THE BARRICADE

National Association of Realtors–hucksters and charlatans who will say anything to get you to take a bum deal (From Charting The Economy and via- Patrick.net)

Many of you blog readers must have already seen this, but I was impressed by how well this post illustrated how much we don’t need realtors in the internet age, and how they only persist because of what amounts to a Congressionally protected guild system–I just had to put it up.  No wonder they have to spend so much lobbying.  Oh, and also, look at this chart that matches statements in their press releases to national housing data:

From the NAR website on April 23rd: “Record-high housing affordability conditions are helping markets recover, with home sales higher than a year ago in Minneapolis, Northern Virginia, Las Vegas, Phoenix and most areas of California and Florida.”  First of all, this isn’t even right, but even so, higher house sales numbers in one month means the housing market is really recovering? Or does it mean that banks are unloading abandoned cracker boxes in forgotten sprawl suburbs.  Well, I suppose thy are just going to keep saying that we’re in a recovery every few weeks from now until who knows when–even a broken clock is right twice a day.

Run, Don’t Walk From the USD (Schiff, CSM)

“They’re [China] not going to be the bankers for all this stuff. Four years from now we could end up owing them $3 trillion. So [from their perspective], better to take a loss on $1 trillion than to take $3 trillion. You can hear the rumblings.”

Terrible GDP Numbers Come Out, Stupid Herd Largely Ignores (NY Times Economix)

The gross domestic product report released today was unquestionably depressing: The economy shrank at an annualized rate of 6.1 percent in the first quarter of this year, after a 6.3 percent annualized decline in the last quarter of 2008. But as a few analysts (including the blogger at Calculated Risk) have pointed out today, there may be some bright spots, particularly if you look at which components of G.D.P. fared worst and best.

Counting the Bailout, 9.8 T and a Nice Pie Graph (Milken Institute)

Each passing week seems to bring new or revamped initiatives aimed at taming the U.S. economic situation and keeping track of where the money is going becomes more and more complex. To keep things straight, the Milken Institute has created an ongoing tracking system of programs and associated obligated or already-dispersed funding.

Swine Flew! A View from an American in the EU (Thirteenth Generation)

It’s hard to recall a time when there wasn’t some impending doom that was going to kill us all. The ubiquitous stories about the dangers of common household items are enough to send some people into nervous breakdowns. Pandemic disease has always been a common fear but in the past few years it seems that we have stepped up our anticipation to claim that any outbreak of the flu might be “the big one.”

Inflation or Deflation Discussion (Financial Sense)

If the USD is the greatest key to the inflation/deflation debate (again, defined in terms of the price level and not money supply levels), then perhaps the biggest concern we face in terms of inflation will not be dictated by the underutilization of our manufacturing or labor capacity but instead by macro economic differences between the U.S. and its foreign counterparts that can lead to swings in exchange rates.

Pakistan: Hope Is Not A Strategy

I’ve tracked the Pakistani military operations against the Taliban for years. The Pakistani military declares victory after each operation, yet curiously the Taliban move closer and closer to Peshawar and Islamabad and gain more and more ground (see here for a list of the Pakistani military “victories”).

Its Almost Mayday, Barricades in France, Apathy in Germany…

Heiner Ganssmann from Berlin’s Free University, for instance, thinks the rise in unemployment is more likely to be accompanied by “resignation and apathy” than militant action. He says the situation is different to France.

by Pigpen

“One of the saddest lessons of history is this: If we’ve been bamboozled long enough, we tend to reject any evidence of the bamboozle. We’re no longer interested in finding out the truth. The bamboozle has captured us. It is simply too painful to acknowledge — even to ourselves — that we’ve been so credulous.” — Carl Sagan

Dr. Sagan, thank you, your voice from the cosmos is heard. The big bamboozle that we need to painfully acknowledge, if only to ourselves, is that somehow we have been duped into believing that our leaders know what they are doing. Perhaps we could kindly call this “hero worship,” but it is more accurately described as the tyranny of the experts. Our culture is infatuated with heroes, and blinded by the fact that our leaders claim to be experts, but that in reality know nothing and are consistently wrong.

