New Year Predictions 2012 - Review

Another year gone, another batch of predictions to review. Some particularly notable predictions are: Civil War and the the Resurgence of Nationalism, The original post is posted here unmodified with all of the comments and scores listed in red text.

July Review: 36/75 - 48% accuracy (Not bad for 1/2 way through the year)
Dec Review: 57/75 - 76% accuracy (I have until the 1st to amend this data. 1/30 - Updated GDP to reflect Q4 prediction accuracy.)


So, what went right? Surprisingly, quite a few points were outstanding -

• War Starts With Civil War and a Resurgence of Nationalism. (Start of the Asiatic war North/South Korea, Syria, Pakistan, Afghanistan, Iraq)

This little prediction was my lead prediction and it paid off massively. With such precision on the above mentioned, especially Egypt, and a delicious little surprise bulls-eye on Uganda it was a incredibly good call! The push for nationalism took off exactly as expected and the final case for globalism has started in earnest.

• The major economic focus shifts dramatically from Europe to Asia.

Perhaps the call I took the most grief on, most people at the start of 2012 saw Asia as the perma-bull market to save the rest of the world. Yet, huge cracks appeared in the facade of the Chinese beast and Japan has been repeatedly brutalized.

• The European Union implodes completely. Global TARP (EFSF) fails as firewall after firewall is breached. It may cease to exist nominally as the EU, but its Phoenix Transformation still awaits. 

With an implosion of market after market the EFSF, the much vaunted economic savior of the EU died repeatedly. In addition, we got a literal phoenix display at the London Olympics.

• a Constitutional Crisis emerges

What was wrong with the call is that the reason for the crisis was political, not economic. Most of the ultimate feedback to the crisis resulted in the November secessionist movement.

• Things break down. As resources continue to dive, local alliances are formed to compete for these resources. 

Cities in CA were especially hard hit as bankruptcies actually started happening.

• The U.S. College bubble begins to pop (The bubble exploded, but the schools are still riding the loan wave as kids are being herded into schools)

The contrarian curve ball of  2012, I liken it to my 2005 prediction of a housing collapse.

But what went wrong? There were two predominate problems with the predictions:

1) Culture - Numbers are easy to judge, either you hit it or you didn't. Something that's intangible such as 'value' is far more difficult to assign a yes or no to unless it's blatantly obvious. (Like the increasing recognition of the manosphere)  (-4 points)

2) The US election - I thought for sure that the right would find its base of power federally. It turns out they're centered in the States and the left is running the Feds. That changes my outlook somewhat as to what the goal is for the US at this point. (My script saw the reactionary left utilizing the unemployed youth to wage war on an 'indifferent' right Federal war machine.) Most of the economic misses were probably due to a (now repeated) lack of understanding as to just how far an administration will go to paper over the problems. (As Denninger points out, "I never would have believed The Fed could actually buy up nearly a trillion dollars worth of various instruments and hit the middle and lower classes to the degree they had and get away with it.  They have -- thus far.")



(Original post below)
****************************
New for 2012!
 
Yearly Theme: Are we responsible for our own actions?
This question becomes the fundamental litmus test for most every action and decision in the future.

War - 2012
The idea of a World War moves into the mainstream by becoming a probability instead of a possibility. People begin to realize that the only way presented to get out of this will be to fight. Let us pray that they realize who the correct people to fight are.(Syria, Iran, China, Russia, Muslim countries, this is now certainly the case. +1/1)


War Starts With Civil War and a Resurgence of Nationalism
Civil war leads the way as regional conflicts devolve into national wars. (The US is talking secession, Trayvon Martin in the US stokes racial tensions, the Chicago NATO summit stirs the pot and gets violent, Syria, Libya, Egypt, Iraq, Spain/Catalonia, lead the way. Greece is rumored to collapse into civil war. +1/1)
 
