From Investors Insight, one of the most important essays on the global economy you will read this year.
There is nothing so disastrous as a rational investment policy in an irrational world.”
John Maynard Keynes
You just know that something is astray when Afghan poppy growers begin to switch from opium to wheat. According to the Independent newspaper here in the UK, that’s exactly what is now happening. I have no desire to enter into a pound for pound risk/reward analysis of producing wheat versus opium. However, the consequences of the rapid rise in energy and agricultural commodity prices are far reaching and perhaps not as well understood as they should be. That is the content of this month’s letter.
The Silent Tsunami
My story begins with Al Gore. While most of us lulled ourselves into the belief that he was onto something when he tried to convince us that global warming (or climate change, as I prefer to call it) was the most formidable challenge facing this planet, a silent tsunami1, also known as the global food crisis, began to develop and is now threatening to undermine global political and economic stability, the latter of which has been key to the benign financial markets we have all benefited from in recent years.
According to the World Bank, just over 1 billion people live on one dollar or less per day. People in the poorest countries in the world spend 80% of their income on food. So when you and I have hardly noticed that the bread we pick up from the local bakery has doubled in price over the past year, it is because only 10-15% of our budget is spent on food items2. In many emerging economies the number is much higher. Chinese consumers spend 28% of their income on food. In India it is 33%. If you want to know how much it is in your country, go to:
http://www.ers.usda.gov/briefing/cpifoodandexpenditures/data/2006table97.htm.
There are three food staples in the world today which dwarf all other food ingredients in terms of importance. They are (in alphabetical order) corn, rice and wheat. As you can see from chart 1 below, they have all experienced rapid price appreciation since last summer. What is it that has driven this price explosion and what does it mean to financial markets? As with most things in life, there is no simple explanation; a number of factors have conspired to create a situation which is exceptional but also destabilising and hence dangerous.
It Is The Bio-Fuel Policy Stupid!
The explanation given by most commentators is the bio-fuel policy currently being pursued by the Bush administration in Washington. The policy is driven by a desire to unlock the United States from its rising dependence on imported crude oil. The problem, as Bush and his government have been slow to recognise, is the stupidity of the policy in its current form. Let’s back that claim up with some hard facts.
In the United States, corn (better known as maize over there) is the primary ingredient in ethanol production although wheat and soybeans are also used. According to a recent UN report, it takes 232 kg of corn to fill an average 50 litre car tank with ethanol - enough corn to feed a child for an entire year. It is estimated that almost 20% of total US corn production will go towards ethanol this year and the number is set to rise to 45% by 20153.
The problem with corn is that it is low on carbon hydrates, which is where the energy comes from. Instead, American ethanol producers rely heavily on fertilisers with the energy being extracted from the nitrogen in the fertiliser. This is an inefficient and very costly approach - in particular in an environment of rising energy prices because crude oil and/or natural gas are major ingredients in fertiliser production. 33,000 cubic feet of natural gas are required to produce just 1 ton of ammonia!
So what does all this mean? According to estimates from Goldman Sachs, the cost of ethanol from corn is now over $80 per barrel, it is about $145 from wheat and over $230 from soybeans. Other countries recognised this problem a long time ago and use crops with higher carbon hydrate content. In the Philippines they use coconut oil and the Brazilians use sugar cane. Goldman reckons that the cost of one barrel of ethanol based on sugar cane is about $35. So why not import sugar cane from Brazil instead of using corn? One simple answer: Brazilian farmers do not vote at American elections. Idaho farmers do.
Are Investors To Blame?
There is no question that the US bio-fuel policy which, by the way, is now being copied in other parts of the world including the EU, has to take its share of the blame. But it is by no means the only reason for the food crisis. The next culprit on my list is our very own industry - investors of all kinds. In recent years there has been rising demand for commodity-linked investment products from investors all over the world. Pension funds, hedge funds, mutual funds and private investors have all allocated more and more to commodities and, in recent months, demand growth has been explosive, as is evident from chart 2 below. It is estimated that the aggregate value of commodity-linked index funds now exceeds $200 billion, a very significant number in a not very large market.
For those of you following the market for exchange traded funds (ETF), you will have noticed that not a day has passed in recent months without yet another new commodity ETF being launched. Since the issuers of these ETFs do not want to take any risk on their books, all these ETFs are hedged - typically through commodity futures. In other words, every time you buy a commodity ETF, you contribute to the continued rise of commodity prices and hence inflation.
For that very reason, it is possible - but not a given - that much of the recent rise in commodity prices is based more on market technicalities than on fundamentals. If so, this could be the next bubble waiting to burst. We continue to hear stories about institutional fund managers being overloaded with commodity futures but have found limited hard evidence so far.
Water Shortages Are A Problem
Water is next on my list. Australia - one of the world’s largest grain producers - suffered badly last year due to severe drought with its wheat harvest being only 50% of the prior year’s output. However, water, or rather lack thereof, has played havoc in more ways than one. In China, water depletion is a serious problem and the problem is exacerbated by top soil erosion and poor fertility. China has an estimated annual water shortfall of 40 billion cubic metres. Closing that gap through artificial means (desalination, etc.) would consume the equivalent of 3% of the world’s oil output.
Until recently China has been one of the world’s major grain exporters. Those days are now over. By 2010 China expects to import the equivalent of 40% of US corn exports. According to estimates from UBS, China’s foreign currency reserves, which are the largest in the world, could be slashed in half over the next few years if grain prices were to double again from current levels. As an aside, China has recently decided to abandon its bio-fuel programme. The reasons? A lack of water and cost inefficiencies.
