What Is Your God?

From The Belmont Club…

In other words, it would have been better if Benes had just left things alone. Just two weeks after the magnificent last stand of the Anthropoids at the Church of Saints Cyril and Methodius, a huge rally in support of the Third Reich was held in Wenceslas Square, as this video shows. The Nazis gloated that “terror has produced the desired results”. It did, even politically. Benes himself was taken to task after the war for launching the operation on Heydrich without considering the consequences on the Czechs. In the end, as Camus observed, it is always innocence and not guilt that is called on to justify itself. Guilt doesn’t give a damn.

The true test of your ideals is not what you achieve, but what you will give up to achieve them. One of the reasons that the Nazis conquered so easily was that no one in Europe was willing to give up very much in order to oppose them. As I argued in my essay “The Crisis of Authority,” World War II revealed how weak the ideals of much of Europe really were (and are). Only the communists where willing to fight and die in large numbers in the conquered nations (with the possible exception of Norway).

It is telling to read how many people consider such sacrifices a mistake even on a conservative blog like the Belmont Club. Here is one such comment….

Only in Communist-led resistance, where they gladly traded 1,000 innocent civilian lives to kill 12 enemy troopers, persisted. In the communist mindset, large casualties are acceptable because individual life is cheap compared to the importance of revolutionary macrotrends that are sought to be cultivated by partisan attacks and mass reprisals. Mao felt the same way as Stalin or Tito or their minions in France.

In one sense I agree with this. The communists most certainly did not value life. Nor do I wish to make the communists into heroes. But having as your highest goal the preservation of yourself and your family is no better. The natural result of this desire is to make any man who can credibly threaten to kill you or your family into a kind of God. If you insist on a certain chance of success before you will do anything you are saying that you will worship anyone who is sufficiently powerful.

What bothers me about today’s conservative movement is that there is so many people who are willing to boast about what evil things they would do to preserve their family’s life and so few people willing to boast that they would give up their lives and their family’s lives for their ideals even if that accomplished nothing.

The reason we have it so good in the west is that there were a number of people in our past who laid down their lives with no hope of getting any benefit for themselves or their families in return. When there is no one left who is willing to do that, the “west” will cease to exist in its current state no matter how powerful it is.

Land slide for Obama?

From Megan McArdle….

Even more shocking is that my grandmother, a rock-ribbed Republican who to my knowlege has never voted Democratic and will not let a bad word be spoken about George W. Bush in her hearing . . . that GOP-lovin’ granny almost voted for Obama. At the last minute, she decided that since she lives in Western New York, and there’s no chance of Obama losing the state, she could safely support her party. But that she even thought about voting for the Democrat augers dire things for the McCain campaign.

I would dismiss this anecdote accept that I have seen the same thing. For example, I know a firm supporter of the Republican Party whose opinion of African Americans would put him in the raciest working class white man category. He told me that for the first time in his life he has thought about voting for the democratic ticket.

Of course, I know firm McCain supporters. But it does not seem good that McCain is struggling to keep the support of people who voted for Bush two elections in a row and every other republican candidate previous to that.

A lot of lower income white males who are die hard republicans could support the war in Iraq as long as it was about killing people. But when it became about rebuilding the country it was harder for them to support it. There is too much stuff around them that needs to be rebuilt for them to be happy with hundreds of billions of dollars to be spent on a country that they feel will just turn against them in the end. Throw a trillion or so in bailouts for the banking industry when the manufacturing firms were allowed to go under, and you have the makings for some serious class resentment.

People in my area still miss those manufacturing jobs and they don’t understand why they left.

Credit Collapse Hurting World Trade?

From Naked Capitalism….

The cause is the break down of the world commodity trading system. For the past few weeks Andy and I have been reporting in our respective dailies on the difficulties being faced by importers and exporters of basic materials in getting access to bank finance to fund trades. For example, Andy wrote about South Korea’s request for immediate aid support from the US to fund food and fuel imports, I discussed how the lack of trade finance was reducing the volume of coal shipments into Rotterdam and was affecting the volume of US grain exports. When you come to think about it, if banks are reluctant to lend to each other because of perceived counter-party risk, why are they going to lend to a small trader from Asia, Africa or even Europe. We know of banks that have rejected letters of credit from other banks – and we are aware of banks that have simply refused to pay out on letters of credit because they claimed they did not have access to the funds. Without a working trade finance system the global market is going to break down……….eventually.

