AT LEAST THE GUY IN CHARGE HAS A BRAIN Because the international finance geeks can't seem to figure out why the RMB should fall.

You heard it directly from the source: the Chinese banking system is a giant pyramid scheme, fueled by the US dollar (may not have been his exact words). And I do hope the hedge funds manage "attack" and bring down the entire system.

What a great day for mankind that would be. Free at last.

ARE FREQUENT FLYER MILES even currency? I don't think so, buddy. If anything they are coupons. I wouldn't even call them "money substitutes" since they aren't redeemable for cash, are they? Truly a ridiculous article by The Economist.

HIT ME UP ON MY SPACE

Since my boys just sold My Space to Murdoch for over 500 mil, I thought I'd ask everyone to find me on My Space and add me as a friend. If you have any trouble with this, let me know. I don't even bother to drop "the number" anymore -- I opt for handing out the My Space name! Just do a member search and you'll see why! You can view a wide selection of pictures (including, yes, the topless photos) of LJ and his Clique, leave a message on my comments about how wonderful I look all Gucci'd out down to my socks, send a quick email message, read about my hobbies, heroes and love interests, and even click through to the lengthy list of Jackass friends (totaling over 300 so far, including several "adult film stars" we met in Vegas)! Other tidbits you might discover on the My Space page:

--The real identity of the Libertarian Jackass
--LJ's real sexual orientation
--LJ's real gender
--The names and pictures of LJ's pets and/or girlfriends
--LJ's birthdate and hometown
--A host of private, personal information from friends of the Jackass displayed openly in the comments section (mainly because it makes us feel that much better about ourselves)

All of this is available to anyone, at anytime -- for free! But, be patient, ladies: we've already received requests from girls in 15 different cities for dates and, um, other assorted activities. Hopefully, we'll be able to fit all of you into our schedule on the continuing world tour. We are taking My Space by storm so log on and join the movement . . .

"My Space, it's the greatest thing since AOL Member Profiles." -- LJ
Prepaid Phone Cards

NUKING MECCA A Republican has called for nuking Mecca if al-Qaeda attacks the United States again. A few years ago, Rich Lowry made a similar suggestion. A number of my "Republican" friends have privately advocated this strategy as a remedy to The Virus (Islam). Actually this sentiment is not all that unusual if you follow the theory of deterrence in international relations. As al-Qaeda is an extra-territorial organization -- a "non-state actor" -- IR theorists worry that we've entered a new, more dangerous era where our Cold War worldview won't help policymakers. In other words, one state can't just threaten to retaliate against an organization that doesn't occupy a certain territory in order to deter the launching of attacks. Threatening to "nuke Mecca" is the only viable "solution" to the deterrence puzzle.

It makes interesting coffee shop talk for professors and grad students with little else to do, but from a libertarian perspective, I think we should actually be less worried than before. In recent history, it's States that have inflicted the greatest toll on human civilization, not murderous, roaming gangs. And how can a roaming gang achieve that level of death and destruction without legitimately extracting resources at gunpoint from a defined territory?

But, don't misunderstand: the theory of deterrence in general is disgusting, immoral and perverse. It's just that plenty of intellectuals, politicains and public figures support the theory as a guide for interstate relations, why abandon it now in the face of The Virus? Surely thousands of innocent Muslims should pay the price for the actions of a criminal gang, right?

It's tragic that proponents of such a theory, which amounts to advocating mass murder, are allowed to operate freely in the public sphere with our tacit respect and without ridicule.

FINAL PREPARATIONS LJ was down in Encinitas yesterday making the final preparations for his next big adventure. According to friends and family, this will be the most dangerous endeavour we've yet attempted. (Personally, I think diving out of planes is much more dangerous. This one, though, is on the "Life Dreams List" and we are going after it.) We fly out on Friday morning for the attempt. I think I'll update our 7 readers upon successful completion.

GREENSPAN HAS GONE INSANE: "Since the late '70s central bankers have generally behaved as though we were on the gold standard." (from The Daily Reckoning)

JONAH GOLDBERG Why does a quote from that clown show up on my Starbucks venti drip cup?

LANCE IS AN INSPIRATION The "scientists" say he's a "physical freak." I'm guessing these scientists have never won a championship. Athletic and competitive greatness is about more than physical supremacy.

HEAT It's a little warm here, but I've got the nice ocean breeze.