Nationalism takes center stage again as there is a temporary shift away from the "Union / Globalism" mentality in order to demonize and bury Nationalism once and for all. This can be observed in patriotic displays of loyalty to one's home country as the globalists demand fealty to their flag in an attempt to demonize it. (Well, well, well, it turns out that Bilderberg has been preaching the evils of Nationalism for almost 50 years. Pat Buchanan notes the 'rise of nationalism', Russia is "united", Israel is "united", "Ultra-nationalism" appears to be the term of choice +1/1)

The draft discussion becomes prevalent again. "Not enough boots to go around" combined with talks of "National Pride" and "Supporting one's country" (Afghan General Stanley McChrystal kicks off the discussion +1/1)

Outright War 
Start of the Asiatic war (Late Q3 - Q4) - With the US being over committed, it can't back up its positions in other countries, the East sees this and starts moving. Fires break out faster then they can be put out. (The US moves to 'defend' the Phillipines, puts pressure on the ASEAN bloc to contain China, Japan move to nationalize the Diaoyu Islands, Japan uses water canons on Chinese fishing boats)  +1/1) 

Theaters of war

• Asia East - The riots and revolutions that the citizens have been participating in need an outlet. The rulers will direct this to local conflicts. Police crackdowns will be brutal, efficient and deadly. (The riots from the Arab Fall emigrate to the East, Foxconn goes nuts and the police are called in, the Chinese are literally crushing people. +2/2)
• Singapore - Led by an outright collapse in the market there. (The market positions, not this year. + 0/1)
• China - Peace is easy to keep when you can throw money at it.(Housing market collapsing, the rest of the economy is now following suit. +1/1)
• North/South Korea - Outright skirmishes, possibly full war. The new ruler of North Korea becomes convinced that he needs to demonstrate his and the country's resolve and the time is ripe. (Drills have started, and escalate, Obama visits, a missile launch, missing submarines, the West is practicing invading, fishing vessels are shot at, North Korea talks of 'nuclear war', threatens war at the UN, they start eying up the US, outright threats. They launch their first successful orbiting rocket. +2/2)
• Western Asia - especially deteriorate
• Pakistan - Civil war OR expulsion of US troops starts in earnest. (Q2 - Q3) (Start of talk of sanctions, demands an end to CIA drone strikes, demands of early elections. the US strikes back, Panetta admits we're at war, +1/1 )
• Afghanistan - As the US moves into other regions, the MEK begins targeting remaining US troops. (It starts, several soldiers are shot dead, two British soldiers shot, another soldier killed, a pullout by 2015? Mass revolts. an upturn in 'insider attacks', Karzai orders Afghan forces to capture US base. + 1/1)
• Mideast
• Syria  - It appears that the road to Iran lies through Syria. The US will try to draw in Hezbollah through "regime change". (Q1) (Nothing but net here! Kofi's plan fails and is resurrected, the US is planning "strategic communication", Syria shells Turkey, Turkey shells back +1/1)
• Iran - Time will tell on this one. Iran is a tough nut to crack as opinion is running contrary to Western interests here. IF the US gets Syria, Iran is next. There has been a lot of posturing in 2011, but no one has been able to capitalize. Look for the moral justification route being presented via Iranian "guerrilla forces" "destabilizing Syria and attacking US or NATO "peacekeepers". (+0/0)
  
• Iraq - Destabilizes into sectarian violence with the north being especially unruly. (Bombings targeting Shi'ites kick things off, 100 dead in bombing. Turkish jets bombing PKK locations.  +1/1)
  
• Africa
• Uganda (The KONY 2012 video and it's follow-up stoke the fires, contractors set up spying missions, +1/1)
• North America
•  US
• Terror attacks - Like the 888 event, London's 2012 Olympics (Batman Attacks, Sikh Temple shootings, embassy attacks, CT  school shootings+1/1)
• Mexico - The War On Drugs steps up on the borders in Texas, Arizona, New Mexico and California (Decapitation on the border, gang warfare +1/1)
  
