The Lost Highway

The Lost Highway

By Richard Fernandez in PJ Media and the Belmont Club Blog

Negotiations between Iran and the Obama administration have reached a fever pitch, with sources suggesting the two sides were only days away from an agreement.  Although the exact character of the deal is still unknown, enough has been guessed to allow some people to make up their minds about it.  Prime Minister Benjamin Netanyahu warned a few hours ago that:

“This deal, as it appears to be emerging, bears out all of our fears, and even more than that,” Netanyahu told his cabinet in Jerusalem as the United States, five other world powers and Iran worked toward a March 31 deadline in Lausanne, Switzerland.

Noting advances made by Iranian-allied forces in Yemen and other Arab countries, Netanyahu accused the Islamic republic of trying to “conquer the entire Middle East” while moving toward nuclearisation.

A message in the same vein was carried by an Iranian defector. “A media aide to Iranian President Hassan Rouhani covering the P5+1 nuclear talks in Lausanne, Switzerland, is seeking asylum in the West and has blasted the U.S. negotiating team as apologists for Iran,” writes the American Interest, quoting the Telegraph.

Mr Mottaghi also gave succour to western critics of the proposed nuclear deal, which has seen the White House pursue a more conciliatory line with Tehran than some of America’s European allies in the negotiating team, comprising the five permanent members of the UN security council and Germany.

“The US negotiating team are mainly there to speak on Iran’s behalf with other members of the 5+1 countries and convince them of a deal,” he said.

These remarks may be dismissed as disinformation by advocates of the deal, who see an agreement as the narrow path to peace, the last hope to settle a conflict without resort to war. The metaphor is John Kerry’s who described his efforts to block Iran off from the four pathways to a nuclear bomb. Three roads he knows about. It is the fourth way — the one whose meanderings are secret — that Kerry is most concerned about.

On Wednesday in Washington, US Secretary of State John Kerry told the Global Chiefs of Mission Conference that the priority of the Obama administration is to reach a comprehensive nuclear deal with Iran that “shuts off the four pathways to a nuclear weapon: the pathway at Fordow, the pathway at Natanz, the pathway at Arak.”

“And finally,” he continued, “the covert pathway, which is the hardest of all but which I can assure you we are deeply focused on.”

That fourth pathway is perhaps the most important— and the least reported— aspect of talks with Iran currently under way here in Switzerland.

Journalists often cite the number of centrifuges Iran will be allowed to retain, the frequency with which they will be inspected by international monitors, the grade to which they will be able to enrich uranium and the technological sophistication, or efficiency, of the machines.

But that public debate is moot should Iran retain the ability to develop nuclear weapons secretly. Of far greater concern to US President Barack Obama is what he does not know— and what Prime Minister Benjamin Netanyahu does not know, either.

It’s a striking image: John Kerry standing sentry over a phantom highway, the lanky, doleful Secretary of State as guardian of the secret path, whose location neither he nor anyone else is certain of.  But there is also something absurd about it. The only man in Washington in a position fit to commiserate with Kerry is probably Trey Gowdy, who is likewise battling with the unseen. Gowdy says that Hillary Clinton has wiped clean the email server whose contents he subpoenaed. Like Kerry he is grappling with the unknown. Politico reports:

Hillary Clinton wiped “clean” the private server housing emails from her tenure as secretary of state, the chairman of the House committee investigating the 2012 terrorist attacks in Benghazi said Friday.

“While it is not clear precisely when Secretary Clinton decided to permanently delete all emails from her server, it appears she made the decision after October 28, 2014, when the Department of State for the first time asked the Secretary to return her public record to the Department,” Rep. Trey Gowdy (R-S.C.), chairman of the Select Committee on Benghazi, said in a statement.

The point of the comparison is that in both cases one is dealing with parties possessed of a considerable, but unmeasured capability for mischief with a proven determination to avoid coming clean. This doesn’t mean it is impossible to reach a deal with them. But it does mean is that any agreement with such parties contains a large element of risk.

The incentive to cheat is high.  The number of trap doors and secret panels in their mansion of mysteries is high. You can think of it intuitively as lending money or granting bail to a high risk individual.  Bail bondsmen know can be done, but only if the sureties are sufficient and the risk premium is adequate.  And even then you will need a bounty hunter on your speed-dial list.

If you worked for a credit card company, how much would you lend Iran? How much Hillary?  This is a nuclear deal in Iran’s case, and the world is lending them a lot.

In a relatively short period, president Obama will place a very large bet.  When he makes the deal a coin will be tossed. On the one hand he may have saved the world from a major war. On the other hand, he may have guaranteed it. No can know for sure while the coin is spinning in the air.  We will only know when it lands. Such is the nature of risk in this world.

But surely everyone will agree that it is only prudent to examine the coin before it is tossed or to inspect the dice for loading.  At the very least Congress and the Senate must look it over and kick the tires.  There should be none of this nonsense about “trust me”. The more serious the outcome, the more finely you must weigh the odds. President Obama is hungry for a legacy. Let’s hope he remembers that an administration legacy is not the same as an epitaph.

