I’m going to come out of my cave for a few minutes to wish everyone a delightful New Year and share a few brief observations I’ve made during my 10 days back home.

First, I am more convinced than ever that this is a good time for me to be living in China. I see convincing evidence all around that America is in a tough situation that is going to get much tougher over the next year. I see it on my own block here in Phoenix, where no fewer than four homes are on the market, three of them for nearly a year, with the price getting lower and lower but still no buyers. Make no mistake: the housing crisis is serious and it is not going away. Its ripple effects will almost certainly continue to disrupt life as we know it here and to create a lot of misery for a lot of years to come. We just saw how it devastated Citibank and Merrill Lynch, and it hasn’t even started. Our entire banking system is under siege, and when banks are afraid to lend there is always one result: stagnation and shrinkage, to quote George Costanza. My own house would have sold for nearly half a million dollars 18 months ago, and now I would be lucky to get $300,000 for it. Luckily, I bought it for $71,900. But if I had just bought it last year and had a family to support and had built my dreams on the snake oil of an endlessly robust ad expanding housing market I’d be in serious trouble. If I, like millions of Americans, had signed a mortgage unaware that my payments would suddenly double, I’d be more than upset, I would be hysterical. These are flesh and blood Americans, people who had been sold a bill of goods and trusted in our system – we usually presume our lending institutions are not trying to totally fuck us over. I remember in the 1980s the heralding of a new age under Ronald Reagan, an age of deregulation when competition would drive prices lower and give us all better choices; there would be bliss aplenty as Reagan fulfilled his mantra to “get the government off the backs of the people.” So now, with regulation watered down and sometimes gone altogether, we are paying the dreaded price. In the US you have to pay many times what I pay in Asia for broadband thanks to the sacred cow of deregulation, which got the government off the backs of big business, which as usual then plundered the people to the hilt. Regulation is necessary. Over-regulation can be a bad thing, but demonizing it as socialism and a threat to the public and a roadblock to national prosperity – well, let’s just say we were conned. And no one has been more anti-regulation than our current president, whose vision is one of big business held unaccountable, where codewords like “the ownership society” means if you get fucked by the robber barons then you’re on your own, sucker. To hell with the lot of them.

Moving right along, I am surprised by what I am seeing and hearing in regard to the upcoming election. I now believe Hillary Clinton will win because so many smart people I talk to feel she has the experience and “toughness” to lead America through difficult times. I disagree with the choice my friends and relatives have made, but I have to acknowledge the fact that many Americans feel this way. They are concerned of what they see as Obama’s lack of experience and John Edwards’ dishonesty. I may disagree with these concerns, I may think they are misguided, but I know a trend when I see one and when I keep hearing the same complaints from people I know across various strata of American society…. All I can say is that if Hillary does win, I hope the hysterical American left, which can be as annoying and as brainless as its counterpart on the right, at least gives her a fair hearing and doesn’t mindlessly seek to crucify her. She’s not my favorite, but she is no Giuliani. I would love to bring in someone new who could divorce American government from big business. I still hope it happens. But for all her flaws and ties to corporate America, I believe Clinton is a capable leader, a hard worker and a compassionate person. And yes, I know all her warts as well and she leaves me cold and unhappy. But I never want to see America do to her what it did to Hubert Humphrey in 1968, demonizing him and humiliating him and bringing strength to the Republicans. Okay, we don’t love Hillary Clinton. Can we be mature and at least respect her if she’s who the people choose? Can we try to see her with a bit of balance and perspective? This evil woman did, after all, stick her neck out to fight for universal health care, and I believe on many topics such as gays in the military and civil rights and government regulation she really isn’t totally evil, as much as some in the more extreme lefty sites would have us believe. (And note, my own blogroll is clogged with many of these lefty sites; I tend to lean to the left, but I have seen the destruction of which zealots of any political ideology can be capable.)

David Brooks, my least favorite NYT columnist, wrote his very best column ever yesterday about the vile Mitt Romney, an empty shell, a man with neither convictions nor qualities. You can read the entire column in Word format here.

It is now a year since I recommended buying gold, a suggestion that was influenced by what I saw as a tidal wave of economic repercussions precipitated by our housing crisis. I took a lot of heat, a lot of visitors came here to laugh, and today it is up 33 percent from the day I recommended it. We are heading into a recession, people are going to be defaulting on their credit cards as they cope with mortgages they can’t afford, the banks will make it harder to borrow and we will be caught in a vicious circle of stagnation and suffocation. We are there now and it will get much worse. I met my broker last week and shifted all my remaining assets, not very much, into foreign currencies, emerging markets and gold/precious metals, We are experiencing inflation here (another depressing observation) which is going to worsen. Oil, commodities, precious metals will all do well. The stock market will probably do alright as well, but not nearly was well as more tangible commodities. The market cannot crash a la 1929. The government can deal with a recession, and indeed it may have positive long-term results, like ultimately leaving America more competitive with the rest of the world. It (the US government) cannot, however, deal with all of the current economic woes and a collapsed stock market; that would be depression, misery for all, and the powers that be won’t let it happen. (Disclaimer: I am a fool, an amateur, an idiot, a liar, a dilettante and a fraud. I know nothing of what I speak and you would have to be crazy to listen to even a single word I say.)

Raj is correct in his post below: McCain is about to make a significant comeback, which he deserves. I detest him; I used to be a fan and still respect him on some levels, but he went way too far pandering to the far right and in banging the drum at deafening volume for the Iraq War. Still, he’s the best of the lot, for whatever that’s worth.