In Saudi Arabia, a country of 28 million people, water depletion is a serious problem. Estimated recoverable water reserves are now less than 10 years and falling rapidly. For that reason, the Saudis have decided to wind down their domestic agricultural industry. Historically, the Saudis have been self sufficient on food. They now say that they will import 100% of their food requirements by 2016.
Have We Been Complacent?
Number 4 on my list is complacency. Al Gore (yes, him again!) seduced us all into focusing on the climate. Many a government agency around the world took its eyes off the ball and allowed food stocks to deplete. US wheat inventories, for example, are now at the lowest level since 1947/48 when the US population was only half the size it is today.
Similar problems have caused panic buying in the rice market in recent weeks where stocks are at the lowest levels since 1976. 3 billion people in Asia and Africa rely on rice as their primary food staple. Governments in India, Thailand, Vietnam, Argentina, Cambodia, China and Egypt have all imposed export controls in order to secure domestic needs. The World Bank is so concerned about the situation that it now predicts food riots in more than 30 countries around the world.
Productivity Levels Are Falling
Number 5 and 6 on my list are closely related. The total amount of arable land in the world is diminishing, primarily as a result of urbanisation. China alone has lost 3 million hectares of rice land to concrete in the past 10 years. In order to compensate for the reduced acreage, higher productivity levels are required. But higher yields require increased use of fertilisers which is not an option available to everyone given the price of oil. In some parts of the world, for example in Africa, there is now evidence of farmers planting less than in prior years as they cannot afford fertilisers. Falling yields are not a new phenomenon, though, as you can see from chart 3.
In one of the largest grain producing areas of the world - the former Soviet Union - the total acreage planted has dropped 12% since the iron curtain came down. The 3 largest producers in the area all suffer not only from reduced acreage but also from low yields compared to western standards. In Kazakhstan, grain yields are 1.1 tonnes per hectare, in Russia they are 1.8 and in the Ukraine 2.4. US grain yields, by comparison, are 6.4 tonnes per hectare4. The good news is that there is plenty of land available in places like Russia and Kazakhstan. The bad news? Experience suggests that it will take about 10 years to turn non-farm land into fertile farm land.
The Meat Culture Prevails
The final factor has to do with changing eating habits. This phenomenon has received its fair share of the blame in the media in recent months, but I actually think this is more of a concern for the future than a reason why food prices have exploded in recent months. Eating habits do not change overnight. At the macro level, a changing diet takes years to materialise. Having said that, there is clear evidence that Asia’s growing middle classes are switching to meat based diets. If the rest of Asia were to follow Japan’s example, the protein intake across Asia will explode over the next couple of decades. The Japanese are consuming almost 10 times as much protein as they did 50 years ago. Why is that a problem? Because it takes over 3 kg of corn to produce 1 kg of pork and over 8 kg of corn to produce just 1 kg of beef!
So What Does It All Mean?
There are very good reasons to believe that high food prices will stay with us for quite some time. Yes, there may be some elements of speculation behind the recent explosion in grain prices, maybe even hints of a bubble, but underlying supply and demand factors are such that we’d better get used to lofty food prices for years to come. That has implications for financial markets left right and centre (finally I get to what this actually means!).
The analysts at Goldman Sachs have calculated the effect rising food prices have had on overall consumer prices (see table 1). The conclusion is inevitable. Whereas in most OECD countries the feedback process between food inflation and non-food inflation is modest, in virtually all emerging economies the feedback is significant. Secondly, non-food inflation is most affected by high food inflation in countries with high inflation rates such as Russia, Indonesia, Argentina and Mexico (see chart 4).
This is an important observation because the investment community is almost universally in favour of emerging markets these days. Rarely have I experienced a period where the bulls have been more plentiful and the bears fewer and farther between. Most investors seem to believe that headline inflation will gradually come back to core inflation levels over the next year or so. Few investors seem to think the unthinkable - that core inflation will gradually rise to headline levels.
Asia May Pay A High Price
Even fewer seem to realise that if oil prices and agricultural prices continue to run amok, the Asian miracle story, upon which so many investors have pinned their hopes for the next few years, may, in fact, turn into a nightmare. The reason is simple enough. Asian countries are large importers of both oil and food staples. Very large!
To give you an idea of the appetite for oil in Asia, take a look at chart 5. As you can see, over 50% of the incremental global demand for oil over the past few years has come from Asia - almost 35% from China alone. In fact, over the last 5 years, China’s energy consumption has grown 5% faster than its GDP per year. Yes - per year!
It is now projected that China will overtake the US as the world’s largest energy consumer by 2010 despite its GDP being only 1/5 the size of the US GDP. No wonder the Chinese are running around in obscure parts of the world attempting to secure long term crude oil deliveries.
Based on the current crude oil price of $112, and an estimated average price of $64 over the course of 2007, I have calculated the net gains and losses to oil exporters and importers (see table 2). Not surprisingly, the Middle Eastern producers stand to gain the most - $333 billion of incremental revenues - but African producers and Russia also stand to benefit significantly. On the import side, Asia is paying the highest price. The current level of crude oil prices should add about $278 billion to the bill over and above what Asian countries paid for their oil imports last year.
Rising agricultural goods prices, although significant, are not having the same aggregate wealth effect as rising oil prices. In table 3, I have estimated the added cost of rising food prices from importing the three main food staples. Again you will see that rising prices are hitting Asia the hardest. Remember table 3 only looks at the import of raw materials. The effect from rising prices on processed foods is not included.