MORE ON DATING

I wanted to add to the post encouraging the use of suits and French cuffs. When taking a lady out, you must always valet park. If the restaurant doesn't have valet, always drop the lady off in the very front and then go find a space. I encourage the use of this song when pulling up to the valet. I have no idea what they're talking about, but I love the beat. Don't turn down the system when you get out of the ride. Tip well. In fact, you should be tipping often in general (always carry plenty of dollars on your money clip), but especially when you're with a lady. The valet kid. The hostess. Think of it as an investment.

Oh, and never, under any circumstances, take a lady to a restaurant which requires you to hold a "beeper" or "pager" and wait until it "vibrates" to claim your table. That's just insulting. If that's all you can afford, cook for her at home instead.

In fact, I put a beautiful little antique table for two on the outdoor patio of the Luxury Beach Villa for this very purpose.
Ovulation tests
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AGAINST MERCENARIES I'm convinced mercenaries are a reaction to the State's inability to produce order and justice, not a creation of free markets or indication of what we should expect from the stateless society.

SOBRAN ON THE TERROR WAR SCAM

We've been singing a similar song here for the last two years, but this is well put:

Has the war, with all the additional measures taken at home, deterred terrorism? Or has it just inspired more determination on the other side?

We can't really know. Maybe the answer is both: maybe some acts of terrorism have been prevented and discouraged, but others have merely been provoked. But the response of Bush and Blair implies a sweeping certainty nobody can have. When there is a lull in terrorism, it shows that the war is succeeding; when it erupts again, that shows the need to continue the war. What would it take to convince these men that their policy is failing?

alcohol tests

SUPREME COURT I have to question the libertarian credentials of anyone trying to explain to me why I should feel comforted by the nomination of John Roberts.

SUITS ARE IN Guys, I don't know if you picked up on this, but suits are definitely in. GQ even had an article on this a couple of months ago. So if you're taking a lady out, put on a suit.

UPDATE: You know what else is hot? French cuffs. I rock them as much as possible and the decent women love the look.

THE L.A.P.D. MURDERS ANOTHER

Many libertarians focus their efforts on the Federal gang. Here at Libertarian Jackass, we keep an eye on the other death squad: the Los Angeles police department:

In less than an hour, the number of cops had swelled to about 100--with snipers stationed on the rooftops surrounding the dealership and SWAT officers at the perimeters.

At this time, Lorena Lopez's younger brother Joshua tried to get police to let him talk to Raul, but they refused. "Actually, I wanted to talk to him face-to-face," Joshua told LA Weekly. "I know I could have made him understand. And I know he never would have done harm to his daughter."

Less than three hours after police arrived, SWAT officers stormed the dealership, firing 60 rounds into its small office. When the gunfire stopped, Raul and Susie were dead.

Where are the protests? More from the San Fran Gate.

At first, police said Pena had taken his daughter as a hostage. A few days later, they polished their story and insisted the girl was more like a human shield. Either way, they said, the responsibility for this tragic chain of events belongs to Pena.

Meanwhile, the mother of the dead toddler, Lorena Lopez, is screaming to the Spanish-language press -- and anyone else who will listen -- that the police killed her baby, that authorities should have made her child's safety their top priority and that she wants justice. She even -- surprise -- has an attorney and plans to sue the police department.

Then there are the sideshows. Black community activists, many of whom have had their own run-ins with the LAPD, have rallied to Lopez's side. Some of the more vocal elements of the Latino immigrant community are hysterical with anger. That includes the fool who, according to the Associated Press, irresponsibly yelled out in Spanish at the girl's funeral: "The police are assassins!"

No, they're not. They're just ordinary people who found themselves in a terrible situation whose outcome will probably haunt them forever. Assistant Police Chief George Gascon has acknowledged that some of the officers involved are now having "tremendous emotional problems" and may not come back to work.

No, they're assassins. It may feel good to believe otherwise, but that doesn't change reality.
Drug tests
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BREAKING NEWS! Developing hard at this hour . . . It's official: a good friend is getting married and we are taking a Bachelor Party Cruise...

BREAKING NEWS! DEVELOPING HARD . . . will China ever revalue?

WEDDING CRASHERS

Are you still a big Hollywood star if LJ gets into places before you do? A couple of months back I had dinner with a friend in Santa Monica and then headed over to meet up with Jigga at White Lotus. I walked up to the front of the line and kindly asked the bouncer to lift the velvet rope and let me in. He said "for 80 dollars" he might be able to help me out. I responded: "Eighty dollars, huh? Let me make one phone call."

Of course, one phone call and I get right in.

