*** It is a dark and windy day here in France. The weather always turns
on
Assumption Day...or so everyone says. This year was no exception. It
changed from cool and cloudy to cold and cloudy. Summer seemed to come
to
an end at the beginning of August. Since then, it has seemed more like
October than late summer.

The month of August was an invention of Octavian, otherwise known as
Emperor Augustus Caesar. The Caesars seem to have been vain. His
adoptive
father, Julius, is the only other person to have a whole month named
after
him. Augustus, wanting to eclipse him in imperial glory even stole a
day
from February, so that his month would be as long as July.

Augustus was a great one for P.R. and propaganda of that sort. His
profile
adorns more Roman coins than anyone else's and he even commissioned
poets
and historians to flatter him and Rome, which he transformed from a
city
of brick into a city of marble.

"Roman, remember," wrote Virgil, as if to Augustus himself, "by your
strength to rule Earth's people - for your arts are to be these: To
pacify, to impose the rule of law, to spare the conquered, battle down
the
proud."

Augustus was a murderous dictator, but fortunately, Virgil knew how to
tell a good story.

*** Colleague Lila Rajiva writes that telling a good story has been an
imperial priority ever since. Even in the United States, which prides
itself on a free press, the government hires propagandists to plant
fake
news stories in the media. For instance, it paid a P.R. firm to tell
the
world that Saddam Hussein had WMD hidden in Iraq. And then it used the
phony stories to justify its war:

"[P.R. firm] Rendon [was] hired by the CIA in 1990 to help 'create the
conditions for the removal of Hussein from power,' [and] went on to
earn a
hundred million dollars in government contracts in just the five years
following. It got together anti-Saddam militants, gave them a 'brand' -
the Iraqi National Congress, and advised them on P.R. strategy. It also
hand-picked Ahmad Chalabi, the ex-bank con turned peddler of pro-war
propaganda, and primed a flyspecked assortment of defectors in the fine
art of bluffing polygraphs. All to further neo-conservative plans for
creative destruction in the Middle East."

*** It is too bad Americans don't know more history. They might have a
better idea where their imperial role is leading them. At least, they
might pick up a few tips on the way. Like Sir George Murray.

While fighting the French in Egypt in 1801, Murray and his men were in
dire need of water. But Murray, having read the classics, knew that
Julius
Caesar had once had the same problem on practically the same spot (just
outside of Alexandria). He checked the copy of Caesar's writings he
always
carried around and found that the Romans had stumbled on water at a
certain depth underground. He dug in the region and soon had plenty.

Of course, Hitler's generals studied Napoleon's Russian campaign
carefully
too, but they didn't seem to have learned anything from it. At least
one
of them had a copy of Caulincourt's history of the campaign in his
greatcoat, when the Russians captured him.

*** History would tell us that in the pantheon of imperial spectacles,
the
War on Terror is only a crude, silly one. Terror is, after all, only a
tactic...the last resort of a weak enemy unable to mount a real threat.
As
near as we can tell, the War on Terror is actually a kind of P.R. move
meant to boost support for military spending, for dismantling civil
liberties at home, and for heavily armed meddling abroad.

P.R. is the lie with which the public spectacle starts...then we get
the
farce...and only finally, the disaster that ends them. Yesterday's news
reminds us which stage we are still in:

"Two fighter jets were scrambled Wednesday to escort a
London-to-Washington flight to an emergency landing in Boston after a
passenger became so agitated she needed to be restrained, authorities
said.

"The federal official for Boston's Logan International Airport said
there
was no indication of terrorism and denied reports that the passenger
aboard United Flight 923 had a screw driver and a note referring to
al-Qaeda.

"Gov. Mitt Romney said the 59-year-old woman was from Vermont and
became
so claustrophobic and upset that she needed to be restrained..."

Devious, those terrorists.

Housing Slump Gains Momentum

The Daily Reckoning - Weekend Edition
August 19-20, 2006
Los Angeles, California
by Kate "Short Fuse" Incontrera

VIEWS FROM THE FUSE: HOUSING SLUMP GAINS MOMENTUM

Your editor is in the land of sunshine, plastic surgery and
overpopulation: Los Angeles. While out for a jog around West Hollywood,
evidence of the real estate bubble is everywhere. Almost every single
house was being renovated, every car that drove by on the steep roads
was
a pick-up filled with laborers, ready to work on these homes perched
precariously on the side of the hill.