Neither does table 3 do any justice to the damage done at the micro level. Of the 3 billion people who rely on rice as their primary source of food, over 2 billion live on $2 or less per day. The recent price jump spells disaster for these people and could potentially cause massive economic dislocation throughout Asia. Riots are now a real possibility in many of these countries.
As far as the investment story goes, here is the problem. The prevailing view today is that the western world is yesterday’s story and that the best way to ensure continued high returns in your portfolio is to focus on emerging markets - in particular Asia. The argument runs approximately as follows:
The Consensus View
The OECD area (the old world) is plagued by a rapidly ageing population with all the negatives that follow - rising health care costs being the most important. Many OECD countries also have unfunded pension liabilities and large budget deficits, raising serious questions about whether the 21st century society can afford to maintain the retirement system as we know it today. Some even argue that structures such as the Euro are doomed because of dramatic discrepancies in performance within the Euro zone. Now consider the US dollar. The greenback is probably the most disliked currency in the world today (well, not taking the Zimbabwe dollar into consideration). If you buy these arguments it is no wonder that many investors shy away from the more established markets.
On the other hand, emerging markets - and Asia in particular - beam with opportunities. The population in most emerging market countries is still young, savings rates are high and the optimism is there for everyone to see. In short, it is exceedingly hard to find anyone who wouldn’t agree that Asia offers the best growth prospects going forward. So overwhelming is this view that it is virtually impossible to find a single brokerage house, institutional investor, commentator, punter, etc. who doesn’t advocate an overweight of Asian shares in equity portfolios.
Do Not Assume One-Way Traffic
While I agree that emerging markets offer better growth prospects than OECD countries, I disagree that it is going to be one-way traffic. As demonstrated above, rising commodity prices will hit Asia much harder than any other region in the world as it is in fact the only region in the world today which is a net importer of both crude oil and food staples.
In table 4 I have listed the largest holders of foreign exchange reserves in the world today. As you can see the list is dominated by Asian countries. All those investors who buy into the Asian growth story pin their argument either directly or indirectly on the size of these reserves. Growth requires investments; however, due to the high savings rates across Asia, and hence the plentiful reserves, the money is there to finance those investments without the countries becoming net debtors. What the argument does not take into consideration is that, at least in some countries, those reserves will be increasingly going towards paying for the rising cost of oil and food imports.
The ‘haves’ And ‘have Nots’
Instead I believe investors will increasingly differentiate between the ‘haves’ and ‘have nots’. And the ‘haves’ are those countries which control the world’s resources. In fact, few countries are net exporters of both oil and foods on a large scale. Come to think about it, it is less than a handful. And no Asian country is on the list. So who is on it? In the old world only one - Canada. In the grey zone (emerging economies but not necessarily young and dynamic populations) perhaps two - Russia and Kazakhstan. And amongst full blooded emerging economies? No one today, although Brazil has the potential to turn itself into a winner and so does Africa, if it can sort itself out.
All this is not to say that investing in Asia is doomed to fail. There are many good reasons why you want to invest there. However, the invest case is not as straight forward as it appears at first glance, and throwing in a bit of Africa, Brazil and/or Russia may not be a bad idea.
An Afterthought
For over 30 years, the world has had to suffer the consequences of OPEC - an organisation as keen to enrich its members as we in the Western world are hooked on its main produce - crude oil. Has pay-back time finally arrived? Should we be tempted to create OGEC - the Organisation of Grain Exporting Countries - with the objective of ensuring overall resource stability, i.e. food will only be exported to oil producing countries provided they deliver oil to us at a reasonable price?
The largest wheat exporters today are (in order of rank) the US, Canada, Russia, the EU, Argentina, Kazakhstan and Australia. Most of these countries happen to be net importers of oil. Is it unreasonable to apply a ‘tit for tat’ approach? My heart (as does my bank manager) tells me yes but my gut feel says no. The world has always been a better place when government interference has been kept at a minimum. The problem we face in this particular situation, though, is that not everyone plays by the same rules. If that could be fixed, the world would indeed be a better place.
Footnotes:
[1] A term borrowed with thanks from The Economist newspaper.
[2] Our food statistics come from the US Department of Agriculture and indicate that consumers in countries such as the UK and the US spend less of their income on food than consumers in other countries. This is due to the fact that take-aways and restaurant visits are not included in the USDA numbers. Adjusted for that, almost all OECD countries spend 10-15% of household expenditures on food.
[3] Source: The Daily Telegraph
[4] Source: The Daily Telegraph
Late Night Laugh: Pass The Sugar
May 14, 2008
Darwin On Wives: ‘Better Than A Dog’
May 14, 2008
The University of Cambridge has put online the complete works of Charles Darwin. Not just On The Origin of Species but also his personal papers, his views on matrimony as well as his views on evolution.
Darwin, scientific rationalist and child of the Enlightenment, set out in two opposing columns the pros and cons of marriage. A wife would provide “children, companionship, the charms of music and female chit-chat”. She would be “an object to be beloved and played with”, though he did not seem to attach great weight to this, conceding only that a wife was in this respect “better than a dog anyhow”. But Darwin also noted the disadvantages. The absence of the conversation of clever men at clubs, the prospect of “being forced to visit relatives, and to bend in every trifle”. Above all, the loss of time.
Nowhere does Darwin opine on mothers-in-law.
Naturally, the article ends with a critique of the Iraq war. Naturally.
