[Allan from Fallbrook]

Rustico: I agree, and I appreciate your reasoned response. I mention my Jesuitical education for a reason: Anyone remember the Spanish Inquisition? I absolutely agree that as Christians we have some fairly significant skeletons in our closets.

However, it is interesting to note the decided lack of “moderate” Moslems when it comes to confronting Al Qaeda on their home turf. While I agree about the poor citizens in both Iraq and Afghanistan being killed in a war that was not of their choosing, would I also not be remiss in remarking upon the fact that the majority of the casualties being inflicted upon those people are from fellow Moslems? You’d be hard pressed to argue that point when Sunnis and Shia are killing each other with reckless abandon all in the name of Allah.

Lastly, I am of German descent on both sides of my family. Given the Teutonic predisposition for aggressive behavior, I am probably the last one to throw stones. However, Germany is now a peaceful and productive member of the world, proving that you can rehabilitate instransigent nations over time. But it requires a strong commitment and a lot of time.

While I fear that the cause is lost in Iraq, I don’t disagree with the underlying rationale. I think nation building is worthwhile and I agree that justice is all important.

I am not a saber rattling nationalist, but I do think America has been a force for good far more often than she has not. I think we need to find our way back to those ideals that made us great and assert a sense of decent leadership again.

[Allan from Fallbrook]

Rustico: I agree, and I appreciate your reasoned response. I mention my Jesuitical education for a reason: Anyone remember the Spanish Inquisition? I absolutely agree that as Christians we have some fairly significant skeletons in our closets.

However, it is interesting to note the decided lack of “moderate” Moslems when it comes to confronting Al Qaeda on their home turf. While I agree about the poor citizens in both Iraq and Afghanistan being killed in a war that was not of their choosing, would I also not be remiss in remarking upon the fact that the majority of the casualties being inflicted upon those people are from fellow Moslems? You’d be hard pressed to argue that point when Sunnis and Shia are killing each other with reckless abandon all in the name of Allah.

Lastly, I am of German descent on both sides of my family. Given the Teutonic predisposition for aggressive behavior, I am probably the last one to throw stones. However, Germany is now a peaceful and productive member of the world, proving that you can rehabilitate instransigent nations over time. But it requires a strong commitment and a lot of time.

While I fear that the cause is lost in Iraq, I don’t disagree with the underlying rationale. I think nation building is worthwhile and I agree that justice is all important.

I am not a saber rattling nationalist, but I do think America has been a force for good far more often than she has not. I think we need to find our way back to those ideals that made us great and assert a sense of decent leadership again.

[Allan from Fallbrook]

Rustico/PerryChase: I am not ideologue. Far from it. I did not vote for Bush in either election (nor did I vote for either Gore or Kerry). I am Catholic by birth, baptism and education, but Jesuit Catholic. While conservative politically, I think the Republican party has lost its way, especially as regards its core principles. The Democrats, on the other side of the aisle have ideologically sold out to a morally bankrupt and morally infantile left wing element that had its heyday during the Vietnam War.

I do not condone the various depredations visited on the world by Western powers, nor do I conclude that we are completely responsible for the state of the world as well.

If I were to pick an ancient (Greek or Roman) model for the US, I would choose Athens right befoe and during the Pelopponesian War. A power that had grown decadent, arrogant and incorrect in its stance about its neighbors and its place in the world.

I also do not have a chauvinistic view of Islam. Rather, my views on Islam are solely a product of reading up on history. When you cite the example of the Crusades, do you believe that this was an example of exploitation, or that there was genuine justification in the defense of Christendom? I believe that the Christians had as much claim (during that time) as the Jews and Moslems to Jerusalem. The fact is that Europeans were fighting as late as 1683 to eject Islam from Vienna. It is not a matter of “interpretation” either. People cite the “peaceful” examples of the Qu’ran and say that we (Christians and Jews) have been co-existing peacefully. Sadly, this is untrue. True Islams demands complete subjugation to the will of Allah as either a convert or a controlled unbeliever (subject to taxes, punishments, etc) or death.

