Friday, January 29, 2010

The Final Countdown: Greek Sovereign Default

The aptly named band Europe brought us the epic music video and song "The Final Countdown" about 20 years too early (I mean, who cares about the countdown to the end of communism - let's talk about the PIIGS sovereign default).

As I read all these articles about Greece's impending doom, it's hard not to hear in the back of my head the implied complaint, "why won't they just lend us the money for free? This doesn't make any sense. Just lend us the money for free!"

[emphasis added and comments in brackets]
Europe Weighs Possibility of Debt Default in Greece
New York Times

European leaders are quietly considering whether to come to the aid of their troubled neighbor Greece amid fears that the nation might default on its debts and unleash another round of financial crisis.

Only a month after Dubai was rescued by its neighboring emirate Abu Dhabi, Germany, France and other European powers are discussing whether Greece might need a bailout too.

After a decade of debt-fueled profligacy, Greece is confronting what amounts to a run on the bank. And, despite repeated assurances from Athens, the nation’s strained finances have put already jittery financial markets on edge. On Thursday, the worries stretched all the way to Wall Street, where the stock market sank 1.1 percent.

Some economists worry that Greece’s troubles could have deep and lasting repercussions for Europe. The crisis poses complex challenges for the euro, which Greece adopted in 2001. The currency sank to a six-month low against the dollar and yen on Thursday.[ironically, TILB thinks letting Greece go could be an incredibly strong event for the euro]

“Greece failing is not an option, and lots of people think that we will have to intervene at some stage,” said one European finance official, who was not permitted to speak publicly on the matter. “It doesn’t have to happen, and we hope it won’t, but it would be better than seeing a default.”


But doubts have intensified over the credibility of the drastic austerity measures put forward to try to get Greece’s budget under control, in spite of concerted efforts by the Greek government to calm the markets.

Investors worry that the crisis in Greece could touch off a domino effect across Southern Europe. Many are fleeing bond markets in Portugal, Spain and Italy out of concern the troubles might spread. [TILB - Collectively known as the PIIGS when Ireland is included]

The market’s judgment has been swift and brutal. On Thursday, the difference between the interest rates on Greek and German bonds — a measure of the risk investors perceive in the Greek debt — rose to nearly four full percentage points, its highest level since the euro was adopted.

Officials in Athens, Frankfurt and Brussels remained adamant that Greece was not at risk of being forced to abandon the euro. [TILB - of course not. Could you imagine if they said, "hey, we're thinking of going back to the Drachma so that we can print our way out of this debacle?" That would be amazing.]

As a condition of any aid package, the Greek government led by Mr. Papandreou would be asked to provide a more detailed program to bring the country’s deficit — currently equal to 12.7 percent of gross domestic product — under control. European Union rules call for a maximum of 3 percent. Officials insist that any bailout must not put into doubt the credibility of the euro.

Another condition of any aid would be further guarantees over the reliability of Greece’s economic data. Last year the newly elected government in Athens announced a sharp upward revision of its deficit figures, which have since been exposed as seriously flawed.

Next week, the European Commission is expected to propose greater powers for the European statistical agency, Eurostat, to audit the accounts of national governments. [TILB - watch Czech president Vaclav Klaus give this interview where he presciently assesses the fact that the EU and the Euro are forfeitures of sovereignity and freedom, then watch the slow leech of powers from the states to the centralized United States of Europe]

The latest moves reflect a continuing skepticism among euro-zone members over the practicality of the plans put forward so far by the Greek government. Athens wants to reduce the deficit to 3 percent of G.D.P. by 2012, an objective described as unrealistic by one European diplomat, also speaking on condition of anonymity. These plans are also to be assessed by the commission next week.

Greece’s budget deficit is four times the E.U. limit, while the country’s debt amounts to 113 percent of G.D.P. But officials insist that, because Greece is not one of the euro zone’s larger economies, the problems created by its grim public finances can be absorbed. The Greek economy represents about 2.5 percent of the euro area’s G.D.P. [TILB - Japan is over 200% sovereign debt to GDP and the US is a bit over 80%. Carmen Reinhardt and Kenneth Rogoff show that 90% is the threshold past which few survive, as well as 60% externally financed debt to GDP - this latter point has been Japan's saving grace, though that is likely over]


For Greece’s neighbors, there is the possibility of a domino effect, with investors subsequently moving on to test the resilience of another heavily indebted member of the euro area — possibly Italy, whose debt is also 113 percent of its gross domestic product.