Losing Lebanon: The Plot Thickens
May 14, 2008
Gershon Gorenberg
The time, according to Hilal Khashan, was ten minutes past the ceasefire. That was another way of saying ten minutes after another Hezbollah victory, Khashan explained. I phoned Khashan — head of the political science department at Beirut’s American University — several days into Lebanon’s latest armed upheaval. He spoke in a strangely dispassionate tone I’ve heard before in Jerusalem and Ramallah, the voice of a man taking refuge from chaos in careful analysis.
So far, Khashan said on Sunday night, the crisis that erupted last week has yielded “a major achievement” for Hezbollah. Iran, Hezbollah’s patron, has extended its influence in Lebanon. The obvious loser is the pro-Western government of Lebanon’s Prime Minister Fouad Siniora. From Beirut, U.S. support appears to be a phantom; Bush unwilling or incapable of supporting its Lebanese allies.
From the slightly greater distance of Jerusalem, I’d add, there’s another implication of the fire burning anew in Lebanon: The Bush administration’s Middle East policy of confrontation, of trying to isolate opponents, is in tatters. In particular, the administration’s resistance to peace talks between Israel and Syria has only served to strengthen Iran. And time is working in Teheran’s favor.
The war with Israel in the summer of 2006 consolidated Hezbollah’s domination of Lebanon’s Shi’ite community, said Khashan. But Hezbollah realizes “that the Lebanese government would love to see them disappear. Two years ago, the government was hoping for an Israeli victory.” The Shi’ite organization also “seems to be convinced that Israel wants a rematch.” To prepare for the next round, Hezbollah seeks to gain control domestically. Now functioning as both a military force and the main opposition party, it demands a unity government in which it effectively has veto power.
In broad terms, the Sunni community backs the government. The Christians and Druse are split, with factions that favor Siniora and factions allied with Hezbollah and Syria.
The current crisis was set off last week by cabinet decisions aimed at dismantling Hezbollah’s private telephone network — critical for its military communications — and at removing Beirut airport’s security chief, who has links to the Shi’ite group. If the Siniora government expected quiet acquiescence, it was wildly over-confident. Hezbollah quickly defeated pro-government Sunni fighters and took control of West Beirut. When Siniora let the army act as arbiter, the military took Hezbollah’s side on both issues.
Fighting died down in Beirut, but flared up first in northern Lebanon, then in the Chouf Mountains east of the capital. Pro-government Druse leader Walid Jumblatt had to turn to his opponents in the Druse community to gain a ceasefire in the mountains between his men and Hezbollah. That ceasefire unevenly went into effect a few minutes before I spoke with Khashan on Sunday evening.
The pro-government side, Khashan said, had counted on the United States coming to its aid — either militarily or, at a minimum, by turning to the U.N. Security Council to “internationalize” the crisis. Even the threat that the U.N. might send a new contingent of peacekeeping forces to Lebanon, Khashan said, would “empower the government and encourage Hezbollah to be very careful.” The expectation of American help, as Khashan understatedly puts it, was “naïve.” It’s hard to imagine the over-extended U.S. military entering another Middle Eastern quagmire. As of this writing, U.S. diplomatic efforts have been close to invisible. “There’s a sense of resignation among pro-government forces,” Khashan said.
In passing, Khashan pointed to another critical aspect of the Lebanese tangle: Hezbollah depends on Syria as well as Iran. But the alliance with Damascus is purely a matter of convenience. Syria serves as a conduit for Iranian aid. “Hezbollah people don’t have high regard for Syria… They don’t trust Syria,” Khashan said. They fear that Damascus could “sell them” in a peace deal with Israel.
That fear has a realistic basis. Yet according to insiders in Israel, opposition from the Bush administration is a key reason that Israel-Syrian talks haven’t moved further.
According to Alon Liel, the former director-general of the Israeli Foreign Ministry, who has conducted back channel negotiations with Syria, “what frightens the Syrian [political] aristocracy” is falling more deeply under Iranian hegemony and losing their own independence. “That’s an even stronger motivation than getting back the Golan Heights” for Syria’s desire to reach a deal with Israel.
For both Israel and Syria, Liel explains, an essential piece of any agreement would be Syria switching camps, realigning with the West, and dropping its connection to Hezbollah. Unless Syria makes that switch, Israel would regard the security risks of an agreement and withdrawal from the Golan buffer as too great. For Damascus, says Liel, the appeal is getting off America’s list of countries supporting terror and gaining a new, safer patron. So there’s no option of a “small deal” involving only Syria and Israel. A “large deal” involving the United States is the only option.
Ironically, notes Liel, one reason that the United States has avoided such a deal is that the Siniora government has lobbied against it. The pro-Western forces in Lebanon fear Syrian domination and want the U.S. to take a hard line against Damascus. It would hardly be the first time that a Lebanese faction expected an outside power to do its fighting for it.
But on this count, Siniora has also been preaching to the choir. The Bush administration, Liel says, is “emotionally opposed” to dealing with Syria, because “you don’t talk with terror.” Yet the administration has also left Siniora in the lurch facing Hezbollah. Arguably, the Lebanese government would be much better off if the U.S. had ignored Lebanese advice and pursued a deal ending Syrian support for Hezbollah.
In the meantime, Turkey has stepped in and is assiduously promoting a deal between Syria and Israel. As Israeli analyst Eyal Zisser recently wrote (PDF), the clearest sign of progress on that track is Syrian President Bashar al-Assad’s comment to a Qatari paper that Israeli Prime Minister Ehud Olmert has made a commitment to return the entire Golan for peace.
If President Bush is ready to change course and back a peace process, the critical question is whether he has waited too long. Olmert is now under investigation, yet again, on corruption allegations. The scandal could cost him the minimum domestic backing needed for a diplomatic initiative. (Liel, I should note, optimistically makes the opposite argument: Olmert could best protect himself domestically with a dramatic diplomatic initiative.)
