Thursday, June 18, 2009
Monday, June 15, 2009
Sunday, June 14, 2009
A special report on the euro area
Holding together
The euro area, sorely tested by the financial crisis, has survived intact and is likely to expand further, says John O’Sullivan (interviewed here)
IN THE mid-1980s Rolling Stone magazine published an essay by P.J. O’Rourke, a conservative American humorist, with the splendid title “Among the Euro-Weenies”. In it the author poured scorn on Europe, an annoyingly fractured continent with its “dopey little countries”, “pokey borders”, “itty-bitty” languages and “Lilliputian” drinks measures. The mosaic of countries made the visitor feel claustrophobic: “You can’t swing a cat without sending it through customs,” he complained.
He will not have been aware, or cared much, that plans were already in train to give “Europe” the continental scale it so painfully lacked, as well as a currency that would rival the dollar. In 1986, the year of Mr O’Rourke’s visit, the European Economic Community (as the European Union was then known) expanded from 10 to 12 countries, with the addition of Portugal and Spain. Its members had spent most of the 1970s erecting non-tariff barriers to internal trade, and the early 1980s battling over who should pay for its joint budget (a fight which, to be fair to the others, Britain started). With that settled, there was a fresh desire to make progress towards a genuinely open free-trade block.
The first fruit of that effort was the Single European Act, an agreement to dismantle barriers to internal trade by the end of 1992. A rider to the act sketched out an ambition to complement the single market with a single currency. Few took that seriously, least of all British politicians, who had signed up to the act with enthusiasm because they were keen free-traders, but dismissed the grander kind of Community rhetoric as “euro-guff”.
An idea whose time had come
Yet by the time a 1991 European summit was held in the Dutch city of Maastricht, a plan for economic and monetary union (EMU) was written into a new EU treaty, to be ratified by member states later. That the proposal had gained ground so swiftly was a surprise to many. The British government had thought that a committee of EU central-bank governors, charged in 1988 with studying if monetary union was feasible, would quash the idea. Instead the group, chaired by Jacques Delors, then president of the European Commission, the EU’s executive branch, gave it qualified approval.
The Delors Report concluded that EMU could work if control of the single currency was kept from meddling politicians and left to independent technocrats at a European central bank, to be modelled on Germany’s Bundesbank. The report gave warning, however, that to prevent large trade imbalances, reforms would be needed to make prices and wages more flexible and workers and capital more mobile.
EMU’s route from rhetoric to economic blueprint was a familiar one, if unusually swift. The push behind trade integration in Europe has been primarily political rather than economic. The EU itself was born of the catastrophe of two world wars, collisions of competing nation-states. It was designed to avoid a repeat of such conflicts by forging “ever closer union” in Europe. Economic ties were viewed as much as a means to co-operation as an end in themselves. The Delors Commission between 1985 and 1994 marked the zenith of this sort of integrationist zeal.
After many a flap (see article), EMU eventually metamorphosed into a bird of much grander plumage. On January 1st 1999 the currencies of 11 countries were fixed against a new currency, the euro, which became the unit of reckoning in wholesale financial markets. In 2002 euro notes and coins came in and the old paper currencies were phased out. Since the single currency’s launch five more countries have joined the euro area. In a unique economic experiment, 16 countries with a combined population of 329m have handed over monetary sovereignty to an entity at arm’s length from national politics: the European Central Bank (ECB).
So far the experiment has worked fairly well. The ECB has fulfilled its remit to maintain the purchasing power of the euro. Since the currency’s creation the average inflation rate in the euro area has been just over 2%. Fears that the euro would be a “soft” currency have proved unfounded. It is unquestioningly accepted at home and widely used beyond the euro area’s borders. (Several countries, including Montenegro and Kosovo, use the euro as their currency without formally belonging to the euro zone.) The switch from old currency to new went remarkably smoothly, though consumers in many countries complained, perhaps predictably, that they were charged higher prices as merchants rounded up to new price-points in euros. But this caused barely a blip in the official inflation figures.
So far the euro has brought neither greater prosperity nor political union. Job-creation improved but productivity increases slowed, leaving the region’s trend growth rate much the same as before EMU. In its early years the euro fell against the dollar, but it has since more than made up for its early losses. It has quickly established itself as a global currency without becoming a true rival to the greenback’s status. For much of the euro zone’s first decade Germany, its largest economy, was in the doldrums, but after a long period of wage restraint its export industries started to lift the economy. Spain, Greece and Ireland proved more dynamic, each enjoying a consumer boom.