One option, deemed unlikely, would be issuing a sovereign bond for the entire 16-nation euro area. That would probably require complex legal changes among members. [TILB - see prior Vaclav Klaus reference]


On Monday, Greece paid a hefty 6.22 percent rate to borrow money in the bond market, underscoring investors’ concern. [TILB - and it's much more expensive for them already, just five days later. If memory serves us well, they have a number of huge maturities in April/May that will be challenging to finance affordably without German backstop...]

In an interview this week, the Greek finance minister, George Papaconstantinou, acknowledged that the high rates were punitive but asked that investors keep faith. Greece needs to raise at least 53 billion euros this year, much of it this spring.
People think this is news?

As we've been saying for a year, just wait until Japan blows. It's situation is nearly twice as bad as Greece's. Despite having 40% of the U.S.'s GDP, it has as much debt. If its blended cost of funding goes up from 1.5% to a bit over 3%, 100% of its tax revenue will be absorbed by interest expense. We're talking about the second largest economy in the world and it literally has no other options than massively debasing its currency or defualting on its debt (or, more likely, both). That's what they get for following Bernanke's wicked advice.

The sooner Japan blows, the better for the U.S. - I suspect our only hope of not suffering the same fate is to witness Japan's meltdown after having followed a similar prescription.

And as to Europe, just wait until Greece's implosion lights up Italy, which is a very large economy. That is the real worry the EU is facing: do we let Italy go?

Which brings us full circle, to The Final Countdown...

Why Don't You Start Calling Me Gordon?

Wall Street 2: Money Never Sleeps

Wednesday, January 27, 2010

State Of The Union - Summary: "It's A Shitshow Out There"

Watching Obama's debacle of a State of the Union address reminds us of Thomas Sowell's prescient analysis from almost a year and a half ago.

Sowell link.

As an aside, did anyone else find Obama referencing the Constitution at the beginning of his speech ironic?

Tuesday, January 19, 2010

U.S. Rail Data Crushingly Negative

[HT: Max Headroom and LB]

The weekly railroad traffic data collected by the Association of American Railroads (AAR) did not have a particularly difficult comp in January. You may recall that in January 2009, it seemed as if the world had stopped as retailers and suppliers were crushed by excess inventory that needed to be burned off. Those same businesses allegedly just stopped placing orders leading to the collapse in rail volumes during November and December of 2008 in the below graph. January 2009 was no better.
2010 - Jan 14 - AAR Data

So January 2010, even if still in the teeth of a recession, should at least have the benefit of not dealing with an excess inventory problem. It should have been better than January 2009.

But alas. In fact, the first week of January is comping well below the worst average month in all of 2008 or 2009 (or any month for YEARS, for that matter). Green shoots?

From the AAR's weekly rail data release (emphasis added):
WASHINGTON, D.C. – Jan. 14, 2010 – The Association of American Railroads today reported that freight rail traffic is off to a slow start in 2010 with U.S. railroads originating 236,796 carloads for the week ending Jan. 9, 2010, down 12.4 percent compared with the same week in 2009 and down 28 percent from the same week in 2008. In order to offer a complete picture of the progress in rail traffic, AAR will now be reporting 2010 weekly rail traffic with year-over-year comparisons for both 2009 and 2008.
Helicopter Ben, your authotization to continue debasing has arrived. Continue your destructive ways freely.

Thursday, January 14, 2010

California Debt Is Downgraded: Schwarzies Prepare For A Comeback!

TILB is so incredibly thankful that - as we informed our readers over and over again last spring and summer (click here for all TILB posts referencing Schwarzies) - California has not at all fixed its budget woes. It has another $20 billion deficit expected in the coming 18 months.

It seems as if California lawmakers think this problem might solve itself. That somehow, they are going to miraculously bring in another $14 billion in tax "revenue" - annually mind you - over any reasonably near term period.

Spoiler Alert: Ain't gonna happen. In fact, the more you raise taxes when you are already a high tax regime like California, in the long run, the less tax "revenue" the state can expect to receive. It will actually worsen its problem by driving out marginal growth and productive investment.

The obvious solution is not to try to raise another $14 billion per year - it's to cut $14 billion more in spending per year. Free that capital up so that your citizenry can productively deploy it rather than having a bunch of proven morons in Sacramento deploy it destructively.

