2008-The Great Crash: The Trouble With Bubbles

My wise friend TB repeatedly reminds me of the basics and why they are so important.  Take this pearl as example “If your outgo is greater than your income then your downfall will be your upkeep”

We know, however, that hope, greed and fear tend to overwhelm rationality especially when the prospect of increasing our wealth is concerned and as the old sales pitch goes ‘this time is different’ becomes especially enticing when markets {housing and stock] are on their way up and our PM assures us interest rates will remain low.  By the way, famed investor Sir John Templeton referred to the aforementioned sales pitch as ‘the four most expensive words in the English language’.

And why are those words so expensive?  Well, it’s because of the spell these words tend to have on the masses in times of great optimism and growing prosperity.  But for every bubble these words help create there’s a pin. That’s what we’re learning right now.

In short, the collapse in confidence we are seeing, in my opinion, comes back to the excesses generated by easy money, namely debt, and the rampant  speculation that it helped generate on a very large scale [global level] for far too long [starting back in the 1980’s] .. In short, we’ve experienced a prolonged period of prosperity and monetary ease [credit expansion] and the financial innovation of more than a few dubious financial instruments that has led more than a few to truly believe that ‘this time is really different’.

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AL Qaeda Franchises Available

Remind me again why the COW invaded Iraq?

About 18 months ago I wrote:

There may just come a point (a tipping point) where we wake up one day and realise that we have been fighting the wrong war all along, and it has been a war that terror groups such as al qaeda have wanted us to fight.  By that stage, their forces and support bases around the globe may have grown considerably as well as their access to financial resources to fund their operations anywhere and anytime they please.
We fear they will gain access to oil in Iraq to fund their activities, but Afghanistan offers them a more potent source of funding through illegal poppies that can be harvested, turned into heroin and shipped all over the western world and sold on our streets (just another potent weapon that can be used against the Western world and all the while making a healthy profit)

And only now, after how long in Afghanistan? NATO have finally figured out where the Taliban and Al qaeda’s funding is coming from.

NATO has agreed to officially take part for the first time in the fight against Afghanistan’s opium trade to try to cut off drug funds from Taliban insurgents, an alliance diplomat recently confirmed.

You could say that the seriousness of this conflict has increased significantly and quite possibly way beyond NATO’s ability to even remain in the country, let alone achieve any real progress  .

And as for ASIO’s assessment on the ‘war on terror’:

AL-QAEDA remains firmly committed to mass terrorist attacks and has been able to adapt, rebuild and reinvent itself, according to ASIO’s latest assessment.

ASIO says violent jihadism remains the principal terrorist threat faced by Australia, with Islamic extremist networks around the world continuing to attract a new generation of followers, The Australian reports.

South Asia, particularly Pakistan, is now a top security concern for ASIO as the al-Qaeda leadership is now operating from the country’s Federally Administered Tribal Areas and Waziristan.

“Stability in South Asia is vital to the global security outlook,” a senior ASIO official told the annual Security in Government conference .

“The prospect of further deterioration in the situation has significant and far-reaching national security implications.

Around the globe, terrorist attacks this year have killed more than 1600 people and injured almost 3000.

“Given the fluid and decentralised nature of the global jihad, we remain as concerned by the dynamic formation and splintering going on within extremist networks and cells, as by the activities of al-Qaeda,” ASIO says.

“These networks, whose members may or may not have concrete links with al-Qaeda, or other like-minded groups, all broadly identify with the violent jihadist mission.”

ASIO says that, beyond its base in Pakistan, al-Qaeda continues to establish and maintain links with several so-called “franchises” across the Middle East, the Gulf region as well as parts of Africa.

“Al-Qaeda also continues doggedly to pursue its propaganda campaign – including increasing numbers of messages in the languages of target audiences,”