And the housing bubble is deflating, even in formerly "hot" markets
like
Los Angeles. The LA Times reports:

"Southern California home sales fell to their lowest level in nine
years
last month as price appreciation continued to decelerate, data released
Tuesday showed.

"'I don't know how soft the landing's going to be,' Eli Broad, Los
Angeles
philanthropist and founder of giant builder KB Home, told Bloomberg
News
on Tuesday. 'I think we're in for a period of a year or two years where
housing prices are going to go down or stay stable, but certainly not
go
up.'

"At the very least, 'current trends suggest that the market is heading
into a lull,' DataQuick analyst Andrew LePage said."

According to the article, houses are sitting on the market for a lot
longer than they used to, which could account for all of the
renovations
we stumbled upon.

This week, the National Association of Home Builders/Wells Fargo index
of
builder confidence fell to it lowest level in 15 years, from 39 to 32
for
July. This is the seventh consecutive monthly decline.

"'Two big factors are coloring builders' perceptions of the market
right
now, rising sales cancellations and substantial growth in inventories
of
both new and existing homes,' David Seiders, chief economist at the
National Association of Home Builders, said in a statement. 'We expect
the
erosion in market activity to continue through most of this year before
stabilizing in 2007.'"

While most are finally admitting that there is - or was - a housing
bubble, what analysts and experts are at odds about is how far housing
will fall, and its impact on the economy. Some feel that there is only
a
correction in our future, not a complete collapse.

Of course, there are those on the other side of the fence (ourselves
included) who think that with the over-inflated market, and
overextended
borrower, a soft landing for housing is just not possible. Look out
below!

Short Fuse
The Daily Reckoning

August 12, 2006. Hanford Carnegie Museum. Cornerstone dedication ceremony. Items on the table will be placed in the plastic cylinder. The cylinder will be sealed up for 100 years and then opened up by a future generation.

The Daily Reckoning PRESENTS: It is perhaps best that soldiers don’t
think. But of course, those in charge of armies must think, and often
enough the outcome of that is far from what was expected. Bill Bonner
discusses decisive thought in ancient battles.

Cannons to the Right, Cannons to the Left
by Bill Bonner

“Their's not to make reply,
Their's not to reason why,
Their's but to do and die...”

“The Charge of the Light Brigade,” Alfred, Lord Tennyson

In September of A.D. 9, Emperor Augustus was behaving like a lunatic.
Reports circulated that he was banging his head against stone walls
muttering, “Quintili Vare, redde legions” (“Quinctilius Varus, give me
back my legions”). The legions had been lost in Rome’s worst military
disaster since the Battle of Cannae. Augustus could have demanded the
head
of the general responsible, but he already had it. The Germans had sent
it
to him.

The battle of Cannae, in which Hannibal faced a Roman army twice as
large
as his own, and beat it decisively -- killing some 70,000 Romans -- was
already as distant in Roman memory as Ticonderoga is to Americans
today.
Otherwise, they might have thought twice about getting themselves into
the
same situation with the German tribes. But Americans no longer remember
Ticonderoga and the Romans had forgotten Cannae.

Here follows our brief account.

When Hannibal crossed the Alps to attack the Romans at Cannae, the
Roman
equivalent of Homeland Security was caught completely unprepared. Even
though the Carthaginians had lost many of their North African troops,
almost all of their elephants, and many of their mules and horses, and
though Hannibal himself had lost an eye, the invading troops still
managed
to send the Romans fleeing back to Rome -- those that weren’t killed or
captured, at any rate.

But alas, poor Hannibal had his failings.

“Vincere scis, Hannibal, victoria uti nescis,” said his cavalry
commander.
(“You know how to win, Hannibal, but you don’t know how to profit from
the
victory.”)

Instead of gathering his forces and marching straight to Rome, Hannibal
dithered, negotiating, while Rome regrouped and raised new armies.
Eventually, their time came. The Punic invaders were put to
rout…Carthage
was razed... and the land around the city salted and made infertile
forever. Rome went on to dominate the entire Mediterranean for another
700
years.