If Islam was not a religion spread by the sword, how did Islam wind up in Spain, the Balkans and Central/Eastern Europe? And, if it was a religion that peacefully coexisted with its Christian and Jewish, why did Europe resist so strongly (i.e. the Spanish Reconquista) against it for so many years?

I do respect your opinion as regards your own worldview. It is yours after all. However, history (true history composed only of facts and figures and not revisionism) is history. And, while certainly no fan of Israel, it is the only country in the region that is a democracy and supports the rule of law.

[Allan from Fallbrook]

Rustico/PerryChase: I am not ideologue. Far from it. I did not vote for Bush in either election (nor did I vote for either Gore or Kerry). I am Catholic by birth, baptism and education, but Jesuit Catholic. While conservative politically, I think the Republican party has lost its way, especially as regards its core principles. The Democrats, on the other side of the aisle have ideologically sold out to a morally bankrupt and morally infantile left wing element that had its heyday during the Vietnam War.

I do not condone the various depredations visited on the world by Western powers, nor do I conclude that we are completely responsible for the state of the world as well.

If I were to pick an ancient (Greek or Roman) model for the US, I would choose Athens right befoe and during the Pelopponesian War. A power that had grown decadent, arrogant and incorrect in its stance about its neighbors and its place in the world.

I also do not have a chauvinistic view of Islam. Rather, my views on Islam are solely a product of reading up on history. When you cite the example of the Crusades, do you believe that this was an example of exploitation, or that there was genuine justification in the defense of Christendom? I believe that the Christians had as much claim (during that time) as the Jews and Moslems to Jerusalem. The fact is that Europeans were fighting as late as 1683 to eject Islam from Vienna. It is not a matter of “interpretation” either. People cite the “peaceful” examples of the Qu’ran and say that we (Christians and Jews) have been co-existing peacefully. Sadly, this is untrue. True Islams demands complete subjugation to the will of Allah as either a convert or a controlled unbeliever (subject to taxes, punishments, etc) or death.

If Islam was not a religion spread by the sword, how did Islam wind up in Spain, the Balkans and Central/Eastern Europe? And, if it was a religion that peacefully coexisted with its Christian and Jewish, why did Europe resist so strongly (i.e. the Spanish Reconquista) against it for so many years?

I do respect your opinion as regards your own worldview. It is yours after all. However, history (true history composed only of facts and figures and not revisionism) is history. And, while certainly no fan of Israel, it is the only country in the region that is a democracy and supports the rule of law.

[Allan from Fallbrook]

Da Counselor: I agree with your assessment, but it largely focuses on this as a market related situation.

If you take a step back, there are other variables at work here that make this a problem with potentially far larger implications. Most of those variables are not within the market (so to speak), but rather impinge on the market (in terms of event triggers) or are peripheral to the market (in terms of compliance or oversight).

Think about this scenario (in terms of cascading effects): S&P downgrades a small section of the sub-prime and begins to scrutinize other portions of the MBS market, including CDO/CDS products backing the MBS market. Concurrent with this, Fannie/Freddie are constrained from further participation as regards purchasing additional risk in the MBS market. The Fed, forced to finally acknowledge the inflationary risk posed by increased core and non-core pricing, raises interest rates another 250bp.

These three events (two fairly small, one fairly significant) would cause a major contraction in credit. Now imagine you’re a distressed homebuyer trying to finance his/her way out of a bad sub-prime product into a better fixed rate product. This loan would be: More expensive (in terms of cost of funds), as well as far more difficult to get (in terms of the lender reselling the loan to Freddie or Fannie).

We have seen some inklings of this in terms of more stringent underwriting guidelines and the new limits placed on state income loans. These events, however, predate the notification about S&P and the potential retrenchment of Fannie/Freddie regarding purchasing MBS risk.

Is it too far out of the realm of imagination to think that this is just round one and there are additional rounds of even greater severity set to come? You mention a chain reaction. I think that is an excellent description of what is about to come.

[Allan from Fallbrook]

Da Counselor: I agree with your assessment, but it largely focuses on this as a market related situation.