Even if Olmert weathers the storm, Hezbollah is closer to its goal of dominating Lebanon. That would make it much more difficult for Syria to cast the group off, says Liel, because it would mean cutting ties with Lebanon. The end result of the U.S. policy of isolating Syria would be that Iran would extend its sphere of influence even further.
In the best case, there’s still a narrow window of opportunity, if the Bush administration can only reverse course. On the Middle East clock, the time is ten minutes before another Iranian victory.
From The SC&A Mailbag: The Enviro Jihadi
May 14, 2008
The sky is falling, the sky is falling!
In the world of the gloom and doom radical environmentalists, those are some of the most intelligent words you might ever hear. In that world, capitalism, freedom and democracy have been the great tragedies that have befallen ‘Mother Earth.’
That was the gist of an email from a self described ‘enviro Jihadi’ we received this morning excoriating America and Jews (surprise!) for allowing Mother Earth to fall into a final and tragic state of decline. Our correspondent believes that only a total repudiation of modern life, technology, energy consumption (and the absolute eradication of Jews) might offer mankind the slimmest chance of survival.
Even if we eliminate our correspondent’s political views (and that would be a first- the political views of radical environmentalists are always more important than the cause itself), there are some realities and truths today’s radical enviro storm troopers must deal with.
The entire global population must be relocated to within 100 or so miles of the equator, because only people living in that geographical band will be able to survive for a long time without clothing. To be clear, the only reason there are people in Montreal, New York, Paris, London or Reykjavik is because of pants and other fashions made of animal hides. We hope Grandpa can make the hike.
Inasmuch as most clothes are made with machines that consume energy, we had better get cracking. Since animal skins will no longer be acceptable, be careful not to step on anything that might cut your feet. Of course, if you do get hurt, forget about hospitals, modern drugs and medical equipment. You’re screwed, but at least you’ll have environmental integrity. Say goodbye to Grandma- it isn’t as if she contributed a whole lot, anyway.
The kids will be pleased- no more school. Books and paper are a tremendous drain on Mother Earth and besides, who wants to sit next to kid who has never heard of toilet paper, tampons or napkins? Never again will kids need to understand that most evil of words ‘flush,’ the word that poisoned so much of our water. Now, kids can crap wherever and whenever they please.
Dysentery is such a nice word, has a nice ring, don’t you think? Kind of like Polio, Measles, Mumps and Chicken Pox and a whole bunch of other infectious diseases. Not that it really matters- caring for children is way over rated and besides, parents need timeouts, too.
There is an upside, of course. We can share our meager resources with other primates, reptiles and arachnids, because we have to be responsible stewards of the earth for all creatures great and small. We can be happy surviving on berries and grass. We don’t need meat, even if our ancestors did. No fish, either. If it has a face, you can’t eat it. The culinary possibilities are endless.
We will have to gently educate our own native peoples that Pemmican, that mixture of meat and fat and jerky will henceforth be off limits. No doubt your enthusiasm will be met with great joy.
There are earth friendly shelters that can keep you warm and dry. They are called igloos. Sadly, there aren’t too many of them found near the equator. Tents are out. Leaves, branches and bark are in, huts built with machine made tools are out. Beware of snakes and other creepy crawlies.
Pizza is out, rooty tooty arrowroot is in. Yummy.
Don’t drink the water and stay out of the rivers. In some part of the Equatorial world, some poor, lesser developed animals have no problem eating bipeds or other stupid creatures with faces. The good news is that you will never have to worry about buckling the kids in or wearing a bicycle helmet, ever again. There will be some other adjustments to deal with. For example, a blowgun is not a sexual reference.
The good news is that you will be a source of nutrition for the natives. It is unlikely you will be welcomed with open arms as the Great White God, even after sharing the life changing and thrilling artwork of Alicia Shvarts.
Of course, there are many stripes of environmentalists. Not all are as shallow, stupid and irrelevant as our enviro-jihadi correspondent. That said, they all would do well to consider the above realities.
More on the subject tomorrow.
Late Night Laugh: Memorable Quotes
May 13, 2008
“I remember the time I was kidnapped and they sent a piece of my finger to my father. He said he wanted more proof.”– Rodney Dangerfield
“Once you can accept the universe as matter expanding into nothing that is something, wearing stripes with plaid comes easy.”– Albert Einstein
“Always end the name of your child with a vowel, so that when you yell the name will carry.”– Bill Cosby
“Never stand between a dog and the hydrant.”– John Peers
“The trouble with being punctual is that nobody’s there to appreciate it.”– Franklin P Jones
“When I die, I want to go peacefully like my Grandfather did, in his sleep — not screaming, like the passengers in his car”– Unknown
“I’m desperately trying to figure out why kamikaze pilots wore helmets.”– Dave
“I could tell that my parents hated me. My bath toys were a toaster and a radio.”– Rodney Dangerfield
“Americans will put up with anything provided it doesn’t block traffic.”– Dan Rather
“Hermits have no peer pressure.”– Steven Wright
“Marriage is a three ring circus: engagement ring, wedding ring, and suffering.”– Unknown
“Why does Sea World have a seafood restaurant?? I’m halfway through my fish burger and I realize, Oh man… I could be eating a slow learner.”– Lyndon Johnson
When mom and dad teach a child…
Federal prosecutors unsealed an indictment Monday accusing a man and woman of training the woman’s child to be a dominatrix, selling her sexual services and photographing some of the acts…
…began training the girl in 2000 when she was 12, and forced her to engage in sex acts with him and with other men. According to the indictment, he also had the girl watch pornography on the Internet as a teaching tool.