Bill King echoes Sagan’s brilliance in his discussion of the soon to be released stress test of the country’s largest 19 financial institutions. “A major problem with the ‘stress test’ is it depends on modeling and it’s the precise practice responsible for much of this economic and financial mess. It’s extraordinary that so many people believe that the Fed and Treasury, after missing the financial disaster, housing debacle, recession and derivative implosion, can now extrapolate economic conditions and resultant financial affects from its models. How did all that rocket-science modeling for subprime defaults and securitization workout? Yet many people already forget or ignore this reality.” They don’t know what their doing with these models, they don’t represent the real world, but they are going to go by them and pretend that they’re not WRONG.

So, who are these tyrants, and why do we listen to them at all? Why do they have so much power when they are consistently wrong? Its because we citizens, the body politic, fail to call them out when they are categorically, unqualifiedly, and are consistently wrong. The list of tyrannical experts is innumerable so we will direct our attention on Ben Bernanke, Timothy Geithner, and Hank Paulson.

Henry Paulson: the Grand Vizier of the Most Sacred Temple of Goldman

In 2000, Hank Paulson was the architect of changing the SEC rules regarding the leverage ratios and risk profiles of the investment banks. Investment banks, prior to the Paulson SEC change, were only allowed to be levered $12 for every $1 of capital that they owned. In that scenario, if a bank’s assets went down 8.3% then the bank would be technically insolvent. Hank had the brilliant foresight to petition the SEC to allow for more self-regulation on Wall Street and allow his banks and others to lever $40 for every $1 of capital. In this scenario, a 2.5% decrease in assets wipes out the banks equity and the bank becomes insolvent.

So when you hear Paulson tell you that the reason for the problem we are in is housing, please realize he is lying to you. He is not just mistaken. He is lying to you. He knows better. Any investment can drop 20, 30, 40% without causing catastrophe. It is the leveraging up of these declining assets at 40 to 1 ratios that caused the problem. Hank Paulson was the pointman in creating this leverage. HE WUZ WRONG.

So, not only has Hammerin’ Hank been dead wrong, but he also used this financial crisis as a tool to consolidate more power and influence into the house of Goldman Sachs. Notice which bank received the most money through the AIG back door bailouts. Notice which bank was NOT saddled with a government mandated merger/acquisition of another bank riddled with toxic assets. “Hi, I’m Hank Paulson, nice to meet you. Listen, I just want to let you know that I will protect any Goldman Sachs counterparty with an unlimited amount of US taxpayer money.” It has almost become too easy to pick on Goldman Sachs, as it is clear as the day is long that this has been an inside job, yet no credible reporter other than japer Jon Stewart, nor any elected official other than Maxine Waters has mentioned it. Maxine, we love you and we know you are dealing with complex issues and insidious connections, but we wish you were a bit more educated on the matter when you do discuss the Goldman swindle.

But Maxine’s ignorance is at the crux of the issue of our reliance on tyrannical “experts.” The financial world is too complex for most Americans to understand and it is that way by design. Adam Tabibi from Rolling Stone describes it fiercely:

“As complex as all the finances are, the politics aren’t hard to follow. By creating an urgent crisis that can only be solved by those fluent in a language too complex for ordinary people to understand, the Wall Street crowd has turned the vast majority of Americans into non-participants in their own political future. There is a reason it used to be a crime in the Confederate states to teach a slave to read: Literacy is power. In the age of the CDS and CDO, most of us are financial illiterates. By making an already too-complex economy even more complex, Wall Street has used the crisis to effect a historic, revolutionary change in our political system — transforming a democracy into a two-tiered state, one with plugged-in financial bureaucrats above and clueless customers below.”