If you take a step back, there are other variables at work here that make this a problem with potentially far larger implications. Most of those variables are not within the market (so to speak), but rather impinge on the market (in terms of event triggers) or are peripheral to the market (in terms of compliance or oversight).

Think about this scenario (in terms of cascading effects): S&P downgrades a small section of the sub-prime and begins to scrutinize other portions of the MBS market, including CDO/CDS products backing the MBS market. Concurrent with this, Fannie/Freddie are constrained from further participation as regards purchasing additional risk in the MBS market. The Fed, forced to finally acknowledge the inflationary risk posed by increased core and non-core pricing, raises interest rates another 250bp.

These three events (two fairly small, one fairly significant) would cause a major contraction in credit. Now imagine you’re a distressed homebuyer trying to finance his/her way out of a bad sub-prime product into a better fixed rate product. This loan would be: More expensive (in terms of cost of funds), as well as far more difficult to get (in terms of the lender reselling the loan to Freddie or Fannie).

We have seen some inklings of this in terms of more stringent underwriting guidelines and the new limits placed on state income loans. These events, however, predate the notification about S&P and the potential retrenchment of Fannie/Freddie regarding purchasing MBS risk.

Is it too far out of the realm of imagination to think that this is just round one and there are additional rounds of even greater severity set to come? You mention a chain reaction. I think that is an excellent description of what is about to come.

[Allan from Fallbrook]

I hate to say I told you so…

The big news here is what this will mean as far as spreading the pain. If a credit contraction ensues then the whole house of cards starts to come down.

This will strike CDO/CDS investors (including pension funds, which is a whole different can of worms to be opened) first and then trigger a whole slew of peripheral, but just as important, follow on actions.

There will be a massive amount of scrutiny paid to everything connected to this market and Fannie/Freddie will be right back in the hot seat. They both hold major positions in the market and, while not officially a government agency, they give the impression that the “full faith” of the goverment is behind them. If they have to unwind their position and are forced to substantially withdraw from purchasing any more MBS products of any stripe, then this will literally have the same effect as a credit contraction, in that the single largest player in the game will be sidelined.

The downside “ugly” potential of this is huge.

[Allan from Fallbrook]

I hate to say I told you so…

The big news here is what this will mean as far as spreading the pain. If a credit contraction ensues then the whole house of cards starts to come down.

This will strike CDO/CDS investors (including pension funds, which is a whole different can of worms to be opened) first and then trigger a whole slew of peripheral, but just as important, follow on actions.

There will be a massive amount of scrutiny paid to everything connected to this market and Fannie/Freddie will be right back in the hot seat. They both hold major positions in the market and, while not officially a government agency, they give the impression that the “full faith” of the goverment is behind them. If they have to unwind their position and are forced to substantially withdraw from purchasing any more MBS products of any stripe, then this will literally have the same effect as a credit contraction, in that the single largest player in the game will be sidelined.

The downside “ugly” potential of this is huge.

[Allan from Fallbrook]

Rustico: Where to begin? I guess by saying that the rulers of the Middle East have done a far better job of oppressing their people (and for a far longer time) than the Western powers ever have.

As far as America being an autocracy: That is opinion oft advanced, but with no basis in fact.

Islam has been always been a religion of war, and has been spread by the sword since it’s inception. It is a religion that demands either subjugation, or death. The idea that there is any moral equivalence between the prevailing religion/philosophy of the Middle East and Western democratic states beggars description.

As far as centuries of oppression and death, please give examples. As the various posters here are fond of saying: Please provide data.

As regards our (Western democracies) exploitation of their mineral resources: Explain then how Saudi Arabia, Kuwaiti, Qatar, UAE, etc, are all cash rich states. That region is awash in petrodollars, all paid by the self same Western democracies that are so egregiously exploiting them. An interesting paradox, no?

[Allan from Fallbrook]

Rustico: Where to begin? I guess by saying that the rulers of the Middle East have done a far better job of oppressing their people (and for a far longer time) than the Western powers ever have.