All seemed well until the present financial crisis struck. This reawakened worries about the imbalances that have built up inside the euro zone. Germany’s huge current-account surplus is matched by big deficits elsewhere, particularly in the Mediterranean countries that German policymakers had been so keen to exclude from joining. It remains an open question how these will be resolved.
The financial crisis is proving by far the biggest test to date for the euro zone. This special report will look at its effects on the euro area and consider whether such a disparate group of countries can continue to share the same monetary policy. It will ask whether the crisis will spur economic reform and whether it will attract more members to the club or, conversely, whether some of them might be thinking about leaving. Lastly, it will examine the idea that in the longer term a multinational currency area will require greater political union to function properly.
Monday, June 8, 2009
Employment Report Fuels GOP Attack on Obama Policies
Employment Report Fuels GOP Attack on Obama Policies
JONATHAN WEISMAN
WASHINGTON -- Republicans launched a political offensive against President Barack Obama's handling of the economy after weeks of reticence, emboldened by Friday's report of a surging unemployment rate.
Political strategists have been pushing GOP lawmakers to attack Mr. Obama's $787 billion stimulus plan and to challenge how the Democratic Congress has handled everything from taxes to unions to energy policy. At the same time, Republicans have worried such attacks would backfire in the event of a recovery.
Job Figures Suggest Recession Is Close To Ending
2:20While job losses mounted in May, the numbers weren't as high as expected and suggest the U.S. recession is close to an end, reports Brian Blackstone of DJ Newswires.
With Friday's report that the unemployment rate had jumped to 9.4%, the highest monthly reading since September 1983, Republicans put aside those qualms.
Rep. Dave Camp (R., Mich.), the senior Republican on the House Ways and Means Committee, declared the stimulus plan a failure. House Minority Leader John Boehner (R., Ohio) proclaimed, "Washington is hanging middle-class Americans out to dry."
"This is President Obama's economy now," said House Minority Whip Eric Cantor (R., Va.).
Republicans noted that a report by the Obama transition team in early January said that without a large stimulus plan, unemployment would go above 9%. It is now above that level, despite passage of the stimulus plan, though less than 5% of funds have been spent.
White House economists said Friday that the economic slide built up steam between the time that report was drafted and passage of the plan in February.
Some Republicans have been hammering the president's economic policies for months, saying the White House has been spending hundreds of billions of taxpayer dollars with nothing to show for it. But until this week, Republican congressional leaders were more muted.
Christina Romer, chairman of the White House Council of Economic Advisers, countered that she saw some positive developments in the numbers.
The Labor Department reported Friday that job losses slowed to 345,000 -- the first time in six months that monthly payroll losses have been less than a half-million. And for the second month in a row, the labor force actually grew. That helped drive the unemployment rate up, but it also suggested more people are feeling positive enough about the economy to look for work.
Also, the Bureau of Labor Statistics revised March and April payroll figures to show that the country lost 80,000 fewer jobs than previously thought.
Still, "seeing the unemployment rate hitting 9.4% is incredibly distressing," Ms. Romer said. "It is a high number and there's no way around that."
Vice President Joe Biden called the situation "tough," despite slowing job losses. "Less bad is not how we're going to measure success," he said.
Job-market improvement has always lagged behind economic recovery, often with serious political consequences. In May 1981, President Ronald Reagan faced a 7.5% unemployment rate, which rose to 10.4% in October 1982, before the GOP lost 26 House seats.
Rep. Chris Van Hollen, chairman of the Democratic Congressional Campaign Committee, noted that Franklin Roosevelt's Democrats gained seats in the midterm election of 1934, with an unemployment rate over 20%, because voters saw the party as trying to lift the country from a depression not of its making.
"I give the American people a lot of credit in determining who's working hard to get us out of this recession and who's not," the Maryland Democrat said.
Still, the unemployment numbers stirred anxiety on Capitol Hill. House Speaker Nancy Pelosi (D., Calif.) had to pull a $100 billion war-spending bill from the House floor Thursday after lawmakers revolted over billions of dollars for the International Monetary Fund. The funding is critical if Mr. Obama is to keep a pledge secured by the Group of 20 industrialized and developing nations at the London summit in April.