The citizenry is the clueless customer. We just keep our heads down, watch a little TV, maybe play some golf or go fishing on the weekend, and dutifully pay our taxes. So, are we delusional or indifferent? The reason deception sells is that so many people line up for it.

Timothy “turbo tax override deductions” Geithner:

As the former head of the NY Federal Reserve and chief regulator for all the big money center NYC banks, Turbo has failed at his job as a regulator. This is too obvious. Rather than going into dark detail here, please refer to a previous Barricade post: The Fed is the Biggest Failed Regulator. But, instead of being fired or resigning due to abject failure and shame, Timothy was promoted to the top financial job in the land - Secretary of Treasury. Please, read that again slowly for effect.

“Helicopter” Ben Bernanke

“Helicopter” Ben Bernanke, as in “I will drop money from helicopters to stop deflation,” has been the architect of every silly program with alphabet letters that we have seen to date. Ben should be working on Madison Avenue designing cool acronyms for toilet paper companies, but instead he runs one the most powerful public institution in the U.S. Economy and also the most secretive: The Federal Reserve Bank of the United States. Also significant is the fact that Chairman of the Fed is a political appointment, rather than an elected post. Funny how that happens - all the power in the world resides with people who are unelected. (I am going to reread my constitution and try to figure out which section allows for all this concentration of power in the hands of a banking oligarchy.)

Here are just a few of the comments Ben Bernanke has made that if anyone else would have made such lousy predictions they would have been fired with no hope of employment in the financial industry.

1.The Fed assumed house prices were increasing due to income gains . WRONG

2.The Fed assumed the housing mess was limited to subprime and that losses to the system would be between $50 - $100 billion max. SO WRONG (- he will likely be off by about $4 trillion with a T - that is a very large number)

3. The Fed assumed that bankers were writing good loans based on sound economic demand not bubble demand. WRONG on so many levels

4. The Fed assumed that derivatives made the system safer. SO WRONG I don’t know where to begin

5. The Fed assumed that additional leverage in the system would beneficially increase economic activity. 40x WRONG

8. The Fed assumed that bankers would act responsibly WRONG WRONG WRONG (but I do hope for and look forward to show-trials of bankers)

So, how have Bernanke and Geithner done in terms of management of their new hedge fund - the FED balance sheet? The Federal Reserve took on more than $74 billion in subprime mortgages, depreciating commercial leases and other assets after Bear Stearns Cos. and American International Group Inc. collapsed. Translate: the FED paid $74 billion for SHIT.Instead of Bear or AIG taking the loss, we the taxpayer will likely take the loss. In its biggest disclosure of the securities accepted to stabilize capital markets, the Fed said yesterday it had unrealized losses of $9.6 billion on the assets as of Dec. 31, 2008. Do you think those positions have improved since that date? If you do please, please email or comment on this blog and tell me where I can get some of those mushrooms. “The numbers basically confirm that Treasury (U.S. Gov’t) is going to have to take some TARP money and reimburse the Fed,” said Chris Whalen, whose financial-services research company analyzes banks for investors. “It is essentially up to the Treasury to get the Fed out of this.”

The FED has lent $2 trillion to financial institutions and hasn’t disclosed information about most of the collateral backing those loans. When these loans blow up, who do you think is going to reimburse the FED for their losses. You see, that’s very large number, folks, and another sign that we are doomed is that the citizenry is no longer stupefied and befuddled at the mention of the word “trillion”. Regardless, the U.S. Taxpayer is the sucker and loser of only resort. To summarize, instead of banks going out of business and into bankruptcy, the FED is buying all of their garbage assets and when the FED fails it will go to the US. Govt - aka the US taxpayer, and you will have you pay them back. So, losers are us taxpayers and winners are investors in banks who are constantly made whole. Does that seem perverse? These events suggest that the big bankers are untouchable, as they are unelected and are simply shills for the true power structure, the elite financial oligarchs that control our country. They are unaccountable, and are never fired for being so WRONG.