Read more: http://pjmedia.com/richardfernandez/2015/03/29/the-lost-highway/#ixzz3VqhTnuDN

Oops! 8 Discoveries Astronomers Didn't Mean to Make

Oops! 8 Discoveries Astronomers Didn't Mean to Make

http://discovermagazine.com/galleries/2015/jan-feb/accidental-discoveries

Calling BS on Harry Reid's story about his injuries

Calling BS on Harry Reid's story about his injuries

By Thomas Lifson in American Thinker

It is an emperor has no clothes moment. The partisan mainstream media has failed to show the slightest curiosity about an improbably story peddled by one of the central figures of the last six years of politics. John Hinderaker of Powerline has been asking the questions about Harry Reid’s injuries and retirement from the Senate that a reasonably curious media should have been asking, but hasn’t because Reid is a Democrat.

I noted the injuries that Reid suffered on New Year’s Day, in Las Vegas: multiple broken bones around his right eye, damage to the right eye, severe facial bruising, broken ribs, and a concussion. Was all of this really the result of losing his balance because an elastic exercise band broke? That seems unlikely, to say the least.

Anyone who saw Reid would say that he looked like he had been beaten up by a guy with a hard left, maybe using brass knuckles:

Face it, Reid has a very questionable past, having enriched himself with deals on land that became very profitable following federal government decisions. Reid cultivated an image as a mob-fighter, once acting out on videotape he knew was rolling a show of outrage over an offered bribe. But as Kevin Williamson notes at NRO:

Reid’s political incubator: mobbed-up unions fighting mobbed-up gambling interests, both sides quick to resort to violence but too blisteringly incompetent to manage very much of it effectively.

Hinderaker:

When a guy shows up at a Las Vegas emergency room on New Year’s Day with severe facial injuries and broken ribs, and gives as an explanation the functional equivalent of “I walked into a doorknob,” it isn’t hard to guess that he ran afoul of mobsters. Yet the national press has studiously averted its eyes from Reid’s condition, and has refused to investigate the cause of his injuries. To my knowledge, every Washington reporter has at least pretended to believe Reid’s story, and none, as far as I can tell, has inquired further.

The people back home in Nevada aren’t really buying Reid’s story, and Hinderaker notes the amount of Google traffic aournd questioning Reid’s story. Rumors can’t be given much credibility, of course, but they do tell us what people are thinking. And the people in Nevada do know Reid better than the rest of us:

A friend of mine was in Las Vegas a week or two ago. He talked to a number of people there about Reid’s accident, and didn’t find anyone who believed the elastic exercise band story. The common assumption was that the incident resulted, in some fashion, from Reid’s relationship with organized crime. The principal rumor my friend heard was that Reid had promised to obtain some benefit for a group of mobsters. He met with them on New Year’s Day, and broke the bad news that he hadn’t been able to deliver what he promised. When the mobsters complained, Reid (according to the rumor) made a comment that they considered disrespectful, and one of them beat him up.

Harry Reid is a known liar. Using the protection of the Senate floor where he could not be sued for liel, he lied about Mitt Romney not paying income taxes. His list of scurrilous charges about the Koc brothrs is long and well known.

The story here is as much about the propaganda press, which accepts unlikely stories as it is about the man Harry Reid, who in my book is one of the worst politicians of our era. 

Read more: http://www.americanthinker.com/blog/2015/03/calling_bs_on_harry_reids_story_about_his_injuries.html#ixzz3Vqf8tRta

Thomas Lifson, editor and publisher, calls himself a recovering academic. After graduating from Kenyon College, he studied modern Japan, sociology, and business as a graduate student at Harvard (three degrees) and joined the faculty at Harvard Business School, where he began the consulting career that was to lead him away from academia. He also taught sociology and East Asian studies at Harvard and held visiting professorships at Columbia University and the Japanese National Museum of Ethnology. As a consultant, he has worked with major companies from the United States, Japan, Europe, Asia, and Australasia at the nexus of human, organizational, and strategic issues.
A Democrat by birth, Thomas became more conservative in adulthood as reality taught him that dreams of perfecting human society always run smack into human nature.
In 2003 he founded American Thinker.

A Local Bank in Amish Country Flourishes Amid Dearth of Small Lenders

A Local Bank in Amish Country Flourishes Amid Dearth of Small Lenders

Bank of Bird-in-Hand is the only new bank to open in the U.S. since 2010, when the Dodd-Frank law was passed

By Ryan Tracy in the Wall Street Journal

BIRD-IN-HAND, Pa.—William O’Brien, chief loan officer at the Bank of Bird-in-Hand, closed so many loans in the bank’s first year of business that locals call him “Gelt Chappie,” or “money man” in Pennsylvania German.