Objections to the IMF funding are bipartisan. Republican leaders are charging that the money will be used to prop up terrorist organizations like Hezbollah. More than 40 Democrats signed a letter saying the IMF funds should not be approved without assurances that they will be used to stimulate economies in poor countries.
Friday, June 5, 2009
A BLS Report Not Witnessed in 25 Years
A BLS Report Not Witnessed in 25 Years
06/05/09 St. Louis, Missouri Well… Today is another Jobs Jamboree Friday, and we’re about to witness something that hasn’t been seen in 25 years… A “published by the BLS” unemployment rate of 9%!
OK… You know me… I think the (Bureau of Labor Statistics) BLS should just drop the “L” as they have gone whacko with the adjustments and deletions to the statistics! So… For those of you keeping score at home, we will have a Jobs Jamboree this morning, and the “experts” believe the total jobs lost in May will be -520,000 – with the unemployment rate rising from 8.9% to 9.2%.
Me? I have to think that that -520,000 is too optimistic… But, with the BLS making adjustments, it’s just too difficult to make a call based on the data you’ve seen… Data like the ADP report that was worse than expected… Recall that last month the BLS added over 220,000 jobs to the report out of thin air, including construction jobs! Really? I shake my head in disgust! So, we’ll just have to wait-n-see, eh?
The currencies threw out their own roadblock on the dollar bulls yesterday, and wrapped a tourniquet around the wound suffered from the dollar’s rise from the canvas that I talked about yesterday.
The European Central Bank (ECB) and Bank of England (BOE) both kept their interest rates unchanged… The thing we were looking for from ECB President Trichet, (any words suggesting the euro has risen too fast) didn’t materialize, and like I said yesterday… If Trichet doesn’t mention the euro, the single unit will get to pass Go and collect $200!
The BOE announced that they would keep their Quantitative Easing (bond buying) right where it’s at, with no rise, which surprised a few analysts that follow the BOE. This non-move allowed the pound sterling to stop the bleeding, but only momentarily… The political picture in the U.K. is dragging pound sterling through the mud. A 5th minister resigned yesterday, and on his way out he urged Prime Minister Gordon Brown to do the same! There is political uncertainty underway in the U.K., and political uncertainty is a recipe for disaster regarding a currency, which in this case is the pound sterling! A huge drop form the lofty figure of 1.65 earlier this week in pound sterling, has occurred… Recall, I told you I just couldn’t get my arms around why the pound sterling was so strong…
I did an interview with the Pittsburgh Gazette the other day, (someone that wanted to talk about the dollar!) and excepts of the interview printed in yesterday’s edition of the Gazette… I tried and tried to get across the deficit thang, I even repeated the phrase… “recall the people that kept saying that deficits don’t matter? Well, obviously the do!”
Speaking of deficits… I believe that while there may be short periods of time when the dollar rebounds, especially when U.S. Treasury Sec. Geithner goes on his Magical Currency Tours, but overall, the deficits will hang over the dollar like the Sword of Damocles… And I also believe that we will return to the underlying Weak Dollar Trend for good in the 2nd half of this year… Because… By then… the U.S. Budget Deficit, which has already breached 5% of GDP (late last year), will be heading beyond 10% of GDP this year. So… Do you want to own a truck load of dollars when the markets are staring at a Budget Deficit of greater than 10% of GDP? I don’t think so!
Recall yesterday’s Pfennig, when I made a BIG deal out of what Angela Merkel, Germany’s chancellor, said? Well… Big Ben Bernanke didn’t like being taken to the woodshed like that, and said that he respectively disagreed with the chancellor… He went on to defend his actions… “The US and the global economies, including Germany, have faced an extraordinary combination of a financial crisis not seen since the Great Depression, plus a very serious downturn. In that context, I think that strong action on both the fiscal and monetary sides is justified.”
“I am comfortable with the policy action the Federal Reserve has taken,” Mr. Bernanke said Wednesday. “We are comfortable we can exit from those policies at the appropriate time without inflationary consequences.”
Really? You think so? I don’t think so! And remember I was the first to say that the Fed would begin to cut rate aggressively in August of 2007! I remember it because I was at home recuperating from my cancer surgeries, and watched the liquidity get drained out of the markets in the first round of the housing meltdown… I wrote about how they would cut rates immediately and a couple of more times before year-end… The Big Boss, Frank Trotter, called me at home and said, “are you sure?” I was!