I would like to close on a positive note. It was revealed this week by CEO of Bank America Ken Lewis that he was pressured by Paulson and Bernanke to keep quiet about the losses at Merrill Lynch and to continue with the merger knowing it was full of toxic crap. Ken Lewis’s fiduciary duty is to his shareholders and not to his regulators. According to Lynn Turner, former chief accountant at the SEC, if these allegations are proven true, both Bernanke and Paulson should be prosecuted by the SEC to the fullest extent of the law.Now that my friends would be some must see TV or as the readers of US Weekly can appreciate - our financial oligarch elites do the same things as regular people and they are just like us. So next time you see one of the tryrannical experts, please do me a favor and ridicule them as they WUZ WRONG. Snicker at them and make fun of them and let them know you are on to them and they are simply mouthpieces for the elite banking oligarchs and they are WRONG

From Pigpen: “It gets no clearer and succinct than this one minute piece last night on Charlie Rose.  Top hedge fund manager and Nobel Prize winning economist talking how the banks are scamming taxpayers. Please send around as it disgusts me.”

Banks don’t like the prices so they are using their political influence to make sure that they don’t have to accept them.  Alas, banana republic are we.

Watch the full thing in three parts on youtube:  Part 1, Part 2, Part 3

Dispatch From the Marcellus: Natural Gas Prices and the Shale Paradox

In the middle of this decade, E&P companies were spurred on by rising commodity prices and easy credit to find and develop new sources of domestic natural gas–most notably shale gas.  The forces that enabled this phenomenal growth in domestic gas production–the great asset and credit bubble–have vanished into air, into thin air.  Now, Shale-gas companies may have been impaled on their own bayonets. Yet some would have us believe that natural gas prices are poised for a great comeback–that all the fret and worry is for nothing because prices are going to come right back up and justify the development of all the shale in the country, and then some.  They are wrong: demand will continue to be weak and supply will not be nearly as sparse as the some of the gas-bulls would have us believe. Instead, the story of 2009, 2010, and beyond will be not only how much farther natural gas prices will fall, but also how long prices will stay in the basement, and who will be counted among the casualties.

The Fallacy of the Rig-Laydown, Production-Decline Pricing Idea:

U.S. producers, loudest among them being Chesapeake, are howling that lower prices will eventually lead to less production, which in turn will severely impact supplies and raise the price. But this is not a process which will lead to sustained greater prices, because even if this phenomenon caused a temporary or seasonal price increase, that would only encourage more production from known, vast shale supplies, and other prolific domestic sources like deep Bossier–which would result in another glut, and bring prices down again.  In this scenario, wouldn’t the price just settle at a point which is only marginally better than the cost of production? Its also important to recognize that it takes less rigs actively drilling now to produce more gas than even a few years ago.  With more built-for-purpose horizontal shale rigs active in places like the Marcellus shale, a few new, successful horizontal units can bring forth a level of production that may have taken 10 or 20 vertical wells to equal only a few years ago.   For example, to date, CXG has drilled 5 horizontal wells with costs declining from $5.3mm for the first well to $3.8mm for the fifth well.  The Company expects the next horizontal well to cost ~$3.6mm.  Average IP-rate for the first 5 horizontal wells was 4.3 MMcf/d.  If we assume the lower horizontal well cost of ~$3.8mm with a 3 Bcfe EUR on 40-acre spacing

Another factor which could cut short a price spike is that gas companies may have wells they have shut in and are not producing. They will turn these wells on as prices rise, allowing a rapid flood of natural gas to enter the market much faster than an increase in drilling could respond. It is also likely that if storage reaches capacity there will be no choice but to shut in some production. In any event, a slight rise in prices into the zone of marginal profitability would likely engender a race to bring on more production in order to realize cash-flow, which could flood the marketplace once again, causing the price settle at or near the break-even point.  In this shale-supply driven scenario, prices will go to the marginal cost of production, so any industry gains in efficiency and cost-saving of production will only serve to drive the price down.