• This authorizes a FEMA reaction to stem the violence. We might get to see U.N. refugee action (This is already starting to an extent) (We've seen enormous purchases of hardware and bullets by alphabet agencies, +0/1)
• South America
• Venezuela (Chavez is still dealing with cancer, building drones with the Russians/Chinese, a US cargo ship is detained and then freed, a lot of action but no war.  +0/1)

Economics
The major economic focus shifts dramatically from Europe to Asia. The economic downturn moves to Asia, setting the stage for war with these countries later. Stagflation takes hold most everywhere (+1/1)

• Asia
• China/Taiwan/US - Chinese economy fails (Even now, the government is desperately trying to cover it up) (China defaults on commodity shipments, the 'slowdown' goes mainstream, Beijing has a TON of empty houses, China is desperately trying to stop the recession, but not doing a good job, indicators are turning south fast,  Chinese Industrial Profits Fall 6.2% in Fifth Straight Drop, +1/1)
• Russia, China (Too bad I didn't articulate a prediction here - Russia embraces China +0/0)
• Europe
• The European Union implodes completely. (Europe staggers - France elects a new leader, Greece shifts gears and has bank runs and is on it's way out, +1/1)
  
• Global TARP (EFSF) fails as firewall after firewall is breached (EFSF is in trouble, Spain is having funding issues, Italy, Cyprus are in trouble, rumors of money,  +1/1)
• Ratings Agencies continue to downgrade countries and municipalities, not based on any metrics or logical sense, but rather out of a need to recognize the already obvious collapse that is in motion. (S&P weakly recognizes the problem and does nothing, coincidentally the ratings downgrade for JPM comes after the snafu, Italy is downgraded, +1/1)
• It may cease to exist nominally as the EU, but its Phoenix Transformation still awaits. (A banking Union is floated, Bulgaria balks at joining, the Phoenix is unveiled at the Olympics, Jose Barroso calls for a Unite Europe obedient to the Eurocrats +1/1)
• North America
• Canada staggers (Protests over tuition rises lead to riots, riots,  +1/1)
• Their housing market collapses by 10 - 20%. (Already starting, continuing, Toronto is down 13% Vancouver 17% YoY +1/1)
•  The United States
• Asset prices file in giant fits (20 - 40%) as positions are sold to protect themselves (Silver starts out +20% for January, Gold 11%, 2/29/2012 Silver flash smash to the tune of 10% in 1/2 hour, Electricity is spiking massively,. +1/1)
• Commodities
• Oil - Oil has solidified above $100. $130 - $150 is the next target with a Iran led upside of $200 - $250. (And the rally starts at $110, oil exploded upwards in Q1 but pulled back harder in Q2, ultimately it ends in a huge miss. +0/1)
• Gold - Gold and silver have temporarily bottomed. Gold takes out $1700 easily and quickly closes in on $1800. After it breaches $1900, there is a sell off as the wild market fluctuations come into play. (Q1 +  Q2-) Target range is $2000 - $2300. (Gold takes $1700 in the first month, $1800 in the second and collapses back to $1650. Retakes 1800 after QE Infinity is announced and sets the target at $2400 an ounce. +2/4)
• Silver - Silver takes off like a lion again but also suffers just as badly. Initial stop is at $48 as it takes out the previous high. At this point speculators pile on and take it to $75. After this it gets destroyed back to the low $50 range. (Practice in Q1 gets it to $37, Sept has silver rocketing, silver then pulls back to remain flat for the year. + 0/3)
• Copper - Decouples from industry and becomes a poor man's silver investment. (10 - 20% gains) (Copper takes off like a rocket +16% and then collapses back to the bottom. +1/1)
  