Hannibal’s mistake was a common one. The Confederacy made a similar
error
when it failed to follow up its victory at Bull Run in 1861 with a
massive
attack on Washington. It might have dictated the terms of an armistice;
instead, it waited for a negotiation that never came. Then, Gen. Robert
E.
Lee made the mistake that sealed the fate of the Southern cause. He
said
he thought his soldiers were “invincible” and sent them up Cemetery
Ridge
to attack the Union forces, even though it had long been obvious that a
frontal charge across open space was a losing proposition.

“Remember the stone wall,” Stonewall Jackson used to say, referring to
the
stone wall at Chancellorsville, where, in 1863, he learned the critical
lesson that a fortified position is almost impossible to take by direct
attack. In almost every battle of the War Between the States, it was
the
defenders who were the winners. There was a very simple reason: Rifles
had
become more accurate at longer range than they used to be. So important
was the lesson and so obvious were the consequences of disregarding it
that Gen. Longstreet dared to differ with his legendary commander. Only
a
fool would attack up that hill, he warned Lee. Longstreet was right.
The
Southerners who charged under Gen. Pickett might have been tough, but
they
proved that they were still vincible.

Robert E. Lee may have been a legend, but as Gettysburg shows, there is
something about camp life that turns even the best men into blockheads.
We
say that, mind you, in admiration, not contempt. After all, the world
needs good soldiers who don’t think too much, and a really good soldier
would rather die than think. Often he does.

The last thing you want in the enlisted mess is philosophers. They are
liable to begin asking questions. Imagine the reaction of a Russell, or
a
Wittgenstein, or a Camus, had they been in the Wehrmacht in 1942 when
the
German army advanced on Moscow:

“We’re going to march across the biggest land mass on Earth…we’re going
to
fight the biggest army on Earth…we’re going to freeze our butts off in
the
coldest, least hospitable place on the planet, across the widest front
line in history…with the Soviet Army in front and partisan guerrillas
at
our rear…and we’re going to do this without enough fuel or supplies…led
by
a bunch of fanatics, who are at least delirious, and probably
criminally
insane...” Right.

No, you don’t want thinkers with guns in their hands. But at the top of
the chain of command, thinking might not be such a bad thing...if only
it
were done right. But it never is. Put a man on a public stage and he
gets
an almost irresistible urge to make a spectacle of himself. He thinks.
Or
thinks he thinks. But his thoughts get all tangled up with his
amour-propre. The next thing you know, he is doing something, but
something so absurd that even the theater mice are tittering at him.

In contrast, a man in his own private life need not think too much. He
can
get by on instinct and tradition...making his idle mistakes and
suffering
its petty consequences. Then, after he is in the grave, people may
remember him for his kind remarks or the wart on his nose…or they may
not...and life goes on just as well without him.

Not so the public man. Seduced by the stage on which he struts, he
imagines he is a thinker...and an actor...on whom the planet depends.
All
public spectacles begin with this delusion, segue into farce, and
conclude
with a flourish in disaster.

And nowhere are those disasters in sharper focus than in military
affairs,
where every vainglorious dimwit -- from P.Q. Varus to George Armstrong
Custer -- has left behind him a charred trail of corpses and burned-out
war chariots.

There was, for another instance, Lord Cardigan, who having bought his
commission in the British Army, was moored in the Black Sea enjoying
life
aboard his private yacht -- attended by a French chef -- while his
soldiers shivered, starved, and died in misery in the Crimean War.
Called
to action and never having seen the terrain, he took his light brigade
of
cavalry on a mad dash in the wrong direction down into the “valley of
Death.” A thinking cavalryman might have pulled the plug on that
operation. Apparently, there were none. Instead, they all rode to their
deaths -- except, of course, Lord Cardigan, who returned home to
England a
national hero.

Then, there’s the Italian ace, Italo Balbo, who was given the command
of
Italy’s forces in Libya in 1940. He flew to take charge…and was shot
down
by his own troops.

A British general, whose name we don’t recall, thought it rather
unmanly
to duck. Touring the trenches in WWI, his lieutenants urged him to put
his
head down. No, said he, if we all go crouching around all the time,
we’ll
never be able to fight the war, let alone win it. He had just finished
his
sentence when a German marksman shot him in the head.