Unfortunately for Owen Wilson and Vince Vaughan (still waiting outside in line), they didn't have the same luck. I told Jigga, "find out if Ben Stiller is lurking somewhere out there. If not, then get those guys in."

There's also another important lesson here: never pay to bypass lines and get into clubs, bars, or restaurants. Any loser taking your money to get you in a place is running a fradulent business. Simply contact LJ and I'll put you in touch with the right people and they'll see what they can arrange. This goes for any city in Cali, Vegas and most of the West. Heck, they can probably do NYC, too.

As we like to say, "All over the world, baby!"
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IS THE "TRADE DEFICIT" a meaningful and useful economic concept? I think it's really just a political term.

MORE THAN JUST MORTGAGE PROBLEMS

From today's WSJ:

And recent data suggest the debt burden on households is growing heavier, despite low interest rates. The "debt service ratio," the Federal Reserve's estimate of the ratio of debt payments to after-tax income, hit 13.4% in the first quarter of this year, an all-time high since the Fed began tracking it in 1980. The financial obligations ratio, which adds automobile lease and rent payments, homeowners insurance and property-tax payments to the debt service ratio, was 18.45% last quarter, near the record high of 18.84% in late 2002.

Overall, U.S. consumers now owe roughly $11 trillion, nearly double what they owed a decade ago. The vast majority of that debt growth came from people taking out big mortgages and tapping their escalating home equity. Total household debt grew 11.2% in 2004, the largest year-to-year increase since 1986.

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I CAN NEVER figure out what Jonah Goldberg is writing about. It happens in virtually every column I take the time to read. This time I did learn something new: the "7/7" terrorists were born and raised in Britain. Not terrorists from Aghanistan or Iraq or Jihadistan.

But, this part still confused me:

But even if the number doesn't grow, the danger is already enormous. The official number of British Muslims is 1.6 million, though most observers say it's closer to two million or so. The "official" guess at how many of these Muslims are jihadis is 16,000, based on the assumption that no more than 1 percent could be extremists.

That narrows it down.

Prepaid Calling Cards

BACHELORS

TWO OF AMERICA'S MOST ELIGIBLE BACHELORS went to the Angels' baseball game last night. I hate baseball. I've said it before: it's a game not a sport. Fat men are not athletes. It's boring. But, if Jigga calls and says I can lounge at a restaurant overlooking the field, enjoy a bottle of wine and take note of the important moments (which are few) in the game, I'm there. I think the Angels won or something. I know Real won. I'm a Spaniard at heart.

After was a short trip to the hottest spot west of the Mississippi: Sutra Lounge. No, let's be real: hottest nightspot in the continental US. Easily. And, yes, I was the guy on the dancefloor with the Blackberry in one hand and the Sidekick in the other. Conducting business, so to speak.

IMPORTANT UPDATE: Jigga emailed to say I forgot ALL of the important facts: how we had to be "escorted through the kitchen to avoid the line at the club, the 'floating' VIP section and the six Newport* blondes we roll with. By the way, I love the new ears, bro. Oh and put a 'shout out' to Dennis Rodman and Warren Moon on the site.

*Newport = family net worth of +$400 million + gorgeous"

OK, so he may be off by a couple of zeroes there but you get the idea.
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THE SUNSET I have a favorite spot along the Coast where I love to sit and watch the sun dip below the horizon. Sometimes I take a friend or two along, but this is not necessary. Typically I go there on the Sunday evenings when I'm in town. My favorite moment of the day is actually just after sunset, a time often referred to as dusk. I try to watch the sunset on as many days of the week as possible, either while running on the sand, sitting out on the board on the water or at the secluded spot I mentioned above. It's the little things.

LUXURY LIVING IN ORANGE COUNTY

The unofficial guide to locating and building a custom home in the nation's greatest county.

The other interesting item buried here is a note to all the libertarian/anarchist types trying to dig up historical examples of "the stateless society" to prove to their friends that the "private property anarchism" stuff really could work. Take a look at the numerous and massive private communities all over south Orange County, California. It's a private property anarchists dream! Well, that is, if you realize all of the implicaitons of the theory (e.g., you DON'T get to travel freely, er, migrate, to the location of your choice, unless your name is on the list at the security checkpoint.) The only part of these communities remaining "public" are the ones that the developers can dump off on the public system in order to cut costs (subsidized police and fire services, municipal bond financed infrastructure, etc.). International Phone Cards south lakes

HILARIOUS As an anarchist and a pacifist, one would think that most emailers would take offense to some ideological position hinted at in the posts here. Not so. Most of the email we get is from people ticked off that we would -- GASP! -- dare to suggest there is a bubble in the real estate market!
http://quote.bloomberg.com/apps/news?pid=10000039&cid=wasik&sid=aKHeDSYWNh9I

FORTY PERCENT CHANCE OF global recession in 2005, according to Roach. Note the difference between Roach's opinion and that of Bill Gross.

