slide into a recession even at a zero interest rate.

And this is the winter of Japan's discontent. Perhaps because of its aging population, perhaps also because of a general nervousness about the future, the Japanese public does not appear willing to spend enough to use the economy's capacity, even at a zero interest rate. Japan, say the economists, has fallen into the dread "liquidity trap." Well, what you have just read is an infantile explanation of what a liquidity trap is and how it can happen. And once you understand that this is what has gone wrong, the answer to Japan's problems is, of course, quite obvious.

So the story of the baby-sitting co-op is not a mere amusement. If people would only take it seriously—if they could only understand that when great economic issues are at stake, whimsical parables are not a waste of time but the key to enlightenment—it is a story that could save the world.
------
Well, maybe not so obvious. The basic problem with the winter co-op is that people want to save the credit they earn from baby-sitting in the winter to use in the summer, even at a zero interest rate. But in the aggregate, the co-op's members can't save up winter baby-sitting for summer use. So individual efforts to do so end up producing nothing but a winter slump.

The answer is to make it clear that points earned in the winter will be devalued if held until the summer—say, to make five hours of baby-sitting credit earned in the winter melt into only four hours by summer. This will encourage people to use their baby-sitting hours sooner and hence create more baby-sitting opportunities. You might be tempted to think there is something unfair about this—that it means expropriating people's savings. But the reality is that the co-op as a whole cannot bank winter baby-sitting for summer use, so it is actually distorting members' incentives to allow them to trade winter hours for summer hours on a one-for-one basis.

But what in the nonbaby-sitting economy corresponds to our coupons that melt in the summer? The answer is that an economy that is in a liquidity trap needs expected inflation—that is, it needs to convince people that the yen they are tempted to hoard will buy less a month or a year from now than they do today.

The diagnosis that Japan is in a liquidity trap—and proposals for inflation as a way out of this trap—has been widely publicized in the last few months. But they have had to contend with a deep-seated prejudice that stable prices are always desirable, that to promote inflation is to cheat the public out of its just reward for saving to create perverse and dangerous incentives. Indeed, some economists and commentators have tried to claim that despite all appearances, Japan is not in a liquidity trap, perhaps even that such a thing can't really happen. But the extended baby-sitting story tells us it can—and that inflation is actually the economically correct way out.

The Sleeping in the Field Festival - in Samaria

The Central Committee

The Central Committee of the Chinese Communist Party approved by unanimity reforms in the agricultural sector of the economy. A picture of a government of a very large country working in harmony.

Arab Inbreeding

Saudi Arabia has the highest rate of birth defects in the Gulf, with around 80 babies out of every 1,000 born with a disorder. 8% of all births ! See illustration.

In the UAE, Kuwait and Oman, 70 to 79 children in every 1,000 are born with a birth defect.

Sudan has the highest rate in the world at 82 per 1,000, while France has the world’s lowest rate, at 39 per 1,000.

Birth defects have been closely linked to marriages between cousins and relatives, a common practice throughout the region and estimated to account for 35 to 50 per cent of all weddings.

Market Discounting President Obama

It is said that the current crisis is Wall Street discounting the coming Obama presidency.

It is the Opportunity of a Lifetime

These days of panic, very solid stocks can be picked up for a fraction of their value. The market plunge in the last week is no longer being driven by rational analysis. Stocks are falling because of a combination of panic and forced selling by hedge funds that must meet margin calls from their lenders.

Chesapeake Energy, a natural gas producer traded for $63 a share in July. On Friday, it fell as low as $11.99.

Investors with a stomach for risk and a long time horizon should consider following Warren E. Buffett, who in the last three weeks has invested $8 billion in Goldman Sachs and General Electric. And J.

Yiddische Piraten

Pic: Jean Lafitte (1776–1826), a privateer in the Gulf of Mexico who possessed a personal fiefdom in the Louisiana bayou. Lafitte and his brother Pierre ran a warehouse in New Orleans to market the goods Jean’s ships captured. Following the 1815 Battle of New Orleans, in which he and his men fought alongside Andrew Jackson’s American troops, Lafitte moved his base of operations to Texas’s Galveston Island. Jean Lafitte’s published diary, the authenticity of which is still hotly debated, states that he and his brothers were raised on the Caribbean island of Hispaniola by a Jewish grandmother, Zora Nadrimal, who often told the young boys how their family suffered under the Spanish Inquisition, sparking their determination for revenge. The same source states that Lafitte’s wife was a Danish Jew, Cristiana Levine.