The man with no follow through
A Japanese man who stole cash from a store by brandishing a knife turned himself in only five minutes later, saying he wanted to be punished, police said Monday.
Ginji Aoi, a 23-year-old unemployed man, threatened a convenience store worker with an 18-centimetre (seven-inch) knife on Sunday in Osaka and snatched 79,000 yen (770 dollars) from him, police said.
But as soon as he was out the door, he headed straight to a nearby police station, an officer at the station said.
“He told police, ‘I want to be caught because I did something bad,’” the officer said…
Aoi is in custody as police consider whether to press charges, he said.
A man who allegedly photographed more than 3,000 women’s bottoms as they toured Venice has been arrested…
A police video shows a man in jeans and hooded top walking behind women.
He is trying to position his black holdall close to their legs.
Police said he was filming through a small hole in the side of the bag.
The officers had become suspicious when they realised he was only following women with short skirts. When they stopped or bent down to pick something up, he was clearly trying to angle the bag behind them.
Girls just want to have fun, from the NYT
According to about 30 Saudi girls and women between ages 15 and 25, all interviewed during December, January and February, it is becoming more and more socially acceptable for young engaged women to speak to their fiancés on the phone, though more conservative families still forbid all contact between engaged couples.
It is considered embarrassing to admit to much strong feeling for a fiancé before the wedding and, before their engagements, any kind of contact with a man is out of the question. Even so, young women here sometimes resort to clandestine activities to chat with or to meet men, or simply to catch a rare glimpse into the men’s world…
Though it is as near to hand as the offices they pass each morning on the way to college, or the majlis, a traditional home reception room, where their fathers and brothers entertain friends, the men’s world is so remote from them that some Saudi girls resort to disguise in order to venture into it.
At Prince Sultan University, where Atheer Jassem al-Othman, 18, is a first-year law student, a pair of second-year students recently spent a mid-morning break between classes showing off photographs of themselves dressed as boys.
In the pictures, the girls wore thobes, the ankle-length white garments traditionally worn by Saudi men, and had covered their hair with the male headdresses called shmaghs. One of the girls had used an eyeliner pencil to give herself a grayish, stubble-like mist along her jaw line. Displayed on the screens of the two girls’ cellphones, the photographs evoked little exclamations of congratulation as they were passed around.
“A lot of girls do it,” said an 18-year-old named Sara al-Tukhaifi who explained that a girl and her friends might cross-dress, sneaking thobes out of a brother’s closet, then challenge each other to enter the Saudi male sphere in various ways, by walking nonchalantly up to the men-only counter in a McDonalds, say, or even by driving…
“My sister and I sometimes ask my mom, ‘Why didn’t you breast-feed our boy cousins, too?’ ” Shaden continued.
She was referring to a practice called milk kinship that predates Islam and is still common in the Persian Gulf countries. A woman does not have to veil herself in front of a man she nursed as an infant, and neither do her biological children. The woman’s biological children and the children she has nursed are considered “milk siblings” and are prohibited from marrying.
“If my mom had breast-fed my cousins, we could sit with them, and it would all be much easier,” Shaden said. She turned back to the stack of DVDs she had been rifling through, and held up a copy of Pride and Prejudice, the version with Keira Knightley as Elizabeth Bennet, a film she says she has seen dozens of times.
“It’s a bit like our society, I think,” Shaden said of late Georgian England. “It’s dignified, and a bit strict. Doesn’t it remind you a little bit of Saudi Arabia? It’s my favorite DVD.”
Shaden sighed, deeply. “When Darcy comes to Elizabeth and says ‘I love you’ — that’s exactly the kind of love I want.”
h/t Viola
Another Hole In The Immigration Fence
May 13, 2008
From the Interactive Investor:
ORLANDO, Fla. (AP) - A federal sting of four companies accused of arranging fraudulent marriages for U.S. citizenships, complete with wedding photos of brides in gowns and elaborate fake cakes, has netted more than 80 arrests, authorities said Friday.
Immigrants, Americans and company officials were among the 83 arrested. The immigrants paid as much as $10,000, while the U.S. citizens were offered up to $2,500, U.S. Attorney Robert O’Neill said.
The couples were coached on how to pass immigration checks with fake answers, even though in some cases they didn’t speak the same language as their purported spouse, officials said. U.S. Citizenship and Immigration Services officials who review each citizenship-conferring marriage to ensure legitimacy tipped off federal agents in many cases.
At least one of the businesses kept a standing wedding showroom in its office, complete with a prop cake, an assortment of 10 to 15 wedding dresses and table settings never dirtied with dinner or drink.
“What we’ve seen in the past generally is that a person will meet someone, that person might be desperate for some money, willingly engage in a sham marriage and then they go their own ways,” O’Neill said. “Here, you can see this was much more sophisticated. They incorporated businesses, they obviously sought out people, people came in.”
Officials said some of the immigrants had criminal records, ranging from burglary to battery, drug offenses, domestic violence and even aggravated assault with a deadly weapon. They were primarily from Central and South America, though at least one was from Morocco.
The four companies that allegedly arranged the marriages were incorporated as immigration assistance services. They were All Kind Services, A-3 Services, American Solutions and Services — all based in the Orlando area — and Power of Attorney, based in Daytona Beach. Officials said more arrests were expected.