• Cotton
•  US Dollar officially goes inflationary. Printing comes in one form or another (Operation Twist 1 and 2, QE 3 is on the radar, Bernanke's talking pumping, QE 3 is unleashed and the dollar takes a dive! +1/1)
• Posts first official negative GDP. (In response, the market tanks) (GDP posts negative, Official Q2 is revised down a stunning 24% to 1.3, no 'official' negative. Late, but official Q4 -.01%  +1/1)
• In response a Constitutional Crisis emerges (In truth it has existed for a long time) (Obama appoints positions and then 'chides' SCOTUS, North Dakota looks to jettison its property tax, Florida is suing the Feds over votes, Eric Holder invokes the magic words, Washington Times weighs in, Holder might be arrested, +1/1 - Seriously, there should be bonus points for this)
• More "desperate" Keynesian solutions are floated as a dramatic attempt to "shock" the economy back to life. If enacted, it will ultimately fail. (Ex-head of the FDIC 'humorously' floats giving every household $10 million!, Krugman just can't get enough,  QE3 is an open ended purchase of just about anything. +1/1)
  
• Citizens favor giving less people more power to "fix" it (Note - This is one of the goals these bloodsuckers want) ('Eminent Domain' is expanded off the Kelo decision to fix 'urban blight', no specific call from the people +0/1)
• Social programs are demanded in an attempt to 'restore America' but the economic argument now trumps 'societal values'. This leads to screeching about the inherit "injustice" present in the system as the freebies come to an end in austerity. (The Wisconsin recall election is the case model. San B is beginning to charge for services you're taxed for.   +2/2 )
  
• Things break down. As resources continue to dive, local alliances are formed to compete for these resources. (Cities are especially hard hit, including Detroit,  Stockton and Compton CA, Camden NJ is a wreck. Barter is becoming a new 'in' thing +2/2)
•  Corporations now rule (Corporate profits are up, JPM loses BILLIONS,)
• Repatriate the money - Corporations attempt to hide behind the Congress and demand a return of 'offshore funds'.(+2/2)
• At least one state (Illinois?) seriously contemplates bankruptcy (In the end it ends up being bailed out by the Fed) (Could it be California? Or perhaps Michigan? Obama floats 'helping', cities declare emergency, Scranton, San Bernardino, California, Illinois, New Jersey, New York, Texas and Virginia are headed for a fiscal cliff. Illinois Governor is talking about Federal guarantees, The Feds buy a prison from them, +2/2)
• Food stamp use soars (The Dept of Agriculture is trying to get everyone on it, College students are using it, a record 46+ million Americans or 15% of the population, another huge increase. +1/1)
• The U.S. College bubble begins to pop as longstanding institutions begin to slash their budgets to remain solvent. Some even discuss closing outright. (Start of the "education crisis".) This will be a long recovery as the perception that "education" = "money and success" will be difficult to break. (The problem is significantly worse then previously reported. 33% of their finances are 'wobbly'.  Univ of California and one in N.C. is cutting departments, Univ of Florida is playing games and cutting IT. ACC has lost 10,000 students, student debt deliquincies surge and reach all-time high. +2/2)
• Student loans start to slow (Rate) Teachers will lead the calls for more funding to be thrown at colleges in an attempt to "save education". (The rate is still increasing, the bubble has popped but the problem has not been recognized.  +0/2)
  
• Existing home sales (SAAR) plummet by at least 10% with 15-20% being the more likely range. (4.5 million units to a bottom of 3.3 million units) Certain areas that were big on expansion before the crash, begin to resemble (Chinese) ghost towns. Eventually, gangs move into these areas abandoned by the local populace. (New home sales plummet by 8.4% MoM, while existing home sales have actually increased  to 5 million units, the bulk of these sales are not to private parties rather to banks. Detroit has become a wasteland. + 2/3)
• Unemployment 
• Unemployment Weekly Claims rise again (450,000 to 525,000) range. (2Q)
• Unemployment Rate - Note: In 2011 I intentionally predicted a rise in the rate along with all of my other stunning positions for one reason. This is a non-lose scenario. If I predicted it would stay the same, it would obviously be correct. However, seeing my stunning clairvoyance on every other issue, why would I be so wrong on this one? Simple, because the government is fudging the numbers. By inaccurately predicting a rise, when one did not occur, it stands in sharp contrast to all the other prediction. One is left pondering - Just why is this number staying the same? (The bleeding is persistent, but hasn't quite ratcheted up to that level again, claims hit 451k the week after hurricane Sandy, I'm tempted to give myself a half-point, but seeing as how on average the claims fell slightly to 375k, it's a miss.  + 0/1)