In the shale-supply driven scenario, big regional shale leaders like Range Resources could continue to make money producing high volumes at prices at or near the marginal cost of production, especially since Marcellus gas is usually sold at a nymex premium in the Northeast market due to savings on transportation.  But this scenario does not factor in the burgeoning supply of natural gas headed to the U.S. on foreign-flagged tankers that can deliver as much gas in a month’s transport time as a good shale well can deliver over its entire productive life.

LNG and the Coming Wave of Cheap Foreign Gas:

Another product of the price bubble in recent years that has gone unnoticed by many Americans has been the massive new development in overseas gas fields.  Unlike previous years, this development will affect the price of domestic gas because the increase in U.S. import/gasification facilities in the coming months and years means NG is becoming a global commodity.  The last few years have seen a significant growth in the availability of liquefied natural gas (LNG) as both liquefaction facilities and available tanker numbers increase. The world’s LNG supply capacity is expected to grow 25% this year, and global demand will not match this increase. Therefore, LNG will be available to come into the American market.  The United States tends to be the LNG market of last resort, as producers send LNG to the higher paying Asian and European markets first. However, global LNG demand and prices have fallen, leaving more LNG for the United States, whose extensive storage and pipeline network means it can absorb LNG even at times of low demand.  “It’s completely counterintuitive,” said Murray Douglas, a global LNG analyst with Wood Mackenzie in Houston, who is predicting U.S. LNG imports will grow 30 percent to 456 billion cubic feet this year and to more than 1.1 trillion cubic feet by 2013.  “We don’t believe Asia and Europe will be in a position to absorb this new production, and the U.S. is the only market that can take it, that has a large amount of storage.”

LNG can be competitive priced as low as $3 per million British thermal units (and perhaps lower), said Zach Allen, head of Pan EurAsian Enterprises, a management advisory firm that follows LNG markets. That’s a price the U.S. hasn’t seen since 2002.  “Some cash is better than none, especially for producers who rely heavily on that cash for social and other programs that would be politically explosive to cut off or cut back,” Allen said. The biggest contributors to the world LNG market is Qatar, followed closely by Indonesia.  The productive capacity of the gas wells in these countries dwarf domestic production, and new liquefication-export facilities that have activated in recent years, and more that will be coming-on-line in the coming months, will only add to the world’s ability to produce LNG. What’s more, most of these big, foreign wells have zero or near-zero cost of gas production, because they produce liquids in volumes sufficient to pay for the cost of finding and developing the wells.  So they are essentially producing gas for free.

Even more encouraging for foreign LNG producers is the discovery of new super-giant, and world-class giant gas production zones.  Overshadowing them all, is InterOil’s recent new discovery in New Guinea, the Antelope 1 well, which likely contains Ten Trillion Cubic Feet.  One well, ten TCF.  Just put a liquification plant near-by and that well could supply the gas needs of several countries for many years.

Even without any of the additional supply from these new fields, the new production coming on line in Qatar is more than the current market can absorb, and the Qatar CEO notes , “For the shorter term, I don’t think the UK will be able to take 16 million tons,” al-Suwaidi said. “Anything the UK cannot absorb, we will have to find a market for.”  The consumption of petroleum products in Japan, the world’s biggest buyer of LNG, is projected to fall 4.7 per cent in the year starting this month, according to the Institute of Energy Economics Japan. The global recession has reduced electricity use in Japan. Barclays Capital said the global LNG market will add 5.6 BCF/d of production capacity to the 23 BCF/d currently online. (Barclay’s Latest view on the LNG-supply to world demand quandry)