And that’s where we are at the moment. The reason that spot iron ore prices in India have collapsed – more than halving in three months, is because Chinese demand has vanished but it has vanished because of a combination of real demand destruction and apparent demand destruction caused by the inability to finance cargoes. Its the same for other bulk commodities, industrial metals, coal, oil and even food. The slump in global demand for basic materials is real but it is not as bad as the BDIY would make you believe.

No One Is Immune

From the Economist….

UNTIL recently Japanese banks had largely avoided the agonies of the credit crunch that had caused such difficulties in much of the rest of the world. Now the misery has well and truly come to Tokyo. The culprit is not toxic derivatives and swaps, but ordinary shares held by banks in Japanese companies. These cross-shareholdings, a peculiar feature of Japanese capitalism, are having pernicious effects. As share prices fall, banks are force to revalue their assets, which in turn reduces their capital ratios. The result is a need to raise capital quickly.

In the past four trading days, the Nikkei 225-share index has tumbled by 23%. On Monday October 27th the index plunged by 6.4% to 7,162.90, the lowest level in 26 years. Mitsubishi UFJ Financial Group (MUFG), Japan’s biggest bank, plans to raise as much as Â¥990 billion ($10.6 billion) by issuing new common shares of perhaps Â¥600 billion and preferred securities of Â¥390 billion. Mizuho Financial Group and Sumitomo Mitsui Financial Group are said to be planning their own capital increases.

The government is scrambling to help out. It is poised to announce a set of new measures, including spending perhaps Â¥10 trillion to buy shares in companies that the banks hold (in an off-market transaction, so their values do not fall further). This was a tactic used by the Banks’ Shareholdings Purchase Corporation to respond to a banking crisis in 2002. The government may also request that pension funds and life insurance firms buy equities to support the market, though whether they would respond remains to be seen.

The U.S. Department of Energy Does Bail Outs?

From the Wall Street Journal…..

The U.S. Department of Energy is working to release $5 billion in loans to General Motors Corp., according to a person familiar with the matter, a move that could help ease the way for the auto maker’s discussed merger with Chrysler LLC.

This is a surprise only because I have not been paying attention. Apparently the auto makers bail out was always supposed to be coming through the Department of Energy. The next thing I know, I will be finding out that the State Department will be handing out cash to international companies.

And doesn’t the part about helping a stupid merger go through make you sick? I mean, what is the point of using government money to tie two sinking ships together?

America Attacks Syria and other stories

I have wasted a bunch of time I could not really afford to waste reading Abu Mugawama’s blog tonight. So naturally I think everyone else ought to do the same.

First off, read this post on the American attack into Syrian. Be sure to follow all the links and read all the comments.

Then read Abu Mugawama/Andrew Exum’s post of the week. In fact, you should do this every week.

For those that don’t know, Andrew Exum outed himself and retired from the blog that he started because of time constraints. That lasted all of a couple of months before he was suckered into coming back. The deal was that he would only write one post a week. He has sort of stuck to this schedule. Which is to say; he writes one post a week and sometimes he writes more.

It was a good thing he came back because his blog was getting boring without him. The others are cool and all (particularly Londonstani) but Abu Mugawama has consistently demonstrated that he is the best of the best and the rest are just the rest. That is not to say I agree with all the time (or even most of time) but he is one of the few people out there who consistently makes me feel dumb by comparison. Plus, he manages to bring out the best of his excellent comment section.

I only wished he could cover more areas of the world. On the other hand, I am thankful that he seems to have limitations.

Another way of proving that it is a solvency problem

From Paul Kedrosky….

The following more or less supports what some have been saying for a while -– that major banks in the U.S. and the U.K. will end up being entirely nationalized before this crisis is over –- but it’s still a striking way of looking at the data. The gist: Government recapitalization and other fund-raising has largely been in service of banks’ prior subprime losses, while corporate and consumer loans are just starting to hit bank balance sheets. It won’t take much to tip banks over into insolvency again.

What follows is a chart that you all should take a look at. Alphaville has more.