Culture
The mantra "The future is our hope" begins to become center to the recovery.  What is lost on everyone is that in order for this concept to work, you have to sacrifice now. You can't borrow from tomorrow at an inflated rate (interest) and expect tomorrow to be better when the underlying fundamentals have NOT changed. (Mitt Romney is beginning to embrace this concept in a religious way. +1/1)

Men want to marry less (See the rise of the "Sugar Daddy" enterprises. Mark Driscoll weighs in. +1/1) due to the parasitical nature of women. This results in a "marriage/woman crisis" down the road. (Marriage at lowest level ever +1/1) Churches begin to brow beat men into "growing up" and "accepting responsibility". (Already happening) (+0/1) This leads to a further schism in the churches as many churches become void of patriarchal leadership and shift aggressively to matriarchal influence. (This does not mean that men will not lead, but rather the male leadership will be massively influenced to the "injustices" being carried out on women. They will then accordingly enforce the desires of the female population.) (This is far too difficult to call, it's possible to swing some points, but I'm going to err on the side of a miss. +0/3)

Feminism takes one in the eye as mothers decide it's not economically worth it to work, but would rather stay home and raise their children. (Commentators are beginning to call for a repeal of women's suffrage +1/1)


Metrosexual males start losing market value as they begin to be perceived as weak in the eyes of women everywhere as society stops valuing "fashion". (The fall of the metro and the rise of the Alpha. +1/1)


Crime nationally rises dramatically. + 20 - 30 % (Theft skyrockets, homicides increase and assault is up. Suicides increase.) (NY subways become even more dangerous with 31.8% increase in robberies, 'Organized shoplifting' rises, flash mobs becoming commonplace,   +1/1)


Police become a gang (Us vs. Them mentality intensifies) Small - medium riots emerge as the police overplay their authority. Dallas police kill a suspect, hundreds of citizens virtually riot. (Nationalize?) The cost of policing goes up substantially due to hazard pay, deaths and low enrollment. (Already starting to happen.) This leads to turf wars - (Black vs black, black vs Mexican, cop vs gang, cop vs Fed) (Cop vs gang, the Black Panthers seize on the Trayvon Martin killing, racial shootings increase, summary executions, police shootings rise dramatically, 40% increase in gang members in the US since 2009,  +4/4 )

Customers begin to get violent. (Ding, ding - McDonald's specifically is getting some issues and more, T-Mobile gets smashed, +1/1) The mantra has been get more for less these last 30 years, now individuals who have heard this their whole lives will run int```1`2111`qo the laws of supply and demand. (McDonald's raises their price of the $1 menu) (They're doing it incognito. Change habits to $2 items and then remove the $1 items sloooowly. And then the return to $1 items to boost 'flagging' sales. +1/1) 

Women Subjected to Body Cavity Search During Routine Traffic Stop

This is exactly the kind of nonsense I've been railing about -

Two Texas women are suing after state troopers subjected them to a humiliating and invasive 'roadside body cavity search' that was caught on video.

Female trooper Kellie Helleson is seen in the footage aggressively searching the private parts of Angel Dobbs, 38, and her niece, Ashley Dobbs, 24, in front of passing cars.

The women, who claim the trooper used the same rubber glove for both of them, were initially stopped by Helleson's colleague David Farrell on State Highway 161 near Irving after he saw one of them throw a cigarette butt out the window.

However, he requested the women be searches after allegedly claiming they were 'acting weird.'

The lawsuit states he then tried to 'morph this situation into a DWI investigation,' according to the Dallas Morning News.

Angel Dobbs passed a roadside sobriety test and the women were given warnings for littering.