As we promised back in July 2009, TILB stands ready to laugh in California's face as their legislature acts like a political set of keystone cops.

Below and linked here is a Reuters article discussing the S&P downgrade [emphasis added and comments in brackets are TILB's].

UPDATE 4-California debt rating cut as cash crunch looms
8:03pm EST* S&P sees budget solution possibly crimping economy

* $19 bln shortfall tougher to close than last year's-S&P [no shit - you can't cut the fat you already cut, so it's all new fat here]

* Cash crunches seen in March, July, but RANs to be paid (Recasts, adds debt insurance costs and comparison)

By Jim Christie and Peter Henderson

SAN FRANCISCO, Jan 13 (Reuters) - California's main debt rating was cut on Wednesday by Standard & Poor's, which said the government of the most populous U.S. state could nearly run out of cash in March -- and another rating cut might follow.

The state government's budget gap of nearly $20 billion over the next year and a half leaves it in a precarious situation, requiring tax increases or spending cuts, either of which may slow economic recovery, the agency said in a statement.

"If economic or revenue trends substantially falter, we could lower the state rating during the next six to 12 months," S&P said after cutting the rating on $63.9 billion of California's general obligation debt one notch to A- from A.

The new level is four notches above "junk" status, a level at which many investors refuse to buy debt.

"The big question is, is there any fear they will get downgraded out of investment grade (so) you may have to sell ... that's where I think it would get interesting or hairy," said Eaton Vance portfolio manager Evan Rourke.

Bond prices did not move much, though, since many expected the downgrade, he said.

S&P's downgrade was overdue because the state's revenues have been so weak, said Dick Larkin, director of credit analysis at Herbert J. Sims Co Inc in Iselin, New Jersey. "Frankly I can't understood why it took S&P so long," he said. "They could have made that decision back in September." [September? Try March.]


California already had the lowest debt rating of any U.S. state before the downgrade, and 39 state governments are struggling with shortfalls this fiscal year, according to the nonpartisan Center on Budget and Policy Priorities.

Many are begging for more federal funds and caught between cutting social programs, raising taxes, or both.

The housing market implosion was felt especially strongly in California, a subprime mortgage lending center. Its double-digit unemployment rate, one of the highest in the United States, is expected to endure for a year or more.

California's government resorted to issuing IOUs last year for the second time since the Great Depression when it nearly ran out of cash. Officials are scrambling to raise $1 billion for March and the shortfall could be worse in July, S&P said. [sounds like Schwarzies are coming back; we're almost giddy with excitement!]

State Treasurer Bill Lockyer's spokesman Tom Dresslar said S&P's downgrade "highlights the critical need for the legislature and the governor to produce a swift budget resolution that is credible to the market."

"Standard & Poor's makes it clear the failure to act in a timely manner and with credibility threatens to further lower our GO rating," Dresslar said, adding that a further cut would hit taxpayers already paying higher interest rates than people in some emerging economies.

The cost to insure California's debt with credit default swaps is now higher than debt of developing countries, such as Kazakhstan, Lebanon and Uruguay. It costs $277,000 per year for five years to insure $10 million in California debt, compared with $172,000 for Kazakh debt. [phenomenal]

George Strickland, a municipal bond mutual fund manager at Thornburg Investment Management said S&P still has California GOs rated too high. Moody's Investors Service has a Baa1 rating on the debt and Fitch Ratings rates the bonds BBB.

"There's another notch to go before they hit bottom," Strickland said, adding that he expects another long and ugly battle to fill the state budget's shortfall.

Governor Arnold Schwarzenegger less than a week ago unveiled a plan to balance the state's books, largely with spending cuts that he described as draconian and which leaders of the Democrat-controlled legislature sharply criticized. [I can't wait to see the Donkey-proposed alternative - Lord willing it involves more unconstitutional minting of Schwarzies by Sacramento]

S&P said "timely progress" on a budget fix would be impeded by previous reliance on one-time measures, fewer choices for one-time cuts, extraordinary reliance on federal aid in Schwarzenegger's plan, and California's unusual requirement for a supermajority of lawmakers to pass a budget.

