Revising the Iraq break up plan

Prime minister Nouri al Maliki’s Shiite-dominated government was approved and is allied with Iran.   The Shiite arc from Iran, Iraq and Syria has one purpose, block Saudi incursion.

Can Iraq Survive?

If Baghdad now loses control of the Sunni heartland, U.S. and other Western governments may need to accept that “Iraq” is increasingly a geopolitical fiction. At a minimum, Washington ought to ponder that scenario and not be blindsided. As a hedging strategy, U.S. officials at least should evaluate how to strengthen diplomatic and economic ties with the KRG. It is probably not too early even to establish productive contacts with Sunni tribal leaders in Anbar and its environs, rather than ignoring them or dismissing them as Al Qaeda fronts.

The Iranian government is about as schizophrenic as they come, and they will likely screw things up, mostly for themselves. End result, Iranian intervention in Iraq, which will come to failure.

Chart of the day

From Zero Hedge

Yahoo finacial reporting is pro cyclical

On down days in the market they feature headlines about bear markets. On up days the storyline is about bull markets. Why do they even bother?

Ugly American

(Reuters) - Israel's hawkish defense minister drew rare U.S. condemnation on Tuesday over reports he had denounced U.S. Secretary of State John Kerry's quest for Israeli-Palestinian peace as messianic and obsessive.
Israeli Prime Minister Benjamin Netanyahu, already at odds with Washington over settlement building on land Palestinians, scrambled to try to avoid a damaging crisis with his country's closest ally over defense chief Moshe Yaalon's remarks.

DC makes idiots delusional, and John Kerry is one schizoid idiot. But he is mild compared to the New York dingbat.

Try a little cause and effect, Zero Hedge

Zero Hedge: Remember when everyone said rising rates would not cripple mortgage origination and the lending pipeline? Well, tell that to the largest US mortgage lender, Wells Fargo...

How about: Remember when everyone said growing housing demand would not cripple rates?

Interest rates are an outcome, even the Fed cannot avoid that conclusion.

More poverty charts

And yet again we see that post war productivity was driving poverty down and LBJ's war on poverty was ineffectual. Yglesias claims he has found a new measure of poverty that shows a different effect, I am looking for the link.

OK, here is the Yglesias graph, taken from the CBPP. This graph is inflation adjusted, includes federal transfers, and taxes.  Start from the current and work backwards.  Lets call the blue line the post transfer and the yellow line the pre transfer.  They both converge by 2009, and they were not diverging much from 1994 to 2006. The five point gap between the two narrowed significantly during the Clinton era.

Next is the chart showing aid to dependent families.

Notice the reduction in this program from 1980 until 2000, all down, yet the two lines maintained their separation, no effect.

When the programs were first introduced, the adherents can claim possibly a 4% drop from 1969 to 1979, but from then on these programs had little effect.

The summary:  The proponents of the war on poverty can claim some initial success, but as the middle class begin to pay for these programs, the yellow line started rising and then the blue line started rising and finally, the poverty has spread to the middle class because of increased economic costs of these programs.  But that's the problem, we just ding the middle class for payments, then soon we have no middle class. I still claim LBJ was a complete failure.

Deranged Sunni Mullah puts belt bombs on 9 year old

BBC

A young girl was detained at a checkpoint in southern Afghanistan wearing what officials said was a suicide vest. Spozhmai, who says she is nine years old, is now in the protective custody of the provincial government. This is her story in her own words.

It was late evening, the mullah was calling for prayers and my brother took me outside and told me to put on this vest. He showed me how to operate it, and I said: "I can't - what if it doesn't work?" And he said: 'It will, don't worry.'

The Sunni religion of Belt Bombing mad men. If they preach exploding children, then why do they have religious freedom in the USA?

California drought, worst in four decades

Dark areas show water shortage. We are very low snow pack, summer will be difficult.

Bad Day in the Market

Stocks off by 1.3%. Ten year yield down. We are probably in a bear market.

Grasping at straws

Obama Plans to 'Mobilize' Americans Around a 'National Mission'

(CNSNews.com) - President Obama says he will use his upcoming State of the Union Address to "mobilize the country around the national mission of making sure our economy offers everyone who works hard a fair shot at opportunity and success."

This is why the Keynesians have been rallying around the genocidal president, LBJ. Obama wants to repeat the catastrophe.