Now I will admit upfront that I find littering, especially cigarettes especially irritating. Dispose of your own trash in your own bins and not the side of the road! Despite this, this sort of 'offense' barely warrants a ticket, much less a full freaking cavity search, in public to boot! Let's check the supreme law of the land -

"The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no warrants shall issue, but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized." ~ 4th Amendment

 Got that? No, let's walk through it...

"The right of the people to be secure in their persons, houses, papers, and effects.."

Note, this is an inherit right. Not something granted by any individual, government or corporation. Take away the Constitution and you still possess this right. Let's note further that this right extends to your property. So the people have a right to be secure, but from what?

"...against unreasonable searches and seizures, shall not be violated,..."

The law of the land protects you by strictly prohibiting government from searching you or your effects unless the following criteria are met (thus satisfying the definition of "reasonable")

"...but upon probable cause, supported by oath or affirmation..."

So only a sworn officer of the court can execute a warrant upon probable cause only! This has at least a two-fold effect (Not that we recognize this anymore) 1) It virtually eliminates harassment by your government. 2) It allows the transaction and transmission of commerce without the parasitical drain of the state.

But wait, how will this warrant be executed?

"...particularly describing the place to be searched, and the persons or things to be seized."

Got it? It's not enough to be suspicious, you have to know what you're searching for and who or what you are searching. Does the incident above rise to that? Certainly not! Let's start with the instigating factor -

"..he saw one of them throw a cigarette butt out the window."

Ok, we have our 'offense'. Hardly a civil crime much less a felony. (You can argue about the propriety of this at a different time.) So the officer pulls them over and immediately begins to escalate, looking for 'dirt'.

Trooper searched car for marijuana before requesting invasive cavity search

So here we have the 'ladder aproach' to crime. They already committed one 'offense', so we use that as a stepping stone to microscopically examine a person's life. In this case, it came in the form of the great War on Drugs. This search should have never happened because there was no probable cause. (The ladies probably consented to a search of the car.) Despite there being no probable cause and no incriminating evidence, the ladder is put to use again with the flimsiest of excuses..."they were 'acting weird.'"

Yes, yes. You just got pulled over for throwing a cigarette butt out your window (An act that happens millions of times every day on the roadways), your car has just been searched for drugs, of which, there were zero. I'd be a little 'weird' too. Undaunted, the officer doubles-down. 'I know there's drugs here... Let's search the cavities!'

And what did it net? Zero. Nada. Zilch. Not even a ticket, just a warning. (Most likely because there was no 'dirt' to be had.)

This is the badass attitude on 'crime'. A creeping, pervasive, authoritarian attitude which treats 'citizens' like kindergarteners incapable of crossing the street without offending the State. Every action. Monitored. Every transaction. Reviewed. Every relationship. Approved. Cross that street and you pay the fine buddy!

This is exactly why the Constitution was enacted, to stop this abuse.  

Spend Now, Cut....Maybe Later

The GOP proves once again just why they are not the answer to any sort of 'fiscal cliff', but are in fact, one of the contributors to -

Speaker John Boehner (R-Ohio) told House Republicans on Tuesday he will move to a “Plan B” on the fiscal cliff by having the House vote on legislation to extend tax rates on annual income under $1 million.

The bill would allow tax rates on annual income above $1 million to rise from 35 percent to 39.6 percent, but make permanent lower rates on income below that threshold, Boehner's office said.

There's the tax increases. Because, we have to and all that jazz... What about the cuts in spending?

Boehner’s proposal would increase both the capital gains and the top dividends tax rate to 20 percent from 15, which matches Obama’s latest offer.

Ok, so we have more taxes. Cuts?

“The Speaker laid out the plan in a very compelling way, and there’s just a lot of hard thinking going on,” conservative Rep. Trent Franks (R-Ariz.) said. “I’m going to let the Speaker have as much latitude as he needs to try to negotiate with this president.”

Oh, you think hard...nice. Cuts?