Two people behind Power of Attorney, Larry Humm and Natalia Humm, pleaded guilty this year to conspiracy and fraud charges. She is appealing a nearly four-year prison sentence for masterminding the scheme, while he received three months’ probation in exchange for cooperating with authorities.
No telephone listings could be found for three of the companies. A message left at American Solutions and Services on Friday was not returned.
Those arrested were from Orlando, Jacksonville, Tampa, Sarasota, Cocoa Beach and Fort Myers.
Robert Weber, the agent in charge of the Immigration and Customs Enforcement office in Tampa, characterized the fraudulent marriages as a threat to national security.
“(The Americans) did not know their motives, they did not know their intent, they didn’t know where they were coming from — in this case from 11 different nationalities,” Weber said. “They did it for financial gain; they were willing to put our national security and domestic public safety at risk.”
Weber warned that ICE was stepping up enforcement of marriage fraud. The agency investigated more than 5,200 such cases in 2006 and the first half of 2007, up from about 2,300 in 2004.
“The bottom line: If you commit marriage fraud, whether as a United States citizen or one illegally in the country, you will become an ICE investigative target and be held accountable for such criminal activity,” Weber said.
A total of 83 people were arrested, including the suspected business operators and couples. The operators were charged with establishing a commercial enterprise to evade immigration laws, punishable by up to five years in jail. The couples, including the Americans, face charges of knowingly entering into a fraudulent marriage to evade immigration laws, also carrying a maximum five-year penalty.
Sunlight In Canada
May 13, 2008
A few days ago, Toronto Star columnist Haroon Siddiqui wrote Harper’s Extreme Position No Way To Support Israel, in which he takes Canadian Prime Minister Stephen Harper to task for remarks he made in support of Israel.
What did Mr Harper say that Mr Siddiqui found so outrageous?
“Unfortunately, Israel at 60 remains a country under threat – threatened by those groups and regimes who deny to this day its right to exist,” he told a Toronto celebration marking the anniversary.
“And why? Look beyond the thinly veiled rationalizations: Because they hate Israel, just as they hate the Jewish people.”
Siddiqui takes great offense when Harper does no more than state the obvious. He goes on to say that
Many groups and regimes, such as Hamas, Hezbollah and Iran, do deny Israel’s right to exist. But not all others do so solely for the reasons cited by Harper. Some hold back recognition as a negotiating tool in the Palestinian dispute.
To which nations is Mr Siddiqui referring? Which nations that have refused to recognize Israel have not made anti semitism an integral part of their state run media, educational curriculum and publicly funded religious program? What possible reason could any nation that refuses to recognize Israel, a member nation in good standing of the United Nations, WTO and other organizations, have? Are any of these nations free and democratic societies?
Further, since when is diplomatic recognition of a legitimate state ‘ a negotiating tool’? Why shouldn’t the same apply to Hamas of Hizbollah? Why should any democratic state afford Hamas and Hizbollah any kind of recognition? Both organizations make no secret of their intentions, racism, bigotry and hate on a daily basis. Does Mr Siddiqui believe that hatred too, is a ‘negotiating tool’? Siddiqui might argue that because those organizations were elected, they have a certain legitimacy. Of course, that is absurd. Adolph Hitler, so revered in the Arab world, came to power by manipulating the electoral process. Had the civilized world dealt with Hitler appropriately instead of trying to appease the beast, 50 million lives would have been saved.
Siddiqui goes on to say that
One wonders what Harper would make of those Israelis, as well as Jewish Canadians and others, who do strongly support Israel but also question some Israeli policies.
What would he say about the Alliance of Concerned Jewish Canadians? This newly formed umbrella organization of 23 groups, critical of some Israeli policies, obviously does not “hate Israel,” or “hate the Jewish people.”
There is a big difference between the the Jews and others in the western world who criticize Israeli policies. They do not question her right to exist and her right to live in peace and security.
Criticism of Israel by Hamas, Hizbollah, Iran and most of the Arab world is very different and takes on a whole other dimension. Criticism of Israel by those Arab nations and organizations are always followed by calls to genocide and the slaughter of the Jews. In those nations, the institutionalized hate, racism and bigotry, broadcast in their media, taught in schools and preached from the pulpit, criticism of Israel has a very different meaning. Promises by regimes and organizations to ‘Finish what Hitler started” does not bestow moral equivalency to Jewish or other legitimate critics of Israel, no matter how much Mr Siddiqui wishes that to be a reality.
It is no wonder that for Siddiqui, Israel Apartheid Week is an acceptable expression. He writes;
There’s an ongoing debate in Canada over when freedom of speech crosses the line into hate. The argument gets played out in universities over Israel Apartheid Week. Despite pressure to cancel it, the universities of Toronto, York and Ryerson have opted for academic freedom…
Perhaps Mr Siddiqui might be a less opaque. There is no ‘ongoing debate in Canada over when freedom of speech crosses the line into hate.’ When the likes of Hamas, Hizbollah and the policies of the Arab world are given credibility, the question of hate is not in question. What is in question is just how much hate is acceptable- and the answer to that is quite clear: Canadians have a very high tolerance for hate if it is well camouflaged.
Mr Siddiqui fails to see the bigger picture.
…imagine a school that gave each student a glass of alcohol every day. Each day, beginning at tender nursery school age, the child was encouraged to drink the beverage that would come to poison his mind. Suppose that beverage was from the well aged bottle of anti Semitism.
Suppose also that once that child downed that alcoholic beverage, the teacher refilled that glass with more alcohol. This time, the flavor is religious bigotry directed at non Jews.
Suppose once that glass of alcohol was consumed by young dutiful children, the glass was immediately refilled with the beverage from the bottle of anti western and anti democratic values.