Current U.S. LNG gasification-import capacity is about 60 million tons per year, and several new LNG receiving terminals are coming into operation in 2009, including Sabine Pass in Louisiana. (One metric ton is equivalent to about 48,700 cubic feet of NG).  One LNG tanker can transport 6 billion cubic feet of gas–which is equivalent to estimated recovery over the lifetime of a decent shale well. While the EIA estimates LNG imports to average about 369 BCF, estimates vary widely.  “We are going to be awash in natural gas and could have $2 gas”, says Steve Johnson, president of Houston-based Waterborne Energy Inc., which tracks LNG shipments. He also predicts that the US will see 1.1 TCF of gas delivered to the US in 2009 as repairs to some LNG export facilities overseas are completed, new projects come online and seasonal shifts in global demand increase the amount of LNG in the market.

LNG: there’s plenty of it, just like there’s plenty of Shale.  The difference is that no matter how cheap it gets to produce Shale gas, LNG will always be cheaper–it costs nothing to produce so the only cost is transport. And that transport cost is only between $1.29 to $2.09 from the Middle East to various U.S. import facilities.  Its doubtful that Shale producers could be profitable at those levels.  With so much cheap LNG in the world, gas prices in the coming years may not be based on futures at all, Henry Hub could be a thing of the past, and U.S. traders might just be buying and selling gas based on spot LNG prices.

Demand  Side:

“Demand destruction will still outpace supply destruction through this summer and into next winter, “Stephen Schork, president of the Schork Group Inc., an energy markets consulting company in Villanova, Pennsylvania, said in a note on April 24th. Businesses are closing, and unemployment continues to rise, which means big trouble for natural gas prices.

NG is a major power source for electrical utilities, and it has been building up in storage at levels well above seasonal averages as manufacturers cut back on production. The EIA reported Thursday that natural gas in U.S. storage is now 36 percent greater than it was at this time last year. On Friday, American Electric Power said that electricity use by industrial customers in its region fell 15 percent.  That falling demand can also be seen clearly in recent unemployment figures, with energy intense industries like manufacturing hit particularly hard. Earlier this year, Dow Chemical, which had previously been one of the largest single consumers of NG in the country, closed 20 plants and cut 5000 jobs since December.  The three major U.S. automakers have slowed down production this year to match a plunge in demand. General Motors said Thursday it would shutter 13 assembly plants for up to 11 weeks this summer. Ford Motor Co. also has cut back on manufacturing this year.

In addressing the demand for natural gas this year and in the coming years, we must acknowledge that demand for natural gas is a reflection of aggregate demand in the greater American economy, and therefore the global economy.  Because manufacturing and fertilizers make up such a large portion of the demand picture for NG, it is unlikely that such demand will increase to levels seen in recent years as long as the overall economy remains on its current deflation-depression path.

So, deflationary forces retrench across the world economy, even in the face of unprecedented low interest rates and quantitative easing by central banks, and demand for NG stays weak.  Where has growth come from, anyway, in the last ten years?–other than by an expansion of the money-supply and credit? The fate of NG prices is just a manifestation of the credit-bubble blow-back.  A look at almost all other asset classes shows them returning to 1997-1998 levels, adjusted for inflation. The S&P 500, at present writing, is at about 1998 levels, and real estate, though widely varied across the country, is at about 2002 levels and continues to fall as new-buyers shy away and inventories of unsold houses stagnate. If the most of the economic growth in the last ten years as been a product of the great asset and credit bubble, and all asset classes are deflating down to values last seen ten years ago, then why shouldn’t NG prices go back to 1997-1998 levels?

As we mentioned above, the cost of getting the LNG from its foreign origin to other markets is low. The 43-day round trip from the huge export terminal in Qatar to the Lake Charles LNG terminal costs $2.09 per million British thermal units. From Egypt to Lake Charles takes 30 days and $1.29 per million Btu. $1.29 to $2.09? Funny, that’s precisely where gas prices were in 1997, 1998.  The grip of deflation is firmly in place.  Go down, Moses, and take NG prices with you.  So, prices will revert to the mean and crash through it, right back to the late ’90s levels–which is where prices should be (after all) at a more honest time (perhaps), before the bubble took hold.