Senior Republicans rallied reluctantly around Boehner.

“We're all going to support the Speaker because we're not fiscal cliff divers,” said Rep. Pete Sessions (R-Texas), the incoming chairman of the House Rules Committee and former campaign chief for the party.

Kumbaya?! Come on, where's the cuts?!

Boehner said his talks with Obama could still yield a balanced plan that includes $1 trillion in spending cuts to match $1 trillion in revenue.

That's not cuts. That's maybe cuts. If we feel like it this time. Which, we don't.
Even more important, this is a pittance of the increase which has ravaged this country over the last 4 years, let alone the last 30. (Hint, hint...This is why Republicans are losing elections)

But what is The Real Effect of this? Denninger sheds some light -

First, note that the so-called "$2.4 trillion in deficit reduction over a decade" is about 20% of the deficit at today's run rates, if it happens.  And it won't, because it relies on (1) people not changing their behavior and (2) unrealistic economic growth predictions that won't occur because the nation's debt load as a whole remains too high and thus is and will continue to block economic output.

There are also reports that Boehner is willing to agree to a two year debt ceiling increase, an amount that would have to be more than $2.5 trillion.  This, standing alone, should be worth a credit downgrade -- and probably will be.

Worse, let's assume that the $15 trillion in existing debt winds up with a 2% interest rate, blended.  This is ridiculously low and presumes that economic growth is tepid at best; if it picks up more then the rate will go up.  In that case the interest alone will be $300 billion annually, or more than the alleged "savings."

 So we're playing 'kick the can' again? Lovely. Guess what the market is going to do to you? (Hint, hint - It starts with cr and ends with ash.)

The Decline: The Geography of a Recession

Leverage In the School Systems Hits Predatory Status

No, we're not entering some sort of third-world financial hell at all. It's just your silly 'conservative' values blinding you to the truth -

In 2010, officials at the West Contra Costa School District, just east of San Francisco, were in a bind. The district needed $2.5 million to help secure a federally subsidized $25 million loan to build a badly needed elementary school.

Charles Ramsey, president of the school board, says he needed that $2.5 million upfront, but the district didn't have it.

Why would you leave $25 million on the table? You would never leave $25 million on the table.
- Charles Ramsey, school board president, West Contra Costa School District

"We'd be foolish not to take advantage of getting $25 million" when the district had to spend just $2.5 million to get it, Ramsey says. "The only way we could do it was with a [capital appreciation bond]."

Those bonds, known as CABs, are unlike typical bonds, where a school district is required to make immediate and regular payments. Instead, CABs allow districts to defer payments well into the future — by which time lots of interest has accrued.

In the West Contra Costa Schools' case, that $2.5 million bond will cost the district a whopping $34 million to repay. - Bill Lockyer, California state treasurer

Get that? This is how gangsta, banksta, 'modern' accounting works. In order to get back $25 mil that the people paid the Feds in the first place, the district is taking out a $2.5 mil loan that will be payed back at a 17 x 1 ration. Later...of course. But this is not the first run in that TRE readers have had with out of control school districts, nor it is Califormia's -

Lockyer is poring through a database collected by the Los Angeles Times of school districts that have recently used capital appreciation bonds. In total, districts have borrowed about $3 billion to finance new school construction, maintenance and educational materials. But the actual payback on those loans will exceed $16 billion.

Some of the bonds can be refinanced, but most cannot, Lockyer says.

Perhaps the best example of the CAB issue is suburban San Diego's Poway Unified School District, which borrowed a little more than $100 million. But "debt service will be almost $1 billion," Lockyer says. "So, over nine times amount of the borrowing. There are worse ones, but that's pretty bad."

 This is the kind of insanity that I point out when liberals (and to a lesser extent, conservatives) attempt to extol the virtues of edumucation. It isn't that there is a problem with higher learning per se, merely that you don't make yourself financially insolvent in order to attain it. Given the atrocious, ahem, cost...of today's higher education, you better be able to service that loan fast in order to keep yourself afloat. Else you end up a slave to the banksta!