Of course, some commanders are simply mad. Confederate Gen. Richard S.
Ewell, who had a bald head and a beaked nose, believed he was a bird.
Reports circulated that he pecked at his food and made noises as if he
were chirping. The Prussian field marshal Leberecht von Blucher
tiptoed
around his room, claiming the French had heated the floor. He also
believed that he had been raped by a French soldier and was pregnant
with
an elephant.

But most military commanders the gods destroy without bothering to make
mad. We turn back to Publius Quinctilius Varus and Rome’s great defeat
at
the hands of the Germans.

Varus’s father was a high-ranking Roman, holding the post of quaestor,
but, apparently, not a smart one. After the assassination of Caesar,
Sextus Varus chose to back the wrong side in the civil war that ensued,
aligning himself with Brutus and Cassius, Ceasar’s murderers. At the
Battle of Philippi in 42 B.C., Varus’s team was thrashed. It was Roman
tradition that the leaders of the losing squad committed suicide. Varus
turned to his slave and asked the man to kill him with his own sword.
We
don’t know whether the servant was delighted or appalled. All we know
is
that he did what was asked of him and Varus disappeared from history.

His son, P.Q., married carefully -- that is to say, in a way that
brought
him to Emperor Augustus’s notice. In fact, he married twice, each time
bringing himself a little closer to the imperial household. Given the
governorship of Syria, he came to it as a poor man to a rich province.
He
left it as a rich man leaving a poor one. Longing for more glory, he
saw
his opportunity east of the Rhine River, where the Germans had not
quite
been brought into the Empire.

In the Romans’ view, the Germans were a wild, unruly, and uncivilized
group of tribes. When they weren’t getting drunk and fighting with each
other, they were just getting drunk. They were regarded much in the way
as
Iraqis today are seen by senior American military leaders -- as
incompetent and disorganized. The Romans, on the other hand, were well
organized, but their contempt for the barbarians…and their general
arrogance toward all subject peoples…made them prey to error.

Varus’s first mistake was that he trusted the young leader of the
Cherusci
tribe, Arminius, who spoke Latin and had ambitions of his own. Arminius
told him of the Chauci -- a tribe to the east of his own Cherusci, far
from the Roman fortresses along the Rhine. Varus couldn’t resist the
opportunity for glory. He gathered three legions together -- along with
several cohorts of Germanic auxiliary troops -- to put down the
rebellion.

His second mistake was not listening to Arminius’s own uncle, who
warned
him of the trap.

And his third mistake was to take his troops through a narrow defile
where
they could be easily ambushed.

Varus was probably riding along happily, imagining the triumphal march
he
would make through Rome when he returned, when he first heard the
“baritus.” It was a sort of war cry, made by the Germans before a
battle,
a kind of low moan produced by roaring in a deep voice against their
own
shields.

It began at Kalkriese, near today’s Osnabruck, and is called the Battle
of
the Teutoburg Forest. Varus was so confident that he had brought with
him
a whole caravan of women, children, and supplies. The army was
stretched
out along a narrow road through the forest. To make matters worse, it
rained. Roman archers found that their bows were almost useless. Foot
soldiers could not form up properly. All their training, tactics, and
careful administration were of no use.

Arminius had managed to bring together the Cherusci, Marsi, Chatti, and
Bructeri -- all the local tribes -- and set them on the Romans. They
may
have been no match for the Romans on open ground…but here in the
forest,
they were having a picnic. They wiped out the baggage train first.
Women
and children were killed or taken as slaves. Then, they went to work on
the Roman soldiers. Soon, the auxiliaries not only deserted, but went
over
to the enemy.

For several days, the legions held together -- out of discipline and
desperation. They even managed to build impromptu fortifications. But
they
had no way out. When it was clear their situation was hopeless, Varus
must
have followed family tradition. He probably buried his sword in the
ground
and fell upon it. The Germans picked him out among the dead, cut off
his
head…and sent it to Rome. Arminius was later defeated by Roman forces
sent
to get even, but Germany was never subdued…and never part of the
Empire.

Regards,

Bill Bonner
The Daily Reckoning

The July 2006 display case of rocks at the Hanford Public Library.