QUESTIONS FOR LJ We get a few questions via email, especially on real estate, libertarian strategy, relationships and women. Here's one: "LJ, if I'm out should I buy a girl a drink?" LJ's response: We only buy by the bottle (if we are paying at all). Most probably you should get a bottle sent to her table to share with her friends. With that said, I think it's important to mention our top three locations to avoid meeting members of the opposite sex (if a meaningful relationship is what you seek): a bar, a club or the gym.

HARRY POTTER Is the Pope really anti-Potter? If so, I'm with the Pope.

HUMMER LIMOUSINE Last night we went out with a group of about 20 in a Hummer Stretch Limo. Shout out to our limo driver for enduring the Pacific Coast Highway hotspots on a beautiful California summer night. A lot of people wonder, why take a limo just for a regular night out? Our response: because we can. Oh, and, a night out with us is never a regular night out.

TWO GREAT MOVIES you should definitely watch if you haven't yet: The Notebook and Finding Nemo. Speaking of movies, I fell in love with a beautiful waterfront restaurant in Newport Beach based entirely on the fact that, instead of playing some useless sporting event on the plasma televisions, they were running Casablanca. We ordered a few bottles there to be sure.

REAL MADRID versus the L.A. Galaxy? Not much of a match there, I'm afraid, especially without Donovan. I'd love to go, but we have fantastic seats at the Los Angeles Angels of Anaheim (haha) game.

I tell everyone: they should have gone with The OC Angels. It would have been huge.

THE SPACE SHUTTLE Why don't they just scrub the whole program?

SIDEWAYS TRIP I almost forgot: we treated ourselves to a weekend get-a-way to Central California wine country, hitting a few of the spots they visit in the movie (that's also why we spent some time in Montecito). There are definitely some other hidden treasures up there though, including Rideau. I spent a wonderful afternoon there under the oak trees sipping the 2002 Temperanillo. Yes, it seems they are successfuly growing a Spanish grape in Central California.

BEN BERNANKE: What housing bubble?

The increase in house prices has recently received much attention in the media. While speculative behavior appears to be surfacing in some local markets, strong economic fundamentals are contributing importantly to the housing boom. These fundamentals include low mortgage rates, rising employment and incomes, a growing population, and limited supply of homes or land in some areas. For example, states exhibiting higher rates of job growth also tend to have experienced greater appreciation in house prices. The Administration will continue to monitor these developments. However, our best defenses against potential problems in housing markets are vigilant lenders and banking regulators, together with perspective and good sense on the part of borrowers.

House review
http://www.whitehouse.gov/cea/20050712.html

LAS VEGAS IDIOTS This is a great article. Personally, I can't imagine why a person would want to live in Las Vegas. Ever. But, now someone wants to live in Las Vegas by purchasing an old apartment, er, condo?

Uh, with a carport?

THE RIPPLE EFFECT More potential losers in the real estate boom fallout: public pension funds, which have piled into real estate-related investments.

HOT MONEY

Anticipating a revaluation, speculators are sending hordes of money to China. The other financial bubble: China and the RMB. How do they maintain the currency peg in light of the increasing demand?

Here's how sterilization works: Chinese companies that earn export earnings in dollars and other foreign currencies usually have their banks exchange them for yuan. A company with $100 million in export earnings could wind up with some 800 million yuan in its bank account. Foreign investors also ship dollars into China by the truckload to spend on new plants and securities. This money is converted into yuan deposits, too, giving China's banks huge wads of yuan to lend. In the past the banks had a bad habit of recklessly lending this money for construction of steel plants and other industrial enterprises. To keep a lid on such lending, the PBOC has been selling short-term bills to the banks, taking excess yuan out of circulation.

Right now the cost of neutralizing the flows is low. The PBOC can sell its short-term central bank bills to Chinese banks for 1.5% and reinvest that cash in longer-range domestic and foreign bonds at higher returns. Yet if the government bumps up interest rates to cool China's economy, this mopping-up process could get expensive, driving up the already sizable liabilities of the Chinese government. The other risk is that China's foreign exchange stockpile -- already equal to about 40% of gross domestic product and parked mostly in U.S. Treasuries -- could face a valuation hit if the yuan appreciates. "The more accumulated [reserves], the greater the losses," says Frank F.X. Gong, chief China economist at JPMorgan Chase & Co. (JPM ) in Hong Kong.