The Republican governor's budget plan also said that while the state government faces cash challenges in March, it will have sufficient cash to repay $8.8 billion in revenue anticipation debt in May and June as scheduled. [whether true or not, what else can they say? Any other statement would be a hand delivered invitation for the ratings agencies to slash the G.O. rating further]

State Finance Director Ana Matosantos along with Lockyer and State Controller John Chiang said on Monday they are working together so the state government honors its RAN debt.

Bond payments are by law a top state priority and state Finance Department spokesman H.D. Palmer said they will be honored: "Even though we've got to make some decisions in managing March we absolutely have ample cash on hand to make our RAN payments in May and June on time and in full."

Larkin said the three major rating agencies will hold off on more downgrades to California's credit rating to avoid roiling the municipal debt market, even in the event budget talks between Schwarzenegger and lawmakers drag on.

"They'll give the state an awful lot of rope," Larkin said. "For a state to go below investment grade would cast a pall on every state and local issuer out there." [at least market participants publicly acknowledge that the ratings agencies are pussies]
(Reporting by Jim Christie, Peter Henderson, Karen Brettell and Joan Gralla; Editing by Andrew Hay, Gary Hill)

Wednesday, January 13, 2010

Hayman Capital's Kyle Bass Gives Interview On CNBC

Kyle Bass of Hayman Capital (enjoy a past letter of his here) will be testifying in front of the Congressional Financial Crisis Inquiry Commission (FCIC) today as a market participant playing counterpunch to a bunch of big name bankers that are there to defend the role of banks in the crisis. Hopefully Lloyd talks more about how Goldman is doing "God's work."

Bass talks to David Faber in this video about capital adequacy of banks, Freddie and Fannie, and the looming meltdown of Japan (further proof of The Singularity risk).


Monday, January 11, 2010

Jeffrey Gundlach, CEO Of DoubleLine Capital, Responds To Lawsuit From TCW

Gundlach strikes back at TCW and defends his honor.

Dear Friends of DoubleLine:
I am writing to address briefly the business dispute between Trust Company of the West and my new firm, DoubleLine Capital LP. As has been widely reported in the press, TCW filed suit last week against DoubleLine, me and some of my trusted colleagues. I have referred TCW's unfortunate litigation tactics to my legal team and expect this matter to be handled as a business dispute in the ordinary course. My portfolio management and trading teams and I continue to focus on the work of building DoubleLine and managing our clients' accounts. We are dedicated to the well being of our clients and to delivering on our promise to treat our clients' precious capital as our own.

DoubleLine has made remarkable progress in the past few weeks. We have in place our seasoned Mortgage, Corporate, Emerging Markets and Core Fixed Income teams; the Securities and Exchange Commission has approved our application to become a registered Investment Adviser; we have occupied our new permanent office and trading space in downtown Los Angeles; and we have established separate accounts on behalf of our initial clients. We look forward to sharing further news of our progress in the days and weeks ahead.

While I am resolved not to let TCW distract me or my team, TCW has disseminated certain smears and innuendoes that I am unwilling to let pass without at least a brief comment.

First of all, I was a loyal and extraordinarily productive employee of TCW for over 24 years. I have very good feelings toward many of the people with whom I worked there. And I am proud of the significant contributions by my teams and myself to the historic success of TCW.

In January 2009, TCW's parent, Société Générale, publicly announced that it was no longer interested in being in the money management business in a meaningful way. Soc Gen has since wound down direct involvement in its primary money management arm and discussed plans for an IPO or other paths of divestiture of TCW sometime before 2014. I became deeply concerned about the extended period of uncertainty: how would the divestment of TCW occur? How would that uncertainty affect me, my colleagues, the business and our clients? I know that other senior managers at TCW shared the same concerns at the time and do so to this day.

In response, in my last few months at TCW, I explored avenues to purchase the business, overtures that were rebuffed. Although I had begun to consider other options, I fully expected up until my dismissal on December 4 that, if I left TCW, I would do so in a negotiated transaction that was accommodative to clients as well as mutually beneficial for TCW and myself. It is unfortunate that TCW elected to take another route.

A second deeply disturbing element of TCW's actions has been its invasion and searching of locked drawers in my office at TCW's headquarters in downtown Los Angeles and of a small personal office I kept in Santa Monica. I personally paid the rent and all other expenses for the operation of this office. After seizing these offices, TCW refused to allow me to collect my personal possessions, and the salacious disclosure in TCW's lawsuit of certain of the items apparently taken there from is a transparent attempt to embarrass me and harm my business. While these actions will no doubt be subjects of litigation, suffice it to say that I had every expectation of privacy in these spaces, which stored vestiges of closed chapters of my life.