You might also recall that Big Ben Bernanke was quick to say that the sub-prime meltdown would not filter out through the rest of the mortgage sector, or economy… It was an isolated thing… Remember? Then… The U.S. Treasury Sec. Paulson, said a month later that the housing meltdown had “bottomed”… So… You want to go to the bank on the fat chance that the Fed WILL know when to exit these policies? Not me! Their track record is awful!
OK… Enough on that! So… How about that Aussie dollar? Yesterday, I told you how the Australian economy avoided a technical recession by posting a positive growth figure in the last quarter, after posting a negative figure the previous quarter. Well… Barclays Capital issued a report this morning calling for a rise to 90-cents in the Aussie dollar in the next year. Barclays believes that within the year, the Reserve Bank of Australia will be back to raising interest rates, and this will be enough to push the A$ higher and higher… (think of Sly Stone with his arms in the air… I wanna take you high-er!)
However, before you rush out and buy on what Barclays Capital has to say… You might want to read the fine print from their report that says… “We continue to expect some pullback in these currencies (Aussie and kiwi) in the near term to provide opportunities to establish medium-term positions.”
So… In other words… They’re saying to buy on the dips! Shoot Rudy, wouldn’t it have been easier for them to just say that than all those words?
Canada also prints a jobs report today… But that will take a third row seat to the U.S. Jobs Jamboree… Nevertheless, Canadian dollar investors will want to watch for any signs of the job losses to bottom out.
Speaking of Canada… I see where the folks at Morgan Stanley like the Canadian dollar / loonie, and Norwegian krone because of each respective country’s strong balance sheet… Hmmm… Sounds like the researchers there have been reading the Pfennig again! HA! But seriously… It’s nice to see other companies that spend large sums of money for research, come up with the same stuff that little ole’ me comes up with! OH! And a looooonnnnngggg time before they do!
The FDIC is calling for a shake-up at Citigroup… What? Since when does the Gov’t or its Agencies make decisions like that? Isn’t it up to the shareholders and board of directors? OH! That’s right! The government has made a LARGE investment into Citigroup… And having done so, they believe they can call the shots! What did I tell you was going to happen with all those bailouts and TARP money? It’s happening… (Strike up the eerie music)…
Speaking of the government of this country… I’ve been writing and writing about the things I see going on that makes my skin crawl… Yesterday I really went out on a limb, but that’s OK, it is MY letter, and it is FREE, so, if I want to talk about how we’re taking our republic to the brink of bad stuff… It’s OK!
Today, instead of a “feel good” Corporate story, I have something that I want to share with you… Yesterday, the Big Boss, Frank Trotter, sent me a note. He had gone to a Crosby, Stills and Nash concert the night before, and had a V-8 moment… So… As I finish out this week’s Pfennigs and head to the Big Finish, I want to give you Frank’s notes to me… There’s a loud message here, folks…
You got to speak out against the madness…
I went to a CSN concert last night. The crowd was a little thin but not as thin as the hair in the auditorium. I’ll have to admit it transported me straight back into the spirit of the early 70’s. No matter what your side of an issue it was a time to speak your mind. One of the most disappointing things, and something that is indicative of the country’s reliance on “I’m from the government, and I’m here to help” is the total lack of belligerence with any side of issues today. At that time there was another war under way and after Nixon conceded that the combination of the Great Society and a foreign war was a little too much even for the greatest economic powerhouse on earth to support he took the US off the gold standard and let the dollar float. Well it’s 38 years later and a long, strange float downward it has been. Just hearing the words made me resolve to speak out against the current madness. Madness in congress for the past 10 years and at least two administrations. Madness at the Fed as Helicopter Ben spreads the good word of monetary easing. Madness of Nationalization and a trend toward Collectivism. Madness in the markets. Maybe it’s time to stop the motors of the world and head for your own personal gulch - but make it one where you can still make a difference and “Speak out, you got to speak out against the madness, you got to speak your mind, if you dare.” (David Crosby)
I’ve always told Frank that he had a gift to write… He’s got bigger fish to fry though! And… Can you see why Frank and Chuck have been good friends since 1981? I tell people when we speak that we’ve worked together so long… That when we began working together, the Dead Sea wasn’t even sick! HA!
Tuesday, June 2, 2009
Friday, May 29, 2009
Wednesday, May 6, 2009
ADP Report Boosts Stocks
ADP Report Boosts Stocks
Bank Stocks Rise Despite Capital Concerns
Stocks surrendered much of an early jump built on better-than-expected employment data as traders continued to prepare for the release of the bank stress-test results and pocketed some recent gains.