Based in a rural village in the heart of Amish country, Bank of Bird-in-Hand is the only new bank to open in the U.S. since 2010, when the Dodd-Frank law was passed and enacted. An average of more than 100 new banks a year opened in the three decades before Dodd-Frank.

Bankers say the drought is a sign of new regulatory requirements in the wake of the financial crisis, which are boosting expenses and discouraging potential startups from even trying. Regulators say the profit squeeze from rock-bottom interest rates is a bigger problem.

“There was, still is, a pent-up demand for a local bank,” Mr. O’Brien says, describing a local man who manufactures mattresses for dairy cows. Though the mattresses are common in dairy barns, the man told Mr. O’Brien he had trouble getting a loan from a large bank, which didn’t understand the product.

“He never forgot that,” Mr. O’Brien says. “And that gets around.”

Bank of Bird-in-Hand caters mainly to the local Amish community, though it welcomes other customers, too. The bank doesn’t offer online banking, but its sole branch does have a drive-through window that can accommodate a horse and buggy.

Lancaster County, Pa., has abundant farms and small businesses, but larger banks often aren’t interested in business loans of less than $1 million, says Mr. O’Brien.

He says loan demand is so high that “if there would have been two of me, we could have done more” than the $60 million in loans made in the first year after Bank of Bird-in-Hand opened its doors in late 2013.

Last year, the more than 6,000 locally focused “community banks” in the U.S. increased their combined earnings by 9.1% from 2013, according to the Federal Deposit Insurance Corp. The overall U.S. banking industry suffered a profit decline because of problems at the biggest firms.

A Federal Reserve study concluded that the number of bank startups has historically tracked the Fed’s interest-rate policy, suggesting that higher rates might encourage investors to start a new crop of banks.

Earlier this month, regulators gave conditional approval for the second postcrisis bank, Primary Bank of New Hampshire.

Lawmakers are concerned about the dearth of new banks because small banks make the majority of farm and small-business loans, federal data show.

“There are many on both sides of the aisle that believe improvements [to rules impacting small banks] can and should be made,” Senate Banking Committee Chairman Richard Shelby (R., Ala.) said earlier this year.

Low interest rates are especially painful for small banks because they rely on interest income more than big banks do.

In the fourth quarter, Bank of Bird-in-Hand had a net interest margin of 1.38%, far below 3.63% for community banks overall, as it altered loan and deposit rates to seek out new customers. Net interest margin is the gap between what banks earn on loans and pay for deposits.

The new bank posted a loss of about $1.4 million in 2014, hurt by reserves set aside to cover future loan losses. Experts say profits aren’t expected right away at startup banks.

Like other banks, Bank of Bird-in-Hand has had to hire compliance experts, buy new computer systems and spend more time writing policies and regulatory reports. One of its 16 employees is dedicated full-time to regulatory compliance, despite Mr. O’Brien’s desire to hire another loan officer.

Last fall, the management team spent more than a month preparing for its first annual exam, a three-week visit from a team of about 10 FDIC and state examiners, who visited in shifts.

The examiners looked at hardware and software systems geared toward meeting regulatory requirements for loan reviews, information technology, anti-money-laundering controls and treatment of low-income borrowers, among other areas.

The bank paid for “white hat” hackers to test its cyber-security infrastructure and hired a consultant to test the bank’s sensitivity to interest rates.

Chief Executive Alan Dakey says the examiners “obviously want to see us be successful, and the attitude is constructive in their approach.”

The bank’s early success suggests there is a place for small lenders, but it is also in a position others would struggle to replicate. More than half of its borrowers are local Amish businesses. That group is known for being financially stable, conservative and disinterested in the types of technology that are threatening typical bank branches.

Instead of planning to cash out with a future merger, Bank of Bird-in-Hand’s board members have thought about the long run, attending FDIC training sessions before the bank opened.

The board has expanded to include banking experts from other parts of Pennsylvania. The original group had a storage-shed maker, accountant, concrete contractor and real-estate lawyer, all local.

The bank’s backers won regulatory approval partly by raising and contributing $17 million in initial capital, far more than would have been expected before the financial crisis hit.

“It was a serious commitment in terms of time and money,” said Nick Bybel, a Pennsylvania banking lawyer who advises Bank of Bird-in-Hand.

A recent board meeting lasted six hours. Directors discussed the bank’s finances and employee compensation. They voted on eight internal policies, including 10 pages about advertising, even though the bank had run just three newspaper ads.

When the bank’s first CEO stepped down for health reasons last fall, regulators told the bank that the successor should have prior experience as a CEO, according to people at the bank.

Regulators wouldn’t discuss Bank of Bird-in-Hand but have told lawmakers that they are trying to ease rules that impose an undue burden.

Doreen Eberley, the FDIC’s director of risk management supervision, pointed Mr. Shelby last month to data showing that capital is flowing into community banks at a rate of more than $3 billion a year.

“That’s capital that at some point will shift into [brand new] institutions as the economy continues to improve,” she said.