Notwithstanding TCW's scorched earth legal policy, I am certain that no employee of TCW, past or present, friend or foe, can honestly say that they ever had any experience with me, either in the office, on the road or in any meeting, in which there was any improper activity consistent with the innuendoes, smears and gross distortions to which TCW has shamelessly subjected me in its lawsuit.

I assure you that I remain the worthy fiduciary in whom you have entrusted your investments over many years. Together with my team, I navigated the treacherous credit crisis markets and protected and grew your principal while others failed. I believe that we at DoubleLine have earned your trust, and hope that you will continue to permit us to protect and make money for you and with you.


Jeffrey Gundlach
Chief Executive Officer
DoubleLine Capital LP

Contact Information
phone: 213-633-8200

Wednesday, January 06, 2010

Thank Goodness For Food Stamps - These Job Seekers Would Do Anything For A Job If One Simply Existed

This past Sunday, The New York Times ran a front page article on the massive increase in people living off food stamps alone (no other income whatsoever).

Peppered with sad tales like that of Isabel Bermudex who went from a poor upbringing to earning $180,000 in one year as a real estate agent during the boom before falling back to nothing, the article is intended to tug at the heart strings. It emphasizes the desperate straights of these unemployed and incomeless folks and how badly they want an honest day's work.

Throughout the article, people talk about wanting - but not being able to find - jobs and the terrible situation they'd be in without government handouts.

We certainly don't doubt it.

What we do doubt is that the solution is more handouts; more government. Government interference is the problem - it is what prevents most people from finding gainful employment. We have a huge excess supply of labor that allegedly wants nothing more than employment (10% unemployed). Any income is better than no income, all else being equal. However, our strict minimum wage legislation prevents the natural market clearing mechanism from taking place. As any freshman econ major can tell you, virtually any amount of supply of goods or services that has positive value can be cleared at the right price. Further, because we pay people not to work when they lose their jobs, the hurdle for accepting new work is artificially raised by the government subsidy the individuals receive.

The minimum wage and welfare-type programs are painful legacies of the New Deal era that oontinue to wreak havoc today. The people in the article below continue to suffer from F.D. Roosevelt's mad science. TILB used to think the minimum wage level didn't particularly matter because during the long period of full employment it really didn't. However, during periods of economic downturn, minimum wage basically puts a chokehold on remployment - not allowing labor prices to reset and preventing companies from hiring.

In reality, the minimum wage and other cost raising government interferences like it are nothing but Chinese economic stimulus legislation.

As our policies make it impossibly uneconomic for Americans to be employed in America by American companies, the government is basically encouraging those same companies to send wages and much needed investment capital overseas to countries that have more friendly policies toward their populous - policies that don't legally prevent citizens from working for a wage they'd happily accept and worse, that pay people not to work!

Only a government official or tunnel visioned theoretical academician could come up with this foolishness. Sadly, we seem to have returned to this sort of thinking at our highest levels. It virtually guarantees that our country will struggle to reach a full recovery.

Sometimes we wonder if that underperformance and increase of government supplicants isn't actually the goal of the left; to enslave the underemployed and undereducated to resources provided by their friendly congressman.

Intentional or not, that is the outcome of these thoughtless laws.

Article excerpts below.

January 3, 2010
The Safety Net
Living on Nothing but Food Stamps

CAPE CORAL, Fla. — After an improbable rise from the Bronx projects to a job selling Gulf Coast homes, Isabel Bermudez lost it all to an epic housing bust — the six-figure income, the house with the pool and the investment property.

Now, as she papers the county with résumés and girds herself for rejection, she is supporting two daughters on an income that inspires a double take: zero dollars in monthly cash and a few hundred dollars in food stamps.

With food-stamp use at a record high and surging by the day, Ms. Bermudez belongs to an overlooked subgroup that is growing especially fast: recipients with no cash income.

About six million Americans receiving food stamps report they have no other income, according to an analysis of state data collected by The New York Times. In declarations that states verify and the federal government audits, they described themselves as unemployed and receiving no cash aid — no welfare, no unemployment insurance, and no pensions, child support or disability pay.