After gaining nearly 100 points in early trading, the Dow Jones Industrial Average was little-changed at around 10:30 a.m. Losses in technology stocks like Hewlett-Packard, down 2%, and consumer stocks like Wal-Mart Stores, down 1.4%, kept the benchmark in check. The S&P 500 index was also flat as many of its sectors moved into negative territory for the day.
![[Markets Data]](http://s.wsj.net/public/resources/images/MDGpromo_D01222009151210.jpg)
The Nasdaq Composite Index, which has outperformed other major benchmarks by rising nearly 10% so far this year, was down 1.2% as Amazon, eBay and other tech stocks declined. Amazon, whose shares were up 1.7% in early trades, scheduled a late-morning press event where it is expected to launch a large-screen version of its Kindle e-book reader.
Financial stocks were managing to hang on, however, despite worry that banks will have to raise much more capital.
Bank of America was up about 8% despite reports that regulators have told the company that it needs to take steps to shore up its books based on the results of the government's stress tests, which are due for public release late Thursday. Regulators began notifying the 19 financial companies subjected to the tests of the results Tuesday, with a public announcement due late Thursday.
Market veterans are still on guard against nasty surprises in the tests, though many say their concern has been tempered in recent days by a series of leaks that have given a general sense of what the results will look like following the official unveiling.
"At this point, I'm not worried that we'll see anything to take the market to new lows," said strategist Jim Paulsen, of Wells Capital Partners in Minneapolis. "But I do think you could get some short-term imbalances if certain details come out differently than people expect."
Other financial stocks traded higher on Wednesday. Citigroup rose 6%, SunTrust Banks rose 11%, and PNC Financial Services was up 5%.
A report from Automatic Data Processing and Macroeconomic Advisors said the U.S. private sector shed 491,000 jobs during April, better than the 650,000-job decline that economists had expected the report to show and a slowing in the pace of job losses seen during the first three months of the year.
Stock markets have rallied over the past two months on traders' hopes that the economy may be stabilizing after many months of deterioration. Economists, however, remained wary.
"We remain profoundly skeptical of the idea that the economy is now on a smooth path to recovery," said Ian Shepherdson, chief U.S. economist at High Frequency Economics in Valhalla, N.Y. "Those parts which took the biggest pounding after Lehman are rebounding to some degree but the overarching problem of massive household leverage remains."
Elsewhere, General Motors shares were down more than 10% after the ailing auto giant said in a regulatory filing that the government could end up owning at least half of GM and current common stockholders will be left with roughly a 1% stake if a restructuring plan being currently considered is approved.
Oil futures pushed north of $55 a barrel, helping lead to a 1.5% advance in the S&P 500's energy sector.
Overseas, Asia stocks closed mostly higher on upbeat results from banks. The Hang Seng climbed 2.5% in Hong Kong. European markets also traded higher.
Saturday, April 25, 2009
World Bank Report Card
World Bank Report Card
'Material weakness' on corruption.
The world's finance ministers are gathered in Washington this weekend for the spring meeting of the World Bank, which recently announced that it would spend up to $45 billion over three years for public-works projects alone. But as they shovel the money out the door, they might want to consider how carefully it will be spent -- or misspent.
Last week, the bank quietly released a review of the internal controls of its International Development Association, or IDA, which dispenses about $10 billion a year in long-term, interest-free loans to the world's poorest countries. While broadly congratulating the bank, the review discovered "significant deficiencies" in six areas, from "management oversight of project processes" to "operational risk management." The review also noted that the bank suffered "material weakness" in "the complex of controls to manage the risk of fraud and corruption" in IDA-financed projects. Material weakness is bank-speak for an "F."
The review was commissioned in 2006 during Paul Wolfowitz's tenure and is a first of its kind for the bank. It is the work of the Independent Evaluation Group (IEG), a misnamed unit since its staff are on secondment from the bank and have careers to consider in assessing the work of their colleagues. So consider the review to have been graded on a curve. And at 690 acronym-laced pages, it is almost purposely written to be read by as few people as possible.
Still, give the IEG credit for producing a remarkable rebuke of an institution that likes to boast of its "action plans" and "governance strategies" to reduce corruption. As the review gets around to noting on page 38 of Annex D, while the bank has initiated various initiatives to combat fraud and corruption, "the internal controls to make these effective are not yet in place."