International Phone Cards UK Phone Cards

PAGEANT OF THE MASTERS Tucked away in Laguna Canyon, it's become our summer tradition. The finale is always the best part: the living version of Da Vinci's Last Supper.

MY NEW FAVORITE BLOG I don't even enjoy blogs, but this one is fantastic: RightWatch.

MY MOTHER My mother says to me today: "LJ, you have more diamonds on than any woman I know. And you have them on your ears, too? Is there something else you want to tell me?"

My wrists, my neck, my ears = minus 80 degrees.

ARE THERE TOO MANY HEDGE FUNDS?

John Mauldin addresses the question. Seems to me this is sort of like asking: are there too many shoe manufacturers? It doesn't really concern me. Hedge funds are just alternative investment vehicles:

In fact, the great majority of equity hedge funds have exactly the same purpose and goals as most equity mutual funds: finding value in the equity world. Hedge funds simply have more tools at their disposal in their quest for value, and most attempt to do so while at the same time dampening the volatility of the market. While one could argue that a continued proliferation of long/short US equity hedge funds would mean that the opportunities for finding value will be more difficult, and thus returns would be depressed, that does not mean that hedge funds are a bubble, any more than 50,000 mutual funds constitute a bubble.

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TAKE NOTES, KIDS

The lady from T-Mobile tells me I sent and received over 1,000 text messages last month alone. Along with emailing, it's my preferred method of communication. I'm notorious for seeing a number pop up, hitting "Call Decline" and yet responding immediately to text messages. Honestly, I don't have the time in the day for a lot of chit-chat on the phone. Here are the text messages of the week, courtesy of a gorgeous, blue-eyed California (natural) blonde:

Blonde: I hope I'm not being too forward, but I can't wait to spend time with you again...
LJ: Un momento, Mami, slow your tempo...
Blonde: Why?
LJ: Because you will never get enough...
Blonde: That's what I'm afraid of.

And that's how it's done. Phone Cards

SECOND THOUGHTS ON KELO?

More reason to hate PowerLine conservatives:

Even here, though, it is possible to sympathize with the affected municipalities. Suppose a large company whose headquarters are located in an urban area needs more space--say, a whole city block. Lacking powers of eminent domain, it has only two choices. It can negotiate with each landowner on the block and try to buy all of the individual parcels. This, however, is often difficult or impossible; once it becomes known that the company is buying land for its corporate headquarters, any individual landowner can block the project by refusing to sell. Occasionally such "holdouts" are motivated by sentimental attachments, but usually they simply want to extort an unreasonable sum from the corporate buyer. (It is interesting that in her Kelo dissent, Justice O'Connor stressed that: "Petitioners are not hold-outs; they do not seek increased compensation. . . ." Yet the majority opinion notes that "[t]en of the parcels [at issue] are occupied by the owner or a family member; the other five are held as investment properties." If petitioners had won their case, the value of those investment properties would have skyrocketed.)

Faced with the difficulty of assembling an adequate real estate package at a reasonable cost, our hypothetical company has one obvious alternative: buy a cornfield remote from any city, and erect a "campus" rather than a high-rise building. Rather than accept the loss of a major employer and taxpayer under these circumstances, it is not surprising that some cities have chosen to cooperate in development projects that put the city's eminent domain power at the disposal of a private company.

I see absolutely no reason to sympathize with municipalities. It sounds like Hinderaker is doing his best to justify theft. Too bad his best is laughable. "Holdouts" are property holders, regardless of their "sentimental" attachment to hold the property. Since when is refusing to sell your property extortion? So what if property is held in anticipation of price appreciation?

Scum. Drug tests Alcohol tests

http://www.weeklystandard.com/Content/Public/Articles/000/000/005/779fkbar.asp?pg=2

NONSENSE Teachers are way overpaid. Especially in California. Fire them all and let the market sort it out.

Public policy is so simple.

SORRY TO BREAK IT TO YOU, but we don't celebrate the Fourth of July. We just decided to leave town. Two main reasons for this: 1) Fourth of July has become a massive propaganda tool for the ruling regime (once again this year I can't tell you how many times I've been greeted with the "Happy Birthday America" crap.) and 2) we don't support the use of violence, which is essentially what the Fourth has become: a celebration of America's involvement in various violent campaigns, past and present.