Their numbers were rising before the recession as tougher welfare laws made it harder for poor people to get cash aid, but they have soared by about 50 percent over the past two years. About one in 50 Americans now lives in a household with a reported income that consists of nothing but a food-stamp card.

“It’s the one thing I can count on every month — I know the children are going to have food,” Ms. Bermudez, 42, said with the forced good cheer she mastered selling rows of new stucco homes.

Members of this straitened group range from displaced strivers like Ms. Bermudez to weathered men who sleep in shelters and barter cigarettes. Some draw on savings or sporadic under-the-table jobs. Some move in with relatives. Some get noncash help, like subsidized apartments. While some go without cash incomes only briefly before securing jobs or aid, others rely on food stamps alone for many months.


A skinny fellow in saggy clothes who spent his childhood in foster care, Rex Britton, 22, hopped a bus from Syracuse two years ago for a job painting parking lots. Now, with unemployment at nearly 14 percent and paving work scarce, he receives $200 a month in food stamps and stays with a girlfriend who survives on a rent subsidy and a government check to help her care for her disabled toddler.

“Without food stamps we’d probably be starving,” Mr. Britton said.

A strapping man who once made a living throwing fastballs, William Trapani, 53, left his dreams on the minor league mound and his front teeth in prison, where he spent nine years for selling cocaine. Now he sleeps at a rescue mission, repairs bicycles for small change, and counts $200 in food stamps as his only secure support.

“I’ve been out looking for work every day — there’s absolutely nothing,” he said.

A grandmother whose voice mail message urges callers to “have a blessed good day,” Wanda Debnam, 53, once drove 18-wheelers and dreamed of selling real estate. But she lost her job at Starbucks this year and moved in with her son in nearby Lehigh Acres. Now she sleeps with her 8-year-old granddaughter under a poster of the Jonas Brothers and uses her food stamps to avoid her daughter-in-law’s cooking.

“I’m climbing the walls,” Ms. Debnam said.


But others say the lack of cash support shows the safety net is torn. The main cash welfare program, Temporary Assistance for Needy Families, has scarcely expanded during the recession; the rolls are still down about 75 percent from their 1990s peak. A different program, unemployment insurance, has rapidly grown, but still omits nearly half the unemployed. Food stamps, easier to get, have become the safety net of last resort.

“The food-stamp program is being asked to do too much,” said James Weill, president of the Food Research and Action Center, a Washington advocacy group. “People need income support.”


The expansion of the food-stamp program, which will spend more than $60 billion this year, has so far enjoyed bipartisan support. But it does have conservative critics who worry about the costs and the rise in dependency.

“This is craziness,” said Representative John Linder, a Georgia Republican who is the ranking minority member of a House panel on welfare policy. “We’re at risk of creating an entire class of people, a subset of people, just comfortable getting by living off the government.”

Mr. Linder added: “You don’t improve the economy by paying people to sit around and not work. You improve the economy by lowering taxes” so small businesses will create more jobs.


Kevin Zirulo and Diane Marshall, brother and sister, have more unlikely stories than a reality television show. With a third sibling paying their rent, they are living on a food-stamp benefit of $300 a month. A gun collector covered in patriotic tattoos, Mr. Zirulo, 31, has sold off two semiautomatic rifles and a revolver. Ms. Marshall, who has a 7-year-old daughter, scavenges discarded furniture to sell on the Internet.

They said they dropped out of community college and diverted student aid to household expenses. They received $150 from the Nielsen Company, which monitors their television. They grew so desperate this month, they put the breeding services of the family Chihuahua up for bid on Craigslist.

“We look at each other all the time and say we don’t know how we get through,” Ms. Marshall said.


Ms. Bermudez recently answered the door in her best business clothes and handed a reporter her résumé, which she distributes by the ream. It notes she was once a “million-dollar producer” and “deals well with the unexpected.”

“I went from making $180,000 to relying on food stamps,” she said. “Without that government program, I wouldn’t be able to feed my children.”

Friday, January 01, 2010

Liberty Quote Of The Day: George Bernard Shaw

We instantly fell in love with this quote, when we heard it released from the lips of Margaret Thatcher, although it originates from George Bernard Shaw. It is so true. Enjoy the bonus Thatcher video below.
"Freedom incurs responsibility; that is why so many men fear it."
- George Bernard Shaw