If we are going back to 1998 levels, then it looks like we can take several TCF off the table, which suggests that only the largest, most prolific, and most efficient domestic gas plays will be workable.

Without the dawning of a new source of domestic demand for NG, domestic marginal producers can fuggedaboutit.  LNG will punish them.  Still, the prospect of low nat gas prices persisting well into future makes NG attractive as a fuel for electricity generation and transportation.  I don’t know, but anyone in the power world out there please chime in, if you are operating a power plant at dual capability, at what point do you switch to NG from Coal? $2.50? Please chime in and comment here, Coal people. That may give a glimmer of hope to those in the NG business.  But no hope can be found in the Obama administration, which scorns all associated with the O&G business, so its not likely that NG will get much support from government “stimulus” efforts of from Dept of Energy policy.  Even if we were to actually see a proliferation of new usage of gas as the product of government mandates or incentives, any marked increase in the actual amount of gas consumed from those hypothetical projects would still be years off.  And its doubtful that many domestic producers can weather such a long stretch of very low prices.

Stiglitz, Simon Johnson Argue In Congressional Hearing for Breaking Up Big Banks

A Contrarian View of the Green Revolution (NY Times)

Harvard Students Handling Rejection

Global Economic Slow Burn

Volcker Fires A Shot at the Fed

Jim Rogers’ View: An American in Singapore

President Obama and Venezuelan President-for-Life, Hugo Chavez, started their own, instantly famous book club this weekend at the Summit of the Americas. While most book clubs prefer to have their initial kick off with American classics like Tom Sawyer or The Great Gatsby that allow for fun discussions over red wine and nostalgic memories of high school, Hugo and Barack like to get down to the brass tacks.  Their first book was Open Veins of Latin America: Five Centuries of the Pillage of a Continent. The book questions the role of the U.S. and Western Powers and their agents, such as the IMF and the World Bank, in the exploitation of natural resources in Latin America, as well as the political and economic methods that fostered their policies.  It’s a history told from the point of view of the vanquished rather than the victors.

President Chavez, Senor Presidente, you certainly are a renegade. Not only do you refuse to kowtow to the Western system of crony capitalism, but also you turn your nose at the fashion protocol appropriate to certain meetings of world dignitaries. You certainly surprised by showing up at the Summit of the Americas wearing a dark Members Only jacket and leaving the traditional Latin American dictator’s costume in the closet. I love you in your all white suit, decked-out in medals, complete with a Miss Universe sash.  I’m certain the only reason Obama greeted you was out of sheer confusion. Since this was your first meeting, Obama figured you would either be in your all whites with medals and sash, your fatigues ala Castro, or your bright red button-down oxford. You confused the former editor of the Harvard Law Review with your incognito Michael Knight look, and made him accept a book that shines a bright light on America’s denial-consciousness.  Good show, sir.

But while you may have pulled one over on Obama, be careful not to savor the victory too long, for I fear you may have waked a sleeping giant. I know you have survived CIA hit squads, CIA meddling in your already rigged elections, and low oil prices, but I am not sure that you are prepared to suffer the wrath of the most powerful person in the U.S.: Oprah Gail Winfrey. Starting a book club without the permission or even an acknowledgment to Oprah shows cajones, indeed.  But have you overplayed your hand, Senor Presidente? There are three things a man does not get in between when it comes to Oprah: her Gayle, her food, and her spotlight. Oprah waited 11 years before delving into the dark dystopia of Cormac McCarthey’s The Road, but you SenorPresidente, you have the moxy–or gall–to open with a master-stroke like Open Veins?! Now, that’s just asking for it.  Word has it that Obama’s book of choice will be Green Shoots with Gringos , my gardening club experience in US federal prison, by Manuel Noriega, with an addendum and forward by Exxon, Chevron and Conoco. Two can play at this game.