Town Militarizes Despite Lack of Crime

The arming of the statists continues in earnest -

Welcome to Johnston, Rhode Island, population 28,769 (as of 2010). The town hasn't seen a murder since 2004*, and has had all of four since 1999.
But thanks to the Pentagon, Johnston's cops are armed to the teeth.

The town of Johnston has received more than $4.1 million in military equipment over the past two years through a U.S. military surplus program that has supplied its Police Department with 30 M-16 rifles, 12 humvees, and military night-vision equipment, among others tools.

Supporters of the $2.5-billion surplus program see many valuable uses for municipal police departments. Johnston Police Detective Raymond Peters says the program is helping equip a SWAT team capable of becoming a "world-class hostage rescue team."

Terrific! Now all Johnston needs is for someone to take some actual hostages. But until that happens, they always use all this spiffy new equipment on people who grow pot. You know, the sort of people who according to neighbors, "never bother anybody or anything."
Via the Providence Journal, here's the full list of goodies the small police department has procured through the U.S. military:

2 Freightliner tractor-trailers and several other trucks; 30 M-16 rifles and conversion parts to transform them into M-4 weapons; 599 M-16 magazines containing about 18,000 rounds; a sniper targeting calculator; 44 bayonets for ceremonial purposes; 5 generators from M1 tanks; and 23 snow blowers. The Johnston SWAT team plans to train with its military equipment Saturday in a town park.

At least the snow blowers sound reasonable. I wonder if they come in camouflage.

(*According to data through 2010.)

Imagine that for a moment you could do this to your neighbors. You arrange to 'tax' them and then use the revenues to outfit the younger teens with military surplus weapons. After a period of time, you simply declare yourself 'in charge' by virtue of the fact that you've been so generous to equip the family with weapons and the other side of the family is hopelessly outgunned.

This is the sheer genius of compartmentalization. By removing the end goal from the equation, you can effectively argue for anything by justifying any of the argument's sub-components.

Syrians Used as Political Pawns | Interview with Webster Tarpley

Iran Downs Yet Another US Drone

Pretty soon, Iran is going to have a whole squadron of these things -

The Fars news agency quoted navy chief Gen. Ali Fadavi as saying that the Iranian forces caught the "intruding" drone, which had apparently taken off from a U.S. aircraft carrier. Fadavi said the unmanned Scan Eagle aircraft was now in Iran's possession.

"The U.S. drone, which was conducting a reconnaissance flight and gathering data over the Persian Gulf in the past few days, was captured by the Guard's navy air defense unit as soon as it entered Iranian airspace," Fadavi said. "Such drones usually take off from large warships."

Al-Alam, the state TV's Arabic-language channel, showed two Guard commanders examining what appeared to be an intact Scan Eagle drone. It was not immediately clear if that was the same drone Iran claimed to have captured.

Lest anyone be tempted to think that Iran is automatically lying, let's review the record.

• Nov 11, 2012 - Two Iranian jets fired on a US drone close to Iranian airspace.
• Jan 8, 2012 - RQ-4 Global Hawk UAV, took off from the USS Stennis aircraft carrier for for a Broad Aerial Maritime Surveillance Mission (BAMS) over the coasts of Iran.
• Dec 4, 2011 - Failed US UAV drone (RQ-170 Sentinel) overflight, which which is shot down over 140 miles into Iranian territory.   (Iran also claims to have shot down 2 more drones in January)
• 2009 - The CIA dispatched a stealth surveillance drone into the skies over Iran. The RQ-170 Sentinel penetrated more than 600 miles inside the country, captured images of Iran’s secret nuclear facility at Qom and then flew home.

Upon further review, it becomes pretty clear that the US is pretty interested in repeatedly violating Iranian airspace with their drones.  That much should be evident without the US pretending that somehow IT is adhering to some sort of international moral code while the dirty, dirty Iranians are simply terr'ists deserving a place in the global glass factory.