Thus, the IEG reports that the bank's "treatment of F&C [fraud and corruption] considerations has often been sparse." That goes for the bank's design of country strategies and its project supervision. The bank's procurement guidelines, for instance, "were designed to ensure equity and economy, and there is no explicit F&C prevention in these guidelines."
The IEG also faults the bank for what it calls "tone at the top": "There is still fear among some staff that seeking out F&C issues in projects and reporting on observed improprieties may lead to reprisals from their managers, and managerial signals and behavior are not always consistent with these messages. Overall, mixed messages and ambivalence are still considered prevalent."
This ambivalence is reflected in the bank management's response to the IEG findings. While management acknowledged "significant deficiencies" in its handling of fraud and corruption, it rejected the finding of a material weakness. Instead it praised itself for the "assertive and concrete" actions it has taken since Robert Zoellick became president nearly two years ago.
This response reflects the bank management's belief that corruption, while regrettable, is a tolerable cost of the bank's good works. Meanwhile, the only real sanction that would matter -- cutting off corrupt projects -- almost never happens. To wit, the bank has just doled out another quarter-billion dollars to a Kenyan project the corruption of which we reported over a year ago. Bank staff will get the message.
Wednesday, April 15, 2009
Six Things You Should Know About the Homeland Security Report on ‘Rightwing Extremism’
JUDGE ANDREW NAPOLITANO: Six Things You Should Know About the Homeland Security Report on ‘Rightwing Extremism’
By Judge Andrew Napolitano
FOX News Senior Judicial Analyst
Homeland Security Warns of Rise in Right-Wing Extremism
The Department of Homeland Security (DHS) report entitled “Rightwing Extremism: Current Economic and Political Climate Fueling Resurgence in Radicalization and Recruitment”, dated April 7, 2009, which I have read, is apparently an unclassified summary of a larger classified report.
1. The summary contains few proper names, has no footnotes of any significance, lists very few sources, and is drafted with a prejudice against anyone who criticizes the role of the federal government in our lives today. It lumps together in its definition of “rightwing extremism” hate groups, anti-government groups, and single issue groups “such as opposition to abortion or immigration.”
My guess is that the sentiments revealed in the report I read are the tip of an iceberg that the DHS would prefer to keep submerged until it needs to reveal it. This iceberg is the heavy-hand of government; a government with large and awful eyes, in whose heart there is no love for freedom, and on whose face there is no smile.
2. The document itself cautions the reader that the document is “not to be released to the public, the media, or other personnel who do not have a valid need-to-know without prior approval” of the DHS. The document refers to itself as one of a series of intelligence assessments intended to “deter, prevent, preempt, or respond to terrorist attacks against the United States.”
3. The thrust of this report is that in the present environment of economic instability, returning military veterans, those who fear of the loss of Second Amendment-protected rights, those threatened by an African-American president, and those who fear “Jewish ‘financial elites’” could all be a fertile breeding ground for groups whose power and ideas the government hates and fears. The document is essentially a warning for DHS and FBI officials to be on the look-out for rootless persons looking for the comfort of groups as they may be a danger to American security.
4. The summary (unclassified) document is terrifying. One can only imagine what is contained in the classified version. This document runs directly counter to numerous U.S. Supreme decisions prohibiting the government from engaging in any activities that could serve to chill the exercise of expressive liberties. Liberties are chilled, in constitutional parlance, when people are afraid to express themselves for fear of government omnipresence, monitoring, or reprisals. The document also informs the reader that Big Brother is watching both public and private behavior.
5. The whole purpose of the First Amendment is to guarantee open, broad, robust debate on the policies and personnel of the government. The First Amendment presumes that individuals — NOT THE GOVERNMENT — are free to choose what they believe and espouse, what they read and say, and with whom they associate in public and in private. The writers of this abominable report are particularly concerned with the expression of opinions that might be used to fuel ideas that challenge federal authority or favor state and local government over the federal government. Unfortunately, legislation passed during the past eight years gives the DHS and the FBI the tools to monitor everything from a telephone conversation to the keystrokes used on a personal computer without a warrant issued by a federal judge.
6. My guess is that the sentiments revealed in the report I read are the tip of an iceberg that the DHS would prefer to keep submerged until it needs to reveal it. This iceberg is the heavy-hand of government; a government with large and awful eyes, in whose heart there is no love for freedom, and on whose face there is no smile.