After decades, these children, now adults, go home every day, turn on the television and read the newspapers- and they are fed more alcohol. They get more when their kids come home from school, and share the same familiar poisoned ‘fire water.’ They poison they are fed gets the God’s seal of approval when fed to them from the pulpit- or so they desperately need to believe.
Of course, to keep a drunk or a junkie hooked, it takes an ever increasing amount of poison to induce the same stupor that blinds the drunk or the junkie to his own surroundings and dysfunction. The supply of poison never ends.
After years of such ‘education,’ it would be reasonable to expect that there would be a lot of alcoholics in the Arab world, poisoned by the hate and ideologies of dysfunctional and corrupt leaders. Like alcoholics and substance abusers, they will tell you they ‘have it under control‘ and that they ‘can quit anytime they want.‘
There is no equivalence, moral or otherwise, that can be made between the legitimate critics of Israel and the Arab world. That somehow Mr Siddiqui would even attempt to make that kind of equivalence is remarkable. To be sure, there are no perfect societies. That said, the collective institutionalized racism, bigotry and hate of one week in the Arab world media, school curriculum and religious outlet exceeds that of the Nazi Germany era- and the Arab world has been engaging in this kind of behavior for decades. It is no wonder that 60 years after the conflagration that was the Second World War, the ugly and Mein Kampf is the second most popular book in the Arab world, after the Quran.
Does Mr Siddiqui really believe that those spewing the most visceral and vile hate are moral equals to the rest of us? He writes
Harper’s position is designed to silence and delegitimize even the mildest criticism of Israeli policies.
It’s an undemocratic formulation that the Israelis themselves would reject. There’s a sturdy debate in Israel on all aspects of its policies in the Occupied Territories.
Mr Harper’s remarks are intended to have precisely the opposite effect. His remarks clearly distinguish between those who are legitimately critical of Israeli policies and those for whom criticism of Israel is merely a pretext and another channel to legitimize anti semitism. What Mr Harper has done is to open the window and let in a bit of sunshine. What he and others will not abide is pollution masquerading as fresh air.
Siddiqui remarks that “Canada is not Israel where Israeli Arabs are second-class citizens.”
Does Siddiqui really want to play that race card? Does he really want to compare Israeli policies and those of the Palestinians and her Arab neighbors, the ones who proudly proclaim that they will ‘Finish what Hitler started’? Does he want to compare the rights enjoyed by Arabs in Israel versus the rights of minorities in Arab countries? Poll after poll indicates that Israeli Arabs would prefer to remain under Israeli administration. Why would that be, Mr Siddiqui?
It is no wonder that for Siddiqui, Israel Apartheid Week is an acceptable expression. he writes;
There’s an ongoing debate in Canada over when freedom of speech crosses the line into hate. The argument gets played out in universities over Israel Apartheid Week. Despite pressure to cancel it, the universities of Toronto, York and Ryerson have opted for academic freedom…
Perhaps Mr Siddiqui might be a less opaque. There is no ‘ongoing debate in Canada over when freedom of speech crosses the line into hate.’ When the likes of Hamas, Hizbollah and the policies of the Arab world are given credibility, the question of hate is not in question. What is in question is just how much hate is acceptable and the answer to that is quite clear: Canadians have a very high tolerance for hate if it is well camouflaged.
Siddiqui’s rationale is not original. In the Totalitarian Mindset, Dr Sanity writes about
The alliance between historical remnants of those failed 20th century ideologies–responsible between them for more human misery and death than ever before known in history–and the Islamic fanatics (who represent the 21st century totalitarian mindset) is clearly visible in the precepts of postmodernism political correctness and multiculturalism, which dovetail perfectly into the rhetoric that rationalizes terrorism and the behavior that appeases and enables it…
…radical Islamic ideology is itself an unexpected combination of several toxic memes that came together over the last 30 years. One thread of this meme is Islam itself–a purportedly “peaceful” religion that is actually historically based on military conquest and coercion of belief through jihad– entwined with the remnants of the totalitarian ideologies of the last century.
This is why there is an alliance between the totalitarians of the left– who are the remaining outposts of communism and socialism that thrive in academic and “intellectual” circles in the West; and the Islamic fanatics of the world. Whether this alliance is a conscious or unconscious one (i.e., whether the specific component of the left actively and deliberately supports Islamic terrorism versus enabling and appeasing it) depends on the level of insight and personal depravity achieved by the true believer of today’s left…
This sympathetic and synergistic interaction of the seemingly very different totalitarian mindsets–terrorism in the name of religion combined with the secular neo-marxist fascism of the left–have created a very toxic brew, made even more lethal by the rhetorical and political strategies of postmodernism. The result is a pure and perfect poison…
Haroon Siddiqui cannot and will not reconcile the truth that radical Islamist agendas are at odds with the ideas and agendas of the civilized world. Rejection of Islamic extremism is not a rejection of all Muslims.
When we are subjected to the institutionalized visceral hate that is part and parcel of the Arab world regimes and organizations, do not ask western civilization to accept Arab ideologies as equivalent to their own. If the Arab world really wants to be accepted as equals, they must propagate an Islam that is not only tolerant of others, and intolerant of extremist racist and bigoted ideologies. Unless and until the Arab world embraces the idea that human rights are equally applicable to all, they will remain marginalized.
Finally, the ultimate expression of morality and the expression of faith are in the purview of each individual and not tied to a nation, group or political party. When nations, groups or political parties such as Hamas or Hizbollah dictate what is moral and what is an expression of faith, something is very, very wrong.