As far as America being an autocracy: That is opinion oft advanced, but with no basis in fact.

Islam has been always been a religion of war, and has been spread by the sword since it’s inception. It is a religion that demands either subjugation, or death. The idea that there is any moral equivalence between the prevailing religion/philosophy of the Middle East and Western democratic states beggars description.

As far as centuries of oppression and death, please give examples. As the various posters here are fond of saying: Please provide data.

As regards our (Western democracies) exploitation of their mineral resources: Explain then how Saudi Arabia, Kuwaiti, Qatar, UAE, etc, are all cash rich states. That region is awash in petrodollars, all paid by the self same Western democracies that are so egregiously exploiting them. An interesting paradox, no?

[Allan from Fallbrook]

PerryChase,

It had less to do with Christianity and Islam, and more to do with the clash of cultures inherent to the Greco-Persian conflicts.

From a Western Civ perspective, we owe much to the Hellenistic values (especially the democratic ideals of individual voice, the right of franchise and the freedom to live one’s life without undue interference or fear).

The Persians represented the worse sort of autocracy and, like militant Islam, believed in obligation through subjugation.

I don’t see the present day conflict as being between Judeo-Christian values versus Islamic values. Rather, it is between the right to have individual freedoms versus submitting to some medieval autocratic ideal.

[Allan from Fallbrook]

PerryChase,

It had less to do with Christianity and Islam, and more to do with the clash of cultures inherent to the Greco-Persian conflicts.

From a Western Civ perspective, we owe much to the Hellenistic values (especially the democratic ideals of individual voice, the right of franchise and the freedom to live one’s life without undue interference or fear).

The Persians represented the worse sort of autocracy and, like militant Islam, believed in obligation through subjugation.

I don’t see the present day conflict as being between Judeo-Christian values versus Islamic values. Rather, it is between the right to have individual freedoms versus submitting to some medieval autocratic ideal.

[Allan from Fallbrook]

Kudos, then.

Excellent choice of authors, by the way. You don’t see much in the way of Classics anymore, especially the Roman authors.

I was discussing the movie “300” with someone recently, and they were fervently convinced it was fiction. I mentioned Herodotus and Thucycidides, in the context of the Greeks fighting the Persians and the modern example of Western democracy fighting militant Islam and had the sense of how we’ve lost that part of our history. Which is truly unfortunate, both for the lessons it offers and the richness of the experience.

I had a teacher of mine, a Jesuit priest, tell me that all of life’s lessons could be found in “The Pelopponesian Wars” by Thucyidides. I make a point of reading it every year and, as I get older, the more I believe he was right.

I quoted Polybius (“Those who don’t learn from the lessons of History are doomed to repeat them”) on an earlier post, and it seems that simplest axioms are the hardest to remember and the easiest to forget.

[Allan from Fallbrook]

Kudos, then.

Excellent choice of authors, by the way. You don’t see much in the way of Classics anymore, especially the Roman authors.

I was discussing the movie “300” with someone recently, and they were fervently convinced it was fiction. I mentioned Herodotus and Thucycidides, in the context of the Greeks fighting the Persians and the modern example of Western democracy fighting militant Islam and had the sense of how we’ve lost that part of our history. Which is truly unfortunate, both for the lessons it offers and the richness of the experience.

I had a teacher of mine, a Jesuit priest, tell me that all of life’s lessons could be found in “The Pelopponesian Wars” by Thucyidides. I make a point of reading it every year and, as I get older, the more I believe he was right.

I quoted Polybius (“Those who don’t learn from the lessons of History are doomed to repeat them”) on an earlier post, and it seems that simplest axioms are the hardest to remember and the easiest to forget.

[Allan from Fallbrook]

Rankandfile: Interesting choice of Roman authors (Juvenal) from an interesting time in Rome’s history (lamenting the move from Republic to Autocracy).

Coincidence, or were you also drawing a parallel to modern America?

It certainly seems as though we have abdicated our rights as an informed, involved citizenry and have devolved into a narcissistic, ignorant and easily led rabble.

[Author]

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