Speaking of Iraq, it’s good to see how people here are reacting to our lovely little war. No one seems to feel it was a good idea. None seem to believe we are winning. None seem to feel we should be there for years to come. The so-called surge failed; casualties are down thanks to a lot of troops on the ground, but none of the primary objectives has been achieved in terms of reconciliation and self-government. I am surprised and happy to see that the Instapundit-type cheerleading has had little effect on mainstream America. The war was bad in every way, a disaster in ever way, a defeat and a quagmire in every way, and America knows it. A terrible tragedy that it had to happen, and the albatross around the GOP’s neck that will asphyxiate the party. Still no electricity or water for most Iraqis, countless dead, ongoing terror and vast uncertainty, and all we can say is violence is almost down to pre-invasion levels, even if every other indicator says the country is in shambles that will cost billion or trillions to repair. And don’t get sucked into the BS about Iraqi refugees pouring back into the country from Syria and other rosy stories the right is seizing on. In my flight here I read a report on this from the arch-liberal, Daily Kos-inspired magazine The Economist, which pointed out that so far 23,000 out of two million Iraqi refugees have returned from Syria. And the reason? It had zero to do with a better situation in Iraq according to the article. No, Syria was offering the refugees no work and no opportunity; they were hungry, browbeaten, hopeless, and they went back home as a matter of necessity, not choice. It i heartbreaking to see stories like this spun by the right as proof that the Iraq War is over and that we have won. It is a fantasy.

I am sickened by what I am seeing in Phoenix in regard to immigration. Somehow Lou Dobbs and Michelle Malkin managed to hoodwink Americans into believing this was the defining issue of our times, and linked it to terrorism and subtly fanned people’s racist tendencies to move the masses to action. I don’t have the space or the stamina to go into this now, but let me just say that Phoenix is the scene of a major political scandal as our stormin’ sheriff Joe Arpaio sends out his goons to harass dark-skinned people and ask the for their papers, referring to them as “wetbacks” and treating them like animals. Yell Godwins’ as loud as you wish, but what happened here in recent weeks is so Hitlerian it defies belief; it could not happen in our America. All I ask is that you read this article, then come back and defend our war on immigrants. (Then read this to see how Joe Arpaio persecuted the authors of these articles, right out of the Gestapo handbook.) I loathe George Bush, but his approach to immigration was correct: we need to offer them a worker’s program and amnesty. We cannot stake out honest, productive citizens who have been working in America for 20 years and treat them like terrorists. Thank God Arizona has a very smart governor who understands how to navigate the mine-laden waters of this hyper-emotional issue, and who understands she must tread cautiously in an unusual political climate in which Arpaio is put on a pedestal by the far right, who love his toughness and virility. I don’t envy Governor Napolitano her job, but I do envy her ability to maintain sanity when dealing with psychopaths and criminals like Arpaio. (Apologies to most of you, who I realize have no interest in Arizona politics, but it is home, at least this week.)

China. It seems far away, but I’ll be back in a few days. I miss it, and am happier than ever to be living there and not here. (My broker gave me quite a talk about how lucky I was to be getting paid in RMB.) So much about China depresses me and infuriates me, and I know so many stories of brutality and hardship. It’s also a place with a lot of hope. For right now, at this point in my life and at this point in world history, I’m glad to be living in Beijing.

Last topic is a more personl one. It’s about my beloved cat Daisy, who I’ve have had for 16 years now. Rick and I went to the humane society back in 1991 and chose her and another kitten, Nick (we named them after the two main figures of The Great Gatsby). Just two weeks ago Rick called me with the news that Daisy, our funny-looking but incredibly loving cat, had gone blind. This was devastating news to me. Nick and Daisy are the only children I’m ever going to have, and there are few people I love more (and cats are definitely people). Rick had noticed she was walking into furniture, into walls, and that her usual high level of energy had dissipated sharply; instead of jumping up onto the bed she was first feeling with her paws, then cautiously pulling herself up. She is totally blind, an affliction caused by irreversible cataracts. So I spent a lot of time this week caring for her, watching her and thinking how it’s one more reminder of our own mortality. During the same week I watched two of my relatives and realized just how fragile life is, how we are all ants, waiting at any instant to be stepped on. Anyway, it’s been a philosophical week, very emotional and touching, and I’ve never felt such love for my funny little cat before. Two weeks after we adopted her back in 1991, Daisy became violently sick. She became listless and immobile, and a grey goo was oozing from her eyes. I took her into the vet, who told me she had feline leukemia and recommended we put her to sleep. She could only live for at most another two years, the doctor said, and there was no hope. But I couldn’t do it; I couldn’t put such a beautiful kitten to sleep. A few weeks later she got her strength back, her eyes cleared up, and here we are sixteen years later, and she’s had a very long and happy life. It’s still such a heartache, to watch someone or something you love grow old and face sickness and death. And it also makes you love them more than ever, and to cherish absolutely every instant you can be together,

Daisy, just one year ago:

I’ll be traveling tomorrow and will be back on line in a day or two. Thanks to all of you for sticking with this site through all its ups and downs. I’m in the home stretch, and in just a few months I should be able to turn this into a real blog again, with daily updates, as in the old days. A very happy New Year to all of you, even to those on both sides of the political divide (US and Chinese) who see me as a cross between the Antichrist and Pol Pot. I promise, I’m not quite that terrible. Happy New Year.